Document:

<PAGE>

                                                                    EXHIBIT 10.1

                                 OFFICE BUILDING

                                 LEASE AGREEMENT

                                 110 SPIT BROOK

                              NASHUA, NEW HAMPSHIRE

<PAGE>

                                 LEASE AGREEMENT

      This Lease Agreement is made and entered into as of June 9th, 2004 by and
between HEWLETT-PACKARD COMPANY, a Delaware corporation, acting by and through
its duly authorized representative, hereinafter referred to as "LESSOR", and
SKILLSOFT CORPORATION, a Delaware corporation, hereinafter referred to as
"LESSEE."

      In consideration of the mutual covenants as set forth herein, Lessee and
Lessor hereby agree as follows:

SEC. 1. LEASED PREMISES, COMMON AREAS AND PARKING:

            A. Lessor hereby leases to Lessee and Lessee hereby leases from
      Lessor, for the rental and on the terms and conditions hereinafter set
      forth, approximately 37,416 sq. ft. of "Rentable Area" (as hereinafter
      defined), the usable area of which is indicated on the plan attached
      hereto as Exhibit "A" and made a part hereof (the "LEASED PREMISES") on
      the second floor of the office building 2 (the "BUILDING") located on the
      parcel(s) of land known as and numbered 110 Spit Brook, Nashua, New
      Hampshire 03062 (the "LAND"). The Building is part of a three-building
      complex located on the Land (the "COMPLEX") that is operated and managed
      by Lessor as a single unit for cost center purposes.

            B. The term "RENTABLE AREA" as used herein shall mean the total of
      (i) the entire area included within the Leased Premises covered by this
      Lease, being the area bounded by the inside surface of any exterior glass
      walls (or the inside surface of the permanent exterior wall where there is
      no glass) of the Building bounding such Leased Premises, the exterior of
      all walls separating such Leased Premises from any public corridors or
      other public areas on such floor, and the centerline of all walls
      separating such Leased Premises from other areas leased or to be leased to
      other lessees on such floor, and (ii) a pro rata portion of the area
      covered by the elevator lobbies, corridors, restrooms, mechanical rooms
      serving individual floors, electrical rooms, janitor and telephone
      closets, and other common areas in the Building. For all purposes of this
      Lease, (i) the Rentable Area of the Building shall be deemed to be 249,750
      square feet, (ii) the Rentable Area of the Complex shall be deemed to be
      751,254 square feet, and (iii) the Rentable Area contained within the
      Leased Premises shall be deemed to be the number of square feet set forth
      above. Neither the Base Rent nor any other obligation of Lessee hereunder
      shall be increased or reduced by a determination that the amount of
      Rentable Area in the Leased Premises, the Building or the Complex is more
      or less than as set forth in this Section 1.

            C. Lessee acknowledges that the Leased Premises will be delivered to
      it in their "as is" condition (except for the work to be performed by
      Lessor as described in Paragraph 2 of the Rider attached hereto and made a
      part hereof (the "RIDER")), that it

<PAGE>

      has had an opportunity to inspect the Leased Premises, and that Lessor has
      made no warranties or representations as to the condition of the Leased
      Premises or as to its sufficiency for Lessee's purposes or needs, or its
      conformity with "Legal Requirements" or "Insurance Requirements" (as
      hereinafter defined). Lessee's occupancy of the Leased Premises shall be
      deemed an acknowledgement that the condition of the Leased Premises is
      satisfactory and that Lessor, to the best knowledge of Lessee, has
      fulfilled all obligations, if any, with respect to the condition of the
      Leased Premises. Lessee shall have the right to access the Leased Premises
      twenty-four (24) hours per day, every day of the calendar year, subject to
      Lessor's security procedures. Lessee's employees shall carry building
      identification cards at all times within the Building.

            D. Lessee shall have the right, as appurtenant to the Leased
      Premises, to use (i) the ground floor Building entrance lobby, (ii) the
      common corridors, elevators and stairways providing access to and egress
      from the Leased Premises within the Building, (iii) common rest rooms
      located on the second floor of the Building, and (iv) the loading docks
      serving the Building during normal business hours, provided that such use
      does not conflict with Lessor's use of the loading docks. Lessor shall
      make a small room in the area of the loading dock available to Lessee for
      its exclusive use in connection with Lessee's loading and unloading
      activities. Lessee shall have no right of access to or use of any other
      areas within the Building, including the cafeteria, and shall not enter
      into the same.

            E. Lessee, its employees, and invitees, shall have the right to park
      passenger motor vehicles in the parking area located on the Land while
      conducting business in the Leased Premises; provided that the number of
      parking spaces to be used by Lessee, its employees and invitees at any one
      time shall not exceed five spaces per 1,000 square feet of Rentable Area
      in the Leased Premises. All parking spaces shall be unreserved and
      non-designated.

SEC. 2. TERM:

            A. Subject to and upon the conditions set forth herein, the initial
      term of this Lease (the "INITIAL TERM") shall commence on June 15, 2004
      (the "COMMENCEMENT DATE") and shall end at midnight on June 14, 2009 (the
      "STATED EXPIRATION DATE").

            B. 1. Subject to, and in accordance with, the provisions of this
      Section 2.B, Lessee shall have the following options to extend the Lease
      Term: (i) the option (the "FIRST EXTENSION OPTION") to extend the Lease
      Term for a period of up to five (5) years (the "FIRST EXTENSION TERM"),
      commencing upon the expiration of the Initial Term; and (ii) the option
      (the "SECOND EXTENSION OPTION") to extend the Lease Term for a period of
      up to five (5) years (the "SECOND EXTENSION TERM"), commencing upon the
      expiration of the First Extension Term (the First Extension Option and the
      Second Extension Option are sometimes referred to in this Lease,
      generically, as an "EXTENSION OPTION"; the First Extension Term and the
      Second Extension Term are sometimes referred to in this Lease,
      generically, as an "EXTENSION TERM"). Lessee shall not have the right to
      exercise an Extension Option unless, as of each of (a) the date on which
      Lessee gives to Lessor

                                       2
<PAGE>

      written notice of its intention to exercise an Extension Option and (b)
      the first day of the corresponding Extension Term, (i) there then exists
      no "Event of Default" (as hereinafter defined) hereunder, nor any event or
      condition that, with the giving of notice and/or the passage of time,
      would constitute an Event of Default hereunder, and (ii) the Lessee named
      in the Preamble has not assigned this Lease without Lessor's consent, or
      subleased any portion of the Leased Premises. In addition, Lessee's right
      to give to Lessor a "Notice of Intention to Exercise Extension Option" (as
      hereinafter defined) shall automatically terminate effective upon the
      conveyance by Hewlett-Packard Company of title to the Complex to a third
      party, and all Extension Options that have not been validly exercised by
      Lessee in accordance with the terms of this Section 2.B shall be void and
      of no further force or effect from and after the date of such conveyance
      of title.

                  2. If Lessee intends to exercise an Extension Option, Lessee
      shall give written notice to Lessor of such intention (a "NOTICE OF
      INTENTION TO EXERCISE EXTENSION OPTION") not earlier than fifteen (15)
      months prior to the then-Stated Expiration Date and not later than nine
      (9) months prior to such then-Stated Expiration Date. Lessee must give a
      separate Notice of Intention to Exercise Extension Option within the time
      periods stated in the immediately preceding sentence with respect to each
      Extension Option that Lessee intends to exercise. Lessee shall state in
      each Notice of Intention to Exercise Extension Option the number of entire
      (but not partial) years (which shall be not less than one nor more than
      five years) that Lessee desires to include in the Extension Term with
      respect to which Lessee is giving such Notice of Intention to Exercise
      Extension Option.

                  3. If Lessee gives a Notice of Intention to Exercise Extension
      Option in accordance with the provisions of this Section 2.B with respect
      to the First Extension Option, then:

                  (i)   If the duration of the First Extension Term specified in
                        the Notice of Intention to Exercise Extension Option is
                        one year, then (a) the Lease Term shall be deemed
                        extended for a First Extension Term of one (1) year,
                        which shall constitute the full exercise of the First
                        Extension Option and (b) the parties shall proceed to
                        determine Base Rent for the First Extension Term in the
                        manner provided in the Rider; or

                  (ii)  If the duration of the First Extension Term specified in
                        the Notice of Intention to Exercise Extension Option is
                        more than one year, then, notwithstanding anything to
                        the contrary herein contained, in the event that Lessor
                        determines in good faith that Lessor will require the
                        use of some or all of the Leased Premises for its own
                        business operations after the expiration of the Initial
                        Term, Lessor shall have the right to negate Lessee's
                        intention to exercise the First Extension Option as set
                        forth in such Notice of Intention to Exercise Extension
                        Option (and thereby void all Extension Options and cause
                        the Lease Term to expire at the end of the Initial Term)

                                       3
<PAGE>

                        by giving written notice of the same to Lessee within
                        thirty (30) days after Lessor receives Lessee's Notice
                        of Intention to Exercise Extension Option. If Lessor
                        does not give such written notice of negation within
                        such 30-day period, then (a) the Lease Term shall be
                        deemed extended for a First Extension Term equal to the
                        period set forth in the Notice of Intention to Exercise
                        Extension Option, which shall constitute the full
                        exercise by Lessee of the First Extension Option, and
                        (b) the parties shall proceed to determine Base Rent for
                        the First Extension Term in the manner provided in the
                        Rider. For the purposes of this Lease, the phrase
                        "Lessor will require the use of some or all of the
                        Leased Premises for its own business operations" shall
                        mean that some or all of the Leased Premises will be
                        occupied by Lessor and its employees, and not be leased
                        to or occupied by third parties.

                  4. If Lessee validly exercised the First Extension Option and
      Lessor did not timely give notice to Lessee pursuant to Section 2.B.3(ii)
      above to negate the exercise of the First Extension Option, then Lessee
      shall have the right to give a Notice of Intention to Exercise Extension
      Option in accordance with the provisions of this Section 2.B with respect
      to the Second Extension Option. If Lessee so gives a Notice of Intention
      to Exercise Extension Option in accordance with the provisions of this
      Section 2.B with respect to the Second Extension Option, then Lessee shall
      state in such Notice the desired duration of the Second Extension Term.
      Notwithstanding anything to the contrary herein contained, in the event
      that Lessor determines in good faith that Lessor will require the use of
      some or all of the Leased Premises for its own business operations after
      the expiration of the First Extension Term, Lessor shall have the right to
      negate Lessee's intention to exercise the Second Extension Option as set
      forth in such Notice of Intention to Exercise Extension Option (and
      thereby void the Second Extension Option and cause the Lease Term to
      expire at the end of the First Extension Term) by giving written notice of
      the same to Lessee within thirty (30) days after Lessor receives Lessee's
      Notice of Intention to Exercise Extension Option with respect to the
      Second Extension Option. If Lessor does not give such written notice of
      negation within such 30-day period, then (a) the Lease Term shall be
      deemed extended for a Second Extension Term equal to the period set forth
      in the Notice of Intention to Exercise Extension Option, which shall
      constitute the full exercise by Lessee of the Second Extension Option, and
      (b) the parties shall proceed to determine Base Rent for the Second
      Extension Term in the manner provided in the Rider.

            C. All the provisions of this Lease shall apply during each of the
      Extension Terms without any further action by Lessor or Lessee except that
      (i) Base Rent during each Extension Term shall be the "Fair Market Rent"
      determined in accordance with the Rider, and (ii) there shall in no event
      be more than two Extension Terms. As used in this Lease, (a) the term
      "LEASE TERM" shall mean the Initial Term as it may be extended by any
      Extension Term pursuant to an Extension Option validly exercised by Lessee
      in accordance with the provisions of Section 2.B, and (b) the term "STATED
      EXPIRATION DATE" shall mean the last day of the Initial Term (or, if the
      Lease Term has been extended

                                       4
<PAGE>

      pursuant to an Extension Option validly exercised by Lessee in accordance
      with the provisions of Section 2.B, the last day of the corresponding
      Extension Term).

SEC. 3. USE: The Leased Premises shall be used and occupied by Lessee solely for
general office and software development purposes (the "PERMITTED USES"), and for
no other use or purpose. In its use of the Leased Premises, Lessee shall, at its
sole cost and expense, comply with applicable "Legal Requirements" and
"Insurance Requirements" (as hereinafter defined).

SEC. 4. SECURITY DEPOSIT: Upon the execution of this Lease, Lessee shall deposit
with Lessor the sum of $21,826.00 (the "SECURITY DEPOSIT") as security for the
punctual performance of each and every obligation of Lessee under this Lease and
not as a prepayment of rent hereunder. Lessor may commingle the Security Deposit
with Lessor's other funds, and no interest shall be due thereon. Lessor may use
the Security Deposit to cure any default by Lessee and, in the event that Lessor
so applies all or any portion of the Security Deposit, Lessee shall pay to
Lessor, as Additional Rent, the amount so expended by Lessor within (i) ten (10)
days of notice given by Lessor in the case of amounts of more than $500 so
expended, or (ii) fifteen (15) days of notice given by Lessor in the case of
amounts of not more than $500 so expended, so that at all times (subject to the
grace periods hereinabove referenced) Lessor shall be entitled to hold the full
Security Deposit. Any failure of Lessee to restore any amount expended from the
Security Deposit within the applicable grace period specified in this Section
shall immediately constitute an Event of Default hereunder without the necessity
of any further notice or passage of time. Lessor shall assign the Security
Deposit to any successor or assign of Lessor under this Lease, and thereafter
Lessor shall have no further responsibility therefor. Within thirty (30) days
after the expiration or earlier termination of the Lease Term, Lessor shall
inspect the Leased Premises, make such deductions from the Security Deposit as
may be required to cure any defaults by Lessee hereunder, and, if Lessee is not
then in default hereunder, pay the balance of the Security Deposit to Lessee.

SEC. 5. BASE RENT: As part of the consideration of the execution of this Lease,
Lessee covenants and agrees and promises to pay base rent ("BASE RENT") for the
Initial Term described in Section 2.A above, at the rate of $261,912.00 per
year, payable in monthly installments of $21,826.00. Base Rent during an
Extension Term shall be the "Fair Market Rent" as defined in, and determined
pursuant to, the provisions of the Rider, and shall be payable in equal monthly
installments. Until Lessor gives Lessee other instructions, Base Rent and all
other amounts due under this Lease (collectively, "ADDITIONAL RENT") shall be
payable by Lessee to Lessor at the address of Lessor set forth below (or at such
other address as Lessor may from time to time specify in writing to Lessee):

            Hewlett-Packard Company
            c/o MacMunnis, Inc.
            1840 Oak Avenue
            Suite 300
            Evanston, Illinois 60201

      The Base Rent payable hereunder shall be payable in legal tender of the
United States of America, in advance, without demand and without offset,
abatement or deduction (except as

                                       5
<PAGE>

otherwise expressly provided in this Lease), commencing on September 15, 2004
(the "RENT COMMENCEMENT DATE") and continuing on the first day of each calendar
month during the Lease Term thereafter; provided, however that the first
installment of Base Rent shall be paid on September 15, 2004. Base Rent for the
period September 15 - 30, 2004, and for any partial month at the expiration or
earlier termination of this Lease, shall be pro-rated.

      Any Base Rent or Additional Rent (collectively, "RENT") not received by
the Lessor within five (5) days after the date on which the same is due
hereunder, shall be accompanied by a late charge of 5% of the amount of such
overdue installment of Rent.

      Notwithstanding anything to the contrary contained in this Lease, provided
that no "Event of Default" (as hereinafter defined) has occurred, Lessee shall
be entitled to a credit against each monthly installment of Base Rent due and
payable during the Initial Term in the amount of $2,598.33 per month, commencing
on the Rent Commencement Date. In the event that this Lease is terminated by
reason of the occurrence of an Event of Default hereunder, Lessee shall not be
entitled to such credit with respect to any period from and after the effective
date of such termination.

SEC. 6. ESCALATION RENT: For purposes of this Section:

            A. "OPERATIONAL EXPENSES" means all expenses, costs and
      disbursements of every kind and nature as determined in accordance with
      Lessor's accounting practices which the Lessor shall pay or become
      obligated to pay because of, or in connection with, the ownership,
      management, or operation of the Land, the Building, the Complex, or any
      other improvements located on the Land (collectively, the "PROPERTY"),
      including the following:

                  (i) Wages and salaries of all employees engaged in operation
            and maintenance of the Property, including taxes, insurance and
            benefits relating thereto, and fees for managing the Property;
            provided, however, that there shall be excluded from Operational
            Expenses for the purposes of this Lease any management fee paid by
            Lessor in excess of that typically paid by landlords in connection
            with the provision of a similar level of management services to
            comparable buildings in the vicinity of the Property in arm's length
            transactions between unaffiliated parties.

                  (ii) All supplies, materials and tools used in the operation,
            maintenance, repair and security of the Property and Property
            facilities (with the cost of any such supplies, materials and tools
            that are used at more than one of Lessor's properties being
            pro-rated among such properties).

                  (iii) Cost of all utilities, including gas, water,
            electricity, heating, air conditioning, and ventilation, for the
            Complex, including lighting the Property.

                  (iv) Cost of all janitorial, security, maintenance and service
            agreements, including window cleaning, snow removal and elevator
            maintenance.

                                       6
<PAGE>

                  (v) Cost of casualty and liability insurance applicable to the
            Property and Lessor's personal property used in connection
            therewith; provided, however, that if the cost of such insurance
            increases by reason of a specific use being made of portion(s) of
            the Property by Lessee, Lessor or another occupant (rather than by
            reason of increases in premiums for such insurance generally
            applicable to office/R&D use), then the amount of such increase
            attributable to such specific use shall be excluded from Operational
            Expenses and shall be charged to and payable by the party(ies) whose
            use has resulted in such increase in insurance costs.

                  (vi) Property Taxes. The term "PROPERTY TAXES" shall mean all
            ad valorem taxes, personal property taxes and all other taxes,
            assessments, use and occupancy taxes, transit taxes, water and sewer
            charges, excises, levies, license and permit fees and all other
            similar charges (but specifically excluding federal and state taxes
            on income), if any, whether federal, state, county or municipal, and
            whether they be taxing districts or authorities presently taxing the
            Property or any portion thereof, which are levied, assessed, or
            imposed upon or become due and payable in connection with, or a lien
            upon, the Land, the Building, the Complex, the Property, or
            facilities used in connection therewith and rentals or receipts
            therefrom, and all taxes of whatsoever nature that are imposed in
            substitution for or in lieu of any of the taxes, assessments, or
            other charges included in this definition of "Property Taxes."

                  (vii) Cost of repairs and general maintenance (excluding
            repairs and general maintenance paid by proceeds of insurance or by
            Lessee or other third parties, and alterations attributable solely
            to lessees of the Complex other than Lessee); provided, however,
            that for the purposes of this Lease (a) there shall be excluded from
            Operational Expenses repairs and general maintenance costs incurred
            by Lessor with respect solely to either Building 1 or Building 3 of
            the Complex and no portion of which is incurred with respect to
            Building 2 of the Complex (i.e., the Building in which the Leased
            Premises are located); and (b) with respect to costs incurred by
            Lessor pursuant to Section 8.A below that would be classified as
            "capital" under generally accepted accounting practices, such costs
            (together with interest thereon at an annual rate equal to the prime
            rate at the time of such expenditure plus two (2) percentage points)
            shall be amortized on a straight-line basis over an appropriate
            period reasonably selected by Lessor in accordance with generally
            accepted accounting practices, and there shall be included in
            Operational Expenses for each year on account thereof only the
            amount of such year's amortization amount.

            B. "PROPORTIONATE SHARE" shall be the figure obtained, as expressed
      in a percentage, by dividing the Rentable Area of the Leased Premises by
      the total Rentable Area of the Complex. For the purposes for this Section,
      the parties hereto agree that Lessee's Proportionate Share is 4.98%;
      provided, however, that with respect to Operational Expenses incurred with
      respect to less than all of the three buildings included

                                       7
<PAGE>

      in the Complex, Lessee's Proportionate Share thereof shall be the figure
      obtained, as expressed in a percentage, by dividing the Rentable Area of
      the Leased Premises by the total Rentable Area of the buildings of the
      Complex with respect to which such Operational Expenses were incurred.

            C. Lessee shall pay to Lessor as Additional Rent its Proportionate
      Share of all Operational Expenses in the following manner:

            (i) Lessee shall, for the portion of the Lease Term contained in
      calendar year 2004, pay to Lessor on account of Lessee's Proportionate
      Share of Operational Expenses the sum of $22,792.58 per month (computed on
      the basis of $7.31/sf/year x 37,416 sf), on the Rent Commencement Date and
      on the first day of each calendar month thereafter during calendar year
      2004 (with the first payment on account of Operational Expenses to be made
      on September 15, 2004 and to be in an amount equal to the pro-rated
      remainder for the month of September, 2004). Subsequent payments on
      account of Operational Expenses shall be due and payable on the first day
      of every calendar month during the term of this Lease. Lessee acknowledges
      that the amount set forth in the first sentence of this subsection (i) is
      only a good faith estimate of the amount of Lessee's Proportionate Share
      of Operational Expenses for calendar year 2004. Within a reasonable time
      after the commencement of each calendar year after 2004 (hereinafter
      called a "SUBSEQUENT YEAR"), Lessor shall notify Lessee in writing of the
      amount of Lessor's good faith estimate of Lessee's Proportionate Share of
      Operational Expenses for such Subsequent Year. In each Subsequent Year,
      Lessee shall pay to Lessor on the first day of each and every month during
      such Subsequent Year, a sum equal to one-twelfth of Lessor's estimate of
      Lessee's Proportionate Share of the Operational Expenses for such year;
      provided, however, that Lessor shall have the right from time to time to
      deliver updated written estimates to Lessee of the monthly installments to
      be paid by Lessee to Lessor on account of Lessee's Proportionate Share of
      Operational Expenses, in which case Lessee shall thereafter pay such
      revised amount to Lessor on the first day of each calendar month during
      the Lease Term. Lessee acknowledges that any such estimate provided by
      Lessor is only a good faith estimate of the amount of Lessee's
      Proportionate Share of Operational Expenses during such period; or in the
      alternative

            (ii) Within ninety (90) days after the end of any quarter or
      calendar year included (in whole or in part) within the Lease Term, Lessor
      shall give written notice to Lessee of the amount of such Additional Rent
      due from Lessee, and Lessee agrees to make payment of the Additional Rent
      due from Lessee to Lessor within ten (10) days following receipt of this
      notice.

