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As filed with the Securities and Exchange Commission on July 10, 2002

Registration No. 333-89474

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Collegis, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware	7379	23-2414968
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

2300 Maitland Center Parkway
Suite 340
Maitland, Florida 32751
(407) 660-1199
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Thomas V. Huber
Collegis, Inc.
2300 Maitland Center Parkway
Suite 340
Maitland, Florida 32751
(407) 660-1199
(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

R. Cabell Morris, Jr.
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
(312) 558-5600 Lawrence D. Levin, Esq.
Katten Muchin Zavis Rosenman
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
(312) 902-5200

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

        If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

        The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JULY 10, 2002

                            Shares

Common Stock

        Prior to this offering, there has been no public market for our common stock. The initial public offering price of the common stock is expected to be between $              and $              per share. We will apply to have our common stock quoted on The Nasdaq Stock Market's National Market under the symbol "CLGS."

        We are selling              shares of common stock and the selling stockholders are selling an aggregate of                            shares of common stock. We will not receive any of the proceeds from the shares of common stock sold by the selling stockholders.

        The underwriters have an option to purchase a maximum of                            additional shares from certain selling stockholders to cover over-allotments of shares.

        Investing in our common stock involves risks. See "Risk Factors" on page 7.

	Price to Public	Underwriting Discounts and Commissions	Proceeds to Collegis	Proceeds to Selling Stockholders
Per Share	$	$	$	$
Total	$	$	$	$

        Delivery of the shares will be made on or about                            , 2002.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse First Boston	Banc of America Securities LLC
U.S. Bancorp Piper Jaffray

The date of this prospectus is                            , 2002

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY	1
RISK FACTORS	7
FORWARD-LOOKING STATEMENTS	14
USE OF PROCEEDS	14
DIVIDEND POLICY	14
CAPITALIZATION	15
DILUTION	16
SELECTED FINANCIAL DATA	17
UNAUDITED PRO FORMA FINANCIAL DATA	18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
BUSINESS	28
MANAGEMENT	40
RELATED PARTY TRANSACTIONS	50
PRINCIPAL AND SELLING STOCKHOLDERS	52
DESCRIPTION OF CAPITAL STOCK	55
SHARES ELIGIBLE FOR FUTURE SALE	58
CERTAIN FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK	60
UNDERWRITING	64
NOTICE TO CANADIAN RESIDENTS	68
LEGAL MATTERS	69
EXPERTS	69
ADDITIONAL INFORMATION	69
INDEX TO FINANCIAL STATEMENTS	F-1

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Dealer Prospectus Delivery Obligation

Until            , 2002 (25 days after the commencement of the offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our common stock. We urge you to read this entire prospectus carefully, especially the risks of investing in our common stock discussed under "Risk Factors" and our financial statements and notes to those statements.

Our Company

        We are a leading provider of integrated academic and administrative services to colleges and universities in the United States. Our solutions address an array of technology-related issues facing colleges and universities, including institutional strategic assessment and planning, implementation of learning technology initiatives, new curricula design and deployment and long-term management of technology resources. We focus on both academic and administrative aspects of institutional operations, helping clients to increase revenues, improve efficiency and enhance competitiveness in the higher education market. In working with our clients, we combine a wide variety of services into a comprehensive solution, positioning us as a long-term strategic partner to colleges and universities.

        The foundation of our solutions is broad expertise in the following areas: higher education institutional strategy, technology resource management, instructional and learning technologies and development of new curricula. We design tailored solutions for each client by formulating a detailed perspective on the client's unique strategic challenges, whether operational, financial or competitive in nature. We then deliver our services through a client service structure that is designed to define objectives, provide accountability in results and regularly reassess our clients' needs. Our functional expertise includes:

•

Strategic Services. We employ a consultative approach to understand the unique needs of each institution, and to develop and implement plans to maximize the utility and value of technology to our client's institutional strategy.



•

Technology Management Solutions. We provide management, leadership and support of campus technology and infrastructure to improve functionality and productivity. Blending leadership from our on-site client service professionals with centralized technical resources and methodologies, we assume complete operational responsibility for our clients' technology resources.



•

Learning Technology Solutions. We provide enterprise-wide learning technology solutions to support our clients' academic missions and instructional goals. Drawing on our unique expertise in higher education applications, we assist in the design and development of technology-based educational initiatives, as well as integration of related administrative and student service applications; and



•

Curriculum Solutions. Capitalizing on industry alliances, we offer our clients fully-developed certification and professional education course materials. Our curriculum solutions, which range from single course material additions to comprehensive turn-key programs, are a scalable resource that allows post-secondary institutions to generate additional revenue by offering broader curricula and reaching new target student groups.

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        We believe we are uniquely positioned to be the long-term strategic partner of choice to U.S. colleges and universities. Unlike technology vendors, systems integrators, broader consulting organizations and specialty service providers, we offer our clients all of the following:

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dedicated focus and specialized expertise in higher education;



•

a comprehensive service offering that drives both revenue growth and cost savings;



•

objective assessment and advice due to our vendor neutral approach;



•

ongoing technology management with a focus on continuous improvement and accountability; and



•

size, stability and a proven track record of success within the higher education market.

        Our business model facilitates company-wide collaboration of technical resources to leverage our collective knowledge and capture best practices and methodologies developed from our broad experience within the higher education market, providing a scalable resource base to benefit our clients. We utilize centralized expertise to provide our clients with technical solutions that they could not easily develop or acquire on their own. At the same time, we tailor our on-site service offerings to the unique needs of each client, providing clear accountability and defined results from a single, comprehensive service partner.

        Our integrated service offering enables us to deliver an identifiable return on investment to our clients from a strategic, operational and financial perspective. Specifically, our services enable post-secondary institutions to:

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increase efficiencies in operations, information technology systems and administration to maximize returns on investments in technology and infrastructure;



•

generate revenue by attracting new students and developing new educational programs;



•

utilize emerging teaching, learning and student management technologies to better serve a growing, dispersed and increasingly technology-savvy student base; and



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enhance competitiveness and institutional reputation through the introduction and improvement of technology in the higher education process.

        Our mission is to partner with our clients to enhance the post-secondary educational experience for students, faculty and administrators.

        We have a proven track record of delivering consistent results to our clients, helping them address their most critical business and technology issues. We have over 15 years of experience in successfully providing technology-related solutions to colleges and universities and currently have over 100 significant engagements with post-secondary institutions across the country. Based upon our successful client relationships, we have earned a reputation for providing high quality services and technical expertise. Because references and referrals play a significant role in obtaining new business in the higher education market, these relationships provide a foundation for future growth.

        Substantially all of our revenue is generated through the delivery of services under fixed-priced contracts that typically have initial terms of three to seven years. Although these contracts are for a fixed term, they are ordinarily renewed or expanded prior to expiration. Since 1997, we have experienced a dollar weighted renewal rate on our technology management contracts in excess of 90%. In most instances, when our contracts are extended, the scope of services is also expanded. Our business model provides us with a significant component of recurring and predictable revenue with over 75% of our total annual revenue having been contractually committed at the beginning of each of the last five years. We achieved compound annual revenue growth of 31.0% from 1997 to 2001.

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        We offer our services to community, regional and national colleges and universities in the United States. According to the Digest of Education Statistics, 2001, a report published by the U.S. Department of Education, as of Spring 2001, there were approximately 4,100 of these institutions with aggregate annual operating budgets of over $270 billion serving approximately 15 million degree-seeking students. The DOE estimates that by 2010 post-secondary enrollments will increase to approximately 17 million degree-seeking students. We expect that enrollments will also rise as more working adults and other non-traditional students elect to continue their educations to obtain additional skills training or specialized certifications to increase their earning potential. The rising numbers of high school graduates, escalating enrollments by working adults and other non-traditional students and rapid growth in non-degree studies are straining the physical and faculty resources of many institutions, particularly mid-sized institutions and community colleges.

        In addition to increasing enrollments, U.S. colleges and universities currently face a number of other challenges, including managing budgetary constraints, outdated technology and administrative systems, rising demand for technology-enhanced education and services and increased competition for students. A growing number of for-profit, post-secondary education providers has further intensified competition among schools for students. Although prevalent among institutions of all sizes, these challenges are particularly acute at mid-sized colleges and universities and community colleges in large, metropolitan areas. Currently, we focus primarily on this market segment because we believe these institutions can benefit most from our services.

        Our goal is to become the primary provider of integrated strategic advisory, education delivery and technology management solutions to post-secondary institutions of all sizes. We intend to pursue the following growth strategies to attain this goal:

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expand our client base by capitalizing on our established reputation and existing relationships within the higher education market;



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broaden and upgrade existing client relationships to enhance our position as their strategic and technology partner;



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further develop our curriculum solutions division to create additional revenue sources for our clients; and



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expand services through internal development and acquisitions to further enhance our value as a comprehensive solutions provider.

        We were formed in Pennsylvania in 1986. On May 23, 1996, we reincorporated in Delaware. On August 31, 2001, we acquired Eduprise, Inc. in exchange for shares of our common stock.

        Our principal executive offices are located at 2300 Maitland Center Parkway, Suite 340, Maitland, Florida 32751. Our telephone number at that location is (407) 660-1199. Our web site is http://www.collegis.com. The information contained on our web site is not incorporated by reference into this prospectus. References in this prospectus to "Collegis", "we", "us" and "our" refer to Collegis, Inc.

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The Offering

Common stock offered by us	shares
Common stock offered by selling stockholders	shares
Common stock to be outstanding after this offering	shares
Use of proceeds	To provide working capital for our operations and to fund general corporate purposes.
Proposed Nasdaq National Market symbol	CLGS

        Except as otherwise indicated, the information in this prospectus assumes the inclusion of 731,994 shares of common stock issuable to certain selling stockholders for resale in this offering upon exercise of all outstanding warrants and does not assume inclusion of the following:

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4,930,985 shares of common stock issuable upon exercise of stock options outstanding as of June 30, 2002 at a weighted average exercise price of $2.94 per share;



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1,000,000 shares of common stock available for issuance under our Employee Stock Purchase Plan;



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2,500,000 shares of common stock available for issuance under our 2002 Stock Incentive Plan; and



•

any shares to be sold by any selling stockholders upon exercise of the underwriters' over-allotment option.

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SUMMARY FINANCIAL DATA

        The following table summarizes our statement of operations during the periods indicated. You should read the data set forth below in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes thereto included elsewhere in this prospectus. The summary pro forma financial data have been derived from the unaudited pro forma financial data included elsewhere in this prospectus, which have been prepared by applying certain pro forma adjustments resulting from our acquisition of Eduprise, Inc. on August 31, 2001. The pro forma data assumes that the Eduprise acquisition occurred on January 1, 2001. The pro forma financial statements are presented for information purposes only and have been derived from, and should be read in connection with, our financial statements, including the notes thereto included elsewhere in this prospectus. For additional information regarding the pro forma financial statements, see "Unaudited Pro Forma Financial Data" included elsewhere in this prospectus.

		Years ended December 31,												Three months ended March 31,
		1999			2000			2001			Pro Forma 2001			2001			Pro Forma 2001			2002
		(in thousands, except per share data)
Statement of Income Data:
Revenue		$	49,707		$	56,376		$	70,359		$	75,756		$	15,851		$	17,627		$	22,790
Operating expenses:
	Cost of services		30,361			34,022			42,893			46,357			9,739			11,076			14,263
	Selling, general and administrative		11,526			12,539			18,709			24,987			3,757			5,874			5,909
	Depreciation and amortization		429			1,312			1,297			1,582			143			365			407
	Other operating expenses		702			797			679			922			—			230			115
Total operating expenses			43,018			48,670			63,578			73,848			13,639			17,545			20,694
Operating income			6,689			7,706			6,781			1,908			2,212			82			2,096
Interest expense (income), net			354			282			58			(135	)		27			(83	)		52
Income before income taxes			6,335			7,424			6,723			2,043			2,185			165			2,044
Income tax expense			2,535			2,972			2,676			818			874			66			818
Income from continuing operations			3,800			4,452			4,047			1,225			1,311			99			1,226
Loss from discontinued operations(1)			551			—			—			—			—			—			—
Net income		$	3,249		$	4,452		$	4,047		$	1,225		$	1,311		$	99		$	1,226
Earnings Per Share — Diluted:
Income from continuing operations		$	0.25		$	0.31		$	0.26		$	0.07		$	0.09		$	0.01		$	0.07
Net income		$	0.21		$	0.31		$	0.26		$	0.07		$	0.09		$	0.01		$	0.07
Weighted average shares outstanding			15,682			14,258			15,516			18,392			13,948			18,240			18,659
Additional Financial Information:
Cash flows from operating activities		$	3,592		$	7,007		$	6,059					$	846					$	(216	)
Cash flows from investing activities			(833	)		(187	)		3,203						(321	)					(101	)
Cash flows from financing activities			(1,241	)		(3,879	)		(2,789	)					(128	)					(551	)
EBITDA(2)			7,118			9,018			8,078						2,355						2,503

(1)

In June 1999, we sold our learning technology solutions division to a group of investors who operated it as Eduprise, Inc. We have reflected the division's results through the time of disposition as a discontinued operation.

(2)

EBITDA equals income before interest, taxes, depreciation and amortization. EBITDA is presented because we believe that it provides a meaningful measurement from which to further analyze our results of operations. EBITDA should not be considered as an alternative to, nor is there any implication that it is more meaningful than, any measure of performance or liquidity as promulgated under accounting principles generally accepted in the United States.

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        The following table is a summary of our balance sheets as of December 31, 1999, 2000 and 2001 and March 31, 2002, and as adjusted assuming completion of this offering, as of March 31, 2002. To calculate the "As Adjusted" data, we have assumed the sale by us of                        shares of common stock in this offering at an assumed initial public offering price of $            per share, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, and the application of the net proceeds from this offering.

	December 31,						March 31, 2002
	1999		2000		2001		Actual		As Adjusted
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	5,296	$	8,237	$	14,710	$	13,842	$
Working capital		5,485		6,614		13,657		15,236
Intangible assets		681		—		10,343		10,223
Total assets		15,766		19,529		44,857		46,471
Long-term obligations		4,630		3,515		1,723		1,652
Stockholders' equity		2,471		4,611		29,407		30,753

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RISK FACTORS

This offering involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before deciding whether to invest in our common stock. If any of the following risks actually occurs, there could be a material adverse effect on our business, financial condition or results of operations. In this case, the trading price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business

Because we are dependent on the higher education industry, unfavorable events impacting the higher education market could adversely affect our business, financial condition and results of operations.

        Substantially all of our clients are colleges and universities. Unfavorable events or economic conditions adversely impacting the higher education market could have a material adverse effect on our business, financial condition and results of operations. For example, a general economic downturn could further intensify the competitive pressures facing colleges and universities that constitute a significant market for our services. Unfavorable events or adverse economic conditions could decrease our pool of potential clients or affect the willingness or financial ability of post-secondary institutions to engage us as a service provider.

If our existing clients do not renew or upgrade our services upon expiration of a contract or if we fail to persuade additional post-secondary institutions to use our services, our revenues and results of operations will be adversely affected.

        Historically, when providing technology management services, we have formed long-term relationships with our clients. A significant portion of our revenues comes from renewals of or upgrades to existing contracts prior to their expiration. If our clients do not renew or upgrade expired contracts, our revenues and results of operations will be adversely affected. Because our services typically cost more than our clients have historically budgeted for such expenses, we must convince clients that our services will generate a sufficient return to justify the additional investment. Our ability to increase revenues will be impaired if we are unsuccessful in persuading additional colleges and universities to use our services.

Due to the importance that our potential clients in the higher education market place on referrals and reputation during the selection of vendors, our failure or inability to meet a client's expectations may harm our reputation and adversely affect our business.

        We believe the higher education market is unique in the importance that colleges and universities place on reputation and trust. We depend on our existing relationships with clients and our reputation for high-quality professional services and integrity to attract and retain clients. Because client referrals are an important component in obtaining new engagements in the higher education market, a failure or inability to meet a client's expectations could seriously damage our reputation and adversely affect our ability to attract new business.

A reduction in government funding to our clients could have a negative effect on our revenues.

