-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JfDcfBM+qbRLq10G4L6x0+kZgpJxws/BOQzXGG08HpIaqbjLAe7lnEcoeQZB8AN/ ZcMyBdGWcDZkxK4Z7HZoeg== 0000950147-01-500547.txt : 20010314 0000950147-01-500547.hdr.sgml : 20010314 ACCESSION NUMBER: 0000950147-01-500547 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20010302 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TESSERACT GROUP INC CENTRAL INDEX KEY: 0000873601 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 411581297 STATE OF INCORPORATION: MN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11111 FILM NUMBER: 1567437 BUSINESS ADDRESS: STREET 1: 3820 E BAY RD STREET 2: NO 2 CITY: PHOENIX STATE: AZ ZIP: 85044 BUSINESS PHONE: 4807062500 MAIL ADDRESS: STREET 1: 3820 E BAY RAOD CITY: PHOENIX STATE: AZ ZIP: 85044 FORMER COMPANY: FORMER CONFORMED NAME: EDUCATION ALTERNATIVES INC/MN DATE OF NAME CHANGE: 19930328 8-K 1 e6487.txt CURRENT REPORT DATED 3/2/01 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) March 2, 2001 THE TESSERACT GROUP, INC. (Exact name of registrant as specified in its charter) Minnesota 1-11111 41-1581297 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 4515 E. Muirwood Drive Phoenix, Arizona 85048 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (480) 940-6300 (Former Name or Former Address, if Changed Since Last Report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. SALE OF PARADISE LANE SCHOOL On March 2, 2001, The TesseracT Group, Inc. ("we" or us") sold certain of our assets to Gan Yeladeem, an Arizona non-profit corporation ("GY"). We made this sale pursuant to the terms of a Purchase and Sale Agreement, dated February 6, 2001, by and between us and GY. In this transaction, we sold certain of our assets including equipment, personal property, records, files and goodwill related to the property commonly known as the Paradise Lane School in Phoenix, Arizona. In consideration for the sale of these assets we received $250,000 with $150,000 paid at closing and the balance evidenced by a promissory note secured by the purchased assets. ITEM 5. OTHER EVENTS As previously disclosed, The TesseracT Group, Inc. and its wholly owned subsidiary, Sunrise Educational Services, Inc. ("Sunrise") filed for reorganization under Chapter 11 of the United States Bankruptcy Code on October 6, 2000. Monthly Operating Reports for January 2001 as filed with the United States Bankruptcy Court for the District of Arizona for The TesseracT Group, Inc. and Sunrise are attached hereto as Exhibits 99.1 and 99.2. Effective March 15, 2001, our Chief Executive Officer, Dr. Lucian Spataro resigned. Dr. Spataro will remain on the company's Board of Directors. Dr. Spataro resigned to pursue other interests. The press release related to Dr. Spataro's resignation is attached hereto as Exhibit 99.3. ITEM 7. EXHIBITS EXHIBIT NO. ----------- 10.1 Purchase and Sale Agreement between the TesseracT Group, Inc. and Gan Yeladeem 99.1 Monthly Operating Report of The TesseracT Group, Inc. for January 2000 99.2 Monthly Operating Report of Sunrise for January 2000 99.3 Press Release regarding Chief Executive Officer resignation dated March 5, 2001 2 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. THE TESSERACT GROUP, INC. Dated: March 13, 2001 By: /s/ Douglass E. Snell --------------------------------- Douglass E. Snell Controller 3 EX-10.1 2 ex10_1.txt PURCHASE & SALE AGREEMENT DATED 2/6/01 Exhibit 10.1 PURCHASE AND SALE AGREEMENT BETWEEN THE TESSERACT GROUP, INC., AN ARIZONA CORPORATION AND GAN YELADEEM LEARNING CENTER, AN ARIZONA NON-PROFIT CORPORATION FEBRUARY 6, 2001 TABLE OF CONTENTS PAGE ---- ARTICLE I - DEFINITIONS.................................................... 1 1.1 BUSINESS............................................................ 1 1.2 CHARTER OF SELLER................................................... 2 1.3 CLAIM............................................................... 2 1.4 CLOSING............................................................. 2 1.5 CLOSING DATE........................................................ 2 1.6 COURT............................................................... 2 1.7 LANDLORD............................................................ 2 1.8 EQUIPMENT........................................................... 2 1.9 LEASE............................................................... 2 1.10 PURCHASED ASSETS................................................... 2 1.11 REAL PROPERTY PURCHASE AGREEMENT................................... 2 1.12 REAL PROPERTY...................................................... 2 1.13 SECTION 363 ORDER.................................................. 2 1.14 SECTION 365 ORDER.................................................. 3 1.15 SHORT TERM LEASE................................................... 3 1.16 SNOWFLAKE.......................................................... ARTICLE II - PURCHASE AND SALE............................................. 3 2.1 ASSETS TO BE SOLD................................................... 3 2.1.1 THE PURCHASED ASSETS............................................ 3 2.1.2 RECORDS, FILES AND RELATED MATERIALS............................ 3 2.1.3 TELEPHONE AND FACSIMILE NUMBERS................................. 3 2.2 EXCLUDED ASSETS..................................................... 3 2.2.1 CONSIDERATION................................................... 3 2.2.2 CASH, CASH EQUIVALENTS AND ACCOUNTS RECEIVABLE.................. 3 2.2.3 CORPORATE FRANCHISE............................................. 3 2.2.4 LICENSES; PERMITS............................................... 4 2.2.5 THE LEASE....................................................... 4 2.3 SELLER'S BUSINESS................................................... 4 ARTICLE III - ASSUMPTION OF LIABILITIES.................................... 4 ARTICLE IV - TERMS OF PAYMENT.............................................. 4 4.1 PAYMENT DUE AT CLOSING.............................................. 4 4.2 DEPOSIT............................................................. 4 4.3 DETERMINATION....................................................... 5 ARTICLE V - REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER........... 5 5.1 CORPORATE STATUS.................................................... 5 5.2 CORPORATE AUTHORITY................................................. 5 5.3 TITLE TO PURCHASED ASSETS........................................... 5 5.4 DEPOSITS............................................................ 5 ARTICLE VI - REPRESENTATIONS, WARRANTIES, AND COVENANTS OF BUYER........... 6 6.1 ORGANIZATION........................................................ 6 6.2 AUTHORITY........................................................... 6 i 6.3 THE LEASE........................................................... 6 6.4 CONDITION OF ASSETS................................................. 6 ARTICLE VII - POST-CLOSING COVENANTS....................................... 6 7.1 THE LEASE........................................................... 6 7.2 TRANSITION.......................................................... 6 7.3 DEFINITION.......................................................... 6 7.4 EMPLOYEE SOLICITATIONS.............................................. 7 7.5 WORKERS' COMPENSATION............................................... 7 7.6 CERTIFICATE OF OCCUPANCY............................................ 7 ARTICLE VIII - INDEMNITIES................................................. 7 8.1 SELLER.............................................................. 7 8.2 BUYER............................................................... 7 ARTICLE IX - CLOSING....................................................... 7 9.1 CLOSING............................................................. 7 9.2 TIME IS OF THE ESSENCE.............................................. 8 ARTICLE X - PRORATIONS..................................................... 8 ARTICLE XI - CONDITIONS PRECEDENT TO BUYER'S DUTY TO CLOSE................. 8 11.1 CONTINUED TRUTH OF WARRANTIES...................................... 8 11.2 PERFORMANCE OF OBLIGATIONS......................................... 8 11.3 DELIVERY OF CLOSING DOCUMENTS...................................... 8 11.4 LITIGATION......................................................... 8 11.5 COURT ORDERS....................................................... 9 ARTICLE XII - CONDITIONS PRECEDENT TO SELLER'S DUTY TO CLOSE............... 9 12.1 CONTINUED TRUTH OF WARRANTIES...................................... 9 12.2 PERFORMANCE OF OBLIGATIONS......................................... 9 12.3 DELIVERY OF CLOSING DOCUMENTS...................................... 9 12.4 LITIGATION......................................................... 9 12.5 COURT ORDERS....................................................... 9 ARTICLE XIII - ITEMS TO BE DELIVERED AT CLOSING BY SELLER.................. 9 13.1 BILL OF SALE....................................................... 9 13.2 CERTIFIED RESOLUTION............................................... 9 13.3 REPRESENTATIONS AND WARRANTIES..................................... 9 13.4 THE SHORT TERM LEASE............................................... 9 ARTICLE XIV - ITEMS TO BE DELIVERED AT CLOSING BY BUYER.................... 10 14.1 CERTIFIED RESOLUTION............................................... 10 14.2 REPRESENTATIONS AND WARRANTIES..................................... 10 14.3 THE PURCHASE PRICE................................................. 10 14.4 THE NOTE........................................................... 10 14.5 THE SECURITY AGREEMENT............................................. 10 14.6 THE SHORT TERM LEASE............................................... 10 ARTICLE XV - MISCELLANEOUS................................................. 10 15.1 FURTHER ASSURANCES................................................. 10 15.2 NO OTHER AGREEMENTS................................................ 10 15.3 WAIVER............................................................. 10 ii 15.4 TERMINATION OF CONFIDENTIALITY AGREEMENT........................... 10 15.5 ACCESS TO REAL PROPERTY............................................ 11 15.6 NOTICES............................................................ 11 15.7 BROKER AND FINDERS................................................. 11 15.8 BOOKS AND RECORDS.................................................. 11 15.9 RISK OF LOSS....................................................... 12 15.10 THIRD PARTY BENEFICIARY........................................... 12 15.11 RELATIONSHIP OF PARTIES........................................... 12 15.12 CHOICE OF LAW..................................................... 12 15.13 PARAGRAPH HEADINGS................................................ 12 15.14 RULES OF INTERPRETATION........................................... 12 15.15 TIME IS OF THE ESSENCE............................................ 13 15.16 ATTORNEY FEES..................................................... 13 15.17 COUNTERPARTS; FACSIMILE SIGNATURES................................ 13 LIST OF EXHIBITS AND SCHEDULES Exhibit A Form of Promissory Note Exhibit B Form of Security Agreement Exhibit C Form of Short Term Lease Schedule 1.9 Equipment iii PURCHASE AND SALE AGREEMENT (PARADISE LANE SCHOOL) This PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into as of the ____ day of February, 2001, by and between THE TESSERACT GROUP, INC., a Minnesota corporation, in its corporate capacity and in its capacity as debtor and debtor-in-possession in its Chapter 11 case pending in the United States Bankruptcy Court for the District of Arizona ("Seller"), and GAN YELADEEM LEARNING CENTER, an Arizona non-profit corporation ("Buyer"). RECITALS A. Seller operates that certain charter school ("School") commonly known as the "Paradise Lane School" located at 3916 East Paradise Lane, Phoenix, Arizona. B. Seller has filed a voluntary petition for Chapter 11 relief ("Chapter 11 Case") under Title 11 of the United States Code ("Bankruptcy Code"). The Chapter 11 Case is pending before the United States Bankruptcy Court for the District of Arizona ("Bankruptcy Court"). C. Seller desires, subject to the approval by the Bankruptcy Court, to sell and Buyer desires to purchase certain assets and assume certain liabilities of Seller in connection with Seller's operations of the School on the terms and conditions set forth in this Agreement and in accordance with Section 363 and Section 365 of the Bankruptcy Code. D. Buyer has completed its due diligence of the School and all other matters addressed in this Agreement. E. The parties hereto acknowledge that: (i) they intend that the transaction contemplated under this Agreement be an asset purchase and not a sale of the stock of Seller; and (ii) Buyer is not buying the Business of Seller as defined in this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto agree as follows: ARTICLE I. DEFINITIONS For purposes of this Agreement, the following capitalized terms, when used in this Agreement, shall have the meanings assigned to them as follows: 1.1 BUSINESS. The term "Business" shall mean Seller's operations conducted under the names "TesseracT" or "The TesseracT Group, Inc.," or the trade name "TesseracT Charter School PPTO," at the School and at any other location within or outside the State of Arizona. 1 1.2 CHARTER OF SELLER. The term "Charter of Seller" shall mean that certain Charter Contract between Preschool Services, Inc. dba Sunray Charter School and the Snowflake Unified School District No. 5 of Navajo County, Arizona dated June 24, 1997. 1.3 CLAIM. The term "Claim" shall mean the term "claim" as it is defined under 11 U.S.C.ss.101(5). 1.4 CLOSING. The term "Closing" shall mean the completed exchange of: (i) Closing documents set forth in Articles XIV and XV below, together with the simultaneous conveyance by Seller to Buyer of the Purchased Assets; (ii) the payment by Buyer to Seller of the Purchase Price due under the terms of this Agreement; and (iii) the assumption by Buyer of the obligations which it has expressly agreed to assume hereunder. 1.5 CLOSING DATE. The term "Closing Date" shall mean the date on which the Closing occurs which shall not be later than March 15, 2001, unless such date is extended as mutually agreed upon in writing signed by both parties. 1.6 COURT. The term "Court" shall mean the United States Bankruptcy Court for the District of Arizona, which is the Court before which Seller presently is a Chapter 11 debtor. 1.7 LANDLORD. The term "Landlord" shall mean Education Property Investors, Inc., a Nevada corporation. 1.8 EQUIPMENT. The term "Equipment" shall mean all furniture, fixtures, office equipment, office supplies, computers, printers, and other tangible personal property owned by Seller as specifically set forth on SCHEDULE 1.9 attached hereto. 1.9 LEASE. The term "Lease" shall mean that certain Amended and Restated Lease dated June 9, 1998 by and between Seller, as lessee, and Landlord. 1.10 PURCHASED ASSETS. The term "Purchased Assets" shall mean the Equipment. 1.11 REAL PROPERTY PURCHASE AGREEMENT. The term "Real Property Purchase Agreement" shall mean the Agreement to Purchase and Sale dated August 2, 2000, by and between Buyer and Landlord (as amended). 1.12 REAL PROPERTY. The term "Real Property" shall mean the real property that is the subject of the Real Property Purchase Agreement which also is the real property on which the Seller operates the School. 1.13 SECTION 363 ORDER. The term "Section 363 Order" shall mean the order entered by the Court pursuant to Bankruptcy Code ss.363 approving Seller's sale of the Purchased Assets to Buyer free and clear of any and all liens, security interests, and adverse interests of any kind, the form of which shall be agreed to by the parties hereto. 2 1.14 SECTION 365 ORDER. The term "Section 365 Order" shall mean the Order entered by the Court pursuant to Bankruptcy Code ss.365(a) approving Seller's decision to reject the Lease as it relates to the Real Property effective as of when Buyer is the owner of the Real Property. 1.15 SHORT TERM LEASE. The "Short Term Lease" shall mean the Lease as modified by First Amendment to Lease, dated the date of Closing and in the form and substance attached hereto as EXHIBIT C, that leases the Real Property and the Purchased Assets to Seller until May 31, 2001. ARTICLE II. PURCHASE AND SALE 2.1 ASSETS TO BE SOLD. Subject to the terms and conditions of this Agreement, on the Closing Date, Seller agrees to sell, assign, transfer and convey the following assets to Buyer: 2.1.1 THE PURCHASED ASSETS. The Purchased Assets. 2.1.2 RECORDS, FILES AND RELATED MATERIALS. All records, files, invoices, student lists, accounting records, business records, student records (including, but not limited, special education student records), teacher records, operating data and other data of Seller relating solely to the School. 2.1.3 TELEPHONE AND FACSIMILE NUMBERS. All telephone and facsimile numbers currently used at the Real Property to the extent such are transferable at no additional cost to Seller. 2.2 EXCLUDED ASSETS. Notwithstanding Section 2.1 above, Seller shall not sell, transfer, assign, convey or deliver to Buyer, any asset not specifically addressed in Section 2.1 above, including but not limited to the following assets (collectively the "Excluded Assets"): 2.2.1 CONSIDERATION. The consideration delivered by Buyer to Seller pursuant to this Agreement. 2.2.2 CASH, CASH EQUIVALENTS AND ACCOUNTS RECEIVABLE. All cash, cash equivalents, and obligations by any third party to make payment to Buyer as of the Closing Date. 2.2.3 CORPORATE FRANCHISE. Seller's franchise to be a corporation, its certificate of incorporation, corporate seal, stock books, minute books and other corporate records having exclusively to do with the corporate organization and capitalization of Seller, the Charter. 2.2.4 LICENSES; PERMITS. All licenses, permits and approvals of Seller relating in any way to the School or the Business including, without limitation, the Charter. 3 2.2.5 THE LEASE. The Lease relating to the Real Property. 2.3 SELLER'S BUSINESS. The parties expressly acknowledge and agree that this Agreement is not entered into for the sale of the stock of Seller or the sale of Seller's Business. The Agreement addresses only those assets located on the School's premises, or used by Seller solely in connection with the School, and which are defined herein as the Purchased Assets. ARTICLE III. ASSUMPTION OF LIABILITIES Except as expressly set forth in this Agreement, Buyer does not by this Agreement, and will not be obligated to, assume any obligation, liability or duty of Seller whether incurred in connection with the Purchased Assets, or otherwise. ARTICLE IV. TERMS OF PAYMENT 4.1 PAYMENT DUE AT CLOSING. At Closing, Buyer shall pay to Seller an amount equal to Two Hundred and Fifty Thousand Dollars ($250,000) LESS the amount of the Deposit delivered by Buyer to Seller in accordance with Section 4.2 below, in the following manner: (a) Buyer shall pay Seller an amount equal to One Hundred Twenty-Five Thousand and No/100 Dollars ($125,000.00) in immediately available funds at Closing. (b) The balance of the Purchase Price shall be evidenced by Buyer delivering to Seller Buyer's promissory note (the "Note") dated the date of the Closing, in the principal amount of One Hundred Thousand and No/100 Dollars ($100,000.00) and conforming substantially in content with the form of promissory note attached hereto as EXHIBIT A. (c) The Note shall be secured by a first priority security interest pursuant to the terms of a security agreement (the "Security Agreement") on all of the Purchased Assets. At the Closing, Buyer shall deliver to Seller the Security Agreement, dated the date of the Closing and substantially conforming in content with the form of security agreement attached hereto as EXHIBIT B. 4.2 DEPOSIT. Contemporaneously with the execution of this Agreement, Buyer shall deliver and the Seller shall accept a cash deposit in the amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00) (the "Deposit"), which shall not be refundable to Buyer unless: (i) the transactions contemplated in this Agreement do not close due to Seller's failure to meet all of the conditions precedent set forth in Article XIV of this Agreement; (ii) if Buyer's transaction with Landlord to purchase the Real Property does not close, unless such failure to close is the result of a default by Buyer under the Real Property Purchase Agreement; or (iii) Seller otherwise refuses to close the 4 transactions contemplated in this Agreement. If the Closing does not occur on or before March 15, 2001, due to any event described in the immediately preceding (i), (ii) and (iii), and provided that Buyer has satisfied all of the conditions set forth in Article XV of this Agreement on or before March 15, 2001, then Seller shall immediately transfer the Deposit to Buyer. 