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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 31, 1996
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EDUCATIONAL MEDICAL, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
000-21567 65-0038445
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(COMMISSION FILE NUMBER (IRS EMPLOYER IDENTIFICATION NO.)
EDUCATIONAL MEDICAL, INC.
1327 NORTHMEADOW PARKWAY, SUITE 132
ROSWELL, GEORGIA 30076
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 475-9930
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 31, 1996, Educational Medical, Inc. (the "Company"),
through its subsidiary, HBC Acquisition Corp. (a Delaware corporation)
("HBC"), purchased all of the school assets of a postsecondary
educational institution (the "School") located in Hagerstown, Maryland
(the "Maryland Acquisition) from O/E Learning, Inc. (a Michigan
corporation) ("O/E"). The purchase was pursuant to an Asset Purchase
Agreement (the "Agreement") dated as of December 12, 1996. HBC was
formed for the sole purpose of effecting the Maryland Acquisition and
the Company is its sole shareholder. The Company entered into the
Agreement to reflect that it is jointly and severally liable with HBC
with regard to the obligations to O/E as seller which are provided for
in the Agreement.
The purchase price of the Maryland Acquisition was $2.7 million.
Pursuant to the Agreement, O/E sold to HBC substantially all of its
School Related Assets (as defined in Section 1(f)(1) of the Agreement)
and HBC assumed certain related Stated Liabilities (as defined in
Section 1(f)(2) of the Agreement). Additionally, O/E agreed not to
compete with the Company and its schools pursuant to the terms of the
Agreement.
Pursuant to the terms of the Agreement, HBC paid to O/E $1,350,000 on
December 31, 1996. The remaining portion of the purchase price was
paid by delivery of a promissory note in the amount of $1,350,000 (the
"Second Payment Note"), payable without interest on the earlier of the
last business day within the first 30 calendar days following the date
on which all Prerequisite Student Aid Approvals are obtained, but no
later than September 30, 1997. "Prerequisite Student Aid Approvals"
are defined in the Agreement as all "approvals by the United States
Department of Education and all other applicable private and
governmental agencies and organizations of the change in control
resulting from the change in ownership of the School . . . which
approvals are a prerequisite to receipt of federal and state aid by the
School's students." To secure the Second Payment Note, the Company
pledged to O/E all of the issued and outstanding HBC common stock.
The funds utilized by the Company for the Maryland Acquisition were
provided from the proceeds received by the Company from its initial
public offering of $24,000,000 of Common Stock which was completed on
October 28, 1996.
The foregoing description of the Asset Purchase Agreement and the
documents contemplated thereby, including the Second Payment Promissory
Note and the Pledge Agreement, and the transactions contemplated by
such documents, does not purport to be complete and is qualified in its
entirety by reference to each of such documents, copies of which are
filed as exhibits hereto.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Business Acquired: Will be filed by
Amendment not later than 60 days from January 15, 1997.
(b) Pro Forma Financial Information Relative to Acquired Business:
Will be filed by Amendment not later than 60 days from January
15, 1997.
(c) Exhibits
10.1 Asset Purchase Agreement dated December 12, 1996, as
amended, between the Company, HBC Acquisition Corp.
and O/E Learning, Inc. (including all exhibits)
10.2 Executed Form of Second Payment Note in the amount of
$1,350,000 from HBC to O/E (Exhibit 1 to Asset
Purchase Agreement).
10.3 Executed Form of Pledge Agreement (Exhibit 2 to Asset
Purchase Agreement).
10.4 Executed Form of Assumption Agreement (Exhibit 22 to
Asset Purchase Agreement).
10.5 Executed Form of Bill of Sale (Exhibit 23 to Asset
Purchase Agreement).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EDUCATIONAL MEDICAL, INC.
Date: January 7, 1997. By: /S/ VINCE PISANO
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Vince Pisano, Vice President and
Chief Financial Officer
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EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
Agreement dated as of December 12, 1996, among EDUCATIONAL MEDICAL,
INC., a Delaware corporation ("EMI"), HBC Acquisition Corp., a Delaware
corporation wholly owned by EMI (the "Buyer") and O/E Learning, Inc., a Michigan
corporation (the "Seller").
PRELIMINARY STATEMENT
The Seller is the owner of a postsecondary educational institution
located in Hagerstown, Maryland and related dormitory facilities (the "School").
The Buyer wants to buy the School. Subject to the terms and conditions contained
in this Agreement, the Seller wants to sell the School to the Buyer.
This Agreement provides for the sale and purchase of the School. It
contains the terms pursuant to which Seller has agreed to sell to Buyer
substantially all of its School Related Assets (as defined in Section 1(f)(1)
below), and Buyer has agreed to assume certain related Stated Liabilities (as
defined in Section 1(f)(2) below) of Seller. In addition, the Seller has agreed
not to compete with EMI and its schools pursuant to the terms of this Agreement.
EMI has entered into this Agreement to reflect that it is jointly and severally
liable with the Buyer with regard to the obligations of the Buyer provided for
in it.
IN CONSIDERATION OF THE COVENANTS CONTAINED IN THIS AGREEMENT, AND
THE OTHER CONSIDERATION PROVIDED FOR IN IT, THE PARTIES, EACH INTENDING TO BE
LEGALLY BOUND, AGREE AS FOLLOWS:
1. THE PURCHASE PRICE; CONVEYANCE OF THE ASSETS; ASSUMPTION OF
STATED LIABILITIES; CERTAIN DEFINITIONS; EFFECTIVE DATE OF TRANSACTION.
(a) The Purchase Price. The purchase price for the School
Related Assets, below, is $2,700,000 (the "Purchase Price"). The Purchase Price
will be allocated as follows: (i) $2,650,000 to tangible and intangible assets
allocated at the discretion of the Buyer, and (ii) $50,000 to the
Non-Competition Agreement (the "Non-Competition Agreement") contained in Section
7 of this Asset Purchase Agreement.
(b) Conveyance of Assets. On December 31, 1996, or such earlier
date as the parties may specify (the "Closing Date") the Seller shall convey to
Buyer all of its School Related Assets (the "Closing").
(c) Assumption of Stated Liabilities. On the Closing Date the
Buyer shall assume and agree to discharge when due all of the Stated
Liabilities.
(d) Cash Payments by the Buyer. On the Closing Date the Buyer
shall pay to Seller $1,350,000 (the "Initial Payment"), by wire transfer or
otherwise in immediately
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available funds.
(e) Delivery of Second Payment Note by the Buyer. On the Closing
Date the Buyer shall deliver to Seller:
(1) its Promissory Note for $1,350,000 (the "Second Payment
Note") in the form attached to this Agreement as EXHIBIT 1(1), payable without
interest on the earlier of the last business day within the first 30 calendar
days following the date on which the Prerequisite Student Aid Approvals are
obtained, but no later than September 30, 1997. "Prerequisite Student Aid
Approvals" mean approvals by the United States Department of Education and all
other applicable private and governmental agencies and organizations of the
change in control resulting from the change in ownership of the School resulting
from the sale of the School pursuant to this Asset Purchase Agreement which
approvals are a prerequisite to receipt of federal and state aid by the School's
students, and
(2) a pledge agreement in the form attached to this
Agreement as Exhibit(2) (the "Pledge Agreement") pursuant to which EMI secures
the payment of the Second Payment Note, and the related interest by a pledge of
all of the outstanding capital stock (the "Buyer's Stock") of the Buyer.
(f) Definitions of School Related Assets and Stated
Liabilities.
(1) "School Related Assets" shall mean: (i) the assets
reflected in the Seller's Effective Date Balance Sheet (as defined in Section
2(c)(1) below), together with the related goodwill and rights of Seller as a
going concern, tangible and intangible, used in connection with the operation of
the School, together with any other assets acquired by Seller subsequent to the
date of such balance sheet in connection with the operation of the School, and
(ii) Seller's right to use the name "Hagerstown Business College" in each case
either alone or in conjunction with other words or names in the context of the
operation of a school or other learning institution, but shall not include
"Excluded Assets." Excluded Assets are (i) assets, including without limitation,
all properties, interests and interests in properties, which have been or will
be sold consumed or otherwise disposed of in the ordinary course of business
subsequent to the date of the Effective Date Balance Sheet and prior to the
Closing Date, (ii) cash and cash equivalents on hand in an amount equal to that
presented on the Seller's Effective Date Balance Sheet, less accounts payable
(the "Seller's Cash Retention") which, if cash and cash equivalents on hand are
zero, may be a negative number for purposes of the adjustments provided for in
Section 6(e) of this Agreement, and (iii) those assets listed on EXHIBIT (3)
attached to this Agreement.
(2) "Stated Liabilities" shall mean the liabilities, duties
and obligations of the Seller related to the operations of the Schools (i) which
are disclosed as non-contingent liabilities on the Seller's Effective Date
Balance Sheet, (ii) provided for in agreements made or entered into in the
ordinary course of business after the date of the Seller's Effective Date
Balance Sheet to the Closing Date, including (a) accounts payable arising in the
ordinary course of business, from transactions with trade creditors and
suppliers, regardless of whether
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any such agreement is in writing, and (b) accrued but unpaid payroll and other
payroll related liabilities such as payroll taxes (the "Closing Date
Liabilities"), and (iii) provided for in the agreements disclosed on Exhibits
10, 15, and 16 attached to this Agreement, provided, in the case of liabilities,
duties and obligations described in clauses (ii) and (iii) of this sentence,
Stated Liabilities shall only include the liability, duty or obligation to (x)
pay money if, and to the extent, such obligation is provided for in such
agreement and/or (y) perform any service or take any action to the extent
provided for in such agreement. Stated Liabilities shall exclude, without
limitation, any contingent liabilities not specifically assumed, whether arising
prior to or after the Effective Date and regardless of whether disclosed to
Buyer, including without limitation, (x) any employee benefits pursuant to plans
listed on Exhibit 17, or otherwise, other than for accrued wages as provided for
in clause (ii) of this Subsection (1)(f)(2), and (y) liabilities arising from
failure to comply with any law or regulation prior to the Closing Date relating
to the administration of any kind of student aid or grant, or record keeping or
reporting required in connection with such administration.
(g) Effective Date. In the event the Closing occurs, the
effective date of this transaction for all accounting purposes shall be December
1, 1996, and the operations of the School be deemed to have been on behalf of
the Buyer at all times following the Effective Date, provided that the selection
of such effective date shall not impose on the Buyer any liability of the Seller
other than with respect to the assumption of Stated Liabilities.
2. REPRESENTATIONS OF THE SELLER.
Seller represents and warrants to Buyer.
(a) No Misstatements. The representations of the Seller and
the information supplied by Seller contained in this Agreement, the Exhibits
attached to it and the documents incorporated into it by reference do not
contain any untrue statement of a material fact or omit to state any fact
necessary to make such representations or information not materially misleading.
(b) Validity of Actions. Seller (i) is duly organized, validly
existing and in good standing under the laws of its organization, (ii) has all
requisite corporate and other appropriate authorization to operate the School in
the manner in which it is currently operated, except for the State of Maryland,
(iii) is qualified to do business in all jurisdictions in which such
qualification is necessary for the operation of the School, other than those
jurisdictions where the failure to so qualify would not have a material adverse
effect upon the School's assets or operations, except for the State of Maryland,
and (iv) has full power and authority to enter into this Agreement and to carry
out all acts contemplated by it. This Agreement has been duly executed and
delivered on behalf of the Seller, has received all necessary corporate
authorization and is a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms. Entering into this Asset
Purchase Agreement and the
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consummation of the transactions contemplated by it will not (i) violate any
provision of the Articles of Incorporation or Bylaws of Seller or, (ii) conflict
with or result in any breach of in any material respect of any of the provisions
of any material agreement to which the Seller is a party or by which it or its
assets are bound, or (iii) to the best of Seller's knowledge, cause a breach of
any applicable law, governmental regulation, order, or other decree of any court
or governmental agency. The Articles of Incorporation and Bylaws of Seller, as
presently in effect, are attached to this Agreement as EXHIBIT 4(4).
(c) Seller's Financial Statements
(1) Attached as EXHIBIT 5(5) to this Agreement are Seller's
unaudited balance sheets for the School at October 31, 1994, 1995 and 1996, and
statements of income and expense and cash flows for the years then ending, in
the case of the years ending October 31, 1994 and 1995, as appear on a
consolidating basis in the Seller's audited financial statements for the years
then ending, after giving effect to corporate allocations, which are not
continuing expenses of the School (the "Corporate Allocations"), of $284,400 and
$398,500, respectively, and for the year ended October 31, 1996 prepared for the
School as a separate operating entity without giving effect to Corporate
Allocations (the "Seller's Annual Financial Statements"). Attached as Exhibit
6(6) to this Agreement is Seller's unaudited balance sheet at November 30,
1996, (the "Effective Date Balance Sheet"). The Seller's Annual Financial
Statements and Effective Date Balance Sheet are collectively called the
"Seller's Financial Statements."
(2) The Seller's Financial Statements: (i) accurately
represent the transactions appearing on the books and records of the Seller
relating to the operations of the School, and (ii) fairly present in all
material respects School's financial condition and its results of operations at
the times and for the periods presented, including normal adjustments consistent
with year end adjustments to properly reflect accruals through the end of the
period ended November 30, 1996; provided, however that Seller's Financial
Statements do not contain footnotes and the related disclosures. The Sellers'
Financial Statements have been prepared on the accrual basis in accordance with
generally accepted accounting principles consistently applied ("GAAP"), except
as otherwise disclosed in the reports accompanying them or in the notes attached
to them.
(3) There have been no material adverse changes in the
financial condition or in the operations, properties or assets of School since
the date of the Seller's Effective Date Balance Sheet.
(d) Liabilities of Seller. Seller has no liabilities relating
to the School, contingent or otherwise, including, without limitation,
liabilities for state or Federal income, withholding, sales, or other taxes,
except to the extent reflected, reserved against, or provided for, in the
Seller's Effective Date Balance Sheet, except for taxes, trade payables and
other
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obligations incurred after the date of the Seller's Effective Date Balance Sheet
in amounts consistent in all material respects, with those incurred in prior
periods in the ordinary course of business, including without limitation
liabilities for unearned tuition.
(e) Assets of Seller. Seller has good title to all of its
School Related Assets. Except as otherwise disclosed in the Seller's Financial
Statements or the related notes accompanying them or in the Exhibits to this
Agreement, all of the School Related Assets are owned free and clear of any
adverse claims, security interests, or other encumbrances or restrictions,
except liens for current taxes not yet due and payable, landlords' liens as
provided for in the relevant leases or by applicable law, or liens or similar
security interests granted as part of personal property financing agreements
made in the ordinary course of business and which in the aggregate are not
material and the lien of Michigan National Bank (the "Bank Lien") securing the
Seller's general line of credit. The School Related Assets constitute all of the
assets necessary for the operation of the School as currently conducted.
(f) Facility and Facility Operations.
(1) The School's operations are conducted solely at its
single teaching facility located in Hagerstown, Maryland (the "Teaching
Facility") and certain of the School's students are housed at related
dormitories located in a single building also located in Hagerstown Maryland
(the "Dormitory Facility," collectively with the Teaching Facility, the "School
Facilities"). The School Facilities are owned by the Seller. The School
Facilities are described in detail on EXHIBIT 7(7) attached to this Agreement.
The School's educational operations are conducted solely at the Teaching
Facility. All of the tangible School Related Assets used in connection with
the School's operations are located at the School Facilities. To the best of
Seller's knowledge, all of the improvements located at the School Facilities
are in good operating condition and repair, subject only to ordinary wear and
tear. There is no pending or, to the knowledge of Seller, threatened
condemnation proceeding with respect to the School Facilities.
(2) Attached as Exhibit 8(8) to this Agreement is a
schedule of all of the furnishings, fixtures and equipment with values in
excess of the baseline used in determining such inventory, located on, or used
in connection with, the operation of the School Facilities as of the date
indicated on such inventory, subject to immaterial omissions occurring in
course of compiling such inventory.
(3) Except for (i) environmental law compliance (which is
addressed in Section 2(f)(4) below) and (ii) accreditation, recruitment,
admissions, student loan and funding matters compliance (which are addressed in
Sections 2(h) and 2(i) below) as to which no representation or warranty is made
in this Section 2(f), all activities at, and the physical condition of, the
School Facilities are in compliance with all legal and regulatory requirements
applicable to the Seller, the conduct of its business, and the use of each
School Facility, and
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the Seller has not received any actual notice to the contrary. Seller has paid
for and obtained all licenses, permits, and other authorizations material to the
conduct of its business at the School Facilities (the "Permits"). All Permits
currently in effect and pertaining to the School Facilities or the Seller's
activities at the School Facilities are listed on EXHIBIT 9(9) to this
Agreement. The representations contained in this subsection 3 shall not apply
to incidental instances of non-compliance occurring in the ordinary course of
business without the actual knowledge of the Seller, which are immaterial to
the operation of the School and capable of being cured without significantly
disrupting the School's operations.
(4) To the best of the knowledge of Seller, there are no
Hazardous Substances(1) in, on or under the School Facilities except for those
which are used by Seller in compliance, in all material respects, with
applicable law, and Seller is not now engaged in any litigation, proceedings or
investigations, nor knows of any pending or threatened litigation, proceedings
or investigations regarding the presence of Hazardous Substances in, on or under
the School Facilities.
(g) Equipment Leases and Financing Agreements. All of the
leases and financing agreements to which Seller is a party and which relate to
the operations of the School are described in EXHIBIT 10(10) to this Agreement
(the "Financing and Related Agreements"). Copies of the Financing and Related
Agreements are attached to such Exhibit or have been provided to the Buyer.
Except as reflected in such Exhibit, there have been no modifications to any of
the Financing and Related Agreements; Seller is not in default in any material
respect with respect to them; and none of the interests of Seller in any of
them is subject to any restriction except as stated in the applicable document
or as provided by applicable law.
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(1) The term "Hazardous Substance" shall include without limitation:
(i) Those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances," or
"solid waste" in CERCLA, RCRA, and the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq., and in the
regulations promulgated pursuant to said laws;
(ii) Those substances defined as "hazardous wastes" in any
Maryland Statute and in the regulations promulgated pursuant to any
Maryland Statute;
(iii) Those substances listed in the United States Department
of Transportation Table (49 CFR 172.101 and amendments thereto) or by
the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto);
(iv) Such other substances, materials and wastes which are or
become regulated under applicable local, state or federal law, or which
are classified as hazardous or toxic under federal, state, or local
laws or regulations; and
(v) Any material, waste or substance which is (A) petroleum,
(B) asbestos, (C) polychlorinated biphenyl, (D) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act,
33 U.S.C. ss.ss.1251 et seq. or listed pursuant to Section 307 of the
Clean Water Act, (E) flammable explosive, or (F) radioactive materials.
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(h) Accreditation and Compliance with Title IV Requirements.
Attached as EXHIBIT 11(11) to this Agreement is a list of all Federal, state or
other licenses and approvals, including without limitation all accreditations
and certifications, granted to Seller with respect to the conduct of its
educational or training business at the School (the "Accreditations and
Certifications"), and the governmental body or agency or other entity granting
such Accreditation or Certification. Included in such Exhibit are copies of all
such Accreditations and Certifications.
(1) Except for the Permits and the Accreditations and
Certifications, no license or approval is material to the conduct of Seller's
operation of the School as it is now being conducted, and the Seller has
received no notice that any other license or approval is necessary for the
continued operation of the School or that any such license or approval will not
be renewed.
(2) The School is accredited by the Accrediting Council for
Independent Colleges and Schools. The Seller's operation of the School is and
has been conducted in all material respects in accordance with all relevant
standards imposed by applicable accrediting agencies, or agencies administering
state government student aid programs in which the Seller or any students
attending the School participate, or other applicable laws or regulations.
(3) The School is an institution certified by the United
States Department of Education (the "Department of Education"). The Seller is a
party to, and is and at all times has been in compliance with, a valid program
participation agreement with the Department of Education with respect to the
operations being conducted by the School. The Seller has not received any
notice, not previously complied with, with respect to any alleged violation of
the rules or regulations of the Department of Education or any applicable
accrediting agency in respect of the School or the terms of any program
participation agreement to which it is or was a party. If any such notices have
been received and complied with, the Seller has disclosed its receipt and
disposition to Buyer prior to the execution of this Agreement in writing by a
letter making specific reference to this Section of this Agreement. The Seller
is and at all times has been, in compliance with all of the provisions of the
Higher Education Act of 1965 ("HEA") and the regulations promulgated by the
Department of Education thereunder (the "DOE Regulations") necessary to
establish and maintain its eligibility to participate in the Title IV funding
programs provided for therein, including without limitation,
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the demonstration of financial and administrative responsibility as provided for
in the DOE Regulations. The Seller has submitted audited financial statements to
the Department of Education for the fiscal year ended December 31, 1995 relating
to the School's operations (the "DOE Financial Statements").
(4) The Seller is not aware of any investigation or review
of student financial aid programs (including without limitation Title IV
Programs) in which the School or its students participate, or any review of any
of the School's Accreditations or Certifications whether by a party to any
relevant agreement, the issuer of such Accreditation or Certification or
otherwise.
(i) Recruitment; Admissions Procedures; Attendance; Reports.
Attached as EXHIBIT 12(12) to this Agreement is a list of all policy manuals and
other statements of procedures or instruction relating to recruitment of the
School's students, including procedures for assisting in the application by
prospective students for direct or indirect state or Federal financial
assistance; admissions procedures, including any descriptions of procedures for
insuring compliance with state or Federal or other appropriate standards or
tests of eligibility; procedures for encouraging and verifying attendance,
minimum required attendance policies, and other relevant criteria relating to
course completion and certification (collectively referred to as the "Policy
Guidelines") which have previously been delivered to the Buyer by the Seller.
The School's operations have been conducted in all material respects in
accordance with the Policy Guidelines.
The Seller has submitted all reports, audits, and other information,
whether periodic in nature or pursuant to specific requests ("Compliance
Reports"), to all agencies or other entities with which such filings are
required relating to the School's compliance with (i) applicable accreditation
standards governing its activities or (ii) laws or regulations governing
programs pursuant to which the School or students attending the School receive
funding, including, without limitation, the Perkins Loan Program, the Stafford
Student Loan Program, the Pell Grant program and the Supplemental Educational
Opportunity Grant Programs, or the Federal Direct Student Lending Program, all
of which are provided for pursuant to Title IV of the HEA.
Complete and accurate records in all material respects for all present
and past students attending the School have been maintained consistent with the
operations of a school business. All forms and records have been prepared,
completed, maintained and filed in all material respects in accordance with all
federal and state laws and regulations applicable to the operations of the
School, and are true and correct in all material respects. All financial aid
grants and loans, disbursements and record keeping relating to them have been
completed in compliance in all material respects with all federal and state
requirements, and there are no material deficiencies in respect thereto. No
student at the School has been funded prior to the date for which such student
was eligible for funding and such student's records have been processed in all
material respects in accordance with all applicable federal, state and relevant
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third party funding source requirements. All appropriate reports and surveys
have been accurately prepared, taken and filed prior to delinquency.
(j) Default. Attached as EXHIBIT 13(13) is a schedule
indicating the cohort default rate, as calculated by the United States
Department of Education, of all students attending the School receiving
assistance pursuant to the Stafford Loan and Supplemental Loans for Students
programs (or their applicable predecessor programs) for the federal fiscal
years ended September 30, 1992, 1993 and 1994. To the best of the knowledge of
the Seller, such schedule is materially accurate in all respects.
(k) Trademarks, etc. Attached to this Agreement as EXHIBIT
14(14) is a list of all tradenames, trademarks, service marks, copyrights and
the registrations for them owned or used by Seller in connection with the
operation of the School. To the best knowledge of Seller, it has not infringed
and is not now infringing, any trademark, tradename, service mark, or copyright
belonging to any other person in connection with the operation of the School.
Except as set forth on such exhibit, Seller is not a party to any license,
agreement or arrangement, whether as licensor, licensee or otherwise, with
respect to any trademark, tradename, service mark, or copyright used by Seller
in connection with the operation of the School. To Seller's best knowledge,
its operation of the school may be conducted without license by others for the
use of any tradename, trademark, service mark, or copyright.
(l) Material Contracts. Attached as composite EXHIBIT 15(15)
to this Agreement is (i) a schedule identifying all material contracts relating
to the School's operations not otherwise specifically identified in the other
Exhibits to this Agreement, including, without limitation, all agreements
relating to state or Federal funding of educational services provided by the
Seller through grants, loans or direct payments either to the Seller, individual
students or otherwise, and any agreements relating to the placement of students
following their completion of relevant educational programs provided by the
School other than agreements with students involving the teaching of standard
courses, for standard prices as set forth in the School's catalog or in the
enrollment agreement for such students (the "Contracts"); (ii) a summary of all
material provisions of the Contracts that are oral and not reduced to written
documents; and (iii) a copy of all written Contracts. Except as disclosed in
this Exhibit 15: (i) all of the Contracts remain unmodified and in full force
and effect, and (ii) Seller is not in default of any material nature (nor, to
the best knowledge of Seller, does any state of facts exist which, with the
giving of notice, the passing of time, or otherwise, would constitute a default
of any material nature by Seller) with respect to any of the Contracts.
(m) Maintenance and Employment Agreements. Attached to this
Agreement as composite EXHIBIT 16(16) is (i) a schedule of all written
agreements between the Seller and independent contractors, employees and agents
who are employed or engaged in the management or operation of the School or the
School Facilities; (ii) the names of all parties entitled to payments from
Seller under any such agreements or arrangements; (iii) the amounts
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payable by Seller under the terms of all such agreements and arrangements,
including without limitation, the terms of employment and compensation,
including vacation and other employee benefit provisions and the cost of all
employee benefits and payroll taxes; and (iv) a copy of all written contracts
for such services. There are no material oral agreements in effect for any such
services. Except as disclosed on such Exhibit: (x) there are no written
agreements between any of such contractors, employees or agents and Seller; (y)
there is no party entitled to compensation or remuneration for any such services
arising from the operation of the School after the Closing; and (z) Seller's
agreements and arrangements providing for the services described on Exhibit 16
may be terminated by Seller at any time, with or without cause, and without any
obligation to pay any of said parties any amounts whatsoever except as may be
required by law (including, without limitation, severance pay or accrued
vacation pay or other benefits).
(n) Employee Benefit Plans. Seller maintains employee benefit
plans as listed on EXHIBIT 17(17) to this Agreement (the "Employee Benefit
Plans") with respect to employees involved in the operation of the School.
Copies of such plans have been previously delivered to the Buyer. Except as
listed on such Exhibit, Seller does not maintain any profit sharing, pension or
other employee benefit plan related to the School's operations. Seller has no
unfunded obligations pursuant to any insurance, retirement, pension, profit
sharing or deferred compensation plan or program relating to the School's
operations.
(o) Labor. There is no existing labor dispute affecting the
operation of the School. None of Seller's employees involved in the operations
of the School are covered by any union or collective bargaining agreement.
(p) Insurance. A schedule of all of the policies of insurance
maintained by Seller in connection with the operation of the School is attached
as EXHIBIT 18(18) to this Agreement. The insurance coverage provided by such
policies complies in all material respects, with all agreements to which Seller
is a party, and applicable legal requirements to which it is subject. All such
policies are currently in effect.
(q) Taxes. The Seller has filed all Federal, state and local
tax returns which it is required to file and has no outstanding liability for
any Federal, state or local taxes or interest or penalties thereon, whether
disputed or not, except taxes not yet payable which have been provided for in
accordance with GAAP and are disclosed in the Seller's Effective Date Balance
Sheet or have subsequently accrued in the normal course of business.
(r) Actions Pending. Except as disclosed in EXHIBIT 19(19) to
this Agreement: (i) there are no actions, suits, proceedings or claims pending
or (to Seller's knowledge) threatened against Seller which, if determined
adversely to Seller, would (A) have a material adverse effect on the School
Related Assets, or the operation of the School, or (B) prevent or delay the
consummation of any of the transactions contemplated by this Agreement; (ii)
Seller,
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is not (to its knowledge) the subject of any pending or threatened investigation
relating to any aspect of Seller's operation of the School, by any Federal,
state or local governmental agency or authority; (iii) Seller, is not and has
not been (to its knowledge) the subject of any formal or informal complaint,
investigation or inspection under the Equal Employment Opportunity Act or the
Occupational Safety and Health Act (or their state or local counterparts) or by
any other Federal, state or local authority with respect to any aspect of
Seller's operation of the School.
(s) Accounts Receivable. Each of the accounts receivable of
Seller relating to the School's operations, constitutes a valid claim in its
full amount against the debtor charged on Seller's books and has arisen in the
ordinary course of the School's operations. Seller has no knowledge that each
such account receivable is not fully collectible to the extent of the face value
thereof, except to the extent of the normal allowance for doubtful accounts with
respect to accounts receivable computed as a percentage of sales consistent with
Seller's prior practices as reflected on the Effective Date Balance Sheet. No
account debtor has asserted any right to any setoff, deduction or defense with
respect thereto.
(t) No Guaranties. None of Seller's obligations or liabilities
with respect to the School's operations or the School Facilities is guaranteed
by any other person, firm or corporation, nor has Seller guaranteed the
obligations or liabilities of any other person, firm or corporation so as to
affect the operations of the School.
(u) Bank Accounts and Deposit Boxes. Attached to this
agreement as EXHIBIT 20(20) are the names and addresses of all banks or
financial institutions in which Seller has an account, deposit or safety
deposit box with the names of all persons authorized to draw on these accounts
or deposits or to have access to the boxes, and an indication of which accounts
or deposits or boxes contain financial aid funds, in each case to the extent
such accounts are used in connection with the School's operations.
(v) Records. The books of account of Seller relating to the
School's operations are complete and correct in all material respects, and there
have been no transactions involving the School's operations which properly
should have been set forth therein and which have not been accurately so set
forth.
(w) Transactions With Certain Persons. The School, on the one
hand, and the Seller, on the other, when considered on a consolidating basis, do
not owe any amount to, the other or have any contract with or commitment to the
other except as reflected on the School's Financial Statements. Seller has made
no distributions or other intra company transfers from or to the School
subsequent to the date of the Seller's Effective Date Balance Sheet.
3. REPRESENTATIONS AND WARRANTIES OF EMI AND BUYER. Each of EMI and
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Buyer represents to Seller as follows:
(a) No Misstatements. The representations and the information
supplied by it contained in this Agreement, the Exhibits attached to it, and the
documents incorporated by reference into it do not contain any untrue statement
of a material fact or omit to state any fact necessary to make such
representations or information not materially misleading.
(b) Validity of Actions. It is duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the authority to carry on its business as currently conducted, and is qualified
to do business in all jurisdictions in which such qualification is necessary. It
has full power and authority to enter into this Agreement and to carry out all
acts contemplated by it. This Agreement and each of the documents provided for
in it to be delivered as part of this transaction, have been duly executed and
have or will be delivered pursuant to all appropriate corporate authorization on
its behalf and is, or will be, its legal, valid and binding obligation and is
enforceable against it in accordance with its terms. The execution and delivery
of this Agreement, and each of the documents to be executed and delivered by EMI
and the Buyer pursuant to its terms, and the consummation of the transactions
contemplated by them will not violate any provision of their respective
Certificates of Incorporation or Bylaws or, violate, conflict with or result in
any breach of any of the terms, provisions of or conditions of, or constitute a
default or cause acceleration of any indebtedness under, any indenture,
agreement or instrument to which it is a party or by which it or its assets may
be bound, or, upon filing the Articles of Transfer with the Department of
Taxation and Assessment in the State of Maryland, cause a breach of any
applicable law or governmental regulation, or any applicable order, judgment,
writ, award, injunction or decree of any court or governmental instrumentality.
(c) Actions Pending. There are no actions, suits, proceedings
or claims pending or to the knowledge of EMI or the Buyer, threatened against
either of them which, if determined adversely to either of them would (A) have a
material adverse effect on their operations, or (B) prevent or delay the
consummation of any of the transactions contemplated by this Agreement. Neither
EMI nor Buyer is the subject of any pending or (to its knowledge) threatened
investigation relating to any aspect of its operations.
(d) EMI's Financial Statements
(1) Attached as EXHIBIT 21(21) to this Agreement are (A)
EMI's audited balance sheets at March 31, 1994, 1995, and 1996, and statements
of income and expense and cash flows for the years then ending (EMI's Audited
Financial Statements") and (B) EMI's unaudited balance sheets at September 30,
1995 and 1996, and statements of income and expense and cash flows for the
periods then ending ("EMI's Interim Financial Statements" collectively with
EMI's Audited Financial Statements, "EMI's Financial Statements").
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(2) EMI's Financial Statements: (i) have been prepared on
the accrual basis in accordance with generally accepted accounting principles
consistently applied ("GAAP"), except as otherwise disclosed in the reports
accompanying them or in the notes attached to them, and (ii) fairly present
EMI's financial condition and its results of operations at the times and for the
periods presented.
(3) There have been no material adverse changes in the
financial condition or in the operations, business, prospects, properties of
assets of EMI since the date of EMI's Interim Financial Statements.
(e) Buyer's Financial Condition. The Buyer is a newly formed
corporation. It has no material liabilities except as provided for in this
Agreement, and no assets except the joint and several agreements of EMI to
perform in accordance with the terms of this Agreement.
4. COVENANTS OF THE PARTIES.
(a) Conduct of the Business Prior to the Closing. Pending
consummation of the transactions contemplated in this Agreement or prior to
termination of this Agreement, Seller agrees, without prior written consent of
Buyer, given in a letter which specifically refers to this Section of the
Agreement:
(1) not to (i) perform any act or omit to take any act that
would make any of the representations made in Section 2 above, inaccurate in any
material respect or materially misleading as of the Closing Date, or (ii) make
any payment or distribution with respect to the School or its operations except
for the payment of liabilities provided for in Seller's Financial Statements or
incurred in the ordinary course of business;
(2) to conduct the business of the School in the ordinary
and regular course, maintain the School Facilities, protect the School's
Accreditation Certifications and Permits, and keep its books of account, records
and files in substantially the same manner as at present.
(3) to make all tuition refunds with respect to the School's
operations within the time frames provided for in the Regulations and any
applicable state or accrediting agency regulations, and to pay all accounts
payable as they become due.
(b) Notice. Pending the consummation of the transactions
contemplated in this Agreement or prior to termination of this Agreement, each
party agrees that it will promptly advise the others of the occurrence of any
condition or event which would make any of its representations contained in this
Agreement inaccurate, incorrect, or materially misleading.
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(c) Access. Prior to the Closing, Seller shall afford to the
Buyer (and its officers, attorneys, accountants and other authorized
representatives), upon reasonable notice, free and full access during usual
business hours to its relevant offices, personnel, books and records and other
data, financial or otherwise, so that Buyer may have full opportunity to make
such investigation as it shall desire of the School Related Assets and the
business and operations of the School by the Seller, provided that such
investigation shall not unreasonably interfere with Seller's operations. The
scope of the investigation will include, but not be limited to, a verification
of Seller's Financial Statements and a review of Seller's control procedures,
regulatory compliance relating to the School, the School Facility, and material
contracts and litigation relating to the School. Duly authorized representatives
of the Buyer shall also be entitled to discuss with officers of Seller, its
counsel, employees and independent public accountants, all of its books, records
and other corporate documents, contracts, pricing and service policies,
commitments and future prospects to the extent such materials and matters relate
to the operation of the School. Representatives of Seller will furnish to Buyer
and such other persons, copies of all materials relating to the business
affairs, operations, Facility, School Related Assets and liabilities of Seller
relating to the School which may be reasonably requested from time to time and
will cause representatives and employees of Seller to assist Buyer in its
investigation of the matters relative to the School. All information obtained by
Buyer, EMI or any of their officers, directors, employees, lender, investors,
agents and other representatives (the "Buyer's Representatives") in connection
with the transactions contemplated by this Agreement or in the course of their
investigations of the School, whether obtained before or after the date of this
Agreement (the "Evaluation Material") shall be used only in connection with this
Agreement and the subsequent operation of the School, and each of Buyer and EMI
shall assure that all Evaluation Material will be otherwise kept strictly
confidential by each of them and the Buyer's Representatives. The obligations
provided for in this Subsection (c) shall be in addition to the obligations
provided for in the confidentiality agreement dated December 27, 1995 between
the Buyer and EMI, the terms of which are incorporated into this agreement by
reference.
(d) Additional Documents. At the request of any party, each
party will execute and deliver any additional documents and perform in good
faith such acts as reasonably may be required in order to consummate the
transactions contemplated by this Agreement and to perfect the conveyance and
transfer of any property or rights to be conveyed or transferred or perfect the
assumption of any liabilities assumed under the terms of this Agreement.
(e) Employee Notification, Termination of Employee Benefit
Plans, Etc. With respect to any employees employed by the Seller with respect to
the operations of the School, prior to the Closing, Seller will comply with the
terms of all applicable Federal and state laws and regulations, including
without limitation the provisions of the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. ss.ss. 2101 et. seq. or the Consolidated Omnibus
Budged Reconciliation Act ("COBRA"). Seller will terminate all Employee Benefit
Plans relating to such
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<PAGE> 15
employees in accordance with all applicable laws and regulations as of a date no
later than the Closing Date or otherwise take such actions as are necessary to
insure that the Buyer has no obligations with respect to thereto.
(f) Filing of Returns; Additional Information. Seller will
file on a timely basis all tax returns, notices of sale and other documentation
required by law in connection with the transactions provided for in this
Agreement or otherwise required by law, regulation or pursuant to the terms of
any agreement to which it is a party. Seller will supplement any previous filing
made by it in accordance with legitimate requests made by applicable agencies or
parties to the extent required by the relevant law, regulation or agreement.
(g) Compliance with Conditions to Closing. Subsequent to the
execution and delivery of this Agreement and prior to the, each of the parties
to this Agreement will execute such documents and take such other actions as
reasonably may be appropriate to fulfill the conditions to Closing provided for
in Section 5 of this Agreement.
5. CONDITIONS TO CLOSING BY THE RESPECTIVE PARTIES.
The obligation of EMI and Buyer, on the one hand, and Seller on the
other hand, to consummate the transactions contemplated by this Agreement shall
be subject to compliance with or satisfaction of the following conditions by the
other, to the extent applicable:
(a) Bring Down. The representations and warranties set forth
in this Agreement shall be true and correct in all material respects on and at
the Closing Date as if then made by the relevant party (except for those
representations and warranties made as of a given date, which shall continue to
be true and correct as of such given date).
(b) Compliance. Each party shall have complied with all of the
covenants and agreements in this Agreement on its or their part, respectively,
to be complied with as of or prior to the Closing Date.
(c) No Material Adverse Changes. Since the date of the
Effective Date Balance Sheet, there shall not have occurred any material adverse
change in the condition or operations (financial or otherwise) of the School,
the School Facilities, or the School Related Assets. Since September 31, 1996
there shall not have occurred any material adverse change (financial or
otherwise) of EMI.
(d) Buyer Certificates. There shall be delivered to the
Seller:
(1) a certificate executed by the President and Secretary of
each of Buyer and EMI, dated the Closing Date, certifying that the conditions to
be fulfilled by each of them set forth in this Section 5 have been fulfilled;
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(2) a certificate of incumbency for each of the Buyer and
EMI executed by its President or any Vice President and by the Secretary or any
Assistant Secretary of such entity, listing the officers of such entity
authorized to execute (to the extent applicable) the Agreement and the other
documents, certificates, schedules and instruments to be delivered on behalf of
such entity, and their respective offices, and containing the genuine signature
of each such person set forth opposite his name; and
(3) good standing certificates and certified charter
documents of each of them of recent date, from the Secretary of the State of the
jurisdiction of incorporation of such entity and a copy of their respective
By-Laws certified by an officer thereof.
The certificates described in subsections (1), (2) and (3) above are hereafter
referred to collectively as the "Buyer's Certificates."
(e) Seller Certificate. There shall be delivered to the
Buyer and EMI:
(1) a certificate executed by the President and Secretary of
the Seller, dated the Closing Date, certifying that the conditions to be
fulfilled by it as set forth in this Section 5 have been fulfilled;
(2) a certificate of incumbency for the Seller executed by
its President or any Vice President and by the Secretary or any Assistant
Secretary of the Seller, listing the officers of such entity authorized to
execute (to the extent applicable) the Agreement and the other documents,
certificates, schedules and instruments to be delivered on behalf of such
entity, and their respective offices, and containing the genuine signature of
each such person set forth opposite his name; and
(3) good standing certificates and certified charter
documents of the Seller of recent date, from the Secretary of the State of the
jurisdiction of incorporation of such entity.
The certificates described in subsections (1), (2) and (3), above, are hereafter
referred to collectively as the "Seller's Certificates."
(f) No Suits. No action or proceeding shall have been
instituted in any court or before any Federal, state or local governmental
agency against any party seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement, or which could have a material
adverse effect on any of the parties, which shall not have been dismissed or
withdrawn prior to the Closing Date.
(g) Documents. All documents required to be delivered to Buyer
or Seller pursuant to this Agreement at or prior to Closing shall have been so
delivered.
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(h) Authority. There shall be in full force and effect on the
Closing Date resolutions of the Boards of Directors of the Buyer, EMI and the
Seller approving this Agreement the other documents executed and delivered by
each of them in connection with this Agreement and the transactions contemplated
in it. At or prior to the Closing, each party will deliver to the other a copy
of the resolutions of its Board of Directors approving the execution and
delivery of this Agreement and the other documents to be delivered pursuant to
this Agreement and the consummation of all of the transactions contemplated
hereby, duly certified by an appropriate officer.
(i) Opinions of Counsel. Each party shall receive the opinion
of counsel to the other party reasonably satisfactory in form and content to the
party receiving such opinion.
(j) Current Insurance Coverage. Payments will have been made
as of the Closing Date with respect to all of Seller's insurance policies,
relating to the School, and all insurance coverage concerning School Related
Assets and the School's operations shall be continued in force through at least
10 days subsequent to the Closing Date, unless canceled subsequent to the
Closing Date by Buyer.
(k) Bankruptcy, Dissolution, etc. No petition or other
commencement of proceedings in bankruptcy or proceedings for dissolution,
termination, liquidation or an arrangement, reorganization or readjustment of
any party's debts under any state or Federal law enacted for the relief of
debtors or otherwise, whether instituted by or against a party, has been
effected or commenced by or against any party.
(l) Lease. The Buyer and Seller shall have entered into a
lease agreement with respect to the School Facilities effective as of the
Effective Date (for purposes of payments to the Seller thereunder and for all
other purposes effective as of the Closing Date).
(m) State Approvals. The transactions provided for in this
Agreement shall have been approved by all applicable state regulatory agencies
or authorities and such approvals shall have been delivered to Buyer.
(n) Maryland Qualification. The Seller shall be authorized to
conduct business and be duly qualified to do business in the State of Maryland.
(o) November 31, 1996 Statement of Income and Expenses. The
Seller shall have delivered to Buyer a statement of income and expenses for the
one month period ended November 30, 1996 which shall be consistent in all
material respects with the Seller's Effective Date Balance Sheet, and show no
material adverse change from the Seller's October 31, 1996 financial statements
included in Seller's Financial Statements. Upon delivery, such November 30, 1996
statement of income and expenses shall be considered part of Seller's Financial
Statements.
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(p) Bank Lien. The Bank Lien shall have been released with
respect to the School Related Assets.
6. CLOSING AND POST CLOSING AGREEMENTS.
(a) Closing Date and Place; Effective Date. The closing of the
transactions provided for in this Agreement shall take place at the time
provided for in Section 1(b) of this Agreement at such place as the parties may
agree, and shall be effective as provided in Section 1(f).
(b) Deliveries by Buyer to Seller. At the Closing, Buyer and
EMI shall deliver to Seller:
(1) Initial Payment;
(2) The Second Payment Note;
(3) The Pledge Agreement;
(4) An assumption agreement (the "Assumption Agreement")
in substantially the form attached to this Agreement
as EXHIBIT 22(22); and
(5) The Buyer's Certificates.
(c) Deliveries by Seller to Buyer. At the Closing, Sellers shall
deliver to Buyer:
(1) The Bill of Sale (the "Bill of Sale") in
substantially the form attached to this Agreement as
Exhibit 23(23) and
(2) The Sellers' Certificates; and
(3) Such other instruments of conveyance in form and
substance reasonably satisfactory to Buyer's counsel,
as shall be effective to vest in Buyer good title to
the School Related Assets.
(d) Filing of Tax Returns and Other Reports. The Seller shall
timely file all federal and state income tax and other returns or reports
relating to the transactions provided for in this Agreement and relating to all
periods during which each of the Seller owned the School Related Assets, and to
the extent required by law or regulation, all reports with the Department of
Education or any other applicable state of federal regulatory or accrediting
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<PAGE> 19
agency relating to such periods including without limitation the Financial Aid
Audits for the federal fiscal year ended June 30, 1996 to be filed by the School
with the Department of Education pursuant to applicable regulations.
(e) Delivery of December 31, 1996 Financial Statements and
Post Closing Adjustments. Prior to January 31, 1997, the Seller shall deliver to
the Buyer unaudited financial statements for the School for the month ended
December 31, 1996, which shall include a statement of income and expense for the
period then ending and a balance sheet as of such date, all of which shall be
prepared for the School as a separate entity without giving effect to the
Corporate Adjustments in accordance with, and subject to the same
representations contained in, Section 2(c)(2) of this Agreement (the "Closing
Date Financial Statements"). If the amount of cash or cash equivalents paid to
or retained by the Seller on a consolidating basis during such period plus then
on hand as of December 31, 1996 (as computed in accordance with clause (ii) of
the last sentence of Section 1(f)(1) of this Agreement) exceeds the Seller's
Cash Retention, then the amount of such excess shall be promptly paid to the
Buyer by the Seller, and if the amount of such cash is less than the Seller's
Cash Retention, the amount of such shortfall shall be promptly paid to the
Seller by the Buyer. For purposes of the calculations provided for in this
subsection (e), the lease provided for in section 5(l) shall be considered in
effect for the month of December, 1996.
