Document:

<PAGE>

                                                                   EXHIBIT 10.17

                                    WARRANT

            to Purchase up to an Aggregate of     Ordinary Shares
                           (Subject to Adjustment) of
                                 ViryaNet Ltd.
                            at U.S. $    per share

                VOID AFTER 10:00 a.m. (prevailing Tel Aviv time)

                                on

    THIS IS TO CERTIFY that the holder specified below ("Holder") is entitled to
purchase, subject to the provisions of this Warrant, from ViryaNet Ltd. (the
"Company"), at any time during the period commencing               (the
"Effective Date") and ending on              , an aggregate of up to
(subject to adjustment) fully paid and nonassessable Ordinary Shares, nominal
value New Israeli Shekel ("NIS") 0.10 per share (the "Ordinary Shares"), of the
Company at a price of US$      per share or the NIS equivalent thereof (the
"Exercise Price"). The amount and kind of securities purchasable pursuant to the
rights granted hereunder and the Exercise Price for such securities are subject
to adjustment pursuant to the further provisions of this Warrant.

1.  EXERCISE OF WARRANT

    Subject to the provisions hereof, this Warrant may be exercised in whole
    or in part, at any time or from time to time on or after the Effective Date
    and until              . This Warrant shall be exercised by presentation and
    surrender hereof to the Company at the principal office of  the Company;
    accompanied by

    1.  a written notice of exercise and

    2.  payment to the Company, for the account of the Company, of the Exercise
        Price for the number of Ordinary Shares specified in such notice.

    The Exercise Price for the number of Ordinary Shares specified in the notice
    shall be payable in immediately available good funds, at the option of the
    Holder, in U.S. dollars or the NIS equivalent thereof, based on the
    Representative Rate of Exchange published by the Bank of Israel known as of
    the time of payment.

    Upon such presentation and surrender, the Company shall issue promptly to
    the Holder the Ordinary Shares to which the Holder is entitled hereunder. In
    the event the Exercise Price has been paid in U.S. dollars, the certificate
    representing the Ordinary Shares issued upon such exercise shall bear a
    stamp from an Israeli commercial bank confirming that the Ordinary Shares
    were

Page 1 of 8
<PAGE>

    purchased with foreign currency. In the event that the Warrant is exercised
    pursuant to the net exercise provisions below, the Company shall apply to
    the Bank of Israel, if necessary, in order to obtain such stamp.

    If this Warrant should be exercised in part only, the Company shall, upon
    surrender of this Warrant for cancellation, execute and deliver a new
    Warrant evidencing the rights of the Holder to purchase the balance of the
    Ordinary Shares purchasable hereunder. Upon receipt by the Company of this
    Warrant, in proper form for exercise, the Holder shall be deemed to be the
    holder of record of the Ordinary Shares issuable upon such exercise,
    notwithstanding that the share transfer books of the Company shall then be
    closed or that certificates representing such Ordinary Shares shall not then
    be actually delivered to the Holder. The Company shall pay any and all
    expenses, any stamp duty and any other charges that may be payable in
    connection with the issuance of the Ordinary Shares and the preparation and
    delivery of share certificates pursuant to this Paragraph 1 in the name of
    the Holder.

    No fractions of Ordinary Shares shall be issued in connection with the
    exercise of this Warrant, and the number of Ordinary Shares issued shall be
    rounded down to the nearest whole number.

    Notwithstanding the foregoing, in lieu of exercising this Warrant as
    provided above, in whole or in part, the Holder may elect to receive,
    Ordinary Shares equal to the value of the Warrant (or the portion thereof
    being canceled) by written notice of such election to the Company, at the
    principal office of the Company, in which event the Company shall issue to
    the Holder, for no additional consideration, that number of Ordinary Shares
    computed using the following formula:

              Y(A - B)
    X  =  -----------------
                  A

    X   equals the number of Ordinary Shares to be issued to the Holder;

    Y   equals the number of Ordinary Shares which would otherwise have been
        purchasable under this Warrant (or the portion thereof being canceled);

    B   equals the Exercise Price in effect at the time of exercise pursuant to
        this formula (as may have been or be adjusted pursuant to the terms of
        this Warrant); and