        Federal and state governments provide various forms of direct and indirect support for higher education in the form of direct appropriations, subsidies, grants and guaranteed student loan programs. Accordingly, most of the colleges and universities that we serve or intend to serve depend substantially on government funding. The government appropriations process is often slow, unpredictable and subject to economic and political factors outside our control. During 2001, we derived 16% of our revenue from services provided to New Jersey-based community colleges and 16% from services provided to Florida-based community colleges. Curtailments or substantial reductions in government-

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funded or sponsored institutions and programs, or termination or renegotiation of government-funded contracts, could have a material adverse impact on or result in the delay or termination of our revenues associated with these programs and contracts. Additionally, certain of our contracts provide that if the client is affected by a reduction in funding, then the amounts owed to us may be reduced, subject to a pro rata reduction in the level of services we provide.

If growth in the use of technology in higher education does not continue or continues more slowly than we expect, demand for our services may decrease and our revenues could decline.

        Our business is dependent upon continued growth in the use of technology in education by our clients and prospective clients. The successful use of new technology in education generally requires that students, faculty and administrators understand and accept the new technology. Institutions that have already invested substantial resources in traditional operations, systems, administration and educational techniques may be reluctant or slow to adopt a new approach if they perceive that the new technology will be rejected by students, faculty or administrators or that it may make some of their existing personnel and infrastructure obsolete. If the growth in the use of technology does not continue or continues more slowly than we expect, demand for our services may decrease and our revenues could decline.

Our success is dependent on our ability to attract and retain key personnel in a highly competitive marketplace.

        Our business involves the delivery of professional and technical services and is labor intensive. Our performance depends on the continued service of our key technical employees and client managers and our ability to continue to attract, train, retain and motivate such personnel. Competition for such personnel is intense, particularly for highly skilled and experienced technology personnel and client managers who also have backgrounds serving higher education. Such technical personnel are in great demand and are likely to remain a limited resource for the foreseeable future. Competitive forces may require us to increase the compensation of our personnel. We may not be able to pass any such increase on to our clients. As a result, we may not be able to attract or retain sufficient numbers of highly skilled employees in the future. The inability to do so could have a material adverse effect upon our business, operating results or financial condition. Our ability to achieve our growth strategy also depends in large part upon the efforts of our senior management. The loss of the services of one or more of our key officers could adversely affect our business and operating results.

Our failure to anticipate technological advances or meet evolving industry standards could have a material adverse effect on our business.

        Our success will depend, in part, on our ability to anticipate and develop solutions that keep pace with changes in information technology, evolving industry standards and changing client needs and preferences. To successfully serve our clients, we must stay abreast of new technology initiatives, including administrative systems and academic courseware. In addition, we must anticipate and effectively respond to changes within the higher education industry, especially changes in how our clients deliver education services to students. Our failure to anticipate and address these developments could have a material adverse effect on our business, financial condition or results of operations. In addition, services or technologies developed by third parties may render our services less competitive.

Potential liability claims from our services may adversely affect our business.

        Our services, especially the management of a substantial portion of an institution's technology resources, involve key aspects of computer systems and are typically critical to a client's operations. Failures in a client's system could result in a claim for substantial damages against us, regardless of our actual responsibility or the terms in our client contracts. In addition, although we believe that our

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services and procedures do not infringe upon the proprietary rights of third parties, we cannot be certain that such a claim would not be asserted against us. Any infringement claim against us could result in costly litigation or a materially adverse settlement, regardless of the merits of such litigation. We maintain general liability insurance coverage, including coverage for errors and omissions and coverage against infringement claims. Our general liability insurance coverage has an aggregate policy limit of $22 million. Our errors and omissions coverage has a policy limit of $10 million. However, such coverage may not continue to be available on acceptable terms, or may not be available in sufficient amounts to cover one or more large claims. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could each have a material adverse effect on our business, financial condition and results of operations. Although we attempt to contractually limit our liability, we may be legally prevented from doing so with respect to certain clients.

Our failure to accurately estimate the expenses required to complete our contracts may adversely impact our financial condition and results of operations.

        Substantially all of our revenues are generated under long-term fixed-price contracts that subject us to the risk of cost overruns and inflation. In the future we may not be able to include inflation adjustments in our contracts or to successfully manage our individual project costs. If we fail to accurately estimate the resources and related expenses required for a contract or fail to complete our contractual obligations in a manner consistent with the budget upon which the contract was based, our business, financial condition and results of operations could be adversely impacted.

The variability and length of the sales cycle for our services may make our operating results unpredictable and volatile.

        Approval of our engagement as an institution's technology partner by a college or university may require input from, and the authorization of, several different constituencies, including the institution's administrators, faculty and board of trustees or other governing body. In certain instances the approval of state or local government agencies or regulatory bodies may be required before an engagement can be finalized. As a result, the period between our initial contact with a potential customer and the purchase of our services by that customer typically ranges from three to nine months. Other factors that contribute to our long sales cycle include:

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the large size and scope of our potential engagement;



•

our need to educate potential clients about the benefits of our services;



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competitive evaluations by clients; and



•

the client's internal budgeting and approval processes.

Our long sales cycle makes it difficult for us to predict if and when a potential engagement will actually occur.

Our revenues, operating results and profitability will fluctuate from quarter to quarter, which may result in increased volatility of our share price.

        Variations in our revenues, operating results and profitability from quarter to quarter have occurred in the past, and are likely to occur in the future. These variations may result from a number of factors, including:

•

the timing, size and scope of new client engagements;



•

the termination of, or failure to renew or upgrade existing client engagements;

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•

fluctuations in our reported gross profit due to expenses in excess of budgeted amounts; and



•

general economic conditions.

        Due to the foregoing factors, it is possible that in some future periods our results of operations will be below the expectations of public market analysts and investors. This may lead to volatility in our share price.

Our success is dependent upon our relationships and contracts with certain key clients.

        We have derived and expect to continue to derive a significant portion of our revenue from a relatively limited number of clients. Our top five clients accounted for approximately 24.3% of our revenue in 2001. For the three months ended March 31, 2002, our top five clients accounted for approximately 26.2% of our revenue. The loss of any one or more of our major clients could have a material adverse effect on our business, financial condition or results of operations.

We may be unable to manage our growth, which may harm our business.

        We continue to experience significant growth, which has placed, and could continue to place, a strain on our financial, managerial and human resources. From December 31, 1997 through June 30, 2002, the number of our full-time employees increased from approximately 290 to over 790. We expect that the number of our employees will continue to increase for the foreseeable future and such increases may occur in large groups as a result of signing large client contracts. Our future performance and profitability will depend on our ability to integrate new employees into our workforce successfully, particularly in light of the decentralized nature of our workforce. To manage our growth, we must continue to implement and improve our managerial controls and procedures along with our operational and financial systems. We may not have made adequate allowances for the costs associated with this expansion, our systems, procedures or controls may be inadequate to support our operations and our management may be unable to successfully offer and expand our services. If we are unable to manage our growth effectively, our business, results of operations and financial condition could be materially adversely affected.

We operate in a highly competitive market and increasing competition could result in decreased demand for our services, lower margins and loss of market share.

        The market for professional and technology management services is competitive, highly fragmented and subject to rapid technological change. Our primary competitive challenge is overcoming the initial resistance to our services from the internal information technology departments of our prospective clients. We compete for clients and experienced personnel with a number of companies having significantly greater financial, technical and marketing resources and revenues than we have. Our competitors include systems consulting and integration services providers, software and professional service organizations and general management consulting firms. Current and potential competitors may make strategic acquisitions or establish cooperative relationships to increase their service offerings to post-secondary institutions. Accordingly, it is possible that new competitors or alliances may emerge and rapidly gain significant market share. Increased competition could result in downward pricing pressures and loss of market share for us.

Our failure to successfully integrate any future acquisitions could strain our managerial, operational and financial resources.

        We may, from time to time, pursue acquisitions of businesses, products or technologies that complement or expand our existing business to meet client and market demands for new services or enhanced skills. Our success in executing our acquisition strategy will depend on our ability to identify potential targets that meet our criteria, including a reputation as a leading service provider with strong

10

client relationships and a complementary culture. Our management has had limited experience in making acquisitions, and we may not be able to complete the acquisitions on acceptable terms or we may not be able to successfully integrate any acquired assets or businesses into our operations. Acquisitions involve a number of risks, including the diversion of management's attention from day-to-day operations to the assimilation of the operations and personnel of the acquired companies and the incorporation of acquired operations, customer lists, products or technologies. In addition, we may require additional debt or equity financing to consummate future acquisitions, which financing may not be available on terms satisfactory to us, if at all. We may issue shares of our common stock as part of the consideration for an acquisition, which may dilute our earnings per share. We cannot assure you that any acquisitions will be successfully completed or that, if one or more acquisitions is completed, the acquired businesses, products or technologies will generate sufficient revenue to offset the associated costs or other adverse effects.

Misuse or misappropriation of our proprietary rights could adversely affect our results of operations.

        Although we do not develop software or systems for license, our performance is in part dependent upon our internal information and communication systems, databases, tools, and the methodologies that we have developed to serve our clients. We have no patents and consequently, we rely on a combination of nondisclosure and other contractual arrangements and copyright, trademark and trade secret laws to protect our proprietary systems, information and procedures. In addition, we enter into and rely upon confidentiality agreements with our employees and clients and limit access to and distribution of our proprietary information. The steps that we take to protect our proprietary rights may not be adequate to prevent the misappropriation of our proprietary rights. In addition, we may not detect unauthorized use or take appropriate steps to enforce our proprietary rights. Ownership of intellectual property created in providing services to our clients is the subject of negotiation and is frequently assigned to the client. We generally retain the right to use any intellectual property that is developed during a client engagement that is of general applicability and is not specific to the client engagement. Issues relating to the ownership of and rights to use intellectual property developed during the course of a client engagement can be complicated, and clients may demand assignment of ownership or restrict the use of the work that we produce in the future. In addition, disputes may arise that affect our ability to resell or reuse such intellectual property.

Risks Related to this Offering

There has been no prior public market for our common stock.

        Prior to this offering, there has been no public market for our common stock. We cannot predict the extent to which investor interest in our common stock will lead to the development of an active trading market or how liquid that market might become. The market price of the common stock may decline below the initial public offering price. The initial public offering price for the shares has been determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the trading market following the completion of this offering.

The trading price of our common stock could fluctuate significantly.

        The stock market has experienced significant price and volume fluctuations that have affected the market prices of companies in recent years. These fluctuations may continue to occur and disproportionately impact our stock price. Factors that could have a significant impact on the market price of our common stock include:

•

actual or anticipated variation in quarterly operating results;



•

failure to achieve, or changes in, financial estimates or recommendations of securities analysts;

11

•

a downturn in the higher education market generally;



•

additions or departures of key personnel;



•

announcements by us of significant acquisitions, strategic partnerships, joint ventures or capital commitments;



•

reductions in funding for post-secondary institutions; and



•

general market conditions.

        In particular, the realization of any of the risks described in these "Risk Factors" could have a dramatic and material adverse impact on the market price of our common stock. In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. This type of litigation could result in substantial costs and a diversion of management's attention and resources, which could materially affect our business, financial condition or results of operations.

The future sale of shares of our common stock by existing stockholders may negatively affect our stock price.

        If our existing stockholders sell substantial amounts of our common stock, including shares issuable upon the exercise of outstanding options in the public market following this offering, the market price of our common stock could fall. These sales also might make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate. After this offering, we will have outstanding                        shares of common stock. Of these shares, the                        shares being offered in this offering will be freely tradable. Our directors, executive officers, existing stockholders and warrant holders and substantially all of our option holders have agreed to the lock-up restrictions described in "Underwriting." After these lock-up agreements expire 180 days from the date of this prospectus, an additional            shares will be eligible for sale in the public market. Sales of substantial amounts of common stock (including shares issued in connection with future acquisitions that may be issued with registration rights), or the availability of such shares for sale, may adversely affect the prevailing market price for the common stock and could impair our ability to obtain additional capital through an offering of our equity securities.

You will incur immediate and substantial dilution and may experience further dilution.

        The initial public offering price of our common stock is substantially higher than the pro forma net tangible book value per share of the outstanding common stock immediately after the offering. If you purchase common stock in this offering, you will incur immediate and substantial dilution in the pro forma net tangible book value per share of the common stock from the price you pay for the common stock. To the extent outstanding options and warrants to purchase common stock are exercised, there will be further dilution. Moreover, there can be no assurance that we will not require additional funds to support our working capital requirements or for other purposes, in which case we may seek to raise such additional funds through public or private equity financings or from other sources. Any such financing may result in additional dilution to our stockholders.

Control by principal stockholders could adversely affect our stockholders.

        Upon completion of this offering, certain of our existing shareholders will continue to beneficially own a significant percentage of our outstanding common stock and will have substantial ability to control matters submitted to our stockholders for approval, including the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets, and to control our management and affairs. Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of us, impeding a merger, consolidation, takeover

12

or other business combination involving us or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could materially adversely affect the market price of our common stock.

A third-party could be prevented from acquiring your shares of stock at a premium to the market price because of our anti-takeover provisions in our charter and bylaws and Delaware law.

        The following provisions of our certificate of incorporation and by-laws may discourage, delay or prevent a merger or acquisition that you may consider favorable, including transactions in which you might otherwise receive a premium for your shares:

•

the ability of our board of directors to issue preferred stock, and determine its terms, without a stockholder vote;



•

our classified board of directors, which effectively prevents stockholders from electing a majority of the directors at any one annual meeting of stockholders;



•

the requirement that any business combination transaction that is not approved by a majority of the directors be approved by the holders of at least 66²/3% of our outstanding common stock;



•

the prohibition against stockholder actions by written consent; and



•

the inability of stockholders to call a special meeting of stockholders.

        In addition, some provisions of Delaware law, particularly the "business combinations" statute in Section 203 of the Delaware General Corporation Law, may also discourage, delay or prevent someone from acquiring us or merging with us. See "Description of Capital Stock" for detailed information on these provisions.

We have broad discretion to use the proceeds from this offering, and our use of these proceeds may not yield a favorable return.

        We have not identified specific uses for a significant portion of the net proceeds of this offering. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. Although we have no plans, commitments or agreements with respect to any material acquisitions as of the date of this prospectus, we may seek acquisitions of businesses that are complementary to ours, and a portion of the net proceeds may be used for such acquisitions.

Because it is unlikely that we will pay dividends, you will only be able to benefit from holding our stock if the stock price appreciates.

        We have never declared or paid any cash dividends on our capital stock and do not anticipate paying any cash dividends in the foreseeable future. We presently intend to retain any future earnings for funding growth and, therefore, do not expect to pay any dividends in the foreseeable future. As a result of not collecting a dividend, you will not experience a return on your investment, unless the price of our common stock appreciates and you sell your shares of common stock.

13

FORWARD-LOOKING STATEMENTS

        This prospectus contains "forward-looking statements." Such forward-looking statements are contained principally in the sections entitled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Results of Operations and Financial Condition" and "Business." These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this prospectus that are not historical facts.

        When used in this prospectus, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "seek," "should," "will" or "would" or the negative of these terms or similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors discussed under "Risk Factors." Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

USE OF PROCEEDS

        We estimate that our net proceeds from the sale of the                        shares of common stock we are offering pursuant to this prospectus will be approximately $                        , at an assumed initial public offering price of $            per share and after deducting the underwriting discounts and commissions and our estimated offering expenses. We will not receive any proceeds from the sale of shares by the selling stockholders.

        The principal purposes of this offering are to provide working capital to expand our operations and to fund general corporate purposes. In addition, we may use a portion of the net proceeds to acquire or invest in complementary businesses, although we currently have no commitments or agreements with respect to any such transactions. Pending such uses, the net proceeds will be invested in short-term investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. See "Risk Factors — We have broad discretion to use the proceeds from this offering, and our use of these proceeds may not yield a favorable return" for a description of several risks relating to our use of proceeds.

DIVIDEND POLICY

        We have never declared or paid any cash dividends on our capital stock and do not anticipate paying any cash dividends in the foreseeable future. We presently intend to retain future earnings, if any, to finance the expansion of our business. Any payments of dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

14

CAPITALIZATION

        The following table sets forth our actual and our as adjusted capitalization as of March 31, 2002. Our as adjusted capitalization gives effect to:

•

the sale of                  shares of common stock offered by us pursuant to this prospectus at an assumed offering price per share of $            , after deducting the underwriting discounts and commissions and our estimated offering expenses; and



•

the issuance of 731,994 shares of common stock to certain selling stockholders for resale in this offering upon exercise of all outstanding warrants for an aggregate consideration of $1.1 million.