4.3 DETERMINATION. At or prior to thirty (30) days after the Closing, Buyer and Seller shall mutually agree to an allocation of the Purchase Price among the Purchased Assets in a reasonable manner, and each party agrees to file all federal, state and local tax returns in conformity with such allocation. ARTICLE V. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER Seller hereby represents, warrants, and covenants to Buyer as follows, and the warranties, representations, and covenants contained in this Article or elsewhere in this Agreement shall be deemed to be made as of the Closing: 5.1 CORPORATE STATUS. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota and is qualified to do business in the State of Arizona. 5.2 CORPORATE AUTHORITY. Subject only to approval of the Court, Seller has full power and authority to execute and perform this Agreement and all corporate action necessary to confirm such authority has been duly and lawfully taken. Upon execution hereof, this Agreement shall be a valid, legally binding obligation of Seller, enforceable in accordance with its terms subject to approval by the Court. 5.3 TITLE TO PURCHASED ASSETS. Seller has good and marketable title to the Purchased Assets, and has full power and authority to transfer such title to Buyer subject only to approval by the Court. 5.4 DEPOSITS. Seller has no liability to parents of its students at the School for any prepaid tuition or deposit obligations. ARTICLE VI. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF BUYER Buyer hereby represents and warrants to Seller as follows and the warranties and representations contained in this Article or elsewhere in this Agreement shall be deemed to be made as of Closing: 6.1 ORGANIZATION. Buyer is a non-profit corporation duly organized, validly existing and in good standing under the laws of the State of Arizona. 5 6.2 AUTHORITY. Buyer has full power and authority to execute and perform this Agreement and all action necessary to confirm such authority has been duly and lawfully taken. Upon execution hereof, this shall be a valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms. 6.3 THE LEASE. Other than the Real Property Purchase Agreement whereby Buyer shall acquire fee title to the Real Property, Buyer has not entered into any agreement, written or otherwise, with Landlord relating to the Lease, including, but not limited to, any agreement to acquire any Claims which might presently exist, or arise in the future under the Lease. 6.4 CONDITION OF ASSETS. Buyer has fully examined the physical condition of the Purchased Assets, and hereby agrees to accept such property AS IS AND WHERE IS. NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IS MADE WITH RESPECT TO THE PURCHASED ASSETS. ARTICLE VII. POST-CLOSING COVENANTS 7.1 THE LEASE. Buyer shall not be entitled to, and shall not receive, any of the contractual rights provided to Landlord or Seller under the Lease, including, but not limited to, any right to assert any Claims that may arise under or relate to the Lease, irrespective of which person or entity contends that it has the right to asserts such Claims. 7.2 TRANSITION. Buyer and Seller will mutually cooperate with one another to provide for an orderly surrender of the Purchased Assets and Real Property by Seller to Buyer on May 31, 2001 (the "Transition Date") in accordance with the Short Term Lease. 7.3 DEFINITION. On or before the Transition Date, Seller shall provide Buyer with a complete list of all persons regularly employed on either a part-time or full-time basis by Seller in connection with the School within 10 days of receipt of Buyer's request. For purposes of this Article, the term "Employees" shall mean all persons on such list including those listed who may be curtailed and disabled employees and employees on leave of absence. 7.4 EMPLOYEE SOLICITATIONS. Buyer shall be entitled to reasonable access to all employees related to the School for purposes of interviewing these individuals; provided, however, that all such access shall be coordinated through the Chief Executive Officer of Seller. 7.5 WORKERS' COMPENSATION. Seller agrees to assume all responsibility for liability arising from workers' compensation claims, both medical and disability, which have been filed at or prior to the time of the Transition Date or which arose out of incidents that occurred prior to the Transition Date. Buyer shall be responsible for all claims which arise out of, or are based upon, incidents which occur subsequent to the Transition Date. 7.6 CERTIFICATE OF OCCUPANCY. Buyer acknowledges that a type E-1 certificate of occupancy has not been obtained for the building on the Real Property commonly referred to as Building #3 (the "Certificate"). Seller hereby 6 agrees to use its best efforts to obtain, prior to Closing, a third-party bid setting forth its good faith estimate of the total cost to obtain the Certificate. If Buyer elects after Closing to obtain the Certificate, Seller agrees to pay one-half of the cost of obtaining the Certificate; provided, however, the total cost to Seller shall not exceed Thirty Thousand and No/100 Dollars ($30,000.00). Any amounts in excess of Sixty Thousand and No/100 Dollars ($60,000.00) shall be paid entirely by Buyer. ARTICLE VIII. INDEMNITIES 8.1 SELLER. Seller agrees to hold harmless, indemnify and defend Buyer from and against any and all loss, claim, damage, liability or expense arising out of or occurring as the result of any breach by Seller of any of its covenants, representations or warranties hereunder. Such indemnification shall include any claims pertaining to events or actions occurring prior to the date of Closing. In no event shall the liability of Seller under this Section collectively exceed $10,000. 8.2 BUYER. Buyer agrees to hold harmless, indemnify and defend Seller from and against any and all loss, claim, damage, liability or expense arising out of or occurring in connection with any breach by Buyer of any of its covenants, representations or warranties hereunder. Such indemnification shall include any claims pertaining to events or actions occurring after the Transition Date. ARTICLE IX. CLOSING 9.1 CLOSING. Closing shall occur at the law offices of Bryan Cave LLP in Phoenix, Arizona, on a date that is not later than ten (10) business days after the Court enters the Section 363 Order and the Section 365 Order; provided, however, that the Closing must occur concurrently with the closing of the transaction pursuant to which Buyer is purchasing the Real Property from Landlord and by no later than March 15, 2001. 9.2 TIME IS OF THE ESSENCE. Time is of the essence for the Closing of this transaction and if such Closing does not occur as provided in Section 10.1 above, a new Closing Date may be set if, and only if, mutually agreed upon in a writing signed by both parties. If a new Closing Date is not so set, then neither Seller nor Buyer shall have any further obligation under this Agreement. ARTICLE X. PRORATIONS The following revenues, costs and expenses shall be prorated as of the Transition Date: 7 10.1 Personal property taxes and any other assessments related to the Purchased Assets; 10.2 Charges for utilities servicing the School, including, without limitation, charges or gas, electricity, water, sewer, cable television, and telephone services; and 10.3 Any other reasonable expenses approved in writing by Buyer and prepaid by Seller related to the operation of the School. The amount of any prorations shall be computed by Buyer with the assistance of Seller. On or before the Transition Date, Buyer shall pay to Seller or Seller shall pay to Buyer, as the case may be, an amount equal to the net proration so determined. ARTICLE XI. CONDITIONS PRECEDENT TO BUYER'S DUTY TO CLOSE Buyer shall have no duty to close, shall be entitled to a refund of the Deposit, and shall have no obligation hereunder, unless and until each and every one of the following conditions precedent have been fully and completely satisfied: 11.1 CONTINUED TRUTH OF WARRANTIES. All of the representations and warranties of Seller contained herein shall continue to be true and correct at Closing. 11.2 PERFORMANCE OF OBLIGATIONS. Seller shall have fully performed or tendered performance of each and every one of its obligations hereunder which by its terms is capable of performance before Closing. 11.3 DELIVERY OF CLOSING DOCUMENTS. Seller shall have tendered delivery to Buyer of all the documents, in form and substance reasonably satisfactory to Buyer, required to be delivered to Buyer by Seller on or before Closing pursuant to this Agreement. 11.4 LITIGATION. No lawsuit, administrative proceedings or other legal action shall have been filed against Seller as of the Closing Date which seeks to restrain or enjoin Buyer's acquisition of the Purchased Assets. 11.5 COURT ORDERS. The Court shall have entered the Section 363 Order and the Section 365 Order. ARTICLE XII. CONDITIONS PRECEDENT TO SELLER'S DUTY TO CLOSE Seller shall have no duty to close this transaction unless and until each and every one of the following conditions precedent have been fully and completely satisfied: 8 12.1 CONTINUED TRUTH OF WARRANTIES. All of the representations and warranties of Buyer contained herein shall continue to be true and correct at Closing. 12.2 PERFORMANCE OF OBLIGATIONS. Buyer shall have fully performed or tendered substantial performance of each and every one of its obligations hereunder which by its terms is capable of performance before Closing. 12.3 DELIVERY OF CLOSING DOCUMENTS. Buyer shall have tendered delivery to Seller of all the documents, in form and substance reasonably satisfactory to Buyer, required to be delivered to Seller by Buyer on or before Closing pursuant to this Agreement. 12.4 LITIGATION. No lawsuit, administrative proceedings or legal action other than the Chapter 11 Case shall have been filed by or against Seller as of the Closing Date which seeks to restrain or enjoin Seller's sale of the Purchased Assets. 12.5 COURT ORDERS. The Court shall have entered the Section 363 Order and the Section 365 Order. ARTICLE XIII. ITEMS TO BE DELIVERED AT CLOSING BY SELLER At Closing, Seller shall, unless waived in writing by Buyer, deliver to Buyer the following items, each in form and substance reasonably acceptable to Buyer and Buyer's counsel: 13.1 BILL OF SALE. A duly executed warranty bill of sale selling, assigning, transferring, and conveying the Purchased Assets. 13.2 CERTIFIED RESOLUTION. A copy of the resolution of the Board of Directors of Seller, certified by the Secretary of Seller, authorizing the execution and performance of this Agreement. 13.3 REPRESENTATIONS AND WARRANTIES. A certificate signed by an appropriate representative of Seller to the effect that all the representations and warranties of Seller contained herein are true and correct as of Closing. 13.4 THE SHORT TERM LEASE. The Short Term Lease as defined in Section 1.17. ARTICLE XIV. ITEMS TO BE DELIVERED AT CLOSING BY BUYER At Closing, Buyer shall, unless waived in writing by Seller, deliver the following items, each in form and substance reasonably acceptable to Seller and Seller's counsel, to Seller: 14.1 CERTIFIED RESOLUTION. A copy of the resolutions of the Executive Director of Buyer or other appropriate representative(s) authorizing the execution and performance of this Agreement. 9 14.2 REPRESENTATIONS AND WARRANTIES. A certificate signed by an appropriate representative of Buyer to the effect that all the representations and warranties of Buyer contained herein are true and correct as of Closing. 14.3 THE PURCHASE PRICE. The Purchase Price pursuant to Section 4.1. 14.4 THE NOTE. The Note pursuant to Section 4.1. 14.5 THE SECURITY AGREEMENT. The Security Agreement pursuant to Section 4.1. 14.6 THE SHORT TERM LEASE. The Short Term Lease as defined in Section 1.17. ARTICLE XV. MISCELLANEOUS 15.1 FURTHER ASSURANCES. Each party shall, at any time after Closing, execute and deliver to the other party all such additional instruments of conveyance and assignments, certificates or similar documents and take all such further actions as such other party may reasonably request. 15.2 NO OTHER AGREEMENTS. This Agreement, and all agreements delivered as part of the Closing contemplated herein, constitute the entire agreement between the parties with respect to its subject matter. All prior and contemporaneous negotiations, proposals and agreements between the parties, including, but not limited to the Letter of Intent between the parties dated November 27, 2000, are superseded by this Agreement. Any changes to this Agreement must be agreed to in writing signed by both parties. 15.3 WAIVER. Either party may waive the performance of any obligation owed to it by the other party hereunder for the satisfaction of any condition precedent to the waiving party's duty to perform any of its covenants, including its obligations to Close. Any such waiver shall be valid only if contained in a writing signed by the waiving party. 15.4 TERMINATION OF CONFIDENTIALITY AGREEMENT. Upon execution of this Agreement by the parties, the Confidentiality Agreement dated September 8, 2000, by and between Buyer and Seller shall be terminated; provided that, through the Transition Date, Buyer shall obtain Seller's prior written consent, which consent shall not be unreasonably withheld, as to all Buyer activities relating to the recruiting and/or contact of Seller's employees or students and such activities shall not interfere with Seller's operation of the School. 15.5 ACCESS TO REAL PROPERTY. Provided Buyer does not interfere with Seller's operation of the School and, to the extent required by Section 15.5, Seller's prior consent is obtained, Buyer may, upon reasonable prior notice, have access to the Real Property for purposes of constructing improvements and conducting meetings and student sign-up fairs. 10 15.6 NOTICES. Any notices required or allowed in this Agreement shall be effectively given if placed in a sealed envelope, postage prepaid, and deposited in the United States mail, registered or certified, addressed as follows: To Seller: Lucian Spataro, Ph.D. The TesseracT Group, Inc. East Muirwood Drive Phoenix, Arizona 85048 Copy To: Robert J. Miller, Esq. Bryan Cave LLP Two North Central Avenue, Suite 2200 Phoenix, Arizona 85004 To Buyer: Susan K. Heller, Ph.D. Gan Yeladeem Learning Center 15030 North 64th Street Scottsdale, Arizona 85254 Copy To: Timothy A. Smith, Esq. Kutak Rock LLP North Scottsdale Rd., Suite 300 Scottsdale, Arizona 85253 15.7 BROKER AND FINDERS. Each of the parties hereto represents and warrants to the other that it has not employed or retained any broker or finder in connection with the transactions contemplated by this Agreement nor has it had any dealings with any person which may entitle such person to a fee or commission from any party hereto. Each of the parties shall indemnify and hold the other harmless for, from and against any claim, demand or damage whatsoever by virtue of any arrangement or commitment made by it with or to any person that may entitle such person to any fee or commission from the other party to this Agreement. 15.8 BOOKS AND RECORDS. Copies of all customer, employee and accounting records for the School and all records with respect to the Purchased Assets will be provided by Seller to Buyer on or before the Transition Date. 15.9 RISK OF LOSS. The risk of loss, damage, or destruction of the Purchased Assets shall be borne by Seller until the Transition Date. In the event any material loss or damage to or taking of any such Purchased Assets occurs before Closing, Seller shall immediately notify Buyer of the nature and extent of such loss, damage or taking, and Buyer shall, at its option, by written notice to Seller, either terminate this Agreement without further liability or obligation to Seller, or Buyer may proceed with this transaction on the terms and conditions mutually agreeable to the parties, including any adjustment in the Purchase Price. 11 15.10 THIRD-PARTY BENEFICIARY. Nothing contained herein shall create or give rise to any third-party beneficiary rights for any individual or entity as a result of the terms and provisions of this Agreement. 15.11 RELATIONSHIP OF PARTIES. The relationship of Seller and Buyer shall be that of independent entities and neither shall be deemed to be the agent of the other. 15.12 CHOICE OF LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona and, as applicable, title 11 of the United States Code. 15.13 PARAGRAPH HEADINGS. The Section, Article and paragraph headings contained herein are for convenience only and shall have no substantive bearing on the interpretation of this Agreement. 15.14 RULES OF INTERPRETATION. The following rules of interpretation shall apply to this Agreement, the Schedules hereto and any certificates, reports or other documents or instruments made or delivered pursuant to or in connection with this Agreement, unless otherwise expressly provided herein or therein and unless the context hereof or thereof clearly requires otherwise: 15.14.1 A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms, and if a term is said to have the meaning assigned to such term in another document or agreement and the meaning of such terms therein is amended, modified or supplemented, then the meaning of such term herein shall be deemed automatically amended, modified or supplemented in a like manner. 15.14.2 References to the plural include the singular, the singular the plural and the part the whole. 15.14.3 The words "include," "includes," and "including" are not limiting. 15.14.4 A reference to any law includes any amendment or modification to such law which is in effect on the relevant date. 15.14.5 A reference to any person or entity includes its successors, heirs and permitted assigns. 15.14.6 The words "hereof," "herein," "hereunder," and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. 15.14.7 All Schedules to this Agreement constitute material terms of this Agreement and are incorporated fully into the terms of this Agreement. 15.15 TIME IS OF THE ESSENCE. Time is of the essence in the performance and observance of all obligations and duties under this Agreement. 