RESIGNATION AGREEMENT AND GENERAL RELEASE

RESIGNATION AGREEMENT AND GENERAL RELEASE

This Resignation Agreement (“Agreement”) and the General Release which is attached hereto and incorporated by reference as Exhibit A (“the Release”), are made by and between Larry Betterley (“Employee”) on behalf of himself, his agents, heirs, executors, administrators, attorneys and successors, and PLATO Learning, Inc., and any related parent or subsidiary corporations, successors, predecessors, and attorneys, whether in their individual or official capacities (“Employer”) (Employer and Employee collectively “Parties”).

The Parties to this Agreement have considered their rights, options and alternatives under this Agreement and the attached Release; and have agreed to the following terms and conditions:

The Employer and Employee have mutually agreed that it is in the Parties’ best interests for the Employee to resign;

The Employee’s employment with the Employer, and, except to the extent otherwise specifically provided in Section 6 of this Agreement, the Parties’ Employment Agreement which became effective November 5, 2004 (the “Employment Agreement”), shall terminate effective upon the close of business on January 16, 2007 (“Resignation Date”).

NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND ALL OF THE TERMS AND CONDITIONS SET FORTH HEREIN, THE PARTIES AGREE AS FOLLOWS:

1.  Consideration . Employer shall, after receipt of this fully executed Resignation Agreement and General Release, and after expiration of all applicable rescission periods, provide Employee with the Consideration described below:

The foregoing Consideration, with the exception of those benefits identified in paragraph D, shall be subject to appropriate taxes and withholding, as Consideration for Employee’s release of any and all alleged claims, which may have arisen at any time during Employee’s employment with, or in the course of Employee’s resignation from employment with the Employer.

2.  Continuation of Directors’ and Officers’ Insurance Coverage. The Employer will, from the Employee’s Resignation Date through at least the fifth anniversary of that Resignation Date, maintain the Employee as an insured party on all directors’ and officers’ insurance maintained by the Employer for the benefit of its directors and officers on at least the same basis as all other covered individuals.

3.  Employer’s Right to Terminate and Recover Consideration. Except as otherwise prohibited by Law with respect to the release of claims under the Age Discrimination in Employment Act, Employer’s obligation to provide the Consideration as described in Section 1 of this Agreement is expressly conditioned upon Employee’s compliance with all obligations outlined and agreed to in this Agreement and the Release, and Employee’s obligations under his Employment Agreement which survive his resignation from employment. Should Employee violate any of the terms of this Agreement and Release, Employer will be entitled to discontinue or recover the Consideration provided for by this Agreement.

4.  Expense Reimbursement : The Employer agrees to provide the Employee with reimbursement for any and all of the Employee’s legitimate outstanding expenses provided these are submitted immediately following resignation.

5.  Return and Release of All Property : Employee agrees to return, on or before his last day of active employment, all Employer property in Employee’s possession or control, including any computers, fax machines, cell phones, access cards, keys, reports, manuals, records, product samples, correspondence and/or other documents or materials related to Employer’s business that Employee has compiled, generated or received while working for the Employer, including all copies, samples, computer data or records of such material, on or before his Resignation Date. Furthermore, Employee agrees that he will, prior to his Resignation Date, deliver all passwords in use at the time of the separation, a list of any documents that Employee created or is otherwise aware that are password-protected, and the password(s) necessary to access such password-protected documents. Employee also agrees to cooperate with the Employer and to use Employee’s best efforts to ensure that both the Employer’s interests and those of Employee are mutually protected, and to be available, on a reasonable basis, to answer questions that may arise to achieve a smooth transition. Employer’s obligations under this Agreement are contingent upon Employee returning all Employer property and cooperating with the Employer as set forth above. Notwithstanding the foregoing, Employee may retain his current mobile telephone number and the laptop computer currently in his possession, along with the business software currently installed on the laptop, but excluding all company files.

6.  Compliance with Prior Agreements and Confidentiality . The Employee’s Employment Agreement and employment with Employer will terminate effective as of the Resignation Date without any ongoing duties or obligations of the Parties under that Agreement, except that Employee will continue to be bound by Sections 8, 9, 10, and 11 of his Employment Agreement in accordance with their terms. Employee also agrees not to divulge or use any trade secrets, confidential information, or other proprietary information of Employer, which he/she obtained, or to which Employee had access during his employment or consulting arrangement with Employer. “Confidential Information,” shall include that information designated as such in the Employee’s Employment Agreement, and also means information that is not generally known and that is proprietary to Employer or that Employer is obligated to treat as proprietary, which shall include, but is not limited to, the terms of this Agreement and any Exhibits attached hereto. Any information that Employee reasonably considers Confidential Information, or that Employer treats as Confidential Information, will be presumed to be Confidential Information (whether Employee or others originated it and regardless of how Employer obtained it). Except as specifically authorized by an authorized officer of Employer or its affiliates, or by written policies of Employer, Employee will not, either during or after the term of this Agreement, use or disclose Confidential Information to any person who is not an employee of Employer, except as is necessary to perform Employee’s duties under this Agreement. Except as otherwise provided in this Resignation Agreement, the Employer shall have no obligations to the Employee, under his Employment Agreement or otherwise, after the Employee’s Resignation Date.

7.  Stipulation of No Charges . Employee affirmatively represents that he/she has not filed nor caused to be filed any charges, claims, complaints, or actions against Employer before any federal, state, or local administrative agency, court, or other forum.

Employee further waives any right to any form of recovery or compensation from any legal action, excluding any action claiming this Agreement and Release violate the AD