        This table should be read in conjunction with "Selected Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the notes to those statements included elsewhere in this prospectus.

				As of March 31, 2002
				Actual			As Adjusted
				(in thousands, except share and per share data)
Current maturities of long-term debt				$	1,822
Long-term debt					1,652
Stockholders' equity:
	Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding				—
	Common stock, $0.01 par value per share; 25,000,000 shares authorized; 17,378,236 shares issued and outstanding;              shares issued and outstanding as adjusted				174
	Warrants				438
	Paid-in capital				28,627
	Deferred compensation				(793	)
	Treasury stock				(11,731	)
	Retained earnings				14,038
		Total stockholders' equity			30,753
			Total capitalization	$	34,227

        The preceding table does not include:

•

4,930,985 shares of common stock issuable upon exercise of stock options outstanding as of June 30, 2002 at a weighted average exercise price of $2.94 per share;



•

1,000,000 shares of common stock available for issuance under our Employee Stock Purchase Plan;



•

2,500,000 shares of common stock available for issuance under our 2002 Stock Incentive Plan; and



•

any shares to be sold by any selling stockholder upon exercise of the underwriters' over-allotment option.

15

DILUTION

        Our net tangible book value as of March 31, 2002 was approximately $20.5 million or $1.18 per share, based on the number of shares of common stock outstanding as of March 31, 2002. Net tangible book value per share is equal to the amount of our total tangible assets less total liabilities, divided by the number of outstanding shares of common stock. After giving effect to the sale of common stock offered by us pursuant to this prospectus at an assumed initial public offering price of $             per share, our receipt of the estimated net proceeds from this offering and the issuance of 731,994 shares of common stock upon the exercise of all outstanding warrants, our pro forma net tangible book value as of March 31, 2002 would have been approximately $       million, or $             per share. This represents an immediate increase in pro forma net tangible book value of $             per share to existing stockholders and an immediate dilution of $             per share to new investors purchasing shares of common stock in this offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share			$
Net tangible book value per share at March 31, 2002	$	1.18
Increase per share attributable to new investors in this offering
Pro forma net tangible book value per share after this offering
Net tangible book value dilution per share to new investors in this offering			$

        The following table summarizes the differences between existing stockholders and the new investors with respect to the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid before deducting the underwriting discounts and commissions and our estimated offering expenses.

	Shares Purchased			Total Consideration
							Average Price Per Share
	Number	Percent		Amount	Percent
Existing stockholders			%	$		%	$
New investors							$
Total		100.0	%	$	100.0	%

        The foregoing discussion and table assumes the issuance of 731,994 shares of common stock to certain selling stockholders for resale in this offering upon exercise of all outstanding warrants. The foregoing discussion and table assumes no exercise of any outstanding stock options. As of June 30, 2002, there were 4,930,985 options outstanding to purchase common stock. To the extent that any of these options are exercised, there will be further dilution to the new investors.

        If the underwriters exercise their over-allotment option in full, the following will occur:

•

the number of shares of our common stock held by existing stockholders will decrease to                        , or approximately            % of the total number of shares of our common stock outstanding after this offering;



•

the number of shares of our common stock held by new investors will increase to                        , or approximately            % of the total number of shares of our common stock outstanding after this offering; and



•

pro forma net tangible book value will increase to $             per share to existing stockholders, and there will be an immediate dilution in pro forma net tangible book value of $             per share to new investors.

16

SELECTED FINANCIAL DATA

        The following selected financial data is qualified by reference to, and should be read in conjunction with, our financial statements and the notes to such statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. The selected statement of income data presented for the years ended December 31, 1999, 2000 and 2001 and the balance sheet data as of December 31, 2000 and 2001, are derived from our audited financial statements and are included elsewhere in this prospectus. The selected statement of income data presented for the years ended December 31, 1997 and 1998 and the balance sheet data as of December 31, 1997, 1998 and 1999 have been derived from our audited financial statements not included in this prospectus. The selected statement of income data for the three months ended March 31, 2001 and 2002 and the balance sheet data as of March 31, 2002 are derived from our unaudited financial statements included elsewhere in this prospectus. These unaudited financial statements have been prepared on the same basis as our audited financial statements and, in our opinion, include all material adjustments, consisting only of normal recurring adjustments, necessary to present fairly this unaudited financial information. Such financial information may not be indicative of results for a full year.

		Years Ended December 31,										Three Months Ended March 31,
		1997		1998		1999		2000		2001		2001		2002
		(in thousands, except per share data)
Statement of Income Data:
Revenue		$	23,882	$	36,890	$	49,707	$	56,376	$	70,359	$	15,851	$	22,790
Operating expenses:
	Cost of services		14,147		21,929		30,361		34,022		42,893		9,739		14,263
	Selling, general and administrative		6,002		8,751		11,526		12,539		18,709		3,757		5,909
	Depreciation and amortization		153		229		429		1,312		1,297		143		407
	Other operating expenses(1)		487		3,357		702		797		679		—		115
Total operating expenses			20,789		34,266		43,018		48,670		63,578		13,639		20,694
Operating income			3,093		2,624		6,689		7,706		6,781		2,212		2,096
Interest expense, net			869		650		354		282		58		27		52
Income before income taxes			2,224		1,974		6,335		7,424		6,723		2,185		2,044
Income tax expense			938		802		2,535		2,972		2,676		874		818
Income from continuing operations			1,286		1,173		3,800		4,452		4,047		1,311		1,226
Loss from discontinued operations(2)			—		53		551		—		—		—		—
Net income(3)		$	1,016	$	1,120	$	3,249	$	4,452	$	4,047	$	1,311	$	1,226
Earnings Per Share — Diluted:
Income from continuing operations		$	0.09	$	0.08	$	0.25	$	0.31	$	0.26	$	0.09	$	0.07
Net income		$	0.07	$	0.07	$	0.21	$	0.31	$	0.26	$	0.09	$	0.07
Weighted average shares outstanding			13,682		14,995		15,682		14,258		15,516		13,948		18,659

	As of December 31,
												March 31, 2002
	1997			1998		1999		2000		2001
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	3,568		$	3,778	$	5,296	$	8,237	$	14,710	$	13,842
Working capital		2,793			4,491		5,485		6,614		13,657		15,236
Intangible assets		—			569		681		—		10,343		10,223
Total assets		8,257			12,480		15,766		19,529		44,857		46,471
Long-term obligations		8,150			6,900		4,630		3,515		1,723		1,652
Stockholders' equity (deficit)		(4,340	)		119		2,471		4,611		29,407		30,753

(1)

Other operating expenses consisted of corporate office relocation expense in 1997, stock compensation expenses ($2.7 million) and terminated transaction expense ($0.6 million) in 1998, terminated transaction expense in 1999, and stock compensation expense in 2000 and 2001.

(2)

In June 1999, we sold our learning technology solutions division to a group of investors who operated it as Eduprise, Inc. We have reflected the division's results through the time of disposition as a discontinued operation.

(3)

Results of operations for the year ended December 31, 1997 included an extraordinary loss of $270 on the early extinguishment of debt.

17

UNAUDITED PRO FORMA FINANCIAL DATA

        On August 31, 2001, we acquired all of the outstanding capital stock of Eduprise, Inc. Eduprise's historical data for the eight months ended August 31, 2001 are derived from Eduprise's financial statements that are included elsewhere in this prospectus. Eduprise's historical data for the three months ended March 31, 2001 are derived from Eduprise's financial statements that are not included in this prospectus. The pro forma data assumes that this transaction occurred as of January 1, 2001 for both periods.

        The total purchase price for Eduprise was approximately $20.3 million, consisting of shares of common stock ($19.4 million), other equity securities ($0.7 million) and related costs ($0.3 million). The purchase price was allocated to tangible assets ($9.5 million), intangible assets ($1.4 million), which will be amortized over three years, and goodwill ($9.4 million).

        The pro forma financial information should be read in conjunction with our historical financial statements for the year ended December 31, 2001, the unaudited historical financial statements for the three months ended March 31, 2001 and the unaudited historical financial information for Eduprise for the eight months ended August 31, 2001, included elsewhere in this prospectus. The pro forma information is not necessarily indicative of future earnings or earnings that would have been reported for the periods presented had the Eduprise acquisition been completed at the beginning of the earliest period presented. Further, the unaudited pro forma income statement for the three months ended March 31, 2001 should not necessarily be taken as an indication of the earnings for a full year.

		Year Ended December 31, 2001
		Collegis Historical		Eduprise 8 months ended August 31, 2001			Pro Forma Adjustments			Pro Forma
		(in thousands, except per share data)
Revenue		$	70,359	$	5,684		$	(287	)(1)	$	75,756
Operating expenses:
	Cost of services		42,893		3,751			(287	)(1)		46,357
	Selling, general and administrative		18,709		6,278			—			24,987
	Depreciation and amortization		1,297		285			—	(2)		1,582
	Stock compensation		679		180			63	(3)		922
Total operating expenses			63,578		10,494			(224	)		73,848
Operating income (loss)			6,781		(4,810	)		(63	)		1,908
Interest expense (income), net			58		(193	)		—			(135	)
Income (loss) before income taxes			6,723		(4,617	)		(63	)		2,043
Income tax expense (benefit)			2,676		—			(1,858	)(4)		818
Net income (loss)		$	4,047	$	(4,617	)	$	1,795		$	1,225
Earnings per share:
	Basic	$	0.28							$	0.07
	Weighted average shares outstanding		14,504								17,380
	Diluted	$	0.26							$	0.07
	Weighted average shares outstanding		15,516								18,392

18

		Three Months Ended March 31, 2001
		Collegis Historical		Eduprise Historical			Pro Forma Adjustments			Pro Forma
		(in thousands, except per share data)
Revenue		$	15,851	$	1,876		$	(100	)(1)	$	17,627
Operating expenses:
	Cost of services		9,739		1,437		$	(100	)(1)		11,076
	Selling, general and administrative		3,757		2,117			—			5,874
	Depreciation and amortization		143		102			120	(2)		365
	Stock compensation		—		68			162	(3)		230
Total operating expenses			13,639		3,724			182			17,545
Operating income (loss)			2,212		(1,848	)		(282	)		82
Interest expense (income), net			27		(110	)		—			(83	)
Income (loss) before income taxes			2,185		(1,738	)		(282	)		165
Income tax expense (benefit)			874		—			(808	)(4)		66
Net income (loss)		$	1,311	$	(1,738	)	$	526		$	99
Earnings per share:
	Basic	$	0.10							$	0.01
	Weighted average shares outstanding		13,075								17,367
	Diluted	$	0.09							$	0.01
	Weighted average shares outstanding		13,948								18,240

(1)

During the periods presented, we sold certain services that were performed by Eduprise under a subcontract arrangement. This adjustment eliminates the service revenue recognized by Eduprise and the cost of service recorded by us in the period from January 1, 2001 to August 31, 2001 and in the three months ended March 31, 2001.

(2)

Because we recorded a full year of intangible asset amortization related to the Eduprise acquisition in the year ended December 31, 2001, no adjustment is required for the pro forma year ended December 31, 2001. For the three months ended March 31, 2001, the adjustment reflects amortization of intangible asset related to the Eduprise acquisition.

(3)

This adjustment increases stock compensation for the amortization of the costs of unvested replacement options issued to former Eduprise employees and deferred compensation related to options granted to our employees (aggregating $243 for the eight months ended August 31, 2001 and aggregating $230 for the three months ended March 31, 2001), and eliminates the stock compensation recorded by Eduprise prior to the acquisition.

(4)

This adjustment relates to the tax effect of the above adjustments and the recognition of a tax benefit for the loss incurred by Eduprise.

19

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read with "Selected Financial Data" and our financial statements and notes included elsewhere in this prospectus. The discussion in this prospectus contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this prospectus should be read as applying to all related forward-looking statements wherever they appear in this prospectus. Our actual results could differ materially from those discussed here. Factors that could cause or contribute to these differences include those discussed in "Risk Factors," as well as those discussed elsewhere in this prospectus.

Overview

        We are a leading provider of integrated academic and administrative services to colleges and universities in the United States. Our solutions address an array of technology-related issues facing colleges and universities, including institutional strategic assessment and planning, implementation of learning technology initiatives, new curricula design and deployment and long-term management of technology resources.

        Revenue recognition.    Substantially all of our revenue is generated through the delivery of services under multi-year, fixed-priced contracts. We do not sell hardware or software. Revenue is recognized as services are provided, primarily on a straight-line basis over each contract year. Revenue from contracts to provide strategic consulting, instructional design and support, course development and program management services is recognized as the services are performed. For these contracts, changes in scope of services to be provided, estimates of percentage completed or profitability may result in revisions to revenue and are recognized in the period in which such revisions are determined. To date, our operations have not been materially affected from one period to the next by changes in our estimated costs to complete a contract. The vast majority of our revenue results from the delivery of day-to-day services to a client and, therefore, are generally not subject to changes in the estimate of costs to complete a contract. Revenue includes reimbursable expenses charged to the client in accordance with Emerging Issues Task Force Topic No. D-103. Reimbursable expenses have averaged approximately 4% of revenue. In the early periods of new contracts, the percentage of reimbursable expenses to revenue is slightly higher. Billings are based on payment schedules that may differ from the timing of revenue recognition. These differences are reflected in our balance sheets as either unbilled receivables on contracts or deferred revenue.

        Fixed-price contracts subject us to the risk of cost overruns and inflation. This risk is partially mitigated by contract clauses that allow for fee increases in the event of inflation and by the active management of individual project costs by our on-site, regional and corporate management teams. To date, we have not incurred a loss under a fixed-price contract.

        Because our services are provided under multi-year agreements, a substantial portion of our revenue is committed at the beginning of the year. Committed revenue at the beginning of each of the last five years represented in excess of 75% of the total annual revenue for such year. Remaining revenues are derived from new client engagements and additional services sold to existing clients. As of January 1, 2002, we had approximately $74.9 million of full year 2002 revenue contracted for under multi-year agreements.

        At December 31, 2001, approximately $75 million of revenue under existing multi-year contracts was expected to be recognized in the succeeding twelve months. At June 30, 2002, approximately $86 million of revenue under existing multi-year contracts was expected to be recognized in the succeeding twelve months. The above amounts do not include any amounts related to anticipated renewals or extensions of existing contracts nor the signing of new contracts. We expect to be able to meet the obligations under our multi-year contracts at margins approximating our historical levels.

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Since 1997, we have experienced a dollar weighted renewal rate on our technology management contracts in excess of 90%. In most instances, when our contracts are extended, the scope of our services is also expanded.

        Cost of services.    Cost of services consists of direct costs to provide services to our customers and primarily includes salaries and wages and related fringe benefits of our employees directly serving customers through our strategic services, client services and technical services groups. Cost of services also includes any cost of subcontractors and outside consultants and other direct costs, such as travel expenses.

        Selling, general and administrative.    Selling, general and administrative expenses include the salaries and wages and related fringe benefits of our employees not performing work directly for customers, and occupancy and other costs necessary to support those employees. Among the functions included in these expenses are sales and marketing, corporate services (accounting, information systems support, legal, human resources and recruiting) and senior management and its support staff. In future periods we expect our general and administrative expenses to increase as a result of our incurring customary costs associated with being a public company.

Accounting for Eduprise Acquisition

        We acquired all of the capital stock of Eduprise, Inc. on August 31, 2001 in exchange for 4,291,950 shares of our common stock and the assumption of options and warrants to purchase 342,238 shares of our common stock. Eduprise became an integral part of our learning technology services division. In June 1999, we sold our learning technology solutions division to a group of investors who operated it as Eduprise. In 1998 and 1999, we reflected the division's results as a discontinued operation. After our disposition of the division, we continued to provide related services under our existing contracts through a subcontract with Eduprise. Prior to June 1999, the division was engaged in the development of instructional and Internet software applications. Subsequent to our disposition, Eduprise discontinued its focus on the development of software applications and shifted its focus to developing and enhancing services related to the integration of technology into the learning process. The results of Eduprise have been included in our financial statements since September 1, 2001. For more detailed information about our acquisition of Eduprise, see "Unaudited Pro Forma Financial Data" and "Business — Eduprise Acquisition" included elsewhere in this prospectus.