(f) Access to Records. Following the effective Closing Date,
Buyer and EMI shall give to the Seller reasonable access to (and the right to
make copies at the expense of Seller) the all financial and other records of the
School which reflect or relate to the business, operations, income, expenses and
assets of School existing on, accruing or prior to the Closing Date, and to
preserve such records for a period of time reasonably necessary to insure their
availability for purposes of state and federal regulatory compliance or
production or review in the case of an audit, investigation or inquiry. Access
to such records shall be conducted by the Seller in such manner as not to
interfere unreasonably with the operations of the business following the Closing
Date.
(g) Filing for Prerequisite Student Aid Approvals. Prior to
January 31, 1997, or 30 days after the Closing Date, whichever is later, the
Buyer shall file all necessary applications for the Prerequisite Student Aid
Approvals.
(h) Further Documents or Acts. The parties will also execute,
deliver, record (where appropriate) and/or perform at Closing and from time to
time thereafter, at the request of Buyer, EMI, or Seller, all other documents or
acts required to consummate any of the transactions contemplated by this
Agreement or otherwise carry out the purposes of this Agreement, including
without limitation, any and all instruments or other documents of transfer,
conveyance, assignment and assumption as may be reasonably necessary to effect
of evidence the transfer of the School Related Assets and the assumption of the
Stated Liabilities.
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7. CONFIDENTIALITY AND JOINT NON-COMPETITION AGREEMENT.
(a) Seller acknowledges that, as a result of its ownership of
the School it has had access to and knowledge of confidential or proprietary
information developed by Seller with respect to the School and its operations
and of a special and unique nature and value to the Buyer, including, but not
limited to, the methods and systems used in connection with the School's
operations, the names and addresses of its students and sources of referral,
tuition charged and paid by with respect to the School or its customers,
curricula, related memoranda, research reports, designs, records, student files,
services, and operating procedures, and other information, data, and documents
now existing or later acquired by Seller in connection with the School's
operations, regardless of whether any such information, data, or documents,
qualify as a "trade secret" under applicable Federal or state law (collectively
"Confidential Information"). Confidential Information does not include
information that (i) becomes generally available to the public other than as a
result of disclosures by Seller in violation of the terms of this Agreement, or
(ii) becomes available to Seller on a non-confidential basis from a source that
is not bound by a confidentiality agreement with Buyer or EMI or each of their
respective directors, officers, employees, agents or representatives. As a
material inducement to Buyer to enter into this Agreement, the Seller covenants
and agrees not at any time following the directly or indirectly, to divulge or
disclose for any purpose whatsoever, any Confidential Information which is in
the possession of Seller as a result of its ownership of the School, or
otherwise as a result of the relationship between the Seller and the School's
operations. In accordance with the foregoing, the Seller agrees at no time
retain or remove from the School Facilities records of any kind or description
whatsoever (other than those which constitute Excluded Assets) for any purpose
whatsoever unless authorized by Buyer. Notwithstanding the foregoing provisions
of this Section 7(a), Seller may disclose Confidential Information (i) to its
employees, counsel, accountants and agents on a need-to-know basis (provided
that any such person shall be informed of the confidential nature of such
information and directed not to disclose or make public such Confidential
Information), (ii) to the extent required by applicable law, rules and
regulation, and (iii) in any action, suit or proceeding between the parties,
provided that in connection with disclosures permitted by clauses (ii) and (iii)
above, Seller shall provide Buyer with at least three (3) days notice of such
intent so that an appropriate protective order may be sought by Buyer if
desired.
(b) As a material inducement to Buyer to enter into this
Agreement, the Seller agrees for a period of five (5) years after the Closing of
the transactions provided for in this Agreement not to (i) engage in the
operation of a post secondary school facility (the "Prohibited Activities")
anywhere within 50 miles (the "Area") of the location of any school owned or
operated by EMI and listed on EXHIBIT 24(24) or any postsecondary educational
school which EMI subsequently operates during such period with respect to which
EMI either gives written notice to the Buyer or includes on its Internet
homepage or any successor generally available information service prior to the
Seller's commencement of such activities; (ii) become associated as manager,
consultant, advisor, or stockholder owning more that 5%
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of the outstanding stock of a company or participate in the management or
direction of a company or otherwise with any person, corporation or entity
engaging in Prohibited Activities anywhere within the Area; (iii) call upon any
of Buyer's, EMI's or any of EMI's subsidiary schools' students, teachers or
referral sources for the purpose of promoting any Prohibited Activities for any
person, person, corporation or entity within the Area; or (iv) divert, solicit
or take away any of Buyer's, EMI's or any of EMI's subsidiary school's teachers
or other personnel for the purpose of engaging in any Prohibited Activities
regardless of the location of such activities.
(c) In the event of a breach or threatened breach by the
Seller of any of the provisions of this Section 7, Buyer, in addition to and not
in limitation of any other rights, remedies, or damages available to Buyer at
law or in equity, shall be entitled to a permanent injunction in order to
prevent or to restrain any such breach by Seller, or by Seller's partners,
agents, representatives, servants, employers, employees and/or any and all
persons directly or indirectly acting for or with him.
(d) Seller agrees that, if it shall violate any of its
covenants or agreements provided for in this Section 7, Buyer shall be entitled
to an accounting and repayment of all profits, compensation, commissions,
remuneration, or benefits which Seller directly, or indirectly, has realized
and/or may realize as a result of, growing out of, or in connection with any
such violation; such remedy shall be in addition to and not in limitation of any
injunctive relief or other rights or remedies to which Buyer may be entitled to
at law or in equity or under this Agreement.
(e) Seller has carefully read and considered the provisions of
this Section 7, and agrees that the restrictions set forth above (including
without limitation the time period and geographical areas of restriction) are
fair and reasonable and are reasonably required for the protection of the
interest of the Buyer and EMI. In the event that, notwithstanding the foregoing,
any of the provisions of this Section 7 are held invalid or unenforceable, the
remaining provisions shall continue to be valid and enforceable. In the event
that any provision of this Section 7 relating to time period and/or areas of
restriction are declared by a court of competent jurisdiction to exceed the
maximum time period or areas such court deems reasonable and enforceable, said
time period or areas of restriction shall be deemed to become, and thereafter
be, the maximum time period and/or area which such court deems reasonable and
enforceable.
8. INDEMNIFICATION.
(a) Seller agrees to defend, indemnify and hold harmless the
Buyer and EMI and their directors, officers, employees and agents from and
against any loss, liability, damage, settlement or expense (including without
limitation, attorneys' fees and disbursements) incurred by Buyer or EMI arising
from or related to the inaccuracy or breach
-21-
<PAGE> 22
of any of the representations, warranties, covenants or agreements of Seller
contained in this Agreement or in any document incorporated by reference into
this Agreement.
(b) Buyer and EMI, jointly and severally, agree to defend,
indemnify and hold harmless Seller and its directors, officers, employees and
agents from and against any loss, liability, damage, settlement or expense
(including without limitation attorneys' fees and disbursements) incurred by
Seller arising from or related to the inaccuracy or breach of any of the
representations, warranties, covenants or agreements of Buyer or EMI contained
in this Agreement or in any document incorporated by reference into this
Agreement.
(c) The party seeking indemnification pursuant to this Section
8 (the "Indemnified Party") shall give (or cause to be given) to the party or
parties from whom indemnification is sought hereunder (the "Indemnifying Party")
written notice of any claim or matter for which indemnity is (or will be) sought
under this Section 8. Such notice shall be given promptly after the Indemnified
Party receives actual notice or knowledge of the claim or matter that is subject
to indemnification. With respect to any claim asserted by a third party against
an Indemnified Party for which indemnity is sought hereunder, the relevant
Indemnifying Party shall have the right to employ counsel reasonably acceptable
to the relevant Indemnified Party to defend against such assertion and such
Indemnifying Party shall have the right to compromise or otherwise settle any
such action or claim only with the prior written consent of such relevant
Indemnified Party, which consent shall not be unreasonably withheld.
9. EVENTS OF DEFAULT. If any one or more of the following events occurs
then, subject to the expiration of any specified grace period and the giving of
any prior notice required under this Section 9, such event shall constitute an
Event of Default by the party responsible for such event or against whom it
should be charged.
(a) Warranties or Representations. Any warranty or
representation by or on behalf of any party contained in this Agreement (or in
any document between the parties furnished in compliance with this Agreement at
Closing) is false or misleading in any material respect.
(b) Agreements. Any party fails to take any action required of
it to comply with its obligations contained in this Agreement, or takes any
action prohibited or inconsistent with its obligations under this Agreement, and
such failure to act or action is not cured prior to ten (10) days after written
notice thereof is given to the defaulting party.
(c) Refusal to Close. A party refuses to consummate the
transactions provided for (and subject to the terms and conditions specified) in
this Agreement by 5 p.m., Eastern Daylight Time on January 31, 1997 (the
"Termination Date"), except if the failure to close is based upon the failure of
the other party to meet a condition to Closing provided for
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<PAGE> 23
in Section 5 of this Agreement.
(d) Failure of Closing Condition. Any party is unable to
comply with the conditions of Closing provided for in Section 5 of this
Agreement, other than as a result of an Event of Default as described in
Sections 9(a), (b), or (c) above.
10. TERMINATION AND RIGHTS AND REMEDIES ON DEFAULT.
(a) Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned prior to the Closing: (i) by the
mutual consent of Buyer, EMI, and Seller; (ii) by Buyer and EMI, if any
condition to their obligations to close set forth in Section 5 hereof becomes
impossible of performance or has not been satisfied in full (in each case other
than as a result of a breach of such party's obligations under this Agreement)
or previously waived by the other parties to this Agreement in writing at or
prior to the Termination Date; (iii) by Seller if any condition to their
obligations to close set forth in Article 5 hereof becomes impossible of
performance or has not been satisfied in full (in each case other than as a
result of a breach of such party's obligations under this Agreement) or
previously waived by the other parties to this Agreement in writing at or prior
to the Termination Date; or(iv) by any party (other than a party that is in
breach of its obligations under this Agreement) if the Closing shall not have
occurred on or before the Termination Date. If this Agreement is terminated
pursuant to clause (i) of this Article 10, all obligations of the parties
hereunder shall terminate without any further liability or obligation of either
party to the other, except that the provisions of Section 11, Section 13(b) and
the confidentiality provisions of Section 4(c) of this Agreement shall survive
and continue in full force and effect notwithstanding such termination. Except
as limited by the preceding sentence, the exercise by any party of the right to
terminate this Agreement shall not terminate or limit any remedy that such party
may have in this Section 10 as a result of an Event of Default.
(b) Rights and Remedies on Default. Upon and after an Event of
Default by any party, the other party shall have the following rights and
remedies:
(1) Default by Buyer. In the event that Buyer is obligated
to and fails to close by the Termination Date, and Seller is not in default of
its obligations under this Agreement, this Agreement shall terminate and Seller
shall have the right to seek money damages as their sole remedy. Seller hereby
agrees that it shall not be entitled to seek or file suit for specific
performance of this Agreement.
(2) Default by Seller. If, on the Termination Date, there
exists an Event of Default as described in Section 9 of this Agreement,
chargeable against the Seller, Buyer may either (i) waive such default and
close, in which event Buyer shall have the right to seek specific performance of
this Agreement, including, without limitation, the acquisition
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<PAGE> 24
of the School Related Assets and the performance by the Seller of the covenants
provided for in this Agreement, or (ii) refuse to close, and, except in the case
of an Event of Default described in Section 9(d) above, seek money damages from
Seller, including, without limitation, indemnification pursuant to Section 8 of
this Agreement. An election by Buyer to proceed in accordance with subclause (i)
of the preceding sentence shall constitute the acknowledgment by Buyer and
Seller that Buyer cannot be adequately compensated by money damages for the
failure to perform by Seller, that such damages are indeterminate, and that a
court of competent jurisdiction may enter an order pursuant to which Seller is
obligated to specifically perform their obligations to Buyer pursuant to the
terms of this Agreement.
(3) Default Subsequent to Closing. If any party breaches
this Agreement subsequent to Closing, or if a default occurs pursuant to
Sections 9(a) or 9(b), the nondefaulting party(ies) shall have the right to seek
money damages from the defaulting party(ies), either pursuant to Section 8 of
this Agreement or otherwise. In addition, if, (i) as a result of any action
taken or not taken by the Seller in violation of any applicable law or
regulation which (ii) has not been disclosed to the Buyer in this Agreement, and
which (iii) the occurrence or non occurrence of which was known or reasonably
should have been known to the Seller, the Prerequisite Student Aid Approvals are
not received prior to 12 months from the date of the Closing, or, if received or
offered, can only be obtained on conditions imposing substantial financial
burdens on the Buyer in addition to those which would otherwise be imposed in
connection which such approval, the Buyer may elect to rescind the transactions
provided for in this Agreement and, upon such election, the parties will take
such action as may be reasonably required to restore the other party to its
respective positions as they existed prior to the Closing provided for in this
Agreement.
(4) Nature of Remedies Cumulative. Except as otherwise
provided in this Agreement, all rights and remedies granted in this Agreement or
available under applicable law shall be deemed concurrent and cumulative and not
alternative or exclusive remedies, to the full extent permitted by law and this
Agreement, and any party may proceed with any number of remedies at the same
time or in any order. The exercise of any one right or remedy shall not be
deemed a waiver or release of any other right or remedy, and any party, upon the
occurrence of an event of default by another party under this Agreement, may
proceed at any time, under any agreement, in any order and with any available
remedy.
(5) Limitation on Liability of Seller. Except in the case of
a breach of the agreements contained in Section 7 of this Agreement, Seller
shall not have any liability with respect to any claims of Buyer or EMI for
money damages, whether pursuant to this Section, Section 8 of this Agreement or
otherwise, until such time, if any, as the aggregate amount of all such amounts
otherwise subject to recovery by Buyer or EMI shall exceed, in the aggregate,
$10,000, and then only to the extent of such excess; and provided further that
the Seller shall not be obligated to pay such damages to the extent the total
amount otherwise subject to recovery by Buyer or EMI from the Seller exceeds the
aggregate of all amounts paid or payable to the Seller pursuant to the terms of
this Agreement.
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<PAGE> 25
11. FINDERS FEES.
Except with respect to Mr. Frank Paone, each of the parties represents
and warrants to the other that such party has not employed any finder or broker
in connection with transactions contemplated by this Agreement. Seller
acknowledges that it is solely responsible for all compensation due to Mr. Paone
on account of the transactions contemplated by this Agreement. Each party agrees
to indemnify and hold harmless the others from and against any claim, damages,
liabilities, and expenses (including without limitation, attorneys' fees and
disbursements) arising from any claim or demand asserted by any person or entity
on the basis of its employment as a finder or broker by the respective party.
12. NOTICES. All notices or other communications required or permitted
under the terms of this Agreement shall be made in writing and shall be deemed
given (i) upon hand delivery, (ii) when sent by commercial overnight courier
with written verification of receipt, or (iii) three days after deposit of same
in the Certified Mail, Return Receipt Requested, first class postage and
registration fees prepaid and correctly addressed to the parties at the
following addresses:
If to Buyer: HBC Acquisition Corp.
1327 Northmeadow Parkway
Suite 132
Roswell, Georgia, 30076
Attn: President
With a copy to: Greenberg Traurig
777 South Flagler Drive
Suite 310
West Palm Beach, Florida 33401
Attn: Morris C. Brown, Esq.
If to EMI: Educational Medical, Inc.
1327 Northmeadow Parkway
Suite 132
Roswell, Georgia, 33076
Attn: President
With a copy to: Greenberg Traurig
777 South Flagler Drive
Suite 310
West Palm Beach, Florida 33401
Attn: Morris C. Brown, Esq.
-25-
<PAGE> 26
If to Seller: O/E Learning, Inc.
3290 West Big Beaver
Suite 128
Troy, Michigan 48084
Attn: Chairman of the Board
With a copy to: O/E Automation
3290 West Big Beaver
Suite 132
Troy, Michigan 48084
Attn: James Newhard, Esq.
or to such other address as any of the parties hereto may designate by notice to
the others.
13. MISCELLANEOUS.
(a) Successors. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned prior to Closing without
the prior written consent of the other parties hereto.
(b) Expenses. Except as otherwise provided in this Agreement,
Buyer and Seller shall be responsible for any and all of the respective fees,
costs and expenses incurred by each, in connection with the negotiation,
preparation or performance of this Agreement.
(c) Entire Agreement. This Agreement incorporates by this
reference all Exhibits hereto and all documents executed and/or delivered at
Closing. This Agreement and the documents so incorporated into it contain the
parties' entire understanding and agreement with respect to the subject matter
hereof; and any and all conflicting or inconsistent discussions, agreements,
promises, representations and statements, if any, between the parties or their
representatives that are not incorporated in this Agreement shall be null and
void and are merged into this Agreement.
(d) Amendments Only in Writing. No amendment, modification,
waiver or discharge of this Agreement or any provision of this Agreement shall
be effective against any party, unless such party shall have consented thereto
in writing.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original, but all of which
together shall constitute a single agreement.
(f) Cooperation. Each of the parties to this Agreement, when
requested by
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<PAGE> 27
another party, shall give all reasonable and necessary cooperation with respect
to any reasonable matters relating to the transactions contemplated by this
Agreement.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, exclusive of its
choice of law provisions.
(h) Headings. The various section headings are inserted for
purposes of reference only and shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
(i) Gender; Number. All references to gender or number in this
Agreement shall be deemed interchangeably to have a masculine, feminine, neuter,
singular or plural meaning, as the sense of the context requires.
(j) Severability. The provisions of this Agreement shall be
severable, and any invalidity, unenforceability or illegality of any provision
or provisions of this Agreement shall not affect any other provision or
provisions of this Agreement,and each term and provision of this Agreement shall
be construed to be valid and enforceable to the full extent permitted by law.
(k) Survival. Except as otherwise expressly provided in this
Agreement, the liabilities and obligations of each party with respect to any and
all of its representations, warranties, covenants and agreements set forth in
this Agreement and/or in any document incorporated into it shall not be merged
into, affected or impaired by the Closing under this Agreement. All of the
representations, warranties, covenants and agreements set forth in this
Agreement shall survive the Closing for the period of two years thereafter, so
that (except as otherwise provided below) any claim under this Agreement must be
asserted by notice given to the party claimed to be liable on or before the
second anniversary of the Closing Date. Notwithstanding the foregoing, the time
limitation shall not apply to: (i) the covenants related to confidentiality and
non-competition contained in Section 7 above; (ii) claims arising out of a
misrepresentation as to matters contained in Section 2 (h) and 2 (i) (which
shall survive for a period ending on the seventh anniversary of the Closing
Date), or (iii) fraud. All obligations and liabilities described in clauses (i)
and (iii) of the previous sentence shall survive the Closing for the period in
which a claim can be asserted with respect thereto under applicable law.
(l) No Third Party Beneficiaries. This Agreement has been
entered into solely for the benefit of the parties that have executed it, and
not to confer any benefit or enforceable right upon any other party or entity.
Accordingly, no party or entity that has not executed this Agreement shall have
any right to enforce any of the provisions of it.
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<PAGE> 28
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by an officer duly authorized to do so, all as of the day and year
first above written.
HBC ACQUISITION CORP. ("BUYER") O/E LEARNING, INC. ("SELLER")
By:s/Vince Pisano By: s/Anthony Iaquinto
---------------------------- -----------------------------
Authorized Signatory Anthony Iaquinto, Treasurer
EDUCATIONAL MEDICAL, INC.
By: s/Vince Pisano
-------------------------
Vince Pisano, Chief Financial Officer
-28-
<PAGE> 29
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
1. Form of Second Payment Note
2. The Pledge Agreement
3. List of Excluded Assets
4. Articles of Incorporation and By-Laws of the Seller
5. Seller's Financial Statements
6. Seller's Unaudited Balance Sheet
7. Description of School Facilities
8. Inventory of FF & E
9. List of Permits
10. List of Leases, Financing Agreements, and Other Encumbrances relating to Real and
Personal Property
11. List of Accreditation
12. Policy Manuals and other School Material.
13. Cohort Default Rate Evaluation Material
14. Trademarks etc.
15. List of Material Contracts
16. Employment Agreements
17. Employee Benefit Plans
18. Insurance Policies
19. Actions Pending
20. List of Bank Accounts
21. EMI's Financial Statements
22. Form of Assumption Agreement
23. Form of Bill of Sale
24. List of Existing School Locations
</TABLE>
-29-
<PAGE> 30
EXHIBIT 3
LIST OF EXCLUDED ASSETS
All assets of Seller not related to or used in connection with the
operation of the School.
<PAGE> 31
EXHIBIT 4
ARTICLES OF INCORPORATION AND BY-LAWS OF THE SELLER
See attached
<PAGE> 32
C&S-500 (Rev. 1-83)
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY) Date Received
FILED
MAR 05 1984 MAR 05 1984
Administrator
MICHIGAN DEPT. OF COMMERCE
Corporation & Securities Bureau
EFFECTIVE DATE:
CORPORATION IDENTIFICATION NUMBER 295-444
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
(Please read instructions on last page before completing form)
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended,
the undersigned corporation executes the following Articles:
Article I
The name of the corporation is:
O/E Learning Systems, Inc.
Article II
The purpose or purposes for which the corporation is organized is to engage in
any activity within the purposes for which corporations may be organized under
the Business Corporation Act of Michigan.
Article III
The total authorized capital stock is
(1) Class A
Common Shares 1,000,000 Par Value $0.01
per share
(2) Class B
Common Shares 1,000,000 Par Value $0.01
(3) A statement of all or any of the designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions thereof
is as follows:
The holders of the Class A common stock shall each be entitled to three
votes for each share of said stock standing registered in his or her name
on the books of the company. The holders of the Class B common stock shall
each be entitled to one vote for each share of said stock standing
registered in his or her name on the books of the company. Otherwise, each
share of Class A and Class B common stock shall be in all respects equal to
every other share of Class A and Class B common stock.
<PAGE> 33
Article IV
1. The address of the registered office is:
1800 Travelers Tower, 26555 Evergreen Rd., Southfield, Michigan 48076
- --------------------------------------------------------------------------
(Street Address) (City) (Zip Code)
2. The mailing address of the registered office if different than above:
Michigan
- --------------------------------------------------------------------------
(P.O. Box) (City) (Zip Code)
3. The name of the resident agent at the registered office is: James J. Vlasic
Article V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Residence or Business Address
James J. Vlasic 1800 Travelers Tower
26555 Evergreen Rd., Southfield, MI 48076
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Article VI (Optional. Delete if not applicable)
When a compromise or arrangement or a plan of reorganization of this corporation
is proposed between this corporation and its creditors or any class of them or
between this corporation and its shareholders or any class of them, a court of
equity jurisdiction within the state, on application of this corporation or of a
creditor or shareholder thereof, or on application of a receiver appointed for
the corporation, may order a meeting of the creditors or class of creditors or
of the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in such manner as
the court directs. If a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of shareholders
to be affected by the proposed compromise or arrangement or a reorganization,
agree to a compromise or arrangement or a reorganization of this corporation as
a consequence of the compromise or arrangement, the compromise or arrangement
and the reorganization, if sanctioned by the court to which the application has
been made, shall be binding on all the creditors or class of creditors, or on
all the shareholders or class of shareholders and also on this corporation.
Article VII (Optional. Delete if not applicable)
Any action required or permitted by the Act to be taken at an annual of special
meeting of shareholders may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken, is
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to shareholders who have not
consented in writing.
<PAGE> 34
C&S-500 (Rev. 1-83)
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS INDICATED IN THE BOX
BELOW. Include name, street and number (or P.O. box), city, state and ZIP
code.
James J. Vlasic, Esq. Telephone:
1800 Travelers Tower Area Code 313-
26555 Evergreen Rd. ----------
Southfield, MI 48076 Number 355-0300
-------------
INFORMATION AND INSTRUCTIONS
1. Submit one original copy of this document. Upon filing, a microfilm copy
will be prepared for the records of the Corporation and Securities Bureau.
The original copy will then be returned to the address appearing in the box
above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
2. This document is to be used pursuant to the provisions of Act 284, P.A. of
1972, by one or more persons for the purpose of forming a domestic profit
corporation.
3. Article I--The corporate name of a domestic profit corporation is required
to contain one of the following words or abbreviations: "Corporation",
"Company", "Incorporated", "Limited", "Corp.", "Co.", "Inc.", or "Ltd.".
4. Article II--State, in general terms, the character of the particular
business to be carried on. Under section 202(b) of the Act, it is
sufficient to state substantially, alone or without specifically enumerated
purposes, that the corporation may engage in any activity within the
purposes for which corporations may be organized under the Act. The Act
requires, however, that educational corporations state their specific
purposes.
5. Article III (2)--The Act requires the incorporators of a domestic
corporation having shares without par value to submit in writing the amount
of consideration proposed to be received for each share which shall be
allocated to stated capital. Such stated value may be indicated either in
item 2 of article III or in a written statement accompanying the articles of
incorporation.
6. Article IV--A post office box may not be designated as the address of the
registered office. The mailing address may differ from the address of the
registered office only if a post office box address in the same city as the
registered office is designated as the mailing address.
7. Article V--The Act requires one or more incorporators. The address(es)
should include a street number and name (or other designation), city and
state.
8. The duration of the corporation should be stated in the articles only if the
duration is not perpetual.
9. This document is effective on the date approved and filed by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may
be stated as an additional article.
10. The articles must be signed in ink by each incorporator. The names of the
incorporators as set out in article V should correspond with the signatures.
11. FEES: Filing Fee. . . . . . . . . . . . . . . . . . . . . . . . . . .$10.00
Franchise fee--1/2 mill (.0005) on each dollar of authorized
capital stock, with a minimum franchise fee of. . . . . . . . .$25.00
Total minimum fees (Make remittance payable to State of
Michigan) . . . . . . . . . . . . . . . . . . . . . . . . . . .$35.00
12. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, MI 48909
Telephone: (517) 373-0493
<PAGE> 35
Use space below for additional Articles or for continuation of previous
Articles. Please identify any Article being continued or added. Attach
additional pages if needed.
I (We), the incorporator(s) sign my (our) name(s) this 2nd day of March, 1984.
/s/ JAMES J. VLASIC
- -------------------------------------- ---------------------------------
James J. Vlasic
- -------------------------------------- ---------------------------------
- -------------------------------------- ---------------------------------
- -------------------------------------- ---------------------------------
- -------------------------------------- ---------------------------------
<PAGE> 36
[SEAL]
Michigan Department of Commerce
Lansing, Michigan
This is to Certify That Articles of Incorporation of
O/E Learning Systems, Inc.
were duly filed in this office on the 5th day of March, 1984,
in conformity with Act 284, Public Acts of 1972, as amended.
In testimony whereof, I have hereunto set my
hand and affixed the Seal of the Department,
in the City of Lansing, this 5th day
of March, 1984.
Director
<PAGE> 37
MICHIGAN DEPARTMENT OF COMMERCE-CORPORATION AND SECURITIES BUREAU
(For Bureau use only)
FILED Date Received
JUL 06 1984 JUN 18 1984
Administrator
MICHIGAN DEPT. OF COMMERCE
Corporation & Securities Bureau
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
For use by Domestic Corporations
(Please read instructions on last page before completing form)
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended
(profit corporations), or Act 162, Public Acts of 1982 (nonprofit corporations),
the undersigned corporation executes the following Certificate:
1. The name of the corporation is: O/E Learning Systems, Inc.
2. The corporation identification number (CID) assigned by the Bureau is:
295-444
3. The location of the registered office is:
1800 Travelers Tower, 26555 Evergreen, Southfield, Michigan 48076
----------------------------------------------------------------------------
(Street address) (City) (ZIP Code)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
4. Article I of the Articles of Incorporation is hereby amended to read as
follows:
I The name of the Corporation is O/E Learning, Inc.
<PAGE> 38
5. The foregoing Amendment to the Articles of Incorporation was duly adopted on
the 29th day of May, 1984, in accordance with the provisions of the Act.
Complete and execute either a or b below, but not both.
This Amendment
a. [ ] was duly adopted by the unanimous consent of the incorporator(s) before
the first meeting of the board of directors or trustees.
Signed this _____ day of ___________, 19___.
___________________________________________ _________________________________
___________________________________________ _________________________________
___________________________________________ _________________________________
___________________________________________ _________________________________
(Signatures of all incorporators; type or print name under each signature)
b. (Check one of the following)
[ ] was duly adopted by the shareholders or members, or by the directors
if it is a nonprofit corporation organized on a nonstock directorship
basis,in accordance with Section 611(2) of the Act. The necessary
votes were cast in favor of the amendment.
[ ] was duly adopted by written consent of the shareholders or members
having not less than the minimum number of votes required by statute
in accordance with Section 407 (1) and (2) of the Act. Written notice
to shareholders or members who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders or
members is permitted only if such provision appears in the Articles of
Incorporation.)
[x] was duly adopted by written consent of all the shareholders or members
entitled to vote in accordance with Section 407 (3) of the Act.
Signed this 29th day of May, 1984
By /s/ THOMAS A. DOONAN
------------------------------------------------------
(Signature)
Thomas A. Doonan, its President
------------------------------------------------------
(Type or Print Name and Title)
<PAGE> 39
DOCUMENT WILL BE RETURNED TO NAME AND MAILING ADDRESS INDICATED
IN THE BOX BELOW. Include name, street and number (or P.O. box),
city, state and ZIP code.
James J. Vlasic, Esq. Telephone:
1800 Travelers Tower Area Code 313
26555 Evergreen Rd. -------
Southfield, MI 48076 Number 355-0300
----------
INFORMATION AND INSTRUCTIONS
1. Submit one original copy of this document. Upon filing, a
microfilm copy will be prepared for the records of the Corporation and
Securities Bureau. The original copy will be returned to the address
appearing in the box above as evidence of filing.
Since this document must be microfilmed, it is important that the filing be
legible. Documents with poor black and white contrast, or otherwise
illegible, will be rejected.
2. This document is to be used pursuant to the provisions of section 631 of
the Act for the purpose of amending the articles of incorporation of a
domestic corporation.
3. Item 2 - Enter the identification number previously assigned by the
Bureau. If this number is unknown, leave it blank.
4. Item 4 - The entire article being amended must be set forth in its
entirety. However, if the article being amended is divided into separately
identified sections, only the sections being amended need be included.
5. This document is effective on the date approved and filed by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may
be stated.
6. If the amendment is adopted before the first meeting of the board of
directors, item 5(a) must be completed and signed in ink by all of the
incorporators. If the amendment is otherwise adopted, item 5(b) must be
completed and signed in ink by the president, vice-president, chairperson,
or vice-chairperson.
7. FEES: Filing fee (Make remittance payable to State of Michigan)---$10.00
Franchise fee for profit corporations (payable only if authorized
capital stock has increased) - 1/2 mill (.0005) on each dollar of
increase over highest previous authorized capital stock.
8. Mail form and fee to:
Michigan Department of Commerce
Corporation and Securities Bureau
Corporation Division
P.O. Box 30054
Lansing, Michigan 48909
Telephone: (517) 373-0493
<PAGE> 40
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
(FOR BUREAU USE ONLY) Date Received
March 21, 1988
FILED
MAR 29 1988
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation & Securities Bureau
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR USE BY DOMESTIC CORPORATIONS
(Please read instructions and Paperwork Reduction Act notice on last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, as amended
(profit corporations), or Act 162, Public Acts of 1982 (nonprofit corporations),
the undersigned corporation executes the following Certificate:
1. The present name of the corporation is: O/E Learning, Inc.
2. The corporation identification number (CID) assigned by the Bureau is:
295-444
3. The location of its registered office is:
1800 Travelers Tower, 26555 Evergreen Road, Southfield, Michigan 48076
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(Street Address) (City) (ZIP Code)
4. Article IV, Section 1 of the Articles of Incorporation is hereby amended to
read as follows:
1. The address of the registered office is: 2000 Town Center, Suite 900,
Southfield, Michigan 48075
Article VIII is hereby added and reads as follows:
See Exhibit A
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EXHIBIT A
ARTICLE VIII
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for a breach of fiduciary
duty as a director, except for liability:
(a) For any breach of the director's duty of loyalty to the
Corporation or its shareholders;
(b) For acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(c) Resulting from a violation of Section 551(1) of the
Michigan Business Corporation Act; or
(d) For any transaction from which the director derived an
improper personal benefit.
In the event the Michigan Business Corporation Act is hereafter amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Michigan
Business Corporation Act, as so amended. Any repeal, modification or adoption
of any provision in these Articles of Incorporation inconsistent with this
Article shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal, modification or adoption.
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5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS OR
TRUSTEES. OTHERWISE, COMPLETE SECTION (b).
a. [ ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the _______ day of _____________, 19__, in accordance with
the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the board of directors or
trustees.
Signed this _______ day of _______, 19__.
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(Signatures of all incorporators; type or print name under each
signature)
b. [x] The foregoing amendment to the Articles of Incorporation was duly
adopted on the 18th day of March, 1988. The amendment: (check one of the
following)
[ ] was duly adopted in accordance with Section 611(2) of the Act by the
vote of the shareholders if a profit corporation, or by the vote of the
shareholders or members if a nonprofit corporation, or by the vote of
the directors if a nonprofit corporation organized on a nonstock
directorship basis. The necessary votes were cast in favor of the
amendment.
[ ] was duly adopted by the written consent of all the directors pursuant to
Section 525 of the Act and the corporation is a nonprofit corporation
organized on a nonstock directorship basis.
[ ] was duly adopted by the written consent of the shareholders or members
having not less than the minimum number of votes required by statute in
accordance with Section 407(1) and (2) of the Act. Written notice to
shareholders or members who have not consented in writing has been
given. (Note: Written consent by less than all of the shareholders or
members is permitted only if such provision appears in the Articles of
Incorporation.)
[x] was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with Section 407(3) of the Act.
Signed this 18th day of March, 1988
By /S/ Cass T. Casucci
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(Signature)
Cass T. Casucci, Chairman
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(Type or Print Name and Title)
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BARLOW & LANGE, P.C.
ATTORNEYS AND COUNSELLORS AT LAW
3290 WEST BIG BEAVER ROAD
SUITE 310
TROY, MICHIGAN 48084
THOMAS W.H. BARLOW TELEPHONE: (313) 649-3150
CRAIG W. LANGE FAX: (313) 649-3175
H. DAVID CAMP
PAUL W. COUGHENOUR
LEE GOLDMAN
DONNA A. LAVOIE
LAWRENCE M. HINTZ
August 19, 1988
Dr. Thomas A. Doonan
O/E Learning, Inc.
3290 W. Big Beaver
Suite 128
Troy, Michigan 48084
Dear Dr. Doonan:
Please be advised that O/E Learning, Inc. is authorized to do business in
Washington, County, Maryland under the name "Hagerstown Business College" as of
August 16, 1988. Enclosed is the receipt of such filing along with a copy of the
affidavit filed by O/E Learning, Inc.
Very truly yours,
BARLOW & LANGE, P.C.
/s/ Donna A. Lavoie/CL
----------------------
Donna A. Lavoie
/cl
cc: Richard K. Austin
Anthony Iaquinto
Robert T. Smith
Q: OEL81L01
<PAGE> 44
INSTRUMENT: DEED
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MORTGAGE
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REQUEST FOR NOTICE OF SALE
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XX AGENCY RECORD
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HAGERSTOWN BUSINESS COLLEGE
<PAGE> 45
BYLAWS
OF
O/E LEARNING SYSTEMS, INC.
a Michigan corporation
ARTICLE ONE
DEFINITIONS AND ABBREVIATIONS
As used in this set of Bylaws, when capitalized:
Section 1.1 "Corporation" means O/E Learning Systems, Inc., a
Michigan corporation.
Section 1.2 "Act" means the Michigan Business Corporation Act
(Act No. 284 of the Public Acts of 1972), as amended
from time to time.
Section 1.3 "Articles" means the articles of incorporation of the
Corporation as amended from time to time.
Section 1.4 "Bylaws" means the bylaws of the Corporation, as
amended from time to time.
Section 1.5 "Board" means the board of directors of the
Corporation as the same may be constituted from time
to time.
ARTICLE TWO
CORPORATE OFFICES
Section 2.1 Principal Office. The principal office of the
Corporation shall be located in the State of Michigan. The Board may change
the location of the principal office of the Corporation and may, from time to
time, designate other offices within or without the State of Michigan as the
business of the Corporation may require.
ARTICLE THREE
SHAREHOLDERS
Section 3.1 Place of Shareholder's Meetings. Meetings of the
shareholders of the Corporation may be held within or without the State of
Michigan, provided that no meeting shall be held at any place other than 710
North Woodward, Bloomfield Hills, or the registered office of the Corporation
in Michigan, except pursuant to a resolution adopted by the Board.
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Section 3.2 Annual Meeting of Shareholders. The annual meeting of
shareholders shall be held on the third Tuesday in the month of December in
each year, commencing in the year 1984 at the hour of 9:00 o'clock in the
forenoon for election of directors and for such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Michigan, then such meeting shall be held on the next
succeeding day that is not a legal holiday. If the annual meeting is not held
on the date designated therefor, the Board shall cause the meeting to be held
as soon thereafter as convenient.
Section 3.3 Special Meetings of Shareholders. A special meeting of
the shareholders may be called at any time by the Chairman, President, a
Vice-President, or by a majority of the Board, or by shareholders of record of
not less than 10% of all the shares entitled to vote at the meeting. The
method by which such meeting shall be called is as follows: Upon receipt of a
specification in writing setting forth the date and purpose of such proposed
special meeting, signed by the Chairman, President, or by a Vice-President, or
by a majority of the Board or by the required number of shareholders as above
provided, the Secretary of this Corporation shall give the written notice
requisite to such meeting.
Section 3.4 Notice of Meetings of Shareholders; Waiver.
(1) Except as otherwise provided in the Act, written
notice of the time, place and purposes of a meeting of shareholders shall be
given not less than 10 nor more than 60 days before the date of the meeting,
either personally or by mail, to each shareholder of record entitled to vote at
the meeting.
(2) When a meeting is adjourned to another time or place,
it is not necessary to give notice of the adjourned meeting if the time and
place to which the meeting is adjourned are announced at the meeting at which
the adjournment is taken and at the adjourned meeting only such business is
transacted as might have been transacted at the original meeting. However, if
after the adjournment the Board fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder
of record on the new record date entitled to notice under subsection (1).
(3) Attendance of a person at a meeting of shareholders,
in person or by proxy, constitutes a waiver of notice of the meeting, except
when the shareholder attends a meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. (See Section 8.1)
Section 3.5 Action by Shareholders Without a Meeting. Any action
required or permitted by the Act to be taken at an annual or special meeting of
shareholders may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, is signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take the action at a meeting at
which all shares entitled to vote thereon were present and voted. Prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to shareholders who have not consented
in writing.
Section 3.6 Vote of Shareholders.
(1) Each outstanding share is entitled to 1 vote on each
matter submitted to a vote, unless otherwise provided in the Articles. A vote
may be cast either orally or in writing, unless otherwise provided in the
Bylaws. (See Section 3.7)
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(2) When an action, other than the election of directors,
is to be taken by vote of the shareholders, it shall be authorized by a
majority of the votes cast by the holders of shares entitled to vote thereon,
unless a greater plurality is required by the Articles or the Act. Except as
otherwise provided by the Articles, directors shall be elected by a plurality
of the votes cast at an election. There shall be no cumulative voting for
election of directors.
Section 3.7 Voting by Proxy. A shareholder entitled to vote at a
meeting of shareholders or to express consent or dissent without a meeting may
authorize other persons to act for him by proxy. A proxy shall be signed by
the shareholder or his authorized agent or representative. No such proxy need
be recognized by the Corporation until it is filed with the Secretary of the
Corporation, either before or at the time of the meeting. A proxy is not valid
after the expiration of 3 years from its date unless otherwise provided in the
proxy.
Section 3.8 Order of Business at Shareholders Meeting . The presiding
officer of the meeting of shareholders shall, in the exercise of his
discretion, establish the order of business at such meeting of the shareholders
and at any delayed or adjourned meeting of the shareholders, whether a regular,
special, or annual meeting. Such presiding officer has the power to determine
whether a vote shall be cast orally or in writing.
ARTICLE FOUR
BOARD OF DIRECTORS
Section 4.1 General Powers. The business and affairs of the
Corporation shall be managed by its Board, except as otherwise provided in the
Act or in the Articles. A director need not be a shareholder of the
Corporation.
AMENDED
Section 4.3 Removal of Directors. A director or the entire Board may
be removed at any time, with or without cause, by vote of the holders of a
majority of the shares entitled to vote at an election of directors.
Section 4.4 Vacancies. A vacancy occurring in the Board may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board. A directorship to be filled because of an
increase in the number of directors or to fill a vacancy may be filled by the
Board for a term of office continuing only until the next election of directors
by the shareholders.
Section 4.5 Place of Meetings. Except as provided in Section 4.8,
the meetings of the Board may be held at such place, whether in the State of
Michigan or elsewhere, as the Board may from time to time determine.
Section 4.6 Organization Meeting of Board. At the place of holding
the annual meeting of shareholders, and immediately following the same, the
Board as constituted upon final adjournment of such annual meeting of
shareholders shall convene for the purpose of organization, electing officers,
and transacting any other business properly brought before it, provided, that
the organization meeting in any year may be held at a different time and place
than herein provided
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by consent of a majority of the directors of such new Board. No notice of any
kind to either old or new members of the Board shall be necessary for an
organization meeting held on the same day as the annual shareholders' meeting.
Any organization meeting not held on the same day as the annual shareholders'
meeting shall be a special meeting of the Board.
Section 4.7 Regular Meetings of the Board. Regular meetings of the
Board shall be held at such times and places as the Chairman may from time to
time determine. No notice of regular meetings of the Board shall be required.
Section 4.8 Special Meetings of Board. Special meetings of the
Board may be called by the Chairman, President, or a Vice-President, or
Secretary, or by a majority of the members of the Board, at any time by means
of written notice of the time, place and purposes thereof to each director in
the manner provided in Section 4.9, signed by the Chairman, President, a Vice
President, Secretary, or a majority of the members of the Board, as the case
may be. However, action taken at any such meeting shall not be invalidated for
want of notice if such notice shall be waived as hereinafter provided. The
person or persons authorized to call special meetings of the Board may fix any
place within the State of Michigan, as the place for holding any special
meeting of the Board called by him or them.
Section 4.9 Notice to Board of Special Meeting. Written notice of a
special Board meeting, stating the time and place thereof, shall be personally
delivered, or given by letter, telegram, cable or radiogram, mailed or
delivered for transmission not later than during the third day immediately
preceding the day for such meeting, to each director at such address as appears
on the books of the Corporation; provided, however, that such a special Board
meeting may be held on shorter notice, at the call of only the Chairman,
President or a Vice-President, when the Chairman, President or a Vice-President
in his discretion shall deem such shorter notice to be in the best interests of
the Corporation.
Section 4.10 Waiver of Notice. Attendance of a director at a meeting,
constitutes a waiver of notice of the meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. (See Section 8.1)
Section 4.11 Communication Devices. A member of the Board, or of a
committee designated by the Chairman, may participate in a meeting by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other. Participation in a
meeting pursuant to this Section constitutes presence in person at the meeting.
Section 4.12 Quorum and Vote of Board and Committees. A majority of
the members of the Board then in office, or of the members of a committee
thereof, constitutes a quorum for transaction of business. The vote of the
majority of members present at a meeting at which a quorum is present
constitutes the action of the Board or of the committee, unless the vote of a
larger number is required by the Act, the Articles or the Bylaws. Amendment of
the Bylaws by the Board requires the vote of not less than a majority of the
members of the Board then in office.
Section 4.13 Action by the Board Without a Meeting. Action required
or permitted to be taken pursuant to authorization voted at a meeting of the
Board or a committee thereof, may be taken without a meeting if, before or
after the action, all members of the Board or of the committee consent thereto
in writing. The written consents shall be filed with the minutes of the
proceedings of the Board or committee. The consent has the same effect as a
vote of the Board or committee for all purposes.
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Section 4.14 Establishment of Committees by the Chairman. The
Chairman may designate 1 or more committees, each committee to consist of 1 or
more of the directors of the Corporation. The Chairman may designate 1 or more
directors as alternate members of a committee, who may replace an absent or
disqualified member at a meeting of the committee. In the absence or
disqualification of a member of a committee, the members thereof present at a
meeting and not disqualified from voting, whether or not they constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in place of such an absent or disqualified member. A committee, and
each member thereof, shall serve at the pleasure of the Board.
Section 4.15 Powers of Committees of the Board. A committee
designated pursuant to Section 4.14 may exercise all powers and authority of
the Board in management of the business and affairs of the Corporation.
However, such a committee does not have power or authority to:
(a) Amend the Articles.
(b) Adopt an agreement of merger or consolidation.
(c) Recommend to shareholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets.
(d) Recommend to shareholders a dissolution of the Corporation or
a revocation of a dissolution.
(e) Amend the Bylaws.
(f) Fill vacancies in the Board.
(g) Fix compensation of the directors for serving on the Board or
on a committee.
Such a committee does not have power or authority to declare a dividend or to
authorize the issuance of stock. (See subsection 5.1(1))
Section 4.16 Compensation. The Board, by affirmative vote of a
majority of directors in office and irrespective of any personal interest of
any of them, may establish reasonable compensation of directors for services to
the Corporation as directors or officers, and also authorize payment or
reimbursement of the respective director's expenses, if any, of attendance at
each meeting of the Board. No such payment shall preclude any director or
officer from serving the Corporation in any other capacity, and receiving
compensation therefor.