    A   shall equal the "Fair Value" of one share of the Company's Ordinary
        Shares.  Fair Value shall mean in the event that this Warrant is
        exercised in accordance with the above formula (i) if in connection with
        a merger of the Company with or into another Company in which the
        Company is not the surviving company ("Merger") or the sale of all or
        substantially all of the assets of the Company ("Sale"), the value of
        one Ordinary Share as determined for the purposes of the Merger or Sale,
        or (ii) if other than in connection with an a Merger or Sale and if a
        public market exists for the securities then subject to this Warrant and
        such securities are listed on a

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        U.S. nationally recognized stock exchange or on the Nasdaq stock market,
        then the Fair Value shall equal the last sale or trading price of one
        Ordinary Share as reported on such exchange or market, as applicable;
        provided, however, if no public market exists for the securities then
        the Fair Value shall be determined in good faith by the Board of
        Directors of the Company, but if such determination is challenged in
        good faith by the Holder, then as determined by an independent appraiser
        mutually satisfactory to the Company and the Holder, which determination
        shall be binding upon the parties.

2.  RESERVATION OF SHARES: PRESERVATION OF RIGHTS

    The Company hereby agrees that at all times it will maintain and reserve
    such number of authorized but unissued Ordinary Shares so that this Warrant
    may be exercised without additional authorization of Ordinary Shares after
    giving effect to all other options, warrants, convertible securities and
    other rights to acquire Ordinary Shares of the Company. In addition, the
    Company will maintain and reserve such number of authorized but unissued
    Ordinary Shares as will be sufficient to permit the conversion in full of
    all issued or issuable Ordinary Shares. All shares of Ordinary Shares
    issuable pursuant to the terms hereof, when issued upon exercise of this
    Warrant in accordance with the terms hereof shall be duly and validly issued
    and fully paid and nonassessable, not subject to preemptive rights and shall
    be free and clear of all liens, encumbrances, equities and claims. The
    Company further agrees that it will not, by charter amendment or through
    reorganization, consolidation, merger, dissolution or sale of assets, or by
    any other voluntary act, avoid or seek to avoid the observance or
    performance of any of the covenants, stipulations or conditions to be
    observed or performed hereunder by the Company.

3.  EXCHANGE OR LOSS OF WARRANT

    This Warrant is exchangeable, upon presentation and surrender hereof at the
    principal office of the Company, only in connection with a partial exercise
    hereof. The Company shall be under no obligation to issue replacement
    warrants for the aggregate number of shares covered hereby except as
    described herein. The term "Warrant" as used herein includes any Warrant or
    Warrants for which this Warrant may be exchanged. Upon receipt by the
    Company of evidence reasonably satisfactory to it of the loss, theft,
    destruction or mutilation of this Warrant, and (in the case of loss, theft
    or destruction) of reasonably satisfactory indemnification, and upon
    surrender and cancellation of this Warrant, if mutilated, the Company will
    execute and deliver a new Warrant of like terms, tenor and date.

4.  ADJUSTMENT

    The number of Ordinary Shares purchasable upon the exercise of this Warrant
    and the Exercise Price shall be subject to adjustment from time to time or
    upon exercise as provided in this paragraph 4.

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    4.1.    If, during the term of this Warrant, the Company shall distribute a
            stock dividend or shares of capital stock pursuant to a
            reclassification of its Ordinary Shares to the holders of Ordinary
            Shares (i.e., bonus shares), the number of Ordinary Shares
            purchasable upon exercise of this Warrant shall be increased by
            multiplying such number of shares to be purchased under this Warrant
            by a fraction of which the denominator shall be the number of
            Ordinary Shares outstanding at the close of business on the day
            immediately preceding the date of such distribution and the
            numerator shall be the sum of such number of shares and the total
            number of bonus shares, such increase to become effective
            immediately after the opening of business on the date following such
            distribution, and upon the happening of such an event the Exercise
            Price shall be adjusted appropriately.

    4.2.    If, during the term of this Warrant, the outstanding Ordinary Shares
            shall be subdivided into a greater number of Ordinary Shares, the
            number of Ordinary Shares purchasable upon exercise of this Warrant
            at the opening of business on the day following the day upon which
            such subdivision becomes effective shall be proportionately
            increased, and, conversely, if the outstanding Ordinary Shares shall
            each be combined into a smaller number of Ordinary Shares, the
            number of Ordinary Shares purchasable upon exercise of this Warrant
            at the opening of business on the day following the day upon which
            such combination becomes effective shall be proportionately
            decreased, and in each such case the Exercise Price shall be
            adjusted appropriately.