        The acquisition of Eduprise was accounted for in accordance with Statement of Financial Accounting Standard ("SFAS") No. 141 "Business Combinations" ("SFAS 141"), which requires all business combinations initiated after June 30, 2001 to be accounted for under the purchase method. SFAS 141 also sets forth guidelines for applying the purchase method of accounting in the determination of intangible assets, including goodwill acquired in a business combination, and expands financial disclosures concerning business combinations. The assets acquired and liabilities assumed were recorded at estimated fair values as determined by our management, based on information available and on assumptions as to future operations. We obtained independent appraisals of the fair values of the acquired property and equipment and identified intangible assets and their remaining useful lives. We also completed the review and determination of the fair values of the other assets acquired and liabilities assumed.

Critical Accounting Policies

        Our financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions. Our most critical accounting policies relate to revenue recognition (discussed above), compensation costs related to our stock-based compensation plans and the assumptions and estimates used in accounting for our acquisition of Eduprise, particularly those related to the fair value of certain acquired assets including the intangible

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asset related to contractual customer relationships and a deferred tax asset related to operating loss carryforwards.

Results of Operations

        The following table sets forth, for the periods indicated, statements of income data as a percentage of revenue:

			Years Ended December 31,						Three Months Ended March 31,
			1999		2000		2001		2001		2002
Revenue			100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
		Cost of services	61.1		60.3		61.0		61.4		62.6
		Selling, general and administrative	23.2		22.2		26.6		23.7		25.9
		Depreciation and amortization	0.9		2.3		1.8		0.9		1.8
		Stock compensation expenses	—		1.4		1.0		—		0.5
		Terminated transaction costs	1.4		—		—		—		—
	Total operating expenses		86.5		86.3		90.4		86.0		90.8
Operating income			13.5		13.7		9.6		14.0		9.2
Interest expense, net			0.7		0.5		0.1		0.2		0.2
Income before income taxes			12.7		13.2		9.6		13.8		9.0
Income tax expense			5.1		5.3		3.8		5.5		3.6
Income from continuing operations			7.6		7.9		5.8		8.3		5.4
Loss from discontinued operations(1)			1.1		—		—		—		—
	Net income		6.5	%	7.9	%	5.8	%	8.3	%	5.4	%

(1)

In June 1999, we sold our learning technology solutions division to a group of investors who operated it as Eduprise, Inc. We have reflected the division's results through the time of disposition as a discontinued operation.

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

        Revenue.    Revenue increased 43.8% from $15.9 million for the three months ended March 31, 2001 to $22.8 million for the three months ended March 31, 2002. Of the total increase, $2.7 million was attributable to our acquisition of Eduprise. The balance of the increase in our revenue reflects the addition of new clients after the first quarter of 2001 and our undertaking additional work for existing clients. Exclusive of the impact of our Eduprise acquisition, our revenue increased $4.2 million or 26.4%.

        Cost of services.    Cost of services increased 46.5% from $9.7 million for the three months ended March 31, 2001 to $14.3 million for the three months ended March 31, 2002. The increase was due primarily to the number of additional professional staff required to support our growth during the period. We increased the number of our professional staff from 531 at March 31, 2001 to 716 at March 31, 2002. As a percentage of revenue, cost of services increased to 62.6% in the three months ended March 31, 2002 from 61.4% in the three months ended March 31, 2001 primarily due to the signing in late 2001 and early 2002 of several large client contracts with margins somewhat lower than our historical average and a relative increase in reimbursable expenses.

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        Selling, general and administrative.    Selling, general and administrative expenses increased 57.3% from $3.8 million in the three months ended March 31, 2001 to $5.9 million in the three months ended March 31, 2002. Of this increase, $1.6 million was attributable to the acquisition of Eduprise and $0.5 million was from continued investment in corporate infrastructure to support our growth. As a percentage of revenue, selling, general and administrative expenses increased from 23.7% in the three months ended March 31, 2001 to 25.9% in the three months ended March 31, 2002. This increase is due primarily to Eduprise's higher level of selling, general and administrative expenses relative to its revenue recognized by us since the date of acquisition. We believe that as we realize the synergies of the merger, further consolidate Eduprise's operations and eliminate certain redundant support activities, the percentage of selling, general and administrative expenses to revenue will return to historical levels.

        Depreciation and amortization.    Depreciation and amortization was $0.1 million in the three months ended March 31, 2001 and $0.4 million in the three months ended March 31, 2002. Depreciation expense increased from $0.1 million in the three months ended March 31, 2001 to $0.3 million in the three months ended March 31, 2002 due to equipment additions related to our acquisition of Eduprise and to support the growth in our corporate infrastructure. Amortization expense of intangible assets related to the Eduprise acquisition was $0.1 million in the three months ended March 31, 2002.

        Stock compensation expense.    Stock compensation expense in the three months ended March 31, 2002 of $0.1 million relates to amortization of the costs of unvested replacement options issued to former Eduprise employees and deferred compensation costs.

        Operating income.    Operating income decreased 5.2% from $2.2 million in the three months ended March 31, 2001 to $2.1 million for the three months ended March 31, 2002. As a percentage of revenue, operating income decreased from 14.0% in the three months ended March 31, 2001 to 9.2% in the three months ended March 31, 2002. This decrease was primarily due to the inclusion of Eduprise's higher level of selling, general and administrative expenses relative to its revenue in the results for the three months ended March 31, 2002 and the increased cost of services related to the large client contracts discussed above.

        Interest expense, net.    Neither interest expense nor interest income was material in either quarter.

        Income tax expense.    Our effective tax rate for the three months ended March 31, 2002 and March 31, 2001 was 40%.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

        Revenue.    Revenue increased 24.8% from $56.4 million in 2000 to $70.4 million in 2001. Revenue related to Eduprise recognized since the date of acquisition was $3.1 million in 2001. The balance of the increase in revenue primarily reflects the addition of new clients during 2001 and our undertaking additional work for existing clients. Exclusive of the impact of our Eduprise acquisition, our revenue increased $10.9 million or 19.3%.

        Cost of services.    Cost of services increased 26.1% from $34.0 million in 2000 to $42.9 million in 2001. The increase was primarily due to the number of additional professional staff required to support our growth during the period. We increased the number of our professional staff from 516 at December 31, 2000 to 631 at December 31, 2001. As a percentage of revenue, cost of services increased slightly from 60.3% in 2000 to 61.0% in 2001 due to a relative increase in reimbursable expenses.

        Selling, general and administrative.    Selling, general and administrative expenses increased 49.2% from $12.5 million in 2000 to $18.7 million in 2001. Of this increase, $3.5 million was attributable to

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costs associated with increased sales, recruiting and other corporate staff and support systems reflecting our continued investment in corporate infrastructure to support our growth and $2.7 million was attributable to the acquisition of Eduprise. As a percentage of revenue, selling, general and administrative expenses increased from 22.2% in 2000 to 26.6% in 2001. This increase was due primarily to Eduprise's higher level of selling, general and administrative expenses relative to its revenue recognized by us since the date of acquisition.

        Depreciation and amortization.    Depreciation and amortization was $1.3 million in 2001 and 2000. Depreciation expense increased by $0.2 million to $0.8 million in 2001 due to equipment additions related to our acquisition of Eduprise and to support the growth in our corporate infrastructure. Amortization expense of intangible assets related to the Eduprise acquisition was $0.5 million in 2001. Amortization expense related to capitalized software was $0.7 million (including the write-off of the remaining carrying value of capitalized software costs) in 2000.

        Stock compensation expense.    Stock compensation expense in 2001 includes the $0.2 million of amortization of the costs of unvested replacement options issued to former Eduprise employees and deferred compensation and $0.5 million of expense related to vested replacement options issued to former Eduprise employees. The 2000 expense relates to the repurchase of stock from a former officer (see Note 9 to our audited financial statements).

        Operating income.    Operating income decreased 12.0% from $7.7 million in 2000 to $6.8 million in 2001. As a percentage of revenue, operating income decreased from 13.7% in 2000 to 9.6% in 2001. The decrease in operating income is due primarily to Eduprise's higher level of selling, general and administrative expenses relative to its revenue recognized by us since the date of acquisition.

        Interest expense, net.    Interest expense decreased from $0.6 million in 2000 to $0.4 million in 2001. This decrease is due to reduced debt levels and lower average interest rates. Interest income in both periods was $0.3 million as the effect of increased average invested cash balances in 2001 was offset by lower average interest rates.

        Income tax expense.    Our effective tax rate for both 2001 and 2000 was 40%.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

        Revenue.    Revenue increased 13.4% from $49.7 million in 1999 to $56.4 million in 2000. The increase in revenue primarily reflects the addition of new clients during 2000 and our undertaking additional work for existing clients.

        Cost of services.    Cost of services increased 12.1% from $30.4 million in 1999 to $34.0 million in 2000. The increase was primarily due to the number of additional professional staff required to support our growth during the period. We increased the number of our professional staff from 466 at December 31, 1999 to 516 at December 31, 2000. As a percentage of revenue, cost of services declined from 61.1% in 1999 to 60.3% in 2000 as we attained operational efficiencies and incurred lower reimbursable expenses.

        Selling, general and administrative.    Selling, general and administrative expenses increased 8.8% from $11.5 million in 1999 to $12.5 million in 2000. This increase was primarily attributable to costs associated with increased sales, recruiting and other corporate staff and support systems reflecting our continued investment in corporate infrastructure to support growth. As a percentage of revenue, these expenses decreased to 22.2% in 2000 from 23.2% in 1999.

        Depreciation and amortization.    Depreciation and amortization increased from $0.4 million in 1999 to $1.3 million in 2000. Depreciation expense increased by $0.3 million to $0.6 million in 2000.

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Amortization expense related to capitalized software was $0.7 million (including the write-off of the remaining carrying value of capitalized software costs) in 2000 and $0.2 million in 1999.

        Stock compensation expense.    Stock compensation expense in 2000 relates to the repurchase of stock from a former officer (see Note 9 to our audited financial statements).

        Terminated transaction costs.    During 1999, we incurred $0.7 million of legal, accounting and other miscellaneous costs in connection with two anticipated merger transactions that were not completed.

        Operating income.    Operating income increased 15.2% from $6.7 million in 1999 to $7.7 million in 2000. As a percentage of revenue, operating income increased from 13.5% in 1999 to 13.7% in 2000. This increase was primarily due to growth in revenue and improved operational efficiencies.

        Interest expense, net.    Interest expense was $0.6 million in 2000 and 1999. The effect of reduced debt levels was offset by higher average interest rates. Interest income increased from $0.2 million in 1999 to $0.3 million in 2000 due primarily to the increased average invested cash balances in 2000.

        Income tax expense.    Our effective tax rate for both 2000 and 1999 was 40%.

Unaudited Quarterly Results

        The following table sets forth certain unaudited quarterly operating information on an actual and a percentage of revenue basis for each of the nine quarters ending March 31, 2002. This data has been prepared on the same basis as the audited financial statements contained elsewhere in this prospectus and includes all normal recurring adjustments necessary for the fair presentation of the information for the periods presented, when read in conjunction with our financial statements and related notes thereto. Results for any previous fiscal quarter are not necessarily indicative of results for the full year or for any future quarter.

	Three months ended
	March 31, 2000		June 30, 2000		Sept. 30, 2000		Dec. 31, 2000		March 31, 2001		June 30, 2001		Sept. 30, 2001		Dec. 31, 2001		March 31, 2002
	(in millions, except per share amounts)
Revenue	$	13.4	$	13.8	$	14.2	$	14.8	$	15.9	$	17.0	$	17.7	$	19.8	$	22.8
Cost of services		8.5		8.2		8.5		8.9		9.7		10.4		10.8		11.9		14.3
Selling, general and administrative		2.9		3.1		3.4		3.1		3.8		4.2		4.8		6.0		5.9
Depreciation and amortization		0.1		0.1		0.1		0.8		0.1		0.2		0.3		0.7		0.4
Stock compensation expense		0.8		—		—		—		—		—		0.5		0.2		0.1
Operating income		1.1		2.4		2.2		2.0		2.2		2.1		1.3		1.1		2.1
Net income	$	0.7	$	1.4	$	1.2	$	1.2	$	1.3	$	1.3	$	0.8	$	0.7	$	1.2
Earnings per share — diluted	$	0.05	$	0.10	$	0.09	$	0.08	$	0.09	$	0.09	$	0.06	$	0.04	$	0.07

	Three months ended
	March 31, 2000		June 30, 2000		Sept. 30, 2000		Dec. 31, 2000		March 31, 2001		June 30, 2001		Sept. 30, 2001		Dec. 31, 2001		March 31, 2002
Revenue	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of services	63.0		59.1		59.6		59.8		61.4		61.5		60.9		60.2		62.6
Selling, general and administrative	21.5		22.8		23.8		20.9		23.7		24.8		26.8		30.2		25.9
Depreciation and amortization	1.1		1.1		1.2		5.7		0.9		1.0		1.8		3.3		1.8
Stock compensation expense	5.9		—		—		—		—		—		2.9		0.8		0.5
Operating income	8.5		17.1		15.3		13.6		14.0		12.7		7.6		5.5		9.2
Net income	4.9	%	10.0	%	8.6	%	7.9	%	8.3	%	7.4	%	4.4	%	3.6	%	5.4	%

        Quarterly revenue increases are due to the addition of new clients and undertaking additional work for existing clients. Results of operations beginning September 1, 2001 include the results of

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Eduprise. The increase in selling, general and administrative expenses as a percentage of revenue for the third and fourth quarters of 2001 was primarily due to the inclusion of Eduprise, which maintained a higher cost structure as an independent business. As we have integrated Eduprise into our operations, the corresponding costs have declined due to synergies and the benefits of consolidation. Additionally, in the fourth quarter of each fiscal year, adjustments are made to certain estimates, such as annual bonuses that are accrued throughout the year, but only paid upon the achievement of certain growth and profitability targets. The quarterly fluctuations in operating income are also due to the timing of certain charges such as a stock compensation charge in the first quarter of 2000 and the write-off of the remaining carrying value of capitalized software in the fourth quarter of 2000.

Liquidity and Capital Resources

        Cash flow from operations.    Our primary source of liquidity has been cash flow from operations. We frequently structure our billings to take into account our clients' fluctuating cash flows. For example, our fixed-price contracts may provide for delayed billing arrangements early in a contract to coincide with clients' budget cycles. We manage the billings associated with each of our contracts to assure that our cash collections in every year exceed our cash expenditures on each contract. We generally experience a reduced level of cash flow from operations in the first six months of the calendar year as the timing of the receipt of contract payments is more heavily weighted to the July through December period to coincide with the peak cash inflows experienced by our clients. We anticipate that cash flows from operations will be positive for the full year 2002.

        Cash flow from investing activities.    Net cash used in investing activities is largely attributable to capital expenditures for office equipment and personal computers to support our internal expansion. We have no material commitments for capital expenditures. However, we will continue to need computer and office equipment as we expand our operations. In 2001, the acquisition of Eduprise resulted in an increase in cash of $4.1 million.

        Cash flows from financing activities.    Cash used in financing activities has primarily been to repay amounts outstanding under our long-term credit agreement. On July     , 2002, we repaid our obligations under our long-term credit agreement. In 2000, we used cash of $2.2 million to repurchase shares of our common stock held by a former officer.

        Our secured term loan facility, under which we initially borrowed $9.5 million, was entered into to finance the acquisition of us by our controlling stockholders in 1996. Through scheduled and mandatory excess cash flow principal reductions, the amount outstanding was reduced to $1.8 million at March 31, 2002. On July 9, 2002, we repaid all amounts outstanding under the term loan facility and terminated the facility. In addition, we had a $3.0 million revolving credit facility with the same bank. The revolving facility was put in place as a back-up facility and has not been used to finance our working capital or other capital needs. At March 31, 2002 and December 31, 2001 and 2000, there were no amounts outstanding under the revolving facility. The revolving credit facility expired pursuant to its terms in June 2002. We have no plans to replace the term loan facility and anticipate obtaining a new revolving facility following the offering, which will again be used as a back-up facility.

        We believe the net proceeds from the sale of the common stock offered hereby, together with the funds generated by operations, will provide adequate cash to fund our anticipated cash needs over at least the next 12 months and for the foreseeable future. Such needs may include investments in new products and services, expansion of the internal infrastructure to support future growth and acquisitions of complementary businesses.

Recent Accounting Pronouncements

        In October 2001, the Financial Accounting Standards Board issued SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144 supercedes SFAS 121 "Accounting for the

26

Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS 144 applies to all long-lived assets (including discontinued operations) and amends Accounting Principles Board Opinion No. 30 "Reporting Results of Operations — Reporting the Effects of Disposal of a Segment of a Business." SFAS 144 is effective for our fiscal year 2002. We have determined that the adoption of SFAS 144 will have no impact on our financial position and results of operations.