Section 4.17 Further Powers. In addition to the powers and authority
by these Bylaws expressly conferred upon it, the Board may further exercise all
powers of the Corporation, and do all lawful acts and things, as are not by law
or by the Articles or by these Bylaws prohibited, or directed or required to be
exercised or done by the shareholders.
ARTICLE FIVE
OFFICERS
Section 5.1 Officers.
(1) The officers of the Corporation shall consist of a
Chairman, President, Secretary, Vice President Finance - Treasurer, and, if
desired, 1 or more Vice Presidents, and such
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other officers as may be determined by the Board. The officers shall be
elected or appointed by the Board, however, the Chairman may authorize a
committee to elect or appoint officers.
(2) Two or more offices may be held by the same person but an
officer shall not execute, acknowledge or verify an instrument in more than 1
capacity if the instrument is required by law or the Articles or Bylaws to be
executed, acknowledged or verified by 2 or more officers.
(3) An officer elected or appointed as herein provided shall hold
office for the term for which he is elected or appointed and until his
successor is elected or appointed and qualified, or until his resignation or
removal.
(4) An officer, as between himself and other officers and the
Corporation, has such authority and shall perform such duties in the management
of the Corporation as is provided in the Bylaws, or as may be determined by
resolution of the Board not inconsistent with the Bylaws.
(5) None of the officers need be a director.
Section 5.2 Removal of Officers. An officer elected or appointed by
the Board or a committee of the Board may be removed by the Board, at any time,
with or without cause.
Section 5.3 Vacancies. If the office of any officer becomes vacant
for any reason, the Board shall have the power to fill such vacancy.
Section 5.4 Chairman. The Chairman shall be selected from the
membership of the Board. He shall be chief executive officer of the
Corporation and shall preside at the meetings of the Board and at all meetings
of the shareholders; but notwithstanding the fact that he is the presiding
officer, he shall have the full right to participate and vote on all actions of
the Board and shareholders. In addition, he shall have the same general powers
as are granted to the chief executive officer of a corporation. He shall be ex
officio a member of all committees, and shall have the general powers and
duties of supervision and management usually vested in the chief executive
officer of a corporation.
Section 5.5. President. The President shall be the chief operating
officer of the Corporation. He shall, in the absence of the Chairman, preside
at all meetings of the shareholders and directors; he shall have general and
active operating management of the business of the Corporation, and shall see
that all orders of the Chairman and orders and resolutions of the Board are
carried into effect.
Section 5.6 Vice-Presidents. One or more Vice-Presidents may be
selected by the Board. The respective Vice-Presidents shall have such powers
and perform such duties as may from time to time be assigned to each of them by
the Board, or as the Chairman or President may delegate to each of them
respectively.
Section 5.7 Secretary and Assistant Secretaries. The Secretary shall
attend all meetings of the shareholders and of the Board, and shall preserve in
books of the Corporation true minutes of the proceedings of all such meetings.
He shall keep in his custody the seal of the Corporation and shall have
authority to affix the same to all instruments where its use is required. He
shall give, or cause to be given, all notices required to be given by him by
the Act, Bylaws or resolution. He shall, in general, perform all duties
incident to the office of Secretary, and such other duties as may be assigned
to him from time to time by the Board, or as the Chairman or President may
delegate to him.
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The Assistant Secretaries, if any, in the order of their seniority as
determined by the Board, shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary, and shall perform
such other duties as the Board shall assign to them from time to time, or as
the Chairman or President may delegate to them.
Section 5.8 Treasurer and Assistant Treasurer. The Vice President
Finance-Treasurer shall have custody of all corporate funds and securities and
shall keep in books belonging to the Corporation full and accurate accounts of
all receipts and disbursements; he shall cause to be deposited all monies,
securities and other valuable effects in the name of the Corporation in such
depositories as may be designated for that purpose by the Board. (See Section
7.4) He shall cause to be disbursed the funds of the Corporation as may be
ordered by the Board, causing to be taken proper vouchers for such
disbursements. (See Section 7.3) He shall render to the Chairman, President and
the Board, whenever the same shall be required, an account of all his
transactions as Treasurer and of the financial condition of the Corporation.
If required by the Board, he shall deliver to the Chairman or President of the
Corporation, and shall keep in force, a bond in form, amount and with a surety
or sureties satisfactory to the Board, for faithful performance of the duties
of his office, and for restoration to the Corporation in case of his death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and property of whatever kind in his possession or under his control
belonging to the Corporation. He shall, in general, perform all duties
incident to the office of Treasurer, and such other duties as may be assigned
to him from time to time by the Board, or as the Chairman or President may
delegate to him.
The Assistant Treasurers, if any, in order of their seniority as
determined by the Board, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer, and shall perform
such other duties as the Board shall assign to them from time to time, or as
the Chairman or President may delegate to them.
Section 5.9 Duties of Officers May be Delegated. In case of the
absence or disability of any officer of the Corporation, or for any other
reason that the Board may deem sufficient, the Board may delegate, for the time
being, the powers and duties, or any of them, of such officer, to any other
officer, or to any director.
ARTICLE SIX
STOCK MATTERS
Section 6.1 Transfer of Stock. Shares of capital stock of the
Corporation shall be transferable only on the books of the Corporation. The
shares are transferable in accordance with article 8 of the Michigan uniform
commercial code, being act no. 174 of the public acts of 1962, as amended,
being sections 440.8101 through 440.8406 of the Michigan Compiled Laws of 1948,
except as otherwise provided in the Act.
Section 6.2 Lost, Stolen, or Destroyed Certificates. Where the
registered owner of a certificate of capital stock or other security of the
Corporation claims that such certificate or other security has been lost,
apparently destroyed, or wrongfully taken, the issuance of a new certificate or
other security in place of the original certificate or other security shall be
governed by the provisions of article 8 of the Michigan uniform commercial
code, being act no. 174 of the public acts of 1962, as amended, being sections
440.8101 through 440.8406 of the Michigan Compiled Laws of 1948, except as
otherwise provided in the Act. The Chairman, President or a Vice-President in
the exercise of his sole discretion may waive the requirement of an indemnity
bond as referred to in Section 8405 of the Michigan uniform commercial code.
Section 6.3 Regulations. The Board shall have the power and
authority to make all such rules and regulations as the Board shall deem
expedient for the regulation of the issue,
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transfer and registration of certificates for shares of capital stock, or other
securities, of this Corporation.
ARTICLE SEVEN
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 7.1 Contracts. The Board, or a duly authorized committee
thereof may authorize any officer or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name of and on behalf
of the Corporation, and such authority may be general or confined to specific
instances.
Section 7.2 Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board or a duly authorized committee thereof.
Such authority may be general or confined to specific instances.
Section 7.3 Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the Corporation shall be signed by such officer or officers, agent
or agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board or a duly authorized committee thereof.
Such authority may be general or confined to specific instances.
Section 7.4 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositaries as the Board, or a duly
authorized committee thereof may select.
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
Section 8.1 Notice: Waiver. When, under the Act or the Articles or
Bylaws of the Corporation or by the terms of an agreement or instrument, the
Corporation or the Board or any committee thereof may take action after notice
to any person or after lapse of a prescribed period of time, the action may be
taken without notice and without lapse of the period of time, if at any time
before or after the action is completed the person entitled to notice or to
participate in the action to be taken or, in case of a shareholder, by his
attorney-in-fact, submits a signed waiver of such requirements.
Section 8.2 Fiscal Year. The fiscal year of the Corporation shall
end on October 31 in each year.
Section 8.3 Seal. The Corporation's seal shall have inscribed
thereon the name of the Corporation and the words "seal" or "corporate seal".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise. (See Section 5.6)
Section 8.4 Voting of Shares Owned by Corporation. Any share or
shares of stock in other corporations owned by this Corporation may be voted by
the Chairman or President of this Corporation or by a proxy appointed by either
of them, or in the absence of the Chairman, President or their proxy, by a Vice
President or by proxy appointed by him, or in the absence of the aforementioned
persons, by the Secretary or by proxy appointed by him. The Board may by
resolution appoint some other person to vote such shares.
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Section 8.5 Dividends. The Board may, from time to time, declare and
the Corporation may pay dividends on its outstanding shares in the manner and
upon the terms and conditions permitted by law, and not in contravention of the
Articles. (See Section 4.15)
ARTICLE NINE
AMENDMENTS
Section 9.1 Bylaw Amendments, Etc. The shareholders or the Board may
amend or repeal the Bylaws or adopt new Bylaws. (See Section 4.12)
/s/ James J. Vlasic
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James J. Vlasic,
INCORPORATOR
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I, RICHARD K. AUSTIN, duly elected and qualified Secretary of O/E
LEARNING, INC., a Michigan corporation, do hereby certify that at the annual
meeting of the stockholders held on December 18, 1984, Section 4.2 of the
By-Laws of this corporation was amended to read as follows:
"Section 4.2: Number of Directors; Election and Term. The Board shall
consist of five (5) members. At each meeting, the shareholders shall
elect directors to hold office until the succeeding annual meeting of
the shareholders. A director shall hold office for the term for which
he is elected and until a successor is elected and qualified, or until
his resignation or removal."
/s/ Richard K. Austin
------------------------------------
RICHARD K. AUSTIN
Dated: As of December 18, 1984
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I, RICHARD R. VLASIC, duly elected and qualified Secretary of O/E
LEARNING, INC., a Michigan corporation, do hereby certify that at the annual
meeting of the stockholders held on December 16, 1985, Section 4.2 of the
By-Laws of this corporation was amended to read as follows:
"Section 4.2: Number of Directors; Election and Term. The Board shall
consist of six (6) members. At each meeting, the shareholders shall
elect directors to hold office until the succeeding annual meeting of
the shareholders. A director shall hold office for the term for which
he is elected and until a successor is elected and qualified, or until
his resignation or removal."
/s/ Richard R. Vlasic
-----------------------------------
RICHARD R. VLASIC
Dated: As of June 12, 1986
<PAGE> 56
AMENDED SECTION 4.2 OF THE BYLAWS
OF O/E LEARNING, INC.
(as of May 1, 1994)
Section 4.2 Number of Directors; Election and Term. The Board shall
consist of eight (8) members. At each annual meeting, the shareholders shall
elect directors to hold office until the succeeding annual meeting of the
shareholders. A director shall hold office for the term for which he is
elected and until his successor is elected and qualified, or until his
resignation or removal.
END OF AMENDED SECTION 4.2
<PAGE> 57
I, JAMES A. NEWHARD, the duly elected and qualified Secretary of O/E
LEARNING, INC., a Michigan corporation, do hereby certify that, at the annual
meeting of shareholders held on December 14, 1995, Section 4.2 of the Bylaws of
this Corporation was amended to read in its entirety as follows:
Section 4.2: Number of Directors; Election and Term. The
Board shall consist of eight (8) members, or such number of Directors
as may be elected from time to time by the shareholders. At each
annual meeting the shareholders shall elect Directors to hold office
until the succeeding annual meeting of the shareholders. A Director
shall hold office for the term for which he/she is elected and until
his/her successor is elected and qualified, or until his/her
resignation or removal.
/s/ James A. Newhard
-------------------------------------
James A. Newhard
Secretary, O/E Learning, Inc.
Dated: December 18, 1995
<PAGE> 58
I James A. Newhard, the duly elected and qualified Secretary of O/E
Learning, Inc., a Michigan corporation (the "Corporation"), do hereby certify
that, by consent of the majority shareholder as of September 25, 1996, Section
8.6 of the Bylaws of the Corporation was added to read in its entirety as
follows:
"Section 8.6 Referral of Transactions for Approval by Parent
Corporation. Proposed transactions which have been approved by the
Board of Directors of the Corporation and which are outside the
ordinary course of business (acquisitions, divestitures, bank
relationships, etc.), and which involve, affect, obligate or encumber
the assets of the Corporation in an amount in excess of the greater of
ten (10%) percent of the then current net worth of the Corporation or
$100,000, shall be submitted to the Board of Directors (or appropriate
committee thereof) of O/E Automation, Inc., a Michigan corporation
("O/E Automation"), for prior consideration and approval. This
provision shall become null and void in the event O/E Automation shall
cease to be the owner of a majority of the outstanding shares and
voting rights of the Corporation."
/s/ James A. Newhard
----------------------------------
James A. Newhard
Dated: October 10, 1996
<PAGE> 59
EXHIBIT 5
SELLER'S FINANCIAL STATEMENTS
See attached
<PAGE> 60
[COOPERS & LYBRAND LETTER]
Report of Independent Accountants
To the Board of Directors of
O/E Learning, Inc.:
We have audited the accompanying balance sheet of O/E Learning, Inc. as of
October 31, 1994 and 1993, and the related combined statements of income,
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of O/E Learning, Inc. as of
October 31, 1994 and 1993, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
As discussed in Note 4 to the financial statements, the company changed its
method of accounting for income taxes in 1994.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplementary combining information contained
on pages 11 and 12 is presented for purposes of additional analysis of the
financial statements rather than to present the financial position and results
of operations of the individual divisions. The combining information has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated, in all material respects, in
relation to the financial statements taken as a whole. This information should
be read in conjunction with the paragraph immediately preceding.
/s/ COOPERS & LYBRAND L.L.P.
Detroit, Michigan
January 20, 1995
<PAGE> 61
O/E LEARNING, INC.
COMBINING BALANCE SHEET
for the year ended October 31, 1994
<TABLE>
<CAPTION>
-----------
HAGERSTOWN
BUSINESS
COLLEGE
ASSETS -----------
<S> <C>
Current assets:
Cash $ 202,000
Accounts receivable, net 308,200
Note receivable, affiliate -
Inventory 22,700
Other current assets 600
-----------
Total current assets 533,500
-----------
Property and equipment:
Furniture and equipment, net 239,600
Land and buildings, net 2,069,700
-----------
Net property and equipment 2,309,300
-----------
Intangible assets, net 150,000
-----------
$ 2,992,800
===========
LIABILITIES
Current liabilities: -
Line of credit
Accounts payable:
Trade $ 34,600
Affiliates
Accrued expenses and other liabilities 81,200
Deferred revenue 386,300
Income taxes payable, Parent -
-----------
Total current liabilities 502,100
-----------
Deferred income taxes -
Divisional equity 2,490,700
-----------
$ 2,992,800
===========
</TABLE>
This information is supplemental to the basic financial statements and is
presented solely for purposes of additional analysis.
11
<PAGE> 62
O/E LEARNING, INC.
COMBINING STATEMENT OF INCOME
for the year ended October 31, 1994
<TABLE>
<CAPTION>
-------------
HAGERSTOWN
BUSINESS
COLLEGE
-------------
<S> <C>
Revenue: $ 1,997,900
Training -
Interest income -
Gain on disposal of assets 79,700
Other -------------
Total Revenue 2,077,600
-------------
Costs and expenses:
Training 1,090,500
Depreciation 176,000
Amortization of intangible assets 8,000
Selling, general and administrative 513,100
Interest -
-------------
Total costs and expenses 1,787,600
-------------
Income before income taxes and cumulative effect of
change in accounting principle 290,000
Income taxes (104,400)
-------------
Income before cumulative effect of change in
accounting principle 185,600
Cumulative effect of change in accounting principle 9,700
-------------
Net income $ 195,300
=============
</TABLE>
This information is supplemental to the basic financial statements and is
presented solely for purposes of additional analysis.
12
<PAGE> 63
[PLANTE & MORAN, LLP LETTERHEAD]
To the Board of Directors
O/E Learning, Inc.
We have audited the financial statements of O/E Learning, Inc. for the year
ended October 31, 1995. Our audit was made for the purpose of forming an
opinion on the basic financial statements taken as a whole. The combining
information in the accompanying schedules of pages 12 and 13 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Plante & Moran, LLP
December 7, 1995
11
<PAGE> 64
O/E LEARNING, INC.
COMBINING DIVISIONAL BALANCE SHEET
OCTOBER 31, 1995
<TABLE>
<CAPTION>
-----------
HAGERSTOWN
BUSINESS
COLLEGE
ASSETS -----------
<S> <C>
CURRENT ASSETS
Cash $ 207,000
Accounts receivable - Net 302,500
Note receivable, Affiliate -
Inventory 23,800
Other current assets -
-----------
Total current assets 533,300
PROPERTY AND EQUIPMENT
Furniture and equipment - Net 337,900
Land and buildings - Net 2,003,100
-----------
Net property and equipment 2,341,000
INTANGIBLE ASSETS - Net 142,000
-----------
Total assets $ 3,016,300
===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable:
Trade $ 31,900
Affiliates -
Accrued expenses and other liabilities 86,200
Deferred revenue 385,000
-----------
Total current liabilities 503,100
DEFERRED INCOME TAXES -
DIVISIONAL EQUITY 2,513,200
-----------
Total liabilities and equity $ 3,016,300
===========
</TABLE>
12
<PAGE> 65
O/E LEARNING, INC.
COMBINING STATEMENT OF INCOME
YEAR ENDED OCTOBER 31, 1995
<TABLE>
<CAPTION>
-------------
HAGERSTOWN
BUSINESS
COLLEGE
-------------
<S> <C>
REVENUE
Training $ 2,329,900
Interest income -
Gain on disposal of assets -
Other 36,700
-------------
Total Revenue 2,366,600
EXPENSES
Training 1,012,400
Depreciation 176,100
Amortization of intangible assets 8,000
Selling, general and administrative 669,000
Interest -
-------------
Total expenses 1,865,500
-------------
INCOME - Before income taxes
501,100
INCOME TAXES 173,100
-------------
NET INCOME $ 328,000
=============
</TABLE>
PLANTE & MORAN, LLP
13
<PAGE> 66
O/E LEARNING, INC. H.B.C. ASSETS/LIABILITIES AS OF 10/31/96:
<TABLE>
<S> <C> <C>
Assets:
Accounts Receivable $357,774.18
Inventory $ 34,529.60
Goodwill $ 200,000.00
Goodwill Amortization $ (65,999.34)
------------
Net Goodwill $134,000.36
Fixed Assets $ 850,014.15
Accumulated Depreciation-F/A ($570,960.82)
Net Fixed Assets $279,053.33
Other Assets $ 0.00
-----------
Total Assets $805,357.77
===========
Liabilities:
Accounts Payable $ 11,819.81
Customer Deposits $ 4,352.00
Dorm Security Deposits $ 1,500.00
Dorm Rent Deposits $ 9,850.00
Student Credit Balances $ 61,033.08
Deferred Tuition Revenue $382,420.65
Deferred Fees Revenue $ 20,230.00
-----------
Total Liabilities $491,205.54
===========
</TABLE>
This schedule does not include the outstanding liability related to personal
property taxes that will be settled by O/E Learning, Inc.
<PAGE> 67
O/E LEARNING, INC.
HAGERSTOWN BUSINESS COLLEGE
OPERATING RESULTS
<TABLE>
<CAPTION>
MONTH MONTH MONTH MONTH MONTH MONTH MONTH
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
11/30/95 12/31/95 01/31/96 02/28/96 03/31/96 04/30/96 05/31/96
-------- -------- -------- -------- -------- -------- --------
M$ M$ M$ M$ M$ M$ M$
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Tuition............................................. 187.4 187.9 150.5 151.1 154.4 142.7 127.5
Bookstore........................................... 0.4 2.4 80.9 2.1 1.4 17.1 54.5
Dormitory........................................... 4.9 5.0 6.0 6.0 3.3 3.5 3.0
Student Fees........................................ 10.0 10.9 11.8 12.0 5.7 0.3 7.5
----- ----- ----- ----- ----- ----- -----
TOTAL REVENUE....................................... 202.7 206.2 249.2 171.2 164.8 163.6 192.5
----- ----- ----- ----- ----- ----- -----
COST OF TRAINING
Salaries-Instructor................................. 27.1 24.6 26.9 27.1 27.6 27.9 25.3
Salaries-Student Services........................... 11.5 11.6 10.0 11.9 11.7 11.1 11.5
Insurance-Benefit................................... 4.1 3.8 3.7 3.8 3.8 4.1 4.1
Payroll Taxes-Benefit............................... 3.4 3.1 3.9 4.0 4.4 4.0 3.4
Depreciation........................................ 15.1 15.0 15.3 14.6 15.2 14.9 15.2
Property Taxes...................................... 2.6 2.6 2.6 2.6 2.6 2.6 2.6
Repair/Maintenance.................................. 0.7 1.7 2.7 6.9 2.1 3.4 1.2
Service on Equipment................................ 0.6 0.4 0.8 0.4 0.0 0.7 0.7
Purchased Services.................................. 2.3 0.8 1.3 2.4 3.5 0.3 1.5
Bookstore........................................... 0.3 1.8 47.4 2.4 0.3 10.8 40.7
Supplies/Printing................................... 2.0 2.3 3.6 3.6 2.5 6.8 7.6
Telephone........................................... 1.0 1.0 1.0 0.9 1.0 1.3 1.1
Dues................................................ 0.1 0.3 10.3 0.2 0.5 0.9 (3.4)
Utilities........................................... 3.4 2.9 3.5 4.3 3.2 2.5 2.8
Advertising......................................... 0.3 2.4 0.9 0.5 5.6 2.6 0.1
Travel.............................................. 0.0 0.6 0.1 0.0 0.1 0.4 0.0
Postage............................................. 1.6 0.2 2.0 1.4 0.2 0.2 1.3
Other............................................... 9.4 3.5 (9.0) 1.2 0.5 0.2 1.3
----- ----- ----- ----- ----- ----- -----
TOTAL DIRECT COSTS.................................. 85.5 78.6 127.0 88.2 84.8 94.7 117.0
----- ----- ----- ----- ----- ----- -----
GROSS MARGIN........................................ 117.2 127.6 122.2 83.0 80.0 68.9 75.5
----- ----- ----- ----- ----- ----- -----
PERSONNEL EXPENSES
Salaries-Admissions................................. 10.9 10.7 12.9 12.8 11.4 15.1 14.3
Commissions......................................... 2.8 2.8 2.8 2.8 2.6 2.8 2.8
Salaries-Office..................................... 5.5 5.4 5.1 5.0 5.0 6.0 5.4
Payroll Taxes....................................... 1.3 1.8 1.8 1.8 1.6 1.9 1.8
Insurance/Benefits.................................. 1.5 1.4 1.5 1.4 1.5 1.0 1.0
Autos............................................... 0.1 0.1 0.1 0.4 0.1 0.5 0.2
----- ----- ----- ----- ----- ----- -----
TOTAL PERSONNEL EXPENSES............................ 22.1 22.2 24.2 24.2 22.4 27.3 25.5
----- ----- ----- ----- ----- ----- -----
INCOME.............................................. 95.1 105.4 98.0 68.8 57.6 41.6 50.0
===== ===== ===== ===== ===== ===== =====
<CAPTION>
MONTH MONTH MONTH MONTH MONTH F.Y.E.
ENDED ENDED ENDED ENDED ENDED 10/31/96
06/30/96 07/31/96 08/31/96 09/30/96 10/31/96 TOTAL
-------- -------- -------- -------- -------- --------
M$ M$ M$ M$ M$ M$
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUE
Tuition............................................. 139.5 135.5 150.5 186.1 191.4 1,904.5
Bookstore........................................... 0.7 0.6 1.3 108.1 1.5 271.0
Dormitory........................................... 3.1 3.0 3.0 2.8 5.3 48.9
Student Fees........................................ 11.2 11.6 18.0 7.4 10.1 116.5
----- ----- ----- ----- ----- -------
TOTAL REVENUE....................................... 154.5 150.7 172.8 304.4 208.3 2,340.9
----- ----- ----- ----- ----- -------
COST OF TRAINING
Salaries-Instructor................................. 23.8 23.5 23.6 29.2 28.3 314.9
Salaries-Student Services........................... 11.3 9.7 10.5 10.9 11.6 133.3
Insurance-Benefit................................... 4.1 4.1 4.4 3.7 3.9 47.6
Payroll Taxes-Benefit............................... 2.9 2.8 2.8 3.5 3.4 41.6
Depreciation........................................ 16.4 16.8 16.6 16.7 16.5 188.3
Property Taxes...................................... 2.6 2.6 2.6 2.6 2.6 31.2
Repair/Maintenance.................................. 1.4 1.2 6.0 1.8 0.0 29.1
Service on Equipment................................ 0.1 0.3 0.5 0.0 0.0 4.5
Purchased Services.................................. 1.3 0.8 0.7 1.3 1.3 17.5
Bookstore........................................... 0.9 1.3 1.0 66.4 2.7 176.0
Supplies/Printing................................... 1.8 2.8 3.5 3.2 7.6 47.3
Telephone........................................... 1.2 1.0 1.3 1.2 1.2 13.2
Dues................................................ 0.2 0.0 3.6 0.4 0.2 13.3
Utilities........................................... 2.4 3.2 4.2 2.8 4.8 40.0
Advertising......................................... 0.0 3.6 0.2 3.8 3.7 23.7
Travel.............................................. 0.0 0.4 0.0 0.0 0.1 1.7
Postage............................................. 1.6 0.2 1.4 0.0 1.4 11.5
Other............................................... 0.4 0.5 0.0 0.3 1.5 9.8
----- ----- ----- ----- ----- -------
TOTAL DIRECT COSTS.................................. 72.4 74.8 82.9 147.8 90.8 1,144.5
----- ----- ----- ----- ----- -------
GROSS MARGIN........................................ 82.1 75.9 89.9 156.6 117.5 1,196.4
----- ----- ----- ----- ----- -------
PERSONNEL EXPENSES
Salaries-Admissions................................. 13.6 12.8 12.9 12.9 13.4 153.7
Commissions......................................... 2.8 2.8 2.8 0.9 4.6 33.5
Salaries-Office..................................... 5.0 5.0 5.0 5.5 5.2 63.1
Payroll Taxes....................................... 1.6 1.5 1.5 1.4 3.6 21.6
Insurance/Benefits.................................. 1.4 1.2 1.2 1.2 1.2 15.5
Autos............................................... 0.5 0.2 0.0 0.2 0.8 3.2
----- ----- ----- ----- ----- -------
TOTAL PERSONNEL EXPENSES............................ 24.9 23.5 23.4 22.1 28.8 290.6
----- ----- ----- ----- ----- -------
INCOME.............................................. 57.2 52.4 66.5 134.5 88.7 905.8
===== ===== ===== ===== ===== =======
</TABLE>
<PAGE> 68
EXHIBIT 6
SELLER'S UNAUDITED BALANCE SHEET
--------------------------------
See attached
<PAGE> 69
O/E LEARNING, INC. H.B.C. ASSETS/LIABILITIES AS OF 10/31/96:
<TABLE>
<S> <C> <C>
Assets:
Accounts Receivable $150,690.38
Inventory $ 34,596.31
Goodwill $ 200,000.00
Goodwill Amortization $ (66,666.00)
------------
Net Goodwill $133,334.00
Fixed Assets $ 858,164.76
Accumulated Depreciation-F/A ($581,245.04)
------------
Net Fixed Assets $276,919.72
Other Assets $ 0.00
-----------
Total Assets $595,540.41
===========
Liabilities:
Accounts Payable $ 10,015.43
Customer Deposits $ 2,176.00
Dorm Security Deposits $ 1,500.00
Dorm Rent Deposits $ 4,925.00
Student Credit Balances $ 86,864.55
Deferred Tuition Revenue $188,935.20
Deferred Fees Revenue $ 10,115.00
-----------
Total Liabilities $304,531.18
===========
</TABLE>
This schedule does not include the outstanding liability related to personal
property taxes that will be settled by O/E Learning, Inc.
<PAGE> 70
EXHIBIT 7
DESCRIPTION OF SCHOOL FACILITIES
The School Facilities are located on the north side of Crestwood Drive
approximately 500 feet west of its intersection with Pennsylvania Avenue (U.S.
Route 11) and just north of the City of Hagerstown corporate boundary in
Washington County, Maryland. The Teaching Facility is a one-story 23,682
square foot facility located at 18614 Crestwood Drive, Hagerstown, Maryland.
The Dormitory Facility is a two-story facility containing 13 dormitory units
located at the same address. The legal description of the property is:
BEGINNING at a concrete monument recovered 269.75 feet along
the 8th line of a deed from Agnita M. Stine unto Mack Trucks
Reality Corporation, dated July 8, 1960 and recorded among the Land
Records of Washington County, Maryland, in Liber 359, folio 232, and
running thence with portions of the 8th and 7th lines reversed North
42 degrees 44 minutes 29 seconds East 269.75 feet to a concrete
monument recovered, thence North 18 degrees, 04 minutes 14 seconds
East 399.44 feet to an iron pipe and surveyor's cap set, thence South
77 degrees 55 minutes 31 seconds East 245.25 feet to an iron pipe and
surveyor's cap set, thence South 22 degrees 53 minutes 49 seconds
East 240.28 feet to an iron pipe and surveyor's cap set, thence South
69 degrees 49 minutes 57 seconds East 104.60 feet to an iron pipe and
surveyor's cap set, thence South 03 degrees 44 minutes 17 seconds
East 426.77 feet to a 3/8 inch rebar recovered on the north margin of
Crestwood Drive, thence with Crestwood Drive South 89 degrees 50
minutes 33 seconds West 75.52 feet to an iron pipe and surveyor's cap
set, thence leaving Crestwood Drive North 03 degrees 47 minutes 19
seconds West 130.26 feet to an iron pipe and surveyor's cap set,
thence South 89 degrees 50 minutes 33 seconds West 431.75 feet to an
iron pipe and surveyor's cap set, thence South 00 degrees 09 minutes
27 seconds East 130.00 feet to an iron pipe and surveyor's cap set on
the North margin of Crestwood Drive, thence with Crestwood Drive by a
line curving to the right having a radius of 202.11 feet and an arc
length of 151.32 feet subtended by a chord bearing and distance of
North 68 degrees 42 minutes 29 seconds West 147.81 feet to an iron
pipe and surveyor's cap set, thence continuing with Crestwood Drive
North 47 degrees 15 minutes 31 seconds West 153.93 feet to the place
of beginning containing 7.281 acres of land.
BEING all the same lot or parcel as particularly described in
that Deed from Agnita M. Schreiber to HBC Associates, a
<PAGE> 71
Maryland general partnership, dated March 11, 1985, and
recorded among the Land Records of Washington County, Maryland, in
Liber 780, folio 612.
<PAGE> 72
EXHIBIT 8
INVENTORY OF FF & E
See attached
<PAGE> 73
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 100 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Sterile Syringes (Boxes) 1
Culturette Collection & Transport System 1
B-D Alcohol swabs (Boxes) 1
Corkboard 2
Filing Cabinet 1
Tables 3
Chairs 5
Applicators Cannister 1
Tongue Depressors Cannister 1
Gauze Cannister 1
Bandage Cannister 1
Metal Chart Holders 2
Marcaine HCl (Bottles) 1
Sodium Chloride (Bottles) 1
Lidocaine (Bottles) 1
File Box 1
Forceps 1
Metal Cart 1
Disposable Scalpels (Boxes) 2
Prep Pads (Boxes) 1
Silver Nitrate Applicators 2
Triangular Bandages (Boxes) 1
Stretch Gauze Bandade (Boxes) 1
8" Nonabsorbable Surgical Suture (Boxes) 2
Ammonia Inhalants (Boxes) 1
Neosporin (Tubes) 1
Basin/CM 1
Isopropyl Alcohol (Bottles) 1
Hydrogen Peroxide Solution (Bottles) 1
Packing Strip (Bottles) 2
Small Size Sterile Pads (Boxes) 1
Paper Tape Rolls 6
4X4 Post-Op Sponges (Boxes) 1
4X4 Dressing Sponges (Boxes) 1
Sterile Field (Boxes) 1
Stretch Vinyl Medical Gloves (Packages) 1
Stethoscopes 22
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ---------------------- ------ ----------- ------------
<S> <C> <C> <C>
Inner Ear Diagram 1 3 years
Bactrim Diagrams 2
Heart Diagram 1
</TABLE>
<PAGE> 74
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 100 - PAGE 2
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Eye Chart 1
Health O Meter Scale 2
Thermometers (Cases) 2
Thermometer Sheaths (Packages) 2
Nasal Speculum 1
Lister Bandage Scissors 2
Tissue Forceps 5
Curved Kelley 2
Tenaculums 2
Sharp Blunt Scissors 2
Adson Dressing Forceps 1
Utility or Sterilized Forceps 1
Mosquito Hemostat 1
Thumb Forceps 1
Trocar/Cannula 1
Urethral Scissors 7
Splinter Forceps 1
Suture Removal Scissors 2
Tongue Depressor 1
Hemostatic Forceps 1
Transfer/Utility Forceps 1
Blood Pressure Cuffs 21
Examining Table 1
Privacy Screen 1
Electrocardiograph Machine With Stand 1
Metal Trays 2
Desk 1
Stool 2
Disposable Resting ECG Sensors (Boxes) 2
ECG Graph Paper (Boxes) 8
Lectro-Pads (Boxes) 1
Standing Lights 2
Slides (Packages) 1
Paper Gowns (Packages) 1
Lab Coats 20
Ritter M7 Speed Clave 1
Latex Exam Gloves 7
File Holders 2
Bostitch Stapler 1
Distilled Water 6
Resusitube Airway 1
Audio-visual Equipment Number Average Age Owned/Leased
- ---------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 75
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 100 - PAGE 3
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
1995 Physicians' Desk Reference 1
1995 The Complete Drug Reference 1
1994 The Complete Drug Reference 1
1993 Physicians' Desk Reference 1
Cervical Scrapers (Boxes) 1
Surgical Gloves (Boxes) 1
Senior Tongue Blades (Boxes) 2
Sterile Applicator Tips (Boxes) 1
Sheer Bandage Strips (Boxes) 1
Cotton Swabs (Boxes) 4
Glass Jars 4
Metal Emesis Basin 5
Large Exam Gloves (Boxes) 1
Digital Sphygmomanometer 1
Dictionary 1
Sphygmomanometer 1
Gauze Jar 1
Cotton Jar 1
Cotton Balls (Bags) 1
Plastic Nasal Cannula 1
Digital Thermometer 1
Percussion Hammers 3
Tuning Fork 1
Ear Examining Case 1
Suture Removal Kit 9
Metal Tray 1
Probe Covers (Boxes) 1
Termoscan 1
Rectal Thermometer Tray 1
Sterile Gloves 27
Suture Sets 5
Measuring Cups 22
First Aid Kits 2
Mayo Stands 2
Large Biohazard Container 1
Drapes (Packages) 1
Plastic Emesis Basin 2
Sheets 2
Towels 20
EKG Cuffs (Packages) 2
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 76
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 100 - PAGE 4
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Tylenol (Bottles) 1
Mycitracin (Boxes) 1
Band-Aid Bandages (Boxes) 3
Gauze (Boxes) 1
Rolaids (Bottles) 1
Mineral Oil (Bottle) 1
Pepto-Bismol (Bottle) 1
Ampicillin Suspension 1
Benylin Cough Syrup 1
Ceclor 1
Elixicon Donnatal 1
Elixicon 1
Mylanta 1
Naldecon Pediatric Drops 1
Robitussin-DM 1
Somophyllin 1
Tussi-Organidin-DM 1
Stadol Nasal Spray 1
Thorazine 1
Celestone Soluspan Suspension 1
Ntrolingual Spray 1
Isordial Titradose 1
Proencid 1
Premarin 1
Somophyllin-T 1
Penicillin V Potassium 1
Zithromax 1
Inderal 1
Zyloprim 1
Nitro-Bid Ointment 1
Nitrostat Ointment 2% 1
Serax 1
Niacin 2
Nitro Dur 1
Adrenalin Chloride Solution 1
Aspirin Analgesic 1
Aquasol A 1
Anacin-3 Maximum Strength 1
Fioricet 1
Bacteriostatic Sodium Chloride 1
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
</TABLE>
<PAGE> 77
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 100 - PAGE 5
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Aspirin Acetylasalicylic Acid 1
Chlortrimeton 1
Choledyl 1
Dramimine 1
Gantrisin 1
Clinoril 1
Hygroton Chlorthalidone 1
Deltasone 1
Ecotrin 1
Sorbitrate Sublingual 1
Sorbitrate Chewable 1
Sorbitrate Oral 1
Sorbitrate Sustained Action 1
Erythromycin 1
Elavil 1
Naprosyn 1
Feldene Piroxicam 1
Keflex 1
Flagyl Metronidazole 1
Lopressor 1
Isordil 1
Allorurinol 1
Klotrix (Potassium Chloride) 1
Name/Room Paper Pads (Boxes) 1
Clinistix Reagent Strips 1
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
</TABLE>
<PAGE> 78
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 103 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
PS2 Computers complete with Monitor/Keyboard 3
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Microscope 7
Disposable Gloves (Boxes) 1
Pediatric Scale 1
Filing Cabinets 3
Trash Cans 2
Biohazard Trash Cans 2
Lab Coats 34
Urine Collection Containers 2
Butterfly Blood Collectors (Sets) 16
Capillary Finger Sticks (Bags) 1
Rubber Tourniquets (Spools) 2
Hemoccults (Boxes) 2
Fixative for Slides (Cans) 1
Midstream Catch Sets 2
Vaginal Speculum 2
Graduated Cylinders 43
Microscope Slides (Boxes) 1
Wooden Sticks 7
Sputum Collection System 1
Chalk (Boxes) 1
Sorbitrol Plus (Bottles) 1
Specimen Bags 20
Stool System Kit 1
Blood Culture Test Kit 1
Inoculating Tubes (Packs) 2
Safety Goggles 1
Micro Slides (Boxes) 25
Refractometry 1
Plastic Cups 19
Obstetrical Towlettes (Boxes) 1
Thermometer Beaker 35
Reagent Strips - Blood (Bottles) 2
Reagent Strips - Urine (Bottles) 10
Reagent Tablets (Boxes) 2
Red Markers 3
Unopette Tests 15
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Full Body Skeleton 1
Human Model of Torso 1
Human Anatomy Chart 1
Atlas of Urine Sediment 1
</TABLE>
<PAGE> 79
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 103 - PAGE 2
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Kora Stain Bottles 2
Timer 1
Bleeding Time Devices (Boxes) 1/2
Amber Tubes with Serum Separator 25
Syringes 2
Adhesive Bandages (Boxes) 4
Wood Applicators (Boxes) 1
Lancets (Boxes) 2
Alcohol Swabs (Boxes) 4
Disposable Pipettes (Boxes) 2
Bandage Spots (Boxes) 5
Capillary Pipettes (Boxes) 2
Micro Hematricrit Capillary Tubes (Containers) 6
Adhesive Dressing (Boxes) 5
Cotton Balls (Bags) 1
Tube Sealant (Boxes) 1
Slide Holders (Boxes) 2
Hemocytometer 10
Bottle of Cyanmethemoglobin Reagent 1
Resolve Microscope Immersion Oil 1
Filter Paper (Boxes) 1
Lens Paper (Packages) 3
Container of volupette pipets 3
1 fl. oz bottle of iodine 2
Surgery Gloves 3
Tongue Blades 5,000
Cotton Tip Applicators 1,600
Cotton Swab Transporter 8
Throat Swabs (Boxes) 1
End Coder Tutorials 17
CPT Books 4
DRG Books 4
ICD 9 Books 3
Curvettes (Boxes) 5
Vacutainer Collection Tubes-Hemogard Closure 10
Vacutainer Collection Tubes-Sodium Heparin 2
Sterile Blood Collection Tubes 2
Roll of Biohazardous Waste Bags 1
Clorox (Gallons) 1 1/2
Hotpoint Refrigerator 1
Medifuge 1
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
</TABLE>
<PAGE> 80
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 103 - PAGE 3
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Glucose Kit 1 3 years
Spectophotometer - Model 340 1 3 years
Rubberbands (Boxes) 1
Envelopes (Boxes) 1
Printer Ribbons 1
Letterhead Paper (Boxes) 1
Biohazard Bags 12
Binders 7
Payment Plan Contracts (Boxes) 1
First Aid Kits 2
Phlebotomy Training Programs 15
Alcohol Swabs (Cases) 2
Autoclaves 2
200 ml calibrated cylinders 3
100 ml calibrated cylinders 14
Glass Funnels 2
Cotton Container 1
Glass Alcohol Containers 50
180 cc Urine Specimen Cylinder 50
Small Biohazardous Vacutainer 60
Surgical Gowns 5
Face Masks (Boxes) 5
Strep A Testing Kit 1
Slide X-ray Light 1
Centrifuge 2
Blood Microscope 1
Large Vacutainer 4
Artificial Injection Arms 3
Diff-Quik Stain Sets 2
Gram Stain Set 1
100 Ct. Box of Blood Collection tubes
with sodium citrate 4
100 Ct. Box of Blood Collection tubes
with EDTA 7
Iodine Solution Bottles 2
Ammonia Inhalants (Boxes) 1
Lab Film (Boxes) 1
Vacutainer Needles (Boxes) 13
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
Black Board 1 3 years
</TABLE>
<PAGE> 81
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 104 - PAGE 1
--- -
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
Typewriters - IBM Wheelwriter Series II 20 3 years
Lanier Transcription Units 20 3 years
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Transcription Desks 21 3 years
Transcription Chairs 21 3 years
Table 1 3 years
Desk 1 3 years
Trash Container 1 3 years
Book Holders 17 3 years
Filing Cabinets 2 3 years
Books - Assorted Reference 39 3 years
Book Ends 2 3 years
Tray 1 3 years
Box Miscellaneous Office Supplies 1 3 years
Audio-visual Equipment Number Average Age Owned/Leased
- ---------------------- ------ ----------- ------------
<S> <C> <C> <C>
Writable Board 1 3 years
IBM Instruction Pamphlets 18
Lanier Voice Writer Instruction Pamphlets 20
Notebook - Student Transcription Key 1
Plastic Box for Student Folders 1
Transcription Tapes, Medical 13
Audio Cases - Empty 22
Ruler 1
Stapler 2
Worksheets 1
Typewriter ribbons 22
Audio Tapes 35
Notebooks - Transcription Course 4
Notebooks - Gregg Short 2
Zip Code Book 1
Earphones 6
Gregg Manual 1
Gregg Reference 1
Alcohol Swabs (Boxes) 1
</TABLE>
<PAGE> 82
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 105 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Keyboards 8 7 years
Computers 8 7 years
Monitors 8 7 years
X Scribe Adapters 2 7 years
Module Type E Adapter 1 7 years
Steno Adapter for Printer 1 7 years
Mouse Pad 2 1 year
Mouse 2 1 year
Printer Switch Boxes 2 7 years
Printer 2 7 years
Typewriters 2 3 years
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Math Tutorial Software
Basic Math - Basic Math Text
Advanced Math - Fundamentals Math Text
English Tutorial
Grassroots - Basic English
Skillbank - Grammar Skills
CAT system for Court Reporters
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 83
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 106 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owned/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
PS2 Model 50 IBM Computers 25 3 years
IBM Proprinter II--Dot Matrix Printers 25 3 years
Computer Desks 25 3 years
Computer Chairs 25 3 years
Lateral Files 2 3 years
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Writable Board 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 84
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 107 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
PS2 Model 50 IBM Computers 25 3 years
IBM Proprinter II - Dot Matrix Printers 24 3 years
Computer Desks 25 3 years
Computer Chairs 25 3 years
Lateral Files 2 3 years
Epson FX Dot Matrix 286e Printer 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Writable Board 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ---------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 85
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 108 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Gateway 2000 DX2-66 Computers 25 6 months
IBM Proprinter II - Dot Matrix Printers 21 3 years
Epson Action Laser 1500 Printer 1 6 months
Computer Desks 25 3 years
Computer Chairs 25 3 years
IBM Computer Overhead PS2 Model 50 1 3 years
Lateral Files 2 3 years
Storage Cabinet 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Writable Board 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 86
INVENTORY OF EQUIPMENT
Include equipment used directly in the educational activities of the
institution; do not include administrative equipment.
ROOM 109 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Computer Monitor 1 7 years
Keyboard 1 7 years
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Judge's Bench 1 6 months
Chairs 3 6 months
Tables 15 3 years
Chairs 45 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Black Board 1 3 years
Projection Screen 1 7 years
</TABLE>
<PAGE> 87
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 110 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Podium 1 3 years
Tables 12 3 years
Chairs 36 3 years
Desk 1 3 years
Desk Chair 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Blackboard 1 3 years
Projection Screen 1 3 years
</TABLE>
<PAGE> 88
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 111 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Trashcan 1 3 years
Podium 1 3 years
Desk 1 3 years
Desk Chair 1 3 years
Tables 15 3 years
Chairs 45 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Chalkboard 1 3 years
Projection Screen 1 3 years
</TABLE>
<PAGE> 89
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 112 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Podium 1 3 years
Trashcan 1 3 years
Desk 1 3 years
Desk Chair 1 3 years
Tables 15 3 years
Chairs 45 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ---------------------- ------ ----------- ------------
<S> <C> <C> <C>
Black Board 1 3 years
</TABLE>
<PAGE> 90
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 114 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Desks 4 3 years
Chairs 16 3 years
Podium 1 3 years
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Chalk Board 1 3 years
</TABLE>
<PAGE> 91
INVENTORY OF EQUIPMENT
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institution; do not include administrative equipment.