12 15.16 ATTORNEY FEES. Each party shall bear its own legal fees and costs incurred in the negotiation and closing of this transaction. In the event of a dispute arising between the parties under this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs of suit from the non-prevailing party. 15.17 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of such counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also shall deliver a manually executed counterpart of this Agreement but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. IN WITNESS WHEREOF, the parties hereto have set their hands effective the date set forth above. THE TESSERACT GROUP, INC., a Minnesota corporation By ------------------------------------------------ Name ---------------------------------------------- Its ----------------------------------------------- GAN YELADEEM LEARNING CENTER, a Arizona non-profit corporation By ------------------------------------------------ Name ---------------------------------------------- Its ---------------------------------------------- 13 EXHIBIT A PROMISSORY NOTE U.S. $100,000.00 _________, 2001 Phoenix, Arizona FOR VALUE RECEIVED, GAN YELADEEM LEARNING CENTER, an Arizona non-profit corporation ("BORROWER"), hereby promises to pay to the order of THE TESSERACT GROUP, INC., a Minnesota corporation ("LENDER"), at the office of Lender located at 4515 East Muirwood Drive, Phoenix Arizona 85048, the principal amount of One Hundred Thousand and No/100 Dollars ($100,000.00), together with, to the extent applicable, the Default Interest Rate specified below, in accordance with the following terms and conditions: 1. DEFAULT INTEREST RATE. The Default Interest Rate shall be equal to twelve percent (12%) per annum. The principal balance outstanding hereunder from time to time shall bear interest at the Default Interest Rate from the date of the occurrence of an Event of Default (as hereinafter defined) hereunder until the earlier of: (a) the date on which the principal balance outstanding hereunder, together with all accrued interest and other amounts payable hereunder, are paid in full; or (b) the date on which such Event of Default is timely cured in a manner satisfactory to Lender in the exercise of its reasonable judgment, (i) if Borrower is specifically granted a right to cure such Event of Default in any of the Loan Documents (as hereinafter defined) or (ii) if no such right to cure is specifically granted, then Lender, in its sole and absolute discretion, permits such Event of Default to be cured. 2. LATE CHARGE. If Lender has not received the full amount of any payment by the end of five (5) calendar days after the date it is due under this Note, Borrower will pay a late charge to Lender in the amount of five percent (5%) of the overdue payment. Borrower will pay this late charge only once on any late payment. 3. PAYMENTS. This Note shall be payable as follows: (i) Commencing on ____________________, and continuing on the first day of each month thereafter, equal monthly installments of principal in the amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00) shall be due and payable, together with any accrued and unpaid interest at, to the extent applicable, the Default Interest Rate; provided, however, that such payments shall be subject to offset by Borrower in an amount equal to the monthly rental payable by Lender to Borrower pursuant to the terms of the Short Term Lease of even date herewith by and between Borrower, as landlord, and Lender, as tenant. (ii) The entire outstanding principal sum and all accrued and unpaid interest, less the amount of any rental offsets as provided in Section 4.(i) above, shall be due and payable on or before May 25, 2001 (the "FINAL PAYMENT DATE"). 1 4. APPLICATION AND PLACE OF PAYMENTS. Payments received by Lender with respect to the indebtedness evidenced hereby shall be applied in such order and manner as Lender in its sole and absolute discretion may elect. Unless otherwise elected by Lender, all such payments shall first be applied to any accrued and unpaid costs or added charges provided for herein or in any of the Loan Documents, next to accrued and unpaid interest at, to the extent applicable, the Default Interest Rate, and the remainder to the principal balance then outstanding hereunder. Payments hereunder shall be made at the address for Lender first set forth above, or at such other address as Lender may specify to Borrower in writing. 5. PREPAYMENTS. Payments of principal hereof may be made at any time, or from time to time, in whole or in part, without penalty, provided that all other charges accrued to the date of prepayment are also paid in full. Notwithstanding any partial prepayment of principal hereof, there will be no change in the due date or amount of scheduled payments due hereunder unless Lender, in its sole and absolute discretion, agrees in writing to such change. At the option of Lender, partial prepayments shall be applied in the inverse order of maturity. 6. EVENTS OF DEFAULT; ACCELERATION. The occurrence of any one or more of the following events shall constitute an "Event of Default" hereunder, and upon such Event of Default, the entire principal balance outstanding hereunder, together with all accrued interest and other amounts payable hereunder, at the election of Lender, shall become immediately due and payable, without any notice to Borrower: (i) The failure of Borrower to pay any installment of principal or other amounts due hereunder when due and the continuation of such failure for five (5) days after written notice thereof from Lender to Borrower; (ii) The failure of Borrower to comply with any other provision of this Note not provided for in subparagraph (i) above and subparagraph (v) below where such failure continues for thirty (30) days after written notice thereof by Lender to Borrower, provided that if the nature of such breach is such that although curable, the breach cannot reasonably be cured within a thirty (30) day period, an Event of Default shall not exist if Borrower shall commence to cure such breach and thereafter rectifies and cures such breach with due diligence, but in no event later than ninety (90) days after written notice thereof; (iii) The failure of Borrower to comply with any provision of any document, instrument or agreement executed in connection with the indebtedness evidenced hereby including, without limitation, the Security Agreement of even date herewith by and between Borrower and Lender or any other security document executed in connection with this Note (collectively, the "LOAN DOCUMENTS"); (iv) The dissolution, winding-up or termination of the existence of Borrower or any other person or entity who is or may become liable hereunder; (v) The calling of a meeting of the creditors of Borrower or any other person or entity who is or may become liable hereunder; 2 (vi) The making by Borrower or any other person or entity who is or may become liable hereunder of an assignment for the benefit of its creditors; or (vii) The appointment of (or application for appointment of) a receiver of Borrower or any other person or entity who is or may become liable hereunder which is not dismissed in thirty (30) days, or the involuntary filing against Borrower which is not dismissed within forty five (45) days or voluntary filing by Borrower, or any other person or entity who is or may become liable hereunder, of a petition or application for relief under federal bankruptcy law or any similar state or federal law, or the issuance of any writ of garnishment, execution or attachment for service with respect to Borrower or any person or entity who is or may become liable hereunder, or any property of Borrower or property of any person or entity who is or may become liable hereunder. 7. COLLATERAL. Borrower's obligations under this Note are additionally secured by the property described in Security Agreement of even date herewith (the "PROPERTY"), between Borrower, as debtor, and Lender, as secured party. 8. WAIVERS. Except as set forth in this Note or the Loan Documents, to the extent permitted by applicable law, Borrower, and each person who is or may become liable hereunder, severally waive and agree not to assert: (a) any homestead or exemption rights; (b) demand, diligence, grace, presentment for payment, protest, notice of nonpayment, nonperformance, extension, dishonor, maturity, protest and default; and (c) recourse to guaranty or suretyship defenses (including, without limitation, the right to require the Lender to bring an action on this Note). Lender may extend the time for payment of or renew this Note, release collateral as security for the indebtedness evidenced hereby or release any party from liability hereunder, and any such extension, renewal, release or other indulgence shall not alter or diminish the liability of Borrower or any other person or entity who is or may become liable on this Note except to the extent expressly set forth in a writing evidencing or constituting such extension, renewal, release or other indulgence. 9. COSTS OF COLLECTION. Borrower agrees to pay all reasonable costs of collection, including, without limitation, attorneys' fees, whether or not suit is filed, and all costs of suit and preparation for suit (whether at trial or appellate level), in the event any payment of principal or other amount is not paid when due, or in case it becomes necessary to protect the collateral which is security for the indebtedness evidenced hereby, or to exercise any other right or remedy hereunder or in the Loan Documents, or in the event Lender is made party to any litigation because of the existence of the indebtedness evidenced hereby, or if at any time Lender should incur any attorneys' fees in any proceeding under any federal bankruptcy law (or any similar state or federal law) in connection with the indebtedness evidenced hereby. In the event of any court proceeding, attorneys' fees shall be set by the court and not by the jury and shall be included in any judgment obtained by Lender. 10. NO WAIVER BY LENDER. No delay or failure of Lender in exercising any right hereunder shall affect such right, nor shall any single or partial exercise of any right preclude further exercise thereof. 3 11. GOVERNING LAW. This Note shall be construed in accordance with and governed by the laws of the State of Arizona. 12. TIME OF ESSENCE. Time is of the essence of this Note and each and every provision hereof. 13. AMENDMENTS. No amendment, modification, change, waiver, release or discharge hereof and hereunder shall be effective unless evidenced by an instrument in writing and signed by the party against whom enforcement is sought. 14. SEVERABILITY. If any provision hereof is invalid or unenforceable, the other provisions hereof shall remain in full force and effect and shall be liberally construed in favor of Lender in order to effectuate the other provisions hereof. 15. BINDING NATURE. The provisions of this Note shall be binding upon Borrower and the heirs, personal representatives, successors and assigns of Borrower, and shall inure to the benefit of Lender and any subsequent holder of all or any portion of this Note, and their respective successors and assigns. Lender may from time to time transfer all or any part of its interest in this Note and the Loan Documents, without notice to Borrower. 16. NOTICE. Any notice or other communication with respect to this Note shall: (a) be in writing; (b) be effective on the day of hand-delivery thereof to the party to whom directed, one day following the day of deposit thereof with delivery charges prepaid, with a national overnight delivery service, or two days following the day of deposit thereof with postage prepaid, with the United States Postal Service, by regular first class, certified or registered mail; (c) if directed to Lender, be addressed to Lender at 4515 East Muirwood Drive, Phoenix, Arizona 85048, or to such other address as Lender shall have specified to Borrower by like notice; and (d) if directed to Borrower, be addressed to Borrower at the address for Borrower set forth below Borrower's name, or to such other address as Borrower shall have specified by like notice. 17. SECTION HEADINGS. The section headings set forth in this Note are for convenience only and shall not have substantive meaning hereunder or be deemed part of this Note. 18. CONSTRUCTION. This Note shall be construed as a whole, in accordance with its fair meaning, and without regard to or taking into account any presumption or other rule of law requiring construction against the party preparing this Note. 4 IN WITNESS WHEREOF, Borrower has executed this Note as of the date first set forth above. "BORROWER" GAN YALEDEEM LEARNING CENTER, an Arizona non-profit corporation By: ------------------------------------------- Name: ----------------------------------------- Its: ----------------------------------------- Address of Borrower: 15030 North 64th Street Scottsdale, Arizona 85254 5 EXHIBIT B SECURITY AGREEMENT This SECURITY AGREEMENT (this "AGREEMENT") is made and entered into as of the ____ day of January, 2001, by and between GAN YELADEEM LEARNING CENTER, an Arizona non-profit corporation ("DEBTOR"), whose mailing address is 15030 North 64th Street, Scottsdale, Arizona 85254, and THE TESSERACT GROUP, INC., a Minnesota corporation ("SECURED PARTY"), whose mailing address is 4515 East Muirwood Drive, Phoenix Arizona 85048. 1. DEFINITIONS. The following words shall have the following meanings when used in this Agreement: (a) COLLATERAL. The word "Collateral" means the following described property and interests in such property of Debtor, whether now owned or hereafter acquired by Debtor, whether now existing or hereafter arising, and wherever located: all of Debtor's right, title, and interest, in and to the furniture, fixtures, and equipment described on EXHIBIT A attached hereto, including, without limitation, the following: (1) all attachments, accessions, parts, and additions to and all replacements of and substitutions for any of the property described in this Collateral section. (2) all products of any of the property described in this Collateral section. (3) all accounts, contract rights, general intangibles, and monies arising out of a sale, lease, contract of sale, service or lease, or other disposition of any of the property described herein as Collateral. (4) all proceeds (including insurance proceeds) of any of the property described in this Collateral section. (5) all records relating to any of the property described in this Collateral section, whether in the form of a writing, microfilm, microfiche, or electronic media. (b) INDEBTEDNESS. Indebtedness includes all indebtedness and liabilities of Debtor to Secured Party, due or to become due, whether or not now existing or hereafter contracted for or arising, including, but not limited to: (1) the indebtedness for principal of Debtor to Secured Party evidenced by a Promissory Note of even date herewith executed by Debtor in favor of Secured Party, in the original principal sum of One Hundred Thousand and No/100 Dollars ($100,000.00), and any and all extensions, renewals, refinancing, and other amounts owing thereon (the "Note"); 1 (2) any and all present and future advances made or to be made by Secured Party to Debtor under this Agreement, or any other agreement now or hereafter executed between Debtor and Secured Party, whether or not evidenced by any promissory note or other instrument, and all other obligations, indebtedness, or liabilities of Debtor to Secured Party, due or to become due, joint or several, absolute or contingent, now existing or hereafter created or arising out of this Agreement, or any other agreement or guaranty now or hereafter executed between Debtor and Secured Party, including, without limitation, all interest, service charges, collection and attorneys' fees which are payable by Debtor to Secured Party, including any debt, liability, or obligation owing at any time from Debtor to others which Secured Party may have obtained by assignment or otherwise; (3) all expenses incurred by Secured Party in the perfection of its security interest in the Collateral and in the preservation and collection of any of the Collateral, including, but not limited to, all sums advanced by Secured Party to preserve the Collateral; and (4) in the event of any proceeding to enforce the collection of any of the Indebtedness, the reasonable expenses of retaking, holding, preparing for sale, or otherwise disposing of any or all of the Collateral upon any exercise by Secured Party of its rights under this Security Agreement, and attorneys' fees, court costs, and other expenses in connection therewith, including, without limitation, the matters set forth in PARAGRAPH 12 hereof. (c) RELATED DOCUMENTS. The words "Related Documents" shall mean and include the Note, the Lease as modified by the Short Term Lease of even date herewith between Debtor and Secured Party, and all other documents executed in connection with this Agreement or the Indebtedness, whether now or hereafter existing. 2. GRANT OF SECURITY INTEREST. For valuable consideration, Debtor hereby grants to Secured Party a continuing security interest in the Collateral to secure the Indebtedness and agrees that Secured Party shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Secured Party may have pursuant to Related Documents or by law. 3. RIGHT OF SETOFF. In the event of a default pursuant to PARAGRAPH 7 hereof, Debtor authorizes Secured Party, to the extent permitted by applicable law, to charge or setoff all Indebtedness against any and all accounts of Debtor now existing or hereafter established with Secured Party. 4. OBLIGATIONS OF DEBTOR. Debtor warrants to and covenants with Secured Party as follows: (a) PERFECTION OF SECURITY INTEREST. Debtor agrees to execute financing statements and to take whatever other actions are requested by Secured Party to perfect and continue Secured Party's security interest in the Collateral. Secured Party may at any time, and without further authorization from Debtor, file a copy of this Agreement as a financing statement. 2 (b) REMOVAL OF COLLATERAL. Except as otherwise provided in the Lease as modified by the Short Term Lease, Debtor will keep the Collateral (or to the extent the Collateral consists of intangible property such as accounts, the records concerning the Collateral) at 3916 East Paradise Lane, Phoenix, Arizona. Debtor shall not remove the Collateral from its existing location without the prior written consent of Secured Party. (c) TRANSACTIONS INVOLVING COLLATERAL. Except as otherwise provided in the Lease as modified by the Short Term Lease, Debtor shall not sell, offer to sell, lease or offer to lease, or otherwise transfer or dispose of the Collateral. Debtor shall not pledge, mortgage, encumber, or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, whether or not subordinate or junior to the lien evidenced by this Security Agreement, other than the security interest provided for in this Agreement, without the prior written consent of Secured Party. Unless waived by Secured Party, all proceeds from any disposition of the Collateral shall be held in trust for Secured Party, and shall not be commingled with any other funds; provided, however, that this requirement shall not constitute consent by Secured Party to any sale or other disposition of any of the Collateral. Upon receipt, Debtor shall immediately deliver any such proceeds to Secured Party. (d) DEBTOR'S NAME. Debtor has not, during the preceding six years, been known as or used any other corporate or fictitious name, except as otherwise disclosed in writing to Secured Party, and Debtor shall not use any other corporate or fictitious name, except upon prior written notice to Secured Party. (e) VERIFICATION OF ACCOUNT, INSPECTION, AUDIT. Upon an Event of Default, Secured Party or any of its employees or agents shall have the right, at any time hereafter, upon reasonable notice to Debtor, in Secured Party's name, or in the name of Debtor, to discuss Debtor's affairs and finances and the Collateral with any attorney, accountant, account debtor or creditor of Debtor. 