    4.3.    Reorganization, Reclassification, Merger, Consolidation or
            Disposition of Assets

            (a)   In case the Company shall reorganize its capital, reclassify
                  its capital stock, consolidate or merge with or into another
                  corporation or sell, transfer or otherwise dispose of all or
                  substantially all of its property, assets or business to
                  another corporation and pursuant to the terms of such
                  reorganization, reclassification, merger, consolidation or
                  disposition of assets, (i) shares of capital stock of the
                  successor or acquiring corporation or of the Company (if it is
                  the surviving corporation) or (ii) any cash, shares of stock
                  or other securities or property of any nature whatsoever
                  (including warrants or other subscription or purchase rights)
                  in addition to or in lieu of capital stock of the successor or
                  acquiring corporation ("Other Property") are to be received by
                  or distributed to the holders of Ordinary Shares of the
                  Company who are holders immediately prior to such transaction,
                  then the Holder shall have the right thereafter to receive,
                  upon exercise of this Warrant, the number of shares of capital
                  stock of the successor or acquiring corporation or of the
                  Company, if it is the surviving corporation, and Other
                  Property receivable upon or as a result of such
                  reorganization, reclassification, merger, consolidation or
                  disposition of assets by a holder

Page 4 of 8                                                                    4
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                  of the number of shares of Ordinary Shares for which this
                  Warrant is exercisable immediately prior to such event.

            (b)   In case of any such reorganization, reclassification, merger,
                  consolidation or disposition of assets, the successor or
                  acquiring corporation shall expressly assume the due and
                  punctual observance and performance of each and every covenant
                  and condition of this Warrant to be performed and observed by
                  the Company and all the obligations and liabilities hereunder,
                  subject to such modifications as may be deemed appropriate (as
                  determined by resolution of the Board of Directors of the
                  Company) in order to provide for adjustments of shares of the
                  Ordinary Shares for which this Warrant is exercisable, which
                  modifications shall be as nearly equivalent as practicable to
                  the adjustments provided for in this Section 4.

            (c)   The provisions of this subsection 4.3 shall similarly apply
                  to successive reorganizations, reclassifications, mergers,
                  consolidations or disposition of assets.

     4.4.   Other Dilutive Events
            ---------------------

            In case any event shall occur as to which the preceding subsections
            4.1 through 4.3 are not strictly applicable but as to which the
            failure to make any adjustment would not fairly protect the purchase
            rights represented by this Warrant in accordance with the essential
            intent and principles hereof then, in each such case, the Board of
            Directors of the Company shall, in good faith, determine what
            adjustments are necessary to preserve the purchase rights of the
            Holder represented by this Warrant. The Company will notify the
            Holder of any such adjustments.

5.  NOTICE OF ADJUSTMENTS

    Whenever the number of Ordinary Shares for which this Warrant is exercisable
    is adjusted as provided in paragraph 4 hereof or whenever the rate at which
    the Ordinary Shares are convertible into Ordinary Shares is adjusted
    pursuant to the Company's Articles of Association, the Company shall
    promptly compute such adjustment and mail to the Holder at the last address
    provided to the Company in writing a certificate, signed by the principal
    financial officer of the Company, setting forth the number of Ordinary
    Shares for which this Warrant is exercisable and the exercise price as a
    result of such adjustment, a brief statement of the facts requiring such
    adjustment and the detailed computation thereof and when such adjustment has
    or will become effective.

6.  RIGHTS OF THE HOLDER

    6.1.  Without limiting the foregoing or any remedies available to the
          Holder, the Holder will be entitled to specific performance of the
          obligations hereunder, and injunctive relief against actual or
          threatened violations of the obligations of any person subject to this
          Warrant.

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    6.2.  This Warrant shall not entitle the Holder to any voting rights or
          other rights as a shareholder of the Company whatsoever, except the
          rights expressed herein and no dividend or interest shall be payable
          or accrue in respect of this Warrant.