ROOM 116 - PAGE 1
Name of Institution Hagerstown Business College ID Code
--------------------------------------- ----------
City, State Hagerstown, Maryland
------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Machines (e.g. computers, typewriters) Number Average Age Owner/Leased
- ----------------------------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Other Instructional Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
Bulletin Board 1
Conference Table 1
Conference Chairs 17
Trash Container 1
Student Chairs 14
Steno Pad Paper (Boxes) 3
</TABLE>
<TABLE>
<CAPTION>
Audio-visual Equipment Number Average Age Owned/Leased
- ----------------------------- ------ ----------- ------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 92
EXHIBIT 9
LIST OF PERMITS
1. Authorization to conduct business in Maryland (Seller will bring into
good standing at or prior to the Closing)
2. Maryland sales tax license
3. Vendor's license
4. Those accrediations and approvals described on Exhibit 11
<PAGE> 93
________________________________________________________________________________
FIRE SAFETY INSPECTION
________________________________________________________________________________
NAME HAGERSTOWN BUSINESS COLLEGE
ADDRESS 18618 CRESTWOOD DR
HAGERSTOWN, MD ZIP 21742
OCCUPANCY BUSINESS 27,000
TELEPHONE 739 2670 BARBARA KEESECKER
MARYLAND STATE MARYLAND STATE FIRE MARSHALL [LOGO]
FIRE MARSHALL'S
OFFICE
DEPARTMENT OF
PUBLIC SAFETY AND
CORRECTIONAL SERVICES
A fire safety inspection of the above referenced location was conducted by
C.M. Cronauer on 2/2/96. As a result, the following violations of the State
Fire Prevention Code are noted for your immediate attention and compliance
within _________ days:
1. MEANS OF EGRESS
( ) A. Keep all exit doors unlocked and unobstructed.
( ) B. Keep all corridors/stairways clear and unobstructed.
( ) C. Repair exit doors, locks, and hardware for easy operation.
( ) D. Install/Repair normal exit illumination in the following areas:
______________________________________________________________________
( ) E. Install/Repair emergency lighting in the following areas:
______________________________________________________________________
( ) F. Install/Repair illuminated exit signs in the following areas:
______________________________________________________________________
2. FIRE PROTECTION FEATURES
( ) A. Install/Repair fire/smoke doors in the following areas:
______________________________________________________________________
( ) B. Install/Repair self-closing devices on doors in the following areas:
______________________________________________________________________
( ) C. Remove unauthorized hold-open devices on doors in the following areas:
______________________________________________________________________
( ) D. Provide flame spread certification for interior finish in the
following areas:______________________________________________________
3. FIRE PROTECTION EQUIPMENT
( ) A. Install/Repair manual fire alarm system in the following areas:
______________________________________________________________________
( ) B. Install/Repair smoke detectors in the following areas:
______________________________________________________________________
( ) C. Install automatic sprinkler protection in the following areas:
______________________________________________________________________
(X) D. Provide quarterly testing and maintenance for the automatic sprinkler
system.
( ) E. Replace/Repair automatic sprinkler system equipment as follows:
______________________________________________________________________
( ) F. Install/Repair hood extinguishing system in the following area:
______________________________________________________________________
( ) G. Provide semi-annual testing and maintenance for hood extinguishing
system.
( ) H. Install portable fire extinguishers in the following areas:
______________________________________________________________________
( ) I. Provide annual testing and maintenance for portable fire
extinguishers in the following areas:_________________________________
(X) J. Maintain adequate clearance and access to all fire protection
equipment.
( ) K. Maintain a minimum of 18" below sprinkler heads.
4. BUILDING SERVICE EQUIPMENT
( ) A. Provide cover plates for open electrical receptacles and junction
boxes in the following areas:_________________________________________
( ) B. Repair loose electrical fixtures, wiring, and switches in the
following areas:______________________________________________________
( ) C. Discontinue the use of extension cords and multiple type electrical
plugs and replace with permanent wiring in the following areas:
______________________________________________________________________
( ) D. Replace/Repair defective vents or chimneys from heating appliances in
the following areas:__________________________________________________
( ) E. Enclose heating appliances with approved construction/materials in
the following areas:__________________________________________________
( ) F. Provide adequate combustion air for all heating appliances in
accordance with manufacturer's recommendations.
(X) G. Maintain at least a 30 in. clearance between all electrical service
equipment and storage.
5. SPECIAL HAZARDS
( ) A. Store all flammable and combustible liquids and gases in approved
containers.
( ) B. Provide adequate ventilation for areas used for the storage or
handling of flammable or combustible liquids or gases.
( ) C. Install approved electrical equipment for areas used for the storage
or handling of flammable or combustible liquids or gases.
( ) D. Store all pressurized cylinders in the upright position with proper
supports, and with protective valve covers in place.
6. GENERAL
( ) A. Remove combustible waste and debris from the following areas:
______________________________________________________________________
(X) B. Improve general housekeeping in the following areas:
mechanical room
______________________________________________________________________
( ) C. Post "No Smoking" signs in the following areas:
______________________________________________________________________
( ) D. Complete and record fire drills at least:
______________________________________________________________________
( ) E. Maintain a clearance of at least 2 ft. between the ceiling and
storage.
( ) F. Provide appropriate posting of required fire safety information.
Remarks Lecture 45 people; class rm 24 people; ok
-------------------------------------------------------------------------
G: Remove storage from mechanical room
-------------------------------------------------------------------------
* Do not hang anything on automatic sprinkler heads.
-------------------------------------------------------------------------
( ) See attached supplemental report for additional comments.
Received by Barbara Keesecker /s/ Barbara Keesecker
----------------------- ---------------------
Print Sign
Reply To:
Inspector CM Cronauer /s/ CM Cronauer 791 4758
----------------------- ---------------------
Print Sign
Appeals to these requirements may be addressed to the Supervisor of the
Regional Office of the State Fire Marshall listed hereon. All appeal processes
will be conducted and administered in accordance with the provisions as
outlined in Article 38A of the Annotated Code of Maryland.
<PAGE> 94
________________________________________________________________________________
FIRE SAFETY INSPECTION
________________________________________________________________________________
NAME HAGERSTOWN BUSINESS COLLEGE
ADDRESS 18618 CRESTWOOD DR
HAGERSTOWN, MD ZIP 21742
OCCUPANCY DORMITORY 502 CODE
TELEPHONE 739 2670
MARYLAND STATE MARYLAND STATE FIRE MARSHALL [LOGO]
FIRE MARSHALL'S
OFFICE
DEPARTMENT OF
PUBLIC SAFETY AND
CORRECTIONAL SERVICES
A fire safety inspection of the above referenced location was conducted by
CM Cronauer on 2/2/96. As a result, the following violations of the State
Fire Prevention Code are noted for your immediate attention and compliance
within 30 days:
1. MEANS OF EGRESS
( ) A. Keep all exit doors unlocked and unobstructed.
( ) B. Keep all corridors/stairways clear and unobstructed.
( ) C. Repair exit doors, locks, and hardware for easy operation.
( ) D. Install/Repair normal exit illumination in the following areas:
______________________________________________________________________
( ) E. Install/Repair emergency lighting in the following areas:
______________________________________________________________________
( ) F. Install/Repair illuminated exit signs in the following areas:
______________________________________________________________________
2. FIRE PROTECTION FEATURES
( ) A. Install/Repair fire/smoke doors in the following areas:
______________________________________________________________________
( ) B. Install/Repair self-closing devices on doors in the following areas:
______________________________________________________________________
( ) C. Remove unauthorized hold-open devices on doors in the following areas:
______________________________________________________________________
( ) D. Provide flame spread certification for interior finish in the
following areas:______________________________________________________
3. FIRE PROTECTION EQUIPMENT
( ) A. Install/Repair manual fire alarm system in the following areas:
______________________________________________________________________
( ) B. Install/Repair smoke detectors in the following areas:
______________________________________________________________________
( ) C. Install automatic sprinkler protection in the following areas:
______________________________________________________________________
OK ( ) D. Provide quarterly testing and maintenance for the automatic sprinkler
system:_______________________________________________________________
( ) E. Replace/Repair automatic sprinkler system equipment as follows:
______________________________________________________________________
( ) F. Install/Repair hood extinguishing system in the following area:
______________________________________________________________________
( ) G. Provide semi-annual testing and maintenance for hood extinguishing
system.
( ) H. Install portable fire extinguishers in the following areas:
______________________________________________________________________
( ) I. Provide annual testing and maintenance for portable fire
extinguishers in the following areas:_________________________________
(X) J. Maintain adequate clearance and access to all fire protection
equipment.
( ) K. Maintain a minimum of 18" below sprinkler heads.
4. BUILDING SERVICE EQUIPMENT
( ) A. Provide cover plates for open electrical receptacles and junction
boxes in the following areas:_________________________________________
(X) B. Repair loose electrical fixtures, wiring, and switches in the
following areas:______________________________________________________
( ) C. Discontinue the use of extension cords and multiple type electrical
plugs and replace with permanent wiring in the following areas:
______________________________________________________________________
( ) D. Replace/Repair defective vents or chimneys from heating appliances in
the following areas:__________________________________________________
( ) E. Enclose heating appliances with approved construction/materials in
the following areas:__________________________________________________
( ) F. Provide adequate combustion air for all heating appliances in
accordance with manufacturer's recommendations.
(X) G. Maintain at least a 30 in. clearance between all electrical service
equipment and storage.
5. SPECIAL HAZARDS
( ) A. Store all flammable and combustible liquids and gases in approved
containers.
( ) B. Provide adequate ventilation for areas used for the storage or
handling of flammable or combustible liquids or gases.
( ) C. Install approved electrical equipment for areas used for the storage
or handling of flammable or combustible liquids or gases.
( ) D. Store all pressurized cylinders in the upright position with proper
supports, and with protective valve covers in place.
6. GENERAL
( ) A. Remove combustible waste and debris from the following areas:
______________________________________________________________________
(X) B. Improve general housekeeping in the following areas:
mechanical room
______________________________________________________________________
( ) C. Post "No Smoking" signs in the following areas:
______________________________________________________________________
( ) D. Complete and record fire drills at least:
______________________________________________________________________
( ) E. Maintain a clearance of at least 2 ft. between the ceiling and
storage.
( ) F. Provide appropriate posting of required fire safety information.
Remarks DORM STORAGE/PRINT ROOM/AND MECHANICAL ROOM: REMOVE EXCESSIVE
-------------------------------------------------------------------------
STORAGE. 30" CLEARANCE REQUIRED IN FRONT OF ELECTRICAL PANEL.
-------------------------------------------------------------------------
( ) See attached supplemental report for additional comments.
Received by BARBARA KEESECKER /s/ Barbara Keesecker
----------------------- ---------------------
Print Sign
Reply To:
Inspector CM CRONAUER /s/ CM Cronauer 7914758
----------------------- ---------------------
Print Sign
Appeals to these requirements may be addressed to the Supervisor of the
Regional Office of the State Fire Marshall listed hereon. All appeal processes
will be conducted and administered in accordance with the provisions as
outlined in Article 38A of the Annotated Code of Maryland.
<PAGE> 95
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIRE-X
SALES & SERVICE CORP. ANSUL Commercial & Industrial Fire Protection [LOGO]
- --------------------------------------------------------------------------------------------------------------
17227 Virginia Avenue - Hagerstown, Maryland 21740-7606 - (301) 582-0016 - (301) 582-0183 Fax FID# 52-1590945
</TABLE>
SOLD TO CUSTOMER # 2577 SHIPPED TO
PLEASE PAY FROM THIS
INVOICE: NO STATEMENT
HAGERSTOWN BUSINESS COLLEGE WILL BE SENT
18618 CRESTWOOD DRIVE
HAGERSTOWN, MD 21740
(301) 739-2670
--------------
TELEPHONE NO.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
DATE DATE SHIPPED SHIPPED VIA YOUR ORDER NO. INVOICE NO. F.O.B. TERMS
- ---------------------------------------------------------------------------------------------
10-12-95 9-29-95 PM 28243 2 MD net 30
- ---------------------------------------------------------------------------------------------
QUANTITY DESCRIPTION PRICE AMOUNT
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A complete inspection and maintenance procedure was
performed on your fire extinguishers at the above location
in accordance with NFPA 10, chapter 4. This included proper
dating, tagging, sealing & weighing of the units as well as
other applicable procedures as stated in NFPA 10. An
inspection/service report was issued detailing the status of
your facility's compliance with NFPA 10. SERVICE $73.50
PARTS 15.75
HAZ/MAT HANDLING FEE 2.68
TX EXEMPT
TOTAL $91.93
TERMS: Net 30 days from date of invoice: 1 1/2% INTEREST per month charged thereafter.
</TABLE>
<PAGE> 96
EXHIBIT 10
LIST OF LEASES, FINANCING AGREEMENTS, AND OTHER ENCUMBRANCES
RELATING TO REAL AND PERSONAL PROPERTY
1. Michigan National Bank Line of Credit (which will be released at or
prior to Closing with respect to the School Related Assets)
2. Those leases and agreements, if any, described on Exhibit 15
<PAGE> 97
EXHIBIT 11
LIST OF ACCREDITATION
1. Certification by United States Department of Education
2. Accredited by the Accrediting Council for Independent Colleges and
Schools (ACICS)
3. Approved by the Maryland Higher Education Commission
4. Registered in Pennsylvania by the Pennsylvania State Board of Private
Licensed Schools
5. Court Reporting Program approved by the National Court Reporters'
Association
6. Health Information Technology Program accredited by the Commission on
Accreditation of Allied Health Education Programs (CAAHEP) in cooperation with
the Council on Accreditation of the American Health Information Management
Association (AHIMA)
7. Phlebotemy Program approved by the National Accrediting Agency for
Clinical Laboratory Sciences
<PAGE> 98
[SEAL] UNITED STATES DEPARTMENT OF EDUCATION
OFFICE OF POSTSECONDARY EDUCATION
INSTITUTIONAL PARTICIPATION DIVISION
WASHINGTON, DC 20202-5323
Mr. Jim Gifford OPE ID No. 00794600
President
Hagerstown Business Colg
18618 Crestwood Dr
Hagerstown, MD 21742
Dear Mr. Gifford:
The Institutional Participation Division (IPD) is pleased to inform you that,
based upon the information included in your Application for Institutional
Participation (ED Form E40-34P), the Secretary of Education (Secretary) has
determined that Hagerstown Business Colg (Institution) satisfies the definition
of an eligible institution under the Higher Education Act of 1965, as amended
(HEA). The Institution will be listed in the next edition of the DIRECTORY OF
POSTSECONDARY INSTITUTIONS published by the U.S. Department of Education
(Department).
ENCLOSURES
Enclosed, please find a copy of the ELIGIBILITY AND CERTIFICATION APPROVAL
REPORT (ECAR) and the PROGRAM PARTICIPATION AGREEMENT (PPA) that has been
signed on behalf of the Secretary. In the PPA are listed the Federal student
financial assistance programs (Title IV, HEA programs) for which IPD has
certified the Institution.
Together, the PPA and the ECAR constitute IPD's determination that the
Institution has qualified to participate in programs under the Higher Education
Act of 1965, as amended (HEA) and the Federal student financial assistance
programs (Title IV, HEA programs).
The Institution must retain the ECAR and the PPA together.
OPE ID NUMBER
The OPE ID Number 00794600 is a unique identifier for the Institution. The OPE
ID Number will also be the Institution's identification number for the Title
IV, HEA programs. Please use the OPE ID Number in all communications with the
Department.
<PAGE> 99
Hagerstown Business Colg
00794600 Page 2
- --------------------------------------------------------------------------------
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
The ECAR contains a list of the HEA programs other than Title IV, HEA programs,
for which the Institution is eligible to apply. This list DOES NOT MEAN that
the Institution will automatically be eligible to participate in or receive
funds under any HEA competitive grant program. Information concerning
applications for, and the individual requirements of, the competitive grant
program can be obtained from:
Deputy Assistant Secretary
Office of Higher Education Programs
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, DC 20202-5131.
The ECAR also contains a Vocational Programs Section that lists the Non-Degree
Programs that IPD has determined are eligible programs for participation in the
Title IV, HEA programs. Please Note: (a) Vocational Programs that do not meet
the requirements of 34 CFR Parts 600 and 668 have not been approved and do not
appear in the ECAR; and (b) in order to comply with the requirements of 34 CFR
668(l), some Vocational Programs may have been approved for fewer credit hours
than requested in the Institution's application.
PROGRAM PARTICIPATION AGREEMENT
As explained in the PPA, Title IV HEA programs administered by participating
educational institutions are subject to applicable laws, regulations, and
guidelines.
Listed below are the appropriate telephone numbers for further information on
the HEA programs for which the Institution is approved:
- Federal Pell Grant Program (202) 708-7509
- Federal Family Education Loan Program (202) 708-9222
- Federal Direct Student Loan Program (202) 708-9951
- Federal Campus-Based Programs(1) (202) 708-9807
____________________
(1) The Federal Campus-Based Programs are (a) the Federal Supplemental
Educational Opportunity Grant Program, (b) the Federal Work-Study Program, and
(c) the Federal Perkins Loan Program.
<PAGE> 100
Hagerstown Business Colg
00794600 Page 3
- --------------------------------------------------------------------------------
Not more than one year before beginning to participate in any Title IV, HEA
program for which the Institution has not previously participated, the
Institution must participate in Precertification Training(2).
Participating educational institutions will be reviewed at least once every
four years to determine whether the institutions remain administratively
capable and financially responsible to administer Title IV programs and funds.
REPORTING AND REAPPLICATION REQUIREMENTS
The institution must report promptly to the Department certain changes and
actions that affect the institution's participation approval, as specified in
34 CFR 600 and 668, including, but not limited to:
- Change of name and/or address;
- Change in the way the institution measures educational program length;
- Change in the level of course offerings;
- Additions and/or closures of non-main campus locations that offer at
least 50% of an educational program;
- Change of primary accrediting agency;
- Change of the State agency that confers legal authority on the
institution to offer programs of postsecondary education;
- Change in ownership, whether or not that ownership change results in a
change in control of the institution;
- Change in exercise of a person's substantial control over the
institution, e.g., a change in the chief executive officer or members
of the board of trustees or board of directors; or
- New contract or significant modification of existing contract with a
third party servicer.
If the institution fails to report any such changes within ten days after the
change occurs, the ability of the institution to administer the Title IV
student financial assistance programs properly will be called into question.
As a consequence, we will consider whether it is necessary to monitor the
institution's receipt of Federal funds more closely. Failure to report changes
within the time frame required may also result in an adverse action being taken
against the institution in accordance with 34 CFR 668, Subpart G.
_____________________
(2) For information concerning Precertification Training, contact Team 3 at
the telephone number listed later in this Letter.
<PAGE> 101
Hagerstown Business Colg
00794600 Page 4
- --------------------------------------------------------------------------------
AUTOMATIC TERMINATION OF APPROVAL
This Approval for Institutional Participation automatically terminates on the
happening of any of the following events:
- 07/31/1999;
- The date the institution loses the legal authority to offer programs
of postsecondary education in the State in which it is located;
- The date the institution loses accreditation from its designated
primary accrediting agency;
- The date the institution ceases to offer all approved postsecondary
instruction;
- The date the institution merges with another institution;
- The date the institution undergoes a change in ownership resulting in
a change of control;
- The date the institution files for bankruptcy; or
- The date the institution otherwise ceases to meet the definition of
an eligible Proprietary institution of higher education
Please send all information or documentation required by this letter to:
if by mail:
U.S. Department of Education
Institutional Participation Division, Team 3
600 Independence Avenue, S.W.
Washington, DC 20202-5323
if by overnight mail/courier delivery:
U.S. Department of Education
Institutional Participation Division, Team 3
7th & D Streets, S.W., GSA Building, Room 3522
Washington, DC 20407
Please contact the IPD Team 3 if you have any questions concerning information
included in this Notice. Telephone numbers for Team 3 are:
(202) 205-3772 (202) 205-3778 (202) 205-3887 (202) 205-3888
Respectfully yours,
/s/ Robert E. Jamroz, Ph.D.
---------------------------
Robert E. Jamroz, Ph.D.
Acting Director
<PAGE> 102
Hagerstown Business Colg
00794600 Page 5
- --------------------------------------------------------------------------------
Enclosures:
Program Participation Agreement
Eligibility and Certification Approval Report
<PAGE> 103
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 PAGE A - 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
NAME OF INSTITUTION: HAGERSTOWN BUSINESS COLG
ADDRESS: 18618 CRESTWOOD DR
HAGERSTOWN, MD 21742
CONGRESSIONAL DISTRICT: 06 ACTION DATE: 05/22/95
DEPARTMENT REGION: 03 ACTION: Reapprove Elig/Cert
REASON: Meets Statutory Requirement
- ------------------------------------------------------------------------------------------------------------------------------------
OPE ID : 007946 00 FEDERAL PELL GRANT ID : 00794600
EIN ID : 382530076 FEDERAL FAMILY EDUCATION LOAN ID : 00794600
IPEDS ID : FEDERAL DIRECT STUDENT LOAN ID :
CRS ID : 1 382530076 A3 FEDERAL WORK - STUDY ID : 00175000
PIN ID : 8279 FEDERAL SUPPLEMENTAL EDUCATION OPPORTUNITY GRANT ID : 00175000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 104
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 PAGE A - 2
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg ELIGIBLE : Y
OPE ID : 007946 00 INITIAL APPROVAL DATE : 05/23/84
WAIVER(S): **** End of Waivers ***
ACADEMIC CALENDAR : Trimester Hours
HIGHEST EDUCATIONAL PROGRAM OFFERED : Associate's Degree
- ------------------------------------------------------------------------------------------------------------------------------------
THE INSTITUTION IS ELIGIBLE TO APPLY FOR PARTICIPATION IN THE FOLLOWING PROGRAMS AUTHORIZED UNDER THE HIGHER EDUCATION ACT OF 1965,
AS AMENDED:
TITLE I : N TITLE IV : Y TITLE VII : N TITLE X : N TITLE XIII : N
TITLE II : N TITLE V : N TITLE VIII : N TITLE XI : N TITLE XIV : N
TITLE III : N TITLE VI : N TITLE IX : N TITLE XII : N TITLE XV : N
- ------------------------------------------------------------------------------------------------------------------------------------
TITLE IV STUDENT FINANCIAL ASSISTANCE PROGRAMS
PROGRAM PARTICIPATION AGREEMENT
CERTIFIED : Certified EFFECTIVE DATE : 08/02/1995
LOAN DEFERMENT ONLY : N EXPIRATION DATE : 07/31/1999
PROGRAM CERTIFIED APPROVAL DATE PROGRAM CERTIFIED APPROVAL DATE
------- --------- ------------- ------- --------- -------------
FWS Com Serv Y 05/04/93 FWS Priv Sec Empl Y 05/22/95
FWS Job Loc Dev Y 05/04/93 FFEL Staff Y 11/23/88
FFEL Staff Unsub Y 05/22/95 FFEL PLUS Y 05/22/95
FFEL SLS N FPerkins Y 11/23/88
FSEOG Y 05/04/93 FPell Y 11/23/88
FDSLP Staff Y 05/22/95 FDSLP Staff Unsub Y 05/22/95
FDSLP PLUS Y 05/22/95
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 105
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 ACCREDITATION SECTION PAGE B - 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg
OPE ID : 007946 00
ACCREDITATION
FIRST
ACCREDITING AGENCY SCOPE TYPE ACCREDITATION STATUS CONFERRED
- ------------------------------------- ----- ---- -------------------- ---------
Accrediting Commission of Independent INS PRI Full Accreditation 01/01/68
Colleges and Schools
**** End of Accreditation Section ****
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 106
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 STATE AUTHORIZATION SECTION PAGE C - 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg
OPE ID 007946 00
STATE AUTHORIZATION
STATE AGENCY EFFECTIVE DATE AUTHORIZATION TYPE
- ------------------------------ -------------- ------------------------------------
MD Higher Education Commission 04/26/95 Institutional Authorization
**** End of State Authorization Section ****
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 107
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 OFFICIALS SECTION PAGE D - 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg
OPE ID : 007946 00
OFFICIALS
NAME AND ADDRESS TITLE PHONE FAX INTERNET
- ------------------------------------ --------------------------- --------------- --------------- ----------------------
Gifford, Jim President (301) 739-2670 (301) 791-7661
POB 2861
Hagerstown, MD 21741
McCarthy, Timothy President (301) 739-2670 (301) 791-7661
3290 W Big Beaver
Troy, MI 48084
Gilgore, Robert G Financial Aid (301) 739-2670 (301) 791-7661
Administrator
Doonan, Thomas A Director / General
3290 W Big Beaver Partner
Troy, MI 48084
Vlasic, Richard R Director / General
Partner
Vlasic, Michael A Director / General
Partner
Toma, H D Vice President
10430 Elizabeth Lake Rd
White Lake Township, MI 48386
**** End of Officials Section ****
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 108
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 ADDITIONAL LOCATIONS SECTION PAGE E - 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg
OPE ID : 007946 00
ADDITIONAL LOCATIONS
OPE ID NAME AND ADDRESS LOCATION TYPE APPROVED INITIAL APPROVAL DATE
- ----------------- ------------------------------------- --------------------- -------- ---------------------
**** End of Section ****
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 109
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 VOCATIONAL PROGRAMS SECTION PAGE F - 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg
OPE ID : 007946 00
VOCATIONAL PROGRAMS
CIP CIP NAME APPROVED FIRST OFFERED CREDIT HOURS CLOCK HOURS DURATION IN WEEKS
- ------- ------------------------------ -------- ------------- ------------ ----------- -----------------
51.0899 Health and Medical Assistants, Y 24 45
Other
51.1099 Health and Medical Laboratory Y 26 45
Technol./Technicians, Other
52.0302 Accounting Technician Y 50 45
52.0403 Legal Administrative Y 47 45
Assistant/Secretary
52.0404 Medical Administrative Y 51 60
Assistant/Secretary
52.0406 Receptionist Y 51 60
52.0407 Information Processing/Data Y 26 30
Entry Technician
52.0499 Administrative and Secretarial Y 50 60
Services, Other
**** End of Section ****
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 110
<TABLE>
<CAPTION>
[SEAL]
INSTITUTIONAL PARTICIPATION DIVISION
ELIGIBILITY AND CERTIFICATION APPROVAL REPORT
DATE: 09/13/1995 OWNERSHIP SECTION PAGE G - 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INSTITUTION NAME : Hagerstown Business Colg
OPE ID : 007946 00
OWNERSHIP
EIN/SSN NAME OWNER TYPE PERCENT OWNED START DATE END DATE
- --------- ------------------------- ------------------------------- ------------- ---------- --------
382530076 O/E Learning INC. Corporation - Privately Held 100% 04/25/95
3290 West Big Beaver
Suite 128
Troy, MI 48084
**** End of Section ****
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 111
[LOGO] ACICS [LETTERHEAD] ACCREDITING COUNCIL FOR
INDEPENDENT COLLEGES AND SCHOOLS
August 21, 1996
ID Code: M00115
Mr. James E. Gifford
President
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Mr. Gifford:
The Council acted at its recent meeting to give your institution a new grant of
accreditation as a junior college through December 31, 2002.
The institution should be aware of the correct interpretation of Section 3-3-302
of the Accreditation Criteria (copy enclosed) related to the percentage of
faculty with advanced degrees or professional certification who are teaching
courses at the institution. Faculty teaching courses that do not require a
baccalaureate degree for the basis of hiring are not included in the numerator
or the denominator when calculating the percentage of courses being taught by
faculty possessing advanced degrees or professional certification.
The Council is pleased to have this continued relationship with your
institution. Please contact Jill DeAtley at (202) 336-6774 if you have any
questions.
Sincerely,
/s/ Stephen D. Parker
- ---------------------
Stephen D. Parker
Executive Director
cam
Enclosure
<PAGE> 112
ACCREDITING COUNCIL
FOR
INDEPENDENT COLLEGES AND SCHOOLS
[LOGO] ACICS
Hagerstown Business College
Hagerstown, Maryland
is accredited as a
Junior College
This accreditation, with all the rights, honors,
and privileges, is granted through
December 31, 2002
in testimony of institutional compliance with
the criteria of the Council.
/s/ Stephen D. Parker
----------------------------------------------
EXECUTIVE DIRECTOR
<PAGE> 113
[LETTERHEAD] THE MARYLAND HIGHER EDUCATION COMMISSION
[LOGO]
June 20, 1996
Mr. Jim Gifford
President
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Mr. Gifford:
The Maryland Higher Education Commission (the "Commission") has
reviewed the program changes by Hagerstown Business College. This review
entailed an analysis of the changes in accord with the Commission's Policies
and Procedures for Academic Program Proposals and the Minimum Requirements for
Degree-Granting Institutions.
The proposed program changes to the Legal Secretary, Medical
Assistant, Medical Transcriptionist, Medical Receptionist, and Health
Information Coding certificate programs do not require action by the Commission
and can be implemented as proposed. Further, the proposed changes to the
Professional Secretary, Computer Applications, Court Reporting, Medical
Secretary/Assistant, Medical Receptionist/Transcriptionist, Health Information
Technology, and Legal Assistant Associate of Applied Science degree programs
likewise do not require Commission action. Therefore, the following proposed
name changes are acceptable.
FORMER PROGRAM NAME NEW PROGRAM NAME
Business Administration - Marketing Business Administration
Clerk Typist/Receptionist Typist/Receptionist
Business Administration - Management Business Administration
Computerized Office Accounting Computerized Accounting
Data Entry Clerk Data Entry
Bookkeeper Computerized Accounting
This action does not include the proposal to use the term "Accounting"
to describe the program Business Administration-Accounting. The Minimum
Requirements for Degree-Granting Institutions (COMAR 13B.02.02.11(A)) states:
IF AN INSTITUTION ALREADY APPROVED BY THE STATE OR CHARTERED BY THE
GENERAL ASSEMBLY WISHES TO OFFER AN INSTRUCTIONAL PROGRAM NOT
SPECIFIED IN THE INSTITUTION'S CERTIFICATE OF APPROVAL, OR NOT
AUTHORIZED BY ITS CHARTER, OR BY AN APPROVAL OR RECOMMENDATION OF THE
COMMISSION, THE INSTITUTION SHALL SUBMIT A PROSPECTUS AND A REQUEST
FOR APPROVAL OR RECOMMENDATION THROUGH ITS GOVERNING BOARD TO THE
COMMISSION IN ACCORDANCE WITH INSTRUCTIONS PROVIDED BY THE SECRETARY.
<PAGE> 114
Mr. Jim Gifford
June 20, 1996
page 2
The Policies and Procedures for Academic Program Proposals defines a
"new program" to include a "substantial modification" of an existing program.
Because the disciplines of Business Administration and Accounting are
different, your desire to rename the program constitutes the introduction of a
new program and must be submitted for approval to the Commission.
If you have any questions or concerns on this matter, please call me
at 410-974-2971.
Sincerely,
/s/ David A. Sumler
--------------------------------------
David A. Sumler, Ph.D.
Director of Collegiate Affairs
DS:LM
<PAGE> 115
[LETTERHEAD] THE MARYLAND HIGHER EDUCATION COMMISSION
[LOGO]
August 9, 1996
Mr. Jim Gifford
President
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Mr. Gifford:
The Maryland Higher Education Commission (the "Commission") has
reviewed the program change proposal by Hagerstown Business College. This
review entailed an analysis of the changes in accord with the Commission's
Policies and Procedures for Academic Program Proposals and the Minimum
Requirements for Degree-Granting Institutions.
The proposed program change to Accounting does not require action by
the Commission and can be implemented as proposed. Therefore, the following
proposed name change is acceptable.
FORMER PROGRAM NAME NEW PROGRAM NAME
Business Administration - Accounting Accounting
If you have any questions or concerns on this matter, please call me
at 410-974-2971.
Sincerely,
/s/ David A. Sumler
-------------------------------------
David A. Sumler, Ph.D.
Director of Collegiate Affairs
DS:LM
<PAGE> 116
[LETTERHEAD] MARYLAND HIGHER EDUCATION COMMISSION
May 14, 1992
Ms. Cheryl M. Hyslop
Dean
Hagerstown Business College
12031 Hopewell Road
Hagerstown, Maryland 21740
Dear Ms. Hyslop:
Hagerstown Business College maintains full and unconditional approval
from the Maryland Higher Education Commission to operate in the State of
Maryland and to offer programs in accounting technologies, secretarial
technologies, and medical and legal assistance leading to the lower division
certificate and the associate's degree.
Cordially
/s/ Shaila R. Aery
------------------------------
Shaila R. Aery
Secretary
SRA:JAS:ds
<PAGE> 117
MARYLAND HIGHER EDUCATION COMMISSION
hereby states that
HAGERSTOWN BUSINESS COLLEGE
maintains full and unconditional approval to operate
in the State of Maryland and to offer programs in
accounting technologies
secretarial technologies
medical assistance
legal assistance
leading to the lower division certificate and
associate's degree
<PAGE> 118
Commonwealth of Pennsylvania
DEPARTMENT OF EDUCATION
333 Market Street
Harrisburg, PA 17126-0333
June 20, 1995
MR JAMES GIFFORD
CHIEF EXECUTIVE OFFICER
HAGERSTOWN BUSINESS COLLEGE
18618 CRESTWOOD DRIVE
HAGERSTOWN MD 21742
Dear MR GIFFORD :
Your school has been registered as an out-of-state school authorized
to solicit students in the Commonwealth of Pennsylvania under the provisions of
Act 174 of 1986 for the period from 07-01-1995 to 07-01-1997 or until this
registration is suspended or revoked for cause.
This registration authorizes licensed representatives of your school
to enroll students within the Commonwealth of Pennsylvania for the program(s)
on the enclosed listing.
As you know, representatives of your school who enroll students within
the Commonwealth must be licensed by the State Board of Private Licensed
Schools. If you have submitted admissions representatives' applications they
are being processed and will be forwarded under separate cover.
This registration applies only to the program titles, lengths and
tuition charges shown above. Please notify the State Board of Private Licensed
Schools of any proposed changes relative to these programs or for new programs;
change of address; change of director or a change of ownership.
Sincerely,
/s/ James G. Hobbs
------------------
JAMES G HOBBS
COORDINATING SECRETARY
STATE BOARD OF PRIVATE LICENSED SCHOOLS
Enclosure
<PAGE> 119
COMMONWEALTH OF PENNSYLVANIA
Department of Education
hereby states that
HAGERSTOWN BUSINESS COLLEGE
has been registered as an out-of-state school
authorized to solicit students in the
Commonwealth of Pennsylvania
under the provisions of Act 174 of 1986
July 1, 1995 to July 1, 1997
<PAGE> 120
COMMONWEALTH OF PENNSYLVANIA
Department of Education
October 25, 1996
SUBJECT: School Program Profile (PDE-3808)
TO: School Administrators
Licensed/Registered Private Schools
/s/ Pat Dowswell
------------------------------------
FROM: Pat Dowswell
Division of Private Licensed Schools
Enclosed is your current School Program Profile.
Please review the profile carefully and return any changes
using current procedures.
If you have any questions concerning this matter,
please contact me at (717) 783-8228.
<PAGE> 121
PDE-3808 SCHOOL PROGRAM PROFILE PAGE 162
4-00-00-940-9-0000 HAGERSTOWN BUSINESS COLLEGE 10/24/96
PDS840 18618 CRESTWOOD DRIVE HOBBS
CALENDAR SYSTEM: TRIMESTER HAGERSTOWN MD 21742
301-739-2670
<TABLE>
<CAPTION>
CIP CODE PROGRAM NAME TYPE PROGRAM DISC'D PROG-NEW TUITION
AWARD LENGTH YEAR TUITION TUITION EFF-DATE
<S> <C> <C> <C> <C> <C> <C> <C>
11.9999 000 COMPUTERIZED AAS 1365 CLOCK HOURS 8960
APPLICATIONS 70 CREDIT HOURS
22.0103 000 LEGAL ASSISTANT AAS 1215 CLOCK HOURS 8960
70 CREDIT HOURS
51.0707 000 HEALTH INFORMATION D 570 CLOCK HOURS 3840
CODING 30 CREDIT HOURS
51.0707 001 HEALTH INFORMATION AAS 1290 CLOCK HOURS 8960
TECHNOLOGY 70 CREDIT HOURS
51.0708 000 MEDICAL D 1095 CLOCK HOURS 6528
TRANSCRIPTIONIST 51 CREDIT HOURS
51.0801 000 MEDICAL ASSISTANT D 1095 CLOCK HOURS 6528
51 CREDIT HOURS
51.9999 000 PHLEBOTOMIST D 660 CLOCK HOURS 4096
32 CREDIT HOURS
52.0201 000 ACCOUNTING AAS 1290 CLOCK HOURS 8960
70 CREDIT HOURS
52.0201 001 BUS ADMIN/ AA 1470 CLOCK HOURS 1996 8960
MANAGEMENT 70 CREDIT HOURS
52.0201 002 BUSINESS ADMINISTRATION AAS 1230 CLOCK HOURS 8960
70 CREDIT HOURS
52.0302 000 COMPUTERIZED ACCOUNTING D 750 CLOCK HOURS 5248
41 CREDIT HOURS
52.0302 001 BOOKKEEPER D 705 CLOCK HOURS 1996 6400
50 CREDIT HOURS
52.0401 000 PROFESSIONAL SECRETARY AAS 1365 CLOCK HOURS 8960
70 CREDIT HOURS
52.0403 000 LEGAL SECRETARY D 825 CLOCK HOURS 6016
47 CREDIT HOURS
52.0404 000 MEDICAL SECRETARY/ AAS 1320 CLOCK HOURS 8832
ASSISTANT 69 CREDIT HOURS
52.0405 000 COURT REPORTER AAS 1470 CLOCK HOURS 8960
70 CREDIT HOURS
52.0406 000 MEDICAL RECEPTIONIST/ AAS 1335 CLOCK HOURS 8832
TRANSCRIPTIONIST 69 CREDIT HOURS
52.0406 001 MEDICAL RECEPTIONIST D 1050 CLOCK HOURS 6528
51 CREDIT HOURS
</TABLE>
<PAGE> 122
PDE-3808 SCHOOL PROGRAM PROFILE PAGE 163
4-00-00-940-9-0000 HAGERSTOWN BUSINESS COLLEGE 10/24/96
PDS840 18618 CRESTWOOD DRIVE HOBBS
CALENDR SYSTEM: TRIMESTER HAGERSTOWN MD 21742
301-739-2670
<TABLE>
<CAPTION>
TYPE PROGRAM DISC'D PROG-NEW TUITION
CIP CODE PROGRAM NAME AWARD LENGTH YEAR TUITION TUITION EFF-DATE
<S> <C> <C> <C> <C> <C> <C> <C>
52.0407 000 DATA ENTRY D 645 CLOCK HOURS 4096
32 CREDIT HOURS
52.0408 000 TYPIST/RECEPTIONIST D 975 CLOCK HOURS 6400
50 CREDIT HOURS
</TABLE>
<PAGE> 123
NCRA [LETTERHEAD]
June 5, 1995
Mr. James Gifford
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Mr. Gifford:
The Board on Approved Student Education has recently concluded its June meeting
where action was taken to confer a new grant of approval to your court reporter
education program. Approval is normally issued for four (4) years; however,
each program is subject to reexamination at any time if a question is raised as
to its compliance with the General Requirements and Minimum Standards.
Enclosed is a copy of the motion passed at the meeting concerning your
institution.
Your program will continue to be listed as an approved one in the Journal of
Court Reporting as well as in promotional mailings distributed to potential
students who request the information.
Congratulations, and BASE appreciates your support of its approval program.
Please do not hesitate to contact me for further information or assistance if
needed.
Sincerely,
/s/ D. Kay Frazier
- ---------------------
D. Kay Frazier, Chair
Board on Approved Student Education
DKF/dmg
Enclosure
<PAGE> 124
HAGERSTOWN BUSINESS COLLEGE
Hagerstown, Maryland
WHEREAS, The Board on Approved Student Education has considered
information, documents, and reports of the above-named
institution's court reporter education program, and finds
that it generally complies with the General Requirements
and Minimum Standards of the Board on Approved Student
Education,
THEREFORE
RESOLVED, that the above-named institution's court reporter education
program be approved.
<PAGE> 125
NATIONAL COURT REPORTERS ASSOCIATION
[NCRA LOGO]
HAGERSTOWN BUSINESS COLLEGE
COURT REPORTING PROGRAM
Has Been Approved by the
Board on Approved Student Education
APPROVED UNTIL DECEMBER 1996
The on-site court reporter education program of this institution has met the
General Requirements and Minimum Standards established by the
Board on Approved Student Education of the
National Court Reporters Association.
/s/ Brian E. Cartier
--------------------
Executive Director
<PAGE> 126
[AHIMA LETTERHEAD]
April 11, 1994
Patricia Brown, BS, RRA
Hagerstown Business College
Health Information Technician Program
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Ms. Brown:
The Council on Accreditation has completed its review of the Progress Report you
submitted in September 1993 and has determined that all deficiency areas cited
in your last on-site visit report (Essentials II.C.3, III.E and Essential
III.F.3) have now been met. The Council congratulates you on your efforts to
bring your program into compliance with all of the Essentials criteria.
Because you were awarded the maximum five years of initial accreditation in
October, 1992, this progress report review does not change the timeframe for
your next on-site accreditation visit. Therefore, the next accreditation
on-site visit will occur in the 1997-98 academic year.
Sincerely,
/s/ Shirley Eichenwald
Shirley Eichenwald, MBA, RRA
Director, Education and Accreditation
cc: Casimer Kriechbaum, Jr., MA, Dean, Hagerstown Business College
Cheryl Hyslop, MA, President, Hagerstown Business College
L.M. Detmer, MHA, Secretary, CAAHEP
<PAGE> 127
CERTIFICATE OF ACCREDITATION
Committee on Allied Health Education and Accreditation
in cooperation with the
Council on Education of the American Health Information Management Association
presents this certificate to the
Medical Record Technology Program
Hagerstown Business College
Hagerstown, Maryland
on October 9, 1992
for being in substantial compliance with the
Essentials of an Accredited Educational Program for the
Medical Record Technician
next evaluation 1997-1998
/s/ Rhonda Karp [SEAL] /s/ Marion Pruchard
- ----------------- ----------------------------
CAHEA Chairperson Review Committee Chairperson
<PAGE> 128
[LOGO]
March 14, 1994
Kateri Frazier, MT (ASCP) BB
Program Director
Phlebotomy Program
Hagerstown Business College
1050 Crestwood Drive
Hagerstown, MD 21740-2797
Dear Ms. Frazier:
At the March 11-13, 1994 NAACLS Review Board meeting, the board approved the
attached action regarding your Phlebotomy Program. A certificate of approval is
enclosed.
Program approval is based on your program's activity from March 11, 1993 to the
present as evidenced by a progress report that was due November 1, 1993. In
order to assist your program in future administrative and financial planning, we
will notify you of the renewal of approval process on April 1, 1996. This will
allow you to submit the renewal documentation for your program by August 1,
1996, well in advance of the ending of your program's approval on April 30,
1997.
As a measure of quality assurance, we ask that you help us by completing the
enclosed Post Evaluation Process form. We consider your feedback critical to
the future improvement of our peer review process.
Please accept our congratulations on receiving NAACLS' approval for your
program.
Sincerely,
/s/ Cynthia Wells
Cynthia Wells, EdD, CLS(NCA), MT(ASCP)
Chairman, NAACLS Review Board
Enclosures - Certificate of Approval
- Post Evaluation Process Form
- Invoice
cc: Cheryl Hyslop, Director
Betty Warrenfeltz, Medical Division Director
CW/dpa
<PAGE> 129
[NAACLS LOGO]
THE NATIONAL ACCREDITING AGENCY
FOR CLINICAL LABORATORY SCIENCES
presents this
Certificate of Continued Approval
to
HAGERSTOWN BUSINESS COLLEGE
HAGERSTOWN, MARYLAND
In recognition of the Phlebotomy Program, which is consistent with the
Standards established by the NAACLS Review Board.
FROM APRIL 1, 1994 TO MARCH 31, 1997.
/s/ Cynthia L. Wells /s/
- ---------------------------- -------------------------------
Review Board Chairman Executive Director
<PAGE> 130
THE NATIONAL PHLEBOTOMY ASSOCIATION
WASHINGTON, D.C.
presents this
CERTIFICATE
to
Hagerstown Business College
FOR N.P.A. ACCREDITATION PHLEBOTOMY TRAINING PROGRAM
REGISTRATION NUMBER: C-0007
-----------------
SPECIALIZATION: Phlebotomy Course
------------------------
/s/ Sharon N. Jones /s/
- --------------------------------- [LOGO] ---------------------------------
EXECUTIVE DIRECTOR EDUCATIONAL PROGRAM PLANNER
January 1 - December 31, 1995
- ---------------------------------
DATE
[SEAL]
<PAGE> 131
[SEAL]
MARYLAND BOARD OF NURSING [LETTERHEAD]
December 8, 1995
Dr. Jim Gifford,
President,
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Dr. Gifford:
At its November meeting, the Board of Nursing met with you and Dr.
Kriechbaum to discuss the proposal to implement a License Practical Nursing
Program at Hagerstown Business College. The Board reviewed the resume of both
applicants for the position of Nursing Administrator and agrees that both
persons meet the qualification stated in the regulations.
The Board voted to authorized Hagerstown Business College to implement
a license practical nursing program in January 1996, with the understanding that
the nursing courses will not begin before May, 1996. The curriculum is to be
reviewed by the faculty and approved by the Board before the nursing courses
begin in May 1996.
Its the Board's understanding that the curriculum is based on five
modules of 9 weeks and that the modules provide a total of 36 credit hours.
Students will be able to complete the program in one calendar year.
Please remember the Board's professional staff is available as you
implement and prepare the program.