            Within ninety (90) days after the end of calendar year 2004 Lessor
      shall give to Lessee a computation of Lessee's Proportionate Share of
      Operational Expenses for the period September 15 - December 31, 2004, and
      within ninety (90) days after the end of each Subsequent Year Lessor shall
      give to Lessee a computation of Lessee's Proportionate Share of
      Operational Expenses for such Subsequent Year, and within ten days
      following receipt of such computation Lessee shall pay to Lessor its
      Proportionate Share of Operational Expenses as shown on such computation
      less the payments made by

                                       8
<PAGE>

      Lessee to Lessor pursuant to this subparagraph (ii) during the preceding
      calendar year, or if Lessee has overpaid such Proportionate Share, the
      Lessor shall refund any overpayment or credit the same against Lessee's
      Proportionate Share of Operational Expenses for the next succeeding
      calendar year.

            If the Lease Term commences after the beginning of a calendar year
      or expires before the end of a calendar year, Lessee's Proportionate Share
      of Operational Expenses for such year shall be adjusted proportionately.
      Lessee's obligations under this Section 6.C shall survive the expiration
      or earlier termination of this Lease with respect to the portion of the
      calendar year occurring prior to the effective date of such expiration or
      earlier termination.

            The parties hereby agree that the amount to be paid by Lessee on
      account of electricity charges shall be separately determined in
      accordance with the provisions of Section 7 below, rather than included in
      the amount of Operational Expenses with respect to which Lessee is
      obligated to pay Lessee's Proportionate Share thereof. Notwithstanding the
      different method of calculation of the amount of Lessee's obligation with
      respect to electricity charges, references in this Lease to Lessee's
      obligation to pay "Lessee's Proportionate Share" of Operational Expenses
      shall be deemed to include the amount of Lessee's obligation with respect
      to electricity charges as determined in accordance with the provisions of
      Section 7 below.

            D. Upon Lessee's written request made within one hundred twenty
      (120) days after the end of a calendar year, Lessor shall provide to
      Lessee (i) copies of Property Tax bills for the prior calendar year, and
      (ii) copies of Lessor's cost center reports relating to the Complex for
      the prior calendar year. In the event that the materials so provided
      demonstrate that Lessee has made an overpayment of Operational Expenses
      for such calendar year, Lessor shall credit the amount of such overpayment
      to the next succeeding payment(s) of Base Rent and Additional Rent due
      hereunder (or, if this Lease has expired without Lessee then being in
      default hereunder, Lessor shall refund the amount of such overpayment to
      Lessee). Lessor shall have no obligation to provide any documentation to
      Lessee in response to any such request by Lessee other than those items
      expressly identified in this Paragraph D.

SEC. 7. SERVICES AND UTILITIES: Subject to the provisions of this Lease, Lessor
shall furnish to Lessee the following services during the Lease Term:

      (a) Janitorial service for Building standard items, which shall initially
      be in accordance with the standards set forth on Exhibit "C" attached
      hereto and made a part hereof.

      (b) Elevator service during normal business hours (with reduced passenger
      elevator service made available outside normal business hours).

      (c) Air conditioning and heating as reasonably required in Lessor's
      judgment for comfortable use and occupancy of the Leased Premises under
      normal office conditions or

                                       9
<PAGE>

      in accordance with applicable governmental regulations or guidelines;
      provided, however, that Lessor shall be obligated to furnish heat or air
      conditioning to the Leased Premises only at such times and on such days as
      are necessary, in Lessor's judgment, to meet the needs of the occupants of
      the Building; and Lessor shall not be required to furnish heat and air
      conditioning before 7:00 A.M. or after 7:00 P.M. on week days, or on
      weekends or holidays observed by Lessor.

      (d) Electricity for normal office use.

      (e) Tempered and refrigerated water at those points of supply provided for
      general use of other lessees in the Complex.

      The cost to Lessor of providing the above-referenced services shall be
included in Operational Expenses. No interruption or malfunction of any such
services shall render Lessor liable for damages or entitle Lessee to be relieved
from any of its obligations hereunder or grant Lessee any right of set-off or
recoupment. Unless expressly set forth in this Section, Lessor shall have no
obligation to provide any utility or service to the Leased Premises or the
Building.

      For purposes of calculating the amount of Lessee's payment obligation with
respect to electricity charges hereunder (the "ELECTRICITY CHARGE"), the base
amount (the "BASE ELECTRICITY CHARGE") of electricity charges to be paid by
Lessee shall be $3.18 per year per square foot of Rentable Area in the Leased
Premises ($118,982.88 per year), based upon the rate charged to Lessor as of the
date of this Lease by the company providing electricity to the Complex of
$.09/KwH (the "BASE ELECTRICITY RATE"). Subject to the provisions of the last
paragraph of Section 6.C above, the Electricity Charge shall be included in
Operational Expenses and shall be payable by Lessee to Lessor at the times and
in the manner provided in Section 6 above for the payment of Lessee's
Proportionate Share of Operational Expenses. If, from time to time, the rate
charged to Lessor for electricity service to the Complex by the company
providing the same (the "ELECTRICITY RATE") should increase above the Base
Electricity Rate, the Electricity Charge payable by Lessee hereunder shall
increase effective as of the date of such increase in the Electricity Rate,
which increased Electricity Charge shall be calculated by multiplying the Base
Electricity Charge by a fraction, the numerator of which is the most recent
increased Electricity Rate and the denominator of which is the Base Electricity
Rate. The parties acknowledge and agree that the Base Electricity Charge has
been established based on the assumption that Lessee will consume electricity in
the Leased Premises at a rate comparable to that of other occupants of
administrative/office space in comparable buildings in the vicinity of the
Property; if at any time Lessee's consumption should exceed this amount, Lessor
reserves the right to adjust the amount of the Electricity Rate accordingly.

      In addition, Lessee shall pay to Lessor, as Additional Rent, monthly as
billed, such charges as may be separately metered or submetered with respect to
the Leased Premises. At the request of Lessee, or upon Lessor's own initiative,
Lessor shall install a separate meter or submeter to measure the consumption of
one or more utilities in the Leased Premises. The cost of installation of such
meters or submeters shall be borne equally by Lessor and Lessee. From and after
the installation of any such separate meter or submeter, Lessee shall pay the
full amount for the utility so metered or submetered based on such meter or
submeter reading. In

                                       10
<PAGE>

lieu of requesting the installation of a meter or submeter, Lessee and Lessor
shall each have the right to cause the applicable utility provider to perform an
audit of the consumption of such provider's utility service within the Leased
Premises, at the sole expense of the party requesting such audit, the report of
which audit shall be shared with the other party to this Lease. If such audit
report demonstrates that the actual cost of such utility service as consumed
within the Leased Premises is less than or more than the amount paid by Lessee
based on its Proportionate Share of the total charge for such utility to the
Complex (or, in the case of electricity charges, if such audit report
demonstrates that the actual cost of electricity attributable to the Leased
Premises is less than or more than the then-current Electricity Charge as
determined in accordance with the provisions of this Section 7), Lessee and
Lessor shall make an equitable adjustment to the amount of such charge on a
prospective basis.

      In the event that Lessee desires air conditioning or heating at any time
or times other than as specified in subparagraph (c) of this Section 7 and
Lessor consents to the furnishing of such service at the time or times requested
by Lessee, Lessee shall be charged for such air conditioning or heating
furnished by Lessor during such periods at Lessor's then standard hourly rate
applicable during the periods when such services are furnished (which rate shall
reflect the actual cost to Lessor (including depreciation) of operating the air
conditioning or heating system after normal business hours). Such rate may be
changed by Lessor at any time and from time to time during the term of this
Lease as Lessor's cost of providing such service changes.

      Lessor shall have the right, exercisable upon reasonable advance notice to
Lessee (except in the case of an emergency, when only such notice as is
practicable under the circumstances need be given), to temporarily suspend any
utility service to the Leased Premises or the Building (or any portion thereof)
in order to facilitate the performance of construction, repair, restoration, or
alteration activities. Lessor shall make reasonable efforts to provide
substitute utility service for any service so suspended, but Lessor shall not be
liable to Lessee for any such suspension.

SEC. 8. MAINTENANCE, REPAIRS, ACCESS AND USE:

            A. Lessor shall, except as otherwise provided herein, provide for
      the maintenance and repair of the exterior walls, exterior windows, roof,
      structural elements, common areas, and Building systems equipment (other
      than equipment installed by any lessee), the cost of which shall be
      included in Operational Expenses. Unless otherwise expressly stipulated
      herein, Lessor shall not be required to make any improvements or perform
      any maintenance or repairs of any kind or character on the Leased Premises
      or the Building during the Lease Term except that Lessor shall make such
      modifications to the Building (including the Leased Premises) as may be
      required in order to comply with "Legal Requirements" (as hereinafter
      defined) applicable to general office use that first become effective
      after the date of this Lease, the cost of which modifications shall be
      included in Operational Expenses; provided, however, that if such
      newly-enacted Legal Requirements require any modifications to be made to
      the Leased Premises by reason of any use being made thereof other than
      general office use (without intending hereby to modify the definition of
      "Permitted Uses" set forth in Section 3 above), then such modifications
      shall be made by Lessor at the sole cost of Lessee. Lessee shall promptly
      give Lessor written notice of any damage in the Leased Premises or the
      Building

                                       11
<PAGE>

      requiring repair by Lessor, and Lessor shall not be liable for any damages
      resulting from the failure to make any such repair.

            B. Lessor, its officers, agents and representatives shall have the
      right to enter all parts of the Leased Premises at all reasonable hours to
      inspect, clean, make repairs, alterations and additions to the Building or
      Leased Premises which it may deem necessary or desirable, or to provide
      any service which it is obligated to furnish to Lessee, or to show the
      Leased Premises to prospective lessees during the last six (6) months of
      the Lease Term, and Lessee shall not be entitled to any abatement or
      reduction of Rent by reason thereof. Except in case of emergency, such
      entry shall be made upon at least twenty-four (24) hours' advance written
      notice to Lessee, and persons making such entry shall be accompanied by a
      representative of Lessee (unless Lessee fails to make such a
      representative available after Lessor timely gives such notice).
      Notwithstanding anything to the contrary contained in this Lease, in the
      event of an emergency, Lessor shall be permitted to enter upon the Leased
      Premises at any time and with only such notice (if any) to Lessee as is
      practicable under the circumstances.

            C. Lessor may at its option and at the cost and expense of Lessee,
      repair or replace any damage or injury done to the Building or any part
      thereof, caused by Lessee, Lessee's agents, employees, licensees, invitees
      or visitors; Lessee shall pay the cost thereof to Lessor as Additional
      Rent, on demand. Lessee further agrees to maintain and keep the interior
      of the Leased Premises, all alterations, additions or changes to the
      Leased Premises made by Lessee, and all equipment installed by Lessee in
      the Building, in good repair and condition (reasonable wear and tear
      excepted), at Lessee's expense. Lessee agrees not to commit or allow any
      waste or damage to be committed on any portion of the Leased Premises, and
      at the termination of this Lease, by lapse of time or otherwise, and to
      maintain the Leased Premises in as good condition as on date of first
      possession by Lessee, reasonable wear and tear alone excepted.

            D. Lessee will not: use, occupy or permit the use or occupancy of
      the Leased Premises for any purpose which is not permitted under "Legal
      Requirements" or "Insurance Requirements" (as hereinafter defined), or
      which may be dangerous to life, limb, or property; or permit the
      maintenance of any public or private nuisance; or do or permit any other
      thing which may disturb the quiet enjoyment of any other lessee of the
      Building; or keep any substance or carry on or permit any operation which
      might emit offensive odors or conditions into other portions of the
      Building; or use any apparatus which might make undue noise or set up
      vibrations in the Building; or permit anything to be done which would
      increase the fire and extended coverage insurance rate on the Building or
      contents, and if there is any increase in such rates by reason of acts of
      Lessee, then Lessee agrees to pay such increase promptly upon demand
      therefor by Lessor. Lessor will not use, occupy or permit the use or
      occupancy of any portion of the Complex then occupied by Lessor for its
      own business purposes, for any purpose which is not permitted under "Legal
      Requirements" or "Insurance Requirements" (as hereinafter defined). As
      used in this Lease, (i) the term "LEGAL REQUIREMENTS" means, collectively,
      those statutes, by-laws, codes, and ordinances (and all rules and
      regulations thereunder), licenses, permits, approvals, consents, executive
      orders and other administrative orders,

                                       12
<PAGE>

      judgments, decrees, and other judicial orders of or by any governmental
      authority which may at any time be applicable to the Land or the Building
      or to any condition or use thereof; and (ii) the term "INSURANCE
      REQUIREMENTS" means, collectively, the terms of any policy of insurance
      maintained by Lessor or Lessee and applicable to the Land or the Building
      or to the use of any portion of either, and all requirements of the issuer
      of any such policy and all orders, rules, regulations and other
      requirements of the National Board of Fire Underwriters, or any other body
      exercising similar functions.

SEC. 9. LIENS: Lessee shall not permit any mechanics' liens, materialmen's
liens, or other liens to be fixed or placed against the Leased Premises or the
Building and shall immediately discharge (either by payment or by filing of the
necessary bond) any such lien which is allegedly fixed or placed against the
Leased Premises or the Building or the Complex by any person or entity claiming
against Lessee or anyone claiming by or through Lessee.

SEC. 10. ALTERATIONS: All alterations, additions or changes to the Leased
Premises that Lessee desires to make shall require Lessor's prior written
consent, after submission to Lessor of plans and specifications showing the
alterations, additions or changes Lessee desires to make and any other
information reasonably requested by Lessor, which consent shall not be
unreasonably withheld, delayed or conditioned; provided, however, that Lessor's
consent shall not be required for painting or installing removable decorative
items (other than wall coverings and floor coverings). All alterations,
additions or changes shall: be made by bondable (unless otherwise approved by
Lessor) workers and contractors approved in advance in writing by Lessor, which
approval shall not be unreasonably withheld, delayed or conditioned (provided,
however, that with respect to alterations, additions or changes costing less
than $50,000 in the aggregate being performed at any one time, such workers and
contractors need not be bondable, but they shall still be subject to Lessor's
approval as previously provided); be performed in accordance with the plans and
specifications previously delivered to (and where required by this Lease, as
approved by) Lessor; be done in a manner so as to create the least possible
disruption or inconvenience to Lessor and to other lessees in the Building and
other workers and contractors performing work in the Building; and shall be done
in a good and workmanlike manner employing new construction materials at least
equal in quality to those of the existing Building, and in compliance with all
Legal Requirements, Insurance Requirements, "Rules and Regulations" (as
hereinafter defined), and the plans and specifications submitted to (and, where
required, approved by) the Lessor. Before commencing work, Lessee shall: secure
all necessary licenses, permits and approvals required by applicable Legal
Requirements, and furnish copies thereof to Lessor; at Lessor's request, provide
(or cause its contractor to provide) such bonds or other assurances satisfactory
to Lessor protecting Lessor against claims arising out of the furnishing of
labor and materials for the work; and carry or cause each contractor to carry
insurance with such coverages and in such amounts as Lessor may reasonably
require (all such insurance to be written in companies approved by Lessor and
Lessee shall deliver to Lessor certificates of all such insurance prior to the
commencement of such work). Within two (2) weeks after completion of any
alterations, additions or changes involving Building systems, hardwall
partitions, or structural changes, Lessee shall submit as-built drawings or
sketches of the completed work to Lessor.

                                       13
<PAGE>

      Lessee shall indemnify, defend and hold harmless Lessor and its officers,
directors, servants, agents, employees, contractors and invitees from and
against any and all liability, damage, penalties or judgments and from and
against any claims, actions, proceedings and expenses and costs in connection
therewith, including reasonable attorneys' fees, resulting from any alterations,
additions or improvements undertaken by or on behalf of Lessee, which
obligations shall survive the expiration or termination of this Lease with
respect to work performed by or on behalf of Lessee prior to such expiration or
termination.

      In the course of any work being performed by or on behalf of Lessee,
Lessee agrees to use labor compatible with that being employed by Lessor for
work in the Building or on the Property, and not to employ or permit the use of
any labor or otherwise take any action which might result in a labor dispute
involving personnel providing services in the Building or on the Property
pursuant to arrangements made by Lessor.

      Lessee shall not, without the specific written consent of Lessor and
Lessee's written agreement to pay additional costs resulting therefrom, install
any apparatus or device within the Leased Premises, including electronic data
processing machines, punch card machines or any other machines, that would (i)
weigh in excess of the machines normally used in comparable buildings in Nashua,
New Hampshire; or (ii) use electrical power in excess of that available to the
Leased Premises through the Building's existing electrical system; or (iii) in
any way increase the amount of electrical power, water, gas heating or air
conditioning used by Lessee in the Leased Premises to an amount in excess of the
amount usually furnished at such time for use by lessees in general office space
in other similar buildings in Nashua, New Hampshire.

SEC. 11. FURNITURE, FIXTURES AND PERSONAL PROPERTY: Lessee may remove its trade
fixtures, office supplies and movable office furniture and equipment provided:
(a) such removal is made prior to the expiration or earlier termination of this
Lease; and (b) Lessee promptly repairs all damage caused by such removal. All
other property at the Leased Premises and any alterations or additions to the
Leased Premises (including wall-to-wall carpeting, paneling or other wall
covering) shall become the property of Lessor and shall remain upon and be
surrendered with the Leased Premises as a part thereof at the expiration or
earlier termination of this Lease, Lessee hereby waiving all rights to any
payment or compensation therefor. If, however, Lessor so requests in writing at
the time of its approval of the plans therefor submitted by Lessee, Lessee
shall, prior to the expiration or earlier termination of this Lease, remove the
alterations, additions, fixtures, equipment and property placed or installed by
it in the Leased Premises as so requested by Lessor, and will repair any damage
caused by such removal. If any property which is required to be removed by
Lessee is not removed within the specified time, Lessor may, in addition to its
other rights and remedies, treat such property as abandoned, and may remove such
property and store the same at Lessee's expense, and Lessee shall reimburse
Lessor on demand for the expenses incurred in doing so.

SEC. 12. SUBLETTING AND ASSIGNING: Lessee shall not assign or otherwise transfer
this Lease or any interest herein, and shall not sublet the Leased Premises or
any portion thereof, or any right or privilege appurtenant thereto, or suffer or
permit any other party to occupy or use the Leased Premises or any portion
thereof, without the prior express written consent of Lessor, which consent may
be withheld by Lessor in its sole and absolute discretion. Lessee shall not

                                       14
<PAGE>

mortgage, pledge, hypothecate or otherwise encumber this Lease or any interest
herein. Lessee shall reimburse Lessor on demand, as Additional Rent, for all
reasonable expenses (including reasonable attorneys' fees) incurred by Lessor in
connection with any such assignment or subletting.

      If Lessee wishes to enter into an assignment or sublease with respect to
all or any portion of the Premises, Lessee shall deliver to Lessor (i) a true
and complete copy of the proposed instrument containing all of the terms and
conditions of such proposed assignment or sublease, (ii) a reasonably detailed
description of the business operations proposed to be conducted in the Leased
Premises by such assignee or sublessee, (iii) such financial information
concerning such proposed assignee or sublessee as Lessor may reasonably require,
(iv) schematic plans and specifications for any alterations which Lessee or such
assignee or sublessee seeks to make in connection with such proposed assignment
or sublease (with complete plans and specifications to be submitted and approved
prior to the commencement of any construction, as required under Section 10),
and (v) a written agreement, in form reasonably approved by Lessor, between such
proposed assignee or sublessee and Lessor in which such assignee or sublessee
agrees with Lessor to perform and observe all of the terms, covenants and
conditions of this Lease.

      Within thirty (30) days after receipt of the notice of the proposed
assignment or subletting and the other information required to be provided to
Lessor hereunder, Lessor shall notify Lessee in writing whether it consents to,
or withholds its consent to, the proposed assignment or subletting. Failure of
Lessor to so notify Lessee within such time period shall be deemed to constitute
Lessor's withholding its consent to such assignment or subletting. If Lessor
consents to such proposed assignment or subletting, then prior to such
assignment or sublease becoming effective (and as a condition precedent to the
effectiveness thereof), Lessee shall deliver to Lessor an original of the
fully-executed instrument of assignment or sublease and of the agreement
described in clause (v) above.

      Notwithstanding any such consent, the undersigned Lessee shall remain
jointly and severally liable (along with each approved assignee or sublessee,
who shall automatically become liable for all obligations of Lessee hereunder),
and Lessor shall be permitted to enforce the provisions of this Lease directly
against the undersigned Lessee and/or any assignee or sublessees without
proceeding in any way against any other person. If Lessee enters into an
assignment or sublease, then Lessee shall pay to Lessor as Additional Rent,
within ten (10) days of receipt by Lessee, fifty (50%) percent of the amount by
which (on a pro-rated basis in the case of a sublease covering less than all of
the Leased Premises) the consideration, rent, or other charges payable to Lessee
under such assignment or sublease exceed the sum of (i) the Rent to be paid
hereunder, and (ii) Lessee's actual out-of-pocket payments to third parties for
costs reasonably incurred in connection with such assignment or sublease
(including advertising, architect's and engineer's fees and expenses, brokerage
fees, legal fees, and fit-up costs) all amortized for these purposes over the
term of this Lease (in the case of an assignment) or over the term of the
sublease (in the case of a sublease). No consent to an assignment or sublease or
collection of rent by Lessor directly from any assignee or sublessee, or failure
so to collect such rent, shall be deemed a waiver of the provisions of this
Section, an acceptance of such assignee or sublessee as a lessee hereunder, or a
release of Lessee from direct and primary liability for the performance of all
of the covenants of this Lease. Lessor's consent to an assignment or sublease

                                       15
<PAGE>

shall not relieve Lessee from the obligation of obtaining the express consent of
Lessor to any modification of such assignment or sublease, or any further
assignment or sublease. In no event shall any party to an assignment or
sublease, whether or not consented to, further assign, sublease or otherwise
transfer all or any part of its interest in the Leased Premises without the
prior written consent of Lessor in each instance, which consent may be withheld
by Lessor in its sole and absolute discretion. Lessee shall not permit any other
person or entity to occupy the Leased Premises for any purpose, whether as
tenant at will or as tenant at sufferance or otherwise, or by license,
concession, or any other written or verbal arrangement, except in accordance
with the provisions of this Section.