5. DEBTOR'S RIGHT TO POSSESSION. Except as otherwise provided in the Lease as modified by the Short Term Lease, until default, Debtor may have possession of the tangible personal property and beneficial use of all of the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents. 6. EXPENDITURES BY SECURED PARTY. Except to the extent already required to be discharged or paid by Secured Party under the Lease as modified by the Short Term Lease, if not discharged or paid when due, Secured Party, at its option but without obligation, may discharge taxes, liens, security interests, or other encumbrances at any time levied or placed on the Collateral, may pay for insurance with respect to the Collateral, and may pay for maintenance and preservation of the Collateral. To the extent not already required to be discharged or paid by Secured Party under the Lease as modified by the Short Term Lease, any and all such payments shall become a part of the Indebtedness and shall be payable on demand, with interest at the default rate as set forth in the Note from date of expenditure until repaid. Such right shall be in addition to any other rights or remedies to which Secured Party may be entitled on account of default. 3 7. EVENTS OF DEFAULT. The following are events of default under this Agreement ("Event of Default"): (a) DEFAULT ON INDEBTEDNESS. Debtor fails to make any payment when due on the Indebtedness, subject to any grace period provided in the document evidencing such indebtedness. (b) OTHER BREACHES. Failure to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in the Related Documents; provided, however (except as to a default in payment referred to in PARAGRAPH 7(A) above), that if such a failure is with respect to a term, obligation, or condition contained in this Agreement and such failure is curable, and if Debtor has not been given a prior notice of a breach of the same provision of this Agreement, such default may be cured by Debtor (and no event of default will have occurred) if Debtor, after receiving written notice from Secured Party demanding cure of such failure: (a) cures the failure within thirty (30) days; or (b) if the cure requires more than thirty (30) days, if Debtor immediately initiates steps sufficient to cure the failure and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. (c) FALSE STATEMENTS. Any material warranty, representation or statement made or furnished to Secured Party by or on behalf of Debtor under this Agreement or any of the Related Documents, is or at the time made or furnished was, false in any material respect. (d) INSOLVENCY. Dissolution of Debtor, termination of Debtor's existence as a going business, cessation of Debtor's operations, insolvency by Debtor, appointment of a receiver for any part of Debtor's property, any assignment for the benefit of creditors by Debtor, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Debtor. (e) CREDITOR PROCEEDINGS. Commencement of foreclosure, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Debtor against any of the property of Debtor, including, without limitation, the Collateral. However, this subsection shall not apply in the event of a good faith dispute by Debtor as to the validity or reasonableness of the claim which is the basis of the foreclosure suit, provided that Debtor gives Secured Party written notice of such claim and furnishes adequate reserves or security for the claim, as determined by Secured Party. 8. RIGHTS OF SECURED PARTY. Upon any Event of Default, Secured Party shall have all the rights of a secured party under the Arizona Uniform Commercial Code. In addition and without limitation, Secured Party may exercise any one or more of the following rights and remedies: (a) ACCELERATE INDEBTEDNESS. Secured Party, may, at its option, and without demand, notice or legal process of any kind, declare the entire Indebtedness immediately due and payable. Anything herein contained to the contrary notwithstanding, in the event of a default referred to in PARAGRAPHS 7(E) OR (F) above, the Indebtedness, without demand, notice or legal process of 4 any kind (all of which are hereby waived by Debtor), automatically shall be deemed to be declared immediately due and payable. (b) ASSEMBLE COLLATERAL. To the extent the Collateral is not already in Secured Party's possesion and control pursuant to the Lease as modified by the Short Term Lease, Secured Party may require Debtor to deliver to Secured Party all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Secured Party may require Debtor to assemble the Collateral and make it available to Secured Party at a place or places to be designated by Secured Party which is reasonably convenient to both parties. Secured Party also shall have full power to enter upon the property of Debtor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Debtor agrees Secured Party may take such other goods, provided that Secured Party makes reasonable efforts to return them to Debtor after repossession. (c) SELL THE COLLATERAL. Secured Party shall have full power to sell, lease, transfer, and otherwise deal with the Collateral or proceeds thereof in its own name or that of Debtor. Secured Party may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline rapidly in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time after which any private sale or any other intended disposition of the Collateral is to be made. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, preparing for sale and selling the Collateral shall become a part of the Indebtedness secured by this Agreement, and shall be payable on demand, with interest at the default rate provided in the Note from date of expenditure until repaid. (d) APPOINTMENT OF RECEIVER. Secured Party may have a receiver appointed as a matter of right. The receiver may be an employee of Secured Party and may serve without bond. All fees of the receiver and his attorney shall be secured by this Agreement. (e) COLLECT REVENUES. Secured Party may revoke Debtor's right to collect any rents and revenues from the Collateral, and may, either itself or through a receiver, collect any rents and revenues. To facilitate collection, Secured Party may notify Debtor's account debtors and obligors on any instrument to make payments directly to Secured Party. Debtor irrevocably designates, makes, constitutes and appoints Secured Party (and all persons designated by Secured Party) as Debtor's true and lawful attorney in fact and Secured Party, or Secured Party's agent, may, without notice to Debtor: (i) at such time or times hereafter as Secured Party or its agent, in its sole discretion, may determine, in Debtor's or Secured Party's name, endorse Debtor's name on any checks, notes, drafts or other payments relating to and/or proceeds of the Collateral which come into the possession of Secured Party or under Secured Party's control; and (ii) sign the name of Debtor on any agreements, instruments, documents, financing statements, warehouse receipts, bills of lading, notices of assignment of accounts, schedules and other written matter necessary or required by Secured Party to perfect and maintain perfected Secured Party's security interest in the Collateral (the "Supplemental Documentation") and to deliver any of the foregoing to such person or entity as Secured Party, in its sole discretion, may elect. 5 (f) OBTAIN DEFICIENCY. Secured Party may obtain a judgment for any deficiency remaining on the Indebtedness due to Secured Party after application of all amounts received from the exercise of the rights provided in this Agreement. Debtor shall be liable for a deficiency even if the underlying transaction is a sale of accounts or chattel paper. (g) OTHER RIGHTS AND REMEDIES. In addition to Secured Party's rights and remedies as a secured creditor under the provisions of the Arizona Uniform Commercial Code, Secured Party shall have and may exercise any or all of the rights and remedies it may have available at law, in equity, or otherwise. (h) APPLY ACCOUNTS. Secured Party may hold all of Debtor's Collateral consisting of accounts with Secured Party, and Secured Party may apply the funds in these accounts to pay all or part of the Indebtedness. 9. CUMULATIVE REMEDIES. All of Secured Party's rights and remedies, whether evidenced by this Agreement or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Secured Party to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Debtor under this Agreement, after Debtor's failure to perform, shall not affect Secured Party's right to declare a default and to exercise its remedies. 10. WAIVER. Secured Party shall not be deemed to have waived any rights under this Agreement (or under the Related Documents) unless such waiver is in writing and signed by Secured Party. No delay or omission on the part of Secured Party in exercising any right shall operate as a waiver of such right or any other right. A waiver by any party of a provision of this Agreement shall not constitute a waiver of or prejudice the party's right otherwise to demand strict compliance with that provision or any other provision. No prior waiver, nor any course of dealing between Secured Party and Debtor, shall constitute a waiver of any of Secured Party's rights or Debtor's obligations as to any future transactions. Whenever consent by Secured Party is required in this Agreement, the granting of such consent by Secured Party in any instance shall not constitute continuing consent to subsequent instances where such consent is required. 11. NOTICES. All notices required to be given by either party to the other under this Agreement shall be in writing and shall be effective when actually delivered or three (3) days after deposit with the United States Postal Service mail, first class postage prepaid, addressed to the other party at the address shown above or to such other addresses as either party may designate to the other in writing which change of address shall be effective upon receipt. Debtor agrees not to change its name or operate under any fictitious name without giving Secured Party at least ten (10) days prior written notice of such change and agrees, for notice purposes, to keep Secured Party informed at all times of Debtor's current address. 12. EXPENSES, COSTS AND ATTORNEYS' FEES. Debtor shall reimburse Secured Party on demand for all its expenses (including, but not limited to, reasonable attorneys' fees) of, or incidental to: (a) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Secured Party, Debtor or any other person or entity) in any way relating to the Collateral, this Agreement, the Related Documents or Debtor's affairs, including, without limitation, 6 bankruptcy proceedings and efforts to modify or vacate any automatic stay or injunction except as may relate to an actual breach of this Security Agreement by Secured Party, in which event Secured Party shall reimburse Debtor for its expenses; (b) any attempt to enforce any rights of Secured Party against Debtor or any other person or entity which may be obligated to Secured Party by virtue of this Agreement or the Related Documents, including, without limitation, any account debtor and whether or not a lawsuit or proceeding is filed; and/or (c) any attempt to inspect, verify, protect, collect, sell, liquidate or otherwise dispose of the Collateral. All such sums and expenses shall constitute a portion of the Indebtedness hereunder secured by the Collateral. 13. INTERPRETATION. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. If any provision of this Agreement is held to be invalid, illegal or unenforceable by any court for any reason, the remaining provisions of this Agreement shall nevertheless be binding, and this Agreement shall be enforceable as if the void or unenforceable provision or provisions had not been included in this Agreement. Any terms used in this Agreement, including, without limitation, "account", "account debtor", "chattel paper", "document", "equipment", "instrument", "general intangible", which are not specifically defined in this Agreement but are specifically defined in the Arizona Uniform Commercial Code, shall have the meanings ascribed in the Arizona Uniform Commercial Code. 14. APPLICABLE LAW. This Agreement is accepted in the State of Arizona. In addition, this Agreement shall be governed by and construed in accordance with the laws of the State of Arizona. Secured Party and Debtor agree that if there is a lawsuit, Secured Party and Debtor will submit to the jurisdiction of the courts in Maricopa County, State of Arizona, and at Secured Party's option, to the jurisdiction of the courts in any county where any Collateral is located. 15. ASSIGNMENT; MODIFICATION. This Agreement and the Related Documents may not be modified, altered or amended, except by an agreement in writing signed by Secured Party and Debtor. Debtor may not sell, assign or transfer this Agreement or the Related Documents or any portion thereof, including, without limitation, Debtor's rights, title, interest, revenues, powers and/or duties hereunder or thereunder. Debtor hereby consents to Secured Party's participation, sale, assignment, transfer or other disposition at any time or times hereafter, of this Agreement or the Related Documents or any portion hereof or thereof, including, without limitation, Secured Party's rights, titles, interests, remedies, powers and/or duties hereunder or thereunder. Subject to the foregoing, this Agreement and the Related Documents shall be binding upon and inure to the benefit of the successors and assigns of Secured Party and Debtor. 16. CONTINUING AGREEMENT. This is a continuing Agreement which shall remain in full force and effect until actual receipt by Secured Party of written notice of the Agreements revocation as to future transactions and shall remain in full force and effect thereafter until all of the Indebtedness incurred before the receipt of such notice, and all of the Indebtedness incurred thereafter under commitments extended by Secured Party before receipt of such notice, shall have been paid and performed in full. 7 17. FURTHER ASSURANCES. At Secured Party's request, Debtor shall execute and deliver to Secured Party, at any time hereafter, any Supplemental Documentation that Secured Party may reasonably request, in form and substance acceptable to Secured Party. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written. DEBTOR: GAN YALEDEEM LEARNING CENTER, an Arizona non-profit corporation By: ------------------------------------------- Name: ----------------------------------------- Its: ----------------------------------------- 8 EXHIBIT C FIRST AMENDMENT TO LEASE THIS FIRST AMENDMENT TO LEASE (the "Amendment") made as of _______________________, 2001, by and between GAN YELADEEM, an Arizona non-profit corporation ("Lessor"), and THE TESSERACT GROUP, INC., a Minnesota corporation ("Lessee"), hereby amends that certain Amended and Restated Lease between Educorp Properties, Inc., ("Original Lessor") and Lessee dated as of June 9, 1998 (the "Lease"), with respect to certain real property, together with all buildings, structures, fixtures and improvements located thereon, in Phoenix, Maricopa County, Arizona, a legal description of which is contained in EXHIBIT A attached hereto (the "Premises"). Any capitalized terms not herein defined shall have the meanings ascribed thereto in the Lease. WITNESSETH: WHEREAS, Lessor, has purchased fee title to the Premises from Original Lessor; WHEREAS, Lessee has filed a voluntary petition for Chapter 11 relief ("Chapter 11 Case") under Title 11 of the United States Code ("Bankruptcy Code"). The Chapter 11 Case is pending before the United States Bankruptcy Court for the District of Arizona ("Bankruptcy Court"); WHEREAS, Lessee has obtained the approval of the Bankruptcy Court to (i) sell certain assets of Lessee, defined in the Lease as Lessee's Personal Property, on the terms and conditions set forth in that certain Purchase and Sale Agreement (Paradise Lane School) dated February _____, 2001 (the "Purchase Agreement") and (ii) enter into this Amendment; WHEREAS, Lessee, with the approval from the Bankruptcy Court has rejected and terminated the Lease as of the Closing Date (as such term is defined in the Purchase Agreement). Lessor hereby acknowledges that it shall not be entitled to and shall not receive any of the contractual rights provided to Original Lessor under the Lease, including but not limited to any right to assert any "Claims" (as that term is defined in the Purchase Agreement) that may arise and/or relate to the Lease, provided that the Lessor shall be entitled to all contractual rights of Lessor under the terms of this Amendment from and after the Closing Date; WHEREAS, the Lease is hereby incorporated into this Amendment in its entirety and deemed effective as a lease of the real property described on the attached Exhibit A, enforceable by and between Lessor and Lessee, subject to the foregoing limitations and subject to the amended provisions set forth herein; and WHEREAS, Lessor and Lessee desire to amend certain provisions of the Lease as set forth in this Amendment. 1 NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as follows: 1. The terms and provisions of this Amendment shall be deemed effective and the terms of the Lease shall be deemed effective and enforceable against Lessor and Lessee on and as of the date set forth in the first paragraph above (the "Effective Date"). 2. All references in the Lease to the Paradise Valley Montessori Property and to Exhibit A-1 are deleted from the Lease. 3. Section 1.1.2 of the Lease is hereby modified to add the following subsection (vi): "(vi) All of the personal property defined in the Lease as Lessee's Personal Property." 4. Section 1.1.2 of the Lease is further amended by deleting the first sentence of the last paragraph of said section which reads: "Notwithstanding the foregoing, the Paradise Valley Property shall not include any property not acquired by Lessor pursuant to the Paradise Valley Purchase Agreement." 5. Section 1.2 of the Lease is hereby amended by deleting the existing Section 1.2 and substituting in lieu thereof the following: 1.2 TERM. The term of the Lease (the "Term") shall be the period commencing on the Effective Date and expiring on May 30, 2001. 6. Section 1.3 of the Lease is hereby deleted in its entirety. 7. Article II, Section 2 of the Lease is hereby amended by deleting the following definitions: "C.P.I.", "Extended Term," "Lease Year," "Paradise Valley Montessori Purchase Agreement," "Related Leases," "Security Agreements," "Security Documents," "Unsuitable for Its Primary Intended Use" and "Unavoidable Delays." 8. Article II, Section 2 of the Lease is hereby amended by modifying the definition of Lessor to read as follows: "LESSOR." Gan Yeladeem, an Arizona corporation and its successors and assigns. Unless Lessee is notified by Lessor otherwise, Lessor's address is: 15030 North 64th Street, Scottsdale, AZ 85254. 