Sincerely,
/s/ Judith W. Ryan
---------------------------------
Judith W. Ryan, Ph.D., RN, CRNP-A
President
Maryland Board of Nursing
JWR/was
<PAGE> 132
EXHIBIT 12
POLICY MANUALS AND OTHER SCHOOL MATERIAL
1. Financial Aid Handbook and related material published by U.S.
Department of Education
2. Recruitment Training Manual
3. Hagerstown Business College Course Catalog
4. Instructional manuals on "CLASS" computer software system
<PAGE> 133
EXHIBIT 13
COHORT DEFAULT RATE EVALUATION MATERIAL
Cohort Year Cohort Default Rate
----------- -------------------
1991 10.5%
1992 4.6%
1993 10.6%
1994 8.4%
<PAGE> 134
[LOGO]
UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
MAY 1996
PRESIDENT
- --------- OPE ID: 007946
HAGERSTOWN BUSINESS COLG Borrowers in Default: 12
18618 CRESTWOOD DR Borrowers in Repayment: 143
HAGERSTOWN, MD 21742 FY 1994 PRE-PUBLICATION
COHORT DEFAULT RATE: 8.4%
Dear President:
I am pleased to announce that, based upon data currently available on the
National Student Loan Data System (NSLDS), the U.S. Department of Education
(Department) has calculated a fiscal year (FY) 1994 pre-publication cohort
default rate for your school. Your school's FY 1994 pre-publication cohort
default rate is set forth above.
The cohort default rate identified in this letter is called a pre-publication
rate because, pursuant to the Department's regulations, your school has the
opportunity to review and correct errors in the data that form the basis for
this rate before an official cohort default rate is disclosed to the public.
See, 34 C.F.R. 668.17(h). The information that was used to calculate your
school's pre-publication cohort default rate was provided to NSLDS by the
guaranty agencies. Therefore, if your school chooses to challenge its data,
any challenge must be sent to the guaranty agency that reported the data to
NSLDS. Your school has 30 calendar days from the receipt of the
pre-publication data to submit challenges to the applicable guaranty agencies.
Because your school's pre-publication cohort default rate is less than 20.0%,
the Department has not enclosed a copy of the data used to calculate your
school's pre-publication cohort default rate. If your school wishes to review
its data, it must request that data within ten (10) working days of its receipt
of this letter. An order form is enclosed at the end of the enclosed
informational booklet.
Please note that there are no official consequences associated with your
school's FY 1994 pre-publication cohort default rate and the pre-publication
cohort default rate will not be voluntarily released to the public by either
the Department or the guaranty agencies. When the Department calculates your
school's official FY 1994 cohort default rate later this year, it will be
released to the public and your school may be subject to applicable
consequences.
If you have any questions regarding your school's FY 1994 pre-publication
cohort default rate, the underlying data, or the challenge process, please
review the enclosed informational booklet or contact the Default Management
Hotline at 202-708-9396.
Very truly yours,
/s/ James D. Gette
James D. Gette, Acting Chief
Default Management Section
Enclosure
<PAGE> 135
EXHIBITS 14
TRADEMARKS ETC.
The Hagerstown Business College name and logo are attached. Neither the name
Hagertown Business College nor the HBC logo has been registered as a trademark
on the State or Federal level.
<PAGE> 136
[Hagerstown Business College LOGO] 18618 Crestwood Drive
Hagerstown, Maryland 21742
301-739-2670
800-HBC-2670
FAX 301-791-7661
<PAGE> 137
EXHIBIT 15
LIST OF MATERIAL CONTRACTS
1. Program Participation Agreement with the U.S. Department of Education
2. Contract for Perkins Loans - 3rd party that administers general
disbursement
3. Agreement with Williams & Fudge for collections
4. Agreement with Greencastle-Antrim School District to teach high school
juniors and seniors in certain business education programs
5. Pitney Bowes Postal Meter Lease: Annual maintenance and rental
6. Maintenance Agreement on Xerox Copy Machine
7. Telephone System: contract with Wiltel Telegration
8. Alarm System servicing: contract with Glessner
9. Fire Security System servicing: contract with Dynamark
10. Vending Agreement to provide vending services
11. Maintenance Agreement for electronic card catalog system in library
12. Clearinghouse service for subscription for periodicals for library
with Ebisco
13. Waste Removal agreement
14. Medical Waste Management Removal contract
15. Lawn Maintenance Agreement
16. Agreement with Heating and Cooling service (on per call basis)
17. Medisoft subscription agreement
18. Westlaw subscription agreement
19. Employment agreement described on Exhibit 16
<PAGE> 138
DEPARTMENT OF EDUCATION
OFFICE OF POSTSECONDARY EDUCATION
STUDENT FINANCIAL ASSISTANCE PROGRAMS
INSTITUTIONAL PARTICIPATION DIVISION [LOGO]
PROGRAM PARTICIPATION AGREEMENT
Effective Date of Approval: The date on which this Agreement is
signed on behalf of the Secretary of
Education
Approval Expiration Date: 07/31/1999
Name of Institution: HAGERSTOWN BUSINESS COLG
Address of Institution: 18618 CRESTWOOD DR
HAGERSTOWN, MD 21742
Office of Postsecondary Education Identification Number: 00794600
U.S. Department of Education Central Registry Service Number: 1382530076A3
THE EXECUTION OF THIS AGREEMENT BY THE INSTITUTION AND
THE SECRETARY IS A PREREQUISITE TO THE INSTITUTION'S INITIAL
OR CONTINUED PARTICIPATION IN ANY TITLE IV, HEA PROGRAM.
The postsecondary educational institution (Institution) listed above, referred
to hereafter as the "Institution," and the United States Secretary of
Education, referred to hereafter as the "Secretary," agree that the Institution
may participate in those student financial assistance programs authorized by
Title IV of the Higher Education Act of 1965, as amended, (Title IV, HEA
Programs) indicated under this Agreement and further agrees that such
participation is subject to the terms and conditions set forth in this
Agreement. As used in this Agreement, the term "Department" refers to the
U.S. Department of Education
SCOPE OF COVERAGE
This Agreement applies to all locations of the Institution as stated on the
most current ELIGIBILITY AND CERTIFICATION APPROVAL REPORT issued by the
Department. This Agreement covers the Institution's eligibility to participate
in each of the following listed Title IV, HEA programs, and incorporates by
reference the regulations cited.
- FEDERAL PELL GRANT PROGRAM, 20 U.S.C. 1070a et seq; 34 CFR Part 690.
- FEDERAL FAMILY EDUCATION LOAN PROGRAM, 20 U.S.C. 1071 et seq; 34 CFR Part
682.
- FEDERAL PERKINS LAON PROGRAM, 20 U.S.C. 1087aa et seq; 34 CFR Part 674.
- FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT PROGRAM, 20 U.S.C. 1070b
et seq; 34 CFR Part 676.
- FEDERAL WORK-STUDY PROGRAM, 42 U.S.C. 2751 et seq; 34 CFR Part 675.
Page 1
<PAGE> 139
GENERAL TERMS AND CONDITIONS
1. The Institution understands and agrees that it is subject to and will
comply with the program statutes and implementing regulations for
institutional eligibility as set forth in 34 CFR Part 600 and for each
Title IV, HEA Program in which it participates, as well as the general
provisions set forth in Part F and Part G of Title IV of the HEA, and the
Student Assistance General Provisions regulations set forth in 34 CFR Part
668. THE RECITATION OF ANY PORTION OF THE STATUTE OR REGULATIONS IN THIS
AGREEMENT DOES NOT LIMIT THE INSTITUTION'S OBLIGATION TO COMPLY WITH OTHER
APPLICABLE STATUTES AND REGULATIONS.
2. a. The Institution certifies that on the date it signs this Agreement, it
has a drug abuse prevention program in operation that it has determined
is accessible to any officer, employee, or student at the Institution.
b. The Institution certifies that on the date it signs this agreement, it
is in compliance with the disclosure requirements of Section 485(f) of
the HEA (Campus Security Policy and Crime Statistics).
3. The Institution agrees to comply with --
a. Title VI of the Civil Rights Act of 1964, as amended, and the
implementing regulations, 34 CFR Parts 100 and 101 (barring
discrimination on the basis of race, color or national origin);
b. Title IX of the Education Amendments of 1972 and the implementing
regulations, 34 CFR Part 106 (barring discrimination on the basis of
sex);
c. The Family Rights and Privacy Act of 1974 and the implementing
regulations, 34 CFR Part 99;
d. Section 504 of the Rehabilitation Act of 1973 and the implementing
regulations, 34 CFR Part 104 (barring discrimination on the basis of
physical handicap); and
e. The Age Discrimination Act of 1975 and the implementing regulations, 34
CFR Part 110.
4. The Institution acknowledges that 34 CFR Parts 602 and 667 require
accrediting agencies, and State Postsecondary Review Entities (SPREs),
and the Secretary to share information about institutions. The Institution
agrees that the Secretary, any accrediting agency recognized by the
Secretary, or SPRE may share or report information to one another about the
Institution without limitation.
5. The Institution acknowledges that the HEA prohibits the Secretary from
recognizing the accreditation of any institution of higher education
unless that institution agrees to submit any dispute involving the final
denial, withdrawal, or termination of accreditation to initial arbitration
prior to any other legal action.
SELECTED PROVISIONS FROM
GENERAL PROVISIONS REGULATIONS, 34 CFR PART 668
By entering into this Program Participation Agreement, the Institution agrees
that:
(1) It will comply with all statutory provisions of or applicable to
Title IV of the HEA, all applicable regulatory provisions prescribed under that
statutory authority, and all applicable special arrangements, agreements, and
limitations entered into under the authority of statutes applicable to Title IV
of the HEA, including the requirement that the institution will use funds it
receives under any Title IV, HEA program and any interest or other earnings
thereon, solely for the purposes specified in and in accordance with that
program;
(2) As a fiduciary responsible for administering Federal funds, if the
institution is permitted to request funds under a Title IV, HEA program advance
payment method, the institution will time its requests for funds under the
program to meet the institution's immediate Title IV, HEA program needs;
(3) It will not request from or charge any student a fee for
processing or handling any application, form, or data required to determine a
student's eligibility for, and amount of, Title IV, HEA program assistance;
(4) It will establish and maintain such administrative and fiscal
procedures and records as may be necessary to ensure proper and efficient
administration of funds received from the Secretary or from students under the
Title IV, HEA programs, together with assurances that the institutions will
provide, upon request and in a timely manner, information relating to the
administrative capability and financial responsibility of the institution to--
(i) The Secretary;
(ii) The State postsecondary review entity designated under 34 CFR
part 667 for the State or States in which the institution or any of the
institution's branch campuses or other locations are located;
Page 2
<PAGE> 140
(iii) A guaranty agency, as defined in 34 CFR part 682, that
guarantees loans made under the Federal Stafford Loan, and Federal PLUS
programs for attendance at the institution or any of the institution's branch
campuses or other locations;
(iv) The nationally recognized accrediting agency that accredits or
preaccredits the institution or any of the institutions's branch campuses,
other locations, or educational programs;
(v) The State agency that legally authorizes the institution and any
branch campus or other location of the institution to provide postsecondary
education; and (vi) In the case of a public postsecondary vocational
educational institution that is approved by a State agency recognized for the
approval of public postsecondary vocational education, that State agency;
(5) It will comply with the provisions of Section 668.15 relating to
factors of financial responsibility;
(6) It will comply with the provisions of Section 668.16 relating to
standards of administrative capability;
(7) It will submit reports to the Secretary and, in the case of an
institution participating in the Federal Stafford Loan, Federal PLUS, or the
Federal Perkins Loan Program, to holders of loans made to the institution's
students under that program at such times and containing such information as
the Secretary may reasonably require to carry out the purpose of the Title IV,
HEA programs;
(8) It will not provide any statement to any student or certification
to any lender under the Federal Stafford Loan, or Federal PLUS, Program that
qualifies the student for a loan or loans in excess of the amount that the
student is eligible to borrow in accordance with sections 425(a), 428(a)(2),
428(b)(1)(A) and (B), and 428H of the HEA;
(9) It will comply with the requirements of Subpart D of 34 CFR part
668 concerning institutional and financial assistance information for students
and prospective students;
(10) In the case of an institution that advertises job placement
rates as a means of attracting students to enroll in the institution, it will
make available to prospective students, at or before the time that those
students apply for enrollment--
(i) The most recent available data concerning employment statistics,
graduation statistics, and any other information necessary to substantiate the
truthfulness of the advertisements; and
(ii) Relevant State licensing requirements of the State in which the
institution is located for any job for which an educational program offered by
the institution is designed to prepare those prospective students; (11) In the
case of an institution participating in the Federal Stafford Loan, or Federal
PLUS Program, the institution will inform all eligible borrowers, as defined
in 34 CFR part 682, enrolled in the institution about the availability and
eligibility of those borrowers for State grant assistance from the State in
which the institution is located, and will inform borrowers from another State
of the source for further information concerning State grant assistance from
that State;
(12) It will provide the certifications described in paragraph (c)
of this section;
(13) In the case of an institution whose students receive
financial assistance pursuant to section 484(d) of the HEA, the institution
will make available to those students a program proven successful in assisting
students in obtaining the recognized equivalent of a high school diploma;
(14) It will not deny any form of Federal financial aid to any
eligible student solely on the grounds that the student is participating in a
program of study abroad approved for credit by the institution;
(15) In the case of an institution seeking to participate for the
first time in the Federal Stafford Loan and Federal PLUS programs, the
institution has included a default management plan as part of its application
under Section 668.12 for participation in those programs and will use the plan
for at least two years from the date of that application. The Secretary
considers the requirements of this paragraph to be satisfied by a default
management plan developed in accordance with the default reduction measures
described in Appendix D to 34 CFR part 668;
(16) In the case of an institution that changes ownership that results
in change of control, or that changes its status as a main campus, branch
campus, or an additional location, the institution will, to participate in the
Federal Stafford Loan and Federal PLUS programs, develop a default management
plan for approval by the Secretary and implement the plan for at least two
years after the change in control or status. The Secretary considers the
requirements of this paragraph to be satisfied by a default management plan
developed in accordance with the default reduction measures described in
Appendix D to 34 CFR part 668;
(17) The Secretary, guaranty agencies and lenders as defined in 34 CFR
part 682, nationally recognized accrediting agencies, the Secretary of Veterans
Affairs, State postsecondary review entities designated under 34 CFR part 667,
State agencies recognized under 34 CFR part 603 for the approval of public post
secondary vocational education, and State agencies that legally authorize
institutions and branch campuses or other locations of institutions to provide
postsecondary education, have the authority to share with each other any
Page 3
<PAGE> 141
information pertaining to the institution's eligibility for or participation in
the Title IV, HEA programs or any information on fraud and abuse;
(18) It will not knowingly--
(i) Employ in a capacity that involves the administration of the Title
IV, HEA programs or the receipt of funds under those programs, an individual
who has been convicted of, or has pled nolo contendere or guilty to, a crime
involving the acquisition, use, or expenditure of Federal, State, or local
government funds, or has been administratively or judicially determined to have
committed fraud or any other material violation of law involving Federal,
State, or local government funds;
(ii) Contract with an institution or third-party servicer that has
been terminated under section 432 of the HEA for a reason involving the
acquisition, use, or expenditure of Federal, State, or local government funds,
or that has been administratively or judicially determined to have committed
fraud or any other material violation of law involving Federal, State, or
local government funds; or
(iii) Contract with or employ any individual, agency, or organization
that has been, or whose officers or employees have been--
(A) Convicted of, or pled nolo contendere or guilty to, a crime
involving the acquisition, use, or expenditure of Federal, State or local
government funds; or
(B) Administratively or judicially determined to have committed fraud
or any other material violation of law involving Federal, State, or local
government funds;
(19) It will complete, in a timely manner and to the satisfaction of
the Secretary, surveys conducted as a part of the Integrated Postsecondary
Education Data System (IPEDS) or any other Federal collection effort, as
designated by the Secretary, regarding data on postsecondary institutions;
(20) In the case of an institution that offers athletically related
student aid, it will comply with the provisions of paragraph (d) of this
section;
(21) It will not impose any penalty, including, but not limited to,
the assessment of late fees, the denial of access to classes, libraries, or
other institutional facilities, or the requirement that the student borrow
additional funds for which interest or other charges are assessed, on any
student because of the student's inability to meet his or her financial
obligations to the institution as a result of the delayed disbursement of the
proceeds of a Title IV, HEA program loan due to compliance with statutory and
regulatory requirements of or applicable to the Title IV, HEA programs, or
delays attributable to the institution;
(22) It will not provide, nor contact with any entity that provides,
any commission, bonus, or other incentive payment based directly or indirectly
on success in securing enrollments or financial aid to any persons or entities
engaged in any student recruiting or admission activities or in making
decisions regarding the awarding of student financial assistance, except that
this requirement shall not apply to the recruitment of foreign students
residing in foreign countries who are not eligible to receive Federal student
assistance. This provision does not apply to the giving of token gifts to
students or alumni for referring students for admission to the institution as
long as: the gift is not in the form of money, check, or money order; no more
than one such gift is given to any student or alumnus; and the gift has a value
of not more than $25;
(23) It will meet the requirements established pursuant to part H of
Title IV of the HEA by the Secretary, State postsecondary review entities
designated under 34 CFR part 667, and nationally recognized accrediting
agencies;
(24) It will comply with the refund provisions established in 668.22;
(25) It is liable for all improperly administered funds received or
refunded under the Title IV, HEA programs, including any funds administered by
a third-party servicer; and
(26) If the stated objectives of an educational program of the
institution are to prepare a student for gainful employment in a recognized
occupation, the institution will--
(i) Demonstrate a reasonable relationship between the length of the
program and entry level requirements for the recognized occupation for which
the program prepares the student. The Secretary considers the relationship to
be reasonable if the number of clock hours provided in the program does not
exceed by more than 50 percent the minimum number of clock hours required for
training in the recognized occupation for which the program prepares the
student, as established by the State in which the program is offered, if the
State has established such a requirement, or as established by any Federal
agency; and
(ii) Establish the need for the training for the student to obtain
employment in the recognized occupation for which the program prepares the
student.
(c) In order to participate in any Title IV, HEA program (other than
the SSIG and NEISP programs), the institution must certify that it--
Page 4
<PAGE> 142
(1) Has in operation a drug abuse prevention program that the
institution has determined to be accessible to any officer, employee, or
student at the institution; and
(2)(i) Has established a campus security policy in accordance with
section 485(f) of the HEA; and
(ii) Has complied with the disclosure requirements of Section 668.47 as
required by section 485(f) of the HEA.
(d) In order to participate in any Title IV, HEA program (other
than the SSIG and NEISP programs), an institution that offers athletically
related student aid must--
(l) Cause an annual compilation, independently audited not less
often than every 3 years, to be prepared within 6 months after the end of the
institution's fiscal year, of--
(i) The revenues derived by the institution from the institution's
intercollegiate athletics activities, according to the following categories:
(A) Total revenues.
(B) Revenues from football.
(C) Revenues from men's basketball.
(D) Revenues from women's basketball.
(E) Revenues from all other men's sports combined.
(F) Revenues from all other women's sports combined;
(ii) Expenses made by the institution for the institution's
intercollegiate athletics activities, according to the following categories:
(A) Total expenses.
(B) Expenses attributable to football.
(C) Expenses attributable to men's basketball.
(D) Expenses attributable to women's basketball.
(E) Expenses attributable to all other men's sports combined.
(F) Expenses attributable to all other women's sports combined; and
(iii) The total revenues and operating expenses of the institution; and
(2) Make the compilation and, where allowable by State law, the
results of the audits required by paragraph (d)(1) of this section available
for inspection by the Secretary and the public.
(e) For the purposes of paragraph (d) of this section--
(l) Revenues from intercollegiate athletics activities allocable to a
sport shall include without limitation gate receipts, broadcast revenues and
other conference distributions, appearance guarantees and options, concessions,
and advertising;
(2) Revenues such as student activities fees, alumni contributions,
and investment interest income that are not allocable to a sport shall be
included in the calculation of total revenues only;
(3) Expenses for intercollegiate athletics activities allocable to a
sport shall include without limitation grants-in-aid, salaries, travel,
equipment, and supplies; and
(4) Expenses such as general and administrative overhead that are not
allocable to a sport shall be included in the calculation of total expenses
only.
(f)(1) A program participation agreement becomes effective on the date
that the Secretary signs the agreement.
(2) A new program participation agreement supersedes any prior program
participation agreement between the Secretary and the institution.
(g)(l)(i) With respect to an institution that has been certified other
than under a provisional certification--
(A) Except as provided in paragraphs (h) and (i) of this section, the
Secretary terminates a program participation agreement through the proceedings
in subpart G of this part.
(B) An institution may terminate a program participation agreement.
(C) If the Secretary of the institution terminates a program
participation agreement under paragraph (g) of this section, the Secretary
establishes the termination date.
(2) With respect to an institution that has been provisionally
certified, the Secretary revokes a provisional certification through the
proceedings in Section 668.13(f).
(h) An institution's program participation agreement automatically expires on
the date that--
(1) The institution changes ownership that results in a change in
control as determined by the Secretary under 34 CFR part 600; or
(2) The institution's participation ends under the provisions of
Section 668.26(a)(1), (2), (4), or (7).
(i) An institution's program participation agreement no longer applies
to or covers a location of the institution as of the date on which that
location ceases to be part of the participating institutions.
Page 5
<PAGE> 143
IN WITNESS WHEREOF
the parties hereto have caused this Agreement to be executed by their duly
authorized representatives
Signature of Institution's
Chief Executive Officer /s/ Jim Gifford Date: 8/1/95
----------------------- -------------
Print Name and Title: Jim Gifford, President
-----------------------
For the Secretary: /s/ Robert E. Terry Date: Aug-2 1995
U.S. Department of Education ----------------------- --------------
Page 6
<PAGE> 144
AMENDMENT
(Institutional - Campus Based)
This Amendment is made this 1st day of July, 1994, by and between the
designated Institution below ("Customer") and EduServ Technologies, Inc.
("EduServ").
WHEREAS, Customer and EduServ entered into a Servicing Agreement as
amended ("Agreement") whereunder EduServ agreed to perform certain services with
respect to Student Loans made or to be made under Title IV of the Higher
Education Act of 1965, as amended (the "Act").
WHEREAS, on April 29, 1994, the Department of Education promulgated
Interim Final Regulations (the "Regulations") which require, among other
things, that contracts between third party servicers and Institutions (as
defined under the Act) include certain mandated provisions.
WHEREAS, the parties desire to amend the Agreement to comply with the
requirements of the Regulations while maintaining the rights which the parties
had and have under the Agreement vis-a-vis one another.
NOW, THEREFORE, the Agreement is amended by adding the following
provisions:
1. So long as the same is required under Title IV of the Higher
Education Act or the regulations promulgated and in force
thereunder (the "Act"), EduServ will comply with the applicable
provisions of (i) the Act; (ii) all statutory provisions; and (iii)
any special arrangements, agreements, limitations, suspensions and
terminations entered into under the authority of the Act ("Other
Agreements") of which EduServ has actual written knowledge, to the
extent of the services contracted by EduServ to be performed for
Customer hereunder.
2. Customer hereby consents to and authorizes EduServ to refer to
the Office of the Inspector General of the Department of Education
for investigation any information indicating there is reasonable cause
to believe that Customer might have engaged in fraud or other criminal
misconduct in connection with Customer's administration of any Title
IV, HEA program or an applicant for Title IV, HEA program assistance
might have engaged in fraud or other criminal misconduct in connection
with his or her application. Customer agrees to defend, indemnify and
hold harmless EduServ from any action taken by EduServ in good faith
under this provision.
<PAGE> 145
3. So long as the same is required by the Act and is legally
enforceable, EduServ agrees to be jointly and severally liable with
Customer to the United States Secretary of Education for any
violation by EduServ of any statutory provision of or applicable to
Title IV of the Act, any regulations thereunder or any Other Agreement
of which EduServ has actual written notice as of the date of such
violation. Notwithstanding anything herein or in the Agreement to the
contrary, Customer agrees that it shall pay within the time frame
demanded by the Department of Education any monies for which the
Department of Education may hold EduServ and Customer jointly and
severally liable. In the event Customer fails to make such payment and
EduServ is required to make such payment as a result of the joint and
several liability provisions of this amendment or the Regulations,
Customer shall indemnify and hold harmless EduServ from all costs,
expenses (including reasonable attorney's fees) and payments made by
EduServ incurred as a result of Customer's failure to make payment to
the Department of Education as provided herein, including interest at
the rate of eighteen (18%) percent per annum on any such amounts paid
by EduServ to the Department of Education from the date paid.
4. Customer represents and warrants that it has not entered into, nor is
it subject to, any Other Agreements. In the event Customer
becomes subject to any Other Agreements, Customer shall immediately
notify EduServ and provide EduServ with a copy of such Other
Agreements. In the event EduServ is required to take on additional
liabilities, obligations or perform additional services as a result of
such Other Agreements, EduServ may immediately terminate the Agreement
and/or offer to amend the Agreement to take into account the economics
of such liabilities, obligations or services.
Except as otherwise amended herein, the terms and conditions of the
Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and date first above written.
EDUSERV TECHNOLOGIES, INC. Hagerstown Business College
Customer
Print Institution Name
By: /s/ William F. Leahy, Jr. By: /s/ R.G. Gilgore
Name: WILLIAM F. LEAHY JR. Name: R. G. Gilgore
Title: Executive V.P. Marketing Title: Director of
Student Financial Assistance
<PAGE> 146
[WACHOVIA LETTERHEAD]
May 10, 1983
Mr. Richard Hajek
President
Hagerstown Business College
P. O. Box 722
Hagerstown, Maryland 21740
Dear Mr. Hajek:
Enclosed you will find your copy of Schedule A covering the servicing of
Hagerstown Business College's NDSL program. Your institution's program will be
serviced under WSI's Option I program, meaning that WSI will be performing all
past due contacts for delinquent borrowers.
The responsibility for further collection activities still rests with Hagerstown
Business College should an account age to 120 or more days past due. You can
still continue to place accounts with outside collection agencies through WSI's
DAP system as you are presently doing.
Wachovia Services values its relationship with Hagerstown Business College very
highly. If you are interested in other service options or should you have any
questions on WSI's servicing capabilities, please feel free to contact me at
the number given below.
Sincerely yours,
/s/ Kevin A. Laborde
Kevin A. Laborde
Marketing Representative
919/748-5608
KAL/bk
Enclosure
<PAGE> 147
WACHOVIA SERVICES, INC.
SCHEDULE A - N.D.S.L. SERVICING - OPTION 1
This Schedule attached to the Servicing Agreement for Hagerstown
Business College (the Customer), dated April 28, 1983, is considered an
integral part of the agreement between Wachovia Services, Inc. (the Company)
and the Customer.
The Company agrees to provide a data processing service to specifically
perform the reporting, billing, and servicing functions outlined in this
Schedule for N.D.S.L. accounts.
All governmental reporting on statistics, loan funds, refunds,
accounting reports, and similar required data will remain the function of the
Customer with supporting data being furnished by the Company, as available.
THE COMPANY AGREES TO:
1.1 Provide the Customer with the necessary forms and materials for
transferring loans and submitting loan account adjustments.
1.2 Provide the Customer with weekly, monthly, quarterly, and annual
reports to include monetary and non-monetary account data.
1.3. Provide the following services:
a. Send each Borrower, entitled to a nine or six month grace
period, a disclosure statement, an introductory letter,
information relative to loan provisions, and repayment
instructions ninety (90) days after separation.
b. Send each Borrower, entitled to a nine month grace
period, an audit statement, a grace expiration notice,
and a list of informative statements one hundred eighty (180)
days after separation.
c. Send each borrower a billing statement to be received thirty
(30) days before the due date of the first payment. This
statement, and subsequent bills (and coupon books issued
annually) are mailed to be received at least ten (10) days
before each due date.
d. Send each repayment borrower forms for deferment, postponement,
and cancellation.
e. Send each Borrower notices at 15 and 45 days past due.
f. Send each Borrower an electronic communication at sixty (60)
days past due.
<PAGE> 148
WACHOVIA SERVICES, INC.
g. Send each Borrower a Demand Letter at seventy-five (75) days
past due.
h. Make a collection telephone call to each borrower at ninety
(90) days past due. The Company will make three
separate attempts to contact each borrower.
i. Perform skip-tracing activities as available through the I.R.S.
THE CUSTOMER AGREES TO:
2.1. Adopt and use the Company's forms and procedures for the preparation
and transmittal of loan account information to the Company.
2.2. Transfer data on new loan accounts to the Company immediately after
initial advances are made.
2.3. Ensure that each Borrower, on ceasing to be a full-time student, is
fully informed as to the relationship between the Customer and
the Company, and the importance of maintaining contact with both.
2.4 Establish and maintain an account at a bank mutually agreed upon into
which payments received by the Company will be deposited.
2.5 Authorize the Company, as agent of the Customer, to review and make
tentative approval or disapproval of cancellations or deferments.
However, the final cancellation and deferment decisions are the
responsibility of the Customer.
2.6 Maintain trained staff as a contact for the Company. In the event the
Company is required to provide additional training to the Customer's
staff, the Customer agrees to pay all travel expenses related to such
training visits.
HAGERSTOWN BUSINESS COLLEGE WACHOVIA SERVICES, INC.
Customer
/s/ Richard J. Hajek /s/ Leslie D. Sari
_____________________________ _________________________
Name Richard J. Hajek Name Leslie D. Sari
Financial Aid Officer General Manager
_____________________________ _________________________
Title Title
May 3, 1983 May 9, 1983
_____________________________ _________________________
Date Date
/601A
<PAGE> 149
TO: Hagerstown Business College
THIS CONTRACT, made and entered into as of this 1st day of September, 1990, by
and between WILLIAMS & FUDGE, INC., hereafter called Collector and the above
stated College hereafter called College.
WITNESSETH:
WHEREAS, College has unpaid accounts which it desires
collected and Collector is qualified to collect such unpaid accounts and
desires to handle such accounts as referred for collection by College.
IT IS MUTUALLY AGREED AS FOLLOWS:
1) Collector agrees to accept for collection, upon terms,
conditions, and provisions herein set forth, unpaid accounts as College refers
for collection.
2) Collector shall promptly undertake, through proper and lawful
means the collection of all accounts referred by the College without regard to
intimidation, or harassment of debtor in the collection of accounts or violate
any guidelines established by the Federal Trade Commission.
3) In the event a claim, complaint, or legal process is filed
alleging threats, intimidation, harassment, deception, or any other improper
act or practice in violation of any federal or state consumer oriented act, and
the College, its agents, officers, or employees is alleged to be actually or
contingently liable, the collector agrees to defend such claim, complaint, or
legal process and to hold the College, its agents, officers, or employees,
harmless therefore as well as for any judgment recovered. Said provision
shall not apply in the event the College's own acts amount to a violation of the
above stated Federal or State consumer oriented acts.
4) Collector shall remit in full to the College the gross total of
all funds collected for the College by the tenth (10) day of each month during
the term of this agreement.
Collector will provide separate payments as well as separate monthly
accounting statements of all payments received and credited during said period.
College agrees to remit collection fees to Collector upon receipt of payments
and monthly statement as described above.
<PAGE> 150
5) The collection fee shall be thirty-three and one-third (33 1/3)
percent of the total amount collected. Said fee will be sole consideration
paid Collector. College shall not be liable for any cost or expense incurred
by Collector in the collection of accounts.
6) Collector shall have no authority to file suit on any account
referred by College. Written authority must be received by Collector from
College prior to filing suit on any accounts. Collector shall make every
effort to collect accounts prior to making suit recommendations. The
collection fee for all accounts approved for litigation shall be fifty (50)
percent.
7) Collector agrees to suspend action either temporarily or
permanently on any accounts referred for collection upon notification by
College.
8) College agrees to have had performed appropriate written demands
informing the debtor of the consequences of his failure to make payments prior
to turning accounts over to the Collector.
9) Collector agrees to implement thorough collection procedures in the
attempt to achieve a maximum recovery on debts. Such procedures are to include
a reasonable number of telephone calls along with a reasonable number of mail
efforts. Skip tracing procedures will be used wherever necessary. Legal
action will be taken when all other efforts fail providing written authority is
given by the College. Reasonable asset location will be performed by Collector
to satisfy judgements.
10) This contract may be terminated for any reason by either party
upon submission of thirty (30) day written notice thereof. Termination by
College for the cause, default, or negligence on the part of the Collector
shall be excused from the thirty (30) day notice.
IN WITNESS WHEREOF, the parties have executed this contract in
duplicate on the date written.
By: (Unreadable) (L.S.) By: /s/ Cheryl M. Hyslop (L.S.)
-------------------- ----------------------
Title: Vice President Title: Director
----------------- ------------------
Date: 8-6-90 Date: 8-13-90
----------------- ------------------
<PAGE> 151
WILLIAMS & FUDGE, INC.
[Letterhead]
CONTRACT ADDENDUM
This addendum as described below is to be incorporated into the existing
contract between Hagerstown Business College and Williams & Fudge, Inc., as
required by the United States Department of Education.
1. Pursuant to Federal Regulations pertaining to the Higher Education Act of
1965 Title IV, as amended; specifically those statutory provisions as set forth
in Section 668.25 (Contracts between an institution and third-party servicer),
Williams & Fudge, Inc., agrees to comply with all current and future applicable
requirements.
2. Williams & Fudge, Inc., further agrees to continue compliance with all
current and future provisions of The Fair Debt Collection Practice Act,
Consumer Credit Protection Act, National Defense Education Act of 1958, Title
II, and the Public Health Service Act Titles VII, and VIII.
Williams & Fudge, Inc. Acknowledgement of receipt
By:
- --------------------------- ----------------------
Gary L. Williams, President
Title: Director of Fiscal Operations
Date: December 1, 1994 ------------------------------
Date: 5/30/96
------------------------------
<PAGE> 152
Williams & Fudge, Inc.
[Letterhead]
TELEPHONE EXTENTIONS
<TABLE>
<S> <C> <C> <C>
Extention # Professional Name Familiar Name Collector #
- ----------- ----------------- ------------- ------------
117 Ashworth, T. Teri 38
111 Becknell, C. Crystal 28
108 Brantley, Susan Susan
109 Burleson, J. Jeff 24
119 Cline, E.T. Betsy 17
130 Crawford, T.M. Tracy 06
122 Drost, Barbara Barbara 02
128 Gravley, Leigh Anne Leigh Anne
107 Griffin, G.L. Gina 46
105 Hensel, T.H. Hope 34
135 Hoopingarner, M. Marsha 40
134 Horne, S. Shirley 41
116 Jones, T.F. Terry 14
115 Langley, E.M. Marrelle 15
120 Lee, Bronda J. B.J.
126 McDowell, S. Sandy 31
112 Parham, C. Cindy 29
104 Perrin, Robert Bob
114 Ramsey, T. Theresa 20
106 Smith, J. Jerry 11
131 Tillman, Lisa Lisa
118 Totherow, N. Nancy 30
123 Wallinford, Esther Esther
136 Wade, J. Jerome 43
110 Ward, S. Sherry 18
125 Warnick, D. Deanna 39
103 Wells, E.C. Ember 03
113 White, M.A. Marianna 05
132 Williams, Gary Gary
137 Williams, D.C. David 04
*** Please do not give out account representatives first name to borrowers ***
</TABLE>
<PAGE> 153
GREENCASTLE
ANTRIM
SCHOOL DISTRICT
E.O.E.
June 17, 1996
Dr. Jim Gifford
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21740
Dear Jim:
We have finally completed the journey through the forest of negotiations
and regulations and have arrived at a point where I can say that our project is
a go. Thank you for your patience.
As a part of our settlement with PSEA we have agreed to limit the program
to 35 students. That number is a reasonable maximum for us at this time. I
believe the current number enrolled is 22.
Attached is a copy of the yearly terms and conditions, a signed copy of
the restructured agreement and a copy of the student contract. Should you see
any problems, call. Please return, at your convenience, a copy of the agreement
carrying your signature.
Jack and Theresa continue to work through the details. I have asked Jack
to coordinate the Act 34 clearances. We are going to need copies for our files.
These are critical as we continue to be monitored by PSEA and others.
Again thank you for helping us through this fascinating process.
Sincerely,
/s/ P. Duff Rearick
P. Duff Rearick
Superintendent
cc: Jack Appleby
PDR/tmh
<PAGE> 154
EDUCATIONAL AGREEMENT BETWEEN
GREENCASTLE-ANTRIM SCHOOL DISTRICT
AND
HAGERSTOWN BUSINESS COLLEGE
Whereas it is the desire of the above-named parties to provide expanded
educational opportunities to the youth of Greencastle-Antrim School District,
and
Whereas it is the intent of Greencastle-Antrim School District to release
secondary school students for the purpose of completing secondary business and
secretarial courses or extended studies, and
Whereas it is the intent of Hagerstown Business College to provide educational
opportunities to those students released by Greencastle-Antrim School District,
and
Whereas it is the intent of the above-named parties to reduce overlap and
duplication of instruction in the educational programs of study that are similar
in content.
Be it herewith resolved that the following agreement is entered into:
1. Instructional faculty within the two educational systems will meet
to determine whether similarities in educational experiences
provided to students of the two systems appear to result in an
overlapping or duplication of instruction when a student completes
or wishes to complete a secondary business or secretarial
educational program of study. Where overlapping or duplication of
instruction appears to be evident, an attempt will be made on the
part of both systems to the granting of credit for learning
experiences at Hagerstown Business College. The method of
granting credit will be specified in individual letters of
agreement which will become a part of this agreement.
2. Greencastle-Antrim School District will provide for currently
enrolled secondary students a program of early release designed to
allow selected students to leave secondary educational facilities
for the purpose of completing secondary business and secretarial
courses or pursuing advanced student at Hagerstown Business
College in an approved program of study. The early release
program will provide for part-time as well as full-time release
for those students desiring to participate in the program.
3. Hagerstown Business College will provide for those secondary
students approved for early release a procedure whereby they may
enroll in career programs at the college for the purpose of
completing secondary business and secretarial courses or pursuing
advanced study.
The following policies shall govern the above agreement:
A. Identification Process for Selecting Students
1. Greencastle-Antrim School District will establish
criteria by which students will be selected to
participate in the early program of study. The
selection criteria will become a part of this
agreement.
<PAGE> 155
2. Hagerstown Business College will establish
prerequisites for entrance into program areas if it
appears prerequisites are desirable.
a. Specifics of any prerequisites established
will be included within letters of agreement
as they are developed.
b. An absence of specifications for articulation
between programs will not exclude credit for
courses of study at Hagerstown Business
College where such specifications have not
been formalized. Requests for admissions
into programs not articulated will be
processed individually and given all possible
consideration.
3. Minimum levels of competency must be determined by
either cognitive or psychomotor demonstrations of
proficiency. The manner of satisfying the level of
proficiency will be specified in the letters of
agreement.
B. Financial Considerations:
1. The Greencastle-Antrim School District shall be
responsible for all tuition and fees for students
selected by the District to participate in the
Hagerstown Business College program. Fees and
charges for educational programming shall be based
upon current College charges and shall be mutually
agreed to by the District and College.
2. The College will bill the District directly for all
agreed upon tuition and charges.
3. Reimbursement of tuition and fees requested for
students who may elect to withdraw from this
agreement will be based upon existing policies and
regulations in effect at Hagerstown Business
College.
Transportation:
Student transportation shall be the responsibility of the
Greencastle-Antrim School District.
D. Student Dismissals or Withdrawals
1. Secondary students who may be academically or
disciplinarily dismissed from Hagerstown Business College,
or students who may elect to withdraw from the college
prior to completing the academic year will be returned to
the Greencastle-Antrim School District for placement within
an existing program in the secondary school system.
2. Students who have not completed high school, but who enter
Hagerstown Business College under this agreement will fall
under the same rules and regulations established for all
students enrolled at Hagerstown Business College for
collegiate level education.
E. Identification of Program Areas for Articulation
1. Articulation efforts will be made in all career program
areas where there appears to be similarity or overlap in
instructional content. Maximum efforts will be made in the
area of business and secretarial education.
2. As new programs are offered at either level of education,
articulation efforts will be explored and implemented where
feasible.
<PAGE> 156
F. Faculty Sharing
Where faculty members at the secondary or postsecondary levels
possess exceptional skills or knowledge in their respective
program areas, and where presentations at the complementary level
would be beneficial to the respective program, faculty members
will be encouraged to share their expertise between the levels of
education. All faculty sharing activities will be coordinated
through the appropriate administrative channels prior to taking
place. A formal request will be made from the educational level
requesting a specific faculty member to share skills or knowledge.
G. Occupational Information Articulation
Greencastle-Antrim School District will cooperate toward
developing, disseminating, and presenting occupational information
to students within the public school system concerning the process
of choosing a career. Such information will include, as a
minimum, an orientation on career programs at the secondary and
postsecondary levels, and the articulation agreements that have
been made.
This agreement will become effective upon approval by Greencastle-Antrim School
District and Hagerstown Business College. Upon implementation, this agreement
will continue on an annual basis until one of the parties notifies in writing
the other party to end the agreement. Such petition to end this agreement must
be submitted one year in advance of the intent to terminate.
/s/ P. Duff Rearick
- --------------------------------------- ------------------------------
Superintendent President
Greencastle-Antrim School District Hagerstown Business College
<PAGE> 157
TERMS AND CONDITIONS BETWEEN THE
GREENCASTLE-ANTRIM SCHOOL DISTRICT
AND THE
HAGERSTOWN BUSINESS COLLEGE
FOR THE SCHOOL YEAR 1996-97
The following are the terms and conditions agreed to by the
Greencastle-Antrim School District and the Hagerstown Business College for the
school year 1996-97. These terms and conditions serve as attachment to the
Educational Agreement between the two education agencies.
A. Financial Considerations:
The Hagerstown Business College shall bill the Greencastle-Antrim
School District according to the following rate.
Tuition fee: $1,330 per semester per student
B. Planned Courses:
The Hagerstown Business College shall provide the
Greencastle-Antrim School District with planned course descriptions for
the listed courses.
Business Education Data Processing
Trimester 1 Trimester 1
1. Beginning Keyboarding 1. Introduction to Business
2. Principles of Accounting 2. Introduction to Data Processing
3. Business Law 3. English Essentials
4. Speedwriting 4. Orientation to College
5. Orientation to College 5. Beginning or Intermediate
Keyboarding
Trimester 2 Trimester 2
1. Intermediate Keyboarding 1. Principles of Accounting I
2. Office Management 2. Business Law
3. Principles of Accounting 2 3. Data Information Processing
4. Data Information Processing or 4. Work Information Processing I
Word Information Processing 1 5. English Composition
or Word Information Processing 2
5. Professional Life
C. Schedule:
Students shall be in attendance at the Hagerstown Business College
between the hours of 8:30 a.m. and 12:00 p.m. Daily attendance recording
shall be the responsibility of the Greencastle-Antrim High School. The
semester schedule shall follow the College's schedule.
D. Supervision:
The Greencastle-Antrim School District shall provide a program
supervisor.
<PAGE> 158
E. Faculty Certification:
The Hagerstown Business College shall provide a listing of faculty
and their credentials on a yearly basis to the Greencastle-Antrim School
District.
F. Grading:
Grade reporting shall be provided on a six week basis by the
College. The District shall be responsible for providing appropriate
forms.
<PAGE> 159
GREENCASTLE-ANTRIM HIGH SCHOOL
Student Contract
Hagerstown Business College Articulation
The following contract represents an expanded educational opportunity for
a Greencastle-Antrim high school student who desires to complete training in
secondary business and secretarial courses, or extended studies at the
Hagerstown Business College. The student must accept all of the following terms
of agreement to participate in the educational program.
1. The student must be willing to attend off campus classes at the Hagerstown
Business College. These classes will occur during first semester of the school
year. These classes will be scheduled between 8:30 a.m. and 12:30 p.m. The
student will return to home school for an afternoon home school class period,
periods 7 & 8.
2. The student will be expected to be in attendance each day for their
assigned homeroom period. This permits the student to remain in contact with
the daily events occurring at the home school.
3. Transportation will be provided for the student by the school district to
and from the Hagerstown Business College campus. Individual student driving
privileges may be approved on a selective basis due to a student's educational
program with prior parental approval.
4. Students who enter Hagerstown Business College under this agreement will
fall under the same rules and regulations established for all students enrolled
at Hagerstown Business College for collegiate level education.
5. A student who may be academically or disciplinarily dismissed from the
Hagerstown Business College, or who have elected to withdraw from the college
prior to completing the semester will return to the Greencastle-Antrim High
School and be placed within an existing program.
<PAGE> 160
6. All student rules and procedures that are applicable for a student while in
attendance in the Greencastle-Antrim High School apply to the students attending
the Hagerstown Business College program. In addition, all rules and regulations
that are applicable to students of the Hagerstown Business College apply to all
the Greencastle-Antrim student participants.
7. Student participants will finish their Hagerstown Business College
coursework before the ending date of the first semester at the high school due
to a difference in program calendars. All student participants must do one or
all of the following:
a. Complete an approved 30 hour community service project.
b. Participate in a morning work release program or internship
experience.
c. Participate in an independent study program for enrichment or
remediation.
d. Develop with the program coordinator an alternative education plan
unique to personal career goals.
Student Signature: Date
------------------------ -----------------
Parent Signature:
------------------------
<PAGE> 161
[PITNEY BOWES Letterhead]
HAGERSTOWN BUSINESS
COLLEGE
18618 CRESTWOOD DR
HAGERSTOWN MD 21742-2752
Dear Valued Customer:
Thank you for your continued use of Pitney Bowes for your mailing and shipping
requirements. We hope that you have been totally satisfied with your equipment
and you have our commitment to continue to do anything reasonable to insure
your satisfaction.
Our surveys have continuously shown that customers with our "Comprehensive
Maintenance Agreements" are more satisfied than those without.
We feel the reason for this is due to the extra added value you receive when
you select this option. With an annual "Comprehensive Maintenance Agreement"
you will receive:
1) Ability to budget your service costs
2) Unlimited service calls
3) All parts and labor are included (no hidden costs)
4) Ability to schedule preventative check-ups prior to a large
mailing, or whenever you deem necessary
If you would like to take advantage of our offer just sign the space provided
and begin enjoying the benefits of our complete Comprehensive Maintenance
Agreement today! Please detach the bottom portion of this letter and return it
in the postage paid envelope provided, making sure the return address below can
be seen through the window. If you have any questions, please call me at (800)
522-0020.