      Notwithstanding the preceding provisions of this Section, without the
necessity of obtaining Lessor's prior written consent, Lessee shall be entitled
to assign this Lease to, or to enter into a sublease of all or any portion of
the Leased Premises to, (i) an entity into or with which Lessee is merged or
consolidated, or to which substantially all of Lessee's stock or assets are
transferred, or (ii) any entity which controls or is controlled by Lessee or is
under common control with Lessee, provided that in any such event: (a) the
successor to Lessee has a net worth, computed in accordance with generally
accepted accounting principles consistently applied, at least equal to the
greater of (1) the net worth of Lessee immediately prior to such merger,
consolidation or transfer, or (2) the net worth of the named Lessee on the date
of this Lease; (b) proof of such net worth satisfactory to Lessor shall have
been delivered to Lessor at least ten (10) days prior to the effective date of
such transaction, and (c) in the case of an assignment, the assignee agrees
directly with Lessor, by written instrument in form satisfactory to Lessor, to
be bound by all of the obligations of Lessee hereunder, including the
prohibition against further assignment and subletting.

SEC. 13. FIRE AND CASUALTY: If at any time during the Lease Term, the Leased
Premises or a substantial portion of the Building shall be damaged or destroyed
by fire or other casualty, Lessor shall have the right by giving Lessee written
notice thereof at any time within forty-five (45) days after the occurrence of
such damage or destruction to terminate this Lease. If Lessor does not so
terminate this Lease, then within such 45-day period Lessor shall deliver to
Lessee Lessor's good faith estimate of the time required to complete the repair
and restoration of the Leased Premises and the Building to substantially the
same condition in which they existed immediately prior to such damage or
destruction (subject to the exclusions hereinbelow described). If the time set
forth in such estimate exceeds nine (9) months from the date of the casualty,
then Lessee shall have the right to terminate this Lease by giving written
notice of termination to Lessor within thirty (30) days after Lessee's receipt
of such estimate. If this Lease is not terminated in accordance with the
preceding provisions of this Section, then this Lease shall continue in full
force and effect and Lessor shall proceed to repair and reconstruct the Leased
Premises and the Building to substantially the same condition in which they
existed immediately prior to such damage or destruction (subject to the
exclusions hereinbelow described), such repairs and restoration to be made
within a reasonable time thereafter, subject to delays arising from the
settlement of insurance proceeds, shortages of labor or material, acts of God,
or other conditions beyond Lessor's reasonable control. Lessor shall not be
required to rebuild, repair, or replace any part of Lessee's alterations,
furniture, furnishings or fixtures or equipment, and Lessee shall be obligated
to rebuild, repair and replace the same; provided, however, that Lessor shall be
responsible, at its expense, for replacing the furniture described in

                                       16
<PAGE>

Paragraph 4 of the Rider to the extent that the same is damaged or destroyed by
such casualty. Lessor's restoration obligation shall not require Lessor to spend
an amount in excess of the insurance proceeds actually received by Lessor and
allocable thereto. If Lessor fails to substantially complete such repair and
reconstruction within six (6) months after it commenced the same (subject to
delays as aforesaid), Lessee shall have the right to terminate this Lease by
giving written notice of termination to Lessor within thirty (30) days after the
expiration of such 6-month period. In the event that this Lease is terminated as
herein permitted, Lessor shall refund to Lessee the prepaid unaccrued Rent, if
any, less any sums then owing to Lessor by Lessee, or Lessee shall pay all Rent
and other sums owed to Lessor up to the date of such termination, as the case
may be. In any of the aforesaid circumstances, Rent shall abate proportionately
during the period to the extent that the Leased Premises are unfit for use by
Lessee in the ordinary conduct of its business. Notwithstanding the preceding
provisions of this Section, if the Leased Premises or the Building shall be
damaged by fire or other casualty resulting from the fault or negligence of
Lessee, or the agents, employees, licensees, or invitees of Lessee, then (i)
Lessee shall have no right to terminate this Lease, (ii) such damage shall be
repaired by and at the expense of Lessee under the direction and supervision of
Lessor, (iii) Lessee shall be responsible, at its expense, for replacing the
furniture described in Paragraph 4 of the Rider to the extent that the same is
damaged or destroyed by such casualty, and (iv) Rent shall continue without
abatement.

SEC. 14. CONDEMNATION: If there shall be taken during the Lease Term any part of
the Leased Premises or the Building, Lessor may elect to terminate this Lease or
to continue this Lease in effect. If Lessor elects to continue the Lease, the
Rent shall be reduced in proportion to the area of the Leased Premises so taken
and Lessor shall repair any damage to the remainder of the Leased Premises or
the Building resulting from such taking, but in no event shall Lessor be
required to spend thereon more than the amount of the award received by Lessor
by reason of such taking and allocable thereto. All sums awarded or agreed upon
between Lessor and the condemning authority for the taking of the interest of
Lessor or Lessee, whether as damages or as compensation, shall be the property
of Lessor. If, following any such condemnation, Lessee reasonably determines
that the portion of the Leased Premises or the Building remaining after such
condemnation is not sufficient to enable Lessee to continue the normal operation
of its business as then conducted in the Leased Premises, Lessee shall have the
right to terminate this Lease by giving written notice of termination to Lessor
within thirty (30) days after Lessee receives notice of such condemnation, which
notice shall be effective to terminate this Lease upon the date on which
physical possession of the Leased Premises (or such portion thereof) is taken by
the condemning authority. If this Lease is terminated under any provision of
this Section 14, Rent shall be payable up to the date that possession is taken
by the condemning authority and Lessor shall refund to Lessee any prepaid
unaccrued Rent less any sums then owing by Lessee to Lessor.

SEC. 15. EVENT OF DEFAULT AND LESSOR'S REMEDIES: Each of the following acts,
omissions or occurrences shall constitute an "EVENT OF DEFAULT" hereunder:

      A.    Failure by Lessee to timely pay any Base Rent, Additional Rent or
            other payments required to be paid hereunder, which failure
            continues for at least seven (7) days after Lessor gives written
            notice to Lessee of such failure (provided, however, that

                                       17
<PAGE>

            after Lessor has given two (2) notices to Lessee pursuant to this
            subsection within a 12-month period, failure to make any payment of
            Base Rent, Additional Rent or other payment within seven (7) days
            after the date on which the same is due hereunder shall constitute
            an immediate Event of Default without the necessity of Lessor giving
            any notice to Lessee).

      B.    Failure by Lessee to perform or observe any other covenant,
            condition or provision of this Lease to be performed or observed by
            Lessee, which failure is not cured within thirty (30) days after
            written notice from Lessor to Lessee of such failure.

      C.    The adjudication of Lessee to be bankrupt or insolvent or the filing
            or execution or occurrence of: a petition in bankruptcy or other
            insolvency proceeding by or against Lessee; or petition or answer
            seeking relief under any provision of the Bankruptcy Code or any
            similar acts; or an assignment for the benefit of creditors or a
            composition; or a petition or other proceeding by or against Lessee
            for the appointment of a trustee, receiver or liquidator of Lessee
            or any of Lessee's property or a proceeding by any governmental
            authority for the dissolution or liquidation of Lessee, unless any
            such involuntary receivership or proceeding against Lessee is
            dismissed or stayed within sixty (60) days thereafter.

      D.    Abandonment of the Leased Premises or any significant portion
            thereof.

            Upon or at any time following the occurrence of any Event of Default
      enumerated above, Lessor may, at its option, in addition to any and all
      other rights, remedies or recourses available to it hereunder or at law or
      in equity, do any one or more of the following:

      (a)   Terminate this Lease, in which event Lessee shall immediately
            surrender possession of the Leased Premises to Lessor.

      (b)   Enter upon and take possession of the Leased Premises and expel or
            remove Lessee and any other occupant therefrom, with or without
            having terminated the Lease.

      (c)   Alter locks and other security devices at the Leased Premises.

      (d)   Discontinue furnishing heat, air conditioning, cleaning and lighting
            services or any of them, until all arrears of rent have been paid in
            full.

      Exercise by Lessor of any one or more of the remedies herein granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Leased Premises by Lessee, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Lessor and Lessee.

                                       18
<PAGE>

      In the event Lessor elects to terminate this Lease by reason of an Event
of Default, then notwithstanding any such termination Lessee shall be liable for
and shall pay to Lessor the sum of all Base Rent, Additional Rent and other
indebtedness accrued to the date of such termination, plus, as damages, all
other sums required to be paid by Lessee to Lessor over the remainder of the
Lease Term (which shall expressly not include any unexercised Extension Term),
diminished by any net sums thereafter received by Lessor through reletting of
the Leased Premises during such period (after deducting expenses incurred by
Lessor as hereinafter provided). Such amounts shall be paid by Lessee to Lessor
in monthly installments on the first day of each calendar month during the
remainder of what would have been the Lease Term if this Lease had not been so
terminated. In no event shall Lessee be entitled to any excess of any net sums
obtained by reletting over and above the amounts required to be paid by Lessee
under this Lease. Actions to collect amounts due by Lessee as provided in this
paragraph may be brought from time to time on one or more occasions, without the
necessity of Lessor's waiting until the expiration of the original scheduled
Lease Term. In lieu of the foregoing damages, Lessor may, at any time after such
termination, elect to recover from Lessee as damages, an amount of money equal
to the amount (if any) by which (i) the total Base Rent and all other payments
due for the balance of the Lease Term, exceeds (ii) the fair market rental value
of the Leased Premises for the balance of the Lease Term as of the occurrence of
the Event of Default, such difference to be discounted at the rate of 6% per
annum to present value.

      In the case of an Event of Default, Lessee shall also be liable for and
shall pay to Lessor upon demand, in addition to any other sums provided to be
paid hereunder: brokers' fees incurred by Lessor in connection with reletting
all or any portion of the Leased Premises; the costs of removing and storing
Lessee's or other occupant's property found in the Leased Premises; the costs of
repairing or restoring the Leased Premises to its condition as of the
Commencement Date, reasonable wear and tear excepted; the cost of alterations
made to the Leased Premises in connection with such reletting; and all
reasonable expenses incurred by Lessor in enforcing Lessor's remedies, including
reasonable attorneys' fees. Past due Base Rent, Additional Rent and other past
due payments shall bear interest from their respective due dates until paid at
the rate of 6% per annum.

      In the event of termination or repossession of the Leased Premises upon
the occurrence of an Event of Default, Lessor shall not have any obligation to
relet or attempt to relet the Leased Premises or any portion thereof or to
collect any rental after any such reletting. In the event of any such reletting,
Lessor may relet the whole or any portion of the Leased Premises for any period,
to any Lessee, for any rental and for any use and purpose.

      In calculating the amounts for which Lessee is liable hereunder, it shall
be deemed that Operational Expenses will continue at the same level as during
the twelve (12) month period immediately preceding the termination of this Lease
or Lessee's right to possession of the Leased Premises.

      Lessor shall have the right to invoke any right and remedy allowed at law
or in equity or by statute or otherwise as though re-entry, summary proceedings,
and other remedies were not provided for in this Lease. Nothing in this Lease
shall require Lessor to elect any remedy for a default or Event of Default by
Lessee hereunder, and all rights herein provided shall be

                                       19
<PAGE>

cumulative with one another and with any other rights and remedies which Lessor
may have at law or in equity in the case of such a default or Event of Default.
Lessor's remedies under this Section shall survive the early termination of this
Lease.

SEC. 16. LIABILITY INSURANCE: During the Lease Term, Lessee shall maintain a
policy of comprehensive general liability insurance, including fire legal
liability, at Lessee's expense, insuring Lessor against liability arising out of
the ownership or maintenance of the Property. The initial amount of such
insurance shall be at least $5,000,000 combined single limit, and such policy
shall be issued by an insurer reasonably acceptable to Lessor. However, the
amount of such insurance shall not limit Lessee's liability nor relieve Lessee
of any obligation hereunder. The policy shall contain cross-liability
endorsements, if applicable. Such policy shall contain a provision which
prohibits cancellation or modification of the policy except upon thirty (30)
days prior written notice to Lessor. Lessee may discharge its obligations under
this Section by naming Lessor as an additional insured under a policy of
Comprehensive General Liability maintained by Lessee and containing the coverage
and provisions described in this Section. Lessee shall deliver a Certificate of
Insurance (or a renewal thereof) to Lessor prior to the Commencement Date and
thereafter not less than thirty (30) days prior to the expiration of any such
policy. Lessee shall, at Lessee's expense, maintain such other property and
liability insurance as Lessee deems necessary to protect Lessee. All insurance
policies shall contain a waiver of subrogation to the extent of insurance
proceeds payable.

SEC. 17. HOLD HARMLESS: TO THE FULLEST EXTENT PERMITTED BY LAW, LESSEE SHALL
DEFEND WITH COUNSEL REASONABLY ACCEPTABLE TO LESSOR, INDEMNIFY AND SAVE HARMLESS
LESSOR AND ITS MORTGAGEES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, SERVANTS,
AGENTS, CONTRACTORS, AND EMPLOYEES, FROM AND AGAINST ANY AND ALL LIABILITY,
DAMAGE, PENALTIES OR JUDGMENTS, AND FROM AND AGAINST ANY CLAIMS, ACTIONS,
PROCEEDINGS AND EXPENSES AND COSTS IN CONNECTION THEREWITH, INCLUDING REASONABLE
COUNSEL FEES, ARISING FROM (I) INJURY TO PERSONS OR DAMAGE TO PROPERTY SUSTAINED
BY ANYONE ON OR ABOUT THE LEASED PREMISES, UNLESS CAUSED BY THE NEGLIGENT OR
WILLFUL ACT OR OMISSION OF LESSOR OR ITS OFFICERS, DIRECTORS, SERVANTS, AGENTS,
OR EMPLOYEES, OR (II) ANY BREACH OF ANY PROVISION OF THIS LEASE BY LESSEE OR ANY
PERSON OR ENTITY CLAIMING BY, THROUGH OR UNDER LESSEE, OR THEIR RESPECTIVE
OFFICERS, DIRECTORS, SERVANTS, AGENTS, CUSTOMERS, CONTRACTORS, EMPLOYEES OR
INVITEES, OR (III) ANY NEGLIGENT OR WILLFUL ACT OR OMISSION OF LESSEE, ANY
PERSON OR ENTITY CLAIMING BY, THROUGH OR UNDER LESSEE, OR THEIR RESPECTIVE
OFFICERS, DIRECTORS, SERVANTS, AGENTS, CUSTOMERS, CONTRACTORS, EMPLOYEES OR
INVITEES. LESSEE SHALL NOT SETTLE OR COMPROMISE ANY SUIT OR ACTION WITHOUT
LESSOR'S PRIOR WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD
OR DELAYED.

TO THE FULLEST EXTENT PERMITTED BY LAW, LESSOR SHALL DEFEND WITH COUNSEL
REASONABLY ACCEPTABLE TO LESSEE, INDEMNIFY AND SAVE HARMLESS LESSEE AND ITS
OFFICERS, DIRECTORS, SERVANTS, AGENTS,

                                       20
<PAGE>

CONTRACTORS, AND EMPLOYEES FROM AND AGAINST ANY AND ALL LIABILITY, DAMAGE,
PENALTIES OR JUDGMENTS, AND FROM AND AGAINST ANY CLAIMS, ACTIONS, PROCEEDINGS
AND EXPENSES AND COSTS IN CONNECTION THEREWITH, INCLUDING REASONABLE COUNSEL
FEES, ARISING FROM (I) INJURY TO PERSONS OR DAMAGE TO PROPERTY SUSTAINED BY
ANYONE ON OR ABOUT THE LEASED PREMISES CAUSED BY LESSOR, OR (II) ANY BREACH OF
ANY PROVISION OF THIS LEASE BY LESSOR OR ITS OFFICERS, DIRECTORS, SERVANTS,
AGENTS, OR EMPLOYEES (BUT EXCLUDING OTHER TENANTS OR OCCUPANTS OF ANY PORTION OF
THE COMPLEX), OR (III) ANY NEGLIGENT OR WILLFUL ACT OR OMISSION OF LESSOR OR ITS
OFFICERS, DIRECTORS, SERVANTS, AGENTS, OR EMPLOYEES. LESSOR SHALL NOT SETTLE OR
COMPROMISE ANY SUIT OR ACTION WITHOUT LESSEE'S PRIOR WRITTEN CONSENT, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.

SEC. 18. INTENTIONALLY DELETED.

SEC. 19. NON-WAIVER: Neither acceptance of Rent by Lessor nor failure by Lessor
to complain of any action, non-action or default of Lessee, whether singular or
repetitive, shall constitute a waiver of any of Lessor's rights hereunder.
Waiver by Lessor of any right for any default of Lessee shall not constitute a
waiver of any right for either a subsequent default of the same obligation or
any other default. No act or thing done by Lessor or its agent, nor receipt by
Lessor of Lessee's keys to the Leased Premises, shall be deemed to be an
acceptance of surrender of the Leased Premises and no agreement to accept a
surrender of the Leased Premises shall be valid unless it is in writing and
signed by a duly authorized officer or agent of Lessor. No acceptance by Lessor
of any partial payment shall constitute an accord or satisfaction but shall only
be deemed a partial payment on account, nor shall any endorsement or statement
on any check or in any letter accompanying any check or payment be deemed an
accord and satisfaction. Time is of the essence with respect to the performance
and observance by Lessee and Lessor of every covenant, condition and provision
of this Lease in which time of performance is a factor.

SEC. 20. RULES AND REGULATION: Such reasonable rules and regulations applying to
all lessees in the Building as may be adopted by Lessor from time to time for
the safety, care and cleanliness of the Property and the preservation of good
order thereon, are hereby made a part hereof and Lessee agrees to comply with
all such rules and regulations (the "RULES AND REGULATIONS"). Lessor shall have
the right at all times to change such Rules and Regulations or to amend them in
any reasonable manner as may be deemed advisable by Lessor, all of which changes
and amendments will be sent by Lessor to Lessee in writing and shall be
thereafter carried out and observed by Lessee. The initial Rules and Regulations
applicable to the Property are attached hereto as Exhibit "B" and made a part of
this Lease.

SEC. 21. DEFAULT BY LESSOR: In the event of any default by Lessor hereunder,
Lessee's exclusive remedy shall be to bring an independent action for damages or
other relief, but prior to any such action Lessee shall give Lessor written
notice specifying such default with reasonable detail, and Lessor shall
thereupon have thirty (30) days in which to cure any such default. Unless Lessor
fails to cure any default after such notice, Lessee shall not have any remedy or
cause of

                                       21
<PAGE>

action by reason thereof. If such default cannot reasonably be cured within such
thirty (30) day period, the length of such period shall be extended for the
period reasonably required therefor if Lessor commences curing such default
within such thirty (30) day period and continues the curing thereof with
reasonable diligence and continuity. Except as otherwise expressly provided in
this Lease, Lessee shall have no rights to abatement, self-help, offset, or
deduction of or from Rent otherwise due and payable hereunder, nor any right to
terminate this Lease, by reason of any default by Lessor hereunder. All
obligations of Lessor hereunder shall be construed as covenants, not conditions,
and all such obligations shall be binding upon Lessor only during the period of
its ownership of the Building and not thereafter, (but upon the sale or
disposition of the Building, unless the purchasing party agrees to assume
liability for actions or defaults hereunder by the selling party occurring prior
to the closing of such sale or disposition, the selling party shall remain
liable to Lessee for actions and defaults hereunder by such selling party
occurring prior to the closing of such sale or disposition but only in an
amount, in the aggregate, up to the sale or disposition proceeds received by the
selling party). The term "Lessor" shall mean only the owner at the time of the
Building.

SEC. 22. GOVERNING LAW; SEVERABILITY: This Lease Agreement shall be construed in
accordance with the laws of the State of New Hampshire. If any clause or
provision of this Lease is illegal, invalid, or unenforceable, under present or
future laws effective during the Lease Term, then it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby,
and it is also the intention of both parties that in lieu of each clause or
provision that is illegal, invalid or unenforceable, there be added as a part of
this Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible that is legal, valid and
enforceable.

SEC. 23. SIGNS: No signs of any kind or nature, symbol or identifying mark shall
be put on the Building, in the halls, elevators, staircases, entrances, parking
areas or upon the doors or walls, whether plate glass or otherwise, of the
Leased Premises, nor elsewhere upon the Land or the Building. Lessor shall
install, at its sole cost and expense, (i) a ground monument sign-holder at a
location on the Land selected by Lessor, to which Lessee may affix its sign
panel, and (ii) other signage as reasonably agreed upon by Lessor and Lessee.

SEC. 24. SUCCESSORS AND ASSIGNS: Subject to the provisions of the section
entitled "Subletting and Assigning" hereof, this Lease and all the covenants
herein contained shall be binding upon the parties hereto, their respective
heirs, legal representatives, successors and assigns.

SEC. 25. SURRENDER OF LEASED PREMISES AND HOLDING OVER: On the last day of the
Lease Term, or upon the earlier termination of this Lease, Lessee shall
peaceably and quietly leave, surrender and yield up to Lessor the Leased
Premises, free of all claims by third parties, broom clean and in as good
condition as on date of possession by Lessee, ordinary wear and tear alone
excepted. Prior to the surrender of the Leased Premises to Lessor, Lessee at its
sole cost and expense shall remove all liens and other encumbrances that have
resulted from the acts or omissions of Lessee. If Lessee fails to do any of the
foregoing, Lessor may without notice, enter upon, re-enter, possess and
repossess itself thereof, by force, summary proceedings, ejectment, forcible
detainer, or otherwise and may dispossess and remove Lessee and all persons and

                                       22
<PAGE>

property from the Leased Premises; and Lessee hereby waives any and all damages
or claims for damages as a result thereof. Such dispossession and removal of
Lessee shall not constitute a waiver by Lessor of any claims by Lessor against
Lessee.

      In the event of holding over by Lessee after the expiration or termination
of this Lease, such hold over shall be as a tenant at sufferance only, and all
of the terms and provisions of this Lease shall be applicable during such
period, except that Lessee shall pay Lessor as rental for the period of such
hold over (i) for the first thirty (30) days of such hold over, an amount equal
to one hundred fifty (150%) percent of the Rent which would have been payable by
Lessee had such hold over period been a part of the Lease Term, and (ii)
thereafter, an amount equal to two hundred (200%) percent of the Rent which
would have been payable by Lessee had such hold over period been a part of the
Lease Term. In all events, Lessee will vacate the Leased Premises and deliver
the same to Lessor upon Lessee's receipt of notice from Lessor to vacate the
Leased Premises. The rental payable during such hold over period shall be
payable to Lessor on demand. In addition, Lessee shall indemnify and hold Lessor
harmless from and against any and all claims, liabilities, expenses (including
court costs and reasonable attorneys' fees), damages, penalties and judgments,
arising from Lessee's failure to vacate and redeliver the Leased Premises when
required to do so by the terms of this Lease (including claims of persons or
entities who have leased all or portions of the Leased Premises for occupancy
after Lessee is required to vacate the same). No holding over by Lessee, whether
with or without consent of Lessor, shall operate to extend this Lease.