        In November 2001, the Emerging Issues Task Force issued Topic No. D-103 "Income Statement Characterization of Reimbursements Received for 'Out-of-Pocket' Expenses Incurred." EITF Topic No. D-103 requires companies to report reimbursements received for out-of-pocket expenses incurred as revenue, rather than as a reduction of expense. We have historically accounted for reimbursements of out-of-pocket expenses in the manner prescribed by EITF Topic No. D-103.

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BUSINESS

Overview

        We are a leading provider of integrated strategic advisory, education delivery and technology management solutions to colleges and universities in the United States. We offer a full suite of academic and administrative services that enhance our clients' competitiveness and institutional reputations. We enable post-secondary institutions to:

•

increase efficiencies in operations, information technology systems and administration to maximize returns on investments in technology and infrastructure;



•

generate revenue by attracting new students and developing new educational programs;



•

utilize emerging teaching, learning and student management technologies to better serve a growing, dispersed and increasingly technology-savvy student base; and



•

enhance competitiveness and institutional reputation through the introduction and improvement of technology in the higher education process.

Our mission is to partner with our clients to enhance the post-secondary educational experience for students, faculty and administrators.

The Higher Education Market Opportunity

        We offer our services to community, regional and national colleges and universities in the United States. According to the Digest of Education Statistics, 2001, a report published by the U.S. Department of Education, as of Spring 2001, there were approximately 4,100 of these institutions with aggregate annual operating budgets of over $270 billion. Colleges and universities face a number of challenges, including managing rising enrollments, budgetary constraints, outdated technology and administrative systems, rising demand for technology-enhanced education and increased competition for students. We believe that a significant opportunity exists in the higher education market to help colleges and universities address these challenges.

        Rising Enrollments.    In 2001, post-secondary institutions in the U.S. served approximately 15 million degree-seeking students. The U.S. Department of Education estimates that by 2010 post-secondary enrollments will increase to approximately 17 million degree-seeking students. We expect that enrollments will also rise as more working adults and other non-traditional students elect to continue their educations to obtain additional skills training or specialized certifications to increase their earning potential. The increasing student population will continue to strain the physical, faculty and financial resources of many institutions, particularly mid-sized institutions and community colleges.

        Budgetary Constraints.    For the last several years, increases in costs for post-secondary institutions have outpaced national rates of inflation. At the same time, post-secondary institutions in most states have faced a slow, but steady decline in public funding as a percentage of their total operating budgets. Additionally, the levels of annual contributions and returns from endowments to colleges and universities may not keep pace with increases in costs due to declines in the stock market and personal wealth of donors. To remain competitive, colleges and universities are under pressure to resist continued tuition increases and find alternative means to fund their operations. To meet these pressures, colleges and universities focus principally on effective cost control measures, but are also increasingly exploring ways to generate additional revenues and maximize financial returns on their investments.

        Outdated Technology and Administrative Systems.    Technology-based infrastructure and administrative systems in many post-secondary institutions are outdated and inefficient. Aging software and hardware impede an institution's ability to compete, both on a cost and quality of education basis,

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with colleges and universities that have upgraded technology systems. We estimate that nearly 20% of private university information technology officers view replacement of outdated technology and administrative systems as their most significant near-term issue. As institutions move to improve their technology infrastructure and administrative systems, there is an increased need for experienced providers of technology services and solutions to assist them. Although institutions of all sizes are being forced to upgrade their technology infrastructures, mid-sized institutions and community colleges, in particular, face challenges in improving outdated and inefficient systems. These institutions often lack the technological and managerial resources to effectively upgrade and manage their technology infrastructure.

        Increased Demand for Technology-Enhanced Education.    As elementary and secondary schools continue to integrate more technology-enhanced education initiatives into the classroom, a new generation of technology-savvy students is entering the higher education market. These students expect technology-enhanced learning experiences, inside and outside of the classroom. In addition, working adults, who often lack the time or schedule flexibility to attend all of their classes in a traditional setting, are interested in convenient, non-traditional educational opportunities. Technology-delivered learning, coupled with online access to course material and administrative resources, allows post-secondary institutions to offer their services to a broader market. Such programs enable colleges and universities to increase utilization of existing physical facilities by blending both traditional and technology-based learning. The increased demand for technology-enhanced educational offerings is evidenced by the rapid growth of blended learning programs and online enrollments. Based on market research, we believe that 90% of all post-secondary institutions will offer some form of technology-enhanced learning programs by 2005.

        Increased Competition for Students.    Post-secondary institutions compete with one another to attract students. A growing number of for-profit, post-secondary education providers has further intensified competition among schools for students. When deciding which school to attend, students increasingly consider, among other factors, the breadth of curricula offered, an institution's technology resources and its ability to provide high quality technology-enhanced educational experiences and programs that accommodate student lifestyles and time constraints. Institutions that fail to respond to these market demands face a competitive disadvantage in attracting students. Competition for students is particularly strong at mid-sized institutions and community colleges in large, metropolitan areas. Currently, we focus primarily on serving this market segment because we believe these institutions can benefit most from our services. According to the U.S. Department of Education, there are approximately 1,390 institutions with estimated aggregate annual budgets of $82 billion in this market segment.

The Collegis Solution

        Focused exclusively on the higher education market, our solutions address an array of technology-related issues currently facing colleges and universities, including institutional strategic assessment and planning, implementation of learning technology initiatives, new curricula design and deployment and long-term management of technology resources. Our integrated service offering enables us to deliver an identifiable return on investment to our clients from a strategic, operational and financial perspective.

        We believe that we are uniquely positioned to be the long-term strategic partner of choice to U.S. colleges and universities. Unlike technology vendors, systems integrators, broader consulting organizations and specialty service providers, we offer our clients all of the following:

        Dedicated Focus and Specialized Expertise in Higher Education.    Because we focus exclusively on the higher education market, we have accumulated a detailed understanding of the strategic technology needs of post-secondary institutions that enables us to apply proven methodologies, skills and solutions to problems in a cost-effective and timely fashion. We believe that we provide our clients the most

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complete, industry-specific knowledge base and the greatest access to centralized expertise in the higher education market. In addition, we believe our competitive position is enhanced by our understanding of the unique cultural environment of colleges and universities, where academic considerations often drive technology investment and implementation decisions.

        Comprehensive Service Offering.    We are a single-source provider of a comprehensive range of technology-based services for post-secondary institutions. Our services provide clients with both strategic and tactical value by developing new sources of revenue and increasing efficiency to save costs. Through a unique client service approach, we tailor our services to address the specific strategic, education delivery and technology management needs of each institution. Our business model also captures best practices from our broad experience within the higher education market, providing a scalable resource base to benefit our clients. Our breadth of expertise and service approach enable us to provide clear accountability and defined results.

        Objective Assessment and Advice.    We are experts in dealing with most leading higher education applications and technology, but we do not create or sell software or hardware. As a result, we have a comprehensive understanding of the complexity of our clients' technology environments and are impartial to any specific hardware, software or systems. We complete detailed assessments of each client's present and future needs, and make unbiased recommendations regarding the most appropriate software or systems to meet the client's objectives within its budget. We believe our vendor-neutral approach is a competitive advantage because our clients can trust that our expert assessment and advice is not influenced by external factors or competing loyalties.

        Ongoing Technology Management.    We leverage the best practices developed through our extensive experience to provide our clients with comprehensive technology management and support, with a focus on continuous improvement and accountability. Most of our personnel work at a client's site and become intimately involved in the day-to-day operation of an institution's technology systems. As a result, we become an integral part of each client's institutional strategy and information technology functions to effectively serve as its strategic technology partner. We develop high-level relations between our professionals and an institution's senior administrators to ensure the highest quality of service and continue to explore new ways to enhance the competitiveness and success of our clients. Our strong client relationships are evidenced by the number, length and renewal rate of our client contracts. Since 1997, we have experienced a dollar weighted renewal rate on our technology management contracts in excess of 90%. In most instances, when our contracts are extended, the scope of services is also expanded.

        Size, Stability and a Proven Track Record.    We have over 15 years experience in successfully providing technology-related solutions to colleges and universities and are currently engaged in over 100 relationships with post-secondary institutions across the country. Based upon our successful client engagements to date, we have earned a reputation for providing high quality services and technical expertise. We believe that our reputation, our long-standing relationships with influential members of the higher education community and our high degree of "referenceability" among clients are a significant comfort to institutions attempting to choose a long-term partner.

Our Growth Strategy

        Our goal is to become the primary provider of integrated strategic advisory, education-delivery and technology management solutions to post-secondary institutions of all sizes. We intend to pursue the following growth strategies to attain this goal:

        Expand Our Client Base by Capitalizing on Our Established Reputation.    Our 15 years of experience in providing technology service to colleges and universities, along with our technical expertise, has enabled us to establish a reputation as education-technology solutions experts. By expanding our sales

30

force under experienced and knowledgeable leadership and further refining our sales approach, we plan to capitalize on our high quality reputation to further penetrate this marketplace. Because references and referrals play a significant role in establishing new business relationships in the higher education market, we intend to target new clients by highlighting our outstanding performance record and strong institutional relationships. While we currently focus primarily on large community colleges and mid-sized institutions, we plan to expand beyond this primary market to larger public and private institutions throughout the U.S.

        Broaden and Upgrade Existing Client Relationships.    Over time, we have expanded our areas of focus into a broad array of complementary services. Drawing on our breadth of expertise, we continuously assess each institution's needs and market additional solutions to maximize our clients' return on investment. We plan to continue to aggressively market and expand the breadth of services we offer to existing clients to increase the length and scope of our contracts. Our ability to both recommend and deliver additional services to our clients enables us to adapt to our clients' changing needs and to solidify our position as their long-term strategic and technology partner.

        Further Develop Our Curriculum Solutions Division.    In 2001, we launched our curriculum solutions division to offer turnkey and customized curricula programs that generate additional revenues for our clients. Currently, our curriculum solutions offerings include training programs to enable clients to offer training in Microsoft, Cisco, Oracle and Sun coursework and certification programs. As we develop our curriculum solutions service offerings into new program areas, we plan to aggressively market and offer these services to further enhance our long-term strategic partnerships with our clients. We believe there are numerous opportunities in the continuing education field to expand our curriculum solutions offerings to additional areas such as executive business education, teacher training and allied health.

        Expand Services Through Internal Development and Acquisition.    As the higher education market evolves, we plan to internally develop additional skill sets to complement or expand our current offerings. In addition, because the market for higher education technology and professional services companies is highly fragmented, we believe that numerous acquisition opportunities exist. These opportunities provide us with a rapid, cost-effective method to add technology professionals, broaden our existing client base and establish new or expand our existing service offerings. Potential areas into which we may expand will be determined by client needs and market forces, but could include alumni relationship management, marketing and fundraising, student affairs and campus activity management.

Client Case Studies

        The following case studies represent how several of our clients have engaged us to deploy our solutions to meet their needs.

        Salt Lake City Community College.    In December 2001, we entered into a five-year contract with Salt Lake City Community College, a community college with an enrollment of more than 60,000 students. SLCC recently adopted a stated goal to be a "learning technology center of excellence" among post-secondary institutions throughout the Western states. College and state officials decided to partner with us on a comprehensive sole-source basis due to our reputation and combined experience in campus networks, college administrative systems and online learning systems.

        Our initial strategic assessment identified a number of immediate opportunities for improvement, including organizational structure, administrative systems and on-going technology reliability. Following a detailed execution plan, we have worked quickly to reorganize SLCC's information technology employees and to centralize responsibility for the college's systems and networks under our on-site chief information officer. In addition, we have assisted the college with its conversion to a new administrative system application. We now monitor and manage all aspects of the college's technology network and resources. Furthermore, to manage rising enrollments and space limitations, we are

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working with the college to expand online course offerings and increase the number of students taking those courses. Although still early in our partnering relationship, we believe we have already provided SLCC with a significant return on its investment from an operational perspective.

        The University of Baltimore.    In the summer of 1998, we entered into a contract with the University of Baltimore, a public university with an enrollment of approximately 5,000 upper-division and graduate students. Serving a student population comprised of approximately 90% working adults with an average age of 32, UB needed to launch new web-enabled instructional programs and student services to provide greater flexibility and accessibility to students. The university set an ambitious goal of developing, marketing and implementing its new programs and support services in a manner that would quickly recoup its investment. UB elected to partner with us because of our unmatched expertise and experience in emerging instructional and learning technologies.

        In only six months, we helped UB launch the first fully-online MBA program accredited by the American Assembly of Collegiate Schools of Businesses. In addition, we have developed new instructional and administrative applications that bring greater convenience and quality to classroom- based courses. The webMBA program was named in the Top 25 MBA Programs by U.S. News and World Report in 2002. Currently, webMBA courses account for more than half of all MBA credit hours at UB. The additional revenue and competitive advantage created by the webMBA program illustrate a measurable return on investment for UB from a strategic and financial perspective.

        Valencia Community College.    In 1998, we partnered with Valencia Community College, a two-year public institution located in Orlando, Florida with an enrollment of approximately 53,000 students. Valencia initially contracted with us to provide comprehensive on-site technology management leadership to oversee the technology resources of the college's seven campuses. Beginning in 2001, acting on a strategic plan that we developed with college officials, Valencia expanded the scope of our engagement to include support for software implementation and learning technology solutions. Through the contract expansion, we have become Valencia's comprehensive strategic and technology services provider.

        Currently, we are redesigning and redeploying Valencia's web presence to increase functionality and create an enterprise education portal for students, faculty and administration. In addition, we are providing extensive training services to faculty to enhance the college's learning technology initiatives, including distance learning and web-enhanced coursework. Our instructional design professionals are also supporting the college's migration to a new course management system to increase functionality, security, uniformity and ease of use for faculty, administrative staff and students. Our on-site leadership is helping drive technological efficiency and effectiveness for Valencia in accordance with its stated strategic goals for "learner-centered excellence in education."

        Loyola Marymount University.    Seeking to become the "premier Catholic higher education institution of the West," Loyola Marymount University engaged our strategic services group to advise it in the development of its institutional technology strategy. The initial contact came through our business alliance with Cisco Systems, who was already working on the LMU campus and recommended us to help the institution achieve its technology objectives. Members of our strategic services and learning technology services divisions worked together to provide a systematic assessment of LMU's goals and present capabilities. Our strategic assessment clearly demonstrated that LMU's desire for improved network infrastructure, online learning access, web-enhanced coursework and additional institutional efficiencies would benefit from a comprehensive, long-term technology partner. As a result of our initial assessment, LMU engaged us to provide strategic services, technology management and learning technology solutions. In January 2002, just a few months after completion of initial assessment, we signed a seven-year agreement with LMU that positions the university to accomplish its desired goals for growth and greater technology access for all of its students, faculty and staff.

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Our Services

        We partner with our clients to help them achieve their educational missions by assessing, planning, implementing and supporting new education delivery strategies and reliable technology infrastructure. In working with our clients, we combine a wide variety of services into a comprehensive solution, positioning us as a long-term strategic partner to colleges and universities. The foundation of our solutions is broad expertise in the following areas: higher education institutional strategy, technology resource management, instructional and learning technologies and the development of new curricula development. We design tailored solutions for each client by formulating a detailed perspective on the client's unique strategic challenges, whether operational, financial or competitive in nature. We then deliver our services through a client service structure that is designed to define objectives, provide accountability in results, and regularly reassess our clients' needs. In doing so, we draw upon centralized resources and areas of expertise to provide each client with accessible, cost-effective solutions that bring scalable best practices and industry know-how to each challenge. Our functional expertise includes:

•

Strategic Services;



•

Technology Management Solutions;



•

Learning Technology Solutions; and



•

Curriculum Solutions.

        The diagram below illustrates the breadth in service offerings among our primary solutions areas. Delivered through our client services group and supported by our technical services group experts and resources, we believe we offer the most comprehensive strategic and technology solutions available in the higher education market.

        Strategic Services.    We employ a consultative approach to understand the unique needs of each institution and to develop and implement plans to maximize the utility and value of technology to our

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client's institutional strategy. With our sole focus on higher education and with no loyalty to any specific software, system or platform, we undertake a comprehensive assessment of each client's needs and help create integrated academic and administrative plans to help achieve the client's goals. We believe that our consultants bring superior insight to higher education issues and challenges. Our strategic services group includes only senior technology and education professionals who draw upon their extensive experience to help our clients develop sound strategies to more effectively compete in the rapidly changing higher education market.