Sincerely,
/s/ Debra A. Lee
Service Support Representative
[First Class Permit]
009
Company Name: HAGERSTOWN BUSINESS
Account Number: 15244214886 Date Mailed: 06/08/95
Authorized Signature:
---------------------------------------------------------
Print name of Signer:
---------------------------------------------------------
(tax not included in the cost)
<TABLE>
<CAPTION>
Model # Serial # Annual Cost $
<S> <C> <C>
E675 0002740 244.00
E683 0003557 166.00
5820 0131826 160.00
</TABLE>
<PAGE> 162
[PITNEY BOWES Letterhead]
March, 1995
Good News from POSTAGE BY PHONE(R)
Now you can get emergency advances 24 hours a day,
6 days a week through our automated system.
Dear POSTAGE BY PHONE(R) Customer:
On March 27, 1995 we introduced a new, emergency advance system. Now you can
get postage advances, automatically, through the voice response unit.
This capability will allow you to get an advance 24 hours a day, Monday through
Saturday. It will also reduce the time you need to spend on the phone, and
there is no increase to the current administrative charges for this enhanced
service. Of course, if you wish, you will always be able to talk to a Customer
Service Agent. (Note: Customer Service Agents are available from 8:00 A.M. to
8:00 P.M. EST Monday through Friday, and from 8:00 A.M. to 3:00 P.M. EST on
Saturday).
To qualify for automated advances, you must have reset your meter in the prior
three months and you must have taken an advance through a Customer Service
Agent previously. If you have any questions about your eligibility, please
contact us at 1-800-243-7800 (please enter 0 at the prompt).
This system is easy to use, and the voice response unit will guide you through
the steps. But before calling, you should be prepared to provide the following
information:
- POSTAGE BY PHONE(R) Request Code
- POSTAGE BY PHONE(R) Account Number
- Meter Serial Number
- Meter Access Code
(or postage unused and used for mechanical meters)
- Postage Reset Dollars
- Do you wish to do an advance?
- The check number and dollar amount of the check you will
send to cover the advance
- Date check was mailed
- Contact phone number
If any difficulties arise, your call will be automatically transferred to a
Customer Service Agent.
We appreciate the opportunity to serve you, and hope that you will benefit from
this new enhancement to the POSTAGE BY PHONE(R) System.
Sincerely
/s/ Sue Couture
Sue Couture
Vice President
<PAGE> 163
XEROX
_____________________________________________________________________________
XEROX Corporation
8180 Greensboro Drive, Suite 600
McLean, Virginia 22102
(703) 902-2560
November 11, 1996
Mr. Jim Gifford, President
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, Maryland 21742
Re: Serial #6W6204545
Dear Mr. Gifford:
Thank you for your continued interest in the Xerox Corporation. Pursuant to my
conversation with Barbara Keesecker on Thursday, November 7th, Xerox has agreed
to the following:
-Issue an additional credit in the amount of $400 ($80 x 5 months)
-Continue to bill you at your current maintenance rate of $220/month
and .0102/copy
I am concerned about the miscommunication from our local Sales Agent, Reliable
Office Technologies Corporation since customer satisfaction is our number one
priority. I have taken the necessary actions to ensure that this situation
will not re-occur.
I am confident that we will continue to provide Hagerstown Business College
with our highest level of service. If I can be of any further assistance,
please contact me at (703) 902-2560.
Sincerely,
XEROX CORPORATION
United States Customer Operations
/s/ A. Lynn Edmonds
A. Lynn Edmonds
Vice President and General Manager
Maryland/Virginia Customer Business Unit
ALE/dl
<PAGE> 164
<TABLE>
<S> <C> <C>
AGREEMENT MUST BE LEGIBLE (TYPED OR PRINTED NEATLY)
[DynaWatch Logo] [DynaWatch Logo]
DYNAWATCH INC.
P.O. BOX 2068
HAGERSTOWN, MD 21742-2068 Company Code #
PHONE 1-800-826-2688 66692
LOCAL CUSTOMERS 733-8000 Account #
Date 1-7-91 A-1683
</TABLE>
ALARM MONITORING SERVICE AGREEMENT
SUBSCRIBER
Name Hagerstown Business College
--------------------------------------------------------------------------
(Dorm)
Address/Apt. # 18618 Crestwood Drive
------------------------------------------------------------------
City Hagerstown State Md. Zip 21742
---------------------------------- ----------------- -----------
- -------------------------------------------------------------------------------
Cross Street/Township/Nearest intersection
Tel. No. (301) 739-2670
- -------------------------------------------------------------------------------
FRANCHISE
Name Glessner Protective Svs., Inc.
--------------------------------------------------------------------------
Address 1216 Sherman Avenue
-----------------------------------------------------------------------
City Hagerstown State Md. Zip 21740
---------------------------------- ----------------- -----------
Tel. No. (301) 797-1280
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
Communicator Make and Model # 1486 Wire Panel
-------------------------------------------------
[ ] Extended [X] Standard Reporting (check one)
Using Subscriber Tel. Line #
--------------------------------------------------
Notify alarm co. Alarm Conditions [ ] Yes [X] No
PASS CODE [ ]
CODE UNDER STRESS [ ]
LOCAL AUTHORITIES TO BE NOTIFIED
Code No. Name
Fire Central Tel # ( ) 791-1211
- --------------------------------------- --- --------
Low Tel # ( )
- --------------------------------------- --- --------
Battery Call Sub. List Tel # ( )
- --------------------------------------- --- --------
Tel # ( )
- --------------------------------------- --- --------
AUTHORIZED INDIVIDUALS TO BE NOTIFIED
Name Tel. No.
1. Sharon Sprecker ( ) 739-2004
----------------------- --- --------
2. Cheyrl Hyslop ( ) 824-6159
----------------------- --- --------
3. ( )
----------------------- --- --------
4. ( )
----------------------- --- --------
5. ( )
----------------------- --- --------
6. ( )
----------------------- --- --------
[ ] Check here for monitoring of opening & closing activations.
[ ] Printouts to be sent weekly/monthly to subscriber/alarm company: circle
appropriate response.
<TABLE>
<CAPTION>
Daily Monday Tuesday Wednesday Thursday Friday Saturday Sunday *Window
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Open Times
- ----------------------------------------------------------------------------------------------------------------------------------
Close Times
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Opening and Closing Windows (time in which it is OK for an Opening or Closing
signal to be received without DynaWatch taking action).
i.e. - The business opens 9-5 Mon.-Fri. However, the first employee usually
arrives 15 min. early and will leave 10 or 15 min. after 5 p.m. You need to
allow at least a 15 min. window for openings & closing. LIST ALL TIMES IN
EASTERN STANDARD TIME.
Early Opens or Opens during normal closed hours DynaWatch should:
(number in order or priority)
Log Only Call Premises for P/C Call Al's
-- -- --
Dispatch Police Call alarm co.
-- --
Other
-----------------------------------------------------
Open not received Disregard Call Al's Call Premises for P/C
-- -- --
Call alarm co. other
-- ------------------------
Closing signal not received during normal time DynaWatch should:
(number in order of priority)
Disregard Call Premises for P/C Dispatch Police Call Al's
-- -- -- --
Call alarm co. other
-- -----------------------
[ ] Standard Reporting Codes [ ] 1 - Fire [ ] 2 - Panic/Holdup
[ ] 3 - Burglary [ ] 4 - other
----------- ---------------
[ ] Extended Reporting Codes: Check Codes That Apply
CODE/ZONE DESCRIPTION/LOCATION ACTION DYNAWATCH IS TO TAKE
- --------- -------------------- ---------------------------
[ ] 3-1 (01) Fire-Dormitory Full Stations
-------------------------------------------------------------
[ ] 3-2 (99) Low Battery
-------------------------------------------------------------
[ ] 3-3
-------------------------------------------------------------
[ ] 3-4
-------------------------------------------------------------
[ ] 3-5
-------------------------------------------------------------
[ ] 3-6
-------------------------------------------------------------
[ ] 3-7
-------------------------------------------------------------
[ ] 3-8
-------------------------------------------------------------
[ ] 3-9
-------------------------------------------------------------
[ ] C1-CF Closings (see above)
[ ] B1-BF Openings (see above)
[ ] D1-D9 Closings with zone shunted
-----------------------------------
[ ] 1F Key Pad Fire
------------------------------------------------
[ ] 2F Key Pad Holdup/Panic
----------------------------------------
[ ] 4F Key Pad Emergency
-------------------------------------------
[ ] 5F Power Failure
-----------------------------------------------
[ ] 6F Power Restore
-----------------------------------------------
[ ] 7F Low Battery
-------------------------------------------------
[ ] Other
-------------------------------------------------------------
PLEASE NOTE THAT ANY CHANGES OR CORRECTIONS MUST BE MADE
IN WRITING TO DYNAWATCH.
SUBJECT TO TERMS AND CONDITIONS OF THIS AGREEMENT
(INCLUDING THOSE ON REVERSE SIDE)
Additional Information
------------------------------------------------------
- -----------------------------------------------------------------------------
<TABLE>
<S> <C>
Subscriber and installer have reviewed and approved Signature of Franchise
the information set forth above.
--------------------------------------------
- ------------------------------------------------- Title Date
Signature of Subscriber Title (if Applicable) Signature of Authorized Agent (if applicable)
--------------------------------------------
Title Date
Approved: DynaWatch Inc. By: Title: Date:
---------------------------- ----------------------------- ------------------------
WHITE & CANARY, DYNAWATCH-PANIC INSTALLER - GOLDENROD, SUBSCRIBER
</TABLE>
<PAGE> 165
<TABLE>
<S> <C> <C>
KEEP ON TEST UNTIL WEDNESDAY ANTIETAM MONITORING SYSTEM Installed
SEPT. 18, 1985 A Division of Antietam Answering Service, Inc. 10 Sept. 1985
(301) 733-9292 914 Corbett Street Dana Proctor
Hagerstown, MD 21740
INSTALLER CODE OFFICE USE DATE A-608
1 82 - ONLY M M D D Y Y SUBSCRIBER CODE
9 - 10 - 85 A-608
</TABLE>
ALARM MONITORING SERVICE AGREEMENT
SUBSCRIBER
Hagerstown Business College
- -------------------------------------------------------------------------------
NAME SPOUSE
18618 Crestwood Drive
- -------------------------------------------------------------------------------
ADDRESS STREET SUITE/APT. NO.
Hagerstown, Maryland 21742
- -------------------------------------------------------------------------------
CITY COUNTY STATE ZIP CODE
( ) (301) 739-2670
- -------------------------------------------------------------------------------
HOME TEL. NO. BUSINESS TEL. NO.
SEE BELOW FOR SIGNATURE
INSTALLER
Glessner Protective Services, Inc.
- -------------------------------------------------------------------------------
COMPANY NAME
1216 Sherman Avenue
- -------------------------------------------------------------------------------
ADDRESS STREET SUITE NO.
Hagerstown, Maryland 21740
- -------------------------------------------------------------------------------
CITY COUNTY STATE ZIP CODE
(301) 797-1280 ( )
- -------------------------------------------------------------------------------
BUSINESS TEL. NO. EMERGENCY TEL. NO.
/s/ AUDREY B. SANDERS
- -------------------------------------------------------------------------------
SIGNATURE OF INSTALLER REPRESENTATIVE
TYPE OF
TRANSMITTER Tested Conditions Calls
--------------- --------- ----------- -----
CHECK ONE Private Home [ ] Apartment [ ] Office [ ] Store [ ]
Factory [ ] Other [ ] College
---------------------------------------
STREET DIRECTIONS TO PREMISES
MUST BE WRITTEN OR PRINTED CLEARLY -- NO DIAGRAMS
BE CAREFUL
TO ASCERTAIN AND VERIFY
THE EMERGENCY NUMBERS
SUBMITTED FOR NOTIFICATION
ARE
CURRENT AND CORRECT.
ALL ALARMS EXCEPT HOLD-UP SIGNALS ARE FIRST VERIFIED WITH SUBSCRIBER, IF YOU DO
NOT WANT VERIFICATION CHECK HERE [ ] DO NOT CALL SUBSCRIBER TO VERIFY ALARM.
NOTIFICATION INSTRUCTIONS: E.G. Fire, Burglary, Hold-up, Medical, Freezer, Heat,
Appliance, Flood, Equipment.
LOCAL AUTHORITY NOTIFICATION
LIST IN ORDER OF PRIORITY
<TABLE>
<CAPTION>
Code
No. CONDITION LOCATION Area Code TEL NO. NAME
- ----------------- ------------------------------------------- --------- -------- ---------------
<S> <C> <C> <C> <C> <C>
1 Burg Student Lounge Door 791-3820 Sheriff's Dept.
- ----------------- ------------------------------------------- --------- -------- ---------------
2 Burg Beam Towards Elec. Room Sheriff's Dept.
- ----------------- ------------------------------------------- --------- -------- ---------------
3 Burg Beam towards President's Office
- ----------------- ------------------------------------------- --------- -------- ---------------
4 Burg Beam towards Foyer Entrance
- ----------------- ------------------------------------------- --------- -------- ---------------
5 Burg Side Door towards Dorm.-Tamper Box
- ----------------- ------------------------------------------- --------- -------- ---------------
6 Burg Front Dble. Doors-Delay Sheriff's Dept.
- ----------------- ------------------------------------------- --------- -------- ---------------
7 Burg Knox Box (Keys, for Outside)
- ----------------- ------------------------------------------- --------- -------- ---------------
8 Temperature Monitoring - Call Subscriber List
- ----------------- ------------------------------------------- --------- -------- ---------------
</TABLE>
INSTALLER
If Installer is to be called list here.
( )
- -------------------------------------------------------------------------------
SUBSCRIBER DESIGNATED CALL
LIST IN ORDER OF PRIORITY
Area Code TEL. NO. NAME
- --------- -------- ----
(301) 739-2004 Sharon Sprecker
- -------------------------------------------------------------------------------
(301) 824-6159 Cheryl Hyslop
- -------------------------------------------------------------------------------
( )
- -------------------------------------------------------------------------------
( )
- -------------------------------------------------------------------------------
( )
- -------------------------------------------------------------------------------
( )
- -------------------------------------------------------------------------------
SUBJECT TO TERMS AND CONDITIONS OF THIS AGREEMENT (INCLUDING THOSE ON THE
REVERSE SIDE) THE SUBSCRIBER AGREES TO SUBSCRIBE FOR THE ANTIETAM MONITORING
SYSTEM
SUBSCRIBER MUST SIGN PAGES 1, 2 & 3
/s/ [unreadable]
- --------------------------------------
Signature of Subscriber
ACCEPTED: Antietam Monitoring System
By: /s/ Hilda Jane Rhodes
----------------------------------
Date: October 2, 1985
-------------------------------
FOR OFFICE USE ONLY Typed by ......... Checked by ..........
<PAGE> 166
WETZEL'S SNACKS N' MORE
8832 RABBIT ROAD NORTH
GREENCASTLE, PA 17225
This agreement is entered into between HAGERSTOWN BUSINESS COLLEGE and BONNIE
K. WETZEL, owner of the Drink Machine, the Snack Machine, and the Dollar Bill
Changer.
It is mutually agreed that Wetzel's Snacks N' More will install these machines
at no cost to Hagerstown Business College.
It is also agreed that the machines may be removed at the request of either
party, with a thirty day notice, by the owner of the machines, or their
representative.
It is also agreed that the machine owner will pay a ten percent net commission
on all snacks in the snack machine and a twelve percent net commission on all
drinks in the drink machine. This shall be done on a monthly basis.
For service or questions, call the above owner at 717-597-8945.
This equipment is to be installed at:
HAGERSTOWN BUSINESS COLLEGE
18618 Crestwood Drive
Hagerstown, MD 21740
301-739-2670
- ------------------------------------- ----------- ----------
(Authorized Location Signature) (Title) (Date)
Acceptance of Machine(s)
- ------------------------------------- ----------
(Machine Owner) (Date)
Acceptance of Location
Page 1 of 2
<PAGE> 167
It is mutually agreed that HAGERSTOWN BUSINESS COLLEGE will purchase a Coffee
Vending Machine. This machine shall be serviced by Bonnie K. Wetzel, owner of
WETZEL'S SNACKS N' MORE. It is agreed that the owners of WETZEL'S SNACKS N'
MORE shall take full responsibility for servicing this machine. Servicing
shall include repairing the machine should it breakdown, however, HAGERSTOWN
BUSINESS COLLEGE agrees to purchase the parts needed to repair the machine.
WETZEL'S will assume the full cost of any labor needed to repair the machine.
Servicing shall also include the day to day operations of the machine such as
purchasing the supplies, filling it, cleaning it, etc. WETZEL'S SNACKS N' MORE
agrees to pay HAGERSTOWN BUSINESS COLLEGE thirty percent net commission. This
shall be paid monthly.
Page 2 of 2
<PAGE> 168
THE LIBRARY CORPORATION INVOICE
P.O. BOX 557 INVOICE # 14995
WINCHESTER, VA 22604-0557 Fed. Tax # 52-1043428
800-624-0559 TER. 03 DATE OF INVOICE
FAX 304-229-0295 10/31/95
Carol Bailey
TO: Hagerstown Business College SHIP TO: Hagerstown Business College
18618 Crestwood Drive 18618 Crestwood Drive
Hagerstown, MD Hagerstown, MD
21742 21742
(1.5% INTEREST PER MONTH AFTER 30 DAYS)
<TABLE>
Caption>
===================================================================================================================================
ACCOUNT NO. DATE SHIPPED SHIPPED VIA TERMS. YOUR ORDER NUMBER
930167 10/30/95 FIRST CLASS NET 1022
QUANTITY DESCRIPTION UNIT PRICE AMOUNT
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
1 BIBLIOFILE
PAC SOFTWARE 500.00 500.00
Includes user manual and software
for your public access catalog.
1 PAC SUPPORT & BI-ANNUAL UPDATES 11/95 - 10/96 250.00 250.00
Software support & enhancements, toll-
free 800# service, plus bi-annual
catalog updates.
SHIPPING & HANDLING 20.00
-----------------------
TOTAL (US) 770.00
-----------------------
</TABLE>
<PAGE> 169
THE LIBRARY CORPORATION INVOICE
P.O. BOX 557 INVOICE # 14994
WINCHESTER, VA 22604-0557 Fed. Tax # 52-1043428
800-624-0559 TER. 03 DATE OF INVOICE
FAX 304-229-0295 10/31/95
Carol Bailey
TO: Hagerstown Business College SHIP TO: Hagerstown Business College
18618 Crestwood Drive 18618 Crestwood Drive
Hagerstown, MD Hagerstown, MD
21742 21742-2797
(1.5% INTEREST PER MONTH AFTER 30 DAYS)
<TABLE>
Caption>
===================================================================================================================================
ACCOUNT NO. DATE SHIPPED SHIPPED VIA TERMS. YOUR ORDER NUMBER
930167 10/30/95 FIRST CLASS NET 1022
QUANTITY DESCRIPTION UNIT PRICE AMOUNT
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
1 BIBLIOFILE
PAC SETUP FEE 250.00 250.00
1 PAC SPECIAL PROGRAMMING 3746 RECORDS 37.46 37.46
-----------------------
TOTAL (US) 287.46
-----------------------
</TABLE>
<PAGE> 170
<TABLE>
<CAPTION>
PURCHASE ORDER
1022
<S> <C>
[LOGO] Hagerstown Business College
18618 Crestwood Drive
Hagerstown, Maryland 21742 THIS NUMBER MUST APPEAR ON ALL
(301) 739-2670 CORRESPONDENCE. INVOICES, SHIPPING
PAPERS AND PACKAGES.
TO: SHIP TO:
The Library Corporation Hagerstown Business College Library
Research Park 18618 Crestwood Drive
Inwood WV 25428 Hagerstown, MD 21742-2797
Attention: Mary Light Attention: Carol Bailey, Library
DATE ORDERED DATE WANTED SHIP VIA TERMS F.O.B.
7/25/95
PLEASE ENTER OUR ORDER FOR THE FOLLOWING - TO BE SHIPPED AS DIRECTED
QUANTITY DESCRIPTION UNIT PRICE AMOUNT
Confirming telephone conversation 7/25/95
Conversion of Hagerstown Business College Library
database to public access catalog.
Services and products approximately as follows:
Set up fee 250
Software per station (1) 500
Update biannually 250
Fee per record @ 1 cent (1c.) for approx. 7,000 records 70
1057.46
CONDITIONS
Goods are subject to our inspection and approval. BY /s/ Jim Gifford
To avoid errors, note specifications carefully ----------------------------------
and if unable to complete orders as written notify PURCHASING AGENT
us promptly.
</TABLE>
<PAGE> 171
10/31/95
Called Barbara Coffenberger
at Library Corporation
She quoted costs as follows:
All same except number of records
3,746 = $37.46
making total now 1,057.46
gave this info to Bart
<PAGE> 172
<TABLE>
<CAPTION>
[EBSCO SUBSCRIPTION [EBSCO INDUSTRIES PLEASE ALLOW DOMESTIC
SERVICES LOGO] INC LOGO] PUBLISHERS 60 TO 90 DAYS
INVOICE FROM DATE OF INVOICE TO
BEGIN SERVICE.
1163E SHREWSBURY AVENUE /800/ 526-2337
SHREWSBURY NJ 07702 /908/ 542-8600 FAX /908/ 544-9777
SUBSCRIBER
BILL TO: SEND MAGAZINES TO: CODE IS
30-20-10 AA
HAGERSTOWN BUSINESS COLL/LIB HAGERSTOWN BUSINESS COLL/LIB
18618 CRESTWOOD DR 18618 CRESTWOOD DR
HAGERSTOWN MD 21742 HAGERSTOWN MD 21742
WHEN MAKING REMITTANCE, AND WHEN INQUIRING ABOUT THIS INVOICE, PLEASE REFER TO BOTH THE INVOICE NUMBER AND ACCOUNT NUMBER
- ----------------------------------------------------------------------------------------------------------------------------------
YOUR PURCHASE ORDER NO. ACCOUNT NO. DATE REF. CODE INVOICE NO. PAGE NO.
- ----------------------------------------------------------------------------------------------------------------------------------
RB-S-64535-03 10-10-96 7366194 1
- ------------------------------------------------------------------------------------------------------------------------------------
TERM N PRICE N
ORDER NUMBER ---------- / --------------- E
TITLE NUMBER QTY. NAME OF PUBLICATION FREQ TO PUBLISHER START DATE R UNIT EXTENSION T
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
040606006 1 AMERICAN FAMILY PHYSICIAN IR 3854929N 1 YR R 92.00 92.00
ISSN# 0002-838X 01/01/97
/COMES ALSO WITH/ FAMILY
PRACTICE MANAGEMENT
CLAIMS MUST BE MADE WITHIN
4 MOS US/6 MOS OTHERS/AFTER
THIS TIME ISSUES MAY BE
PURCHASED AT SINGLE ISSUE RATE
PUBL MONTHLY WITH 2 ISSUES
PUBL IN FEB, MAY, SEPT, & NOV
ON THE 1ST & 15TH
VOL 55 STARTS 01-97
PID# 0933548
043831007 1 AMERICAN JOURNAL OF NURSING MO 3855175N 1 YR R 45.00 45.00
/LIBRARY VERSION/ /**/ 01/01/97
ISSN# 0002-936X
VOL 97, 1997
161677000 1 BUSINESS WEEK /**/ /FOR US/ WK 3856353N 1 YR R 49.95 49.95
ISSN# 0007-7135 01/01/97
WHEN CLAIMING ALLOW FOUR
TO SIX WEEKS FROM ENTRY DATE
FOR DELIVERY
PUBL EACH MONDAY EXCEPT FIRST
WEEK IN JAN
162641005 1 BYTE /SURFACE MAIL/ IR 3868886N 1 YR R 29.95 29.95
ISSN# 0360-5280 12/01/96
PUBL MONTHLY WITH ONE
SPECIAL IBM ISSUE IN OCT
PID# 9100 002098903
204711006 1 CHRISTIANITY TODAY /**/ IR 3857162N 1 YR R 24.95 24.95
ISSN# 0009-5753 01/01/97
PUBL 1 ISSUE A MONTH WITH
2 ISSUES IN APR OCT
VOL 41 STARTS 01-97
205449002 1 CHRONICLE OF HIGHER EDUCATION IR 3857188N 1 YR R 75.00 75.00
/SURFACE MAIL/ 01/01/97
ISSN# 0009-5982
/INCLS/ ACADEME TODAY
CHRONICLE OF HIGHER EDUCATION
ALMANAC/& EVENTS & TRAVEL IN
ACADEME
CLAIMS MUST BE MADE WITHIN
3 MONTHS
PUBL WEEKLY EXC LAST WEEK OF
AUG & LAST 2 WEEKS OF DEC
COMBINATION
CONTINUED ON NEXT PAGE
- ------------------------------------------------------------------------------------------------------------------------------------
PAY THIS INVOICE IN FULL. THERE SHOULD TITLE NUMBERS IN BOLD PRINT REFLECT RECENTLY UPDATED PRICES. US$ WIRE TRANSFER
BE NO PARTIAL PAYMENTS. THIS INVOICE CAN BE SENT TO:
IS SUBMITTED TO YOU BY EBSCO IN ITS TERMS: PAYMENT DUE ON SOUTHTRUST BANK
CAPACITY AS YOUR AGENT. RECEIPT OF INVOICE [100% BIRMINGHAM, AL 35290
EBSCO GUARANTEES PAYMENT RECYCLED ABA: 062000080
EBS-40-1 EBSCO'S FEDERAL I.D. NO. 63-6014186 TO ALL PUBLISHERS. PAPER LOGO] ACCT#: 70 001 057
</TABLE>
<PAGE> 173
<TABLE>
<CAPTION>
[EBSCO SUBSCRIPTION [EBSCO INDUSTRIES PLEASE ALLOW DOMESTIC
SERVICES LOGO] INC LOGO] PUBLISHERS 60 TO 90 DAYS
INVOICE FROM DATE OF INVOICE TO
BEGIN SERVICE.
1163E SHREWSBURY AVENUE /800/ 526-2337
SHREWSBURY NJ 07702 /908/ 542-8600 FAX /908/ 544-9777
SUBSCRIBER
BILL TO: SEND MAGAZINES TO: CODE IS
30-20-10 AA
HAGERSTOWN BUSINESS COLL/LIB HAGERSTOWN BUSINESS COLL/LIB
18618 CRESTWOOD DR 18618 CRESTWOOD DR
HAGERSTOWN MD 21742 HAGERSTOWN MD 21742
WHEN MAKING REMITTANCE, AND WHEN INQUIRING ABOUT THIS INVOICE, PLEASE REFER TO BOTH THE INVOICE NUMBER AND ACCOUNT NUMBER
- ----------------------------------------------------------------------------------------------------------------------------------
YOUR PURCHASE ORDER NO. ACCOUNT NO. DATE REF. CODE INVOICE NO. PAGE NO.
- ----------------------------------------------------------------------------------------------------------------------------------
RB-S-64535-03 10-10-96 7366194 2
- ------------------------------------------------------------------------------------------------------------------------------------
TERM N PRICE N
ORDER NUMBER ---------- / --------------- E
TITLE NUMBER QTY. NAME OF PUBLICATION FREQ TO PUBLISHER START DATE R UNIT EXTENSION T
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
205458011 1 CHRONICLE OF HIGHER EDUCATION AN
ALMANAC
ISSN # 1043-7967
/COMES ALSO WITH/ CHRONICLE
OF HIGHER EDUCATION
PUBL AS A SEP ISS OF CHRONICLE
231916008 1 CONGRESSIONAL DIGEST OR 3857485N 1 YR R 4500 4500
ISSN # 0010-5899 01/01/97
CLAIMS MUST BE MADE WITHIN
90 DAYS OF PUBLICATION DATE
5.00 PER ISSUE AFTER 90 DAYS
PUBL MONTHLY WITH JUN/JUL
AND AUG/SEP ISSUES COMBINED
CANCELLATIONS MADE AFTER
SUB HAS STARTED WILL BE
PRORATED & CHARGED A 5.00 FEE/
PUBLISHER ISSUES REFUNDS
1 TIME PER YEAR /NOV OR DEC/
& SENDS LIST OF CANCELLATIONS
W/CHECK FOR ALL REFUNDS
VOL 76 STARTS 01-97
234883858 1 CONSUMER REPORTS /**/ MO 3857551N 1 YR R 2400 2400
ISSN # 0010-7174 01/01/97
/INCLS/ CONSUMER REPORTS
BUYING GUIDE / SUBSCRIPTIONS
ACTIVE IN DECEMBER/
CONSUMER REPORT PUBL MO WITH
BUYING GUIDE PUBL DEC
COMBINATION
VOL 62 STARTS 01-97
234901007 1 CONSUMER REPORTS BUYING AN
GUIDE
/COMES ALSO WITH/ CONSUMER
REPORTS / FOR SUBSCRIPTIONS
ACTIVE DURING THE MONTH OF
DECEMBER/
CURRENT YEAR EDITION PUBL IN
DEC OF PRIOR YEAR
BOOK RETURNS MUST BE SENT TO
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COLLEGE GUIDANCE SET
CURRENT YR EDITION PUBL IN
AUG OF THE PRIOR YEAR
PRODUCTS MAY NOT BE RETURNED
BEFORE 90 DAYS BUT MUST BE
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UNLESS DAMAGED/PRODUCT RETURN
ADDRESS PETERSONS ITP
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694842006 1 PHYSICIANS DESK REFERENCE AN 3863940N 1 YR R 76.20 76.20
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[EBSCO SUBSCRIPTION [EBSCO INDUSTRIES PLEASE ALLOW DOMESTIC
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1163E SHREWSBURY AVENUE /800/ 526-2337
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PAY THIS INVOICE IN FULL. THERE SHOULD TITLE NUMBERS IN BOLD PRINT REFLECT RECENTLY UPDATED PRICES. US$ WIRE TRANSFERS
BE NO PARTIAL PAYMENTS. THIS INVOICE CAN BE SENT TO:
IS SUBMITTED TO YOU BY EBSCO IN ITS TERMS: PAYMENT DUE ON SOUTHTRUST BANK
CAPACITY AS YOUR AGENT. RECEIPT OF INVOICE [100% BIRMINGHAM, AL 35290
EBSCO GUARANTEES PAYMENT RECYCLED ABA: 062000080
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</TABLE>
<PAGE> 181
<TABLE>
<CAPTION>
[EBSCO SUBSCRIPTION [EBSCO INDUSTRIES PLEASE ALLOW DOMESTIC
SERVICES LOGO] INC LOGO] PUBLISHERS 60 TO 90 DAYS
INVOICE FROM DATE OF INVOICE TO
BEGIN SERVICE.
1163E SHREWSBURY AVENUE /800/ 526-2337
SHREWSBURY NJ 07702 /908/ 542-8600 FAX /908/ 544-9777
SUBSCRIBER
BILL TO: SEND MAGAZINES TO: CODE IS
30-20-10 AA
HAGERSTOWN BUSINESS COLL/LIB HAGERSTOWN BUSINESS COLL/LIB
18618 CRESTWOOD DR 18618 CRESTWOOD DR
HAGERSTOWN MD 21742 HAGERSTOWN MD 21742
WHEN MAKING REMITTANCE, AND WHEN INQUIRING ABOUT THIS INVOICE, PLEASE REFER TO BOTH THE INVOICE NUMBER AND ACCOUNT NUMBER
- ----------------------------------------------------------------------------------------------------------------------------------
YOUR PURCHASE ORDER NO. ACCOUNT NO. DATE REF. CODE INVOICE NO. PAGE NO.
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RB-S-64535-03 10-10-96 7366194 10
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TERM N PRICE N
ORDER NUMBER ---------- / --------------- E
TITLE NUMBER QTY. NAME OF PUBLICATION FREQ TO PUBLISHER START DATE R UNIT EXTENSION T
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
VOL 57 STARTS 01-97
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EXTENDED FOR OUT OF STOCK ISS
PUBL WEEKLY WITH SPECIAL
ISSUES IN FEB & SEP
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CAPACITY AS YOUR AGENT. RECEIPT OF INVOICE [100% BIRMINGHAM, AL 35290
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</TABLE>
<PAGE> 182
<TABLE>
<CAPTION>
[EBSCO SUBSCRIPTION [EBSCO INDUSTRIES PLEASE ALLOW DOMESTIC
SERVICES LOGO] INC LOGO] PUBLISHERS 60 TO 90 DAYS
INVOICE FROM DATE OF INVOICE TO
BEGIN SERVICE.
1163E SHREWSBURY AVENUE /800/ 526-2337
SHREWSBURY NJ 07702 /908/ 542-8600 FAX /908/ 544-9777
SUBSCRIBER
BILL TO: SEND MAGAZINES TO: CODE IS
30-20-10 AA
HAGERSTOWN BUSINESS COLL/LIB HAGERSTOWN BUSINESS COLL/LIB
18618 CRESTWOOD DR 18618 CRESTWOOD DR
HAGERSTOWN MD 21742 HAGERSTOWN MD 21742
WHEN MAKING REMITTANCE, AND WHEN INQUIRING ABOUT THIS INVOICE, PLEASE REFER TO BOTH THE INVOICE NUMBER AND ACCOUNT NUMBER
- ----------------------------------------------------------------------------------------------------------------------------------
YOUR PURCHASE ORDER NO. ACCOUNT NO. DATE REF. CODE INVOICE NO. PAGE NO.
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- ------------------------------------------------------------------------------------------------------------------------------------
TERM N PRICE N
ORDER NUMBER ---------- / --------------- E
TITLE NUMBER QTY. NAME OF PUBLICATION FREQ TO PUBLISHER START DATE R UNIT EXTENSION T
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
/CARRIER/ /FOR WASHINGTON 11/01/96
DC & SURROUNDING AREAS IN
VIRGINIA W VIRGINIA & MD/
ISSN # 0190-8286
CLAIMS FOR MISSING ISSUES
MUST BE MADE WITHIN 30 DAYS
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WITH A MAXIMUM CLAIMS OF NO
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MUST CLAIM BY DATE NOT VOL
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</TABLE>
<PAGE> 183
<TABLE>
<S> <C> <C>
[BFI LOGO] WASTE
SYSTEMS
BROWNING-FERRIS INDUSTRIES REASON CODE _____
ACCOUNT NO. ________________ LOCATION CODE __________________ SALESPERSON _____
_____ NEW ACCOUNT _____ REINSTATE CUSTOMER _____ OTHER CHANGE SALES
_____ NEW SERVICE LOCATION _____ CHANGE SERVICE LEVEL TERRITORY _____
</TABLE>
BILLING INFORMATION
CUSTOMER (BUSINESS) NAME
--------------------------------------------------------
OR:
-----------------------------------------------------------------------------
LAST FIRST PREFIX SUFFIX
STREET NUMBER:
------------------------------------------------------------------
STREET NAME:
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
CITY: STATE:
---------------------------------------------- ----------------------
ZIP: PHONE: ( ) - -
----------------------------- ---------- ----------------
FAX: ( ) - -
---------- ----------------
CONTACT:
------------------------------------------------------------------------
NUMBER OF INVOICES REQUIRED: ___________
INV. PAGE BRK BY SERV LOC. (____) (Y/N)
SERVICE LOCATION INFORMATION
CUSTOMER NAME
-------------------------------------------------------------------
OR: Hagerstown Business College
-----------------------------------------------------------------------------
LAST FIRST PREFIX SUFFIX
STREET NUMBER: 18618
------------------------------------------------------------------
STREET NAME: Crestwood Dr.
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
CITY: Hagerstown STATE: MD
---------------------------------------------- ----------------------
ZIP: 21740 PHONE: ( ) - -
----------------------------- ---------- ----------------
CONTACT:
-----------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SERVICE DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------------
ZERO MIN MONTHLY
CONT. VOL ON PICK UP/ EST TCKT EST. DISP MIN HAUL EQUIP.
LINE NO. SYSTEM QTY SIZE CODE FREQ COMP CALL HAUL RATE HAULS FLAG MNTS SITE HAULS RATE CHARGES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N 1 01009 1 8 2 $ 298.33
---------------------------------------------------------------------------------------------------------------------------------
E 2
---------------------------------------------------------------------------------------------------------------------------------
W 3
- -----------------------------------------------------------------------------------------------------------------------------------
O 4
---------------------------------------------------------------------------------------------------------------------------------
L 5
---------------------------------------------------------------------------------------------------------------------------------
D 6
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
OTHER SERVICES:__________________________________________________________
OTHER CHARGES:
=========================================================================
CUSTOMER DEPOSIT:_____________________________________________________________
DEPOSIT RETURN DATE:__________________________________________________________
SPECIAL EVENT END DATE:_______________________________________________________
P.O. NUMBER:__________________________________________________________________
P.O. AMENDMENT NUMBER:________________________________________________________
JOB NUMBER:___________________________________________________________________
AFFILIATION:__________________________________________________________________
RECEIPTS REQUIRED?_____________ (Y/N) SYSTEM CP NO.
SPECIAL BILLING?_______________ (Y/N)
C.O.D.?________________________ (Y/N)
P.O. DURATION__________________
P.O. EFF. DATE:________________ P.O. END DATE ________________
JOB EST. COMPL. DATE___________
SPECIAL INSTRUCTIONS:_________________________________________________________
==============================================================================
Date of Agreement: 9 / 7 / 95 Effective Service Date: 9 / 5 / 95
------------- --------------
The undersigned individual signing this Agreement on behalf of Customer
acknowledges that he or she has read and understands the terms and conditions of
this Agreement and that he or she has the authority to sign the Agreement on
behalf of Customer.
<TABLE>
<CAPTION>
<S> <C>
TERMS: NET 10 DAYS /s/ Hagerstown Business College
BROWNING-FERRIS INDUSTRIES ---------------------------------------------------
WESTERN MARYLAND 417 (CUSTOMER NAME)
11710 GREENCASTLE PIKE
HAGERSTOWN, MARYLAND 21740 BY (SIGNATURE) /s/
---------------------------------------------------
- ------------------------------------------------- NAME (PLEASE TYPE OR PRINT):
(NAME OF OPERATING BROWNING-FERRIS -------------------------------------
INDUSTRIES SUBSIDIARY)
TITLE (PLEASE TYPE OR PRINT):
BY/TITLE /s/ -------------------------------------
-----------------------------------------
</TABLE>
TERMS AND CONDITIONS
ARTICLE 1
SERVICES RENDERED
Customer grants to the undersigned (BFI) the exclusive right to collect and
dispose of all Customer's Waste Materials (which include recylable materials)
and agrees to make the payments as provided for herein and BFI agrees to furnish
such services and equipment specified above, all in accordance with the terms of
this Agreement.
ARTICLE II
TERM
THE INITIAL TERM (THE "INITIAL TERM") OF THIS AGREEMENT IS THREE YEARS FROM THE
DATE BFI'S EQUIPMENT IS DELIVERED TO CUSTOMER'S LOCATION ("EFFECTIVE SERVICE
DATE"). THIS AGREEMENT SHALL AUTOMATICALLY RENEW FOR SUCCESSIVE THREE YEAR
TERMS (THE "RENEWAL TERM") THEREAFTER UNLESS EITHER PARTY SHALL GIVE WRITTEN
NOTICE OF TERMINATION BY CERTIFIED MAIL TO THE OTHER AT LEAST SIXTY (60) DAYS
PRIOR TO THE TERMINATION OF THE INITIAL TERM OR ANY RENEWAL TERM.
ARTICLE III
WASTE MATERIALS
The Waste Material to be collected and disposed of by BFI pursuant to this
agreement is all solid waste (including recycleable materials) generated by
Customer (the "Waste Material"). Waste Material specifically excludes and
Customer agrees not to deposit in BFI's equipment or place for collection by BFI
any radioactive, volatile, corrosive, highly flammable, explosive, biomedical,
infectious, biohazardous, toxic or hazardous material as defined by applicable
federal, state, provincial or local laws or regulations ("Excluded Waste").
ARTICLE IV
TITLE
BFI shall acquire title to the Waste Material when it is loaded into BFI's
truck. Title to and liability for any Excluded Waste shall remain with Customer
and Customer expressly agrees to defend, indemnify and hold harmless BFI from
and against any and all damages, penalties, fines and liabilities resulting from
or arising out of the deposit of Excluded Waste in BFI's trucks, containers or
other equipment.
The Terms and Conditions continue on the reverse side of this page.
<PAGE> 184
ARTICLE V
PAYMENTS
Customer agrees to pay BFI on a monthly basis for the services and/or equipment
furnished by BFI in accordance with the charges and rates provided for herein.
Payment shall be made by Customer to BFI within ten (10) days of the receipt of
an invoice from BFI. BFI may impose and Customer agrees to pay a late fee for
all past due payments, such late fee as determined by BFI in an amount not to
exceed the maximum rate for same allowed by applicable law.
ARTICLE VI
RATE ADJUSTMENTS
Because disposal and fuel costs constitute a significant portion of the cost of
BFI's services provided hereunder, Customer agrees that BFI may increase the
rates hereunder proportionately to adjust for any increase in such costs or any
increases in transportation costs due to changes in location of the disposal
facility. Customer agrees that BFI may also increase the rates from time to
time to adjust for increases in the Consumer Price Index, and Customer agrees
that BFI may also proportionately pass through to Customer increases in the
average weight per container yard of the Customer's Waste Materials, increases
in BFI's costs due to changes in local, state or federal rules, ordinances or
regulations applicable to BFI's operations or the services provided hereunder,
and increases in taxes, fees or other governmental charges assessed against or
passed through to BFI (other than income or real property taxes). BFI may only
increase rates for reasons other than those set forth above with the consent of
the Customer. Such consent may be evidenced verbally, in writing or by the
actions and practices of the parties.
ARTICLE VII
SERVICE CHANGES
Changes to the type, size and amount of equipment, the type or frequency of
service, and corresponding adjustments to the rates, may be made by agreement of
the parties, evidenced either in writing or by the practices and actions of the
parties, without affecting the validity of this Agreement and this Agreement
shall be deemed amended accordingly. This Agreement shall continue in effect
for the term provided herein and shall apply to changes of and new services
address location of the Customer within the area in which BFI provides
collection service.
ARTICLE VIII
RESPONSIBILITY FOR EQUIPMENT
The equipment furnished hereunder by BFI shall remain the property of BFI;
however Customer acknowledges that it has care, custody and control of the
equipment while at the Customer's location and accepts responsibility for all
loss or damage to the equipment (except for normal wear and tear or for loss or
damage resulting from BFI's handling of the equipment) and for its contents.
Customers agrees not to overload (by weight or volume), move or alter the
equipment, and shall use the equipment only for its proper and intended purpose.
Customer agrees to indemnify, defend and hold harmless BFI against all claims,
damages, suits, penalties, fines and liabilities for injury or death to persons
or loss or damage to property arising out of Customer's use, operation or
possession of the equipment. Customer agrees to provide unobstructed access to
the equipment on the scheduled collection day. If the equipment is inaccessible
so that the regularly scheduled pick up cannot be made, BFI will promptly notify
the Customer and afford the Customer a reasonable opportunity to provide the
required access; however BFI reserves the right to charge an additional fee for
any additional collection service required by Customer's failure to provide such
access.
ARTICLE IX
DAMAGE TO PAVEMENT
Customer recognizes the difficulty of ensuring that the Customer's pavement or
driving surface is adequate to bear the weight of BFI's vehicles. Therefore,
Customer agrees that Customer will be responsible for any damage to Customer's
pavement, curbing or other driving surfaces resulting from the weight of BFI's
vehicles providing service at the Customer location.
ARTICLE X
LIQUIDATED DAMAGES
In the event Customer terminates this Agreement prior to its expiration other
than as a result of a Default by BFI or BFI terminates this Agreement for
Customer's Default (including nonpayment), Customer agrees to pay to BFI as
liquidated damages a sum calculated as follows: (1) if the remaining term under
this Agreement is six or more months, Customer shall pay its most recent monthly
charges multiplied by six; or (2) if the remaining term under this Agreement is
less than six months, Customer shall pay its most recent monthly charge
multiplied by the number of months remaining in the term. Customer expressly
acknowledges that in the event of an unauthorized termination of this Agreement,
the anticipated loss to BFI in such event is estimated to be the amount set
forth in the foregoing liquidated damages provision and such estimated value is
reasonable and is not imposed as a penalty. In the event Customer fails to pay
BFI all amounts which become due under this Agreement, or fails to perform its
obligations hereunder, and BFI refers such matter to an attorney, Customer
agrees to pay, in addition to the amount due, any and all costs incurred by BFI
as a result of such action, including, to the extent permitted by law,
reasonable attorneys' fees.
ARTICLE XI
SUSPENSION AND TERMINATION FOR CAUSE
If, during the term of this Agreement, either party shall be in breach of or
default in any provision of this Agreement ("Default"), the other party may
suspend or terminate its performance hereunder until such delinquency or default
has been corrected, provided, however, that no termination shall be effective
unless and until the complaining party has given written notice of default to
the other party and the other party has failed to cure such Default within at
least ten (10) days thereafter. In the event any such Default remains uncured
for a period of ten (10) days, the complaining party may terminate this
Agreement by giving the other party written notice of such termination; such
termination to become effective upon receipt of such notice.
ARTICLE XII
ASSIGNMENT
Neither party shall assign this Agreement without the prior written consent of
the other party, except that BFI may assign this Agreement to any corporation or
entity affiliated with BFI without Customer's consent.
ARTICLE XIII
OPPORTUNITY TO PROVIDE ADDITIONAL SERVICES
BFI values the opportunity to meet all of Customer's nonhazardous waste
collection and disposal needs. Customer will provide BFI the opportunity to
meet those needs and to provide, on a competitive basis, any additional
nonhazardous waste collection and disposal services during the term of this
Agreement.