SEC. 26. INTEREST: All amounts of money payable by Lessee to Lessor under this
Lease, if not paid when due, shall bear interest from the date due until paid at
the rate of the lesser of 6% per annum or the maximum legal rate.

SEC. 27. LIABILITY OF LESSOR: It is expressly understood and agreed that the
obligations of Lessor under this Lease shall be binding upon Lessor and its
successors and assigns and any future owner of the Building only with respect to
breaches occurring during its and their respective ownership of the Building. In
addition, Lessee specifically agrees to look solely to Lessor's interest in the
Leased Premises pursuant to this Lease, it being agreed that neither Lessor, nor
any successor or assign of Lessor, nor any future owner of the Building, nor any
of their respective officers, directors, employees or agents, shall ever be
personally liable for any such judgment.

SEC. 28. ENTIRE AGREEMENT, ETC.: This instrument and any attached rules and
regulations, riders, addenda or exhibits signed by the parties constitute the
entire agreement between Lessor and Lessee; no prior written or prior or
contemporaneous oral promises or representations shall be binding. This Lease
shall not be amended, changed or extended except by written instrument signed by
both parties hereto. Paragraph captions herein are for Lessor's and Lessee's
convenience only, and neither limit nor amplify the provisions of this
instrument. As used in this Lease, the term "including" in any form shall mean
"including, but not limited to,".

SEC. 29. NOTICES: Whenever in this Lease it shall be required or permitted that
notice or demand be given or served by either party to this Lease to or on the
other, such notice or demand

                                       23
<PAGE>

shall be given or served in writing and shall be delivered personally or by
certified or registered mail, postage prepaid, return receipt requested, or by
Federal Express or similar nationally-recognized overnight delivery service,
addressed as follows (or to such other address(es) as a party has notified the
other party by notice given in accordance with this Section):

<TABLE>
<S>                                    <C>
To the Lessor:

     Hewlett-Packard Company           with a copy to:     Frank Pedraza, Esq.
     3433 Broadway Street NE                               Corporate Counsel
     Suite 500                                             Law Department
     Minneapolis, MN 55413                                 Mail Stop 1050
     Attn: Bob Dickinson                                   Hewlett-Packard Company
           Leasing Coordinator                             3000 Hanover Street
                                                           Palo Alto, CA 94304

To the Lessee:

     Greg Porto                        with copies to:     SkillSoft Corporation
     Vice President, Administration                        107 Northeastern Boulevard
     SkillSoft Corporation                                 Nashua, NH 03062
     107 Northeastern Boulevard                            Attn: Chief Financial Officer
     Nashua, NH 03062

                                       and to:             Christopher Cole, Esq.
                                                           Sheehan Phinney Bass & Green PA
                                                           1000 Elm Street
                                                           Manchester, NH 03101
</TABLE>

Any notice provided for herein shall become effective and deemed received (1) if
sent by overnight delivery, the next business day, or (2) if sent by the United
States Postal Service, on the date on which it is delivered or first tendered
for delivery, as evidenced by the return receipt, or (3) if sent by hand
delivery, upon delivery to the addressee.

SEC. 30. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS: If Lessee fails to
perform any one or more of its obligations hereunder, then in addition to the
other rights, remedies and recourses available to Lessor hereunder, at law or in
equity, and without waiving any of such rights, remedies or recourses or the
existence of any default by Lessee, Lessor shall have the right (but not the
obligation) to perform such obligation of Lessee. Lessee shall reimburse Lessor
upon demand, as Additional Rent, for all expenses (including reasonable
attorneys' fees) incurred by Lessor in performing such obligations, together
with interest at the rate of 6% per annum thereon.

SEC. 31. ATTORNEYS' FEES: In case of default arising hereunder or holding over
or possession by Lessee after the expiration or termination of this Lease,
Lessee shall reimburse

                                       24
<PAGE>

Lessor for all reasonable expenses incurred by Lessor by reason thereof,
including reasonable attorneys' fees and related costs. In case of default
arising hereunder by Lessor, Lessor shall reimburse Lessee for all reasonable
expenses incurred by Lessee by reason thereof, including reasonable attorneys'
fees and related costs. In the event of litigation between the parties
hereunder, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and costs as may be set forth in an order entered by the court
hearing such matter.

SEC. 32. SUBORDINATION, ATTORNMENT AND CERTIFICATES: The Lessee agrees as
follows:

      A.    That this Lease and all of the rights and interest of the Lessee
            hereunder shall be subject and subordinate to any mortgage or deed
            of trust which may now or hereafter constitute a first or second
            lien upon the Building (hereinafter called a "PRIOR MORTGAGE", and
            the holder or beneficiary of any such Prior Mortgage being
            hereinafter called a "PRIOR MORTGAGEE") to the same extent as if the
            Prior Mortgage had been executed, delivered and recorded prior to
            the execution of this Lease; provided, however, that any Prior
            Mortgagee shall have the right at any time to elect, by written
            notice to Lessee, to make this Lease and the rights and interests of
            Lessee hereunder superior to such Prior Mortgage.

      B.    That Lessee will not subordinate this Lease to any mortgage, deed of
            trust or other instrument other than any Prior Mortgage, unless
            Lessee shall first obtain the written consent of any Prior
            Mortgagee.

      C.    That, notwithstanding the subordination of this Lease as referred to
            in paragraph A of this Section 32 or any subordination of this Lease
            which may exist by virtue of the execution of this Lease subsequent
            to any mortgage (as hereinafter defined), at the option of the
            holder of any mortgage, deed of trust or similar instruments, this
            Lease shall not terminate in the event of, or on account of,
            foreclosure or other action taken under any mortgage, deed of trust
            or similar instrument constituting a lien on the Building, including
            any Prior Mortgage (any such mortgage, deed of trust or other
            instrument being hereinafter called a "mortgage", and the holder or
            beneficiary of such being hereinafter called a "mortgagee"), but
            shall continue in effect as a Lease in accordance with all of the
            terms and provisions hereof between Lessee and any party, including
            such mortgagee, which shall be the transferee of title to the
            Building pursuant to foreclosure or other action for enforcement of
            any such mortgage, including deed in lieu of foreclosure
            (hereinafter called a "transferee"); and that the Lessee shall
            attorn to and be liable to and recognize such transferee (and its
            successors and assigns) as Lessee's Lessor for the balance of the
            term of this Lease upon and subject to all of the terms and
            provisions hereof. Such transferee shall not be bound by any act or
            omission of any prior Lessor under this Lease, or any offsets or
            defenses which Lessee may have against any such prior Lessor.

      D.    Any Prior Mortgagee to which the Lessor's interest in this Lease
            and/or any of the rents payable hereunder shall be assigned (and any
            transferee taking the title after

                                       25
<PAGE>

            foreclosure or other action under a Prior Mortgage) shall not be
            bound by any prepayment of any rent to any prior Lessor under this
            Lease (other than the rent and escalation payments for the current
            month), or any amendment, modification, or termination of this Lease
            or any waiver, consent or other action taken with respect to this
            Lease, unless such Prior Mortgagee or transferee (as the case may
            be) shall have given its written consent thereto. Furthermore,
            neither such assignment of this Lease and/or the rents payable
            hereunder, nor any actions by the Prior Mortgagee under such
            assignment shall be deemed an assumption of Lessor's obligations
            under this Lease.

      E.    That, after receiving written notice from a Prior Mortgagee of its
            mortgage interest and specifying an address or addresses for
            notices, Lessee shall, so long as such Prior Mortgage is
            outstanding, give to such Prior Mortgagee copies of any notices of
            default on the part of the Lessor under this Lease, and copies of
            such other notices as are required to be given to Lessor under this
            Lease. Such copies of notices shall be given concurrently with the
            giving of such notices to the Lessor and shall be sent certified
            mail, return receipt requested. In the case of any notices of
            default, such Prior Mortgagee shall be permitted to cure any such
            default within a period of 30 days after such Prior Mortgagee shall
            receive such copy of the notice of default or such further period of
            time as may be required for such Prior Mortgagee to cure such
            default acting with diligence (which period of time shall include a
            reasonable time to obtain possession of the Leased Premises if the
            Prior Mortgagee elects to do so), and, if so cured by such Prior
            Mortgagee, Lessee shall not have any such rights or remedies as
            would otherwise be available to it on account of such default.

      F.    That all of the foregoing provisions of paragraphs A through E
            inclusive of this Section 32 shall be self-operative and shall not
            require any further agreement or document by Lessee; and any Prior
            Mortgagee or other mortgagee or transferee may rely upon the
            applicable provisions of this section without any further agreement
            or document by Lessee. In confirmation of the same, however, Lessee
            shall, upon request, execute promptly any further agreements or
            documents which may be desired by any such Prior Mortgagee or other
            mortgagee or transferee as further confirmation and evidence of any
            or all of the agreements contained in said paragraphs A through E
            inclusive of this Section 32.

      G.    That the Lessee shall promptly, whenever requested by the Lessor,
            prospective purchaser, mortgagee, or prospective mortgagee, execute,
            acknowledge and deliver to the Lessor and such mortgagee or
            prospective mortgagee a certificate in writing as to the then status
            of this Lease and any matters pertaining to this Lease, including
            the effectiveness of this Lease at that time and the status of Rent
            hereunder and any defaults hereunder; and the Lessor and any
            mortgagee or prospective mortgagee shall be entitled to rely
            thereon.

                                       26
<PAGE>

      H.    Lessor hereby represents and warrants to Lessee that as of the date
            of this Lease there is no mortgage or deed of trust encumbering all
            or any portion of the Property.

SEC. 33. ACCESS: Lessor and Lessor's agents and contractors shall have the
right, but not the obligation, to enter upon the Leased Premises at all
reasonable times during ordinary business hours upon reasonable prior notice
(twenty-four hours' prior telephonic notice being deemed reasonable in ordinary
circumstances) and, in the case of an emergency at any time and without notice,
to examine the same, to perform any of Lessor's obligations hereunder, to make
any repairs or perform any of Lessee's other obligations hereunder that Lessor
deems necessary to perform, and to exhibit the Leased Premises to prospective
purchasers or lenders and, during the last twelve months of the Lease Term, to
prospective tenants. Any entry by Lessor onto the Leased Premises shall be made
in a manner reasonably calculated to minimize interference with Lessee's
business operations.

SEC. 34. BROKERS: Lessor and Lessee each hereby represents and warrants to the
other that it has dealt with no broker in connection with this transaction other
than Spaulding & Slye/Colliers and Monks & Co. (collectively, "Brokers"). Lessor
hereby agrees to defend and indemnify and hold harmless Lessee from and against
any claims for commissions or fees by any person or entity other than the
Brokers arising from a breach by Lessor of the foregoing representation and
warranty. Lessee hereby agrees to defend and indemnify and hold harmless Lessor
from and against any claims for commissions or fees by any person or entity
other than the Brokers arising from a breach by Lessee of the foregoing
representation and warranty. Lessor shall pay the Brokers as part of a separate
agreement.

SEC. 35. HAZARDOUS MATERIALS: Lessee shall not generate, store or use any
"Hazardous Materials" (as hereinafter defined) in or on the Leased Premises or
elsewhere on the Property, nor permit any person to do so on the Leased
Premises, except those customarily used in general offices, and then only in
compliance with all Legal Requirements, Insurance Requirements and applicable
industry standards. Lessee shall not dispose of Hazardous Materials from the
Leased Premises (or permit any person or entity to do so) to any other location
except a properly licensed disposal facility and then only in compliance with
all applicable Legal Requirements. Lessee shall not release or discharge, or
permit the release or discharge by persons or entities claiming by, through or
under Lessee, of any Hazardous Materials in or on the Leased Premises or
elsewhere on the Property. Lessor shall not be liable to Lessee or to anyone
claiming by, through or under Lessee, or to any other person or entity or
governmental authority whatsoever, in connection with the storage, generation,
use, disposal, transport, or release of Hazardous Materials by Lessee, or anyone
claiming by, through or under Lessee, or any of their respective officers,
directors, servants, employees, agents, contractors, or invitees, whether or not
such activities have been consented to by Lessor. Lessee shall not be liable to
Lessor or to anyone claiming by, through or under Lessor, or to any other person
or entity or governmental authority whatsoever, in connection with the storage,
generation, use, disposal, transport, or release of Hazardous Materials by
Lessor, or anyone claiming by, through or under Lessor (exclusive of Lessee and
those persons identified in the immediately preceding sentence), or any of their
respective officers, directors, servants, employees, agents, contractors, or
invitees, whether or not such activities have been consented to by Lessee.

                                       27
<PAGE>

      Lessee shall defend with counsel reasonably acceptable to Lessor, and
indemnify and hold harmless Lessor and the holder of any mortgage, and their
respective officers, directors, servants, employees, agents, contractors and
invitees, from and against any claim, expense, liability, demand, obligation,
action, proceeding or assertion of liability, and any damage, cost or loss
(including, without limitation, reasonable attorneys' fees, consultant's fees,
the cost of litigation, and any remediation and cleanup costs), arising from or
relating to (i) the storage, generation, use, disposal, transport, or release of
Hazardous Materials by Lessee, or anyone claiming by, through or under Lessee,
or any of their respective officers, directors, servants, employees, agents,
contractors or invitees, whether or not such activities have been consented to
by Lessor, or (ii) the storage, generation, use, disposal, transport or release
of Hazardous Materials in or on the Leased Premises or at the Complex during the
Lease Term, and in each case shall immediately discharge or cause to be
discharged any lien imposed upon the Leased Premises in connection with any such
claim. Lessee shall not settle or compromise any claim without Lessor's prior
written approval.

      Lessor shall defend Lessee, and indemnify and hold harmless Lessee and its
officers, directors, servants, employees, agents, contractors and invitees, from
and against any claim, expense, liability, demand, obligation, action,
proceeding or assertion of liability, and any damage, cost or loss (including,
without limitation, reasonable attorneys' fees, consultant's fees, the cost of
litigation, and any remediation and cleanup costs), arising from or relating to
the storage, generation, use, disposal, transport, or release of Hazardous
Materials at the Complex by Lessor or any of its officers, directors, servants,
employees, agents, contractors or invitees, whether or not such activities have
been consented to by Lessee, and in each case shall immediately discharge or
cause to be discharged any lien imposed upon the Leased Premises in connection
with any such claim.

      As used in this Section, the term "HAZARDOUS MATERIALS" shall mean,
collectively, any chemical, substance, waste, material, gas or emission which is
deemed hazardous, toxic, a pollutant, or a contaminant under any statute,
ordinance, by-law, rule, regulation, executive order or other administrative
order, judgment, decree, injunction or other judicial order of or by any
Governmental Authority, now or hereafter in effect, relating to pollution or
protection of human health or the environment.

      The provisions of this Section shall survive the expiration or termination
of this Lease.

SEC. 36. MISCELLANEOUS:

      A.    Neither diminution nor shutting off of light or air or both nor any
            other effect on the Leased Premises by any structure erected or
            condition now or hereafter existing on lands adjacent to the
            Building shall affect this Lease, abate Rent, or otherwise impose
            any liability on Lessor.

      B.    Neither Lessor nor Lessee shall be in default hereunder if such
            party is unable to fulfill or is delayed in fulfilling any of its
            obligations hereunder, including any obligations to supply any
            service hereunder, or any obligation to make repairs or

                                       28
<PAGE>

                  replacements hereunder, by reason of fire or other casualty,
                  strikes or labor troubles, governmental preemption in
                  connection with a national emergency, shortage of supplies or
                  materials, or by reason of any rule, order or regulation of
                  any governmental authority, or by reason of the condition of
                  supply and demand affected by war or other emergency, or any
                  other cause beyond its control. Such inability or delay by in
                  fulfilling any of Lessor's or Lessee's obligations hereunder
                  shall not affect, impair or excuse such party from the
                  performance of any of the terms, covenants, conditions,
                  limitations, provisions or agreements hereunder on its part to
                  be performed, nor result in any abatement of Rent payable
                  hereunder, except as otherwise provided hereunder.

            C.    Neither Lessor nor (except as otherwise provided in Section
                  25) Lessee shall in any event be liable to the other party or
                  to any person or entity whatsoever for consequential,
                  indirect, special, or punitive damages in any way related to
                  this Lease or the Leased Premises.

            D.    Lessee understands that this Lease shall not be binding upon
                  the Lessor until the Lease is signed by Lessee and by Lessor,
                  and a fully-executed original Lease is delivered to Lessee.

SEC. 37. RIDER: The Rider attached hereto is incorporated by reference and made
a part of this Lease.

                                       29
<PAGE>

      IN WITNESS WHEREOF, the Lessor and Lessee, acting herein by duly
authorized individuals, have caused these presents to be executed under seal in
multiple counterparts, each of which shall have the force and effect of an
original, as of the day first above written.

            LESSOR:
            HEWLETT-PACKARD COMPANY

            By:    /s/ illegible
                 -------------------------------
            Its: Manager, Real Estate Americas Acquisitions and Dispositions

            LESSEE:
            SKILLSOFT CORPORATION

            By:    /s/ Tom McDonald
                 -------------------------------
            Its: Chief Financial Officer

                                       30
<PAGE>

                                   EXHIBIT "A"

                             [DIAGRAM OF FLOOR PLAN]

                                       31
<PAGE>

                                   EXHIBIT "B"

                             "RULES AND REGULATIONS"

      1. The sidewalks, halls, passages, exits, entrances, elevators, lobbies,
and stairways of the Building shall not be obstructed by any of the lessees or
used by them for any purpose other than for ingress to and egress from their
respective premises. The halls, passages, exits, entrances, elevators, lobbies
and stairways are not for the use of the general public, and Lessor shall in all
cases retain the right to control and prevent access thereto of all persons
whose presence in the judgment of Lessor shall be prejudicial to the safety,
character, reputation and interests of the Building and its lessees, provided
that nothing herein contained shall be constructed to prevent such access to
persons with whom any lessee normally deals in the ordinary course of his
business, unless such persons are engaged in illegal activities. No lessee and
no employee, agent or invitee of any lessee shall go upon the roof of the
Building unless supervised for service on a permitted rooftop antenna.

      2. No sign, placard, picture, name, advertisement or notice, visible from
the exterior of any lessee's premises shall be inscribed, painted, affixed or
otherwise displayed by any lessee on any part of the Building without the prior
written consent of Lessor, and Lessor shall have the right to remove any such
sign, placard, picture, name, advertisement or notice at such lessee's expense
and without notice to lessee. If Lessor shall have given such consent at any
time, such consent shall be deemed to relate only to the particular sign,
placard, picture, name, advertisement or notice so consented to by Lessor and
shall not be construed as dispensing with the necessity of obtaining the
specific written consent of Lessor with respect to each and every other sign,
placard, picture, name, advertisement or notice. Lessor will adopt and furnish
to Lessee uniform rules and regulations relating to signs on the office floors,
which shall be applicable to all lessees occupying space on the office floors of
the Building, and Lessee agrees to conform to such rules and regulations. All
approved signs or lettering on doors shall be printed, painted, affixed or
inscribed at the expense of Lessee by a person approved by Lessor.

      3. Lessor will furnish each lessee with two keys free of charge. Lessor
may make a reasonable charge for any additional keys. No Lessee shall have any
keys made. No Lessee shall alter any lock or install a new or additional lock or
any bolt or security system on any door of his premises without prior written
consent of Lessor. If Lessor shall give its consent, the Lessee shall in each
case furnish Lessor with a key for any such lock or access through such security
system. Each Lessee upon the termination of his tenancy, shall deliver to Lessor
all keys to doors in the Building which shall have been furnished to such
Lessee.

      4. No Lessee shall use or keep in, or about the Leased Premises or the
Building any kerosene, gasoline or inflammable or combustible fluid or material,
or use any method of heating or air conditioning other than that supplied by
Lessor. No lessee shall use, keep or permit to be used or kept any foul or
noxious gas or substance in, on, or about the Leased Premises or the Building,
or permit or suffer the Leased Premises to be occupied or used in a manner
offensive or objectionable to Lessor or other occupants of the Building by
reason of noise, odors and/or vibrations, or interfere in any way with other
lessees or those having business therein.

                                       32
<PAGE>

      5. The Leased Premises shall not be used for the storage of merchandise or
for loading, and no cooking shall be done or permitted by any lessee on the
premises, except that the preparation of coffee, tea, hot chocolate and similar
items for lessee and its employees shall be permitted.

      6. No animals, or birds, or bicycles shall be allowed in the offices,
halls, corridors, elevators or elsewhere in the Building.

      7. No lessee shall employ any person or persons other than the janitor of
Lessor for the purpose of cleaning the Leased Premises, unless otherwise agreed
to by Lessor in writing. Except with the written consent of Lessor, no person or
persons other than those approved by Lessor shall be permitted to enter the
building for the purpose of cleaning the same. No lessee shall cause any
unnecessary labor by reason of such lessee's carelessness or indifference in the
preservation of good order and cleanliness. Lessor shall in no way be
responsible to any lessee for any loss of property on the Leased Premises or the
Building, however occurring, or for any damage done to the furniture or other
effects of any lessee by the janitor or any other employee or any other person.
Janitor service shall include ordinary dusting and cleaning by the janitor
assigned to such work and shall not include shampooing of carpets or rugs or
moving furniture or other special services. Janitor services will not be
furnished to areas occupied after 6:30 P.M.

      8. No lessee shall obtain for use in the Leased Premises ice, drinking
water, food, beverage, towel or other similar services, or accept barbering or
bootblacking services in the Leased Premises or the Building, except from
persons authorized by Lessor, and at hours and under regulations fixed by
Lessor.

      9. Each lessee shall see that the doors of its Leased Premises are closed
and securely locked and must observe strict care and caution that all water
faucets, water apparatus and utilities are shut off before lessee or lessee's
employees leave the Leased Premises, so as to prevent waste or damage, and for
any default or carelessness lessee shall indemnify and hold Lessor harmless from
all injuries sustained by other Lessees or occupants of the Building or Lessor.
On multiple-tenancy floors, all lessees shall keep the door or doors to the
Building corridors closed at all times except for ingress or egress.

      10. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in or
used in connection with any window of the Building without the prior written
consent of Lessor. In any event, with the prior written consent of Lessor, said
above items shall be installed inboard of Lessor's standard window covering and
shall in no way be visible from the exterior of the Building.

      11. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, no foreign
substance of any kind whatsoever shall be thrown therein, and the expense of any
breakage, stopping or damage resulting from the violation of this rule shall be
borne by the Lessee who, or whose employees, agents or invitees, shall have
caused it.