        Our strategic services solutions include:

•

Assessments that provide objective evaluations of our clients' strengths and opportunities for improvement;



•

Strategic planning to closely align institutional goals and action plans;



•

Business process redesign to ensure maximum return on our clients' technology investments; and



•

Marketing and branding strategies to convert our clients' technology investments into competitive advantages within the higher education market.

        We strengthen our relationships with clients through annual evaluations assessing the effectiveness of our strategic solutions. We believe the collective expertise of our dedicated strategic service consultants is an important competitive advantage that enables us to establish strong client relationships.

        Technology Management Solutions.    We provide management, leadership and support of campus technology and infrastructure to improve functionality and productivity. Blending leadership from our on-site client service professionals with centralized technical resources and methodologies, we assume complete operational responsibility for our clients' technology resources. Our technology management services leverage the best practices developed through our extensive higher education experience to provide our clients with a greater return on their technology investments.

        Our technology management solutions include:

•

Design and maintenance of campus network infrastructures, as well as emerging technologies such as smart classrooms and wireless environments;



•

Full service project management and operations support that ensures efficiency, reliability and security;



•

Implementation and integration of systems and applications across multiple academic and administrative platforms;



•

Application management and support services that utilize remote monitoring technologies combined with on-site staff to provide reliable access to critical applications, such as network infrastructure, e-mail and administrative systems;



•

Centralized on-site and remote help desk operations designed to meet the workflow and user needs of individual clients; and



•

Web design and support services that create and maintain functional and compelling web sites for faculty, students and alumni while incorporating strong institutional branding.

        Learning Technology Solutions.    We provide enterprise-wide learning technology solutions to support our clients' individual academic missions and instructional goals. Drawing on our unique expertise in higher education applications, we assist in the design and development of online courses and other technology- enhanced educational initiatives, as well as integration of related administrative and student service applications. By introducing new course management systems, facilitating

34

technology-based training and assisting in course development, we increase faculty acceptance, satisfaction and effectiveness in using technology to enhance the education process while minimizing the disruptive impact of new technologies and practices. We are able to rapidly develop and launch instructionally sound courseware and new online educational initiatives to provide new sources of revenue for our clients. Our services enable our clients to provide educational content through a custom blend of online and classroom delivery that better utilizes classroom space, reduces strain on faculty resources and enhances the educational experience for faculty and students.

        Our learning technology solutions include:

•

Instructional and development services to help clients develop courses that are educationally sound, interactive and focused on meeting the needs of different types of students;



•

Faculty and student support services that use our centralized call center, which features sophisticated tracking and response mechanisms to coordinate an extensive, nationwide group of support personnel;



•

Infrastructure and network support services leveraging our high-performance network to provide reliable access to critical learning applications; and



•

Enterprise application integration services that provide access to our technical experts to perform technical consulting, project management and application development for complex student information systems, ERP planning, portal and course management applications.

        Curriculum Solutions.    Capitalizing on our industry alliances, we offer our clients fully-developed certification and professional education course materials. Our curriculum solutions, which range from single-course material additions to comprehensive turn-key programs, are a scalable resource that allows post-secondary institutions to generate additional revenue by offering broader curricula and reaching new target student groups. Our curriculum solutions allow institutions to avoid significant curriculum development costs and to quickly respond to market demands for new educational programs and appeal to a greater number of students, including non-degree students seeking continuing education. We currently offer turnkey information technology certification training programs that provide students with training in Microsoft, Cisco, Oracle and Sun and other vendor coursework and certification programs. We also offer customized programs that create a blended solution focused on a specific market segment.

        Our curriculum solutions include:

•

Curriculum design and program services, including content developed by our clients or obtained through our content development alliances;



•

Enrollment management services, including student recruitment initiatives designed to directly and more aggressively sell and market the educational programs offered by our clients; and



•

Market research and assessment that provides our clients with a competitive advantage in anticipating market trends.

        We have a number of additional relationships that are currently in different phases of negotiation to obtain content from other post-secondary institutions and third-party corporate providers with a focus on developing additional curriculum solutions in executive business education, teacher training and allied health areas.

Client Services Group

        Our client services group is responsible for managing all ongoing aspects of our client relationships. Our focus is to establish a responsive and accountable customer service environment to effectively and efficiently meet our clients' needs. Our client services group includes on-site resources,

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regional management and corporate oversight and support. Our on-site employee base, consisting of over 600 employees as of June 30, 2002, provides a range of technology services that include the support of networks, web sites, administrative applications, portals, help desk, system applications and other technology related functions. Our on-site client service resources also include approximately 50 chief information officers who are responsible for managing our extensive on-site employee base. Our chief information officers draw upon their significant higher education industry experience and technical expertise, as well as company-wide standards and methodologies, to manage and coordinate the delivery of our services and solutions to our clients. Regional vice presidents oversee and provide support to the chief information officers located within their respective regions and are accountable for attaining the financial performance expectations set forth by our executive management and ensuring consistency in the quality of services delivered. Finally, our senior client service management reviews regional resource allocation and utilization and arranges for additional support resources to ensure that our services and solutions are effectively deployed to meet our clients' needs.

        Our on-site presence fosters an atmosphere of open communication between our staff and clients. In addition, we maintain a comprehensive quality management program to manage client expectations and measure client satisfaction. This includes conducting quarterly surveys of faculty, administration and students and annual evaluations to assess how successfully our solutions are addressing our clients' needs. In addition, we commission independent third-parties to conduct bi-annual reviews to gauge client satisfaction of our services. Our quality management program is an important tool in ensuring that our services are effectively deployed to meet our clients' strategic and technology needs.

Technical Services Group

        Our technical services group is integrally involved at the outset of each client engagement, offering initial client technology assessments, startup transition teams and interim staffing, providing an immediate impact on our clients. As the client relationship evolves, our technical services group enhances our service offering by supplementing the on-site efforts of our client services group with highly skilled remote expertise from our corporate headquarters. Our technical services group consists of over 75 employees with extensive experience in the higher education market and expertise across the full spectrum of hardware, software and systems specific to post-secondary institutions. Our technical proficiency spans data and voice networking, web services, help desk management and complex applications unique to post-secondary institutions. Through our sophisticated network operations center, we continuously monitor our clients' key network and computing infrastructures. Using secure virtual private network connections over the Internet, on-site professionals can gain immediate access to our complete technical resources. This approach allows us to efficiently allocate highly-skilled technical resources to our clients that may otherwise be cost prohibitive or unavailable at the client's location.

        Our technical services group facilitates company-wide collaboration of technical resources to leverage our collective knowledge and expertise from all on-site and corporate resources. In addition to centralized technical expertise, we maintain a database of searchable best practices, methodologies and custom developed integration applications. Our technical services group also maintains a suite of on-line productivity-enhancement tools through which our employees can collaborate with peers, access shared document libraries, obtain training, track client support activities and find specific skill sets located anywhere within the company. As we continue to grow, our clients will benefit from our increased institutional depth of knowledge and breadth of experience within the higher education industry.

Marketing, Sales and Pricing

        Through our marketing activities, we attempt to position ourselves as the partner of choice among post-secondary institutions for their technology solutions. We employ a variety of business development

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and marketing techniques to enhance our brand recognition and communicate our value proposition to prospective clients. These techniques include generating focused leads through customer references and alliance relationships. We also endeavor to position ourselves as a thought leader and increase our brand recognition within the higher education market through publication of case studies and coordinated media releases with our existing clients. Our senior executives frequently speak at industry seminars and conferences addressing technology initiatives in higher education. We also sponsor The Collegis Leadership Alliance, an annual executive summit for higher education executives and leaders in our target market. The summit is designed to share best practices and discuss trends regarding technology issues facing post-secondary institutions.

        We sell our services to new clients directly through our sales and marketing staff and to existing clients through our client services group. Due to the unique culture of colleges and universities, we attempt to capitalize on referrals from existing clients and the experience and contacts of our personnel in the higher education industry. As of June 30, 2002, we had over 40 full-time employees engaged in sales and marketing activities. We have organized our sales personnel into separate geographic teams, each of which is given financial objectives for its respective region. Our typical sales cycle is three to nine months, calculated from the time of identification of a prospective client to execution of a definitive contract.

        Our fees are individually negotiated with each client and are tied to the services requested and the amount of resources we believe are necessary to accomplish the client's goals. Because of the long-term nature of our contracts, our fees typically contain pricing escalators tied to a consumer price index or our client's salary structure to protect against inflation. As part of our sales cycle, we prepare a detailed pro forma estimate of our expenses, including salary expenses. Our senior financial management team reviews and approves each pro forma budget to ensure that it is consistent with our target margins and monitors actual performance against the budget throughout the term of the contract.

Recruiting and Staff Management

        Our ability to effectively serve our clients depends in large part on attracting, retaining and motivating talented, creative and experienced professionals at all levels. Upon commencement of a client engagement we retain a large portion of the client's existing information technology staff and supplement this staff with our personnel and high quality recruits. We believe our dedicated recruiting efforts provide us with a significant competitive advantage. We dedicate significant resources to recruiting employees with extensive information technology and higher education experience. As of June 30, 2002, we had six full-time employees engaged exclusively in recruiting activities. Our recruiting personnel work closely and actively with our client services and technical services groups to establish the criteria for hiring individuals with the necessary experience and expertise to provide high quality service to our clients. Each recruiter is assigned to specific clients and is expected to know and support the special staffing needs of the client. Our recruiters have hiring targets and receive incentive compensation based on hiring performance and retention. Our recruiting personnel utilize a comprehensive recruiting information system that tracks recruitment activities and contains an internal database containing over 17,000 resumes of information technology professionals with a focus on higher education. Recruiting activities are continually monitored and adjusted to meet our hiring needs.

        We have historically experienced turnover rates that we believe are below industry averages for technology professional services companies principally due to our extensive professional development opportunities within the higher education marketplace. We believe our management structure and corporate culture, which offer opportunities for promotion, comprehensive and specialized training programs and extensive benefits packages, maximize our ability to recruit and retain experienced staff to serve our clients.

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Clients

        We currently provide our services and solutions to over 100 colleges and universities located throughout the United States. Our clients include community, regional and national colleges and universities. Our top five clients accounted for approximately 24.3% and 26.2% of our revenue in 2001 and the three months ended March 31, 2002, respectively. Our technology management agreements typically have initial terms of three to seven years. Although our contracts are for a fixed term, they are typically renewed or expanded prior to expiration. Since 1997, we have experienced a dollar weighted renewal rate of our technology management contracts in excess of 90%. During 2001, we had 32 clients that each contributed in excess of $1.0 million to our annual revenue under long-term agreements.

Alliances

        Our higher education industry expertise has fostered relationships with leading hardware, software, instructional technology and publishing companies. Our alliances generally take the form of informal, non-exclusive, co-marketing arrangements. We believe that our alliance relationships allow us to offer our clients comprehensive expertise in technology, hardware and applications. These arrangements also provide reciprocal benefits by ensuring that our mutual clients more fully benefit from the capabilities of our alliance partners' products. We also believe that these alliance relationships increase access to potential clients, expand service offerings and expertise. Although we collaborate with our alliance colleagues, we do not compromise our neutrality with regard to any client's decision relating to its systems, software or equipment.

Eduprise Acquisition

        We acquired all of the capital stock of Eduprise, Inc. on August 31, 2001 for 4,291,950 shares of our common stock and the assumption of options and warrants to purchase 342,238 shares of our common stock. The transaction had a value of approximately $20.3 million. Eduprise has been fully integrated into our organization and has become an integral part of our learning technology solutions division. Our acquisition of Eduprise helps fulfill our vision of becoming a comprehensive, integrated provider of strategic advisory, education-delivery and technology management solutions to colleges and universities.

        We initially created Eduprise, then called the COLLEGIS Learning Network, as an operating division in 1997 to develop and support the distance learning initiatives of our clients. Through June 1999, the division was engaged in the development of instructional and Internet software applications and providing hosting, maintenance and support of that software as part of our overall service contracts with selected institutions. In the Spring of 1999, we determined that the capital costs required to fund the development of the division's software would negatively impact our profits. Furthermore, we believed that the division's focus on developing software was inconsistent with our orientation as a software-neutral services provider. Based on its prospects, we determined that the growth of the division would benefit from dedicated capital provided by outside investors and on May 31, 1999, we sold the division. The new owner renamed the business Eduprise, Inc. and subsequently raised approximately $20 million in private equity financing from JP Morgan Partners and Arena Capital Investment Fund, as well as investments by substantially all of our then-existing shareholders.

        In 2000, Eduprise discontinued its focus on software development and shifted its focus to providing services related to the integration of technology into the learning process. As a result, Eduprise's business operations became more congruent with our service offerings. As our clients increasingly sought to integrate their learning technology initiatives with their traditional information technology departments, we worked closely with Eduprise to jointly market and cross-sell our service offerings.

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Based on our collaborative successes, we determined that our clients would be best served by combining our operations.

Competition

        We believe our exclusive focus on the higher education industry is unique. Our primary competitive challenge is overcoming the initial resistance to our services from the internal information technology departments of our prospective clients. Additionally, the market for external professional and technology management services is competitive, highly fragmented and subject to rapid technological and market changes. We compete for clients and experienced personnel with a number of companies having significantly greater financial, technical and marketing resources and revenues than we have. Our competitors include systems consulting and integration services providers, software and professional service organizations, and general management consulting firms.

        We believe the principal competitive differentiators in our market are:

•

focus and specialization in the higher education marketplace;



•

ability to generate both new revenue and cost savings for our clients;



•

breadth and quality of service;



•

product and vendor independence;



•

project management capability;



•

responsiveness to client needs;



•

technical expertise; and



•

price.

        We believe we compete favorably in each of these areas and particularly excel in our focus and specialization in the higher education marketplace, product and vendor independence and our depth of knowledge and experience.

Human Resources

        As of June 30, 2002, we had approximately 790 full-time employees. None of our employees is represented by a labor union, and we consider our relationship with our employees to be good.

Facilities

        Our headquarters and administrative, sales and marketing operations are located in Maitland, Florida, where we lease approximately 25,600 square feet of office space. This lease expires on November 15, 2002. In addition to our headquarters, we lease 21,200 square feet of office space in a building located in Morrisville, North Carolina. This lease expires on January 2, 2004. We believe that we will require additional space as our business expands and that we will be able to obtain suitable space as needed.

Legal Proceedings

        As of June 30, 2002, we were not a party to any material legal proceedings.

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MANAGEMENT

Executive Officers, Directors and Key Employees

        Set forth below is the name, age, position and a brief account of the business experience of each of our executive officers, directors and key employees as of June 30, 2002.

Name	Age	Position
Thomas V. Huber	46	President, Chief Executive Officer and Director
Robert C. Bowers	56	Executive Vice President, Chief Financial Officer and Director
Dr. William H. Graves	61	Vice Chairman
Robert J. Abel	43	Chief Marketing Officer, Senior Vice President, Business Development and General Manager, Learning Technology Services
Janelle A. Baltzer	52	Senior Vice President, Strategic Services
Joseph N. Battista	47	Senior Vice President, Client Services
J. Michael Locke	34	Senior Vice President, Curriculum Solutions
Michael P. Purcell	44	Senior Vice President, Sales and Marketing
Cleatous J. Simmons	57	Senior Vice President, General Counsel and Secretary
Keith E. Thompson	41	Senior Vice President, Technical Services
Dr. Marvin Wachman(1)	85	Chairman Emeritus, Director
Robert E. King(2)	66	Chairman
Robert H. Atwell(2)	71	Director
James E. Cowie(3)	47	Director
Bernard Goldstein(3)	71	Director
Dr. Thurston E. Manning(2)	76	Director
Kenneth G. Pigott(1)(3)	58	Director
Jane Ryland(1)	57	Director

(1)

Member of the nominating committee.

(2)

Member of the compensation committee.

(3)

Member of the audit committee.

        Thomas V. Huber has served as a director since October 2000 and as president and chief executive officer since January 2002. From September 2001 until December 2001, Mr. Huber served as president of the Collegis division and chief operating officer. From October 2000 to September 2001, he served as our chief executive officer. Prior to joining us, from 1998 to 2000, Mr. Huber served as president of the CBS Worldwide Division of Fiserv, Inc., an application software provider and systems integrator for the financial industry, and as acting president of the CBS Worldwide Division of Fiserv, Inc. in 1997. Additionally, Mr. Huber has held senior management positions with Citicorp, Newtrend, L.P., Paramount Communications and Ernst & Young LLP.