9. Article II, Section 2 of the Lease is hereby amended by modifying the definition of Term to read as follows: "TERM. As defined in Section 1.2." 2 10. Sections 3.1.1.(a), 3.1.1.(b) and 3.1.2 of the Lease are hereby modified by deleting those sections and replacing those sections with the following: 3.1.1 (a) INITIAL TERM. The monthly "Minimum Rent" is $16,000.00. The Minimum Rent shall be paid by Lessee to Lessor on or before the first day of each calendar month during the Term (each a "Minimum Rent Payment Date"); Minimum Rent shall be prorated for any partial month at the beginning or the end of the Term. Lessor has agreed in the Purchase Agreement, among other things, to pay to Lessee four payments of $25,000.00. Notwithstanding anything in the Lease to the contrary, Lessor agrees to permit Lessee to offset Lessee's monthly Minimum Rent payments against such $25,000 payments due Lessee from Lessor under the Purchase and Sale Agreement. 3.1.1 (b) EXTENDED TERMS. Intentionally deleted. 3.1.2 PRE-PAYMENT OF MINIMUM RENT. Intentionally deleted. 3.2 ANNUAL ESCALATION OF MINIMUM RENT. Intentionally deleted. 11. The last sentence of Section 3.4 of the Lease is hereby deleted in its entirety and is replaced with the following: "Lessee agrees to indemnify and defend Lessor against any and all claims or other amounts due under this Lease for any period prior to the Term." 12. The last sentence of Section 4.5 of the Lease is hereby deleted in its entirety and is replaced with the following: "Lessee agrees to indemnify and defend Lessor against any and all liabilities and obligations concerning the Facilities which have arisen prior to the Effective Date." 13. Section 4.6 of the Lease is hereby deleted in its entirety. 14. Section 6.1 of the Lease is hereby amended to read as follows: "6.1 OWNERSHIP OF LEASED PROPERTY. Lessee acknowledges and agrees that the Leased Property (including that property defined as the Lessee's Personal Property) is the property of Lessor and that Lessee has only the right to the exclusive possession and use of the Leased Property upon the terms and conditions and during the term of this Lease. 15. Sections 6.2, 6.3 and 6.4 of the Lease are hereby deleted in their entirety. 16. Section 7.3 of the Lease is hereby deleted in its entirety. 3 17. Section 8.1 of the Lease is hereby amended to add the following at the end of said section: "Lessor acknowledges that Lessee has not yet obtained a certificate of occupancy for the building commonly referred to as Building #3. Subject to the terms and conditions of the Purchase Agreement, Lessee has agreed to obtain such certificate of occupancy prior to the end of the Term. 18. The first sentence of Section 9.1.3 of the Lease is hereby deleted in its entirety and replaced with the following: "Lessee shall not make any modifications, alterations or improvements to the Leased Improvements or any portion thereof, whether by addition or deletion, without Lessor's prior written consent, which consent may be given or withheld in Lessor's sole and absolute discretion. Lessor acknowledges that, subject to Section 7.6 of the Purchase Agreement, Lessee may make modifications to the building commonly referred to as Building #3 to obtain a certificate of occupancy and Lessor consents to Lessee's modification." 19. Section 9.2 of the Lease is hereby amended to add the following at the end of said section: "Notwithstanding anything contained herein to the contrary, Lessee shall not be required to expend any amounts under this Section 9.2 in excess of those amounts set forth in Section 7.6 of the Purchase Agreement." 20. Section 9.3 of the Lease is hereby deleted in its entirety. 21. Section 13.1.6 of the Lease is hereby deleted in its entirety. 22. Section 13.6 of the Lease is hereby deleted in its entirety. 23. Section 14.1 of the Lease is hereby deleted in its entirety and replaced with the following: "14.1 INSURANCE PROCEEDS. All insurance proceeds payable by reason of any loss of or damage to the Leased Property, or any portion thereof, which is insured under any policy of insurance required by Article XIII of the Lease shall be paid to the Lessor. In the event Lessor does not elect to repair and restore the Leased Premises, the Minimum Rent shall abate in accordance with Section 5.2. In the event of any loss or damage that renders the Leased Property unsuitable for its Primary Intended Use (in the reasonable business judgment of Lessor and Lessee) the Lease shall be terminated." 24. Section 14.2 through and including Section 14.6 of the Lease are hereby deleted in their entirety. 4 25. Sections 15.3 through 15.6 of the Lease are hereby deleted in their entirety and replaced with the following: "15.3 ALLOCATION OF CONDEMNATION AWARDS. All Condemnation Awards payable by reason of any loss of, damage to or taking of the Leased Property or any portion thereof shall be paid to the Lessor. In the event Lessor does not elect to use such Award to repair and restore the Leased Premises, the Minimum Rent shall abate in accordance with Section 5.2. In the event of any loss of, damage to or taking of the Leased Property that renders the Leased Property unsuitable for its Primary Intended Use (in the reasonable business judgment of Lessor and Lessee) the Lease shall be terminated. 26. Section 16.1 (b) through and including Section 16.1 (f) of the Lease are hereby deleted in their entirety and replaced with the following: "(b) if Lessee fails to observe or perform any term, covenant or condition of this Lease other than those described under Paragraphs 1.3.3, 16.1(a) and 16.1(g) through and including 16.1(n) of this Lease, and such failure is not cured by Lessee within a period of thirty (30) days after Notice thereof from Lessor, unless such failure cannot with due diligence be cured within a period of thirty (30) days, in which case such failure shall not be deemed an Event of Default if Lessee proceeds promptly and with due diligence to cure the failure and diligently completes the curing thereof within ninety (90) days; or (c) Intentionally deleted. (d) Intentionally deleted. (e) Intentionally deleted. (f) Intentionally deleted." 27. Article XVIII of the Lease is hereby deleted in its entirety. 28. The last sentence of Section 20 of the Lease is hereby deleted in its entirety and replaced with the following: "Lessor shall, however, remain liable for any damages arising from Lessor's own negligence or willful misconduct." 29. Subsection 21(b) of the Lease is hereby deleted in its entirety and replaced with the following: "(b) any third party claims of any kind relating to the Leased Property, the Facilities or the operation thereof, whether sounding in contract or tort, and whether arising directly or indirectly from the acts or omissions of Lessee, or any of Lessee's teachers, administrators, students, employees, agents, invitees, guests, permittees or trespassers." 5 30. Subsection 21(g) of the Lease is hereby deleted in its entirety and replaced with the following: "(g) any Hazardous Materials, as defined in Paragraph 10.2, above that now or hereafter during the Term may be located in, on or around, or may potentially affect, any part of the Land or Leased Improvements unless such exposure to or presence of Hazardous Materials has been caused by any act or omission of Lessor;" 31. The sentence immediately preceding the last sentence of Section 21 of the Lease is hereby deleted in its entirety and replaced with the following: "Nothing herein shall be construed as indemnifying Lessor against its negligence or willful misconduct." 32. Section 23 of the Lease is hereby deleted in its entirety. 33. Subsection 25.1(h) of the Lease is hereby deleted in its entirety and replaced with the following: "all telephone numbers and facsimile numbers presently in use." 34. Section 25.3.2 of the Lease is hereby deleted in its entirety. 35. Section 32 (a) of the Lease is hereby amended to add the following: "with a copy to: Robert J. Miller, Esq. Bryan Cave, LLP Two North Central Avenue Suite 2200 Phoenix, Arizona 85004 36. Section 32 (b) is hereby deleted in its entirety and replaced with the following: "(b) If to Lessor: Gan Yeladeem 15030 North 64th Street Scottsdale, Arizona 85254 Attention: Susan K. Heller, Ph.D. With a copy to: Kutak Rock, LLP 8601 North Scottsdale Road Suite 300 Scottsdale, Arizona 85253 Attention: Timothy A. Smith, Esq. 6 37. The following ARTICLE XXXV is hereby added to the Lease: "ARTICLE XXXV 35.1 CONSTRUCTION. Lessee agrees that Lessor shall be entitled to enter onto the Leased Property for purposes of completing any construction, maintenance, replacement and/or repair deemed desirable by Lessor (including, without limitation, the construction of additional buildings and improvements). Lessor agrees to provide to Lessee three days notice of such construction, maintenance, replacement or repair and agrees to take all reasonable action to (i) minimize interference with the operation of Lessee's business, and (ii) prevent Lessee's students from access to any construction area. Lessee agrees to take all reasonable measures to (a) accommodate Lessor's access to the Leased Property, and (b) prevent Lessee's students from entering into any area which Lessor or Lessor's agents, employees or independent contractors are completing construction, maintenance, replacement or repair. 35.2 TOURS, MEETINGS, STUDENT ORIENTATION AND RECRUITING. Lessee agrees to allow Lessor access to the Leased Property for purposes related to recruiting and orientation of students. Lessor may conduct student "fairs", orientations, and other recruiting activities at the Leased Property upon reasonable notice to Lessee. Lessor will take all reasonable actions necessary to prevent disruption to the conduct of Lessee's business. Lessor and Lessee agree to cooperate in the scheduling of any such events which may potentially result in a disruption of Lessee's business operation." 35.3 INDEMNITY. Lessor hereby indemnifies and agrees to defend and hold Lessee harmless from any and all claims, demands, obligations, losses, liabilities, damages, recoveries and deficiencies which Lessee may suffer as the result of Lessor's access to and activities on the Leased Property pursuant to the terms of this Article XXXV including, without limitation reasonable attorneys' fees and costs arising out of or in any way connected with any construction, maintenance, replacement or repair by Lessor, its agents or contractors. 38. Unless credited or delivered to Lessor at the closing of the purchase of fee title to the Leased Property, Lessor is not in possession of any escrowed money, security deposits, prepaid rent or sums other than the amounts agreed to be paid to Lessee by Lessor under the Purchase and Sale Agreement dated February ____, 2001. In the event any such escrowed money, security deposits, prepaid rents or other sums are due and payable to Lessee which have not been credited or paid to Lessor, Lessee agrees to obtain payment from the Original Lessor. 39. Lessee warrants and represents to Lessor that (i) all necessary actions have been taken to authorize the execution of this Amendment by Lessee, (ii) the persons who have executed this Amendment on behalf of Lessee are duly authorized to do so, and (iii) the Lease, as modified by this Amendment, constitutes the legal, valid and binding obligation of Lessee, enforceable against Lessee in accordance with its terms. 7 Lessor warrants and represents to Lessee that (i) all necessary actions have been taken to authorize the execution of this Amendment by Lessor, (ii) the persons who have executed this Amendment on behalf of Lessor are duly authorized to do so, and (iii) the Lease, as modified by this Amendment, constitutes the legal, valid and binding obligation of Lessor, enforceable against Lessor in accordance with its terms. 40. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original. 41. In all other respects the Lease shall remain unchanged and in full force and effect. The Lease, as amended by this Amendment, shall continue to be binding upon the Lessor and Lessee and their permitted successors and assigns. IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of the date first above written. LESSOR: GAN YELADEEM, an Arizona non-profit corporation By /s/ Susan Heller ---------------------------------------- Susan Heller, President LESSEE: THE TESSERACT GROUP, INC., a Minnesota corporation By /s/ Lucian Spataro ---------------------------------------- Lucian Spataro, President 8 STATE OF ARIZONA ) ) SS. COUNTY OF MARICOPA ) The foregoing instrument was acknowledged before me on February ____, 2001, by Susan Heller, as president of Gan Yeladeem, an Arizona non-profit corporation on behalf of the corporation.. --------------------------------------- Notary Public My Commission Expires: - ------------------------------ STATE OF ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me on February ____, 2001, by Lucian Spatoro, as president of The Tesseract Group, a Minnesota corporation on behalf of the corporation. --------------------------------------- Notary Public My Commission Expires: - ------------------------------ 9 EXHIBIT A LEGAL DESCRIPTION EX-99.1 3 ex99-1.txt MONTHLY OPERATING REPORT OF THE TESSERACT GROUP Exhibit 99.1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA In re: ) CASE NO. B-00-10938-ECF-RTB ) THE TESSERACT GROUP, INC. ) BUSINESS AND INDUSTRY ) MONTHLY OPERATING REPORT ) ) MONTH OF JANUARY ) Debtor(s) ) DATE PETITION FILED: October 6, 2000 ) ) TAX PAYER ID NO. 4101581297 Nature of Debtor's Business: For Profit Educational Services DATE DISCLOSURE STATEMENT: FILED Not Yet Filed TO BE FILED To Be Determined ------------- ---------------- DATE PLAN OF REORGANIZATION: FILED Not Yet Filed TO BE FILED To Be Determined ------------- ---------------- I CERTIFY UNDER PENALTY OF PERJURY THAT THE FOLLOWING MONTHLY OPERATING REPORT AND THE ACCOMPANYING ATTACHMENTS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE. RESPONSIBLE PARTY: /s/ Lucian P. Spataro CEO - ---------------------------------------- ---------- ORIGINAL SIGNATURE OF RESPONSIBLE PARTY TITLE Lucian P. Spataro - ---------------------------------------- ---------- PRINTED NAME OF RESPONSIBLE PARTY DATE PREPARER: /s/ Douglass E. Snell Controller - ---------------------------------------- ---------- ORIGINAL SIGNATURE OF PREPARER TITLE Douglass E. Snell - ---------------------------------------- ---------- PRINTED NAME OF PREPARER DATE PERSON TO CONTACT REGARDING THIS REPORT: Douglass E. Snell --------------------------------------- PHONE NUMBER: 480-783-4317 --------------------------------------- ADDRESS: 4515 E. Muirwood Dr. Phoenix, AZ 85048 --------------------------------------- ORIGINAL OF REPORT IS FILED WITH THE COURT, COPY IS FILED WITH U.S. TRUSTEE'S OFFICE THE TESSERACT GROUP, INC. B-00-10938-ECF-RTB MONTH: JANUARY 2001 RECEIPTS AND DISBURSEMENTS
BANK ACCOUNTS --------------------------------------------------------------------------------- AMOUNTS REPORTED SHOULD BE PER THE DEBTOR'S BOOKS, NATIONAL GROUP GROUP GROUP TESSERACT GROUP not per the bank statement DEPOSITORY DEPOSITORY MEDICAL PAYROLL OPERATING #944-010-7759 #022-922-6741 #022-922-6576 #022-922-6576 #022-922-6808 ------------- ------------- ------------- ------------- ------------- ACCOUNT BALANCE - BEGINNING OF MONTH -- 578,299.84 -- -- -- RECEIPTS STUDENT FEES 1,615,212.12 197,782.26 CHARTER SCHOOL REVENUE 165,165.35 165,165.35 ACCOUNTS RECEIVABLE 27,946.27 INTEREST 3,635.54 SALE OF ASSETS TRANSFERS IN FROM OTHER ACCOUNTS 1,622,265.83 62,184.46 1,338,638.80 603,610.45 OTHER (ATTACH LIST) TOTAL RECEIPTS 1,643,158.39 1,823,683.63 62,184.46 1,338,638.80 603,610.45 DISBURSEMENTS BUSINESS - ORDINARY OPERATIONS 20,892.56 62,184.46 654,056.22 558,329.65 CAPITAL IMPROVEMENTS PRE-PETITION DEBT TRANSFERS TO OTHER DIP ACCOUNTS 1,622,265.83 2,004,433.71 PAYMENTS MADE FOR SUNRISE EDU 502,824.56 684,582.58 87,596.38 OTHER (VOIDS) (42,315.58) REORGANIZATION EXPENSES: ATTORNEY FEES ACCOUNTANT FEES OTHER PROFESSIONAL FEES U.S. TRUSTEE QUARTERLY FEE COURT COSTS TOTAL DISBURSEMENTS 1,643,158.39 2,507,258.27 62,184.46 1,338,638.80 603,610.45 ------------ ------------ --------- ------------ ---------- ACCOUNT BALANCE - END OF MONTH -- (105,274.80) -- -- -- ============ ============ ========= ============ ========== BANK ACCOUNTS -------------------------------------------------------------------------------- AMOUNTS REPORTED SHOULD BE PER THE DEBTOR'S BOOKS, TESSERACT CHARTER FIRST FEDERAL PETTY CASH not per the bank statement CHARTER EXTRACURRICULAR CREDIT UNION EAGAN MINNESOTA #022-922-6808 #022-922-7442 #4002-0270-922 #1-801-9204-8049 TOTAL ------------- ------------- -------------- ---------------- ------------- ACCOUNT BALANCE - BEGINNING OF MONTH 666,305.51 13,728.27 11,505.95 500.00 1,270,339.57 RECEIPTS STUDENT FEES 1,812,994.38 CHARTER SCHOOL REVENUE ACCOUNTS RECEIVABLE 27,946.27 INTEREST 36.72 3,672.26 SALE OF ASSETS -- TRANSFERS IN FROM OTHER ACCOUNTS 3,626,699.54 OTHER (ATTACH LIST) -- TOTAL RECEIPTS 165,165.35 -- 36.72 5,636,477.80 DISBURSEMENTS BUSINESS - ORDINARY OPERATIONS 55,820.12 1,351,283.01 CAPITAL IMPROVEMENTS -- PRE-PETITION DEBT -- TRANSFERS TO OTHER DIP ACCOUNTS 3,626,699.54 PAYMENTS MADE FOR SUNRISE EDU 1,275,003.52 OTHER (VOIDS) (42,315.58) REORGANIZATION EXPENSES: ATTORNEY FEES -- ACCOUNTANT FEES -- OTHER PROFESSIONAL FEES -- U.S. TRUSTEE QUARTERLY FEE -- COURT COSTS -- TOTAL DISBURSEMENTS 55,820.12 -- -- -- 6,210,670.49 ---------- --------- --------- ------ ------------ ACCOUNT BALANCE - END OF MONTH 775,650.74 13,728.27 11,542.67 500.00 696,146.88 ========== ========= ========= ====== ============ THE FOLLOWING SECTION MUST BE FILLED OUT DISBURSEMENTS FOR CALCULATING QUARTERLY FEES: TOTAL DISBURSEMENTS FROM ABOVE 6,210,670.49 LESS: TRANSFERS OUT TO OTHER DIP ACCOUNTS (3,626,699.54) LESS: PAYMENTS MADE FOR SUNRISE EDUCATIONAL SERVICES, INC (1,275,003.52) PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. PAYMENTS FROM ESCROW OR 2-PARTY CHECKS) ------------ TOTAL DISBURSEMENTS FOR CALCULATING QUARTERLY FEES: 1,308,967.43 ============