                                       33
<PAGE>

      12. Except with the prior written consent of Lessor, no lessee shall sell,
or permit the sale of newspapers, magazines, periodicals, theater tickets or any
other goods or merchandise in or on the Leased Premises or in the Building, nor
shall any lessee carry on, or permit or allow any employee or other person to
carry on, the business of stenography, typewriting or any similar business in or
from the Leased Premises for the services or accommodation of occupants of any
other portion of the Building.

      13. No lessee shall install any radio, television or telecommunications
antenna, or other device on the roof or exterior walls of the Building or
anywhere on the land, except as specifically otherwise agreed in writing by
Lessor.

      14. There shall not be used in any space, or in the public halls of the
Building, either by any lessee or others, any hand trucks except those equipped
with rubber tires and side guards. No other vehicles of any kind shall be
brought by any lessee, its employees, agents or invitees into the Building or
kept in or about his Leased Premises.

      15. Each lessee shall store all his trash and garbage within its Leased
Premises. No material shall be placed in the trash or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the City of
Nashua, without being in violation of any law or ordinance governing such
disposal. All garbage and refuse disposal shall be made only through entryways
and elevators provided for such purposes and at such times as Lessor shall
reasonably designate.

      16. Canvassing, soliciting, and peddling in the Building are prohibited,
and each lessee shall cooperate to prevent the same.

      17. The requirements of Lessee will be attended to only upon application
at the office of the Building. Employees of Lessor shall not perform any work or
do anything outside of their regular duties unless under special instructions
from Lessor.

      18. A Building bulletin board will be provided for the display of the name
and location of lessee only, and Lessor reserves the right to exclude any other
names therefrom. Any additional name which lessee shall desire to place upon
said bulletin board must first be approved by Lessor, and, if so approved, a
charge will be made therefor.

      19. Lessor may waive any one or more of these Rules and Regulations for
the benefit or any particular lessee or lessees, but no such waiver by Lessor
shall be construed as a waiver of such Rules and Regulation in favor of any
lessees or lessees, nor prevent Lessor from hereafter enforcing any such Rules
and Regulations against any or all of the lessees of the Building.

      20. These Rules and Regulations are in addition to and shall not be
construed to in any way modify, alter or amend, in whole or in part, the terms,
covenants, agreements and conditions of any Lease of Leased Premises in the
Building.

      21. Lessee will refer all contractors, contractors' representatives and
installation technicians rendering any service for Lessee, to Lessor for
Lessor's supervision and/or approval

                                       34
<PAGE>

before performance of any such contractual services. This shall apply to all
work performed in the Building including, but not limited to, installation of
telephone, telegraph equipment, electrical devices and attachments, and
installation of any and every nature affecting floor, walls, woodwork, trim,
window, ceilings, equipment or any other physical portion of the Building. None
of this work will be done by Lessee without Lessor's written approval first had
and obtained.

      22. Movement in or out of the Building of furniture or office equipment,
or dispatch or receipt by Lessee of any merchandise or materials which requires
the use of elevators or stairways, or movement through the Building entrances or
lobby shall be restricted to the hours reasonably designated by Lessor from time
to time, all such movement shall be directed by Lessor and in a manner agreed
upon between Lessee and Lessor by prearrangement before performance. Such
prearrangement initiated by Lessee shall include determination by Lessor and
subject to its decision and control of the time, method, and routing of
movement, limitations imposed by safety or other concerns which may prohibit any
article, equipment or any other item from being brought into the Building.
Unless caused by Lessor's negligence, Lessee expressly assumes all risk of
damage to any and all articles so moved, as well as injury to any person or
persons or the public engaged or not engaged in such movement, including
equipment, property, and personnel of Lessor if damaged or injured as a result
of any acts in connection with carrying out this service for Lessee from the
time of entering property to completion of the work; and Lessor shall not be
liable for the act or acts of any person or persons so engaged in, or any damage
or loss to any property of persons resulting directly or indirectly from any act
in connection with such service performed by or for Lessee.

      23. Lessor will not be responsible for any lost or stolen personal
property, equipment, money, or jewelry from Lessee's area or public rooms
regardless of whether such loss occurs when the area is locked against entry or
not.

      24. Lessor may permit entrance to Lessee's offices by use of pass keys
controlled by Lessor or employees, contractors, or service personnel supervised
or employed by Lessor.

      25. None of the entries, passages, doors, elevators, elevator doors,
hallways, or stairways shall be blocked or obstructed, or any rubbish, litter,
trash, or material of any nature placed, emptied or thrown into these areas, or
such areas be used at any time except for access or egress by Lessee, Lessee's
agents, employees, or invitees.

      26. All Hewlett-Packard owned facilities are "Smoke Free", therefore
smoking of all tobacco products is prohibited anywhere inside the facility by
Lessee and their guests. Areas are designated outside of the building for
smoking and receptacles are provided for smoking waste.

      27. Lessor reserves the right to make such other and reasonable rules and
regulations and to modify these Rules and Regulations as in its judgment may
from time to time be needed for the safety, care and cleanliness of the Leased
Premises or the Building, and for the preservation of good order therein.

                                       35
<PAGE>

      28. Lessee will not conduct itself in any manner, which is inconsistent
with the character of the Building as a first-quality building or which will
impair the comfort and convenience of other Lessees in the building.

      Lessor desires to maintain high standards of environment, comfort and
convenience for its Lessees. It will be appreciated if any undesirable
conditions or lack of courtesy or attention by its employees is reported
directly to Lessor.

                                       36
<PAGE>

                                   EXHIBIT "C"

                              "CLEANING STANDARDS"

                                       37
<PAGE>

                REQUEST FOR PROPOSAL - GENERAL CLEANING SERVICES
                             DUE: SEPTEMBER 9, 2002

APPENDIX B - SERVICE SPECIFICATIONS & SUPPORTING DEFINITIONS

1. GENERAL CLEANING PERFORMANCE SPECIFICATIONS

<TABLE>
<CAPTION>
PERFORMANCE
CATEGORIES                               ZONE B
------------------------------------------------------
<S>                               <C>
Space
Categories                        Office

                                  Primary Circulation

                                  Computer Rooms

                                  Cafe & Amenities

                                  Labs/Test

                                  Manufacturing/Repair

                                  Rest Rooms
</TABLE>

HEWLETT-PACKARD CONFIDENTIAL

<PAGE>

                REQUEST FOR PROPOSAL - GENERAL CLEANING SERVICES
                              DUE: SEPTEMBER 9, 2002

<TABLE>
<CAPTION>
PERFORMANCE
CATEGORIES                                     ZONE B
-------------------------------------------------------------------
<S>                               <C>
Floors                            -   Carpets will be substantially
                                      clean with minor controllable
                                      spots, stains, dirt, and
                                      debris, consistent
                                      with a quality working
                                      environment. All frays and
                                      uncontrollable spots or
                                      stains that cannot be removed
                                      will be reported to Site
                                      Services.

                                  -   Tile, including grout
                                      lines, and concrete floors
                                      will be substantially clean
                                      with minor controllable
                                      spots, stains, dirt,
                                      scuff marks and debris,
                                      consistent with a quality
                                      working environment; high
                                      gloss shine will be applied
                                      in specified cases only

                                  -   Mats will be substantially
                                      free of spots, stains, dirt,
                                      debris and frays

                                  REQUIRED FREQUENCIES - CAFETERIA:

                                  Vacuum - Nightly
                                  Spot Clean - Nightly(3)
                                  Dry Mop - Nightly
                                  Damp Mop - Nightly
                                  Spray Buff - Weekly

Natural                           -   Natural wood surfaces
Wood                                  will be substantially clean
Surfaces                              with minor controllable
                                      spots, stains, dirt,
                                      dust, and debris, and
                                      oiled to prevent drying
                                      (office furniture is
                                      excluded from the oiling
                                      process), consistent with a
                                      quality working environment

Other                             -   Doors, door frames, door
Surfaces                              glass, baseboards, partitions,
                                      walls, acoustic panels,
                                      window coverings, cabinetry,
                                      handmils, flat surfaces and
                                      ledges will be substantially
                                      clean with minor controllable
                                      spots, stains, dirt, dust and
                                      debris, consistent with a
                                      quality working environment
</TABLE>

HEWLETT-PACKARD CONFIDENTIAL

<PAGE>

                REQUEST FOR PROPOSAL - GENERAL CLEANING SERVICES
                             DUE: SEPTEMBER 9, 2002

<TABLE>
<CAPTION>
PERFORMANCE
CATEGORIES                                     ZONE B
-------------------------------------------------------------------
<S>                               <C>
Furniture                         -   Furniture will be
                                      substantially clean with
                                      minor dirt, dust and
                                      debris, consistent with a
                                      quality working environment,
                                      and arranged per original
                                      set-up. Note: spots on chairs
                                      in offices/cubicles will be
                                      removed on an as requested
                                      basis only. Furniture (desk
                                      tops & flat surfaces) in
                                      offices/cubicles that has
                                      personal and/or work related
                                      items on it, are not included
                                      in the General Cleaning
                                      Performance Specification
                                      Requirements

                                  -   Cafeteria and break area
                                      chairs may require more
                                      intense cleaning/laundering.

Interior                          -   Interior windows will be
Windows (2)                           substantially clean with
                                      minor spots, stains,
                                      dirt, dust, debris,
                                      smudges, prints and streaks,
                                      consistent with a quality
                                      working environment

Trash                             -   Trash receptacles and
Receptacles                           trash trucks will be emptied
(Interior and                         of waste with a clean liner
Exterior)                             (where applicable), and
                                      will have minor controllable
                                      spots and stains, inside
                                      and out

                                  -   Trash receptacles and
                                      trash trucks will be kept
                                      odor free

                                  -   Trash receptacles to be
                                      replaced in original position
                                      within work area after being
                                      emptied

                                  REQUIRED FREQUENCIES-
                                  OFFICE/CUBICLES:

                                  Desk-side trash/recycle
                                  receptacles - 2/week
</TABLE>

HEWLETT-PACKARD CONFIDENTIAL

<PAGE>

                REQUEST FOR PROPOSAL - GENERAL CLEANING SERVICES
                             DUE: SEPTEMBER 9, 2002

<TABLE>
<CAPTION>
PERFORMANCE
CATEGORIES                                      ZONE B
---------------------------------------------------------------------
<S>                               <C>
Equipment                         -   Common area telephones
                                      will be clean and sanitized

                                  -   Chalk / whiteboards will be
                                      free of controllable spots,
                                      stains, dirt, and dust
                                      unless marked otherwise
                                      (e.g., "save", "do not crase").
                                      Note: this requirement does
                                      not pertain to office/ cubicle
                                      chalk/whiteboards

                                  -   Cigarette urns and ashtrays
                                      in smoking areas will have
                                      silica sand and be free of
                                      an accumulation of cigarette
                                      butts (< 15-20)

                                  -   Microwaves and refrigerators
                                      will be clean and sanitized

                                  -   Note: fitness equipment
                                      will be cleaned & sanitized
                                      by the fitness supplier
                                      and will not require
                                      services by the custodial
                                      supplier. However, the
                                      custodial supplier is
                                      responsible for providing the
                                      cleaning supplies, including
                                      the disinfectant and paper
                                      towels

Other                             -   Elevator tracks and call
                                      panels will be substantially
                                      clean with minor spots,
                                      stains, dirt and debris,
                                      consistent with a quality
                                      working environment

                                  -   Vents and diffuser outlets
                                      and immediate surrounding
                                      ceiling tiles up to 12' in
                                      height, will be
                                      substantially clean with
                                      minor built-up dust and
                                      debris, consistent with a
                                      quality working environment

                                  -   All light fixtures up to 12'
                                      in height, except explosion
                                      encased fixtures, will be
                                      substantially clean with
                                      minor built-up dust and
                                      debris, consistent with a
                                      quality working environment

                                  -   All damaged items will be
                                      reported to Site Services

                                  -   Coffee station cabinetry,
                                      countertops and sinks
                                      will be substantially clean
                                      with minor controllable
                                      spots, stains, dirt and
                                      debris. Related  trash
                                      receptacles will be emptied
                                      of waste with a clean liner
                                      as needed

                                  -   Water fountains and hot
                                      water dispensers will be
                                      sanitized and free of built
                                      up hard water/lime deposits;
                                      bright work will be
                                      polished. Note: bottled
                                      water dispensers are not
                                      included in performance
                                      requirements
</TABLE>

HEWLETT-PACKARD CONFIDENTIAL
<PAGE>

                REQUEST FOR PROPOSAL - GENERAL CLEANING SERVICES
                             DUE: SEPTEMBER 9, 2002

<TABLE>
<CAPTION>
PERFORMANCE
CATEGORIES                                     ZONE B
-------------------------------------------------------------------
<S>                               <C>
Restrooms &                       -   Floors and counter tops will
Showers -                             be cleaned and sanitized
Additional
Requirements                      -   Toilets and urinals will be
                                      cleaned and sanitized

                                  -   Partitions and walls will be
                                      sanitized and substantially
                                      clean with minor controllable
                                      spots, stains, dirt, dust,
                                      debris, smudges, and free of
                                      all removable graffiti; all
                                      graffiti will be reported to
                                      Site Services

                                  -   Mirrors will be substantially
                                      clean with minor spots and
                                      streaks

                                  -   Vitreous fixtures will be
                                      clean and sanitized

                                  -   Lockers will be substantially
                                      clean with minor controllable
                                      spots, stains, dirt, dust,
                                      debris, smudges and
                                      fingerprints

                                  -   Shower curtains and glass
                                      doors will be sanitized and
                                      free of stains, smudges, and
                                      mildew; shower curtains will
                                      be replaced when torn or
                                      stained

                                  -   Drains will be free of hair;
                                      an adequate level of water
                                      will be maintained in all
                                      drains to keep the area
                                      odor free

                                  -   Minor stoppages will be
                                      cleared; all other stoppages
                                      will be reported to Site
                                      Services

                                  -   Paper towels, 2-ply toilet
                                      paper, hand soap, hand
                                      lotion, seat covers,
                                      sanitary napkins, cone cups,
                                      and air fresheners will be
                                      maintained; recycled
                                      material is encouraged.

                                  REQUIRED FREQUENCIES:

                                  Floors Swept - Nightly
                                  Floors Disinfected - Nightly
                                  Disinfect Hand Basins - Nightly
                                  Disinfect Urinals/Commodes -
                                  Nightly
                                  Polish all chrome - Nightly
                                  Wash Partitions - Nightly
                                  Dust Partition tops - Weekly
                                  Replenish All Dispensers
                                  (Consumables) - Nightly
                                  Machine Scrub or Power Wash
                                  Floors - Quarterly
                                  Machine Scrub or Power Wash Tile
                                  Walls - Quarterly
                                  Trash Removal - Nightly
</TABLE>

HEWLETT-PACKARD CONFIDENTIAL
<PAGE>

                                   EXHIBIT "D"

                         "LESSEE'S PROPOSED FLOOR PLAN"

                             [Diagram of Floor Plan]

                                       38
<PAGE>

                                  EXHIBIT "D-1"

                                 "LESSEE'S WORK"

1. Ceilings: Ceilings will be 2' x 4' x 3/4" Armstrong VL ceiling tile. Ceiling
height will be 10'0".

2. Partitions: Partitions will have 3 5/8" metal studs with 5/8" sheetrock on
each side. Partitions will extend from floor to underside of tile ceiling. There
will be 8 new conference rooms, 2 QA rooms, 1 support room and 1 CD production
room.

3. Doors: There will be 26 new doors and frames. The doors will be solid core
birch, 3'x7'. Door frames will be metal.

4. Coffee areas: Demolition and disposal of cabinets, countertops and sinks from
2 existing coffee areas. Installation of new base cabinets (MDF Cabinets)
countertops, 1 1/2 " laminate with 4" backsplash, and double bowl stainless
steel sinks and faucets.

5. Vinyl tile: Installation in server room and cafeteria.

6. Server Room: Installation of clean room ceiling tile and a Clean Agent
(HFC-227ea/FM-200) Fire Suppression system by SimplexGrinnell.

7. Sprinklers: Rework 20 sprinkler heads for new wall configuration.

8. Electrical: Supply and install (3) 200 amp panels, (20') feeders and breakers
               Supply and install (10) 2x4 light fixtures and relocate (20)
                  fixtures
               Supply and install (50) duplex wall receptacles and (20) wall
                  switches
               Supply and install (350') of divided Wiremold #G-4000 with (80)
                  duplex receptacles on (72) 20 amp, 120 volt circuits
               Supply and install (6) F.A. horn/light units and relocate two
               Supply and install (3) exit signs and relocate three
               Install and connect (45) existing Wiremold #G-4000 power poles
                  to existing circuits
               Supply and install (3) 40 amp disconnects and feeders for room
                  AC units.

                                       39
<PAGE>

                                   EXHIBIT "E"

                            "ANTENNAE SPECIFICATIONS"

          [Specifications for Omnidirectional Antenna/Dual Band/3dBi &
                         Yagi Antenna/800&900 MHz/11dBi]

                                       40
<PAGE>

                    RIDER TO LEASE DATED AS OF JUNE 9th, 2004
                     BY AND BETWEEN HEWLETT-PACKARD COMPANY,
                                    AS LESSOR
                           AND SKILLSOFT CORPORATION,
                                    AS LESSEE

      This Rider is attached to and made a part of a certain lease dated as of
June 9th, 2004 (the "LEASE") by and between Hewlett-Packard Company, as Lessor,
and SkillSoft Corporation, as Lessee. Capitalized terms used in this Rider which
are defined in the Lease and not otherwise defined herein shall have the same
meaning in this Rider as in the Lease.

      1. Base Rent During Extension Term(s). For purposes of this Lease, "FAIR
MARKET RENT" shall mean the annual Base Rent determined on the basis of then
current rentals being charged for newly executed leases for space of a size,
quality and location comparable to the Leased Premises in the Nashua, New
Hampshire area, taking into account, without limitation, such considerations as
the permitted uses, size, location, lease term, and the terms of this Lease
(other than the Base Rent), but specifically excluding any incremental value
attributable to alterations, additions or changes made by Lessee (whether in
preparation for Lessee's initial occupancy of the Leases Premises or at any time
thereafter). Fair Market Rent shall be based on the Leased Premises in its "as
is" condition and shall take into account inducements (such as "free" rent and
tenant fitup allowances) then being offered to prospective tenants in the market
described above. Notwithstanding the foregoing, in no event shall the Base Rent
be less than that of the most recent twelve (12) month period.

      If Lessee gives Lessor written notice of its exercise of an extension
option pursuant to Section 2.B of this Lease, the parties shall attempt to agree
upon the Fair Market Rent for such Extension Term within thirty (30) days
following Lessor's receipt of such notice. If the parties are unable to agree
within such time, then within fifteen (15) days following the end of such 30-day
period, Lessor and Lessee shall each retain a real estate professional with at
least ten (10) years' continuous experience in the business of appraising or
leasing commercial real estate or acting as commercial real estate agent or
broker in the vicinity of the Leased Premises, who shall, within thirty (30)
days of his or her selection, prepare a written report summarizing his or her
conclusion as to Fair Market Rent. Lessor and Lessee shall simultaneously
exchange such reports; provided, however, that if one party has not obtained
such a report within ninety (90) days after Lessor received Lessee's notice of
exercise of an extension option, then the determination set forth in the other
party's report shall be final and binding upon the parties. If both parties
receive reports within such time and the lesser of the two determinations is
within ten (10%) percent of the higher determination, then the average of these
determinations shall be deemed to be Fair Market Rent. If these determinations
differ by more than ten (10%) percent, then the real estate professionals
selected by Lessor and Lessee shall mutually select the "FINAL APPRAISER", who
shall be a person with the qualifications stated above, to resolve the dispute
as to Fair Market Rent. If the Final Appraiser is not selected within thirty
(30) days of the exchange of the first written reports, either party may apply
to the American Arbitration Association or any successor thereto for the
designation of a Final Appraiser. Within ten (10) days of the selection of the
Final Appraiser, Lessor and Lessee shall each submit to the Final Appraiser its
real estate professional's written determination of Fair Market Rent. The Final

                                       41
<PAGE>

Appraiser shall, within thirty (30) days after such submissions, select the Fair
Market Rent as determined by one of the real estate professionals which is
closest to the determination of Fair Market Rent which the Final Appraiser would
have made acting alone and applying the standards set forth in this Lease, and
shall notify Lessor and Lessee in writing of such determination. The Final
Appraiser shall not have the power or the authority to select as Fair Market
Rent an amount different from that set forth in one of the real estate
professionals' submissions to the Final Appraiser. The determination of the
Final Appraiser shall be final and binding upon Lessor and Lessee.

      Each party shall pay the fees and expenses of its real estate professional
and counsel, if any, in connection with any proceeding under this Paragraph 1,
and the parties shall each pay one-half of the fees and expenses of the Final
Appraiser.

      2. Lessor's Initial Work. Prior to the Commencement Date, Lessor shall, at
its sole cost and expense, (i) construct partitions and an entry door so as to
separately demise the Leased Premises, (ii) provide a card reader access system
for the Leased Premises, (iii) clean, repair and paint the walls of the Leased
Premises, (iv) clean the carpet in the Leased Premises, and (v) clean and repair
all light fixtures in the Leased Premises so that the same are in working order.

      3. Right of First Refusal. In the event that at any time during the Lease
Term, Lessor receives a bona fide written offer from a third party unaffiliated
with Lessor for the lease to such party of space on the second floor of the
Building other than the Leased Premises (the "OFFER Space"), which offer Lessor
intends to accept on the terms set forth in such offer (or which Lessor has
accepted expressly subject to Lessee's rights under this Paragraph 3), Lessor
shall give written notice (the "OFFER NOTICE") to Lessee, together with a copy
of such written offer received by Lessor. Provided that (i) no Event of Default
then exists and (ii) the named Lessee is then occupying the entire Leased
Premises, Lessee shall have the right to lease the space identified in the Offer
Notice for a term commencing on the date on which Lessor delivers possession
thereof to Lessee, and ending on the last day of the Lease Term, and otherwise
on the terms set forth in the Offer Notice, by giving written notice of exercise
("LESSEE'S EXERCISE NOTICE") to Lessor within ten (10) days after Lessor gives
the Offer Notice to Lessee. If Lessee exercises its right under this Paragraph 3
to lease such space, then such space shall become subject to all of the terms of
this Lease except that to the extent to which the terms set forth in the Offer
Notice (including Base Rent and concessions) are inconsistent with any of the
terms of this Lease, the terms set forth in the Offer Notice shall apply to such
space; provided, however, that in all events the Lease Term with respect to the
Offer Space shall be co-terminus with the Lease Term with respect to the
remainder of the Leased Premises. In the event that Lessee, for any reason
whatsoever, fails or refuses to give Lessee's Exercise Notice within such 10-day
period, Lessee shall be deemed to have waived its rights under this Paragraph 3
with respect to the Offer Space for the remainder of the Lease Term; provided,
however, that if Landlord has not, within seven (7) months after Landlord gave
the Offer Notice to Lessee, entered into one or more leases covering such Offer
Space on terms not substantially more favorable to the lessee thereunder than
the terms set forth in the Offer Notice, Lessor shall be required to re-commence
the process described in this Paragraph 3 prior to entering into any lease of
the Offer Space (or such unleased portion thereof) to a third party. In the
event that the Offer Space does not include the entire remainder of the second
floor, Lessee's rights under this Section shall apply separately

                                       42
<PAGE>

with respect to each portion of the second floor, but Lessee shall have only one
opportunity to exercise the right herein granted with respect to any specific
portion of such space on the second floor of the Building.