7.  NOTICE GENERALLY

    Any notice, demand, request, consent, approval, declaration, delivery or
    communication hereunder to be made pursuant to the provisions of this
    Warrant shall be sufficiently given or made if in writing and shall be
    deemed to have been validly served, given or delivered (a) when sent after
    receipt of confirmation or answer back if sent by telex or telecopy or other
    similar facsimile transmission, (b) two (2) business days after deposit with
    a reputable international two (2) day courier with all charges prepaid or
    (c) when delivered if hand-delivered by messenger, all of which shall be
    properly addressed to the party to be notified and sent to the address or
    number indicated, to the Holder, or the holder of Ordinary Shares at its
    last known address appearing on the books of the Company maintained for such
    purpose, and to the Company at:

                    ViryaNet Ltd.
                    Science Based Industries Campus
                    P.O. Box 23052
                    Jerusalem 91230, Israel

    or at such other address as may be submitted by notice given as herein
    provided. The giving of any notice required hereunder may be waived in
    writing by the party entitled to receive such notice.

8.  TERMINATION

    This Warrant and the rights conferred hereby shall terminate on

9.  LIMITATION ON TRANSFER

    9.1   This Warrant shall be transferable in whole or in part only to a
          subsidiary of the Holder.

    9.2   This Warrant and the Ordinary Shares issued upon the exercise of this
          Warrant shall be subject to the applicable terms and conditions of the
          Company's Articles of Association, including, without limitation, any
          restrictions and/or limitations on the transfer of securities of the
          Company.

    9.3   Without derogating from Section 9.1 above, the Holder understands that
          neither this Warrant nor the Ordinary Shares issued upon exercise of
          this Warrant have been registered under the Securities Act of 1933
          (the "Securities Act") and that the Warrant and such Ordinary Shares
          issued upon the exercise of this Warrant must be held indefinitely,
          unless they are subsequently registered under the Securities Act or
          the Holder obtains an opinion of counsel, in form and substance
          satisfactory to the Company and

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<PAGE>

          its counsel, that such registration is not required. The Holder
          further acknowledges and understands that the Company is under no
          obligation to register the Ordinary Shares issued upon the exercise of
          this Warrant

          The Holder is aware of the adoption of Rule 144 by the Securities and
          Exchange Commission under the Securities Act, which permits limited
          public resales of securities acquired in a non-public offering,
          subject only to the satisfaction of certain conditions. The Holder
          acknowledges and understands that the conditions for resale set forth
          in Rule 144 have not been satisfied and that the Company has no plans
          to satisfy these conditions in the foreseeable future.

          The Holder hereby represents that will not sell, transfer or otherwise
          dispose of the Warrant and the Ordinary Shares issued upon the
          exercise of this Warrant in violation of the Securities Act, the
          Securities Exchange Act of 1934, or the rules promulgated thereunder,
          including Rule 144 under the Securities Act. The Holder agrees that he
          or she will not dispose of the Warrant and the Ordinary Shares issued
          upon exercise of this Warrant unless and until he or she has complied
          with all requirements of the Company's Article of Association, and of
          this Warrant applicable to the disposition of the Warrant and to the
          disposition of the Ordinary Shares issued upon the exercise of this
          Warrant and it, he or she has provided the Company with written
          assurances, in substance and form satisfactory to the Company, that
          the proposed disposition does not require registration under the
          Securities Act or all appropriate action necessary for compliance with
          the registration requirements of the Securities Act or with any
          exemption from registration available under the Securities Act
          (including Rule 144) has been taken.

    9.4   All certificates evidencing the Ordinary Shares issued upon the
          exercise of this Warrant  shall bear the following legends:

          "THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
          ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
          TERMS OF THE COMPANY'S ARTICLES OF ASSOCATION OF THE COMPANY AND THE
          REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE
          SHARES). INCLUDING CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED
          TRANSFER

          "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
          OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
          SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
          COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."

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    9.5   If required by the authorities of any state in connection with the
          issuance of the Purchased Shares, the legend or legends required by
          such state authorities shall also be endorsed on all such
          certificates.

10. GOVERNING LAW

    This Warrant shall be governed by, and construed in accordance with, the
    laws of the State of Israel, without giving effect to the rules respecting
    conflict of law, and the parties hereto irrevocably submit to the exclusive
    jurisdiction of the Courts of Israel in respect of any dispute or matter
    arising out of or connected with this Warrant.

      DATED:                                   VIRYANET LTD.