2 The Tesseract Group (excl. Sunrise) Statement of Operations For the Month Ending January 31, 2000 Revenue Tuition and Fees Revenue $ 915,342.83 Charter Revenue 218,444.50 Transportation Revenue 293.99 Food Revenue 20,255.75 Refunds/Returns 103,705.19 Discounts (7,046.62) -------------- Total Revenue 1,250,995.64 -------------- Operational Costs Salaries and Wages 562,341.85 Taxes and Benefits 46,125.89 Classroom Expenses 14,706.67 Food Programs Expense 23,594.82 Transportation Expenses 8,347.85 Maintenance Expense 65,461.82 Insurance Expense (416.39) Internet Expense -- Rent Expense 199,104.74 Security Services Expense 573.57 Personal Property Tax Expense 6.24 Real Property Tax Expense 17,834.29 Utilities Expense 31,172.53 -------------- Total Operational Costs 968,853.88 -------------- General & Administrative Costs Advertising, Mktg, Promo Exp 2,700.19 Audit & Tax Expense -- Bad Debt Expense 16,592.24 Bank Charges/Processing Fees-A 9,307.05 Computer/Technology Expense 2,116.57 Consultant Fees Expense -- Investor Relations Expense -- Licenses & Fees Expense -- Office/School Supplies Expense 2,062.14 Penalties & Late Fees Expense -- Postage and Printing Expense (308.89) Pre-Employment Expense 90.00 Telephone Expense 9,768.13 Travel Expense 244.58 Closed School Expense -- Corporate Overhead 314,387.54 Corporate Overhead Allocated to Sunrise (157,194.00) Other Expenses (3,673.27) -------------- Total General and Administrative Expenses 196,092.28 -------------- Gain/Loss on Sales of Fixed Assets (1,168,403.12) Other Expense (1,503.08) Interest Expense -- -------------- Net Interest and Other Income (Expense) (1,169,906.20) -------------- Depreciation Expense 79,383.88 -------------- Total Depreciation and Amortization 79,383.88 -------------- Reorganization Expenses Professional Fees 193,713.55 Professional Fees Allocated to Sunrise (96,857.00) -------------- Total Reorganization Expenses 96,856.55 -------------- Net Income $(1,260,097.15) ============== 3 The Tesseract Group (excl. Sunrise) Balance Sheet January 31, 2000 ASSETS Current Assets Cash and Cash Equivalents $ 1,034,065.85 Accounts Receivable, net 159,412.29 Note Receivable from Nobel -- Prepaid Rent 86,742.93 Other Prepaid Expenses 576,606.32 -------------- Total Current Assets 1,856,827.39 Investment in Sunrise 18,971,824.26 Property and Equipment, net 4,447,670.75 Deposits and Other Assets 1,478,943.49 -------------- Total Assets $26,755,265.89 ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable $ 80,258.44 Accrued Payroll and Benefits 1,162,552.62 Accrued Payroll Taxes 64,374.12 Deferred Revenue and Tuition Deposits 2,020,213.07 -------------- Total Current Liabilities 3,327,398.25 -------------- Pre-Petition Liabilities Line of Credit 5,848,822.65 Accounts Payable 4,062,999.61 Other Unsecured Notes Payable 865,500.00 Other Current Liabilities 3,715,375.04 Long-Term Debt 3,059,893.96 -------------- Total Pre-Petition Liabilities 17,552,591.26 -------------- Due to Sunrise 996,425.00 Reserve for Closed Schools 504,099.10 Other Long-Term Obligations 13,999.76 -------------- Total Long-Term Liabilities 1,514,523.86 -------------- Total Liabilities 22,394,513.37 -------------- Shareholders' Equity Pre-Petition Shareholders' Equity 5,139,994.08 Post Petition Retained Deficit (779,241.56) -------------- Total Shareholders' Equity 4,360,752.52 -------------- Total Liabilities and Shareholders' Equity $26,755,265.89 ============== 4 CASE NUMBER: B-00-10938-ECF-RTB STATUS OF ASSETS 0-30 31-60 60+ ACCOUNTS RECEIVABLE TOTAL DAYS DAYS DAYS ---------- ---------- ---------- ---------- TOTAL ACCOUNTS RECEIVABLE 164,112 105,712 11,055 47,345 LESS: AMOUNT CONSIDERED UNCOLLECTIBLE 4,699 4,699 ACCOUNTS RECEIVABLE (NET) 159,413 105,712 11,055 42,646 SCHEDULED CURRENT FIXED ASSETS AMOUNT ADDITIONS DELETIONS AMOUNT ---------- ---------- ---------- ---------- REAL PROPERTY 1,867,408 1,867,408 BUILDING IMPROVEMENTS/PLANT 846,395 16,066 271,474 590,987 ACCUMULATED DEPRECIATION (136,823) (17,979) (74,873) (79,929) NET BUILDINGS/PLANT 709,573 (1,914) 196,601 511,058 EQUIPMENT 5,466,149 1,737,146 3,729,003 ACCUMULATED DEPRECIATION (2,404,930) (291,596) (921,719) (1,774,807) NET EQUIPMENT 3,061,218 (291,596) 815,427 1,954,196 AUTOS & VEHICLES 557,586 222,162 335,424 ACCUMULATED DEPRECIATION (259,791) (44,193) (83,570) (220,414) NET AUTOS & VEHICLES 297,795 (44,193) 138,592 115,010 NOTE: Reduction in assets due to sale of Paradise Valley and Ahwatukee private schools 5 CASE NUMBER: B-00-10938-ECF-RTB STATUS OF LIABILITIES AND SENSITIVE PAYMENTS POSTPETITION UNPAID OBLIGATIONS TOTAL 0-30 31-60 61-90 91+ ------------------ ----- ---- ----- ----- --- ACCOUNTS PAYABLE 80,258 59,676 4,470 2,400 13,713 TAXES PAYABLE 64,374 64,374 ACCRUED SALARIES AND BENEFITS 1,162,553 1,162,553 PREPAID TUITION AND DEPOSITS 2,020,213 2,020,213 SECURED DEBT OTHER (ATTACH LIST) --------- --------- ----- ----- ------ TOTAL POST-PETITION LIABILITIES 3,327,398 3,306,816 4,470 2,400 13,713 ========= ========= ===== ===== ====== PAYMENTS TO INSIDERS AND PROFESSIONALS INSIDERS AMOUNT PD TOTAL PD NAME REASON FOR PAYMENT THIS MONTH TO DATE - ---- ------------------ ---------- ------- Lucian Spataro Wages and Exp. Reimbursement 20,215.59 89,895.20 Ernie Recsetar Wages -- 22,000.00 Michael Lynch Wages and Exp. Reimbursement 15,793.53 58,522.63 Gary Lilyquist Wages and Exp. Reimbursement 11,335.02 37,521.83 --------- ---------- TOTAL PAYMENTS TO INSIDERS 47,344.14 207,939.66 ========= ========== PROFESSIONALS DATE OF COURT TOTAL ORDER AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE & UNPAID - ---- ------- -------- ---- ------- -------- Engleman & Berger P.C. 25019.52 25019.52 6 CASE NUMBER: B-00-10938-ECF-RTB CASE STATUS QUESTIONNAIRE YES NO --- -- HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT OTHER THAN A DEBTOR IN POSSESSION ACCOUNT? NO ARE ANY POSTPETITION RECEIVABLES (ACCOUNTS, NOTES, OR LOANS) DUE FROM RELATED PARTIES? NO ARE ANY WAGE PAYMENTS PAST DUE? NO ARE ANY U.S. TRUSTEE QUARTERLY FEES DELINQUENT? NO CURRENT NUMBER OF EMPLOYEES: 311 INSURANCE CARRIER AND PERIOD EXPIRATION PAYMENT AMOUNT TYPE OF POLICY POLICY NUMBER COVERED DATE & FREQUENCY - -------------- ------------- ------- ---- ----------- Gen Liability CLI0018811 3/1/00 3/1/01 39,208.72 /month Auto Liability BAP0708409 5/1/00 3/1/01 Included above Excess Liability UMI0000552 3/1/00 3/1/01 Included above Workers Comp 307512-4 12/1/00 11/30/01 Pd Monthly as % of PR Non-Owned Auto 59UUNGG2042 3/1/00 3/1/01 Included above WHAT STEPS HAVE BEEN TAKEN TO REMEDY ANY OF THE PROBLEMS THAT BROUGHT ABOUT THE CHAPTER 11 FILING? Purchasing of new schools has ceased, and administrative expenses have been reduced. Other restructuring measures are being considered. LIST ANY MATTERS THAT ARE DELAYING THE FILING OF A PLAN OF REORGANIZATION? 7 THE TESSERACT GROUP, INC. CONSOLIDATED CASH FLOW ANALYSIS TOTAL FOR JANUARY 2001 ------------ BEGINNING FUNDS AVAILABLE: $1,270,339.57 ------------- Cash In: Telecheck $ 197,782.26 Credit Card Deposit (Preschools) 521,139.53 Credit Card Deposit (Private) 167,644.39 Credit Card Deposit (Charter) 2,212.45 Regular Deposits (Preschools) 533,101.64 Regular Deposits (Private) 395,352.93 Regular Deposits (Charter) 15,137.33 Regular Deposits (Corporate) 27,946.27 Other Deposit (Charter) 165,165.35 Interest 3,635.54 Interest on LTC Acct 36.72 Voids 42,315.58 ------------- Daily Cash In: $2,071,469.99 Cash Out: Preschool A/P $ 502,824.56 Charter A/P 55,820.12 Private A/P 470,733.27 Corporate A/P 175,192.76 TesseracT Payroll 477,251.39 Preschool Payroll 684,582.58 Charter Payroll 176,804.83 College PR -- Preschool NSF 19,376.15 Medical Claims 62,184.46 Banking Fees 20,892.56 LTC Payment -- LTC Fees -- ------------- Daily Cash Out: $2,645,662.68 ------------- Net Cash In/Out: $ (574,192.69) ------------- ENDING FUNDS AVAILABLE: $ 696,146.88 ============ 8 THE TESSERACT GROUP, INC. CASH FLOW ANALYSIS B-00-10938-ECF-RTB BEGINNING FUNDS AVAILABLE: $1,273,788.85 ------------- Cash In: Credit Card Deposit (Private) 167,644.39 Credit Card Deposit (Charter) 2,212.45 Regular Deposits (Private) 395,352.93 Regular Deposits (Charter) 15,137.33 Regular Deposits (Corporate) 27,946.27 Other Deposit (Charter) 165,165.35 Interest 3,672.26 ------------- Daily Cash In: $ 777,130.98 Cash Out: Charter A/P 55,820.12 Private A/P 470,733.27 Corporate A/P 175,192.76 Corporate A/P (allocated to Sunrise) (87,596.38) TesseracT Payroll 477,251.39 Charter Payroll 176,804.83 Medical Claims 62,184.46 Banking Fees 20,892.56 Voids (42,315.58) ------------- Daily Cash Out: $1,308,967.43 ------------- Net Cash In/Out: $ (531,836.45) ------------- ENDING FUNDS AVAILABLE: $ 741,952.40 ============= 9 Corporate Company VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Audit Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------- ------ 200012268 EDUCOR000-B EDUCORP PROPERTIES, INC 1/3/01 OPERATING2 PMTRX00000278 $89,647.80 200012269 REE000000-B REEVES,LARRY 1/3/01 OPERATING2 PMCHK00000147 $1,176.86 200012270 LYN000000-B LYNCH,MICHAEL 1/3/01 OPERATING2 PMCHK00000148 $1,498.19 200012271 AICRED000-B A.I. CREDIT CORP. 1/4/01 OPERATING2 PMCHK00000149 $11,055.99 200012272 SHEMAR000-B SHERIFF OOOF MARICOPA COUNTY 1/4/01 OPERATING2 PMCHK00000149 $17,791.90 200012273 ARC000000-B ARC 1/3/01 OPERATING2 PMCHK00000150 $2,295.81 200012274 BENESI000-B BENESIGHT 1/4/01 OPERATING2 PMTRX00000291 $27,067.50 200012275 REE000000-B REEVES,LARRY 1/5/01 OPERATING2 PMCHK00000151 $193.49 200012276 TAILLC000-B TAI LLC 1/5/01 OPERATING2 PMCHK00000151 $23,348.95 200012277 ROAFIR000-B ROADRUNNER FIRE & SAFETY 1/8/01 OPERATING2 PMTRX00000290 $250.00 200012278 ARIDEP001-B ARIZONA DEPARTMENT OF REVENUE 1/8/01 OPERATING2 PMCHK00000152 $50.00 200012279 DIVTAX000-B DIVISION OF TAXATION-CORP-TAX 1/8/01 OPERATING2 PMCHK00000152 $200.00 200012280 LYN000000-B LYNCH,MICHAEL 1/8/01 OPERATING2 PMCHK00000152 $66.41 200012281 MINFRA000-B MINNRSOTA FRANCHISE TAX 1/8/01 OPERATING2 PMCHK00000152 $1,780.00 200012282 PRISCH000-B PRIVATE SCHOOL REAL ESTATE,LLC 1/8/01 OPERATING2 PMCHK00000152 $12,654.84 200012283 SNELDO000-B DOUG SNELL 1/8/01 OPERATING2 PMCHK00000152 $161.24 200012284 SPA000000-B SPATARO,LUCIAN 1/8/01 OPERATING2 PMCHK00000152 $401.78 200012285 DEPOFREV1-B DEPARTMENT OF REVENUE SERVICES 1/10/01 OPERATING2 PMCHK00000153 $250.00 200012286 FRATAX000-B FRANCHISE TAX BOARD 1/10/01 OPERATING2 PMCHK00000153 $851.00 200012287 AFTCOU000-B AFTERMATH COURIER SERVICE 1/11/01 OPERATING2 PMCHK00000154 $450.68 200012289 AT&T78522-B AT&T - 78522 1/11/01 OPERATING2 PMCHK00000154 $2,730.88 200012290 EMPUNI000-B EMPLOYERS UNITIY INC 1/11/01 OPERATING2 PMCHK00000154 $643.75 200012291 FEDEXP000-B FEDERAL EXPRESS 1/11/01 OPERATING2 PMCHK00000154 $465.98 200012292 IKOOFF001-B IKON OFFICE SOLUTION (AZ) 1/11/01 OPERATING2 PMCHK00000154 $962.69 200012293 LILJ.0000-B LILYQUIST, J. GARY 1/11/01 OPERATING2 PMCHK00000154 $283.02 200012294 PITBOW000-B PITNEY BOWES CREDIT CORP-85460 1/11/01 OPERATING2 PMCHK00000154 $1,442.98 200012295 PURPOW000-B PURCHASE POWER 1/11/01 OPERATING2 PMCHK00000154 $148.43 200012296 Q0MINC000-B Q-MATRIX INC 1/11/01 OPERATING2 PMCHK00000154 $83.47 200012297 RIVJUD000-B JUDI RIVERA 1/11/01 OPERATING2 PMCHK00000154 $16.00 200012298 RSMMCG000-B RSM MCGLADREY 1/11/01 OPERATING2 PMCHK00000154 $600.00 200012299 SHE000000-B SHEARER,DAN 1/11/01 OPERATING2 PMCHK00000154 $401.49 200012300 SHUSTO000-B SHURGARD STORAGE 1/11/01 OPERATING2 PMCHK00000154 $1,205.64 200012301 SIESPR000-B SIERRA SPRINGS 1/11/01 OPERATING2 PMCHK00000154 $45.63 200012302 SRP000000-B SRP 1/11/01 OPERATING2 PMCHK00000154 $1,388.80 200012303 WELFAR003-B WELLS FARGO (MN) 1/11/01 OPERATING2 PMCHK00000154 $2,274.98 200012304 MAN FIN000-B MANULIFE FINANCIAL 1/11/01 OPERATING2 PMCHK00000155 $11,444.98 200012305 ALLFOO001-B ALLIANT FOODSERVICE - AZ 1/15/01 OPERATING2 PMCHK00000156 $619.73 200012306 ALLFOO009-B ALLIANT FOODSERVICE - MN 1/15/01 OPERATING2 PMCHK00000156 $1,378.68 200012307 AMELIN000-B AMERIPRIDE LINEN AND APPAREL 1/15/01 OPERATING2 PMCHK00000156 $22.10 200012308 AT&T00000-B AT&T 1/15/01 OPERATING2 PMCHK00000156 $752.40 200012309 ATTBUS000-B ATT BUSINESS SERVICES 1/15/01 OPERATING2 PMCHK00000156 $11.91 200012310 CITPHO296-B CITY OF PHOENIX 29663 1/15/01 OPERATING2 PMCHK00000156 $1,195.68 200012311 CITSCOUTI-B CITY OF SCOTTSDALE-UTILITIES 1/15/01 OPERATING2 PMCHK00000156 $612.50 200012312 CLS000000-B CLS/CLEANWAY 1/15/01 OPERATING2 PMCHK00000156 $292.92 200012313 CULWAT000-B CULLIGAN WATER COND 1/15/01 OPERATING2 PMCHK00000156 $188.92 200012314 DANKID000-B DANCERCISE KIDS 1/15/01 OPERATING2 PMCHK00000156 $238.00 200012315 DICJEF000-B JEFFREY AND ALICE DICKEY 1/15/01 OPERATING2 PMCHK00000156 $1,942.52 200012316 EARCOM000-B EARLYCHILDHOOD.COM 1/15/01 OPERATING2 PMCHK00000156 $119.77 200012317 FASCOM000-B FASTQ COMMUNICATIONS 1/15/01 OPERATING2 PMCHK00000156 $300.00 200012318 FIREQU000-B FIRSTAR EQUIPMENT FINANCE 1/15/01 OPERATING2 PMCHK00000156 $1,000.95 200012319 HEAIMC000-B HEALTHSOUTH IMC INC-PHOENIX 1/15/01 OPERATING2 PMCHK00000156 $36.00 200012320 IGHDAW000-B IGHODARO, DAWN 1/15/01 OPERATING2 PMCHK00000156 $36.85 200012321 IKOOFF001-B IKON OFFICE SOLUTION (AZ) 1/15/01 OPERATING2 PMCHK00000156 $610.14 200012322 J.LHAM000-B J.L. HAMMETT CO. 1/15/01 OPERATING2 PMCHK00000156 $1,362.41 200012323 JONKEM000-B JONATHAN KEMPIAK 1/15/01 OPERATING2 PMCHK00000156 $220.00 200012324 KP0LIM000-B KP LIMITED INC 1/15/01 OPERATING2 PMCHK00000156 $14,578.80 200012325 MET000000-B METROCALL 1/15/01 OPERATING2 PMCHK00000156 $322.92 200012326 NES000000-B NESTER,ELAINE 1/15/01 OPERATING2 PMCHK00000156 $459.58 200012327 PEAEDU000-B PEARSON EDUCATION-70632 1/15/01 OPERATING2 PMCHK00000156 $656.92 200012328 PEONAT000-B PEOPLES NATURAL GAS 1/15/01 OPERATING2 PMCHK00000156 $589.73 200012329 PITBOW000-B PITNEY BOWES CREDIT CORP-85460 1/15/01 OPERATING2 PMCHK00000156 $618.46 200012330 RHOCOL000-B COLLEEN RHODES 1/15/01 OPERATING2 PMCHK00000156 $887.56 200012331 ROMAMY000-B ROMINE, AMY 1/15/01 OPERATING2 PMCHK00000156 $37.80 200012332 SHAFOO000-B SHAMROCK FOODS COMPANY 1/15/01 OPERATING2 PMCHK00000156 $250.95 200012333 SLAJAC000-B JACK SLATE 1/15/01 OPERATING2 PMCHK00000156 $732.29 200012334 SOUGAS000-B SOUTHWEST GAS CORPORATION 1/15/01 OPERATING2 PMCHK00000156 $318.98 200012335 TERINT000-B TERMINEX INTERNATIONAL 1/15/01 OPERATING2 PMCHK00000156 $268.00
10 Corporate Company VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Audit Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------- ------ 200012336 TRIARO000-B TRIARCO 1/15/01 OPERATING2 PMCHK00000156 $11.44 200012337 U0CWIN000-B U-C WINDOW CLEANING 1/15/01 OPERATING2 PMCHK00000156 $598.76 200012338 US0WES003-B US WEST COMMUNICATIONS-29060 1/15/01 OPERATING2 PMCHK00000156 $5,914.92 200012339 VANPAP000-B VAN PAPER COMPANY 1/15/01 OPERATING2 PMCHK00000156 $480.91 200012340 WASMAN001-B WASTE MANAGEMENT OF ARIZONA 1/15/01 OPERATING2 PMCHK00000156 $522.36 200012341 WASMAN002-B WASTE MANAGEMENT-SAVAGE MN 1/15/01 OPERATING2 PMCHK00000156 $475.66 200012342 WESINN000-B WESTERN INNOVATIONS INC 1/15/01 OPERATING2 PMCHK00000156 $4,200.00 200012343 WICPIL000-B WICK PILCHER INSURANCE, INC. 1/15/01 OPERATING2 PMCHK00000156 $1,572.00 200012344 SOUGAS000-B SOUTHWEST GAS CORPORATION 1/15/01 OPERATING2 PMCHK00000156 $410.80 200012345 LYN000000-B LYNCH,MICHAEL 1/17/01 OPERATING2 PMCHK00000157 $195.40 200012346 SHAN0N000-B SHADE N NET OF ARIZONA 1/18/01 OPERATING2 PMCHK00000158 $425.00 200012347 IMPFIN000-B IMPERIAL FINANCIAL PRINTING 1/19/01 OPERATING2 PMCHK00000159 $242.50 200012348 PARCHR001-B CHRISTINE PARADIS 1/19/01 OPERATING2 PMCHK00000159 $72.40 200012349 SCHMAG000-B SCHOOLHOUSE MAGAZINE 1/19/01 OPERATING2 PMCHK00000159 $688.00 200012350 WELBAN000-B WELLS FARGO BANK 1/19/01 OPERATING2 PMCHK00000160 $59,444.57 200012351 WELBAN000-B WELLS FARGO BANK 1/19/01 OPERATING2 PMCHK00000160 $40,032.91 200012352 WOO LYD000-B LYDIA WOO 1/19/01 OPERATING2 PMCHK00000161 $930.80 200012353 REE000000-B REEVES,LARRY 1/19/01 OPERATING2 PMCHK00000162 $496.09 200012354 US0FOO000-B US FOODSERVICE 1/19/01 OPERATING2 PMCHK00000162 $11,161.79 200012355 LYN000000-B LYNCH,MICHAEL 1/24/01 OPERATING2 PMCHK00000163 $285.32 200012356 NOP000000-B NOPPENBERG,KAREN 1/24/01 OPERATING2 PMCHK00000163 $124.49 200012357 SPA000000-B SPATARO,LUCIAN 1/24/01 OPERATING2 PMCHK00000163 $299.69 200012358 WELBAN000-B WELLS FARGO BANK 1/24/01 OPERATING2 PMCHK00000163 $24.00 200012359 RICBUR000-B RICHARD BURDEN 1/25/01 OPERATING2 PMCHK00000164 $100.00 200012360 ACMLOC000-B ACME LOCKSMITH CO 1/25/01 OPERATING2 PMCHK00000165 $245.00 200012361 USTRUS000-B US TRUSTEE PROGRAM PMT CTR 1/26/01 OPERATING2 PMCHK00000166 $7,500.00 200012362 LANMAR000-B MARK LANE 1/29/01 OPERATING2 PMCHK00000167 $46.43 200012363 ACMLOC000-B ACME LOCKSMITH CO 1/30/01 OPERATING2 PMCHK00000168 $128.28 200012364 AICRED000-B A.I. CREDIT CORP. 1/30/01 OPERATING2 PMCHK00000168 $10,529.51 200012365 ARC000000-B ARC 1/30/01 OPERATING2 PMCHK00000168 $1,173.97 200012366 ARIDEP001-B ARIZONA DEPARTMENT OF REVENUE 1/30/01 OPERATING2 PMCHK00000168 $50.00 200012367 AT&TWIR06-B AT&T WIRELESS SERVICES-PHOENIX 1/30/01 OPERATING2 PMCHK00000168 $6,984.42 200012368 FEDEXP000-B FEDERAL EXPRESS 1/30/01 OPERATING2 PMCHK00000168 $1,009.53 200012369 GECAP0003-B GE CAPITAL 1/30/01 OPERATING2 PMCHK00000168 $2,476.06 200012370 IKOOFF003-B IKON OFFICE SOLUTIONS (CA) 1/30/01 OPERATING2 PMCHK00000168 $833.44 200012371 MINDEP000-B MINNESOTA DEPT OF REVENUE 1/30/01 OPERATING2 PMCHK00000168 $1,057.00 200012372 NELPAT000-B PAT NELSON 1/30/01 OPERATING2 PMCHK00000168 $12.80 200012373 STAOF0002-B STATE OF NEW JERSEY 1/30/01 OPERATING2 PMCHK00000168 $200.00 200012374 US0WES003-B US WEST COMMUNICATIONS-29060 1/30/01 OPERATING2 PMCHK00000168 $355.96 200012375 ACTSUP000-B ACTIVITY SUPPLY 1/30/01 OPERATING2 PMCHK00000169 $14.90 200012376 ADAROA000-B ADAM ROACH 1/30/01 OPERATING2 PMCHK00000169 $855.00 200012377 ALLFOO001-B ALLIANT FOODSERVICE - AZ 1/30/01 OPERATING2 PMCHK00000169 $96.90 200012378 ALLFOO008-B ALLIANT FOODSERVICE - AZ 1/30/01 OPERATING2 PMCHK00000169 $2,245.21 200012379 ALLFOO009-B ALLIANT FOODSERVICE - MN 1/30/01 OPERATING2 PMCHK00000169 $1,092.72 200012380 AMELIN000-B AMERIPRIDE LINEN AND APPAREL 1/30/01 OPERATING2 PMCHK00000169 $97.65 200012381 AMESTU000-B AMERICAN STUDENT TRANSPORTATIO 1/30/01 OPERATING2 PMCHK00000169 $467.00 200012382 APS200000-B APS - 2907 1/30/01 OPERATING2 PMCHK00000169 $5,137.15 200012383 ARISCI000-B ARIZONA SCIENCE CENTER 1/30/01 OPERATING2 PMCHK00000169 $50.00 200012384 AT&T78522-B AT&T - 78522 1/30/01 OPERATING2 PMCHK00000169 $22.13 200012385 AT&TNE297-B AT&T- NE - 2971 1/30/01 OPERATING2 PMCHK00000169 $11.91 200012386 AT&TPHO00-B AT&T PHOENIX-78225 1/30/01 OPERATING2 PMCHK00000169 $40.61 200012387 ATTGA0000-B ATT-GA-277019 1/30/01 OPERATING2 PMCHK00000169 $2,257.20 200012388 BELLAR000 LARRY BELL 1/30/01 OPERATING2 PMCHK00000169 $744.50 200012389 BUGBUS000-B BUG BUSTERS, INC. 1/30/01 OPERATING2 PMCHK00000169 $117.16 200012390 CHICYN000-B CYNTHIA CHILTON 1/30/01 OPERATING2 PMCHK00000169 $178.20 200012391 CITPHO296-B CITY OF PHOENIX 29663 1/30/01 OPERATING2 PMCHK00000169 $686.68 200012392 CITSCO744-B CITY OF SCOTTSDALE -7447 1/30/01 OPERATING2 PMCHK00000169 $192.21 200012393 CITSCOUTI-B CITY OF SCOTTSDALE-UTILITIES 1/30/01 OPERATING2 PMCHK00000169 $3,134.69 200012394 CON000000-B CONCENTRA 1/30/01 OPERATING2 PMCHK00000169 $30.00 200012395 COUCHE000-B COURTESY CHEVROLET 1/30/01 OPERATING2 PMCHK00000169 $600.35 200012396 CRASUS000-B SUSAN CRANDALL 1/30/01 OPERATING2 PMCHK00000169 $4,969.65 200012397 CRESTA000-B CREATION STATION 1/30/01 OPERATING2 PMCHK00000169 $728.00 200012398 CULWAT000-B CULLIGAN WATER COND 1/30/01 OPERATING2 PMCHK00000169 $145.93 200012399 ENEXCE000-B XCEL ENERGY 1/30/01 OPERATING2 PMCHK00000169 $1,609.96 200012400 FEVJOD000-B JODI FEVERHELM 1/30/01 OPERATING2 PMCHK00000169 $125.00 200012401 FIEGAR000-B GARY FIEBER 1/30/01 OPERATING2 PMCHK00000169 $2,526.64 200012402 FIREQU000-B FIRSTAR EQUIPMENT FINANCE 1/30/01 OPERATING2 PMCHK00000169 $6,673.00 200012403 FOS000000-B FOSTER,REBECCA 1/30/01 OPERATING2 PMCHK00000169 $1,419.47 200012404 GAIRAN000-B GAINEY RANCH TENNIS 1/30/01 OPERATING2 PMCHK00000169 $520.00 200012405 GIBRHO000-B RHONDA GIBSON 1/30/01 OPERATING2 PMCHK00000169 $50.00 200012406 HATTER000-B TERRY HATHAWAY 1/30/01 OPERATING2 PMCHK00000169 $615.36 200012407 IGHDAW000-B IGHODARO, DAWN 1/30/01 OPERATING2 PMCHK00000169 $36.74 200012408 IKOOFF001-B IKON OFFICE SOLUTION (AZ) 1/30/01 OPERATING2 PMCHK00000169 $1,709.43 200012409 IOSCAP000-B IOS CAPITAL-TEXAS 1/30/01 OPERATING2 PMCHK00000169 $4,719.01