      Any space which is subjected to the terms of this Lease pursuant to this
Paragraph 3 shall be delivered broom clean but otherwise in its "as is"
condition except as otherwise set forth herein. Effective upon the date on which
Lessor delivers possession to Lessee of any space which is subjected to the
terms of this Lease pursuant to this Paragraph 3, such space shall be deemed to
be part of the Leased Premises, subject to all of the terms, provisions and
conditions set forth in this Lease (except as otherwise provided above in this
Paragraph 3), and Lessee's Proportionate Share shall be appropriately modified.
Notwithstanding the foregoing, each party to this Lease shall, upon request of
the other party, execute an amendment to this Lease setting forth the rentable
area of the Offer Space, the date on which it becomes subject to this Lease, the
Base Rent to be paid therefor, and Lessee's Proportionate Share as adjusted to
reflect the addition of the Offer Space.

      4. Furniture. Lessee shall have the right, at no additional charge, to use
in the Leased Premises during the Lease Term the furniture owned by Lessor and
located in the Leased Premises as of the date this Lease is executed by Lessor.
Such furniture shall remain the sole property of Lessor at all times. Lessee
shall have the right to reconfigure such furniture to suit its requirements and
shall not be required to return the furniture to its original configuration upon
the expiration or earlier termination of this Lease. Lessee shall maintain the
same in good condition and repair, reasonable wear and tear and damage by
casualty excepted, and shall not remove the same from the Leased Premises at any
time. Lessee shall leave all such furniture in the Leased Premises at such time
as Lessee vacates the Leased Premises.

      5. Antennae and Boosters. Lessee shall have the right, at its sole cost
and expense, (i) to install on the roof of the Building (A) one (1) satellite
receiving dish antenna not exceeding 24 inches in diameter (the "SATELLITE
DISH"), and (B) up to two (2) antennae (the "ROOFTOP ANTENNAE") as shown on
Exhibit "E" attached hereto and made a part hereof, (ii) to install within the
Leased Premises one (1) cell phone signal booster (the "BOOSTER") as shown on
Exhibit "E" and made a part hereof, and (iii) to install in the Building chases
and above the finished ceiling of the Leased Premises such wires, conduits, and
similar appurtenant facilities as are necessary for Lessee's use and operation
of the Satellite Dish, the Rooftop Antennae and/or the Booster (collectively,
the "APPURTENANCES"; and together with the Satellite Dish, the Rooftop Antennae
and the Booster, collectively the "ANTENNAE EQUIPMENT"), provided that:

            (a)   the Antennae Equipment shall be used solely by Lessee for the
                  normal conduct of its business in the Leased Premises, and not
                  for any other purpose or for the benefit of any other person
                  or entity unless Lessor otherwise agrees in writing in its
                  sole discretion;

            (b)   Lessee shall obtain Lessor's prior written approval as to (i)
                  the location, type, size, shape, and appearance of the
                  Antennae Equipment, (ii) the identity of all contractors and
                  subcontractors who Lessee proposes to engage to perform any
                  work in connection with such installation, and (iii)

                                       43
<PAGE>

                  the plans and specifications relating to such installation,
                  which approval shall not be unreasonably withheld or delayed;

            (c)   Lessee shall provide to Lessor after such installation is
                  completed a certificate of a structural engineer registered in
                  the State of New Hampshire approving the location and method
                  of installation of the Antennae Equipment, which certificate
                  shall bear such engineer's stamp;

            (d)   to the extent to which the issuer of the warranty on the roof
                  of the Building requires, as a condition to the continued
                  validity of such warranty, that only contractors approved by
                  such issuer perform work on the roof, Lessee shall employ only
                  such contractors as are approved by such issuer and shall
                  submit evidence of such approval to Lessor reasonably
                  satisfactory to Lessor prior to commencing any work on the
                  roof;

            (e)   Lessee, its employees, agents, contractors, and
                  subcontractors, shall not access the roof unless accompanied
                  at all times by a person designated by Lessor;

            (f)   Lessee shall, at its sole cost and expense, obtain all
                  approvals, licenses, permits, and consents from governmental
                  authorities required by applicable Legal Requirements to
                  install the Antennae Equipment;

            (g)   Lessee shall cause the installation of the Antennae Equipment
                  to be done in a good and workmanlike manner and in accordance
                  with all applicable Legal Requirements and Insurance
                  Requirements, the requirements of the warranty on the roof,
                  and the requirements of all existing restrictions, easements,
                  and encumbrances of record affecting the Land;

            (h)   Lessee shall, at its sole cost and expense, maintain the
                  Antennae Equipment in good operating condition and maintain
                  and operate them in accordance with all applicable Legal
                  Requirements and Insurance Requirements, the requirements of
                  the warranty on the roof, and the requirements of all existing
                  restrictions, easements, and encumbrances of record affecting
                  the Land;

            (i)   the Antennae Equipment shall not be designed, constructed,
                  located, or operated so as to (A) interfere with the operation
                  and use of other antennae on the roof by Lessor or by other
                  parties now or hereafter permitted by Lessor to install and
                  operate such antennae, or interfere with the use of cellular
                  communications equipment, or other electronic equipment, or
                  other equipment used by Lessor or any other occupant of the
                  Building (and if Lessor determines at any time that all or any
                  portion of the Antennae Equipment does so interfere, Lessor
                  shall have the right to require Lessee to reorient, modify, or
                  remove the Antennae Equipment so specified by Lessor at
                  Lessee's sole cost and expense), or (B) be visible from the
                  ground or from streets and sidewalks adjacent to or in the
                  vicinity of the Building (provided screening may, subject to
                  Lessor's approval, be

                                       44
<PAGE>

                  used to obscure the Antennae Equipment mounted on the roof of
                  the Building from view);

            (j)   Lessee shall, at its sole cost, remove the Antennae Equipment
                  in its entirety (including all wiring, brackets and mounting
                  systems) and plug all roof penetration sleeves on or prior to
                  the date on which the Lease Term expires or this Lease is
                  terminated, and shall restore the surface of the roof and all
                  other portions of the Building to the condition in which they
                  were prior to the installation of the Antennae Equipment,
                  again using for work on the roof of the Building only such
                  contractor as is approved by the issuer of the warranty
                  covering the roof of the Building, and Lessee shall submit
                  evidence of such approval to Lessor reasonably satisfactory to
                  Lessor prior to commencing any work on the roof; and

            (k)   upon reasonable advance notice to Lessee, Lessor shall be
                  entitled in its sole discretion to cause any or all of the
                  Antennae Equipment mounted on the roof of the Building to be
                  moved to another location on the roof, at Lessor's cost and
                  expense.

            Lessor agrees to cooperate with Lessee, at no cost to Lessor, in
connection with any application for zoning relief submitted and prosecuted by
Lessee to enable Lessee to install the Antennae Equipment after Lessor has
approved the same.

            All work done by or on behalf of Lessee pursuant to this Paragraph 5
shall be subject to the requirements set forth elsewhere in this Lease with
respect to the performance by Lessee of alterations to the Leased Premises.
Lessor may inspect such work at any time or times and shall promptly give notice
to Lessee of any observed defects. Lessee shall indemnify, defend, and hold
harmless Lessor from and against any and all liability, damage, penalties, or
judgments, and from and against any claims, actions, proceedings, and expenses
and costs in connection therewith, including reasonable attorneys' fees,
resulting from any work performed by or on behalf of Lessee pursuant to this
Paragraph 5. All of the Antennae Equipment shall be at Lessee's sole risk,
Lessor shall have no responsibility to maintain any insurance on them, and
Lessor shall not otherwise be responsible for any damage or destruction to the
Antennae Equipment unless such damage or destruction is caused by Lessor's
negligence.

            Lessee acknowledges that Lessor may at any time place and operate
antennae on the roof of the Building, or may allow other Lessees and third
parties to place and operate antennae on the roof of the Building, and Lessee
understands that it does not have an exclusive right to use the roof of the
Building for such purpose.

      6. Lessee's Work Prior to Commencement Date. Lessee intends, at its sole
cost and expense, (i) to lay out the Leased Premises as shown on the floor plan
attached hereto as Exhibit "D" and made a part hereof, and (ii) to make certain
alterations to the Leased Premises, as more particularly described in Exhibit
"D-1" attached hereto and made a part hereof, to prepare the Leased Premises for
its occupancy (collectively, "LESSEE'S WORK"). All work performed by Lessee
shall be subject to the provisions of this Lease, including Section 10. Lessee's
Work shall be designed, constructed, located, and operated so as not to
interfere with the operation and use of other equipment (including, without
limitation, cellular communications equipment or other electronic equipment)
within the Complex or on the roof thereof by Lessor or by other

                                       45
<PAGE>

parties now or hereafter occupying space within the Complex (and if Lessor
determines at any time that any component of Lessee's Work does so interfere,
Lessor shall have the right to require Lessee to reorient, modify, or remove
such component at Lessee's sole cost and expense). Lessee hereby agrees that it
shall, at its sole cost and expense, remove upon the expiration or earlier
termination of this Lease the following items of Lessee's Work and restore at
that time the Building (including all wall and ceiling surfaces) to the
condition in which it was prior to the installation of the following items of
Lessee's Work:

      (1) all HVAC chilled water equipment, and all piping and wiring associated
with the server room to be constructed by Lessee;

      (2) Clean Agent (HFC-227ea/FM-200) Fire Suppression system by
SimplexGrinnell serving the server room to be constructed by Lessee, and all
associated piping and wiring; and

      (3) all partitions that penetrate the existing ceiling grid.

      Lessee shall not be required to remove the remainder of Lessee's Work as
identified on Exhibits "D" and "D-1".

      7. Conflict. In the event of any conflict or inconsistency between the
terms of the Lease and the terms of this Rider, the provisions of this Rider
shall govern and control.

                                       46<PAGE>

                                                                    Exhibit 10.2

                           LOAN AND SECURITY AGREEMENT

      THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of July 23,
2004, between SILICON VALLEY BANK, a California chartered bank, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054
and with a loan production office located at One Newton Executive Park, Suite
200, 2221 Washington Street, Newton, Massachusetts 02462, doing business under
the name "Silicon Valley East" ("Bank") and SKILLSOFT CORPORATION, a Delaware
corporation ("SkillSoft"), SMARTCERTIFY DIRECT INC., a Florida corporation
("SmartCertify"), and BOOKS24X7.COM, INC., a Massachusetts corporation ("Books")
(SkillSoft, SmartCertify, and Books are hereinafter jointly, severally and
collectively referred to as "Borrower") provides the terms on which Bank shall
lend to Borrower and Borrower shall repay Bank. In consideration of the mutual
covenants contained herein and benefits to be derived herefrom, the parties
agree as follows::

      WHEREAS, each Borrower has requested that Bank establish the loan
arrangement as set forth herein; and

      WHEREAS, each Borrower requests that as a convenience to that Borrower,
such loans as may be made hereunder shall be directed to the Agent which will,
in turn, distribute the proceeds thereof to the respective Borrower;

      NOW THEREFORE, as an additional inducement for Bank to establish the loan
arrangement and to direct such loans as may be made hereunder to the Agent, as
described above, each Borrower covenants and agrees as follows:

      1     ACCOUNTING AND OTHER TERMS

      1.1   ACCOUNTING AND OTHER TERMS. Accounting terms not defined in this
Agreement shall be construed following GAAP. Calculations and determinations
must be made following GAAP. The term "financial statements" includes the notes
and schedules. The terms "including" and "includes" always mean "including (or
includes) without limitation," in this or any Loan Document. Capitalized terms
in this Agreement shall have the meanings set forth in Article 13. All other
terms contained in this Agreement, unless otherwise indicated, shall have the
meaning provided by the Code, to the extent such terms are defined therein.

      1.2   DESIGNATION OF AGENT. Each Borrower hereby designates Skillsoft
(hereinafter, the "Agent") as the agent of that Borrower to discharge the duties
and responsibilities of Agent as provided herein.

      1.3   OPERATION OF BORROWING. Except as otherwise provided in this
Article, loans and advances hereunder shall be requested solely by Agent as
agent for each Borrower. Each Borrower shall be directly indebted to Bank for
each advance distributed to Agent, together with all accrued interest thereon,
as if that amount had been advanced directly by Bank to such Borrower. Bank
shall have no responsibility to inquire as to the distribution of loans and
advances made by Bank through Agent as described herein.

      1.4   CONTINUATION OF AUTHORITY OF AGENT. The authority of Agent to
request loans on behalf of, and to bind, the Borrowers, shall continue unless
and until Bank actually receives written notice of the termination of such
authority.

      2     LOAN AND TERMS OF PAYMENT

      2.1   PROMISE TO PAY. Borrower hereby unconditionally promises to pay Bank
the unpaid principal amount of all Credit Extensions and interest on the unpaid
principal amount of the Credit Extensions as and when due in accordance with
this Agreement.

      2.1.1 REVOLVING ADVANCES.

                  (a)   Availability. Bank shall make Advances not exceeding the
   Revolving Line minus (i) the amount of all outstanding Letters of Credit
   (including drawn but unreimbursed Letters of Credit), minus (ii)

<PAGE>

   the FX Reserve, and minus (iii) the aggregate outstanding Advances hereunder
   (including any Cash Management Services). Amounts borrowed under this Section
   may be repaid and reborrowed during the term of this Agreement.

                  (b)   Borrowing Procedure. To obtain an Advance, Borrower must
   notify Bank (which notice shall be irrevocable) by facsimile or telephone by
   3:00 p.m. Eastern time on the Business Day the Advance is to be made. If such
   notification is by telephone, Borrower must promptly confirm the notification
   by delivering to Bank a completed Payment/Advance Form in the form attached
   as EXHIBIT B. Bank shall credit Advances to Borrower's deposit account. Bank
   may make Advances under this Agreement based on instructions from a
   Responsible Officer or his or her designee or without instructions if the
   Advances are necessary to meet Obligations which have become due. Bank may
   rely on any telephone notice given by a person whom Bank believes is a
   Responsible Officer or designee. Borrower shall indemnify Bank for any loss
   Bank suffers due to such reliance, except as a direct result of the gross
   negligence or willful misconduct by Bank.

                  (c)   Interest Rate. The principal amounts outstanding under
   the Revolving Line shall accrue interest at a per annum rate equal to the
   Prime Rate, which interest shall be payable monthly.

                  (d)   Termination; Repayment. The Revolving Line terminates on
   the Revolving Line Maturity Date, when the principal amount of all Advances,
   the unpaid interest thereon, and all other Obligations relating to the
   Revolving Line shall be immediately due and payable.

      2.1.2 LETTERS OF CREDIT SUBLIMIT.

                  (a)   Bank shall issue or have issued Letters of Credit for
   Borrower's account not exceeding the Revolving Line minus (i) the outstanding
   principal balance of any Advances (including any Cash Management Services),
   minus (ii) the amount of all Letters of Credit (including drawn but
   unreimbursed Letters of Credit), plus an amount equal to any Letter of Credit
   Reserves. The face amount of outstanding Letters of Credit (including drawn
   but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not
   exceed Seventeen Million Five Hundred Thousand Dollars ($17,500,000.00). Each
   Letter of Credit may have an expiry date after the Revolving Maturity Date
   provided Borrower's Letter of Credit reimbursement obligation shall be
   secured by cash on terms acceptable to Bank on and after (i) the Maturity
   Date of the Revolving Line, or (ii) the occurrence of an Event of Default
   hereunder. All Letters of Credit shall be in form and substance acceptable to
   Bank in its sole discretion, and shall be subject to the terms and conditions
   of Bank's standard Application and Letter of Credit Agreement ("Letter of
   Credit Application"). Borrower agrees to execute any further documentation in
   connection with the Letters of Credit as Bank may reasonably request.

                  (b)   The obligation of Borrower to immediately reimburse Bank
   for drawings made under Letters of Credit shall be absolute, unconditional
   and irrevocable, and shall be performed strictly in accordance with the terms
   of this Agreement and such Letters of Credit, and such Letter of Credit
   Application. Borrower shall indemnify, defend, protect, and hold Bank
   harmless from any loss, cost, expense or liability, including, without
   limitation, reasonable attorneys' fees, arising out of or in connection with
   any Letters of Credit, except for any loss, cost, expense or liability
   arising from Bank's gross negligence or willful misconduct.

                  (c)   Borrower may request that Bank issue a Letter of Credit
   payable in a currency other than United States Dollars. If a demand for
   payment is made under any such Letter of Credit, Bank shall treat such demand
   as an Advance to Borrower of the equivalent of the amount thereof (plus fees
   and charges in connection therewith such as wire, cable, SWIFT or similar
   charges) in United States currency at the then prevailing rate of exchange in
   San Francisco, California, for sales of that other currency for transfer to
   the country of which it is the currency.

                  (d)   Upon the issuance of any letter of credit payable in a
   currency other than United States Dollars, Bank shall create a reserve (the
   "Letter of Credit Reserve") under the Revolving Line for letters of credit
   against fluctuations in currency exchange rates, in an amount equal to ten
   percent (10%) of the face amount of such letter of credit. The amount of such
   reserve may be amended by Bank from time to time to account for fluctuations
   in the exchange rate. The availability of funds under the Revolving Line
   shall be reduced by the amount of such reserve for as long as such letter of
   credit remains outstanding.

                                      -2-
<PAGE>

      2.1.3 FOREIGN EXCHANGE SUBLIMIT. The Borrower may enter into foreign
exchange forward contracts with the Bank up to a maximum amount of One Million
Dollars ($1,000,000.00) under which Borrower commits to purchase from or sell to
Bank a set amount of foreign currency more than one (1) business day after the
contract date (the "FX Forward Contract"). Bank shall subtract 10% of each
outstanding FX Forward Contract (the "F/X Reserve") from the foreign exchange
sublimit. The total FX Forward Contracts at any one time may not exceed 10 times
the amount of the FX Reserve. Bank may terminate the FX Forward Contracts if an
Event of Default occurs. The Obligations of Borrower relating to this section
may not exceed the Revolving Line minus (i) the amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit), minus
(ii) the FX Reserve, and minus (iii) the aggregate outstanding Advances
hereunder (including any Cash Management Services).

      2.1.4 CASH MANAGEMENT SERVICES SUBLIMIT. Borrower may use up to Seventeen
Million Five Hundred Thousand Dollars ($17,500,000.00) for the Bank's Cash
Management Services (the "Cash Management Services Sublimit"), which may include
merchant services, direct deposit of payroll, business credit card, and check
cashing services identified in the various cash management services agreements
related to such Cash Management Services (the "Cash Management Services"). Such
aggregate amounts utilized under the Cash Management Services Sublimit shall at
all times reduce the amount otherwise available for Credit Extensions under the
Revolving Line. Any amounts Bank pays on behalf of Borrower or any amounts that
are not paid by Borrower for any Cash Management Services will be treated as
Advances under the Revolving Line and will accrue interest at the interest rate
applicable to Advances.

      2.1.5 UNDISBURSED CREDIT EXTENSIONS. The Bank's obligation to lend the
undisbursed portion of the Credit Extensions shall terminate if, there has been
a Material Adverse Change or there has been any material adverse deviation by
Borrower from the most recent business plan of Borrower presented to and
accepted by Bank prior to the execution of this Agreement.

      2.2   INTEREST RATE.

                  (a)   Default Rate. After an Event of Default, Obligations
   shall bear interest at four percent (4.0%) above the rate effective
   immediately before the Event of Default.

                  (b)   Adjustment to Interest Rate. The applicable interest
   rate hereunder shall increase or decrease when the Prime Rate changes.

                  (c)   360-Day Year. Interest is computed on the basis of a 360
   day year for the actual number of days elapsed.

                  (d)   Debit of Accounts. Bank may debit any of Borrower's
   deposit accounts, including Account Number __________, for principal and
   interest payments when due, or any other amounts Borrower owes Bank, when
   due. Bank shall promptly notify Borrower after it debits Borrower's accounts.
   These debits shall not constitute a set-off.

                  (e)   Payments. Interest is payable monthly on the first
   calendar day of each month. Payments received after 12:00 noon Eastern time
   are considered received at the opening of business on the next Business Day.
   When a payment is due on a day that is not a Business Day, the payment is due
   the next Business Day and additional fees or interest, as applicable, shall
   continue to accrue.

      2.3   FEES. Borrower shall pay to Bank:

                  (a)   Commitment Fee. A fully earned, non-refundable
   commitment fee of Fifty Thousand Dollars ($50,000.00) due and payable on the
   Closing Date; and

                  (b)   Letter of Credit Fee. The Borrower shall pay the Bank's
   customary fees and expenses for the issuance or renewal of Letters of Credit,
   including, without limitation, a Letter of Credit Fee of three-quarters of
   one percent (0.75%) per annum of the face amount of each Letter of Credit
   issued, upon the issuance or renewal of such Letter of Credit by the Bank;
   and

                                      -3-
<PAGE>

                  (c)   Unused Revolving Line Facility Fee. In addition to the
   foregoing, as compensation for the Bank's maintenance of sufficient funds
   available for such purpose, the Bank shall have earned a fee (the "Unused
   Revolving Line Facility Fee"), which fee shall be paid quarterly, in arrears,
   on a calendar year basis, in an amount equal to one-eighth of one percent
   (0.125%) per annum of the average unused portion of the Revolving Line, as
   determined by the Bank. For purposes hereof, any Letter of Credit Reserve and
   any F/X Reserve held or in place for any calendar year shall constitute a
   utilization of the Revolving Line. The Borrower shall not be entitled to any
   credit, rebate or repayment of any Unused Revolving Line Facility Fee
   previously earned by the Bank pursuant to this Section notwithstanding any
   termination of the within Agreement, or suspension or termination of the
   Bank's obligation to make loans and advances hereunder; and

                  (d)   Bank Expenses. All Bank Expenses (including reasonable
   attorneys' fees and expenses) incurred through and after the Closing Date,
   when due.