ARTICLE XIV
EXCUSED PERFORMANCE
Neither party hereto shall be liable for its failure to perform or delay in
performance hereunder due to contingencies beyond its reasonable control
including, but not limited to, strikes, riots, compliance with laws or
governmental orders, fires and acts of God and such failure shall not constitute
a Default under this Agreement.
ARTICLE XV
BINDING EFFECT
This Agreement is a legally binding contract on the part of both B.F.I. and
Customer and their respective heirs, successors and assigns, in accordance with
the terms and conditions set out herein.
ARTICLE XVI
ENTIRE AGREEMENT
This Agreement represents the entire understanding and agreement between the
parties hereto and supersedes any and all prior agreements, whether written or
oral that may exist between the parties regarding same.
<PAGE> 185
STATEMENT
Date 3-8 1996
TO Hagerstown Business College
Proposal for 1996 Mowing Season TERMS
IN ACCOUNT WITH
WILLIAMS LAWN CARE
12584 ITNYRE ROAD
SMITHSBURG, MD 21783 Phone# 824-2787
Mowing & Trimming Grass,
Keepng Weeds out of flower beds
each time $150.00
Bush trimming, mulching is
extra.
Mowing rough area when needed $ 30.00
Lawn Mowing
Leaf Clean-up [Picture]
Mulching
WILLIAMS LAWN CARE
Dean Williams
12534 Itnyre Road Walter Williams
Smithsburg, MD 21783 (301) 824-2787
<PAGE> 186
[MEDISOFT LETTERHEAD]
September 20, 1995
To Whom it May Concern:
MediSoft Patient Accounting software is protected under the copyright laws of
the United States of America. Its license agreement states that each licensed
copy of the software is to be used on no more than one computer.
As an educational institution, MediSoft specifically grants your school a
waiver of the license agreement limitation that prohibits installation of the
software on more than one computer. YOU MAY INSTALL MEDISOFT PATIENT ACCOUNTING
SOFTWARE ONTO ALL COMPUTERS IN YOUR FACILITY NEEDED TO SUPPORT YOUR USE OF THE
SOFTWARE FOR EDUCATIONAL PURPOSES. You may not release copies of the software
to your students for use on their personal computers or copy the software for
any other purpose.
Should you have any questions on this matter, please contact me at (800)
333-4747.
Sincerely,
MEDISOFT
/s/ Jeff Ward
- -------------------
Jeff Ward
Marketing Director
<PAGE> 187
Schedule A to WESTLAW(R) Subscriber Agreement
Plan 3B Educational Institution Service [LOGO]
Available only to paralegal, law
librarianship or graduate tax programs.
1. AUTHORIZED USE
Subscriber may select one or more usage options entitling it to authorized use
(as defined below) of certain WESTLAW databases and Features. "Authorized Use"
shall mean use solely for educational purposes by Subscriber's faculty,
administration and staff ("Personnel") and students. Any other use is strictly
prohibited except as provided under paragraph 4 below. No access to DIALOG(R)
or WESTLAW is permitted hereunder. Access to certain other Features and
databases may be restricted by West. Subscriber may elect a different option
by giving West at least 30 days prior written notice; provided, however, that
no usage option may be adopted for less than a three month period.
2. USAGE OPTIONS AND CHARGES
Subscriber may select any one or more of the following usage options:
A. UNLIMITED USAGE OPTIONS. Subscriber shall pay the annual usage
charge indicated for each Unlimited Usage Option password requested.
Annual usage charges shall be billed in twelve equal monthly
installments.
NUMBER OF
PASSWORDS ANNUAL CHARGE
REQUESTED (PER PASSWORD)
1 a. Unrestricted: $1,260
---- Unlimited access at any time
---- b. Off-peak: $960
Unlimited access during off-peak hours
only (3:30 p.m. to 9:00 a.m. CST
Mon.-Fri. and all day Sat. and Sun.)
B. HOURLY USAGE OPTIONS. Under the Hourly Usage Options, Subscriber
shall pay a single annual subscription charge of $100 (regardless of
the number of options selected) and the hourly usage charge indicated
below. The annual subscription charge shall be waived for Subscribers
selecting both an Unlimited Usage Option and an Hourly Usage Option.
Subscriber may request a reasonable number of passwords.
NUMBER OF
PASSWORDS
REQUESTED HOURLY CHARGE
a. Unrestricted: $15
---- Allows access and use at any time
---- b. Off-peak: $12
Allows access and use during off-peak
hours only (3:30 p.m. to 9:00 a.m. CST
Mon.-Fri. and all day Sat. and Sun.)
3. OFFLINE TRANSMISSION
Subscriber may, as indicated below or at any time upon 30 days prior written
notice to West, elect access to offline transmission. Subscriber shall pya
offline transmission charges at the rate of $.02 per standard format line for
all offline transmission. Offline transmission charges apply to printing and
downloading to attached and stand-alone storage devices.
Subscriber requests access to offline transmission
4. NON-AUTHORIZED USE
Subscriber may also permit use of WESTLAW for non-educational purposes or use
by persons other than Subscriber's students and Personnel ("Non-Authorized
Use") by completing Schedule L to WESTLAW Subscriber Agreement. Charges for
Non-Authorized Use shall be billed as set forth in Schedule L and shall be in
addition to Subscriber's Schedule A Plan 3B Charges.
5. GATEWAYS
Subscriber may elect to subscribe to one or more Gateway by completing Schedule
H to WESTLAW Subscriber Agreement. Upon completing Schedule H, Subscriber
shall be issued one password for use in accessing Gateways. Charges for
Gateways selected by Subscriber shall be as set forth on Schedule H or in the
Additional Terms applicable to the particular Gateway. Such charges shall be
in addition to Subscriber's Schedule A Plan 3B Charges.
6. TRAINING
A. Instructors. A basic WESTLAW training session will be provided at
no charge at WESTLAW Training Centers for Subscriber's Personnel who will
use or instruct others in the use of WESTLAW and for Subscriber's students
who will supervise or instruct other students in the use of WESTLAW.
B. West Instruction Program. A West instruction program ("Instruction
Program") is available at a charge of $1,500 to Subscribers selecting an
Unlimited Usage Option. Each Instruction Program will be conducted on
Subscriber's premises for up to seven consecutive days. Subscriber shall
propose dates and the specific location of the Instruction Program to West
in writing at least 45 days prior to the desired commencement date of each
Instruction Program.
i. Equipment and Use. During the Instruction Program, West
shall install on Subscriber's premises up to five workstations (the
"Equipment") and telecommunications lines for use as a WESTLAW training
center ("Training Center"). Subscriber shall receive up to 10 hours of
WESTLAW training, to be provided at the Training Center, and
appropriate instructional materials. West shall issue one password for
each workstation that shall permit unlimited access to end use of the
same WESTLAW databases and Features available under Subscriber's Plan
3B Unlimited Usage Option. When not in use for training purposes, the
Training Center shall be available for access to and use of WESTLAW by
Subscriber's Personnel and students.
ii. Software. WESTLAW software may be installed on the
Equipment prior to delivery to Subscriber. In addition, certain third
party software may also be installed on the Equipment. WESTLAW
software and any such third party software (collectively "Software")
will be provided to Subscriber subject to the terms of the applicable
software licenses, copies of which will be included in the user
documentation supplied with the Equipment. Subscriber agrees to be
bound by and comply with all such licenses. NOTWITHSTANDING ANYTHING
CONTAINED IN SUCH LICENSES, COPYING OF THE SOFTWARE IN WHOLE OR IN PART
IS STRICTLY PROHIBITED.
<PAGE> 188
iii. Equipment Warranty and Limitation of Liability. West shall maintain the
Equipment in good working order or, at its option, replace the Equipment;
provided, however, that Subscriber shall be responsible for all damage to or
loss of the equipment caused by misuse, abuse, negligence or theft.
EXCEPT AS SPECIFICALLY PROVIDED HEREIN OR IN APPLICABLE LICENSE AGREEMENTS, THE
EQUIPMENT AND SOFTWARE ARE PROVIDED "AS IS," WITHOUT WARRANTY OF ANY KIND.
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE WARRANTIES OF
PERFORMANCE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
SUBSCRIBER'S EXCLUSIVE REMEDY AND WEST'S AND WP'S ENTIRE LIABILITY HEREUNDER,
IF ANY, FOR ANY CLAIM(S) MADE AGAINST THEM, INDIVIDUALLY OR JOINTLY. FOR
DAMAGES, INCLUDING ANY CLAIM(S) FOR PROPERTY DAMAGE OR PERSONAL INJURY.
REGARDLESS OF THE FORM OF ACTION, WHETHER BASED IN CONTRACT OR NEGLIGENCE, FOR
WHICH WEST OR WP IS LEGALLY LIABLE SHALL BE LIMITED TO THE AMOUNT OF THE
CHARGES PAID BY SUBSCRIBER FOR THE INSTRUCTION PROGRAM. In no event shall West
or WP be liable to Subscriber for any claim(s) relating in any way to
Subscriber's inability or failure to perform legal or other research or related
work or to perform such legal or other research or work property or completely
or for any lost profits or other consequential, exemplary, incidental, indirect
or special damages relating in whole or in part to Subscriber's rights
hereunder or use of, or stability to use, the Equipment or Software, even if
West or WP has been advised of the possibility of such damages.
7. Responsibility for Certain Matters
Subscriber shall be responsible for all access to and use of WESTLAW (including
both Authorized and Non-Authorized Use). Data, WESTLAW Features, Gateways and
Software by Subscriber's Personnel and students or by means of Subscriber's
equipment or passwords issued to Subscriber hereunder, whether or not Subscriber
has knowledge of or authorizes such access and use. All such access and use
shall be governed by the terms and conditions of the Subscriber Agreement
between Subscriber and West.
8. Reservations of Rights
West reserves the right to modify the terms and conditions of this Agreement
from time to time, including, but not limited to, the right to restrict access
to certain WESTLAW databases, services and Features, to impose usage or other
limitations, or to discontinue or substitute usage options.
<PAGE> 189
Schedule B4 to WESTLAW(R) Subscriber Agreement
WESTLAW Software Order Form [WESTLAW LOGO]
Personal Computer Software
(complete Section 1 on reverse side only if using a LAN)
IBM(R) and compatibles for MS-DOS
(stand-alone and LAN)
IBM and compatibles for Microsoft Windows(TM) 3.1
or higher, with a 486 or higher processor and 8 MB
or more RAM
IBM and compatibles for Microsoft Windows(TM) 3.0
or higher, with a 386 processor
Macintosh(R)
Minicomputer Software
(complete Section 2 on reverse side)
DEC VAX(R)/VMS(TM)
OFFICEPOWER(R)
UNIX(R)
Wang(R) VS
Other Terminal/Computer Access
(WESTLINK(R) or other software access,
complete Section 3 on reverse side)
WESTLAW SOFTWARE
WESTMATE(R) WESTCheck(R)
Quantity Quantity
site(s)* site(s)*
- ------ ------
site(s)* site(s)*
- ------ ------
site(s)* site(s)*
- ------ ------
site(s)* site(s)*
- ------ ------
WESTMATE and WEST Check
Quantity
site(s)*
- ------
site(s)*
- ------
site(s)*
- ------
site(s)*
- ------
Not Requesting Software
For those locations that currently do not have any individual passwords, a firm
password will be issued for each site license requested herein, unless
otherwise noted.
Please check if applicable:
DO NOT issue any firm password(s)
- -----
* A "site" means all personal computers, servers and minicomputers
(including networked systems) with the same operating system platform at a
single location or at different locations that are connected by a single
networked system. A "networked system" means any combination of two or
more terminals that are electronically linked and capable of sharing the
use of a single software product. A location may include more than one
site and require more than one license.
SOFTWARE ORDER
Please send the WESTLAW Software ordered above for the site(s) identified below
and enter one subscription to the ordered Software for each such site. All
orders are subject to approval and acceptance by West in St. Paul, Minnesota.
LICENSE AGREEMENT
Subscriber understands and agrees that the Software, including each new version
thereof, is licensed by West under the WESTLAW Software License Agreement, a
copy of which will be enclosed with each copy of the Software. By opening the
package and using the Software (including each new version), Subscriber agrees
to be bound by the terms and conditions of the accompanying License Agreement.
If Subscriber does not so agree, Subscriber must return the copy of the
Software to West and any fee paid will be refunded.
SUBSCRIPTION
West may issue new versions of the ordered Software from time to time. One
copy of any such version issued during the one year period following the
effective date of this Schedule B4 shall be provided at no charge for each
subscription at each site identified below. Thereafter, Subscriber shall pay
the then-current subscription fee for each such new version. Charges are
exclusive of sales, use and other taxes, which are the responsibility of
Subscriber. At least one subscription is required for each site.
<TABLE>
<CAPTION>
<S> <C>
SUBSCRIBER Address of Equipment if at Different Location:
Signature /s/ Jim Gifford This location is Branch Office
------------------------------------ -----
Name (please print) Jim Gifford Residential Office
------------------------------------ -----
Title President X Main Office
------------------------------------ -----
Firm Name Hagerstown Business College Firm Name
------------------------------------ --------------------------------------
Address 18618 Crestwood Drive Address
------------------------------------ --------------------------------------
Hagerstown, MD 21742
------------------------------------ --------------------------------------
------------------------------------ --------------------------------------
------------------------------------ Contact
Contact Diane Chamberlin --------------------------------------
------------------------------------ Telephone
Telephone 301-739-2670 --------------------------------------
------------------------------------
Date August 15, 1996
------------------------------------
</TABLE>
<PAGE> 190
[MEDICUS SYSTEMS LETTERHEAD]
April 20, 1995
Ms. Beth Shanholtzer
Director, Health Information Technology
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Beth:
Enclosed please find one (1) original of the Letter of Agreement for the use of
the Clinical Data System by the medical record program students of Hagerstown
Business College.
This Agreement has been executed by Gerald L. Hansberger, Vice President,
Finance and is for your files. Should you have any questions regarding this
document, please feel free to call me.
Sincerely,
/s/ Linda V. Islami
Linda V. Islami
Contract Administrator
enclosure
<PAGE> 191
[MEDICUS SYSTEMS LETTERHEAD]
February 20, 1995
Ms. Beth Shanholtzer
Director, Health Information Technology
Hagerstown Business College
18618 Crestwood Drive
Hagerstown, MD 21742
Dear Beth:
This Letter of Agreement outlines the terms and conditions under which
Hagerstown Business College (the "Client") will lease fifteen (15) copies each
of the Medicus Systems Corporation ("Medicus") Clinical DataSystem(TM)'s PC
EncoderPlus, PC CPTPlus and Clinical & Financial Optimizer Software (the
"Software") at no charge for a period of one (1) year from the first day of the
month following delivery of the Software. Medicus reserves the right to ship
the Software at anytime within thirty (30) days of contract execution.
This Agreement will renew annually unless notice of termination is given by
either party, in writing, at least ninety (90) days prior to renewal. Upon
termination of this Agreement, the security devices, software, and
documentation, including any copies thereof, must be returned to the designated
Medicus office.
The Software will be used by the Client for the sole purpose of educating the
Client's students regarding computer-assisted encoding systems.
Software
The Software includes the programs, computer code, routines, subroutines,
documentation, systems descriptions, user manuals, methodologies, concepts,
formulae, indices, edits, tables, comparative and other data, data books,
forms, screens, reports, proposals and other written material and proprietary
knowhow ("Knowhow") constituting or delivered in connection with our
proprietary software product or products listed in this Agreement along with
any subsequent solutions, modifications, refinements, enhancements, additions
and releases relating to Knowhow and any other proprietary Knowhow delivered or
disclosed to you by us.
<PAGE> 192
Ms. Beth Shanholtzer
February 20, 1995
Page Two
License
We hereby grant you a nonexclusive and nontransferable license for use during
the term of this Agreement of the Software listed herein on the fifteen (15)
computers located at and servicing your facility. Use of the Software for the
benefit of any organization other than your organization, including uses
involving rebilling or consulting for any other organization, or for any
application not described in this Agreement is expressly prohibited.
Nondisclosure
You agree that the Software is the property of Medicus, or, in the case of
third party owned software, the property of Medicus' licensors. You further
agree that you will not, at any time, unless you have received our prior
written permission: (1) use the Software in any public based medical
information system, copy or duplicate or permit anyone else to copy or
duplicate any physical embodiment of the Software, or (2) examine, list,
decompile, disassemble, create or attempt to create, or permit anyone else to
examine, list, decompile, disassemble, create or attempt to create, the source
programs or object programs of the Software or any part thereof or any
substantially similar software from the source or object module or other
information in tangible or intangible form made available pursuant to this
Agreement. You agree to notify us of the circumstances surrounding any
unauthorized possession, use or knowledge of any part of the Software or
physical embodiment thereof or other information made available pursuant to
this Agreement. The provisions of this Nondisclosure section shall survive
expiration or termination of this Agreement.
<PAGE> 193
Ms. Beth Shanholtzer
February 20, 1995
Page Three
This Letter of Agreement shall be valid for letters returned on or before
February 28, 1995. Please indicate your acceptance of the contents of this
Letter of Agreement by having the appropriate person sign below. Return both
originals and a purchase order for any fees due to the attention of Cynthia
Gralapp, Contract Administrator at our Evanston office. We will return one
fully executed original for your files.
Sincerely,
/s/ Jeff A. Timbrook
Jeff A Timbrook
Regional Sales Manager
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
indicated below.
MEDICUS SYSTEMS CORPORATION HAGERSTOWN BUSINESS COLLEGE
By: /s/ Gerald L. Hansberger By: /s/ Jim Gifford
--------------------------------- --------------------------------
Name: Gerald L. Hansberger Name: Jim Gifford
------------------------------- ------------------------------
Title: Vice President, Finance Title: President
------------------------------ -----------------------------
Date: March 13, 1995 Date: March 3, 1995
------------------------------- ------------------------------
<PAGE> 194
EXHIBIT 16
EMPLOYMENT AGREEMENTS
1. Letter agreement with Director for Health Information Technology.
2. Letter agreement with Director of Placement.
3. Letter agreement with Registrar
4. O/E Employee Handbook
<PAGE> 195
[LOGO]
M E M O R A N D U M
TO: Lisa Copenhaver
FROM: Jim Gifford
DATE: March 1, 1994
RE: Letter of Appointment
We are pleased to appoint you to the position of Registrar of Hagerstown
Business College. For as long as student enrollment warrants or college
requirements dictate, your status shall be considered as full-time, non-exempt
and your appointment as employment at will.
As renumeration for fulfilling the duties and obligations as Registrar you will
be paid an annual salary of $16,000 with a non-regular merit salary review
within six months of the effective date of your appointment. As additional
compensation, you may receive a $3.00 per credit-hour bonus for every
re-starting student that you have contacted who earns a grade (excluding I or W)
for the registered credit-hours at the end of the term. The definition of a
re-starting student for this purpose shall be one who has incurred a financial
obligation in a previous term; has completely withdrawn from school; and one who
re-starts after one term, but within one year of withdrawal from school. Your
bonus plan is to remain confidential and should it become known to other staff
members, may result in discontinuation of the bonus plan.
We look forward to a professional relationship with you. Our strength and
success depends upon the professionalism and dedication of our staff. Your
interest and encouragement to training our students will be greatly appreciated.
<PAGE> 196
[HBC LOGO]
January 22, 1996
Ms. Marcia Dean
1060 Beechwood Drive
Hagerstown, Maryland 21742
Dear Marcia:
I am very pleased that you have agreed to remain the Director of Placement with
certain modifications. This letter is to confirm our conversation regarding the
director's duties.
As Director of Placement your annual salary will be $24,000 effective February
1st, 1996. The minimum work schedule of 25 hours per week will be arranged and
may vary each trimester. Your responsibilities as director include:
1. Development of sources in the job market which may offer employment to
students and alumni.
2. Making the community aware of Hagerstown Business College, its programs
and courses, and the qualifications of its students and graduates.
3. Maintaining contact with various employment agencies to determine their
manpower and training needs developing a lead source for new students.
4. Educate students in areas of resume writing, employee/employer relations,
career enhancement, dress protocol, time management, and interviewing
techniques by teaching Professional Life courses which varies between one to
three classes per trimester.
5. Informing students and alumni of available jobs and arranging interviews for
them with prospective employers.
6. Maintaining up-to-date files of placement information concerning students
and alumni.
<PAGE> 197
page two
Letter to Ms. Marcia Dean concerning modification of responsibilities
dated January 22, 1996
7. Organize, supervise, and conduct on-campus visits by potential employers,
such as the annual Employment Expo.
8. Conduct annual follow-up survey of graduates in order to determine their
employment status of reporting placement statistics.
9. Planning college graduation exercises.
10. Maintain current market research as to career opportunities and employment
opportunities provided by Maryland Job Service.
11. Develop placement brochure and coordinate printing as required.
I trust you will continue to add your talent and expertise in areas not limited
by the ones itemized above. I look forward to a mutually beneficial working
relationship.
Sincerely,
/s/ Jim Gifford
Jim Gifford
President
<PAGE> 198
[Logo]
18618 Crestwood Drive
Hagerstown, Maryland 21742
301-739-2670
800-HBC-2670
FAX 301-791-7661
April 26, 1994
Beth Shanholtzer, R.R.A.
Director, Medical Records
Martinsburg City Hospital 25401
Dear Beth:
I am very pleased that you have accepted the HIT Director's position with
Hagerstown Business College. This letter is to confirm our phone conversation
of April 26th, 1994 regarding the director's duties.
As program director, your start date will be June 1, 1994 and you will be paid
an annual salary of $22,000. The work schedule agreed upon was Monday,
Wednesday, and Friday per week. Your responsibilities as director include:
* working a minimum of 21 hours/week
* teaching a minimum of 2 day classes and 1 night class per trimester
* hiring for vacancies in HIT schedule
* covering or finding appropriate coverage for illnesses, vacations, etc.,
within the HIT department
* working a 50 week year including trimester breaks and non-scheduled class
breaks
* recruiting new sites
* scheduling a meeting with all current internship sites to evaluate
internship experiences this past year
* visiting all contracted sites at least once per trimester
* keeping internship contracts current
* holding 1 office hour/week per class
* revising student HIT handbook before Fall 94
* helping with HIT curriculum development
* attending scheduled faculty meetings and in-services
* evaluating whether the Coding Certificate should continue to be offered
Pat Brown is willing to assist you whenever you need her! She and I are both
looking forward to working with you. Call me with any questions.
Sincerely,
Kateri
Kateri Frazier
Medical Department Chair
<PAGE> 199
EXHIBIT 17
EMPLOYEE BENEFIT PLANS
1. O/E Automation, Inc. Employees' Retirement Income Plan (terminated
10/31/95, final distribution pending IRS determination letter)
2. O/E Savings Plan (401(K)/Profit Sharing)
3. Health/Dental Insurance
4. Long Term Disability Insurance
5. Group Term Life Insurance
6. Vacation (accrual policy)
7. Other benefits provided in the O/E Employee Handbook
<PAGE> 200
O/E AUTOMATION, INC.
and SUBSIDIARIES
TROY, MICHIGAN 48084
Revised 8/95
<PAGE> 201
O/E AUTOMATION, INC.
EMPLOYMENT POLICY HANDBOOK
REVISED AUGUST 1, 1995
APPLICATION OF POLICY HANDBOOK
This Policy Handbook applies to all employees of O/E Automation, Inc. and its
subsidiaries. From time to time, O/E Automation, Inc. and all of its
subsidiaries are collectively referred to herein as the "Company".
<PAGE> 202
CONTENTS
<TABLE>
<S> <C>
INTRODUCTION 1
About the Company 2
COMPANY POLICIES 3
Employment at Will Policy 3
Equal Employment Opportunity 4
Harassment 4
Employment of Family Members 5
Definitions of Employment 6
Introductory Period 7
Term of Employment 7
Internal Information Ownership 8
Software License Compliance 8
Alcohol and Drug Abuse 9
Social Event Policy 9
Work Assignment 9
Work Week and Work Schedule 10
Overtime 10
Attendance 11
Personnel Records 11
Security and Emergency Policies 11
Promotions 12
Resignation 12
Work Rules 13
PAY POLICIES 14
Total Compensation 14
Performance Reviews 14
Wage Review 15
Pay Day 15
Wage and Tax Statement 15
Benefits 15
Paid Holidays 16
Vacations 17
Vacation Pay Upon Termination 18
Sick Days 18
Medical Leaves of Absence 19
Funeral Leave 19
</TABLE>
<PAGE> 203
<TABLE>
<S> <C>
Jury Duty 20
Military Leave 20
BENEFITS 21
Health Insurance Plan 21
Long Term Disability Benefits 21
Life Insurance 21
Pension Plan 21
401K 21
COMMUNICATIONS 22
Open-Door Policy 22
A Final Note 22
PERSONNEL COORDINATORS LISTING 23
Questions? 24
ACKNOWLEDGMENT 25
Signature Statement 25
Employee's Copy 26
</TABLE>
<PAGE> 204
INTRODUCTION
We have prepared this handbook to acquaint our employees with our current
personnel policies and procedures. Please read it carefully and keep it for
future reference.
To those of you who are newcomers to O/E, we extend a special welcome. This
handbook is designed as a get-acquainted book to let you know who we are, what
we do and how we operate.
To those of our employees of longer standing, this is a greeting...and a thank
you, You have helped make O/E more than a place to work. To a lot of us it's a
second home and we'd like, with your help and cooperation, to continue to
improve it. One of the things you can do is to assist and give guidance to our
new employees.
Whether you are a new employee or one of long standing, this handbook should be
helpful in answering your questions about O/E and the programs that affect you
in your job. Periodically, you will be sent additions or changes to the
booklet. If at any time you have questions about the information, please do
not hesitate to ask your Personnel Coordinator.
1
<PAGE> 205
ABOUT THE COMPANY
O/E was founded in 1979 by Robert J. Vlasic. In May of 1982, the Company was
incorporated. The original mission was to lease office equipment to
corporations in the Detroit area. That mission has grown to encompass a wide
range of computer services offered to major corporations nationwide.
Today the O/E family of companies includes O/E Systems, Inc.; O/E Learning,
Inc.; O/E Management Services, Inc.; O/E MidAtlantic, Inc.; O/E Midwest, Inc.
ABOUT OUR CUSTOMERS
O/E does business in one of the most competitive industries in the world:
systems integration, computer leasing and the delivery of technology based
solutions. There are other routes our customers could take and end up with
somewhat the same results. And when compared financially to other
alternatives, O/E is usually not the least expensive.
One of the reasons our customers favor O/E is the satisfaction and peace of
mind received by obtaining their equipment, training, software, service and
support from a single reliable source. We provide innovative solutions to our
customers' specific needs, and in the process, build strong, long-lasting
relationships.
2
<PAGE> 206
COMPANY POLICIES
EMPLOYMENT AT WILL POLICY
This Employee Handbook is an important document intended to help you become
acquainted with the Company and its rules and procedures. However, you must
understand that this Employee Handbook only serves as a guide and does not
amount to a contract between the Company and you or any other employee.
YOU MUST ALSO UNDERSTAND THAT YOU ARE, AND SHALL REMAIN AT ALL TIMES, AN
"EMPLOYEE AT WILL" OF THE COMPANY. This means that you may terminate your
employment at any time, for any reason or no reason whatsoever, and the Company
may terminate your employment at any time for any reason or no reason
whatsoever. This "employment at will" relationship is not altered or modified
by the Company's granting of any benefits, including, but not limited to, stock
options or profit sharing benefits, which provide for vesting based upon length
of employment.
THE "EMPLOYMENT AT WILL" RELATIONSHIP CANNOT BE MODIFIED OR ALTERED UNLESS
EXPRESSED IN WRITING, SPECIFICALLY STATING SUCH UNDERSTANDING, AND SIGNED BY
THE PRESIDENT OF O/E AUTOMATION, INC. No person other than the President of
O/E Automation Inc. has authority to enter into any agreement for employment
for any specified period of time, or to make any agreement contrary to the
foregoing statement.
3
<PAGE> 207
EQUAL EMPLOYMENT OPPORTUNITY
O/E is an equal opportunity employer and will not discriminate against any
employee or applicant with regard to sex, religion, race, color, national
origin, age, height, weight, marital status, political beliefs, or disability
or handicap that does not substantially impair the performance of essential job
functions, in accordance with all applicable laws. Additionally, laws
regarding veterans' status are fully observed. This policy relates to all of
the Company's employment practices including hiring, transfers, promotion,
layoffs, compensation, benefits and training.
To assist in maintaining full compliance with the above policy, the Company has
designated a Personnel Coordinator. If you feel that you have been the subject
of discrimination, that a co-worker or applicant has been subjected to
discrimination, or that other violations of the above policy have occurred or
are occurring, you are encouraged to discuss the activity with the Personnel
Coordinator who will investigate the matter and recommend any disciplinary
action which may be appropriate. The Company will not retaliate against any
employee who makes a good faith report of alleged discriminatory conduct, even
if the employee was in error.
HARASSMENT
O/E prohibits harassment of any kind by and of its employees. Harassment can
take many forms. It may be, but is not limited to, words, signs, jokes,
pranks, intimidation, physical contact or violence. Harassment may be, but is
not necessarily, sexual in nature. Sexual harassment may include unwelcome
sexual advances, requests for sexual favor, other verbal or physical contact of
a sexual nature when such conduct creates an intimidating environment, prevents
an individual from effectively performing the duties of his/her position, or
when such conduct is made a condition of employment or compensation, either
implicitly or explicitly.
4
<PAGE> 208
As a Company employee, you are responsible for keeping our work environment
free of harassment. Any employee who becomes aware of an incident of
harassment, whether by witnessing the incident or being told of it, must report
it to the Personnel Coordinator or any officer of the Company with whom you
feel comfortable. If you feel that you have experienced harassment, report the
incident immediately to the Personnel Coordinator or any officer with whom you
feel comfortable ("Officer" includes any Vice President, President or Chairman
of an O/E company). Appropriate investigation and disciplinary action will be
taken. All reports will be promptly investigated with due regard for the
privacy of everyone involved. The Company will not retaliate against any
employee who makes a good faith report of alleged harassment, even if the
employee was in error.
The Company accepts no liability for harassment of one employee by another
employee. Any individual who makes unwelcome advances, threatens or in any way
harasses another employee is personally liable for such actions and their
consequences. The Company will not provide legal, financial or any other
assistance to an individual accused of harassment if a legal complaint is
filed.
EMPLOYMENT OF FAMILY MEMBERS
The Company discourages the employment of persons related to each other.
Exceptions may be made particularly in the cases of part-time summer help but
only with the prior approval of the President or Chairman of the Company.
5
<PAGE> 209
DEFINITIONS OF EMPLOYMENT
The nature of your employment is employment at will. This means that you may
terminate your employment at any time and for any reason. Likewise, your
employer may terminate your employment at any time, with or without cause.
Your at-will status cannot be modified or altered unless specifically done so
in writing and signed by the President of O/E Automation. The following are
classes of employees that are all at-will employees:
A Full-Time Employee is one who is normally scheduled to work at least forty
(40) hours per week.
A Part-Time Employee is one who is normally scheduled to work less than a forty
(40) hour work week and is expected to work regularly on a year-round basis.
Part-time employees are eligible for certain employee benefits.
A Temporary Employee is one who is hired on a short-term basis and has been
employed by the Company for less than twelve (12) continuous months or if
assigned to a specific project, for the contracted time of that project.
He/she can be paid on a salaried or hourly basis and is not eligible for any
employee benefits.
Employees who transfer to an affiliate O/E company will retain their original
date-of-hire for purposes of employee benefits.
Every new employee should understand what his/her job is, what is expected in
that job, and how that job contributes to the overall success of the Company.
Every job is important, and the Company cannot succeed without every employee
doing his/her best.
6
<PAGE> 210
We all work together as a team and, as in any team effort, each of us must do
his/her best or else the whole team will suffer.
Whenever you have a work performance related problem, you would normally take
it to your supervisor, who is in the best position to give your problem
immediate attention.
INTRODUCTORY PERIOD
In order for the Company to become acquainted with you and for you to learn
about the Company, the first ninety (90) calendar days of employment will be
used as an introductory period.
During this introductory period you will not be eligible to receive the normal
employee benefits offered to full-time employees (i.e., medical and dental
insurance, life insurance, disability insurance). Completion of the
introductory period does not guarantee continued employment for any specified
period of time, nor does it require that an employee be terminated only "for
cause".
Once you have completed the introductory period, you will be classified as a
regular employee with your service dating back to the time you were hired.
TERM OF EMPLOYMENT
Any employee may leave employment at any time or be terminated at any time,
with or without reason. No person other than the President of O/E Automation
has authority to enter into any agreement for employment for any specified
period of time, or to make any agreement contrary to the foregoing statement.
No such agreement contrary to the foregoing shall be enforceable unless reduced
to writing and signed by the President of O/E Automation and the employee.
7
<PAGE> 211
INTERNAL INFORMATION OWNERSHIP
O/E Automation is the owner of all information contained in Company files or
carried on Company communication lines. These include computer and voice in
addition to various storage media, such as paper, tape, and diskettes. As
such, the Company reserves the right without notice to access, monitor, secure
or destroy this information.
Employees who have access to such information are expected to treat it
accordingly and in a confidential manner. Copying and/or removing internal
information from the premises or disclosing such information to non-employees,
without proper authorization, is prohibited. Violations of this policy will be
disciplined appropriately and may lead to discharge.
SOFMARE LICENSE COMPLIANCE
It is the policy of O/E to adhere to the terms of all software licenses to
which it is a party and to obey the restrictions applicable to copyrighted
materials contained therein.
O/E employees or contractors shall not duplicate any licensed software or
related documentation for use either on premises or elsewhere unless expressly
authorized to do so by agreement with the licensor.
O/E employees or contractors shall not provide licensed software to any
outsiders, including clients, customers, contractors, or others. O/E employees
or contractors shall not use any software given them by clients, customers,
consultants, or vendors without tangible evidence that their use of such
software does not violate copyright laws or other intellectual property rights
of others. Licensed software shall be used on local area networks or multiple
8
<PAGE> 212
machines only in accordance with applicable license agreements. Every O/E
employee is responsible for complying with this policy.
Employees who know of violations of this policy must report such violations to
the Director of Information Systems or other appropriate officer of the
Company.
ALCOHOL AND DRUG ABUSE
Alcohol and drug abuse problems will be dealt consistently with the
requirements of the Americans with Disabilities Act, the Michigan Handicappers'
Civil Rights Act, and other applicable laws.
SOCIAL EVENT POLICY
The O/E companies frequently sponsor social activities to encourage camaraderie
and reward a job well done. The sole purpose is social and recreational. By
inviting our employees to these events we are not requiring the performance of
any business function. Rather, employees who attend an O/E social activity are
voluntary social guests.
While alcohol may be available at an O/E social event, our employees should
feel no pressure whatsoever by the Company to consume it. If you choose to
drink, we expect you to act responsibly and refrain from excessive alcohol
consumption.
WORK ASSIGNMENT
Your work assignment will be given to you by your supervisor or team leader. A
team leader, when used, will have discussed the schedule of work with your
supervisor. Your supervisor is responsible for scheduling and maintaining the
quality standards to meet customer and Company requirements.
9
<PAGE> 213
It is important for the efficient operation of the Company that we all do the
work that must be done to meet the needs of our customers. This means that
from time to time you may be asked to do work which you do not ordinarily do
and you may be asked to learn new work.
WORK WEEK AND WORK SCHEDULE
The regular work week commences on Monday and runs through Friday. A regular
work week consists of five (5) consecutive business days of eight (8) hours
each. The work week can be extended to include holidays, Saturdays or Sundays,
and employees may be required to work overtime.
All employees receive a one (1) hour lunch or one half (1/2) hour lunch and two
(2) 15 minute breaks. Your supervisor will advise you of the normal lunch
periods for your department. The scheduling of breaks is within the discretion
of the supervisor. Employees are expected to be at their work stations and
ready to work at starting time and at the end of each break or lunch period.
OVERTIME
If overtime work is necessary, you will be advised as much in advance as
possible and will receive pay at the rate of time and one-half (1/2) for the
actual time worked in excess of forty (40) hours in a payroll work week. All
overtime must be authorized by your supervisor in advance. Overtime is time
and one half (1/2), even when it falls on a holiday. All managers and
supervisory personnel are exempt from overtime.
In scheduling overtime, every effort is made to accommodate the personal needs
of our employees. Whenever overtime work is scheduled, it is important to the
Company that you work the overtime hours scheduled.
10
<PAGE> 214
ATTENDANCE
Attendance control is important in maintaining consistent operation. It is
your responsibility to notify your supervisor by telephone of an expected
absence or tardiness. This must be done as soon as possible (no later than the
first hour of the work day) so that arrangements can be made to have your job
covered.
All supervisors and managers must fill out an attendance form documenting the
absence.
PERSONNEL RECORDS
Each employee has a permanent personnel record. It is your obligation to keep
your Personnel Coordinator advised in writing the following changes for fringe
benefit and record keeping purposes: name, address, telephone number, marital
status, dependent status, and emergency contact.
Prompt notice of any changes facilitates our ability to properly administer
payrolls and employee benefit programs. Forms are available from your
Personnel Coordinator.
For your best interests, keep your Personnel Coordinator informed of any
courses, programs or technical organization functions that you have
participated in and any certificates you may have earned. This will become a
part of your permanent file and may be helpful in considering you for job
transfers and promotions.
SECURITY POLICY
All visitors must check in with the receptionist at the front desk, and
visitors must be escorted to Company areas.
11
<PAGE> 215
PROMOTIONS
The Company believes that appropriate forms of training and education,
diligently pursued and successfully completed, contribute to employee
development and benefit both the employee and the Company.
In addition, such training and education may assist an employee in benefiting
from the Company's philosophy of "promotion from within", whenever such
promotions are consistent with an employee's capabilities and the Company's
best interest.
RESIGNATION
In order to ensure continuing stability in our organization, we ask that you
provide at least two weeks notice should you decide to terminate your
employment. Employees who provide the requested notice will receive accrued
but unused vacation pay, as set forth in the section on vacations.
Company keys and any company-issued assets or materials must be returned to
your Personnel Coordinator upon your termination. The Director of I.S. should
be notified to make any system adjustments for security issues.
Just as any employee may resign at any time and for any reason, the Company
reserves the right to release an employee at any time with or without cause.
12
<PAGE> 216
WORK RULES
TELEPHONE CALLS:
Courtesy and consideration in handling phone calls impress the caller with the
interest and efficiency of our company. The Company has formal written
"Telephone Answering Procedures" for everyone that regularly answers the
telephone. Ask your Personnel Coordinator for a copy if your job includes
telephone usage.
The telephone on your desk or in your department is a business phone and should
not be used for personal calls. Please ask your family and friends to call
only in regard to serious or emergency matters.
DRESS:
We expect each employee to guide his/her personal appearance and attire by
standards which are in keeping with the Company's best interest, as well as the
employee's health and safety.
Every employee is asked to use discretion and mature judgment regarding
appearance and attire.
HOUSEKEEPING:
We all have a responsibility for keeping our work areas neat and orderly. We
must each do our part to assure that good housekeeping and safe work areas are
maintained.
13
<PAGE> 217
PAY POLICIES
TOTAL COMPENSATION
There are two forms of compensation you receive from the Company. The first is
the direct compensation you receive in your paycheck. The second is the
indirect compensation you receive as benefits which are explained in the
"Benefits" section of this booklet. These benefits help provide various forms
of protection for you and your family that you would otherwise have to finance
yourself. Your direct and indirect pay together provide your total
compensation.
PERFORMANCE REVIEWS
At the Company's discretion, your job performance will be discussed with you at
least once each year. During the review, the employee and his or her
supervisor should discuss the employee's past performance and any changes which
may be needed in the future. To confirm that the review took place, both the
employee and his or her supervisor will sign the performance review form, and a
copy of the review will be given to the Personnel Coordinator to place in the
employee's file.
Employees are encouraged to discuss any questions they may have as to career
growth opportunities within the company and to make suggestions that might
enhance their job satisfaction.
14
<PAGE> 218
WAGE REVIEW
The Company has adopted a policy of only reviewing employee wage rates each
December in light of the employee's performance, the company's performance and
economic conditions. However, this may vary according to the Company's
performance, the employee's performance and economic conditions.
PAY DAY
You will be paid twice monthly: ON THE 15TH AND THE LAST DAY OF THE MONTH. Your
Personnel Coordinator will deliver your paycheck to you personally or it will
be mailed to you or electronically deposited for you, if you so choose. If a
pay day falls on a holiday, the working day immediately prior to the holiday
will be the pay day. If a pay day falls on a weekend, the pay day will be the
Friday preceding the weekend.
WAGE AND TAX STATEMENT
Each year you will receive a statement showing your total earnings and the
amount of taxes deducted from your salary during the year. This statement
(Form W-2) will be given to you or mailed by January 31st of the following year
so you may have it when you file your income tax return.
BENEFITS
Only full time employees are eligible for fringe benefits. To qualify for
fringe benefit programs, a full-time employee must have completed the ninety
(90) day probationary period and must meet the necessary eligibility
requirements of the respective benefit program.
15
<PAGE> 219
PAID HOLIDAYS
You will be paid eight (8) hours pay for the following holidays at your
straight time hourly rate:
NEW YEAR'S DAY THANKSGIVING DAY
MEMORIAL DAY DAY AFTER THANKSGIVING
INDEPENDENCE DAY CHRISTMAS DAY
LABOR DAY GOOD FRIDAY, 1/2 day
Christmas Eve Day and New Year's Eve Day are also paid holidays when they fall
on a normally scheduled work day.
To qualify for holiday pay, you must have completed the probationary period and
have worked the last scheduled work day prior to and the next scheduled work
day immediately following the holiday, unless excused by your supervisor. The
Company may adjust holiday schedules based upon the day of the week that the
holiday is celebrated.
If a holiday falls within your vacation, you will receive an extra day of
vacation at your regular rate in addition to your paid vacation. Probationary
employees will receive holidays off, but without pay.
Paid holidays are subject to revision for O/E Learning schools.
16
<PAGE> 220
VACATIONS
Only full-time employees earn vacation days. Vacation must be approved by your
supervisor in advance of the vacation period. Paid vacations are based on your
length of continuous service with O/E.
<TABLE>
<CAPTION>
Continuous Service Vacation
- ------------------ --------
<S> <C>
Less than one year 1 day per full month worked up
to a maximum of 10 days
One to five years 10 days
Six years but less 15 days
than 15
More than 15 years 20 days
</TABLE>
Vacation days must be taken in the same fiscal year (November 1 through October
31) in which they are earned. Exceptions may be made due to year-end closing,
but only with the prior approval of the President or Chairman of the Company.
Annual paid vacations shall be available based on the following schedule:
<TABLE>
<CAPTION>
Continuous Service Vacation
- ------------------ --------
<S> <C>
Through first 5 years .83 days per full month worked
to a maximum of 10 days per
fiscal year
Beginning at 6 years, but 1.25 days per full month worked
less than 15 years to a maximum of 15 days per
fiscal year
</TABLE>
17
<PAGE> 221
<TABLE>
<CAPTION>
Continuous Service Vacation
- ------------------ --------
<S> <C>
15 years plus 1.66 days per full month worked
to a maximum of 20 days per
fiscal year
</TABLE>
The Company requests that each employee notify his or her supervisor of
vacation plans as far in advance as possible. A schedule is issued at the
beginning of each fiscal year for employees to indicate definite, as well as
tentative vacation days.
Employees are encouraged to take individual vacation days and not take more
than one consecutive week at a time. Vacation requests should be submitted on
forms provided for that purpose. Earned vacation days cannot accumulate into a
succeeding year. If an employee takes vacation over and above what they have
accrued, they must get prior approval from the President or Chairman of the
Company.
Upon written request, employees may be permitted to use vacation days in a
fiscal year before they are earned. However, if the employee does not remain
employed through the end of the fiscal year, the Company may request
reimbursement from the employee for the advanced vacation taken but not earned
as of the employee's last day worked.
VACATION PAY UPON TERMINATION
If you provide the requested notice when your employment terminates, you will
receive payment for vacation time accrued but not used.
SICK DAYS
Our sick day policy is for five (5) days within our fiscal year. The plan will
be explained in detail to you by your Personnel Coordinator. Sick days do not
accumulate to succeeding fiscal years.
18
<PAGE> 222
MEDICAL LEAVES OF ABSENCE
If you qualify for leave under the Family and Medical Leave Act of 1993, unpaid
leaves of absence will be granted for periods of no more than twelve (12)
weeks, unless as required to provide longer periods by state or federal law.
Request must be made in writing, for:
1. Maternity Leave or placement of a child for adoption or foster care
2. Illness Leave (Physical or Mental)
3. Leave to care for a seriously ill spouse, child or parent
All leaves, whether maternity or illness leave, shall be treated in the same
fashion. An employee who requests a leave of absence will be granted such
leave, in the discretion of the Company after exhausting his or her personal
and vacation days.
The Company's policy is intended to fully comply with all provisions of the
Family and Medical Leave Act of 1993 and any other similar federal, state or
local law, to the extent the same applies to the Company. In the event any
provision herein relating to medical leaves of absence provides less rights
than provided by such laws, the policy is deemed amended to provide the greater
rights afforded by such laws.
FUNERAL LEAVE
If there is a death in the employee's immediate family, the Company will pay
for work time missed up to three normal working days while arranging for or
attending the funeral. Immediate family includes father, mother, child,
sister, brother, spouse, mother-in-law and father-in-law. The above policy
applies to both natural and step-relatives.
19
<PAGE> 223
JURY DUTY
After twelve (12) months of employment, a full-time employee who is summoned
and reports for jury duty on a regularly scheduled work day will be paid by the
Company for each day spent in performing jury duty.