11 Corporate Company VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Audit Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------- ------ 200012410 JL0HAM000-B JL HAMMETT CO- NO 1/30/01 OPERATING2 PMCHK00000169 $753.69 200012411 JOHJEFF000-B JEFFREY JOHNSON 1/30/01 OPERATING2 PMCHK00000169 $117.00 200012412 KP0LIM000-B KP LIMITED INC 1/30/01 OPERATING2 PMCHK00000169 $10,386.03 200012413 MAJDAN000-B dan majerle 1/30/01 OPERATING2 PMCHK00000169 $1,400.00 200012414 MINVIS000-B MINNESOTA VISITING NURSE AGCY 1/30/01 OPERATING2 PMCHK00000169 $150.00 200012416 NES000000-B NESTER,ELAINE 1/30/01 OPERATING2 PMCHK00000169 $217.74 200012417 NOBSCH000-B NOBEL SCHOOL MGMT SVC 1/30/01 OPERATING2 PMCHK00000169 $7,965.00 200012418 PARWAS000-B PARADISE WASTE SERVICES 1/30/01 OPERATING2 PMCHK00000169 $455.33 200012419 PBC000000-B PBCC 1/30/01 OPERATING2 PMCHK00000169 $1,379.76 200012420 PEONAT000-B PEOPLES NATURAL GAS 1/30/01 OPERATING2 PMCHK00000169 $4,125.00 200012421 PHOBLA000-B PHOENIX BLACK BELT ACADEMY 1/30/01 OPERATING2 PMCHK00000169 $97.50 200012422 PITBOW001-B PITNEY BOWES-85390 1/30/01 OPERATING2 PMCHK00000169 $247.67 200012423 PROONE000-B PROTECTION ONE - AZ 1/30/01 OPERATING2 PMCHK00000169 $5.11 200012424 QWE000000-B QWEST 1/30/01 OPERATING2 PMCHK00000169 $40.64 200012425 RAYSTE000-B STEPHANIE RAY 1/30/01 OPERATING2 PMCHK00000169 $310.00 200012426 RGIS000-B RGIS INVENTORY SPECIALISTS 1/30/01 OPERATING2 PMCHK00000169 $1,260.00 200012427 SCHCHA000-B CHARLES SCHRON 1/30/01 OPERATING2 PMCHK00000169 $409.00 200012428 SCHDIA000-B DIANA SCHIFTER 1/30/01 OPERATING2 PMCHK00000169 $235.00 200012429 SCIMAR000-B MARCIA REMAN SCIALLI 1/30/01 OPERATING2 PMCHK00000169 $1,560.00 200012430 SHAFOO000-B SHAMROCK FOODS COMPANY 1/30/01 OPERATING2 PMCHK00000169 $572.53 200012431 SMIMIC000-B SMITH MICRO TECHNOLOGIES INC. 1/30/01 OPERATING2 PMCHK00000169 $2,832.75 200012432 STATRI000-B STAR TRIBUNE 1/30/01 OPERATING2 PMCHK00000169 $125.20 200012433 TAHINC000-B TAHER, INC 1/30/01 OPERATING2 PMCHK00000169 $5,082.46 200012434 TEADIS000-B TEACHERS DISCOVERY 1/30/01 OPERATING2 PMCHK00000169 $15.70 200012435 TNTCLE000-B TNT CLEANING 1/30/01 OPERATING2 PMCHK00000169 $4,540.10 200012436 TOPCUT000-B TOP CUT SEASONAL CARE CO 1/30/01 OPERATING2 PMCHK00000169 $1,379.69 200012437 TRAINC000-B TRANS-ALARM, INC. 1/30/01 OPERATING2 PMCHK00000169 $141.90 200012438 TUMTOW000-B TUMBLE TOWN GYMNASTICS 1/30/01 OPERATING2 PMCHK00000169 $529.00 200012439 U0CWIN000-B U-C WINDOW CLEANING 1/30/01 OPERATING2 PMCHK00000169 $762.54 200012440 UNIMAR000-B UNITED MARTIAL ARTS OF PHOENIX 1/30/01 OPERATING2 PMCHK00000169 $306.00 200012441 US0WES003-B US WEST COMMUNICATIONS-29060 1/30/01 OPERATING2 PMCHK00000169 $2,818.06 200012442 VANPAP000-B VAN PAPER COMPANY 1/30/01 OPERATING2 PMCHK00000169 $114.49 200012443 WAMCHA000-B CHANDA WAMPLER 1/30/01 OPERATING2 PMCHK00000169 $31.92 200012444 WELBAN000-B WELLS FARGO BANK 1/30/01 OPERATING2 PMCHK00000169 $440.00 200012445 WESINN000-B WESTERN INNOVATIONS INC 1/30/01 OPERATING2 PMCHK00000169 $1,900.00 200012446 WRIDON000-B DONALD WRIGHT 1/30/01 OPERATING2 PMCHK00000169 $1,132.76 200012447 EDUCOR000-B EDUCORP PROPERTIES, INC 1/30/01 OPERATING2 PMCHK00000170 $32,837.63 200012448 ARIDEP001-B ARIZONA DEPARTMENT OF REVENUE 1/31/01 OPERATING2 PMCHK00000171 $50.00 200012449 LYN000000-B LYNCH,MICHAEL 1/31/01 OPERATING2 PMCHK00000171 $95.02 200012450 MINDEP000-B MINNESOTA DEPT OF REVENUE 1/31/01 OPERATING2 PMCHK00000171 $1,050.00 200012451 BONJAM000-B JAMES BONFIGLIO 1/31/01 OPERATING2 PMCHK00000172 $12,611.25 200012452 ENGBER000-B ENGELMAN BERGER,P.C. 1/31/01 OPERATING2 PMCHK00000172 $25,019.52 200012453 LILJ.0000-B LILYQUIST, J. GARY 1/31/01 OPERATING2 PMCHK00000173 $244.34 200012541 WELBAN000-B WELLS FARGO BANK 1/19/01 OPERATING2 PMCHK00000191 $68,951.50 ----------- Total Checks: 185 Total Amount of Checks: $645,926.03 ===========
12 Corporate Company VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Audit Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------- ------ 800050276 CHALEA000-B CHALLENGER LEARNING CTR 1/11/01 OPERATING PMCHK00000037 $248.00 800050278 CRAMAR000-B CRAWFORD,ANN MARIE 1/11/01 OPERATING PMCHK00000037 $100.08 800050279 CRODAI000-B CROWS DAIRY 1/11/01 OPERATING PMCHK00000037 $292.00 800050280 RAMFAR000-B RAMARK FARMS 1/11/01 OPERATING PMCHK00000037 $200.00 800050281 AZCON0000-B AZ CONSTRUCTION AND MAINTENANC 1/12/01 OPERATING PMCHK00000038 $4,151.35 800050282 ADTSEC000-B ADT SECURITY - CO 1/15/01 OPERATING PMCHK00000039 $37.17 800050283 ATHIN0000-B ATHLETES IN TRAINING 1/15/01 OPERATING PMCHK00000039 $3,600.00 800050284 ATHTRA001-B ATHLETES IN TRAINING-SOUTHERN 1/15/01 OPERATING PMCHK00000039 $1,320.00 800050285 CITPHO296-B CITY OF PHOENIX 29690 1/15/01 OPERATING PMCHK00000039 $4.88 800050286 CLS000000-B CLS/CLEANWAY 1/15/01 OPERATING PMCHK00000039 $608.38 800050287 DOCTEC000-B DOCUMENT TECHNOLOGIES 1/15/01 OPERATING PMCHK00000039 $722.48 800050288 HUGCAL000-B HUGHES-CALIHAN 1/15/01 OPERATING PMCHK00000039 $121.68 800050289 J.LHAM000-B J.L. HAMMETT CO. 1/15/01 OPERATING PMCHK00000039 $14.39 800050290 KP0LIM000-B KP LIMITED INC 1/15/01 OPERATING PMCHK00000039 $1,749.55 800050291 PROOFF000-B PRO OFFICE EQUIPMENT, INC. 1/15/01 OPERATING PMCHK00000039 $176.31 800050292 PURPOW000-B PURCHASE POWER 1/15/01 OPERATING PMCHK00000039 $33.45 800050293 RUTNOR000-B RUTH NORRIS RYAN 1/15/01 OPERATING PMCHK00000039 $600.00 800050294 SRP000000-B SRP 1/15/01 OPERATING PMCHK00000039 $383.25 800050295 SULSPR000-B SULPHUR SPRINGS ELECTRIC 1/15/01 OPERATING PMCHK00000039 $3,869.03 800050296 THEREH000-B THERAPY REHABILITATION SERVICE 1/15/01 OPERATING PMCHK00000039 $1,470.00 800050297 US0WES003-B US WEST COMMUNICATIONS-29060 1/15/01 OPERATING PMCHK00000039 $270.78 800050298 WASMAN001-B WASTE MANAGEMENT OF ARIZONA 1/15/01 OPERATING PMCHK00000039 $220.77 800050299 WELFAR001-B WELLS FARGO FIN/HUGHES CALIHAN 1/15/01 OPERATING PMCHK00000039 $444.76 800050300 WESINN000-B WESTERN INNOVATIONS INC 1/15/01 OPERATING PMCHK00000039 $750.00 800050301 WICPIL000-B WICK PILCHER INSURANCE, INC. 1/15/01 OPERATING PMCHK00000039 $798.00 800050302 SOUGAS000-B SOUTHWEST GAS CORPORATION 1/15/01 OPERATING PMCHK00000039 $572.49 800050303 ABA000000-B ABACUS 1/19/01 OPERATING PMCHK00000040 $539.44 800050304 CAMCLA000-B CLAUDIA CAMACHO 1/19/01 OPERATING PMCHK00000040 $24.80 800050305 CITPHO296-B CITY OF PHOENIX 29690 1/19/01 OPERATING PMCHK00000040 $203.92 800050306 CITSIEVI2-B CITY OF SIERRA VISTA 1/19/01 OPERATING PMCHK00000040 $2,478.90 800050307 COUCHE000-B COURTESY CHEVROLET 1/19/01 OPERATING PMCHK00000040 $64.28 800050308 CRAMAR000-B CRAWFORD,ANN MARIE 1/19/01 OPERATING PMCHK00000040 $386.05 800050309 DUBDAW000-B DAWN DUBELBEIS 1/19/01 OPERATING PMCHK00000040 $60.76 800050310 HARBRA002-B HARCOURT BRACE IL 1/19/01 OPERATING PMCHK00000040 $101.75 800050311 HUNLIL000-B HUNT, LILLIAN 1/19/01 OPERATING PMCHK00000040 $18.60 800050312 J.LHAM000-B J.L. HAMMETT CO. 1/19/01 OPERATING PMCHK00000040 $44.30 800050313 NEG000000-B NEGRETTI,MARILYN 1/19/01 OPERATING PMCHK00000040 $92.38 800050314 NELSHE000-B SHERRI NELSON 1/19/01 OPERATING PMCHK00000040 $150.00 800050316 ROTCAR000-B CAROL ROTH 1/19/01 OPERATING PMCHK00000040 $100.00 800050317 SCHJAC000-B SCHMIDT, JACKIE 1/19/01 OPERATING PMCHK00000040 $383.03 800050318 SECACC000-B SECURITY ACCESS SYSTEMS INC 1/19/01 OPERATING PMCHK00000040 $157.06 800050319 SRP000000-B SRP 1/19/01 OPERATING PMCHK00000040 $68.88 800050320 THUMOU000-B THUNDER MOUNTAIN CLEANING SERV 1/19/01 OPERATING PMCHK00000040 $2,483.80 800050321 WELFAR001-B WELLS FARGO FIN/HUGHES CALIHAN 1/19/01 OPERATING PMCHK00000040 $406.75 800050322 WELFAR002-B WELLS FARGO 1/19/01 OPERATING PMCHK00000040 $322.80 800050323 WELFAR002-B WELLS FARGO 1/19/01 OPERATING PMCHK00000040 $112.36 800050324 FIRWES000-B FIRST WEST PROPERTIES 1/30/01 OPERATING PMCHK00000041 $16,054.21 800050325 APS200000-B APS - 2907 1/31/01 OPERATING PMCHK00000042 $1,540.69 800050326 ARISCI000-B ARIZONA SCIENCE CENTER 1/31/01 OPERATING PMCHK00000042 $441.00 800050327 ATTGA0000-B ATT-GA-277019 1/31/01 OPERATING PMCHK00000042 $297.50 800050328 AZCON0000-B AZ CONSTRUCTION AND MAINTENANC 1/31/01 OPERATING PMCHK00000042 $323.34 800050329 DESOUT000-B DESERT OUTDOOR CENTER 1/31/01 OPERATING PMCHK00000042 $428.00 800050330 KP0LIM000-B KP LIMITED INC 1/31/01 OPERATING PMCHK00000042 $1,914.75 800050331 LIV000-B PIONEER LIVING HISTORY 1/31/01 OPERATING PMCHK00000042 $105.00 800050332 PAIPAR000-B PAINTING IN THE PARK 1/31/01 OPERATING PMCHK00000042 $105.00 800050333 PSYPAT004-B PSYCHOLOGICAL PATHWAYS 1/31/01 OPERATING PMCHK00000042 $600.00 800050334 PUEGRA000-B PUEBLO GRANDE MUSEUM 1/31/01 OPERATING PMCHK00000042 $140.00 800050335 SULSPR000-B SULPHUR SPRINGS ELECTRIC 1/31/01 OPERATING PMCHK00000042 $1,674.17 800050336 U0CWIN000-B U-C WINDOW CLEANING 1/31/01 OPERATING PMCHK00000042 $325.08 800050337 US0WES003-B US WEST COMMUNICATIONS-29060 1/31/01 OPERATING PMCHK00000042 $162.72 800050338 WESINN000-B WESTERN INNOVATIONS INC 1/31/01 OPERATING PMCHK00000042 $750.00 ---------- Total Checks: 61 Total Amount of Checks: $55,820.12 ==========
13 EX-99.2 4 ex99-2.txt MONTHLY OPERATING REPORT OF SUNRISE PRESCHOOLS Exhibit 99.2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA In re: ) CASE NO. B-00-10939-ECF-RTB ) SUNRISE EDUCATIONAL SERVICES ) BUSINESS AND INDUSTRY ) MONTHLY OPERATING REPORT ) ) MONTH OF JANUARY ) Debtor(s) ) DATE PETITION FILED: October 6, 2000 ) ) TAX PAYER ID NO. 4101581297 Nature of Debtor's Business: For Profit Educational Services DATE DISCLOSURE STATEMENT: FILED Not Yet Filed TO BE FILED To Be Determined ------------- ---------------- DATE PLAN OF REORGANIZATION: FILED Not Yet Filed TO BE FILED To Be Determined ------------- ---------------- I CERTIFY UNDER PENALTY OF PERJURY THAT THE FOLLOWING MONTHLY OPERATING REPORT AND THE ACCOMPANYING ATTACHMENTS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE. RESPONSIBLE PARTY: /s/ Lusican P. Spataro CEO - --------------------------------------- ---------- ORIGINAL SIGNATURE OF RESPONSIBLE PARTY TITLE Lucian P. Spataro - --------------------------------------- ---------- PRINTED NAME OF RESPONSIBLE PARTY DATE PREPARER: /s/ Douglass E. Snell Controller - --------------------------------------- ---------- ORIGINAL SIGNATURE OF PREPARER TITLE Douglass E. Snell - --------------------------------------- ---------- PRINTED NAME OF PREPARER DATE PERSON TO CONTACT REGARDING THIS REPORT: Douglass E. Snell --------------------------------------- PHONE NUMBER: 480-783-4317 --------------------------------------- ADDRESS: 4515 E. Muirwood Dr. Phoenix, AZ 85048 --------------------------------------- ORIGINAL OF REPORT IS FILED WITH THE COURT, COPY IS FILED WITH U.S. TRUSTEE'S OFFICE SUNRISE EDUCATIONAL SERVICES, INC. B-00-10939-ECF-RTB MONTH: JANUARY RECEIPTS AND DISBURSEMENTS AMOUNTS REPORTED SHOULD BE BANK ACCOUNTS PER THE DEBTOR'S BOOKS, SUNRISE SUNRISE PMTS not per the bank statement OPERATING MADE BY #052-978-7889 TESSERACT TOTAL ------------- --------- ----- ACCOUNT BALANCE - BEGINNING OF MONTH -- -- RECEIPTS STUDENT FEES -- CHARTER SCHOOL REVENUE -- ACCOUNTS RECEIVABLE -- LOANS AND ADVANCES -- SALE OF ASSETS -- TRANSFERS IN FROM OTHER ACCOUNTS 502,824.56 772,178.96 1,275,003.52 OTHER (ATTACH LIST) -- TOTAL RECEIPTS 502,824.56 772,178.96 1,275,003.52 DISBURSEMENTS BUSINESS - ORDINARY OPERATIONS 502,824.56 502,824.56 CAPITAL IMPROVEMENTS -- PRE-PETITION DEBT -- TRANSFERS TO OTHER DIP ACCOUNTS -- PAYMENTS MADE FOR SUNRISE EDU 772,178.96 772,178.96 OTHER (ATTACH LIST) -- REORGANIZATION EXPENSES: ATTORNEY FEES -- ACCOUNTANT FEES -- OTHER PROFESSIONAL FEES -- U.S. TRUSTEE QUARTERLY FEE -- COURT COSTS -- TOTAL DISBURSEMENTS 502,824.56 772,178.96 1,275,003.52 ACCOUNT BALANCE - END OF MONTH -- -- -- THE FOLLOWING SECTION MUST BE FILLED OUT DISBURSEMENTS FOR CALCULATING QUARTERLY FEES: TOTAL DISBURSEMENTS FROM ABOVE 1,275,003.52 LESS: TRANSFERS OUT TO OTHER DIP ACCOUNTS -- PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES TOTAL DISBURSEMENTS FOR CALCULATING QUARTERLY FEES: 1,275,003.52 2 Sunrise Educational Services, Inc. Statement of Operations For the Month Ending January 31, 2000 Revenue Tuition and Fees Revenue $1,275,097.41 Government Revenue 73,355.82 Food Revenue 4,592.35 Discounts (161,321.72) Refunds/Returns 324.14 ------------- Total Revenue 1,192,048.00 ------------- Operational Costs Salaries and Wages 549,250.31 Taxes and Benefits 41,554.84 Classroom Expenses 13,968.68 Food Programs Expense 51,556.69 Transportation Expenses 11,025.17 Maintenance Expense 90,723.11 Insurance Expense (refund) (11,066.57) Rent Expense 235,554.91 Security Services Expense 2,682.64 Personal Property Tax Expense 2,130.20 Real Property Tax Expense 7,488.53 Utilities Expense 24,875.98 ------------- Total Operational Costs 1,019,744.49 ------------- General & Administrative Costs Advertising, Mktg, Promo Exp 4,834.08 Bad Debt Expense 2,606.95 Bank Charges/Processing Fees-A 13,871.69 Computer/Technology Expense 5,761.19 Licenses & Fees Expense 9,228.63 Office/School Supplies Expense 1,688.80 Penalties and Late Fee Charges 3,700.00 Postage and Printing Expense 529.74 Pre-Employment Expense 2,569.00 Telephone Expense 12,823.24 Travel Expense 857.31 Allocated Corporate Overhead 157,194.00 Other Expenses 2,524.89 ------------- Total General and Administrative Expenses 218,189.52 ------------- Other Income 120.00 ------------- Net Interest and Other Income (Expense) 120.00 ------------- Depreciation Expense 36,057.69 ------------- Total Depreciation and Amortization 36,057.69 ------------- REORGANIZATION EXPENSES Professional Fees Allocated 96,857.00 ------------- Total Reorganization Expenses 96,857.00 ------------- Net Loss $ (178,680.70) ============= 3 Sunrise Educational Services, Inc. Balance Sheet January 31, 2000 ASSETS Current Assets Cash and Cash Equivalents $ 9,725.00 Accounts Receivable, net 451,965.00 Prepaid Rent 246,659.74 Other Current Assets 16,571.96 ------------- Total Current Assets 724,921.70 Due From Tesseract 996,425.00 Property and Equipment, net 1,088,591.22 Deposits and Other Assets 177,385.10 ------------- Total Assets $2,987,323.02 ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable $ 74,338.64 Checks in Process of Collection 321,886.18 Payroll and Related Accruals 536,276.62 Deferred Revenue and Tuition Deposits 117,038.81 ------------- Total Current Liabilities 1,049,540.25 ------------- Pre-Petition Liabilities Accounts Payable 655,109.22 Other Current Liabilities 139,954.72 Long-Term Debt 222,967.25 ------------- Total Pre-Petition Liabilities 1,018,031.19 ------------- Reserve for Closed Schools 143,661.34 Other Long-Term Obligations 197,478.89 ------------- Total Long-Term Liabilities 341,140.23 ------------- Total Liabilities 2,408,711.67 ------------- SHAREHOLDERS' EQUITY Pre-Petition Shareholders' Equity 1,147,962.85 Post Petition Retained Deficit (569,351.50) ------------- Total Shareholders' Equity 578,611.35 ------------- Total Liabilities and Shareholders' Equity $2,987,323.02 ============= 4 CASE NUMBER: B-00-10939-ECF-RTB STATUS OF ASSETS
0-30 31-60 60+ ACCOUNTS RECEIVABLE TOTAL DAYS DAYS DAYS - ------------------- ----- ---- ---- ---- TOTAL ACCOUNTS RECEIVABLE 451,965 383,101 39,937 28,927 LESS: AMOUNT CONSIDERED UNCOLLECTIBLE ACCOUNTS RECEIVABLE (NET) 451,965 383,101 39,937 28,927 SCHEDULED CURRENT FIXED ASSETS AMOUNT ADDITIONS DELETIONS AMOUNT - ------------ ------ --------- --------- ------ REAL PROPERTY BUILDING IMPROVEMENTS/PLANT 1,020,140 56,214 1,076,355 ACCUMULATED DEPRECIATION (413,993) (67,947) (481,940) NET BUILDINGS/PLANT 606,147 (11,733) -- 594,415 EQUIPMENT 755,300 24,266 779,566 ACCUMULATED DEPRECIATION (511,115) (62,545) (573,660) NET EQUIPMENT 244,186 (38,279) -- 205,907 AUTOS & VEHICLES 953,839 953,839 ACCUMULATED DEPRECIATION (625,670) (39,899) (665,569) NET AUTOS & VEHICLES 328,170 (39,899) -- 288,271
5 CASE NUMBER: B-00-10939-ECF-RTB STATUS OF LIABILITIES AND SENSITIVE PAYMENTS POSTPETITION UNPAID OBLIGATIONS TOTAL 0-30 31-60 61-90 91+ ------------------ ----- ---- ----- ----- --- ACCOUNTS PAYABLE 74,339 69,183 -- 5,106 50 TAXES PAYABLE 41,942 41,942 ACCRUED PAYROLL AND BENEFITS 494,335 494,335 PREPAID TUITION 117,039 117,039 SECURED DEBT OUTSTANDING A/P CHECKS 321,886 321,886 OTHER (ATTACH LIST) --------- --------- --- ------ --- TOTAL POST-PETITION LIABILITIES 1,049,541 1,044,385 -- 5,106 50 ========= ========= === ====== === PAYMENTS TO INSIDERS AND PROFESSIONALS INSIDERS AMOUNT PD TOTAL PD NAME REASON FOR PAYMENT THIS MONTH TO DATE - ---- ------------------ ---------- ------- NONE TOTAL PAYMENTS TO INSIDERS -- -- PROFESSIONALS DATE OF COURT TOTAL ORDER AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE & UNPAID - ---- ------- -------- ---- ------- -------- NONE 6 CASE NUMBER: B-00-10939-ECF-RTB CASE STATUS QUESTIONNAIRE YES NO --- -- HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT OTHER THAN A DEBTOR IN POSSESSION ACCOUNT? NO ARE ANY POSTPETITION RECEIVABLES (ACCOUNTS, NOTES, OR LOANS) DUE FROM RELATED PARTIES? NO ARE ANY WAGE PAYMENTS PAST DUE? NO ARE ANY U.S. TRUSTEE QUARTERLY FEES DELINQUENT? NO CURRENT NUMBER OF EMPLOYEES: 479 INSURANCE CARRIER AND PERIOD EXPIRATION PAYMENT AMOUNT TYPE OF POLICY POLICY NUMBER COVERED DATE & FREQUENCY - -------------- ------------- ------- ---- ----------- Gen Liability CLI0018811 3/1/00 3/1/01 39,208.72 /month Auto Liability BAP0708409 5/1/00 3/1/01 Included above Excess Liability UMI0000552 3/1/00 3/1/01 Included above Workers Comp 307512-4 12/1/00 11/30/01 Monthly as a % of PR Gen Liability CLI0018810 3/1/00 3/1/01 Included above Blanket Contents 59UUNGG2042 5/1/00 3/1/01 Included above WHAT STEPS HAVE BEEN TAKEN TO REMEDY ANY OF THE PROBLEMS THAT BROUGHT ABOUT THE CHAPTER 11 FILING? Purchasing of new schools has ceased, and administrative expenses have been reduced. Other restructuring measures are being considered. LIST ANY MATTERS THAT ARE DELAYING THE FILING OF A PLAN OF REORGANIZATION? 