      3     CONDITIONS OF LOANS

      3.1   CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. The Bank's
obligation to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, such documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate, including, without limitation, subject
to the condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, the following:

                  (a)   this Agreement;

                  (b)   a certificate of the Secretary of Borrower with respect
   to articles, bylaws, incumbency and resolutions authorizing the execution and
   delivery of this Agreement;

                  (c)   Negative Pledge Agreement covering Intellectual
   Property;

                  (d)   Perfection Certificates by Borrower and Skillsoft
   Finance Limited;

                  (e)   landlord's waiver;

                  (f)   a legal opinion of Borrower's counsel (authority and
   enforceability), in form and substance acceptable to Bank;

                  (g)   Unconditional Guaranty by Skillsoft Finance Limited;

                  (h)   Pledge/Security Agreement for depository/investment
   accounts by Skillsoft Finance Limited;

                  (i)   Unconditional Guaranty by Skillsoft Plc;

                  (j)   UCC financing statement filing authorization;

                  (k)   Account Control Agreement/ Investment Account Control
   Agreement by SkillSoft Finance Limited;

                  (l)   insurance certificates;

                  (m)   payment of the fees and Bank Expenses then due specified
   in Section 2.3 hereof;

                  (n)   Certificates of Foreign Qualification (if applicable);

                  (o)   Certificates of Good Standing/Legal Existence; and

                                      -4-
<PAGE>

                  (p)   such other documents, and completion of such other
   matters, as Bank may reasonably deem necessary or appropriate.

      3.2   CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Bank's obligations to
make each Credit Extension, including the initial Credit Extension, is subject
to the following:

                  (a)   timely receipt of any Payment/Advance Form; and

                  (b)   the representations and warranties in Section 5 shall be
   true in all material respects on the date of the Payment/Advance Form and on
   the effective date of each Credit Extension and no Event of Default shall
   have occurred and be continuing, or result from the Credit Extension. Each
   Credit Extension is Borrower's representation and warranty on that date that
   the representations and warranties in Section 5 remain true in all material
   respects.

      4     CREATION OF SECURITY INTEREST

      4.1   GRANT OF SECURITY INTEREST. Borrower hereby grants Bank, to secure
the payment and performance in full of all of the Obligations and the
performance of each of Borrower's duties under the Loan Documents, a continuing
security interest in, and pledges and assigns to the Bank, the Collateral,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower warrants and represents that the
security interest granted herein shall be a first priority security interest in
the Collateral. Bank may place a "hold" on any deposit account pledged as
Collateral.

Except as noted on the Perfection Certificate, Borrower is not a party to, nor
is bound by, any material license or other agreement with respect to which the
Borrower is the licensee that prohibits or otherwise restricts Borrower from
granting a security interest in Borrower's interest in such license or agreement
or any other property. Borrower shall not enter into, or become bound by, any
such material license or agreement which is reasonably likely to have a material
impact on Borrower's business or financial condition, unless Borrower provides
Bank with written notice within thirty (30) Business Days after entering into
such agreement. Borrower shall take such steps as Bank requests to obtain the
consent of, or waiver by, any person whose consent or waiver is necessary for
all such licenses or contract rights to be deemed "Collateral" and for Bank to
have a security interest in it that might otherwise be restricted or prohibited
by law or by the terms of any such license or agreement, whether now existing or
entered into in the future

If the Agreement is terminated, Bank's lien and security interest in the
Collateral shall continue until Borrower fully satisfies its Obligations. If
Borrower shall at any time, acquire a commercial tort claim, Borrower shall
promptly notify Bank in a writing signed by Borrower of the brief details
thereof and grant to Bank in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to Bank.

      4.2   AUTHORIZATION TO FILE FINANCING STATEMENTS. Borrower hereby
authorizes Bank to file financing statements, without notice to Borrower, with
all appropriate jurisdictions in order to perfect or protect Bank's interest or
rights hereunder, including a notice that any disposition of the Collateral, by
either the Borrower or any other Person, shall be deemed to violate the rights
of the Bank under the Code.

      5     REPRESENTATIONS AND WARRANTIES

      Borrower represents and warrants as follows:

      5.1   DUE ORGANIZATION AND AUTHORIZATION. Borrower is duly existing and in
good standing in its state of formation and qualified and licensed to do
business in, and in good standing in, any state in which the conduct of its
business or its ownership of property requires that it be qualified except where
the failure to do so could not reasonably be expected to cause a Material
Adverse Change. In connection with this Agreement, the Borrower delivered to the
Bank a certificate signed by the Borrower and entitled "Perfection Certificate".
The Borrower represents and warrants to the Bank that: (a) the Borrower's exact
legal name is that indicated on the Perfection Certificate and on the signature
page hereof; and (b) the Borrower is an organization of the type, and is
organized in the jurisdiction, set forth in the Perfection Certificate; and (c)
the Perfection Certificate accurately sets

                                      -5-
<PAGE>

forth the Borrower's organizational identification number or accurately states
that the Borrower has none; and (d) the Perfection Certificate accurately sets
forth the Borrower's place of business, or, if more than one, its chief
executive office as well as the Borrower's mailing address if different, and (e)
all other information set forth on the Perfection Certificate pertaining to the
Borrower is accurate and complete. If the Borrower does not now have an
organizational identification number, but later obtains one, Borrower shall
forthwith notify the Bank of such organizational identification number.

      The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's organizational documents,
nor constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement to which or by
which it is bound in which the default could reasonably be expected to cause a
Material Adverse Change.

      5.2   COLLATERAL. Borrower has good title to the Collateral, free of Liens
except Permitted Liens. Borrower has no deposit account, other than the deposit
accounts with Bank and deposit accounts described in the Perfection Certificate
delivered to the Bank in connection herewith. The Collateral is not in the
possession of any third party bailee (such as a warehouse). Except as hereafter
disclosed to the Bank in writing by Borrower, none of the components of the
Collateral shall be maintained at locations other than as provided in the
Perfection Certificate. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee,
then Borrower will first receive the written consent of Bank and such bailee
must acknowledge in writing that the bailee is holding such Collateral for the
benefit of Bank.

      5.3   LITIGATION. Except as shown on SCHEDULE 5.3 attached hereto, there
are no actions or proceedings pending or, to the knowledge of Borrower's
Responsible Officers or legal counsel, threatened by or against Borrower or any
Subsidiary in which an adverse decision could reasonably be expected to cause a
Material Adverse Change. Listed on Schedule 5.3 is a summary of all outstanding
litigation and agreed upon settlements and cash payments in connection with
same.

      5.4   NO MATERIAL DEVIATION IN FINANCIAL STATEMENTS. All consolidated
financial statements for Borrower and any Subsidiary delivered to Bank fairly
present in all material respects Borrower's consolidated financial condition and
Borrower's consolidated results of operations. There has not been any material
deterioration in Borrower's consolidated financial condition since the date of
the most recent financial statements submitted to Bank.

      5.5   SOLVENCY. The fair salable value of Borrower's assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities; and
Borrower is able to pay its debts (including trade debts) as they mature.

      5.6   REGULATORY COMPLIANCE. Borrower is not an "investment company" or a
company "controlled" by an "investment company" under the Investment Company
Act. Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations T and U of the Federal Reserve Board
of Governors). Borrower has complied in all material respects with the Federal
Fair Labor Standards Act. Borrower has not violated any laws, ordinances or
rules, the violation of which could reasonably be expected to cause a Material
Adverse Change. None of Borrower's or any Subsidiary's properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally. Borrower and each Subsidiary has
timely filed all required tax returns and paid, or made adequate provision to
pay, all material taxes, except those being contested in good faith with
adequate reserves under GAAP. Borrower and each Subsidiary has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted except where the failure to make
such declarations, notices or filings would not reasonably be expected to cause
a Material Adverse Change.

      5.7   SUBSIDIARIES. Except as provided in the Perfection Certificates,
Borrower does not own any stock, partnership interest or other equity securities
except for Permitted Investments.

      5.8   FULL DISCLOSURE. No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank
taken together with all such written certificates and written statements given
to Bank contains any untrue statement of a material fact or omits to state a
material fact necessary to make the

                                      -6-
<PAGE>

statements contained in the certificates or statements not misleading (it being
recognized by Bank that the projections and forecasts provided by Borrower in
good faith and based upon reasonable assumptions are not viewed as facts and
that actual results during the period or periods covered by such projections and
forecasts may differ from the projected or forecasted results).

      6     AFFIRMATIVE COVENANTS

      Borrower shall do all of the following:

      6.1   GOVERNMENT COMPLIANCE. Borrower shall maintain its and all
Subsidiaries' legal existence and good standing in its jurisdiction of formation
and maintain qualification in each jurisdiction in which the failure to so
qualify would reasonably be expected to cause a Material Adverse Change on
Borrower's business or operations. Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, noncompliance with which could have a material adverse effect on
Borrower's business or operations or would reasonably be expected to cause a
Material Adverse Change.

      6.2   FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.

                  (a)   Borrower shall deliver to Bank: (i) as soon as
   available, but no later than forty-five days after the last day of each
   quarter a company prepared consolidated balance sheet and income statement
   (10-Q) covering Borrower's consolidated operations during the period
   certified by a Responsible Officer and in a form acceptable to Bank, (ii) as
   soon as available, but no later than forty-five days after the last day of
   each quarter, a company prepared consolidating balance sheet and income
   statement covering Borrower's consolidating operations during the period
   certified by a Responsible Officer and in a form acceptable to Bank, (iii) as
   soon as available, but no later than ninety (90) days after the last day of
   Borrower's fiscal year, audited consolidated financial statements (10-K)
   prepared under GAAP, consistently applied, together with an unqualified
   opinion on the financial statements from an independent certified public
   accounting firm reasonably acceptable to Bank; (iv) a prompt report of any
   legal actions pending or to Borrower's knowledge threatened against Borrower
   or any Subsidiary that could result in damages or costs to Borrower or any
   Subsidiary of Five Hundred Thousand Dollars ($500,000.00) or more; and (v)
   other financial information reasonably requested by Bank.

                  (b)   Borrower shall deliver to Bank with the quarterly and
   annual financial statements a Compliance Certificate signed by a Responsible
   Officer in the form of EXHIBIT C.

      6.3   INTENTIONALLY DELETED.

      6.4   TAXES. Borrower shall make, and cause each Subsidiary to make,
timely payment of all material federal, state, and local taxes or assessments
(other than taxes and assessments which Borrower is contesting in good faith,
with adequate reserves maintained in accordance with GAAP) and will deliver to
Bank, on demand, appropriate certificates attesting to such payments.

      6.5   INSURANCE. Borrower shall keep its business and the Collateral
insured for risks and in amounts, and as Bank may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are
satisfactory to Bank. All property policies shall have a lender's loss payable
endorsement showing Bank as an additional loss payee and all liability policies
shall show the Bank as an additional insured and all policies shall provide that
the insurer must give Bank at least twenty (20) days notice before canceling its
policy. At Bank's request, Borrower shall deliver certified copies of policies
and evidence of all premium payments. Proceeds payable under any policy shall,
at Bank's option, be payable to Bank on account of the Obligations.

      6.6   ACCOUNTS. Each Borrower shall maintain an operating account with the
Bank. In addition, the Borrower and Guarantors shall, at all times, maintain
investment accounts with the Bank in an amount of at least Thirty Million
Dollars ($30,000,000.00). In the event, Borrower and Guarantors maintain less
than Thirty Million Dollars ($30,000,000.00) with Bank, for three (3)
consecutive Business Days, Borrower and Guarantors may pay such fees and
expenses as Bank shall determine, in its reasonable discretion based upon the
loss of income resulting from the Borrower's failure to maintain such amounts
(the "Additional Fees"). The failure of Borrower to maintain such amounts shall
not constitute an Event of Default.

                                      -7-
<PAGE>

      6.7   FINANCIAL COVENANTS.

            (a)   ADJUSTED QUICK RATIO. Borrower, on a consolidated basis, shall
      maintain, as of the last day of each quarter a ratio of Quick Assets to
      Current Liabilities of at least: (i) 1.75 to 1.0 as of the quarter ending
      July 31, 2004, and (ii) 2.0 to 1.0 as of the quarter ending October 31,
      2004 and as of the last day of each quarter thereafter.

            (b)   MINIMUM QUARTERLY PROFITABILITY (NET INCOME). Net Income of
      Borrower, on a consolidated basis, of at least: (i) Zero Dollars ($0.00)
      as of the quarter ending July 31, 2004, (ii) Two Million Dollars
      ($2,000,000.00) as of the quarter ending October 31, 2004, (iii) Six
      Million Five Hundred Thousand Dollars ($6,500,000.00) as of the quarter
      ending January 31, 2005, and (iv) as of the quarter ending April 30, 2005,
      and as of the last day of each quarter thereafter, the greater of: (a)
      fifty percent (50.0%) of the projected net income on the operating plan
      dated ___________, as submitted to the Bank, and (b) Two Million Dollars
      ($2,000,000.00).

      6.8   FURTHER ASSURANCES. Borrower shall execute any further instruments
and take further action as Bank reasonably requests to perfect or continue
Bank's security interest in the Collateral or to effect the purposes of this
Agreement.

      7     NEGATIVE COVENANTS

      Borrower shall not do any of the following without the Bank's prior
written consent which shall not be unreasonably withheld.

      7.1   DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of
(collectively a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, except for Transfers (i) of Inventory
in the ordinary course of business; (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; or (iii) of worn-out or obsolete Equipment.

      7.2   CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.
Engage in or permit any of its Subsidiaries to engage in any business other than
the businesses currently engaged in by Borrower or reasonably related thereto,
or have a material change in its ownership (other than by the sale of Borrower's
equity securities in a public offering), or management such that any two (2) of
the four (4) individuals: Charles Moran, Thomas McDonald, Jerald A. Nine, and
Mark Townsend are not longer actively involved in the management of the company
and replacements, reasonably satisfactory to the Bank are not made within sixty
(60) days thereof. Borrower shall not: (i) relocate its chief executive office,
or (ii) change its jurisdiction of organization, or (iii) change its
organizational structure or type, or (iv) change its legal name, or (v) change
any organizational number (if any) assigned by its jurisdiction of organization,
unless Borrower provides Bank with written notice with fifteen (15) days
thereafter.

      7.3   MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person. Notwithstanding the foregoing,
Bank's consent shall not be required for acquisitions by the Borrower of all or
substantially all of the capital stock or assets of another Person, provided the
total cash consideration paid for such acquisitions (including indebtedness
assumed) is not more than Ten Million Dollars ($10,000,000.00), in the
aggregate, during any fiscal year, provided further that: (i) no Event of
Default has occurred and is continuing or would exist after giving effect to the
transactions, and (ii) the Borrower is the surviving legal entity. A Subsidiary
may merge or consolidate into another Subsidiary or into Borrower.

      7.4   INDEBTEDNESS. Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.

      7.5   ENCUMBRANCE. Create, incur, or allow any Lien on any of its
property, or assign or convey any right to receive income, including the sale of
any Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to the first priority security
interest granted herein. The Collateral may also be subject to Permitted Liens.

                                      -8-
<PAGE>

      7.6   DISTRIBUTIONS; INVESTMENTS. (i) Directly or indirectly acquire or
own any Person (except as provided in Section 7.3 hereof), or make any
Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so; or (ii) pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock.

      7.7   TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower, except
for transactions that are in the ordinary course of Borrower's business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person.
Notwithstanding the foregoing, for any twelve (12) month period, the aggregate
net cash outlay by the Borrower to its Affiliates (other than by a Borrower to
another Borrower) shall not exceed Ten Million Dollars ($10,000,000.00).

      7.8   SUBORDINATED DEBT. Make or permit any payment on any Subordinated
Debt, except under the terms of the Subordinated Debt, or amend any provision in
any document relating to the Subordinated Debt, without Bank's prior written
consent.

      7.9   COMPLIANCE. Become an "investment company" or a company controlled
by an "investment company", under the Investment Company Act of 1940 or
undertake as one of its important activities extending credit to purchase or
carry margin stock, or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could reasonably be expected to have a material
adverse effect on Borrower's business or operations or would reasonably be
expected to cause a Material Adverse Change, or permit any of its Subsidiaries
to do so.

      8     EVENTS OF DEFAULT

      Any one of the following is an Event of Default:

      8.1   PAYMENT DEFAULT. Borrower fails to pay any of the Obligations within
three (3) Business Days after their due date. During such three (3) Business Day
period the failure to cure the default shall not constitute an Event of Default
(but no Credit Extension shall be made during such period);

      8.2   COVENANT DEFAULT. (i) Borrower fails or neglects to perform any
obligation in Section 6 or violates any covenant in Section 7; or (ii) Borrower
fails or neglects to perform, keep, or observe any other material term,
provision, condition, covenant or agreement contained in this Agreement, any
Loan Documents, or in any present or future agreement between Borrower and Bank
and as to any default under such other material term, provision, condition,
covenant or agreement that can be cured, has failed to cure the default within
ten (10) days after the occurrence thereof; provided, however, that if the
default cannot by its nature be cured within the ten (10) day period or cannot
after diligent attempts by Borrower be cured within such ten (10) day period,
and such default is likely to be cured within a reasonable time, then Borrower
shall have an additional period (which shall not in any case exceed thirty (30)
days) to attempt to cure such default, and within such reasonable time period
the failure to cure the default shall not be deemed an Event of Default (but no
Credit Extensions shall be made during such cure period). Grace periods provided
under this section shall not apply, among other things, to financial covenants
or any other covenants that are required to be satisfied, completed or tested by
a date certain;

      8.3   MATERIAL ADVERSE CHANGE. A Material Adverse Change occurs;

      8.4   ATTACHMENT. (i) Any material portion of Borrower's assets is seized
or comes into possession of a trustee or receiver and such action is not removed
in ten (10) days; (ii) any material portion of Borrower's assets is attached or
levied on and the attachment, or levy is not removed in thirty (30) days (iii)
the service of process upon the Borrower seeking to attach, by trustee or
similar process, any funds of the Borrower on deposit with the Bank, or any
entity under control of Bank (including a subsidiary); (iv) Borrower is
enjoined, restrained, or prevented by court order from conducting a material
part of its business; (v) a judgment or other claim becomes a Lien on a material
portion of Borrower's assets; or (vi) a notice of lien, levy, or assessment is
filed against any of Borrower's assets by any government agency and not paid
within ten (10) days after Borrower receives notice. These are not Events of
Default if stayed or if a bond is posted pending contest by Borrower (but no
Credit Extensions shall be made during the cure period);

                                      -9-
<PAGE>

      8.5   INSOLVENCY. (i) Borrower is unable to pay its debts (including trade
debts) as they become due or otherwise becomes insolvent; (ii) Borrower begins
an Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against
Borrower and not dismissed or stayed within forty-five (45) days (but no Credit
Extensions shall be made before any Insolvency Proceeding is dismissed);

      8.6   OTHER AGREEMENTS. If there is a default in any agreement to which
Borrower is a party with a third party or parties resulting in the acceleration
of the maturity of any Indebtedness in an amount in excess of Five Hundred
Thousand Dollars ($500,000) or that could result in a Material Adverse Change;

      8.7   JUDGMENTS. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Five Hundred Thousand
Dollars ($500,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of twenty (20) days (provided that no
Credit Extensions will be made prior to the satisfaction or stay of such
judgment);

      8.8   MISREPRESENTATIONS. If Borrower or any Person acting for Borrower
makes any material misrepresentation or material misstatement now or later in
any warranty or representation in this Agreement or in any writing delivered to
Bank or to induce Bank to enter this Agreement or any Loan Document;

      8.9   GUARANTY. (i) Any guaranty of any Obligations terminates or ceases
for any reason to be in full force; or (ii) any Guarantor does not perform any
obligation or covenant under any guaranty of the Obligations; or (iii) any
material misrepresentation or material misstatement exists now or later in any
warranty or representation in any guaranty of the Obligations or in any
certificate delivered to Bank in connection with the guaranty; or (iv) any
circumstance described in Section 7, or Sections 8.4, 8.5 or 8.7 occurs to any
Guarantor, or (v) the liquidation, winding up, termination of existence, or
insolvency of any Guarantor.

      9     BANK'S RIGHTS AND REMEDIES

      9.1   RIGHTS AND REMEDIES. When an Event of Default occurs and continues
Bank may, without notice or demand, do any or all of the following:

                  (a)   Declare all Obligations immediately due and payable (but
   if an Event of Default described in Section 8.5 occurs all Obligations are
   immediately due and payable without any action by Bank);

                  (b)   Stop advancing money or extending credit for Borrower's
   benefit under this Agreement or under any other agreement between Borrower
   and Bank;

                  (c)   Demand that the Borrowers (i) deposit cash with Bank in
   an amount equal to the aggregate amount of any Letters of Credit remaining
   undrawn, as collateral security for the repayment of any future drawings
   under such Letters of Credit, and the Borrower shall forthwith deposit and
   pay such amounts, and (ii) pay in advance all Letter of Credit fees scheduled
   to be paid or payable over the remaining term of any Letters of Credit;

                  (d)   Settle or adjust disputes and claims directly with
   account debtors for amounts, on terms and in any order that Bank considers
   advisable and notify any Person owing Borrower money of Bank's security
   interest in such funds and verify the amount of such account;

                  (e)   Make any payments and do any acts it considers necessary
   or reasonable to protect its security interest in the Collateral. Borrower
   shall assemble the Collateral if Bank requests and make it available as Bank
   designates. Bank may enter premises where the Collateral is located, take and
   maintain possession of any part of the Collateral, and pay, purchase,
   contest, or compromise any Lien which appears to be prior or superior to its
   security interest and pay all expenses incurred. Borrower grants Bank a
   license to enter and occupy any of its premises, without charge, to exercise
   any of Bank's rights or remedies;

                  (f)   Apply to the Obligations any (i) balances and deposits
   of Borrower it holds, or (ii) any amount held by Bank owing to or for the
   credit or the account of Borrower;

                                      -10-
<PAGE>

                  (g)   Ship, reclaim, recover, store, finish, maintain, repair,
   prepare for sale, advertise for sale, and sell the Collateral. Bank is hereby
   granted a non-exclusive, royalty-free license or other right to use, without
   charge, Borrower's labels, patents, copyrights, mask works, rights of use of
   any name, trade secrets, trade names, trademarks, service marks, and
   advertising matter, or any similar property as it pertains to the Collateral,
   in completing production of, advertising for sale, and selling any Collateral
   and, in connection with Bank's exercise of its rights under this Section,
   Borrower's rights under all licenses and all franchise agreements inure to
   Bank's benefit;

                  (h)   Place a "hold" on any account maintained with Bank
   and/or deliver a notice of exclusive control, any entitlement order, or other
   directions or instructions pursuant to any control agreement or similar
   agreements providing control of any Collateral; and

                  (i)   Exercise all rights and remedies and dispose of the
   Collateral according to the Code.