                                               By:
                                                      -----------------------

                                               Name:  Samuel HaCohen
                                                      -----------------------

                                               Title: Chairman and CEO
                                                      -----------------------

      Agreed to and accepted:

      By:
          -----------------------

      Name:
           ----------------------

      Title:
            ---------------------

    Address:
            ---------------------

            ---------------------

Page 8 of 8                                                                    8Exhibit 4.1

                       AMENDMENT NO. 1 TO CREDIT AGREEMENT

                            DATED AS OF JUNE 22, 2000

            SCHOLASTIC CORPORATION, a Delaware corporation, and SCHOLASTIC INC.,
a New York corporation (the "BORROWERS"), and CITIBANK, N.A., as administrative
agent (the "AGENT") for the Lenders (as defined in the Credit Agreement referred
to below), hereby agree as follows:

                             PRELIMINARY STATEMENTS

            (1) The Borrowers are party to an Amended and Restated Credit
Agreement dated as of August 11, 1999 (the "CREDIT AGREEMENT") with the banks,
financial institutions and other institutional lenders party thereto and
Citibank, N.A., as Administrative Agent. Capitalized terms not otherwise defined
in this Amendment shall have the same meanings as specified in the Credit
Agreement.

            (2) The Borrowers have requested that the Required Lenders agree to
amend the financial covenants in the Credit Agreement . The Lenders have
indicated their willingness to so agree on the terms and conditions of this
Amendment.

            SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement
is, effective as of the date of this Amendment and subject to the satisfaction
of the conditions precedent set forth in Section 2, hereby amended as follows:

                  (a) Section 5.02(b) is amended by deleting the reference to
      "subsection (b) of this Section" and substituting therefor the reference
      "subsection (c) of this Section".

                  (b) Section 5.02(e)(ii) is amended (i) by inserting
      immediately after clause (C) a new clause (D) to read ", (D) 25% of the
      stated value of any preferred stock converted to common equity" and (ii)
      by relettering the clause (D) as clause (E).

                  (c) Section 5.03 is amended in full to read as follows:

                  SECTION 5.03. FINANCIAL COVENANTS. So long as any Advance
            shall remain unpaid or any Lender shall have any Commitment
            hereunder, the Borrowers will:

                  (a) CONSOLIDATED DEBT RATIO. Maintain at all times a
            Consolidated Debt Ratio of not more than the ratio set forth below
            for each period set forth below:

                  --------------------------------------------------
                       FISCAL QUARTER ENDING            RATIO
                  --------------------------------------------------
                  August 31, 2000                 0.690 to 1.00
                  --------------------------------------------------
                  November 30, 2000               0.660 to 1.00
                  --------------------------------------------------
                  February 28, 2001               0.660 to 1.00
                  --------------------------------------------------
                  May 31, 2001                    0.625 to 1.00
                  --------------------------------------------------
                  August 31, 2001                 0.650 to 1.00
                  --------------------------------------------------

                  --------------------------------------------------
                  November 30, 2001               0.625 to 1.00
                  --------------------------------------------------
                  February 28, 2002               0.625 to 1.00
                  --------------------------------------------------
                  May 31, 2002 and thereafter     0.600 to 1.00
                  --------------------------------------------------

                  (b) CONSOLIDATED INTEREST COVERAGE RATIO. Maintain as at the
            last day of each of their fiscal quarters a Consolidated Interest
            Coverage Ratio of not less than the ratio set forth below for each
            period set forth below:

                  --------------------------------------------------
                       FISCAL QUARTER ENDING            RATIO
                  --------------------------------------------------
                  August 31, 2000                 3.50 to 1.00
                  --------------------------------------------------
                  November 30, 2000               3.50 to 1.00
                  --------------------------------------------------
                  February 28, 2001               3.50 to 1.00
                  --------------------------------------------------
                  May 31, 2001                    3.30 to 1.00
                  --------------------------------------------------
                  August 31, 2001                 3.30 to 1.00
                  --------------------------------------------------
                  November 30, 2001               3.50 to 1.00
                  --------------------------------------------------
                  February 28, 2002               3.50 to 1.00
                  --------------------------------------------------
                  May 31, 2002 and thereafter     3.50 to 1.00
                  --------------------------------------------------

                  (d) Schedule 5.02(a) is amended in full to read as set forth
      as Schedule A to this Amendment.