7 SUNRISE EDUCATIONAL SERVICES, INC. CASH FLOW ANALYSIS B-00-10939-ECF-RTB BEGINNING FUNDS AVAILABLE: $ (3,449.28) ------------- Cash In: Telecheck $197,782.26 Credit Card Deposit (Preschools) 521,139.53 Regular Deposits (Preschools) 533,101.64 ------------- Daily Cash In: $1,252,023.43 Cash Out: Preschool A/P $ 502,824.56 Preschool Payroll 684,582.58 Corporate A/P (allocated) 87,596.38 Preschool NSF 19,376.15 ------------- Daily Cash Out: $1,294,379.67 ------------- Net Cash In/Out: $ (42,356.24) ------------- ENDING FUNDS AVAILABLE: $ (45,805.52) ============= NOTE: The cash deficit shown above was reversed on February 1 the deficit is due to outstanding checks. Actual cash in bank bank has not gone below zero. 8 Sunrise Preschools, Inc. VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------------- ------ 100012358 MAR000000 MARRO,GINNY 1/2/01 OPERATING PMCHK00000039 $500.00 100012359 HOUCHE000 Cheryl Houser 1/2/01 OPERATING PMCHK00000039 $109.00 100012360 US0FOO000 US FOODSERVICE 1/3/01 OPERATING PMCHK00000040 $9,633.13 100012361 SANBAR000 SANTA BARBARA BANK & TRUST 1/3/01 OPERATING PMCHK00000040 $16,668.01 100012362 MOTVEH000 MOTOR VEHICLE DIVISION 1/3/01 OPERATING PMCHK00000040 $414.00 100012363 MOTVEH000 MOTOR VEHICLE DIVISION 1/3/01 OPERATING PMCHK00000040 $269.21 100012364 MOTVEH000 MOTOR VEHICLE DIVISION 1/3/01 OPERATING PMCHK00000040 $178.59 100012365 VIP000000 VIP 1/3/01 OPERATING PMCHK00000040 $15.75 100012366 CITPHOWAT CITY OF PHOENIX (WATER SVCS)29 1/3/01 OPERATING PMCHK00000041 $186.15 100012367 DAVBAN001-B DAVE BANG ASSOCIATES, INC. 1/5/01 OPERATING PMCHK00000042 $4,617.13 100012368 SHANET0001-B SHADE 'N NET 1/5/01 OPERATING PMCHK00000042 $1,363.38 100012369 CITCHAUT1 CITY OF CHANDLER - UTILITIES 1/9/01 OPERATING PMCHK00000043 $504.83 100012370 GARLYN000 LYNN GARSHA 1/9/01 OPERATING PMCHK00000043 $371.21 100012371 RANKAT000 RANDALL, KATHY 1/9/01 OPERATING PMCHK00000043 $321.36 100012372 SANSHE000 SHEILA SANVILLE 1/9/01 OPERATING PMCHK00000043 $498.90 100012373 STUDEB000 STUBBS, DEBORAH A. 1/9/01 OPERATING PMCHK00000043 $382.24 100012374 THORAE000 THOMAS, RAE ANN 1/9/01 OPERATING PMCHK00000043 $242.61 100012375 TOOLOR000 LORI TOOLEY 1/9/01 OPERATING PMCHK00000043 $351.31 100012378 MCE000000 MCESD 1/11/01 OPERATING PMCHK00000044 $405.00 100012379 WELFAR001 WELLS FARGO 1/11/01 OPERATING PMCHK00000044 $660.00 100012380 WELFAR001 WELLS FARGO 1/11/01 OPERATING PMCHK00000044 $352.00 100012381 WELFAR001 WELLS FARGO 1/11/01 OPERATING PMCHK00000044 $440.00 100012382 WELFAR001 WELLS FARGO 1/11/01 OPERATING PMCHK00000044 $924.00 100012383 WELFAR001 WELLS FARGO 1/11/01 OPERATING PMCHK00000045 $1,056.00 100012384 US0FOO000 US FOODSERVICE 1/11/01 OPERATING PMCHK00000046 $11,475.34 100012385 APS200000 APS-2907 1/12/01 OPERATING PMCHK00000047 $1,307.21 100012386 APS200000 APS-2907 1/12/01 OPERATING PMCHK00000047 $681.93 100012387 APS200000 APS-2907 1/12/01 OPERATING PMCHK00000047 $1,137.28 100012388 APS200000 APS-2907 1/12/01 OPERATING PMCHK00000047 $4,490.92 100012389 APS200000 APS-2907 1/12/01 OPERATING PMCHK00000047 $1,006.27 100012390 APS200000 APS-2907 1/12/01 OPERATING PMCHK00000047 $2,200.76 100012391 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $106.02 100012392 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $106.42 100012393 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $100.51 100012394 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $88.68 100012395 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $112.34 100012396 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $70.95 100012397 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $94.60 100012398 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $112.34 100012399 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $100.51 100012400 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $106.42 100012401 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $100.51 100012402 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $124.16 100012403 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $118.25 100012404 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $112.34 100012405 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $100.51 100012406 ARIAIR000 ARIZONA AIR-SCENT 1/12/01 OPERATING PMCHK00000047 $106.42 100012407 ARIREP000 ARIZONA REPUBLIC 1/12/01 OPERATING PMCHK00000047 $472.00 100012408 AT&TPHO00 AT&T PHOENIX-78225 1/12/01 OPERATING PMCHK00000047 $41.62 100012409 AUGLIS000 LISA AUGUST 1/12/01 OPERATING PMCHK00000047 $50.00 100012410 AZCON0000 AZ CONSTRUCTION AND MAINTENANC 1/12/01 OPERATING PMCHK00000047 $2,487.09 100012411 AZCON0000 AZ CONSTRUCTION AND MAINTENANC 1/12/01 OPERATING PMCHK00000047 $3,192.22 100012412 AZCON0000 AZ CONSTRUCTION AND MAINTENANC 1/12/01 OPERATING PMCHK00000047 $2,906.00 100012413 BANONE003 BANK ONE ARIZONA NA 1/12/01 OPERATING PMCHK00000047 $216.32 100012414 BELVIS000 BELLA VISTA WATER COMPANY 1/12/01 OPERATING PMCHK00000047 $92.73 100012415 BUI70U000 BUILDING 7 UNION HILLS LLC 1/12/01 OPERATING PMCHK00000047 $623.66 100012416 CENLEA000 CENTENNIAL LEASING & SALES INC 1/12/01 OPERATING PMCHK00000047 $408.65 100012417 CITCHA400 CITY OF CHANDLER 1/12/01 OPERATING PMCHK00000047 $10.00 100012418 CITGLEUTI CITY OF GLENDALE - UTILITIES 1/12/01 OPERATING PMCHK00000047 $1,152.47 100012419 CITMESUTI CITY OF MESA - UTILITIES - 187 1/12/01 OPERATING PMCHK00000047 $221.86 100012420 CITPHO296 CITY OF PHOENIX 29663 1/12/01 OPERATING PMCHK00000047 $16.08 100012421 CITPHO296 CITY OF PHOENIX 29663 1/12/01 OPERATING PMCHK00000047 $88.71 100012422 CITTEM296 CITY OF TEMPE - 29617 1/12/01 OPERATING PMCHK00000047 $225.00 100012423 CITTEM296 CITY OF TEMPE - 29617 1/12/01 OPERATING PMCHK00000047 $102.62 100012424 CITTREPHX CITY OF PHX TREASURER 1/12/01 OPERATING PMCHK00000047 $50.00 100012425 CITTREPHX CITY OF PHX TREASURER 1/12/01 OPERATING PMCHK00000047 $50.00 100012426 CITTREPHX CITY OF PHX TREASURER 1/12/01 OPERATING PMCHK00000047 $50.00
9 Sunrise Preschools, Inc. VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------------- ------ 100012427 CITTREPHX CITY OF PHX TREASURER 1/12/01 OPERATING PMCHK00000047 $50.00 100012428 CLS000000 CLS/CLEANWAY 1/12/01 OPERATING PMCHK00000047 $11,796.29 100012429 COCCNT000 COCHISE COUNTY TREASURER 1/12/01 OPERATING PMCHK00000047 $2,249.33 100012430 COUCHE000 COURTESY CHEVROLET 1/12/01 OPERATING PMCHK00000047 $236.10 100012431 COUCHE000 COURTESY CHEVROLET 1/12/01 OPERATING PMCHK00000047 $782.65 100012432 COUCHE000 COURTESY CHEVROLET 1/12/01 OPERATING PMCHK00000047 $75.41 100012433 COUCHE000 COURTESY CHEVROLET 1/12/01 OPERATING PMCHK00000047 $191.95 100012434 CITMESUTI CITY OF MESA - UTILITIES - 187 1/15/01 OPERATING PMCHK00000048 $158.58 100012435 DISSCH000-B DISCOUNT SCHOOL SUPPLY 1/15/01 OPERATING PMCHK00000048 $814.78 100012436 ECO000000 ECOLAB 1/15/01 OPERATING PMCHK00000048 $320.89 100012437 ELEWES000 ELECTRONICS WEST, INC. 1/15/01 OPERATING PMCHK00000048 $239.00 100012438 EXTCLE000 EXTRACTION CLEANING COMPANY 1/15/01 OPERATING PMCHK00000048 $72.03 100012439 FONRAU000 RAUL FONSECA 1/15/01 OPERATING PMCHK00000048 $97.50 100012440 FREMEY000-B FRED MEYERS 1/15/01 OPERATING PMCHK00000048 $345.00 100012441 GARSUS00 SUSAN GARRETT 1/15/01 OPERATING PMCHK00000048 $51.00 100012442 GECAP0003 GE CAPITAL 1/15/01 OPERATING PMCHK00000048 $1,661.91 100012443 HEAIMC000 HEALTHSOUTH IMC INC-PHOENIX 1/15/01 OPERATING PMCHK00000048 $116.00 100012444 HEASAV000 HEART SAVERS 1/15/01 OPERATING PMCHK00000048 $684.00 100012445 HON00P000 HONEYWELL,INC. - PHX 1/15/01 OPERATING PMCHK00000048 $213.00 100012446 HORDIS000 HORIZON DISTRIBUTION 1/15/01 OPERATING PMCHK00000048 $67.91 100012447 IKOOFF003 IKON OFFICE SOLUTIONS (CA) 1/15/01 OPERATING PMCHK00000048 $177.74 100012448 JAKBRE000 JAKE BREAK CAFE 1/15/01 OPERATING PMCHK00000048 $1,152.94 100012449 KIDCON000 KIID CONCEPTS 1/15/01 OPERATING PMCHK00000048 $690.00 100012450 LAKLEA000-B LAKESHORE LEARNING MATERIALS 1/15/01 OPERATING PMCHK00000048 $2,476.06 100012451 LPS000000 LPS.CO 1/15/01 OPERATING PMCHK00000048 $78.08 100012452 MARPUB000 MARCOA PUBLISHING INC 1/15/01 OPERATING PMCHK00000048 $344.95 100012453 MOUPAR001 MOUNTAIN PARK RANCH HOA 1/15/01 OPERATING PMCHK00000048 $102.00 100012454 NEWLYN000 LYNNETTE NEWCOMB 1/15/01 OPERATING PMCHK00000048 $114.00 100012455 NIEMON000 NIENHUIS MONTESSORI 1/15/01 OPERATING PMCHK00000048 $2.60 100012456 NOP000000 NOPPENBERG,KAREN 1/15/01 OPERATING PMCHK00000048 $92.27 100012457 OPECLE000 OPEN WORKS 1/15/01 OPERATING PMCHK00000048 $1,170.00 100012458 PACALA000 PACIFIC ALARMS COMPANY 1/15/01 OPERATING PMCHK00000048 $370.00 100012459 PITBOW000 PITNEY BOWES CREDIT CORP-85460 1/15/01 OPERATING PMCHK00000048 $226.02 100012460 PROUSA000 PROFORCE USA 1/15/01 OPERATING PMCHK00000048 $5,051.60 100012461 RCSONS000 R C AND SONS 1/15/01 OPERATING PMCHK00000048 $60.00 100012462 SOUGAS000 SOUTHWEST GAS CORPORATION 1/15/01 OPERATING PMCHK00000048 $120.69 100012463 SRP2950 SRP2950 1/15/01 OPERATING PMCHK00000048 $2,821.14 100012464 SULSPR000 SULPHUR SPRINGS ELECTRIC 1/15/01 OPERATING PMCHK00000048 $478.08 100012465 SUNPOR000 SUN PORTS INTL 1/15/01 OPERATING PMCHK00000048 $261.70 100012466 TATRAN000 TATUM RANCH 1/15/01 OPERATING PMCHK00000048 $120.00 100012467 THUMOU000 THUNDER MOUNTAIN CLEANING SERV 1/15/01 OPERATING PMCHK00000048 $1,848.60 100012468 TOWOF0002 TOWN OF GILBERT - UTILITIES 1/15/01 OPERATING PMCHK00000048 $1,267.38 100012469 U0CWIN000 U-C WINDOW CLEANING 1/15/01 OPERATING PMCHK00000048 $780.16 100012470 US0WES003 US WEST COMMUNICATIONS-29060 1/15/01 OPERATING PMCHK00000048 $4,728.07 100012471 VEL000000 VELA,DANA 1/15/01 OPERATING PMCHK00000048 $1,500.00 100012472 VIRPUB000 VIRGO PUBLISHING INC 1/15/01 OPERATING PMCHK00000048 $42.00 100012473 WASMAN001 WASTE MANAGEMENT OF ARIZONA 1/15/01 OPERATING PMCHK00000048 $2,713.12 100012474 WESINN000 WESTERN INNOVATIONS INC 1/15/01 OPERATING PMCHK00000048 $6,576.95 100012475 WICPIL000 WICK PILCHER INSURANCE, INC. 1/15/01 OPERATING PMCHK00000048 $2,936.00 100012476 WELFAR001 WELLS FARGO 1/16/01 OPERATING PMCHK00000049 $3,700.00 100012477 BANONE003 BANK ONE ARIZONA NA 1/16/01 OPERATING PMCHK00000050 $206.32 100012478 SRP2950 SRP2950 1/16/01 OPERATING PMCHK00000050 $642.80 100012479 WASMAN001 WASTE MANAGEMENT OF ARIZONA 1/16/01 OPERATING PMCHK00000050 $260.50 100012480 MARTRE000 MARICOPA COUNTY TREASURER 1/16/01 OPERATING PMCHK00000051 $4,028.86 100012481 SHEOFMAR000 SHERIFF OF MARICOPA COUNTY 1/16/01 OPERATING PMCHK00000051 $228.57 100012482 APS200000 APS-2907 1/18/01 OPERATING PMCHK00000052 $914.51 100012483 ARIAIR000 ARIZONA AIR-SCENT 1/18/01 OPERATING PMCHK00000052 $567.20 100012484 ARIREP000 ARIZONA REPUBLIC 1/18/01 OPERATING PMCHK00000052 $472.00 100012485 ARRDRI000 ARROWHEAD DRINKING WATER 1/18/01 OPERATING PMCHK00000052 $257.28 100012486 AT&T78522 AT&T - 78225 1/18/01 OPERATING PMCHK00000052 $642.71 100012487 AZCON0000 AZ CONSTRUCTION AND MAINTENANC 1/18/01 OPERATING PMCHK00000052 $3,985.21 100012488 BOWTAM000 TAMI BOWEN 1/18/01 OPERATING PMCHK00000052 $312.35 100012489 BRICOM000 BRIXTON COMMERCIAL CLEANING 1/18/01 OPERATING PMCHK00000052 $1,000.00 100012490 CASELI000 ELIZABETH CASON 1/18/01 OPERATING PMCHK00000052 $315.05 100012491 CHABAN000 CHANDLER BANNER & SIGN CO 1/18/01 OPERATING PMCHK00000052 $80.04 100012492 CHRSIG000 CHRISTY SIGNS 1/18/01 OPERATING PMCHK00000052 $781.07 100012493 CITGLEUTI CITY OF GLENDALE - UTILITIES 1/18/01 OPERATING PMCHK00000052 $379.03 100012494 CITGOO000 CITY OF GOODYEAR 1/18/01 OPERATING PMCHK00000052 $50.00 100012495 CITPEOUTI CITY OF PEORIA - UTILITIES 1/18/01 OPERATING PMCHK00000052 $405.74 100012496 CITPHO293 CITY OF PHOENIX - 29380 1/18/01 OPERATING PMCHK00000052 $30.00 100012497 CITPHOWAT CITY OF PHOENIX (WATER SVCS)29 1/18/01 OPERATING PMCHK00000052 $412.62 100012498 CITSIEVI2 CITY OF SIERRA VISTA 1/18/01 OPERATING PMCHK00000052 $306.13 100012499 COUCHE000 COURTESY CHEVROLET 1/18/01 OPERATING PMCHK00000052 $4,175.80 100012500 CREFUN000 CREATIVE FUNDING 1/18/01 OPERATING PMCHK00000052 $342.60
10 Sunrise Preschools, Inc. VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------------- ------ 100012501 DISSCH000-B DISCOUNT SCHOOL SUPPLY 1/18/01 OPERATING PMCHK00000052 $44.29 100012502 ECO000000 ECOLAB 1/18/01 OPERATING PMCHK00000052 $143.95 100012503 EXTCLE000 EXTRACTION CLEANING COMPANY 1/18/01 OPERATING PMCHK00000052 $1,320.00 100012504 GARMAT000 MATEO GARCIA 1/18/01 OPERATING PMCHK00000052 $50.00 100012505 GECAP0003 GE CAPITAL 1/18/01 OPERATING PMCHK00000052 $647.26 100012506 GILBER000 BERNITA GILLIAM 1/18/01 OPERATING PMCHK00000052 $247.62 100012507 HODCAR000 CARRIE HODGE 1/18/01 OPERATING PMCHK00000052 $492.57 100012508 HOMDEP000 HOME DEPOT 1/18/01 OPERATING PMCHK00000052 $1,360.66 100012509 HONINC001 HONEYWELL INC 5114 1/18/01 OPERATING PMCHK00000052 $213.00 100012510 IKOOFF003 IKON OFFICE SOLUTIONS (CA) 1/18/01 OPERATING PMCHK00000052 $737.34 100012511 IROMOU000 IRON MOUNTAIN 1/18/01 OPERATING PMCHK00000052 $82.50 100012512 JIFLUB001 JIFFY LUBE 1/18/01 OPERATING PMCHK00000052 $28.45 100012513 KINMGM000 KINNEY MANAGEMENT SERVICES 1/18/01 OPERATING PMCHK00000052 $40.00 100012514 LAKLEA000-B LAKESHORE LEARNING MATERIALS 1/18/01 OPERATING PMCHK00000052 $1,024.97 100012515 LOWTAM000 TAMMY LOWE 1/18/01 OPERATING PMCHK00000052 $121.00 100012516 MARALF000 ALFREDA MARTIN 1/18/01 OPERATING PMCHK00000052 $463.50 100012517 MARCNT000 MARICOPA CNTY ENVIROMENTAL SER 1/18/01 OPERATING PMCHK00000052 $1,035.00 100012518 MARJOE000 JOELY MARTIN 1/18/01 OPERATING PMCHK00000052 $124.62 100012519 MONGAR000 MONICA GARCIA 1/18/01 OPERATING PMCHK00000052 $80.00 100012520 MOTVEH000 MOTOR VEHICLE DIVISION 1/18/01 OPERATING PMCHK00000052 $154.88 100012521 MURKEL000 KELLY MURPHY 1/18/01 OPERATING PMCHK00000052 $289.03 100012522 PARBIL000 BILL PARKS 1/18/01 OPERATING PMCHK00000052 $20.00 100012523 PROUSA000 PROFORCE USA 1/18/01 OPERATING PMCHK00000052 $9,454.77 100012524 RANKAT000 RANDALL, KATHY 1/18/01 OPERATING PMCHK00000052 $278.54 100012525 RAOARA000 ARATHI RAO 1/18/01 OPERATING PMCHK00000052 $28.00 100012528 SHUSTO000 SHURGARD STORAGE 1/18/01 OPERATING PMCHK00000052 $513.48 100012529 SRP2950 SRP2950 1/18/01 OPERATING PMCHK00000052 $1,252.71 100012530 THEISL000 THE ISLANDS COMM ASSOC 1/18/01 OPERATING PMCHK00000052 $882.00 100012531 THUMOU000 THUNDER MOUNTAIN CLEANING SERV 1/18/01 OPERATING PMCHK00000052 $1,845.00 100012532 TOOLOR000 LORI TOOLEY 1/18/01 OPERATING PMCHK00000052 $37.36 100012533 UNIPAR000 UNITED PARCEL SERVICE-UPS 1/18/01 OPERATING PMCHK00000052 $75.00 100012535 VEL000000 VELA,DANA 1/18/01 OPERATING PMCHK00000052 $297.81 100012537 YOUFEL000 FELICIA YOUNAN 1/18/01 OPERATING PMCHK00000052 $59.00 100012538 DISSCH000-B DISCOUNT SCHOOL SUPPLY 1/24/01 OPERATING PMCHK00000053 $5,589.11 100012539 USTRU000 US TRUSTEE PROGRAM PMT CTR 1/26/01 OPERATING PMCHK00000054 $7,500.00 100012540 US0FOO000 US FOODSERVICE 1/26/01 OPERATING PMCHK00000055 $11,506.35 100012541 AFTCOU000 AFTERMATH COURIER SERVICE 1/29/01 OPERATING PMCHK00000056 $190.00 100012542 APS200000 APS-2907 1/29/01 OPERATING PMCHK00000056 $6,748.44 100012543 ARIAIR000 ARIZONA AIR-SCENT 1/29/01 OPERATING PMCHK00000056 $88.69 100012544 ARIREP000 ARIZONA REPUBLIC 1/29/01 OPERATING PMCHK00000056 $934.00 100012545 AT&T78522 AT&T - 78225 1/29/01 OPERATING PMCHK00000056 $488.39 100012546 AZCON0000 AZ CONSTRUCTION AND MAINTENANC 1/29/01 OPERATING PMCHK00000056 $4,561.11 100012548 CHEUSA000 CHEVRON USA INC 1/29/01 OPERATING PMCHK00000056 $3,540.90 100012549 CITCHAUT1 CITY OF CHANDLER - UTILITIES 1/29/01 OPERATING PMCHK00000056 $214.41 100012550 CITPHOWAT CITY OF PHOENIX (WATER SVCS)29 1/29/01 OPERATING PMCHK00000056 $129.77 100012551 CITSCO744 CITY OF SCOTTSDALE -7447 1/29/01 OPERATING PMCHK00000056 $50.00 100012552 CITTEM296 CITY OF TEMPE - 29617 1/29/01 OPERATING PMCHK00000056 $225.00 100012553 CITTEMTAX CITY OF TEMPE - TAX 1/29/01 OPERATING PMCHK00000056 $10.00 100012554 COUCHE000 COURTESY CHEVROLET 1/29/01 OPERATING PMCHK00000056 $258.50 100012555 CROBAN000 CROWN BANK LEASING 1/29/01 OPERATING PMCHK00000056 $1,098.04 100012556 GARLYN000 LYNN GARSHA 1/29/01 OPERATING PMCHK00000056 $234.94 100012557 GECAP0003 GE CAPITAL 1/29/01 OPERATING PMCHK00000056 $1,159.05 100012558 GREPLA000 Great Plains 1/29/01 OPERATING PMCHK00000056 $132.57 100012559 HEASAV000 HEART SAVERS 1/29/01 OPERATING PMCHK00000056 $372.00 100012560 HORDIS000 HORIZON DISTRIBUTION 1/29/01 OPERATING PMCHK00000056 $67.91 100012561 KIDCON000 KIID CONCEPTS 1/29/01 OPERATING PMCHK00000056 $690.00 100012562 LPS000000 LPS.CO 1/29/01 OPERATING PMCHK00000056 $224.75 100012563 MAR000000 MARRO,GINNY 1/29/01 OPERATING PMCHK00000056 $342.22 100012564 PITBOW000 PITNEY BOWES CREDIT CORP-85460 1/29/01 OPERATING PMCHK00000056 $268.39 100012565 PROUSA000 PROFORCE USA 1/29/01 OPERATING PMCHK00000056 $993.00 100012566 SANBAR001 SANTA BARBARA BANK & TRUST 1/29/01 OPERATING PMCHK00000056 $289.17 100012567 SHANET0001-B SHADE 'N NET 1/29/01 OPERATING PMCHK00000056 $19.89 100012568 SIESIG000 SIERRA VISTA SIGNS 1/29/01 OPERATING PMCHK00000056 $121.90 100012569 SRP2950 SRP2950 1/29/01 OPERATING PMCHK00000056 $2,482.31 100012570 SULSPR000 SULPHUR SPRINGS ELECTRIC 1/29/01 OPERATING PMCHK00000056 $568.51 100012571 THOLEA000 THOMSON LEARNING 1/29/01 OPERATING PMCHK00000056 $40.70 100012572 TOOLOR000 LORI TOOLEY 1/29/01 OPERATING PMCHK00000056 $552.72 100012573 TOWOF0002 TOWN OF GILBERT - UTILITIES 1/29/01 OPERATING PMCHK00000056 $285.60 100012574 U0CWIN000 U-C WINDOW CLEANING 1/29/01 OPERATING PMCHK00000056 $1,219.05 100012575 US0WES003 US WEST COMMUNICATIONS-29060 1/29/01 OPERATING PMCHK00000056 $4,927.40 100012576 VER000000 VERIFONE 1/29/01 OPERATING PMCHK00000056 $26.35 100012577 WESINN000 WESTERN INNOVATIONS INC 1/29/01 OPERATING PMCHK00000056 $6,600.00 100012578 4DPROP000 4D PROPERTIES 1/30/01 OPERATING PMCHK00000057 $14,052.59 100012579 ANCVIL000 ANCALA VILLAGE SHOPPING CENTER 1/30/01 OPERATING PMCHK00000057 $16,622.87
11 Sunrise Preschools, Inc. VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks
Check Number Vendor ID Vendor Check Name Check Date Checkbook ID Audit Trail Code Amount - ------------ --------- ----------------- ---------- ------------ ---------------- ------ 100012580 BLD7ZEL000 BLDG7UNION HILLS LLC 1/30/01 OPERATING PMCHK00000057 $7,626.51 100012581 DERENT000 DER ENTERPRISES LLP 1/30/01 OPERATING PMCHK00000057 $15,132.93 100012582 DIVINS000 DIVALL INSURED INCOME PROP INC 1/30/01 OPERATING PMCHK00000057 $11,418.37 100012583 FIDCON000 FIDELITY CONTRACT SERVICES,INC 1/30/01 OPERATING PMCHK00000057 $16,481.08 100012584 JONEAR000 EARL JONES 1/30/01 OPERATING PMCHK00000057 $11,145.82 100012585 MCCVEN003 MCCLINTOCK VENTURE LC 1/30/01 OPERATING PMCHK00000057 $13,067.25 100012586 MESDEV000 MESA DEVELOPMENT INC 1/30/01 OPERATING PMCHK00000057 $12,568.84 100012587 PEOINV000 PEORIA INVESTMENTS INC 1/30/01 OPERATING PMCHK00000057 $18,202.23 100012588 SANVIL003 SANTIAGO VILLA (#129) 1/30/01 OPERATING PMCHK00000057 $13,836.33 100012589 SANVIL005 SANTIAGO VILLA (#124) 1/30/01 OPERATING PMCHK00000057 $14,980.76 100012590 SC0WAR000 SC WARNER TEMPE, INC. 1/30/01 OPERATING PMCHK00000057 $12,330.04 100012591 SDMFAM000 SDM FAMILY CORP 1/30/01 OPERATING PMCHK00000057 $13,794.27 100012592 SUNPRE000 SUNRISE PRESCHOOL VI INVESTME 1/30/01 OPERATING PMCHK00000057 $18,533.62 100012593 THEYOU000 THE YOUNG ONES CENTER 1/30/01 OPERATING PMCHK00000057 $6,525.16 100012594 WELFAR002 WELLS FARGO BANK 1/30/01 OPERATING PMCHK00000057 $18,541.69 100012595 WILPRE000 WILLIS PRESCHOOL VI 1/30/01 OPERATING PMCHK00000057 $12,939.66 100012596 ROAFIR000 ROADRUNNER FIRE & SAFETY 1/31/01 OPERATING PMCHK00000058 $1,164.50 100012598 MELUS0000 MELLON US LEASING 1/31/01 OPERATING PMCHK00000060 $5,761.19 ----------- Total Checks: 233 Total Amount of Checks: $502,824.56 ===========
12 EX-99.3 5 ex99-3.txt PRESS RELEASE DATED 3/5/01 Exhibit 99.3 [LETTERHEAD OF HARDT AND JUNCK ASSOCIATES, INC.] NEWS FOR FURTHER INFORMATION, CONTACT: ATHIA HARDT, 602-252-8200 3/5/01 DR. LUCIAN SPATARO RESIGNS AS TESSERACT CEO Dr. Lucian Spataro, Chief Executive Officer of The TesseracT Group, a private company that operates schools, resigned effective March 15 as Chief Executive officer of the organization. He will remain on the company's Board of Directors. Michael Lynch, TesseracT's Chief Operating Officer, has been appointed by the Board to serve as CEO of the company, as well as Chief Operating Officer, effective March 15. TesseracT filed a Chapter 11 petition in U.S. Bankruptcy court in October. Since then, the 11-year-old company has sold two of its private schools to parent groups, and a charter school to the Gan Yeladeem Learning Center. TesseracT also has sold its North Scottsdale private school and adjacent property to Educational Property Investors, Inc., which transaction is set to close this month, after which TesseracT will only own one remaining school -- the Eagan Minnesota private school. TesseracT also continues to operate the Sunrise preschools owned by its wholly-owned subsidiary, Sunrise Educational Services, Inc. Dr. Spataro has resigned to pursue other interests. Dr. Spataro said: "With the conclusion of these most recent transactions, TesseracT, its Board, and I have met our goal of transitioning these schools to other organizations. During this process, we also worked hard to find consensus with our creditors and meet the needs of all of our constituent groups as best we could." -more- ONLY ADD - TESSERACT He added, "I have nothing but gratitude to the many families, employees and vendors of this company, all of whom have been patient and cooperative through this often daunting process." This news release contains forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are described from time to time in the Company's SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and The TesseracT Group disclaims any intent or obligation to update forward-looking statements. -end- -----END PRIVACY-ENHANCED MESSAGE-----