      9.2   POWER OF ATTORNEY. Borrower hereby irrevocably appoints Bank as its
lawful attorney-in-fact, to be effective upon the occurrence and during the
continuance of an Event of Default, to: (i) endorse Borrower's name on any
checks or other forms of payment or security; (ii) sign Borrower's name on any
invoice or bill of lading for any Account or drafts against account debtors;
(iii) settle and adjust disputes and claims about the Accounts directly with
account debtors, for amounts and on terms Bank determines reasonable; (iv) make,
settle, and adjust all claims under Borrower's insurance policies; and (v)
transfer the Collateral into the name of Bank or a third party as the Code
permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign
Borrower's name on any documents necessary to perfect or continue the perfection
of any security interest regardless of whether an Event of Default has occurred
until all Obligations have been satisfied in full and Bank is under no further
obligation to make Credit Extensions hereunder. Bank's foregoing appointment as
Borrower's attorney in fact, and all of Bank's rights and powers, coupled with
an interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank's obligation to provide Credit Extensions terminates.

      9.3   ACCOUNTS NOTIFICATION/COLLECTION. In the event that an Event of
Default occurs and is continuing, Bank may notify any Person owing Borrower
money of Bank's security interest in the funds and verify and/or collect the
amount of the Account. After the occurrence of an Event of Default, any amounts
received by Borrower shall be held in trust by Borrower for Bank, and, if
requested by Bank, Borrower shall immediately deliver such receipts to Bank in
the form received from the account debtor, with proper endorsements for deposit.

      9.4   BANK EXPENSES. Any amounts paid by Bank as provided herein shall
constitute Bank Expenses and are immediately due and payable, and shall bear
interest at the then applicable rate and be secured by the Collateral. No
payments by Bank shall be deemed an agreement to make similar payments in the
future or Bank's waiver of any Event of Default.

      9.5   BANK'S LIABILITY FOR COLLATERAL. So long as the Bank complies with
reasonable banking practices regarding the safekeeping of collateral, the Bank
shall not be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other Person. Borrower bears all risk of loss, damage or destruction of the
Collateral.

      9.6   REMEDIES CUMULATIVE. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements are cumulative. Bank has
all rights and remedies provided under the Code, by law, or in equity. Bank's
exercise of one right or remedy is not an election, and Bank's waiver of any
Event of Default is not a continuing waiver. Bank's delay is not a waiver,
election, or acquiescence. No waiver hereunder shall be effective unless signed
by Bank and then is only effective for the specific instance and purpose for
which it was given.

      9.7   DEMAND WAIVER. Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees held by Bank on which
Borrower is liable.

      10    NOTICES

                                      -11-
<PAGE>

      All notices or demands by any party to this Agreement or any other related
agreement must be in writing and be personally delivered or sent by an overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile at the addresses listed below. Either Bank or Borrower may
change its notice address by giving the other party written notice.

            If to Borrower:           SkillSoft Corporation
                                      SmartCertify Direct, Inc.
                                      Books24x7.com, Inc.
                                      107 Northeastern Boulevard
                                      Nashua, New Hampshire 03062
                                      Attn: Mr. Anthony P. Amato
                                      Fax: (603) 821-5643

            If to Bank:               Silicon Valley Bank
                                      One Newton Executive Park, Suite 200
                                      2221 Washington Street
                                      Newton, Massachusetts  02462
                                      Attn: Irina Case
                                      Fax: (617) 969-4395

            with a copy to:           Riemer & Braunstein LLP
                                      Three Center Plaza
                                      Boston, Massachusetts 02108
                                      Attn: David A. Ephraim, Esquire
                                      FAX: (617) 880-3456

      11    CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

      Massachusetts law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Massachusetts; provided, however, that if for
any reason Bank cannot avail itself of such courts in the Commonwealth of
Massachusetts, Borrower accepts jurisdiction of the courts and venue in Santa
Clara County, California. NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE
BANK'S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

      12    GENERAL PROVISIONS

      12.1  SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit
of the successors and permitted assigns of each party. Borrower may not assign
this Agreement or any rights or Obligations under it without Bank's prior
written consent which may be granted or withheld in Bank's discretion. Bank has
the right, without the consent of or notice to Borrower, to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank's obligations, rights and benefits under this Agreement, the Loan Documents
or any related agreement.

      12.2  INDEMNIFICATION. Borrower hereby indemnifies, defends and holds the
Bank and its directors, officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any

                                      -12-
<PAGE>

other party in connection with the transactions contemplated by the Loan
Documents, except for losses caused by Bank's gross negligence or willful
misconduct; and (b) all losses or Bank Expenses incurred, or paid by Bank from,
following, or consequential to transactions between Bank and Borrower (including
reasonable attorneys' fees and expenses), except for losses caused by Bank's
gross negligence or willful misconduct.

      12.3  RIGHT OF SET-OFF. Borrower and any guarantor hereby grant to Bank, a
lien, security interest and right of setoff as security for all Obligations to
Bank, whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of the Bank
(including a Bank subsidiary) or in transit to any of them. At any time after
the occurrence and during the continuance of an Event of Default, without demand
or notice, Bank may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower and any guarantor even though unmatured
and regardless of the adequacy of any other collateral securing the Obligations.
ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.

      12.4  TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Agreement.

      12.5  SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.

      12.6  AMENDMENTS IN WRITING; INTEGRATION. All amendments to this Agreement
must be in writing signed by both Bank and Borrower. This Agreement and the Loan
Documents represent the entire agreement about this subject matter, and
supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.

      12.7  COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, constitute
one Agreement.

      12.8  SURVIVAL. All covenants, representations and warranties made in this
Agreement continue in full force while any Obligations remain outstanding. The
obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the
statute of limitations with respect to such claim or cause of action shall have
run.

      12.9  CONFIDENTIALITY. In handling any confidential information, Bank
shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Bank's
subsidiaries or affiliates in connection with their business with Borrower; (ii)
to prospective transferees or purchasers of any interest in the Credit
Extensions (provided, however, Bank shall use commercially reasonable efforts in
obtaining such prospective transferee's or purchaser's agreement to the terms of
this provision); (iii) as required by law, regulation, subpoena, or other order,
(iv) as required in connection with Bank's examination or audit; and (v) as Bank
considers appropriate in exercising remedies under this Agreement. Confidential
information does not include information that either: (a) is in the public
domain or in Bank's possession when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank; or (b) is disclosed to Bank by a third
party, if Bank does not know that the third party is prohibited from disclosing
the information.

      12.10 BORROWER LIABILITY. Each Borrower hereunder shall be obligated to
repay all Credit Extensions made hereunder, regardless of which Borrower
actually receives said Credit Extension, as if each Borrower hereunder directly
received all Credit Extensions.

      12.11 SUBROGATION AND SIMILAR RIGHTS. Notwithstanding any other provision
of this Agreement or other related document, until the payment in full of the
Credit Extensions and termination of this Agreement, each Borrower irrevocably
waives all rights that it may have at law or in equity (including, without
limitation, any law subrogating the Borrower to the rights of Bank under the
Loan Documents) to seek contribution, indemnification or any other form of
reimbursement from any other Borrower, or any other Person now or hereafter
primarily or

                                      -13-
<PAGE>

secondarily liable for any of the Obligations, for any payment made by the
Borrower with respect to the Obligations in connection with the Loan Documents
or otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any payment made
by the Borrower with respect to the Obligations in connection with the Loan
documents or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section shall be
modified to the extent necessary to comply with this Section. If any payment is
made to a Borrower in contravention of this Section, such Borrower shall hold
such payment in trust for Bank and such payment shall be promptly delivered to
Bank for application to the Obligations, whether matured or unmatured.

      13    DEFINITIONS

      13.1  DEFINITIONS. In this Agreement:

      "ACCOUNTS" as accounts as defined under the Code.

      "ADDITIONAL FEES" is defined in Section 6.6.

      "ADVANCE" or "ADVANCES" is a loan advance (or advances) under the
Revolving Line.

      "AFFILIATE" is a Person that owns or controls directly or indirectly the
Person, any Person that controls or is controlled by or is under common control
with the Person, and each of that Person's senior executive officers, directors,
partners and, for any Person that is a limited liability company, that Person's
managers and members.

      "AGENT" is defined in Section 1.2.

      "BANK EXPENSES" are all audit fees and expenses (after the occurrence of
an Event of Default) and reasonable costs or expenses (including reasonable
attorneys' fees and expenses) for preparing, negotiating, defending and
enforcing the Loan Documents (including appeals or Insolvency Proceedings).

      "BORROWER'S BOOKS" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or storage or any
equipment containing the information.

      "BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on which
the Bank is closed.

      "CASH MANAGEMENT SERVICES" is defined in Section 2.1.4.

      "CASH MANAGEMENT SERVICES SUBLIMIT" is defined in Section 2.1.4.

      "CLOSING DATE" is the date of this Agreement.

      "CODE" is the Uniform Commercial Code as adopted in Massachusetts, as
amended and as may be amended and in effect from time to time.

      "COLLATERAL" is any and all properties, rights and assets of the Borrower
granted by the Borrower to Bank or arising under the Code, now, or in the
future, in which the Borrower obtains an interest, or the power to transfer
rights, in the property described on EXHIBIT A.

      "CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the

                                      -14-
<PAGE>

primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.

      "CREDIT EXTENSION" is each Advance, Letter of Credit, F/X Forward Contract
or any other extension of credit by Bank for Borrower's benefit.

      "CURRENT LIABILITIES" are as defined in accordance with GAAP, plus all
obligations and liabilities of Borrower to Bank (excluding undrawn Letters of
Credit), less Deferred Revenue.

      "DEFERRED REVENUE" is all amounts received or invoiced in advance of
performance under contracts and not yet recognized as revenue.

      "ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.

      "FX FORWARD CONTRACT" is defined in Section 2.1.3.

      "FX RESERVE" is defined in Section 2.1.3.

      "GAAP" is generally accepted accounting principles.

      "GUARANTOR" is SkillSoft Finance Limited and SkillSoft Plc, or any future
guarantor of the Obligations.

      "INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

      "INSOLVENCY PROCEEDING" is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

      "INTELLECTUAL PROPERTY": is any copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, now owned or later acquired;
any patents, trademarks, service marks and applications therefor; any trade
secret rights, including any rights to unpatented inventions, now owned or
hereafter acquired.

      "INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

      "INVESTMENT" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.

      "LETTER OF CREDIT" means a letter of credit or similar undertaking issued
by Bank pursuant to Section 2.1.2.

      "LETTER OF CREDIT RESERVE" has the meaning set forth in Section 2.1.2.

      "LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

      "LOAN DOCUMENTS" are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

                                      -15-
<PAGE>

      "MATERIAL ADVERSE CHANGE" is: (i) A material impairment in the perfection
or priority of Bank's security interest in the Collateral or in the value of
such Collateral; (ii) a material adverse change in the business, operations, or
condition (financial or otherwise) of the Borrower; or (iii) a material
impairment of the prospect of repayment of any portion of the Obligations; or
(iv) when Bank determines, based upon information available to it and in its
reasonable judgment, that there is a substantial likelihood that Borrower shall
fail to comply with one or more of the financial covenants in Section 6 during
the next succeeding financial reporting period.

      "NET INCOME" is defined in accordance with GAAP.

      "OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including letters of credit, cash
management services, and foreign exchange contracts, if any, and including
interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank.

      "PERFECTION CERTIFICATE" are those certain perfection certificates
delivered to the Bank by each Borrower.

      "PERMITTED INDEBTEDNESS" is:

                  (a)   Borrower's indebtedness to Bank under this Agreement or
            the Loan Documents;

                  (b)   Indebtedness existing on the Closing Date and shown on
            the Perfection Certificate;

                  (c)   Subordinated Debt;

                  (d)   Indebtedness to trade creditors incurred in the ordinary
            course of business; and

                  (e)   Indebtedness secured by Permitted Liens; and

                  (f)   Extensions, refinancings, modifications, amendments and
            restatements of any items of Permitted Indebtedness (a) through (e)
            above, provided that the principal amount thereof is not increased
            or the terms thereof are not modified to impose more burdensome
            terms upon Borrower or its Subsidiary, as the case may be.

      "PERMITTED INVESTMENTS" are:

                  (a)   Investments shown on the Perfection Certificate and
            existing on the Closing Date;

                  (b)   (i) marketable direct obligations issued or
            unconditionally guaranteed by the United States or its agency or any
            state maturing within 1 year from its acquisition, (ii) commercial
            paper maturing no more than 1 year after its creation and having the
            highest rating from either Standard & Poor's Corporation or Moody's
            Investors Service, Inc., (iii) Bank's certificates of deposit issued
            maturing no more than 1 year after issue, (iv) any other investments
            administered through the Bank; and

                  (c)   transfers of cash or property to one or more Subsidiary
            of the Borrower, having a cash or fair market value, in the
            aggregate, of no more than [$__________________].

      "PERMITTED LIENS" are:

                  (a)   Liens existing on the Closing Date and shown on the
            Perfection Certificate or arising under this Agreement or other Loan
            Documents;

                                      -16-
<PAGE>

                  (b)   Liens for taxes, fees, assessments or other government
            charges or levies, either not delinquent or being contested in good
            faith and for which Borrower maintains adequate reserves on its
            Books, if they have no priority over any of Bank's security
            interests;

                  (c)   Purchase money Liens (i) on Equipment acquired or held
            by Borrower incurred for financing the acquisition of the Equipment
            securing no more than Five Hundred Thousand Dollars ($500,000.00) in
            the aggregate amount outstanding, or (ii) existing on equipment when
            acquired, if the Lien is confined to the property and improvements
            and the proceeds of the equipment;

                  (d)   Leases or subleases and non-exclusive licenses or
            sublicenses granted in the ordinary course of Borrower's business,
            if the leases, subleases, licenses and sublicenses permit granting
            Bank a security interest; and

                  (e)   Liens incurred in the extension, renewal or refinancing
            of the indebtedness secured by Liens described in (a) through (d),
            but any extension, renewal or replacement Lien must be limited to
            the property encumbered by the existing Lien and the principal
            amount of the indebtedness may not increase.

      "PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

      "PRIME RATE" is Bank's most recently announced "prime rate," even if it is
not Bank's lowest rate.

      "QUICK ASSETS" is, on any date, the aggregate of Borrower's unrestricted
cash, cash equivalents, accounts receivable and investments with maturities of
fewer than 12 months determined according to GAAP.

      "RESPONSIBLE OFFICER" is each of the Chief Executive Officer, President,
Chief Financial Officer, Corporate Treasurer, and Controller of Borrower.

      "REVOLVING LINE" is an Advance or Advances of up to Twenty-Five Million
Dollars ($25,000,000.00).

      "REVOLVING LINE MATURITY DATE" is July 22, 2006.

      "SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (pursuant to a subordination agreement entered into
between the Bank, the Borrower and the subordinated creditor), on terms
acceptable to Bank.

      "SUBSIDIARY" is any Person, corporation, partnership, limited liability
company, joint venture, or any other business entity of which more than 50% of
the voting stock or other equity interests is owned or controlled, directly or
indirectly, by the Person or one or more Affiliates of the Person.

      "UNUSED REVOLVING LINE FACILITY FEE" is defined in Section 2.3(c).

                                      -17-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.

BORROWER:

SKILLSOFT CORPORATION (as Agent and Borrower)

By /s/ Thomas McDonald
   ------------------------------------------
Name: Thomas McDonald
Title: Executive Vice President, CFO

SMARTCERTIFY DIRECT, INC.

By /s/ Thomas McDonald
   ------------------------------------------
Name: Thomas McDonald
Title: CFO

BOOKS24X7.COM, INC.

By /s/ Thomas McDonald
   ------------------------------------------
Name: Thomas McDonald
Title: Treasurer

BANK:
SILICON VALLEY BANK, d/b/a
SILICON VALLEY EAST

By /s/ Michael D. Sinclair
   ------------------------------------------
Name: Michael D. Sinclair
Title: Vice President

SILICON VALLEY BANK

By /s/ Jacquelin Le
  -------------------------------------------
Name: Jacquelin Le
Title: Operations Supervisor
(Signed in Santa Clara County, California)

SILICON VALLEY BANK

By: /s/ Dominique Monbureau
   ------------------------------------------
Name: Dominique Monbureau
Title: Operations Supervisor
(Signed in Santa Clara County, California)

                                      S-1
<PAGE>

                                    EXHIBIT A

      The Collateral consists of all right, title and interest of Borrower in
and to the following:

      All goods, equipment, inventory, contract rights or rights to payment of
money, license agreements, franchise agreements, general intangibles (including
payment intangibles), accounts (including health-care receivables), documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), commercial tort claims,
securities, and all other investment property supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and

      All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

      The Collateral does not include:

      Any copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether
published or unpublished, now owned or later acquired; any patents, trademarks,
service marks and applications therefor; any trade secret rights, including any
rights to unpatented inventions, now owned or hereafter acquired.
Notwithstanding the foregoing, the Collateral shall include all accounts,
license and royalty fees and other revenues, proceeds, or income arising out of
or relating to any of the foregoing intellectual property. To the extent a court
of competent jurisdiction holds that a security interest in any Intellectual
Property is necessary to have a security interest in any accounts, license and
royalty fees and other revenues, proceeds, or income arising out of or relating
to any of the foregoing Intellectual Property, then the Collateral shall,
effective as of the Closing Date, include the Intellectual Property, to the
extent necessary to permit perfection of the Bank's security interest in such
accounts, license and royalty fees and other revenues, proceeds, or income
arising out of or relating to any of the Intellectual Property.

<PAGE>

                                    EXHIBIT B
                        LOAN PAYMENT/ADVANCE REQUEST FORM
                 DEADLINE FOR SAME DAY PROCESSING IS 3:00 E.S.T.

Fax To:  (617) 969-5965                              Date: _____________________

LOAN PAYMENT:

                         SkillSoft Corporation, as Agent

From Account #__________________________   To Account #_________________________
                  (Deposit Account #)                      (Loan Account #)

Principal $_____________________________   and/or Interest $____________________

All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone transfer request for an advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date:

AUTHORIZED SIGNATURE: __________________     Phone Number: _____________________

LOAN ADVANCE:

Complete Outgoing Wire Request section below if all or a portion of the funds
from this loan advance are for an outgoing wire.

From Account #__________________________   To Account #_________________________
                  (Loan Account #)                        (Deposit Account #)

Amount of Advance $_____________________

All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone transfer request for an advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date:

AUTHORIZED SIGNATURE: __________________     Phone Number: _____________________

OUTGOING WIRE REQUEST

COMPLETE ONLY IF ALL OR A PORTION OF FUNDS FROM THE LOAN ADVANCE ABOVE ARE TO BE
WIRED.

Deadline for same day processing is 3:00 pm, E.S.T.

Beneficiary Name: ______________________   Amount of Wire: $____________________

Beneficiary Bank: ______________________   Account Number: _____________________

City and State: ________________________

Beneficiary Bank Transit                   Beneficiary Bank Code (Swift, Sort,
  (ABA) #: _____________________________    Chip, etc.):_______________________
                                             (FOR INTERNATIONAL WIRE ONLY)

Intermediary Bank: _____________________   Transit (ABA) #: ____________________

For Further Credit to: _________________________________________________________

Special Instruction: ___________________________________________________________

By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).

Authorized Signature: __________________   2nd Signature (If Required): ________
Print Name/Title: ______________________   Print Name/Title: ___________________
Telephone # ____________________________   Telephone # _________________________

<PAGE>

                                    EXHIBIT C
                             COMPLIANCE CERTIFICATE

TO:   SILICON VALLEY BANK
FROM: SKILLSOFT CORPORATION
      SMARTCERTIFY DIRECT INC.
      BOOKS 24X7

      The undersigned authorized officer of SkillSoft Corporation, SmartCertify
Direct Inc., and Books 24x7 certifies that under the terms and conditions of the
Loan and Security Agreement between Borrower and Bank (the "Agreement"), (i)
Borrower is in complete compliance for the period ending _______________ with
all required covenants except as noted below and (ii) there are no Events of
Default, and all representations and warranties in the Agreement are true and
correct in all material respects on this date. Attached are the required
documents supporting the certification. The Officer certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP)
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer acknowledges that no borrowings
may be requested at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered.

      .PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.

<TABLE>
<CAPTION>
            REPORTING COVENANT                           REQUIRED              COMPLIES
            ------------------                           --------              --------
<S>                                             <C>                            <C>
Quarterly financial statements with CC          Quarterly within 45 days        Yes No
Annual (CPA Audited) with CC                    FYE within 90 days              Yes No
Quarterly Consolidated financial statements     Quarterly within 45 days        Yes No
</TABLE>

<TABLE>
<CAPTION>
       FINANCIAL COVENANT                 REQUIRED        ACTUAL        COMPLIES
       ------------------                 --------        ------        --------
<S>                                       <C>            <C>            <C>
Maintain on a Quarterly  Basis:
 Minimum Quick Ratio                       _____*:1.0     ____:1.0       Yes No
 Minimum Net Income                       $_________*    $________       Yes No
</TABLE>

* As set forth in Section 6.7 of the Agreement.

COMMENTS REGARDING EXCEPTIONS: See Attached.   BANK USE ONLY
Sincerely,                                     Received by: ____________________
SkillSoft Corporation (as Agent and Borrower)               AUTHORIZED SIGNER
                                               Date:     _______________________
_____________________________
SIGNATURE                                      Verified: _______________________
_____________________________                               AUTHORIZED SIGNER
TITLE                                          Date:     _______________________
_____________________________
DATE                                           Compliance Status:  Yes  No

Smartcertify Direct, Inc.

_____________________________
SIGNATURE

_____________________________
TITLE

_____________________________
DATE

<PAGE>

Books 24x7

_____________________________
SIGNATURE

_____________________________
TITLE

_____________________________
DATE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]