            SECTION 2. CONDITIONS OF EFFECTIVENESS OF THIS AMENDMENT. This
Amendment shall become effective as of the date first above written when and
only if the Administrative Agent shall have received counterparts of this
Amendment executed by the Borrowers and the Required Lenders or, as to any of
the Lenders, advice satisfactory to the Administrative Agent that such Initial
Lender has executed this Amendment.

            SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. The
Borrowers represent and warrant as follows:

            (a) Each Borrower is a corporation duly organized, validly existing
      and in good standing under the laws of the State of its incorporation.

            (b) The execution, delivery and performance by each Borrower of this
      Amendment or the Credit Agreement and the other Loan Documents, as amended
      hereby, are within the Borrower's corporate powers, have been duly
      authorized by all necessary corporate action, and do

                                       2

      not contravene (i) such Borrower's charter or by-laws or (ii) law or any
      contractual restriction binding on or affecting such Borrower.

            (c) This Amendment has been duly executed and delivered by each
      Borrower. This Amendment and the Credit Agreement and the other Loan
      Documents, as amended hereby, are the legal, valid and binding obligation
      of each Borrower party thereto, enforceable against such Borrower in
      accordance with their respective terms.

            (d) No authorization or approval or other action by, and no notice
      to or filing with, any governmental authority or regulatory body or any
      other third party is required for the due execution, delivery and
      performance by any Borrower of this Amendment or the Credit Agreement or
      the other Loan Documents, as amended hereby.

            (e) There is no pending or threatened action, suit, investigation,
      litigation or proceeding, including, without limitation, any Environmental
      Claim, affecting the Holding Company or any of its Subsidiaries before any
      court, governmental agency or arbitrator that (i) either would be
      reasonably likely to have a Material Adverse Effect or (ii) purports to
      adversely affect the legality, validity or enforceability of this
      Amendment or the Credit Agreement and the other Loan Documents, as amended
      hereby.

            SECTION 4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
LOAN DOCUMENTS. (a) On and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment.

            (b) The Credit Agreement and the other Loan Documents, as
specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.

            SECTION 5. COSTS AND EXPENSES. The Borrowers agree to pay on demand
all reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment and the other documents to be
delivered hereunder (including, without limitation, the reasonable and
documented fees and expenses of counsel for the Administrative Agent with
respect hereto and thereto) in accordance with the terms of Section 8.04 of the
Credit Agreement.

            SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.

            SECTION 7. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

                                       3

            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                    SCHOLASTIC CORPORATION.

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                    SCHOLASTIC INC..

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                    CITIBANK, N.A.

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                    THE CHASE MANHATTAN BANK

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                    FLEET BANK, N.A.

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                   SUMMIT BANK

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                       4

                                    UMB BANK, N.A.

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                    HSBC BANK USA

                                    By /s/
                                       -----------------------------------
                                       Name:
                                       Title:

                                       5

                                SCHEDULE 5.02(a)

                         EXISTING LIENS AND ENCUMBRANCES

1)    An Operating Overdraft Agreement was entered into on September 12, 1994
      between Scholastic Canada Ltd. ("SCL") and Canadian Imperial Bank of
      Commerce has a negative pledge that SCL cannot give security over any of
      its assets to any other lender.

2)    In 1983, the City of Jefferson, Missouri provided financing to Scholastic
      Inc. through the issuance of Industrial Revenue bonds to complete a
      substantial addition to its national distribution center in Jefferson
      City, Missouri. These Bonds were renegotiated in March 1992. Scholastic
      has issued to the Bond Trustee an unconditional guarantee of principal and
      interest. Land acquired in Jefferson City, Missouri, during f/y 1982, a
      building at Scholastic's national distribution center and certain
      equipment are pledged as security.

3)    In December 1993, Scholastic entered into an agreement pursuant to which
      the IDA provides Scholastic with financial assistance through the issuance
      of IDA Bonds in connection with the purchase of furniture, fixtures and
      equipment for use at Scholastic's headquarters at 555 Broadway, New York,
      New York. In connection with such financial assistance, Scholastic has
      granted the IDA a security interest in such furniture, fixtures and
      equipment.

4)    Liens given to the Screen Actors Guild ("SAG") in connection with the
      production of The Magic School Bus property.

                                       6

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