The Company pays the difference between the employee's regular pay and the
daily jury fee paid by the court (not including travel allowances or
reimbursement of expenses). The maximum paid leave duration is limited to ten
(10) days in any calendar year. These provisions are not applicable to an
employee who volunteers for jury duty.
MILITARY LEAVE
The Company shall comply with all applicable federal laws concerning the rights
of employees who have entered the military service of the United States.
20
<PAGE> 224
BENEFITS
The group insurance programs are explained in other booklets which are given to
you at the completion of the probationary period.
HEALTH INSURANCE PLAN
A Health Insurance Plan is provided for all regular, full-time employees and
their eligible dependents.
LONG TERM DISABILITY BENEFITS
In case of prolonged absence due to illness or injury, the Company provides
insurance which protects you with income continuation. This plan is described
in a separate booklet, which is provided to all new full-time employees.
LIFE INSURANCE
You are also covered by life insurance, as well as accidental death and
dismemberment insurance. Full details of this plan are described in a booklet,
which is provided to all new full-time employees.
PENSION PLAN
The Company has a pension plan for eligible employees with details set out in a
Summary Pension Plan document available from your Personnel Coordinator.
401K
The Company has a 401K plan for eligible employees set out in a Summary Plan
document with details available from your Personnel Coordinator.
21
<PAGE> 225
COMMUNICATIONS
OPEN-DOOR POLICY
Your immediate supervisor is the person you should go to with questions and
requests for help with work-related problems. Your immediate supervisor may
suggest that you discuss your problem/question with the department manager. If
you do not feel comfortable talking to your supervisor, please talk with your
Personnel Coordinator.
This is one of the most important policies we have at O/E. You are urged to
use it whenever you feel it is necessary. A genuine effort will be made to
help solve your problem.
A FINAL NOTE
We hope that your work here will be satisfying and enjoyable. We also hope
that with your mutual understanding of our common goals, together we will build
a strong and profitable future for all of us.
22
<PAGE> 226
PERSONNEL COORDINATORS
<TABLE>
<CAPTION>
COORDINATOR COMPANY TELEPHONE
- ----------- ------- ---------
<S> <C> <C>
Treasa Bloodgood O/E Automation 810-649-4400
Roger Mundy O/E Learning 810-649-4400
Sharon Lutz O/E Management Services 810-643-3414
Pamela Leonard O/E Systems 810-643-3459
Steve Zachary O/E Mid-Atlantic 410-561-3007
Bassam Khayo O/E Midwest 513-872-1032
Candace Post O/E Systems - Chicago 312-629-2041
Mary Curole O/E Systems - Atlanta 404-264-8665
Beth Linden O/E Recruiter 810-643-6683
</TABLE>
23
<PAGE> 227
QUESTIONS?
If you have a specific question about anything in this handbook, please contact
your Personnel Coordinator at your location. In addition, the following people
are experts in handling issues regarding:
PAYROLL / TIME SHEETS / ATTENDANCE / SALARY CHANGES
BILLIE BILICKI 810-649-4400
810-643-0728 FAX
BENEFITS / ADDRESS AND INSURANCE STATUS CHANGES:
MARRIAGE, BIRTH OF CHILD, DIVORCE, ETC.
TREASA BLOODGOOD 810-649-4400
810-643-0728 FAX
24
<PAGE> 228
ACKNOWLEDGMENT
I hereby acknowledge that I have received a copy of the O/E Automation, Inc.
and Subsidiaries (collectively, the "Company") Employment Policy Handbook (the
"Handbook"). I understand that the contents of the Handbook are not, and
should not be construed to be, a contract between the Company and me. I
further understand that to the extent the Handbook describes employee benefit
plans, such as insurance, pension or retirement benefits, the terms of any
insurance policy, plan or summary plan description are controlling regardless
of any statement contained in the Handbook.
I agree to read the Handbook and to abide by the policies and procedures
contained in the Handbook and in future amendments. I understand that my
employment, compensation and benefits can be terminated with or without cause
and with or without notice at any time at the option of the Company or me. I
further understand that no manager, supervisor or other representative of the
Company, other than the President of O/E Automation, Inc., has the authority to
enter into any agreement for employment for any specified period of time or to
make any agreement contrary to the foregoing. Any such agreement will only be
binding and enforceable against the Company if it is in writing and signed by
the President of O/E Automation, Inc. I also understand that the Company
reserves the right to alter, amend, modify, change or terminate any of the
policies or benefits described in the Handbook or elsewhere at anytime it
chooses, with or without notice.
- ------------------------------
SIGNATURE
- ------------------------------
DATE
EMPLOYEE'S COPY TO REMAIN IN HANDBOOK.
25
<PAGE> 229
EXHIBIT 18
INSURANCE POLICIES
------------------
All of the following insurance coverages are provided by Chubb Group of
Insurance Companies:
1. Commercial Package
2. Boiler & Machinery
3. Commercial General Liability
4. Transit & Contingent Interest
5. Business Automobile
6. Workers' Compensation
7. Umbrella Liability
<PAGE> 230
EXHIBIT 19
ACTIONS PENDING
None
<PAGE> 231
EXHIBIT 20
LIST OF BANK ACCOUNTS
The following accounts are all maintained at Farmers & Merchants Bank and
Trust, Hagerstown, Maryland:
General Money Market
Checking Account
The following accounts contain financial aid funds:
Federal Perkins (Money Market)
Federal Direct Loan
Title IV Federal Funds
Federal Pell
Federal SEOG
Federal College Work Study
Federal Perkins
The following individuals are authorized to sign on all of the above accounts:
Jim Gifford, School Director
Bill Zierau, Controller
Anthony Iaquinto, Treasurer
Richard R. Vlasic, Director
Thomas A. Doonan, Chairman
Timothy M. McCarthy, President
<PAGE> 232
EXHIBIT 21
EMI'S FINANCIAL STATEMENTS
See attached
<PAGE> 233
EDUCATIONAL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1996 1996
------------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................... $ 1,332,364 $ 3,033,383
Restricted cash................................................... 624,964 610,000
Trade accounts receivable, net.................................... 4,964,694 3,051,266
Prepaid expenses.................................................. 1,326,364 941,327
----------- -----------
Total current assets...................................... 8,248,386 7,635,976
Property and equipment, net......................................... 4,469,777 4,384,081
Deferred debt issuance costs, net................................... 94,602 96,109
Covenants not to compete, net....................................... 943,868 918,445
Goodwill and other intangible assets, net........................... 8,065,171 5,096,410
Other assets........................................................ 229,210 229,210
----------- -----------
Total assets.............................................. $ 22,051,014 $18,360,231
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................. $ 364,559 $ 213,018
Accrued payroll compensation...................................... 376,648 1,152,547
Accrued income taxes.............................................. 194,210 232,252
Accrued expenses.................................................. 674,128 881,486
Deferred tuition income........................................... 4,546,588 2,277,919
Current portion of long-term debt................................. 1,078,542 1,080,085
----------- -----------
Total current liabilities................................. 7,234,675 5,837,307
Long-term debt, less current portion................................ 7,790,549 6,059,858
Other liabilities................................................... 1,117,487 933,505
----------- -----------
Total liabilities......................................... 16,142,711 12,830,670
Stockholders' equity:
Preferred stock, authorized 5,000,000 shares, none issued and
outstanding.................................................... -- --
Convertible preferred stock, $.01 par value -- authorized
1,100,000 shares; 1,023,049 shares issued and outstanding
(liquidation preference of $6.66 per share).................... 10,230 10,230
Additional paid-in capital on convertible preferred stock......... 6,732,160 6,732,160
Common stock, $.01 par value -- authorized 5,833,333 shares;
1,676,827 shares issued and outstanding........................ 16,768 16,768
Additional paid-in capital on common stock........................ 35 35
Common stock purchase warrants.................................... 2,838,148 2,838,148
Accumulated deficit............................................... (3,654,038) (4,032,780)
Less treasury stock, at cost (29,165 common shares)............... (35,000) (35,000)
----------- -----------
Total stockholders' equity................................ 5,908,303 5,529,561
----------- -----------
Total liabilities and stockholders' equity................ $ 22,051,014 $18,360,231
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 234
EDUCATIONAL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
Net revenues................................ $ 10,476,601 $ 9,166,846 $ 19,679,880 $ 17,928,670
Cost of education and facilities............ 5,119,314 4,209,927 9,762,907 8,446,217
Selling and promotional..................... 1,480,813 1,442,338 2,899,535 2,794,729
Administrative expenses..................... 2,958,640 2,663,965 5,618,501 5,382,062
Amortization of goodwill and intangibles.... 206,968 154,479 382,894 423,632
----------- ----------- ----------- -----------
Income from operations...................... 710,866 696,137 1,016,043 882,030
Interest expense, net....................... 188,694 299,059 384,686 535,476
----------- ----------- ----------- -----------
Income before income taxes.................. 522,172 397,078 631,357 346,554
Provision for income taxes.................. 208,941 170,000 252,615 181,595
----------- ----------- ----------- -----------
Net income........................ $ 313,231 $ 227,078 $ 378,742 $ 164,959
=========== =========== =========== ===========
Pro forma net income per share.............. $ .07 $ .05 $ .08 $ .04
=========== =========== =========== ===========
Pro forma weighted average shares
outstanding............................... 4,707,124 4,707,124 4,707,124 4,707,124
=========== =========== =========== ===========
Historical net income per share............. $ .07 $ .06 $ .08 $ .04
=========== =========== =========== ===========
Historical weighted average shares
outstanding............................... 4,786,557 3,748,815 4,786,557 3,748,815
=========== =========== =========== ===========
OTHER OPERATING DATA:
Number of schools at end of period.......... 17 14 17 14
Number of students at end of period......... 5,170 4,285 5,170 4,285
Number of new starts at end of period....... 1,989 1,900 3,118 3,071
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 235
EDUCATIONAL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
---------------- ----------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
OPERATING ACTIVITIES
Net income..................................................... $ 378,742 $ 164,959
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation................................................. 562,065 435,142
Amortization of other assets................................. 363,025 358,951
Provision for losses on accounts receivable.................. 769,434 607,564
Amortization of discount on long-term debt................... 24,936 108,258
Changes in operating assets and liabilities, net of assets
acquired and liabilities assumed.......................... (2,512,134) (800,789)
----------- -----------
Net cash provided by (used in) operating
activities......................................... (413,932) 874,085
INVESTING ACTIVITIES
Purchase of businesses, net of cash acquired................... (50,000) --
Purchases of property and equipment, net....................... (491,299) (460,548)
----------- -----------
Net cash used in investing activities................ (541,299) (460,548)
FINANCING ACTIVITIES
Principal payments on long term debt........................... (745,788) (1,377,032)
----------- -----------
Net cash used in financing activities................ (745,788) (1,377,032)
----------- -----------
Decrease in cash and cash equivalents.......................... (1,701,019) (963,495)
Cash and cash equivalents at beginning of period............... 3,033,383 2,854,676
----------- -----------
Cash and cash equivalents at end of period..................... $ 1,332,364 $ 1,891,181
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 236
EDUCATIONAL MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30 ,1996
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulations S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three- and six-month periods ended
September 30, 1996 are not necessarily indicative of the results that may be
expected for the year ended March 31, 1997. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's Registration Statement on Form S-1 No. 333-09777 and related
prospectus filed with the Securities and Exchange Commission on October 28, 1996
(the "Registration Statement").
The balance sheet at March 31, 1996 has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
2. INITIAL PUBLIC OFFERING
On October 28, 1996, the Company completed its initial public offering
("IPO") of common stock. A total of 2,400,000 shares were sold at $10 per share
which included 2,200,000 shares sold by the Company and 200,000 shares sold by
certain selling stockholders. The net proceeds to the Company were approximately
$19.7 million and were partially used to repay $4.8 million in debt. The balance
of the offering proceeds will be used for general corporate purposes, including
the expansion of its operations through the acquisition of additional schools.
As a result of the early extinguishment of the $4.8 million in debt in the
third quarter of fiscal year 1997, the Company will incur an extraordinary loss
of approximately $557,000 because of the write-off of associated unamortized
deferred debt issuance costs and unamortized debt discount.
3. EARNINGS PER SHARE
Pro forma net income per share for periods prior to the IPO were computed
by dividing net income by weighted average number of shares of common stock
outstanding after giving effect to (i) the automatic conversion of all of the
outstanding shares of convertible preferred stock into 1,705,082 shares of
common stock, (ii) the issuance of 141,667 shares of common stock upon exercise
of certain outstanding warrants and (iii) the issuance of 933,333 shares of
common stock upon the cashless exercise of outstanding warrants to purchase
1,333,333 shares of common stock, plus (iv) cheap stock as defined below.
Historical net income per share was computed using the requirements of
Accounting Principles Board Opinion No. 15 and SEC Staff Accounting Bulletin No.
83.
Pursuant to SEC Staff Accounting Bulletin No. 83, common stock and common
stock equivalents issued at prices equal to or below the IPO price per share
("cheap stock") during the twelve month period immediately preceding the initial
filing date of the Company's registration statement for the IPO (August 8, 1996)
have been included in both pro forma and historical earnings per share as if
outstanding for all periods presented (using the treasury stock method at the
offering price).
Supplemental net income per common share was computed using the weighted
average number of common and common equivalent shares outstanding as described
above, and also considering the reduction in interest expense from the repayment
of long term debt of $4.8 million with proceeds of the IPO, as if such shares
had been issued and repayment had occurred at the beginning of the fiscal
period. The computations of
6
<PAGE> 237
EDUCATIONAL MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
supplemental historical net income per share for the three and six months ended
September 30, 1996 are $.08 and $.12, respectively.
Retroactive restatement has been made to all share, weighted average shares
and all net income per share calculations for the stock split effected on June
20, 1996.
4. TEXAS ACQUISITION
On September 6, 1996, the Company entered into an acquisition agreement
providing for the purchase of three schools located in Texas for $2.5 million
subject to approval by the Texas Workforce Commission. As of September 30, 1996,
approximately 646 students attended the schools, which offer healthcare diploma
programs and are located in San Antonio, McAllen and El Paso, Texas. The schools
had combined net revenues of approximately $4.7 million and combined income from
operations of approximately $630,000 for the year ended December 31, 1995. The
Company has accounted for the acquisition as a purchase, effective September 6,
1996. Results of operations of the Texas schools after this date are included in
the consolidated results of the Company.
The Company financed the purchase of the Texas schools as follows: $50,000
was paid on September 6, 1996, $50,000 was paid upon approval by the Texas
Workforce Commission (which was received on November 1, 1996), $1,150,000 will
be paid upon approval by the Department of Education and the remaining
$1,250,000 is payable in the form of a five-year promissory note bearing
interest at 8% per annum and due in five equal annual principal payments.
Pro forma financial information as if the Texas acquisition was consummated
on April 1, 1996, assuming the same pro forma adjustments set forth in the
Company's Registration Statement, is as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30,
1996
-------------
<S> <C>
Net revenues............................................................ $ 21,829,000
Net income.............................................................. $ 592,000
Historical net income per share......................................... $ .12
</TABLE>
Financial information related to the Texas acquisition is not available on
an interim basis for 1995.
7
<PAGE> 1
EXHIBIT 10.2
NON-NEGOTIABLE
SECOND PAYMENT PROMISSORY NOTE
U.S. $1,350,000.00 December 31, 1996
FOR VALUE RECEIVED, each of the undersigned, jointly and severally
(each individually called a "Maker" and collectively called the "Makers"),
hereby unconditionally promises to pay to the order of O/E LEARNING, INC., a
Michigan corporation ("Seller"), or assigns ("Holder"), at 3290 West Big Beaver,
Suite 128, Troy, Michigan 48084, or at such other place or to such other party
as Holder may from time to time designate in writing, the principal sum of One
Million Three Hundred Fifty Thousand and 00/100 Dollars (U.S. $1,350,000.00) in
lawful currency of the United States.
This Note evidences a payment to be made to the Holder pursuant to the
Asset Purchase Agreement among Seller, Educational Medical, Inc. and HBC
Acquisition Corp., dated December 12, 1996, and providing for the purchase by
HBC Acquisition Corp. of certain assets of Seller (the "Agreement"). The terms
of the Agreement are incorporated into this Note, and this Note is the Second
Payment Promissory Note referred to in the Agreement, representing a portion of
the purchase price of the School Related Assets as defined in the Agreement.
The principal amount of this Note will be due (1) as provided in
Section 1(e) of the Agreement, or (2) September 30, 1997 (the earlier of the
dates referred to in the preceding two clauses is called the "Maturity Date").
All amounts owing pursuant to this Note and not paid upon the Maturity Date
shall bear interest at the highest rate of interest permitted by law until paid.
Maker for itself, its legal representatives, successors and assigns,
waives presentment for payment, demand, notice of dishonor or non-payment,
notice of default, notice of protest, and protest of this Note, and waives any
right to be released by reason of any extension of time or change in terms of
payment. Maker hereby consents to any number of extensions of time, and any and
all renewals, waivers, and modifications of this Note or any combination of the
foregoing that may be made or granted by Holder.
Maker agrees to pay immediately upon demand all reasonable costs and
expenses of Holder, including attorneys' fees, (i) if after default this Note be
placed in the hands of an attorney or attorneys for collection, or (ii) if
Holder finds it necessary or desirable upon default to secure the services of
one or more attorneys with regard to collection of this Note against Maker, or
for the protection of its rights under this Note. The term "attorneys' fees"
shall include attorneys' fees at trial and
<PAGE> 2
on appeal, and shall include attorneys' fees incurred in connection with
bankruptcy, conservatorship, receivership or any other proceeding.
EACH OF HOLDER AND MAKER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE THE RIGHT EITHER IT OR ITS SUCCESSORS OR ASSIGNS MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN EVIDENCED BY THIS NOTE AND ANY AGREEMENTS
CONTEMPLATED THEREBY TO BE EXECUTED IN CONJUNCTION THEREWITH, OR IN CONJUNCTION
WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE PARTIES.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Note on the date first above written.
EDUCATIONAL MEDICAL, INC.,
a Delaware corporation
By: /s/ Morris C. Brown
-----------------------------------
Authorized Signatory
HBC ACQUISITION CORP.,
a Delaware corporation
By: /s/ Morris C. Brown
-----------------------------------
Authorized Signatory
2
<PAGE> 1
EXHIBIT 10.3
PLEDGE AGREEMENT
AGREEMENT, dated as of December 31, 1996 between EDUCATIONAL MEDICAL,
INC., a Delaware corporation (the "Pledgor"), O/E LEARNING, INC., a Michigan
corporation (the "Pledgee") and HBC ACQUISITION CORP., a Delaware corporation
(the "Issuer").
PRELIMINARY STATEMENT
The Pledgor is the owner of all of the issued and outstanding common
stock, par value $.01 per share (the "Pledged Securities"), of the Issuer.
The Issuer and the Pledgor have jointly and severally executed and
delivered to Pledgee their promissory Note in the principal amount of $1,350,000
(the "Second Payment Note"), a copy of which is attached as Exhibit 1 to this
Pledge Agreement. The Pledgor's obligations with respect to the payment of the
second Payment Note (the "Secured Obligations") are to be secured by the Pledged
Collateral, as defined in Section 1.
In consideration of the premises and of the mutual covenants herein
contained, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. Pledge. As security for the due and punctual payment and performance
of the payment of the Secured Obligations, and this Agreement, the Pledgor
hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto
the Pledgee, and hereby grants to the Pledgee a security interest in, the
following:
(a) the Pledged Securities and the certificates representing
the Pledged Securities, and all cash, proceeds, securities, dividends and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Securities; and
(b) all securities hereafter delivered or issued in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such securities, together with the
interest coupons (if any) attached thereto, and all cash, proceeds, securities,
interest, dividends and other property at any time and from time to time
received or otherwise distributed in respect of or in exchange for any or all
thereof (all such Pledged Securities, certificates, interest coupons, cash,
proceeds, securities, interest, dividends and other property being herein
collectively called the "Pledged Collateral");
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
titles, interests, privileges and preferences appertaining or incidental
thereto, unto the Pledgee, its successors and assigns, forever, subject, however
to the terms, covenants and conditions hereinafter set forth.
2. Transfer to Escrow Agent. The original certificates representing all
Pledged Collateral shall be held on behalf of Pledgee by Greenberg, Traurig,
Hoffman, Lipoff, Rosen & Quentel, P.A., 777 South Flagler Drive, Suite 310 East,
West Palm Beach, Florida 33416 (the "Escrow Agent"). The Pledgor shall deliver
to the Escrow Agent all original certificates (the "Original Certificates")
representing the
<PAGE> 2
Pledged Collateral issued in the name of the Pledgor, endorsed or assigned in
blank in favor of the Pledgee, and subject only to customary restrictions on
transferability provided for in the Securities Act of 1933 and applicable
related state laws and regulations. All of the Pledged Securities represented
by such certificate(s) are validly issued, duly paid and non-assessable. The
Pledgee may, upon request to the Escrow Agent and delivery by the Escrow Agent
of the appropriate Pledged Collateral to the Issuer, exchange the certificates
representing the Pledged Collateral for certificates of smaller or larger
denominations for any purpose consistent with the terms of this Pledge
Agreement.
3. Voting Rights; Dividends. So long as there is no failure to make
due and punctual payment to the Pledgee in accordance with the terms of the
Secured Obligations nor any other continuing event which would constitute an
event of default under this Agreement (an "Event of Default"):
(a) The Pledgor shall be entitled to exercise any and all
voting and/or consensual rights and powers relating or pertaining to the Pledged
Collateral or any part thereof.
(b) The Pledgor shall be entitled to receive and retain any
and all ordinary cash dividends and interest payable on the Pledged Collateral,
but any and all stock and/or liquidating dividends, distributions in property,
returns of capital or other distributions made on or in respect of the Pledged
Collateral, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of an Issuer or received in
exchange for Pledged Collateral or any part thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which the
Issuer may be a party or otherwise, and any and all cash and other property
received in payment of the principal of or in redemption of or in exchange for
any Pledged Collateral (either at maturity, upon call for redemption or
otherwise), shall be and become part of the collateral pledged by the Pledgor
hereunder and, if received by the Pledgor, shall be received in trust for the
benefit of the Pledgee or its assigns or the holder of any subsequent perfected
lien as provided in the addendum to this Pledge Agreement and shall forthwith be
delivered to the Escrow Agent (accompanied by proper instruments of assignment
and/or stock and/or bond powers executed by the Pledgor in accordance with the
Pledgee's instructions) to be held as Pledged Collateral subject to the terms of
this Pledge Agreement.
(c) The Pledgee shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies, powers of attorney,
dividend orders, interest coupons and other instruments as the Pledgor may
request for the purpose of enabling the Pledgor to exercise the voting and/or
consensual rights and powers which it is entitled to exercise pursuant to
subparagraph (a) above and/or to receive the dividends and/or interest payments
which it is authorized to receive and retain pursuant to subparagraph (b) above.
(d) Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting and/or consensual
rights and powers which it is entitled to exercise pursuant to Section 3(a)
hereof and/or to receive the dividends and interest payments which it is
authorized to receive and retain pursuant to Section 3(b) hereof shall cease,
and all such rights shall thereupon become vested in the Pledgee who shall have
the sole and exclusive right and authority to exercise such voting and/or
consensual rights and powers and/or to receive and retain the dividends and/or
interest payments which the Pledgor would otherwise be authorized to retain
pursuant to Section 3(b) hereof. Any and all money and other property paid over
to or received by the Pledgee pursuant to the provisions of this paragraph (d)
or pursuant to the exercise by Pledgee of the voting and/or consensual rights
and powers shall be retained by the Pledgee as additional collateral hereunder
and be applied in accordance with the provisions of this Pledge Agreement.
4. Events of Default. The occurrence of any one or more of the
following shall constitute an
-2-
<PAGE> 3
Event of Default:
(a) if the Makers shall default in making any payment with
respect to the Secured Obligations; or
(b) if Pledgor shall become bankrupt or insolvent, or file any
petition for reorganization or relief from creditors under any applicable law of
any jurisdiction, or make any general assignment for the benefit of creditors,
and in either event
(c) such default or event shall continue for 10 days after
the giving of written notice to the Pledgee.
5. Remedies upon Default. If any Event of Default shall have occurred
and be continuing, then, in addition to exercising any rights and remedies as a
secured party under the Uniform Commercial Code in effect in Maryland, the
Pledgee may, at its option, do any one or more of the following without being
required to give any notice to the Pledgor:
(a) apply the cash (if any) then held by it as collateral
hereunder, first, to the payment of all costs of collection (including
attorneys' fees) incurred in enforcing Pledgee's rights under the Second Payment
Note and this Agreement; second to the payment of interest accrued and unpaid on
the Second Payment Note to and including the date of such application, third to
the payment or prepayment of principal of the Second Payment Note, and fourth,
to the payment of all other amounts then owing to the Pledgee under the terms of
the Second Payment Note and then otherwise pursuant to this Pledge Agreement,
and
(b) sell the Pledged Collateral, or any part thereof, at any
public or private sale or at any broker's board or in any securities exchange,
for cash, upon credit or for future delivery, as the Pledgee shall deem
appropriate. The Pledgee shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to persons
who will represent and agree that they are purchasing the Pledged Collateral for
their own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Pledgee shall have the right
to assign, transfer and deliver to the purchaser or purchasers thereof the
Pledged Collateral so sold, free and clear from any claims or rights of Pledgor.
Further, it shall be deemed commercially reasonable for the Pledgee to impose
sufficient conditions on any such sale so as to preclude the necessity of
registration of the Pledged Collateral under the Securities Act of 1933, as
amended. Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of the Pledgor, and the
Pledgor hereby waives (to the extent permitted by law) all rights of redemption,
stay and/or appraisal which he now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. The Pledgee
shall give the Pledgor at least 30 days' written notice in the manner specified
for notices under this Agreement of the Pledgee's intention to make any such
public or private sale or sales at any broker's board or on any such securities
exchange, and the Pledgor agrees that such notice of sale will be commercially
reasonable notice to it. Such notice, in case of public sale, shall state the
time and place fixed for such sale, and, in the case of sale at a broker's board
or exchange at which such sale is to be made, the day on which the Pledged
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places, as the Pledgee may fix in
the notice of such sale. At any such sale, the Pledged Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Pledgee may (in its sole and absolute discretion) determine and
the Pledgee or other holder of the Secured Obligations may bid (which bid may be
in whole or in part, in the form of cancellation of indebtedness)
-3-
<PAGE> 4
for and purchase for the account of the Pledgee or other holder of the any
Secured Obligation the whole or any part of the Pledged Collateral. If the
proceeds of the Pledged Collateral are insufficient to satisfy Pledgor's
obligations under the Second Payment Note and this Agreement, Pledgor shall
remain liable for any deficiency. The Pledgee shall not be obligated to make any
sale of Pledged Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of Pledged Collateral may have been given. The Pledgee
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case sale of all or any part of
the Pledged Collateral is made on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Pledgee until the sale price is paid
by the purchaser or purchasers thereof, but neither the Pledgee nor any other
holder of the Secured Obligations or the assignee of any of the Pledgee's
rights, shall incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Pledged Collateral so sold and, in the case of
such failure, such Pledged Collateral may be sold again upon like notice. As an
alternative to exercising the power of sale herein conferred upon it, the
Pledgee may proceed by a suit or suits at law or in equity to foreclose this
Pledge Agreement and to sell the Pledged Collateral, or any portion thereof,
pursuant to a judgment or decree of a court or courts of competent jurisdiction;
and
(c) purchase the Pledged Collateral or any part thereof at
any public or private sale.
6. Application of Proceeds of Sale. The proceeds of sale of Pledged
Collateral sold pursuant to Section 5 (c) hereof shall be applied by the
Pledgee as follows:
First: in the manner provided in paragraph (a) of Section
hereof; and
Second: the balance (if any) of such proceeds shall be paid
to the Pledgor, its successors or assigns in proportion to their ownership of
the Pledged Collateral, or as a court of competent jurisdiction may direct.
7. Extension or Modification of the Second Payment Note. The Pledged
Collateral pledged hereunder secures the payment and performance of all of the
indebtedness of the Pledgor with respect to the Secured Obligations and the
Pledgor agrees that the Second Payment Note may be extended or otherwise
modified in accordance with its terms without affecting this Pledge Agreement or
the obligations of Pledgor hereunder, which shall continue in full force and
effect until the Secured Obligations shall have been fully paid and performed.
8. Authority of Pledgee. The Pledgee shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to the Pledgee
by the terms hereof, together with such powers as are reasonably incidental
thereto. The Pledgee may execute any of its duties hereunder by or through
agents or employees and shall be entitled to retain counsel and to act in
reliance upon the advice of such counsel (whether written or oral) concerning
all matters pertaining to its duties hereunder. Neither the Pledgee, nor any
director, officer or employee of the Pledgee, shall be liable for any action
taken or omitted to be taken by it or them hereunder in connection herewith,
except for its or their own gross negligence or willful misconduct. The Pledgor
hereby agrees to reimburse the Pledgee, on demand, for all expenses incurred by
the Pledgee in connection with the administration and enforcement of this Pledge
Agreement (including expenses incurred by the Escrow Agent or any subagent
employed by the Pledgee) and agrees to indemnify and hold harmless the Pledgee
and/or any such subagent against any and all liability incurred by the Pledgee
(or such subagent hereunder or in connection herewith), unless such liability
shall be due to willful misconduct or gross negligence on the part of the
Pledgee or such subagent.
-4-
<PAGE> 5
9. Pledgee Appointed Attorney in Fact. The Pledgor hereby appoints the
Pledgee the Pledgor's attorney-in-fact (any proxy with full power of
substitution to vote and otherwise act following an Event of Default) for the
purpose of carrying out the provisions of this Pledge Agreement and, upon the
occurrence of any Event of Default, taking any action and executing any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, upon an Event of Default, the
Pledgee shall have the right and power to receive, endorse and collect all
checks and other orders for the payment of money made payable to the Pledgor
representing any dividend, interest payment or other distribution payable or
distributable in respect of the Pledged Collateral or any part thereof and to
settle or compromise any claims relating thereto and to give full discharge for
the same.
10. Representations, Warranties and Agreements of Pledgor. To induce
Pledgee to accept the Second Payment Note, Pledgor represents and warrants to,
and agrees with, Pledgee, that:
(a) it owns the Pledged Securities and by the execution and
delivery of this Agreement and delivery of the Pledged Collateral it has created
is a first priority lien granted in favor of the Pledgee with respect to such
Pledged Collateral; and
(b) this Agreement is the valid and binding obligation of
Pledgor, enforceable in accordance with its terms; and
(c) so long as this Agreement is in effect, not to sell
substantially of its assets without the prior written consent of Pledgee.
11. No Waiver; Cumulative Remedies. No failure on the part of the
Pledgee to exercise, and no delay in exercising any right, power, privilege or
remedy hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power, privilege or remedy of the Pledgee
preclude any other or further exercise thereof or the exercise of any other
right, power, privilege or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided herein or by law.
12. Termination. This Pledge Agreement shall terminate when all
indebtedness secured hereby has been fully paid and performed, at which time
the Pledgee shall reassign and redeliver (or cause to be reassigned and
redelivered) to the Pledgor, or to such person or persons as the Pledgor shall
designate, such of the Pledged Collateral (if any) as shall not have been sold
or otherwise applied by the Pledgee pursuant to the terms hereof and shall
still be held hereunder, together with appropriate instruments of reassignment
and release. Any such reassignment shall be without recourse against or express
or implied representation or warranty by the Pledgee and at the expense of the
Pledgor.
13. Assignability. The Pledgee may assign, in whole or in part, any
or all of its rights, title and interests provided for in this Pledge
Agreement, to any holder of the Secured Obligations or portion thereof.
14. Terms Relating to Escrow Agent.
(a) Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.
shall initially act as Escrow Agent under this Agreement. The Escrow Agent shall
acknowledge its receipt of the original certificate(s) representing the Pledged
Securities by executing this Agreement. Pledgor shall also deliver to the Escrow
Agent any and all original certificates, funds or documents as may hereafter
become part of the Pledged Collateral. The possession of the original
certificates and other documents relating to
-5-
<PAGE> 6
the Pledged Collateral shall be deemed to constitute the Pledgee's possession
thereof in order to perfect Pledgee's security interest in the Pledged
Collateral.
(b) The Escrow Agent shall hold all certificates, funds and
documents representing the Pledged Collateral (collectively, the "Instruments")
subject to the following terms and conditions:
(i) If the Pledgee at any time instructs the Escrow
Agent to exchange any certificates representing any securities included
in the Pledged Collateral to change the denominations of such
certificates, the Escrow Agent shall comply with such request promptly
by so exchanging certificates directly with the Issuer. The Escrow
Agent shall give Pledgor and the holder of any subsequent perfected
lien as provided in the addendum to this Pledge Agreement notice of any
such action within 10 days after it is completed.
(ii)Either Pledgor or Pledgee may give the
Escrow Agent a notice requesting the Escrow Agent to make any delivery
or take any action with respect to any Instruments that is proposed to be taken
pursuant to this Agreement. If the notice describing any such request is
executed by both the Pledgor and the Pledgee, the Escrow Agent shall promptly
comply with the request.
If the notice is given by Pledgor or Pledgee, and is not signed by
both, the Escrow Agent shall promptly forward by hand or overnight delivery a
copy of such notice to the party that did not sign it. Thereafter, the Escrow
Agent shall refrain from taking any action with respect to such request for at
least 5 business days, or until the other party authorizes the Escrow Agent in
writing to comply with such request. If the other party fails to deliver written
notice of objection to the Escrow Agent within such 5-day period, the Escrow
Agent shall be fully protected in complying with such request.
(c) In order to induce the Escrow Agent to act under this
Agreement, the Pledgor and the Pledgee jointly and severally agree as follows:
(i) The Escrow Agent shall not in any way be bound or
affected by any notice or modification or cancellation of this
Agreement unless in writing, signed by all parties hereto, nor shall
the Escrow Agent be bound by any modification hereof unless the same
shall be satisfactory to the Escrow Agent. The Escrow Agent shall be
entitled to rely upon any judgment, certification, demand or other
writing (including but not limited to any instructions given to it
under (b), above) without being required to determine the authenticity
or the correctness of any fact stated therein, the propriety of
validity of the service thereof, or the jurisdiction of the court
issuing such judgment or order.
(ii) The Escrow Agent may act in reliance upon any
document, instrument or signature believed by it to be genuine, and the
Escrow Agent may assume that any person purporting to give any notice
or instructions in accordance with the provisions hereof has been duly
authorized to do so.
(iii) The Escrow Agent may act relative hereto in
reliance upon advice of counsel in reference to any matter(s)
connection herewith, and shall not be liable for any mistake of fact or
error of judgment, or for any acts or omissions of any kind, unless
caused by the Escrow Agent's willful misconduct or gross negligence.
The Escrow Agent shall be entitled to consult with its counsel, which
shall include any attorney employed by it, and the Escrow Agent shall
not be liable for any action taken, suffered or omitted by it in
accordance with the advice (whether written or oral) of such counsel.
-6-
<PAGE> 7
(iv) This Agreement sets forth exclusively the Escrow
Agent's duties with respect to any and all matters pertinent hereto.
The Escrow Agent shall not refer to, and shall not be bound by, the
provisions of any other agreement.
(v) The Escrow Agent may at any time resign hereunder
by giving written notice of its resignation to all parties hereto at
least thirty (30) days prior to the date specified for such resignation
to take effect, and upon the effective date of such resignation, all
cash, documents and all other property then held by the Escrow Agent
hereunder shall be delivered by it to such persons as may be designated
in writing by all parties hereto, whereupon all its prospective
obligations as Escrow Agent hereunder shall cease and terminate. The
Escrow Agent's sole responsibility thereafter shall be to keep safely
all property then held by it and to deliver same to a person designated
by all parties hereto or in accordance with the directions of a final
order or judgment of a court of competent jurisdiction. In addition,
the Escrow Agent shall be discharged of its prospective duties and
obligations hereunder upon its interpleading in a court of competent
jurisdiction all of the funds and property then held by it hereunder.
All parties hereto hereby submit to the personal jurisdiction of said
court (but solely for the purpose of implementing this Agreement) and
waive all rights to contest said jurisdiction. However, the Escrow
Agent's resignation and/or interpleading of the Property shall not in
any manner affect or impair any of its obligations under this
Agreement.
(vi) Pledgor and Pledgee shall be jointly and
severally obligated to reimburse the Escrow Agent for all its fees,
costs and expenses in connection herewith, including reasonable counsel
fees, and to indemnify it and hold it harmless against any claim
asserted against it or any liability, loss or damage incurred by it in
connection herewith.
(vii) Nothing herein contained shall be deemed to
obligate the Escrow Agent to deliver any securities, cash, instruments,
documents or any other property referred to herein, unless the same
shall have first been received by the Escrow Agent pursuant to this
Agreement.
(viii) Pledgee acknowledges that the Escrow Agent is
general counsel for the Pledgor, and for its parent corporation,
Educational Medical, Inc. ("EMI"), and agrees that no action taken by
the Escrow Agent under this Agreement shall affect or impair the right
of the Escrow Agent to represent the Pledgor and/or EMI in any matter,
including an interpleader action pursuant to this Agreement.
15. Miscellaneous. This Agreement shall be binding on and inure to the
benefit of the respective parties hereto and their successors and assigns. This
Agreement may be executed simultaneously in counterparts, each of which shall be
deemed an original, but both of which together shall constitute one and the same
instrument. This Agreement represents the entire understanding of the parties
hereto, and supersedes any and all other prior agreements between the parties.
The terms and provisions of this Agreement cannot be terminated or modified or
amended except in writing and signed by the party against whom enforcement is
sought. The provisions of this Agreement are severable, and any invalidity,
unenforceability or illegality in any provision or provisions hereof shall not
affect the remaining provisions of this Agreement. In any suit, action or
proceeding arising out of or in connection with this Agreement, the prevailing
party shall be entitled to an award of the amount of costs and reasonable
attorneys' fees, including costs fees on one or more appeals and in bankruptcy
proceedings.
All notices required or allowed hereunder shall be in writing and shall
be deemed given as provided for in the Asset Purchase Agreement dated December
12, 1996 (the "Asset Purchase
-7-
<PAGE> 8
Agreement") pursuant to which the Second Payment Note has been issued, at the
address written in the first paragraph hereof if not otherwise provided for in
the Asset Purchase Agreement, or such other address as is most recently noticed
for such party as aforesaid.
IN WITNESS WHEREOF, the Pledgee has caused this Pledge Agreement to be
duly executed and delivered by its officer thereunto duly authorized, and the
Pledgor has duly executed and delivered this Agreement, as of the date first
above written.
In the Presence of: EDUCATIONAL MEDICAL, INC., Delaware
corporation
/s/ Wendy Riggs
- -----------------------
/s/ Claudia P. Hock By: /s/ Morris C. Brown
- ----------------------- ------------------------------------
Authorized Signatory
HBC ACQUISITION CORP., a Delaware
corporation
/s/ Wendy Riggs
- -----------------------
/s/ Claudia P. Hock
- -----------------------
By: /s/ Morris C. Brown
------------------------------------
Authorized Signatory
O/E LEARNING, INC., a Michigan corporation
/s/ Frank J. Vandeputte
- -----------------------
/s/ William C. Zierau By: /s/ Thomas A. Doonan
- ----------------------- ------------------------------------
Authorized Signatory
ACCEPTANCE OF ESCROW AGENT
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.
acknowledges receipt of the foregoing Agreement and the Original Certificates,
and agrees to act as Escrow Agent under its terms.
By: /s/ Bridget Ann Berry
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Authorized Signatory
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EXHIBIT 10.4
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT made as of December 31, 1996 between O/E LEARNING,
INC., a Michigan corporation ("Seller"), with a registered office at 3290 West
Big Beaver, Suite 128, Troy, Michigan 48084 and HBC ACQUISITION CORP., a
Delaware corporation ("Buyer"), with a registered office at 1327 Northmeadow
Parkway, Suite 132, Roswell, Maryland 30076.
Preliminary Statement
Seller, Buyer, and Educational Medical, Inc., which is the parent
corporation of the Buyer, have entered into an Asset Purchase Agreement dated as
of December 12, 1996 (the "Asset Purchase Agreement") pursuant to which, among
other things, Buyer has agreed to assume certain stated liabilities and
obligations of Seller relating to the operation of the School. All of the
capitalized terms in this Assumption Agreement shall have the meaning given to
them in the Asset Purchase Agreement unless the context clearly demands
otherwise.
NOW THEREFORE, in consideration of the agreements set forth herein and
in the Asset Purchase Agreement, and other good and valuable consideration, the
receipt and adequacy of which are hereby conclusively acknowledged by Buyer, and
to induce Seller to consummate the transactions contemplated by the Asset
Purchase Agreement, and intending to be legally bound hereby Buyer agrees as
follows:
1. Assumption Obligation. Buyer hereby assumes and undertakes to
perform, pay, satisfy, and discharge each of the Stated Liabilities.
The Buyer shall perform, pay, satisfy, and discharge, as the
case may be, each of the Stated Liabilities at or before such time as payment or
performance thereunder is due.
2. Right to Contest. Buyer may contest, in good faith, its
obligation to perform or pay Stated Liabilities in the event and to the extent
Buyer reasonably believes that such payment or performance is not due to the
creditor or other party claiming entitlement to payment or performance. In the
event that Buyer contests its obligation to pay or perform any of the Stated
Liabilities, (a) Buyer shall promptly notify Seller of the Stated Liability
being contested, and the reasons therefor, and (b) regardless of whether such
notice is given, Buyer shall, at its cost and expense, protect, defend,
indemnify and hold harmless Seller from, against and in respect of any cost,
expense (including reasonable attorneys' fees and costs), liability, obligation
or claim asserted against, incurred by or imposed upon Seller arising from, or
in connection with or related to Buyer's contest of any Stated Liabilities.
3. Costs of Enforcement. In connection with any action arising
from or in connection with the enforcement of this Agreement, the prevailing
party shall be
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entitled to an award of its expenses, including reasonable attorneys' fees and
disbursements, incurred or paid in any proceeding which may be instituted.
4. Jury Trial Waiver. BUYER KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
TRANSACTIONS OR OBLIGATIONS CONTEMPLATED IN THIS AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY PARTY RELATING TO THIS AGREEMENT. BUYER CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF SELLER, NOR SELLER'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT IT WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER
OF RIGHT TO JURY TRIAL PROVISION.
5. Modifications; Waivers Remedies Cumulative. No amendment,
modification, waiver or discharge of this Agreement, or any provision hereof,
shall be valid or effective unless in writing and signed by Seller and Buyer. No
delay or omission of Seller to exercise any right, power or remedy accruing
under or pursuant to this Agreement, at law, in equity, or otherwise, shall
exhaust or impair any right, power or remedy or shall be construed to waive any
such right, power or remedy. Every right, power and remedy of Seller created
under this Agreement may be exercised from time to time and as often as may be
deemed expedient by Seller in its sole discretion. No right, power or remedy
conferred upon or reserved to Seller is exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
under this Agreement or under any other instrument executed in connection
herewith (including, without limitation, the Asset Purchase Agreement), or now
or hereafter existing at law, in equity, or otherwise. No obligation of Buyer
under this Agreement shall be deemed waived by any course or pattern of conduct
by any party.
6. Severability. The provisions of this Agreement shall be
severable. In the event that a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, and is not
reformed by such court, such invalid or unenforceable provision shall not
affect or impair the validity or enforceability of any other provision of this
Agreement and this Agreement shall be construed as if the invalid or
unenforceable provision had not been included in this Agreement.
7. Captions. The captions used in this Agreement are for
convenience of reference only and shall not be construed to extend, limit or
modify the scope of meaning of the respective paragraphs to which they relate.
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8. Enforceability; Successors and Assigns. This Agreement shall be
binding upon Buyer and Buyer's successors and assigns and shall inure to the
benefit of Seller and its successors and assigns.
IN WITNESS WHEREOF, Buyer has executed and delivered this Agreement on
the date first above written.
HBC ACQUISITION CORP., a Delaware
corporation
By: /s/ Morris C. Brown
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Authorized Signatory
Educational Medical, Inc., a Delaware corporation, joins in this Agreement for
the purpose of confirming that it is jointly and severally obligated with HBC
Acquisition Corp. pursuant to the terms of this Assumption Agreement.
EDUCATIONAL MEDICAL, INC., a
Delaware corporation
By: /s/ Morris C. Brown
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Authorized Signatory
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EXHIBIT 10.5
BILL OF SALE
O/E LEARNING, INC., a Michigan corporation ("Seller"), with a
registered office at 3290 West Big Beaver, Suite 128, Troy, Michigan 48084, in
consideration of good and valuable consideration, the receipt and sufficiency of
which are acknowledged, paid to it by HBC ACQUISITION CORP., a Delaware
corporation ("Buyer"), with a registered office at 1327 Northmeadow Parkway,
Suite 132, Roswell, Georgia, 33076, hereby sells and delivers to the Buyer all
of its School Related Assets, as defined in the Asset Purchase Agreement between
Seller, Educational Medical, Inc. and Buyer dated December 12, 1996 (the "Asset
Purchase Agreement"), to which a form of this Bill of Sale is attached as an
Exhibit, including without limitation all of their right, title and interest to
the personal property, tangible or intangible, listed or described on Exhibit 7
to the Asset Purchase Agreement, which is made a part of this Bill of Sale by
reference.
IN WITNESS WHEREOF, the Seller has caused this document to be executed
this 31st day of December, 1996.
WITNESSES: O/E LEARNING, INC., a Michigan
corporation
/s/ Frank M. Vandeputte
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/s/ William C. Zierau By: /s/ Thomas A. Doonan
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Authorized Signatory