        Robert C. Bowers has served as a director since April 1996, as executive vice president since May 1996 and chief financial officer since 1997. Mr. Bowers served as secretary from August 2001 until May 2002. Mr. Bowers served as vice president and chief financial officer of HTE Inc. from June 1995 to May 1996 and as senior vice president and chief financial officer of Newtrend, L.P. from June 1985 to December 1994.

        Dr. William H. Graves has served as a director since November 1997 and currently serves as vice chairman. In this capacity, Dr. Graves serves as our chief academic officer. Dr. Graves served as our senior vice president of instructional technologies from November 1997 until he founded Eduprise in 1999. Dr. Graves has also served as president of the COLLEGIS Research Institute from

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November 1997 until its dissolution in 2001. From 1967 to 1999, Dr. Graves was on the faculty at the University of North Carolina at Chapel Hill (professor of mathematics) and also served in various academic and administrative positions and as senior technology officer. In 1989 he founded the University's Institute for Academic Technology and directed it until joining us in November 1997.

        Robert J. Abel has served as chief marketing officer since September 2001 and general manager, learning technology solutions since May 2002. From May 1999 until September 2001, Mr. Abel was vice president of strategy and business development for Eduprise. Prior to joining Eduprise, Mr. Abel was senior director of online learning products and services at Oracle from November 1996 to May 1999. Mr. Abel also has management experience at National Semiconductor and TRW, Inc.

        Janelle A. Baltzer has served as senior vice president of strategic services since May 2000. Prior to joining us, Ms. Baltzer was a partner with Baltzer-Sutton Associates from January 1997 to May 2000, where her responsibilities included delivering information technology consulting services to post-secondary institutions. Ms. Baltzer was vice president of information services and chief information officer for the Apollo Group, Inc. from December 1995 to December 1996.

        Joseph N. Battista has served as senior vice president of client services since January 2000. From June 1999 until December 1999, he served as senior vice president and chief financial officer of Eduprise, Inc. From 1997 to May 1999, he was vice president of client services. From 1995 to 1997, Mr. Battista served as our vice president and chief financial officer. Prior to joining us, Mr. Battista was chief operating officer of ScanGraphics from 1990 to 1995 and chief financial officer of The WEFA Group from 1987 to 1990. He was also chief financial officer of Chase Econometrics from 1982 to 1987.

        J. Michael Locke has served as senior vice president of curriculum solutions since September 2001. Prior to joining us, Mr. Locke served as the chief financial officer of Eduprise from February 2000 until September 2001. From September 1997 to January 2000, Mr. Locke was a vice president in the Investment Banking group at Banc of America Securities in San Francisco where he focused in the education and training sector. From 1992 to 1995, Mr. Locke was a corporate finance attorney with Sullivan & Cromwell.

        Michael P. Purcell has served as senior vice president of sales and marketing since April 2001. From May 2000 to April 2001, Mr. Purcell was vice president of sales at Postini in Redwood City, CA, responsible for worldwide sales and delivery of email value added applications. From 1982 through 2000, Mr. Purcell held a number of sales and management positions with IBM.

        Cleatous J. Simmons has served as senior vice president and general counsel since February 2002. He has served as secretary since May 2002. Mr. Simmons was a senior partner and practice group manager at the law firm of Lowndes, Drosdick, Doster, Kantor & Reed, P.A. in Orlando, Florida from May 1977 to February 2002.

        Keith E. Thompson has served as senior vice president of the technical services division since July 1999 and was vice president of the technical services division from June 1997 to July 1999. From 1995 until June 1997, he served as vice president of operations for Software Support, Inc., a call center company providing technical support for OEMs, ISPs, and software manufacturers. From 1990 through 1995, Mr. Thompson served as director business data processing for Newtrend, L.P. focusing on technology outsourcing to the financial industry.

        Dr. Marvin Wachman has served as a director since 1993 and is currently chairman emeritus of the board of directors. Dr. Wachman served as chairman of the board of directors from February 1995 to August 2001 and co-chairman until April 2002. Dr. Wachman currently serves as president emeritus of Temple University. He was chancellor of Temple University from 1982 to May 2002 and was president

41

of Temple University from 1973 to 1982. Dr. Wachman is a former president of Lincoln University and a past president of the Pennsylvania Association of Colleges & Universities.

        Robert E. King has served as a director since April 1996 and currently serves as chairman of the board of directors. From September 2001 until January 2002, Mr. King served as our interim chief executive officer. Mr. King served from May 1996 to May 1998 as chairman of the executive committee of the board of directors. Since 1994, Mr. King has served as chairman of Salt Creek Ventures, an organization specializing in equity investments in technology and education/training companies. He also serves as a director of DeVry, Inc. and LaPetite Academy, Inc. From 1983 to 1994, Mr. King was chairman and chief executive officer of Newtrend, L.P. Mr. King also founded and served as chief executive officer of DELTAK, Inc. (now known as NetG, Inc., a subsidiary of Thomson, Inc.).

        Robert H. Atwell has served as a director since November 1996. Since 2001, Mr. Atwell has served as an associated consultant with A.T. Kearney, Inc. Mr. Atwell currently serves as president emeritus of the American Council of Education. From December 1996 until December 2000, he served as an independent consultant. From 1984 to 1996, he served as president of the American Council of Education and served as its executive vice president from 1978 to 1984. From 1970 to 1978, Mr. Atwell was president of Pitzer College, one of the Claremont Colleges located in California. From 1965 to 1970, he was vice chancellor for administration of the University of Wisconsin and before that he held a variety of posts with the federal government. He is also a member of the board of directors of Education Management Corporation, Ed Verify, Argosy University and Eckerd College.

        James E. Cowie has served as a director since April 1996. Mr. Cowie is a managing partner of Frontenac Company and has been a partner since 1989. Mr. Cowie currently serves as a director of divine, inc., Lante Corporation and Seurat Company and is a trustee of the Illinois Institute of Technology. Prior to joining Frontenac in 1988, Mr. Cowie was a vice president at Merrill Lynch Capital Markets.

        Bernard Goldstein has served as a director since April 1996. Since 1997, Mr. Goldstein has served as an independent consultant. He also serves as a director of Broadview International, LLC, SPSS, Inc., Sungard Data Systems Inc. and Allscripts Healthcare Solutions, Inc. Mr. Goldstein is a former partner and managing director of Broadview International, LLC and former chairman of National CSS, Inc.

        Dr. Thurston E. Manning has served as a director since November 1996. Since 1991, he has been a self-employed consultant in higher education administration and accreditation, and a director of DeVry, Inc. Dr. Manning formerly served from 1987 to 1991 as president of the Council on Post-Secondary Accreditation, from 1975 to 1987 as director and executive officer of the Commission on Institutions of Higher Education of the North Central Association of Colleges and Schools, from 1971 to 1974 as president of the University of Bridgeport and from 1964 to 1971 as vice president for Academic Affairs of the University of Colorado.

        Kenneth G. Pigott has served as a director since April 1996. He also serves as managing partner of Pigott & Company, a private investment company he founded 20 years ago. Since 2001, Mr. Pigott has served as chairman of USA.NET, Inc., a leading provider of E-messaging systems solutions and since 1997, he has been chairman of Compass Asset Management, LLC, a money management firm that deploys options based strategies. Mr. Pigott is a former chairman of Specialty Packaging Products, Inc. and of Intertech Resources, Inc. and is a former partner of Winston & Strawn.

        Jane N. Ryland has served as a director since November 1998. She is a consultant in education technology, and has served as a membership consultant to Internet2 since January 2000 and was director of member activities from October 1998 to January 2000. Ms. Ryland also currently serves as a director of Online Computer Library Center, Inc., a global library consortium. Ms. Ryland was president of CAUSE (the professional association for information technology managers in higher

42

education) from 1986 to 1998, and has formerly held positions in both higher education and the technology industry.

Board Composition

        We currently have 11 directors and one vacancy on our board of directors. Our board of directors is divided into three classes of directors serving staggered three-year terms. As a result, one-third of the board of directors will be elected each year. The authorized number of directors may be changed only by resolution of the board of directors or a vote of stockholders holding 66²/3% of our outstanding common stock. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one third of the directors. These provisions allow the board of directors to fill vacancies of or increase the size of the board of directors, and may deter a stockholder from removing incumbent directors and filling such vacancies with its own nominees in order to gain control of the board.

        Our board has resolved that William H. Graves, Robert E. King and Marvin Wachman will serve as Class I Directors whose terms expire at the 2003 annual meeting of stockholders. Robert H. Atwell, Robert C. Bowers, James E. Cowie and Bernard Goldstein will serve as Class II directors whose terms expire at the 2004 annual meeting of stockholders. Thomas V. Huber, Thurston E. Manning, Kenneth G. Pigott and Jane N. Ryland will serve as Class III directors whose terms expire at the 2005 annual meeting of stockholders.

Board Committees

        We have established an audit committee, a compensation committee and a nominating committee. The audit committee reviews our internal accounting procedures and considers and reports to the board of directors with respect to other auditing and accounting matters, including the selection of our independent auditors, the scope of annual audits, fees to be paid to our independent auditors and the performance of our independent auditors. The audit committee currently consists of Messrs. Cowie (chairman), Goldstein and Pigott.

        The compensation committee reviews and recommends to the board of directors the salaries, benefits and stock option grants of all employees, consultants, directors and other individuals compensated by us. The compensation committee also administers our stock option and other employee benefits plans. The compensation committee currently consists of Dr. Manning (chairman) and Messrs. Atwell and King.

        The nominating committee reviews and recommends nominees for election to the board of directors, candidates for board committee membership and employment as senior officers. The nominating committee currently consists of Dr. Wachman (chairman), Mr. Pigott and Ms. Ryland.

Director Compensation

        Non-employee directors not otherwise affiliated with one of our significant stockholders receive $10,000 a year and $1,000 for each board or board committee meeting attended. All of our non-employee directors not otherwise affiliated with one of our significant stockholders have received stock option grants under our 1996 Stock Option Plan and will be eligible to receive stock option grants under our 2002 Stock Incentive Plan.

        In 2001, 2000 and 1999, we paid $25,000 to each of Mr. Pigott and Frontenac Company, an entity affiliated with Mr. Cowie, as additional consideration for Messrs. Pigott and Cowie's board activities. These payments were approved by a majority of the board of directors, including a majority of the independent directors. Upon consummation of this offering, these additional payments will no longer

43

be made and Messrs. Pigott and Cowie will be entitled to compensation in accordance with the preceding paragraph.

Compensation Committee Interlocks and Insider Participation

        Except for Mr. King, no member of the compensation committee has been an officer or employee of ours at any time. None of our existing executive officers serves as a member of the board of directors or compensation committee of any other company that has one or more executive officers serving as a member of our board of directors or compensation committee. Mr. King, our interim chief executive officer from September 2001 to January 2002 and a member of the compensation committee, is also a director of DeVry, Inc. Dr. Manning, one of our directors and a member of the compensation committee, is also a director of DeVry, Inc. Prior to the formation of the compensation committee, the full board of directors made decisions relating to compensation of our executive officers.

Salt Creek Ventures Consulting Agreement

        We are party to an agreement with Salt Creek Ventures, LLC, an entity owned and controlled by our chairman, Robert E. King, under which Salt Creek Ventures provides us with a variety of advisory services, including corporate development activities such as acquisitions, joint ventures and strategic partnerships, strategic planning and competitive assessment and selective sales support through senior client relationships. The contract also requires that Salt Creek Ventures provide supplemental services and support staff personnel to our board of directors. From September 2001 until January 2002, Mr. King served as our interim chief executive officer. Under the agreement, we are obligated to pay Salt Creek Ventures $62,500 per calendar quarter for so long as the agreement is in effect. Amounts paid to Salt Creek Ventures in 1999, 2000 and 2001 were $50,000, $125,000 and $162,500, respectively. The agreement is continuous subject to termination upon mutual agreement of the parties or by either party with one year's prior notice. The agreement, including the amounts paid to Salt Creek Ventures thereunder, has been unanimously approved by all of our directors, including all of the independent directors.

Limitation of Liability and Indemnification of Officers and Directors

        Our certificate of incorporation and bylaws provide that our directors and officers shall be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended, against all expenses and liabilities reasonably incurred in connection with their service for or on our behalf. In addition, the certificate of incorporation provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or to our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper personal benefit from their action as directors. We have obtained insurance which insures our directors and officers against specified losses and which insures us against specific obligations to indemnify our directors and officers.

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Executive Compensation

        The following table shows all compensation received during the year ended December 31, 2001 by our chief executive officer, interim chief executive officer and our five other highest-paid executive officers.

Summary Compensation Table

	Annual Compensation
Name and Principal Position	Salary			Bonus		Other Annual Compensation			All Other Compensation(1)
Thomas V. Huber Chief Executive Officer	$	350,000		$	217,567		—		$	5,250
Robert E. King Interim Chief Executive Officer		162,500	(2)		—		—			—
Robert C. Bowers Executive Vice President and Chief Financial Officer		202,500			84,050		—			5,306
Michael P. Purcell Senior Vice President, Sales and Marketing		236,497			—	$	31,641	(3)		2,200
Janelle A. Baltzer Senior Vice President, Strategic Services		190,876			41,000		—			2,150
Joseph N. Battista Senior Vice President, Client Services		150,000			61,500		—			4,500
Keith E. Thompson Senior Vice President, Technical Services		150,000			61,500		—			4,500

(1)

Other annual compensation for each named executive officer represents amounts that we paid to match contributions by each executive officer to our 401(k) plan.

(2)

Represents amounts paid to Salt Creek Ventures pursuant to a consulting agreement. Mr. King served as our interim chief executive officer from September 2001 to January 2002. See "Management—Salt Creek Ventures Consulting Agreement."

(3)

Represents relocation expenses that we paid on behalf of Mr. Purcell.

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Option Grants in Last Fiscal Year

        The following table sets forth information regarding stock options granted to the persons listed on the Summary Compensation Table for 2001. We have never granted any stock appreciation rights.

Option Grants in Last Fiscal Year

	Individual Grants
							Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
	Number of Securities Underlying Options Granted	Percent of Total Options Granted to Employees in Fiscal Year
Name				Exercise or Base Price (per share)		Expiration Date
							5%		10%
Thomas V. Huber	—	—			—	—		—		—
Robert E. King	—	—			—	—		—		—
Robert C. Bowers	—	—			—	—		—		—
Michael P. Purcell	170,000	9.5	%	$	3.00	4/10/08	$	207,621	$	483,837
Janelle A. Baltzer	25,000	1.4	%		3.00	1/1/08		30,533		71,153
Joseph N. Battista	—	—			—	—		—		—
Keith E. Thompson	—	—			—	—		—		—

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

        The following table sets forth information concerning the exercise of stock options during the fiscal year ended December 31, 2001 by the persons listed in the Summary Compensation Table and the fiscal year-end value of unexercised options.

			Number of Unexercised Options at December 31, 2001		Value of Unexercised In-the-Money Options at December 31, 2001
	Shares Acquired upon Exercise
Name		Value Realized
			Exercisable	Unexercisable	Exercisable	Unexercisable
Thomas V. Huber	—	—	202,500	607,500	—	—
Robert E. King	—	—	—	—	—	—
Robert C. Bowers	—	—	—	—	—	—
Michael P. Purcell	—	—	—	170,000	—	—
Janelle A. Baltzer	—	—	20,196	110,098	—	—
Joseph N. Battista	—	—	168,433	27,567	—	—
Keith E. Thompson	—	—	77,500	35,000	—	—

Employment Agreements

        In September 2000, we entered into an at-will employment letter agreement with Thomas V. Huber, our chief executive officer, pursuant to which we agreed to pay Mr. Huber an annual base salary of $350,000 and an annual bonus of up to $250,000. The actual amount of any annual bonus is determined in accordance with an executive performance incentive plan. In the event that Mr. Huber is terminated without cause, we have agreed to continue paying his base salary and benefits for a period of 12 months after such termination.

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Employee Benefit Plans

1996 Stock Option Plan

        In 1996, the board of directors adopted and our stockholders approved the 1996 Stock Option Plan. The plan is designed to enhance our long-term profitability and stockholder value by aligning the interests of selected directors, officers, employees and consultants with our performance targets.

        The 1996 Stock Option Plan is administered by the board of directors, which has exclusive authority to grant awards under the plan and to make all interpretations and determinations affecting the plan. The board has the sole discretion, for example, to determine the individuals to be granted options, the number of shares of common stock to be subject to each option granted, the exercise price of each option, the conditions with respect to vesting and exercisability of options and all other conditions of any grant of options under the plan. The board may delegate all or any portion of the authority granted to it under the plan to a committee appointed by the board.

        Participation in the plan is limited to our directors, officers, employees and consultants who are selected from time to time by the board or by a committee appointed by the board. Awards under the plan may be in the form of incentive stock options meeting the requirements of Section 422 of the Internal Revenue Code or non-statutory options which are not intended to meet the requirements of Section 422 of the Internal Revenue Code.

        We have reserved an aggregate of 7,400,000 shares of common stock for issuance under the 1996 Stock Option Plan. As of June 30, 2002, options to purchase 4,930,985 shares of common stock were outstanding. There will be no further options issued under the 1996 Stock Option Plan.

2002 Stock Incentive Plan

        Our 2002 Stock Incentive Plan was adopted by the board of directors and approved by our stockholders in July 2002. The 2002 Stock Incentive Plan will be effective upon consummation of this offering and is designed enhance our profitability and stockholder value by providing long-term incentives to selected directors, officers, employees and consultants that are consistent with our objectives and by aligning the interests of selected individuals with those of our stockholders.

        The 2002 Stock Incentive Plan provides for the grant of options intended to qualify as "incentive stock options" under Section 422 of the Internal Revenue Code of 1986, as amended, "nonqualified stock options" that are not intended to meet the requirements of Code Section 422, restricted stock awards, stock appreciation rights and performance shares. Participation in the 2002 Stock Incentive Plan is limited to those directors, officers, employees and consultants who are selected to receive awards.

        The compensation committee of the board of directors, which consists of at least two "outside directors" within the meaning of Code Section 162(m), administers the 2002 Stock Incentive Plan. Subject to the terms of the 2002 Stock Incentive Plan, the compensation committee determines the individuals to be granted awards, the type of award to be granted, the number of shares of common stock to be subject to each award, the exercise price of each award, the conditions with respect to vesting and exercisability of awards, all other conditions of any award granted under the 2002 Stock Incentive Plan, possible amendments to the terms of these awards and the interpretation of the terms of, and adoption of rules for, the 2002 Stock Incentive Plan.

        Initially, up to 2,500,000 shares of common stock will be reserved for issuance under the 2002 Stock Incentive Plan. The number of shares reserved will increase automatically as of the first day of each calendar year beginning on January 1, 2003, by an amount equal to 2.5% of the total number of shares of our common stock then outstanding.

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        Each option granted pursuant to the 2002 Stock Incentive Plan will be designated at the time of grant as either an "incentive stock option" or a "non-qualified stock option." The compensation committee determines the exercise price of each option issued under the 2002 Stock Incentive Plan, provided that in the case of incentive stock options, the exercise price may not be less than 100% of the grant date fair market value of the shares of common stock covered by such options. If an incentive stock option is granted to an employee who owns more than 10% of the total combined voting power of all classes of our outstanding capital stock, then the exercise price thereof may not be less than 110% of the grant date fair market value of the common stock covered by such option. The aggregate fair market value (determined at the time the option is granted) of the shares as to which an employee may first exercise incentive stock options in any one calendar year may not exceed $100,000. The compensation committee may impose any other conditions to exercise that it deems appropriate.

        Stock appreciation rights may be awarded pursuant to the 2002 Stock Incentive Plan along with, in addition to, or in tandem with, other awards under the 2002 Stock Incentive Plan. Upon the exercise of a stock appreciation right, an individual will be entitled to receive an amount in cash and/or shares of stock equal in value to the excess of the fair market value of the stock in respect of which the stock appreciation right shall have been exercised over the grant price of the stock appreciation right, which price will equal the fair market value of the common stock on the date of grant. The individual shall have the right to determine the form of payment.

        Restricted stock may be awarded pursuant to the 2002 Stock Incentive Plan along with, in addition to, or in tandem with, other awards under the 2002 Stock Incentive Plan and/or cash awards made outside the 2002 Stock Incentive Plan. The purchase price for shares of restricted stock may be less than their fair market value (determined without regard to the restrictions) on the award date and may be zero. The compensation committee will establish the restriction on the restricted stock, which may be based on our performance, the individual's performance and/or the individual's period of employment.

        Performance shares may be awarded pursuant to the 2002 Stock Incentive Plan along with, in addition to, or in tandem with, other awards under the 2002 Stock Incentive Plan and/or cash awards made outside the 2002 Stock Incentive Plan. The award of performance shares will be conditioned on the attainment of specified performance goals. The compensation committee will establish the vesting or other conditions applicable to performance shares.

Employee Stock Purchase Plan

        Our Employee Stock Purchase Plan was adopted by the board and approved by the stockholders in July 2002. The Employee Stock Purchase Plan will be effective upon consummation of this offering. The Employee Stock Purchase Plan is designed to allow our eligible employees to purchase shares of common stock, at semi-annual intervals, with their accumulated payroll deductions. The Employee Stock Purchase Plan is intended to qualify for the tax treatment provided under Code Section 423.

        Initially, 1,000,000 shares of our common stock have been reserved for issuance under the Employee Stock Purchase Plan.

        The Employee Stock Purchase Plan has a series of successive purchase periods, each with a maximum duration of six months. All individuals who have been employed by us at least six months, who are not considered "highly compensated employees" under Code Section 414(q) and who own less than 5% of our common stock may join an offering period on any semi-annual grant date. Semi-annual grant dates will occur on January 1 and July 1 of each year. Individuals who become eligible employees after the start date of a purchase period may join the Employee Stock Purchase Plan on any subsequent semi-annual grant date.

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        Subject to the terms of the Employee Stock Purchase Plan, semi-annual purchase dates will occur on June 30 and December 31 of each year. A participant may contribute up to 10% of his or her gross compensation, including salary, bonuses and commissions, through payroll deductions, and the accumulated deductions will be applied to the purchase of shares on each semi-annual purchase date. In no event, however, may any participant purchase shares worth more than $25,000 during any calendar year. For each purchase period, the purchase price per share will be equal to 85% of the fair market value per share on the applicable grant date or, if lower, 85% of the fair market value per share on the semi-annual purchase date.

        Generally, should we be acquired by either merger, sale of substantially all of our assets or sale of more than 20% of our common stock, then all outstanding options to purchase shares will be assumed by the successor entity or will be exercised automatically immediately prior to the effective date of the acquisition. The purchase price will be equal to 85% of the fair market value per share on the grant date of the purchase period in which the acquisition occurs or, if lower, 85% of the fair market value per share immediately prior to the acquisition.

        The Employee Stock Purchase Plan will terminate on the tenth anniversary of the effective date of this offering, when all of the shares of common stock reserved for issuance under the Employee Stock Purchase Plan have been purchased or at the discretion of the board of directors.

Performance Incentive Plan

        In each of the past six years, we have established an annual performance incentive plan pursuant to which substantially all of our employees were made eligible to be paid a bonus based on individual performance and our results of operations for such fiscal year. We currently anticipate establishing a performance incentive plan in 2002. The compensation committee of our board of directors approves levels of allocations of the bonus pool among employee groups and cash bonuses, if any, are paid following our annual audit. In 2001, we contributed $960,000 for payment under the 2001 performance incentive plan.

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RELATED PARTY TRANSACTIONS

        In June 1999, we sold our learning technology solutions division to one of our minority stockholders for $30,000 who operated it as Eduprise. Eduprise assumed $430,000 of deferred revenue and accrued expenses. In connection with the initial formation of the learning technology solutions division, the division recognized a liability to us of approximately $116,000. This liability remained in place after we sold the division to Eduprise. As of December 31, 1999, Eduprise owed us approximately $167,000, which was due on demand. This amount was repaid during 2000 and at August 31, 2001, no amounts were due to or from Eduprise. After our disposition of the division, we retained the rights to computer software and related intellectual property developed by the division and granted a royalty-free license to Eduprise for the use of this intellectual property. We continued to provide related services under our existing contracts through a subcontracting arrangement with Eduprise. We paid Eduprise service fees related to this arrangement of $287,000 in the eight months ended August 31, 2001, $430,000 in 2000 and $301,000 in 1999.

        Subsequent to our disposition, Eduprise raised approximately $20 million in a private equity financing led by JP Morgan Partners and Arena Capital Investment Fund that included investments by substantially all of our then-existing shareholders, including most of our directors and two entities affiliated with one of our significant shareholders, Frontenac VI Limited Partnership. On August 31, 2001, we reacquired Eduprise through the issuance of 4.3 million shares of our common stock and the assumption of options and warrants to purchase 342,000 shares of our common stock. Subsequent to the sale of Eduprise by us, the following affiliates of Collegis made investments in Eduprise for which they directly and indirectly received shares of capital stock of Eduprise that were exchanged for shares of our common stock in our August 2001 reacquisition of Eduprise.

Name		Investment in Eduprise		Collegis Shares Received in August 2001 Eduprise Acquisition
Directors and Named Executive Officers:
	Robert C. Bowers	$	93,704	24,181
	Keith E. Thompson		5,980	1,543
	Dr. Marvin Wachman		5,876	1,516
	Robert E. King (1)		2,205,476	638,285
	James E. Cowie (2)		5,753,190	1,122,872
	Bernard Goldstein		25,768	6,649
	Dr. Thurston E. Manning		4,684	1,208
	Kenneth G. Pigott (3)		976,988	275,170
	Jane Ryland		1,320	340
5% Stockholders:
	Frontenac VI Limited Partnership		753,212	194,379
	Claire Reid		130,512	33,680

(1)

Includes investments by the following entities affiliated with Mr. King, King Children Trust Partnership, Emily Hauser King GST Trust and Flagg Creek Foundation for which such entities received 351,636 shares, 25,806 shares and 2,776 shares of our common stock, respectively, in connection with the Eduprise acquisition.

(2)

Includes investments by the following entities affiliated with Mr. Cowie, Frontenac VI Limited Partnership, Frontenac VII Limited Partnership, Frontenac Masters VII Limited Partnership for which such entities received 194,379 shares, 884,279 shares and 44,214 shares of our common stock, respectively, in connection with the Eduprise acquisition.

(3)

Includes investments by the following entities affiliated with Mr. Pigott, his spouse, the Pigott Family Partnership and The Dearborn Foundation, for which such entities received 1,665 shares,

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5,830 shares and 833 shares of our common stock, respectively, in connection with the Eduprise acquisition.

        For more detailed information about our acquisition of Eduprise, see "Unaudited Pro Forma Financial Data," "Business — Eduprise Acquisition" and the Eduprise, Inc. financial statements included elsewhere in this prospectus.

        In connection with the formation of Eduprise, the rights and obligations of a services agreement between Collegis and the Collegis Research Institute ("CRI"), a not-for-profit research organization related to us through common directors was assumed by Eduprise. In connection with the services agreement, Eduprise was obligated to provide to CRI certain outsourcing, management and administrative services and to serve as liaison on behalf of CRI with outside advisors, and CRI agreed to reimburse Eduprise for its costs of providing such services. During 1999, Eduprise provided approximately $150,000 in services to CRI for which it was reimbursed. The services agreement was terminated in 2000, and no amounts were due from CRI at December 31, 2000.

        In connection with a former officer's severance agreement dated December 31, 1999, we agreed to repurchase 190,000 outstanding shares of our capital stock from the officer for $3.00 per share. In addition, the former officer's remaining options were cancelled.

        In December 1998, as part of a severance agreement with a former officer, we loaned the officer $571,400. The loan was secured by the former officer's 600,000 shares of our capital stock and was repayable under a full recourse promissory note. In March 2000, the former officer exercised 327,000 options to purchase our common stock at $0.56 per share. We simultaneously repurchased and retired all of the former officer's shares of our capital stock for $3,303,000. We issued a promissory note to the former officer in the amount of $1,651,500, which accrues interest at 6.5% and is payable quarterly commencing on June 30, 2000. Any outstanding principal and any accrued but unpaid interest on this note is payable on March 31, 2003. The remainder of the consideration was paid in cash. The former officer used the cash consideration to repay all amounts outstanding under the December 1998 promissory note.

        For detailed information about certain transactions with Messrs. Pigott, Cowie and King, see "Management—Director Compensation" and "—Compensation Committee Interlocks and Insider Participation."

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PRINCIPAL AND SELLING STOCKHOLDERS

        The following table sets forth certain information regarding beneficial ownership of our common stock as of June 30, 2002 and as adjusted to reflect the sale of the shares of common stock offered pursuant to this prospectus by:

•

each person, entity or group of affiliated persons whom we know owns beneficially more than 5% of our common stock;



•

each of our directors;



•

each executive officer listed in the "Summary Compensation" table above;



•

all of our directors and executive officers as a group; and



•

each selling stockholder.

        Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Beneficial ownership and percentage ownership are determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. The table below assumes that the underwriters over-allotment is not exercised. It is therefore based on                        shares of our common stock outstanding prior to this offering and                        shares outstanding immediately after this offering.

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		Shares beneficially owned prior to this offering			Number of shares being offered		Shares beneficially owned after this offering
Name of Beneficial Owner(1)		Number of shares	Percent		Number of shares	Percent	Number of shares	Percent
Directors and Named Executive Officers:
	Thomas V. Huber(2)	202,500	1.15	%
	Robert C. Bowers(2)	749,588	4.31	%
	Michael P. Purcell(2)	42,500	*
	Janelle A. Baltzer(2)	46,446	*
	Joseph N. Battista(2)	168,433	*
	Keith E. Thompson(2)	106,543	*
	Dr. Marvin Wachman(2)	61,472	*
	Robert E. King(3)	2,991,673	17.22	%
	Robert H. Atwell(2)	41,956	*
	James E. Cowie(4)	6,161,164	35.45	%
	Bernard Goldstein(2)	199,874	1.15	%
	Dr. Thurston E. Manning(2)	43,164	*
	Kenneth G. Pigott(5)	2,486,762	14.31	%
	Jane Ryland(2)	31,856	*
	All Directors and Named Executive Officers as a group (consisting of 14 persons)	13,333,931	73.74	%
5% Stockholders:
	Frontenac VI Limited Partnership(6)	5,232,671	30.11	%
	J.P. Morgan Partners (23A SBIC), LLC(7)	1,478,317	8.51	%
	Claire Reid(8)	906,680	5.22	%
	Frontenac VII Limited Partnership(6)	884,279	5.09	%
Other Selling Stockholders:(9)
	Learning Tree International, Inc.	185,698	1.07	%
	U.S. Bancorp Piper Jaffray Inc.(10)	182,170	1.05	%

*

Represents less than one percent.

(1)

Unless noted otherwise, the address for each of the directors, executive officers and beneficial owners identified in this table is c/o of Collegis, Inc., 2300 Maitland Center Parkway, Suite 340, Maitland, Florida 32751.

(2)

Includes shares subject to purchase upon exercise of options exercisable within 60 days after July 31, 2002, as follows: Mr. Huber 202,500 shares; Mr. Purcell 42,500 shares; Ms. Baltzer 46,446 shares; Mr. Battista 168,433 shares; Mr. Thompson 87,500 shares; Dr. Wachman 31,076 shares; Mr. Atwell 31,516 shares; Mr. Goldstein 31,320 shares; Dr. Manning 31,516 shares; and Ms. Ryland 31,516 shares.

(3)

Includes 1,395,975 shares held by King Children Trust Partnership and 25,806 shares held by Emily Hauser King GST Trust for which Mr. King serves as trustee. Also includes 99,667 shares held by Flagg Creek Foundation. Mr. King is a director of Flagg Creek Foundation. As a result, Mr. King may be deemed to have beneficial ownership of the shares held by King Children Trust Partnership, Emily Hauser King GST Trust and Flagg Creek Foundation. Mr. King disclaims beneficial ownership of all such attributed shares.

(4)

Includes 5,232,671 shares held by Frontenac VI Limited Partnership, 884,279 shares held by Frontenac VII Limited Partnership and 44,214 shares held by Frontenac Masters VII Limited

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Partnership. Mr. Cowie is a managing partner of Frontenac Company, which is the sole general partner of Frontenac VI Limited Partnership and a member of Frontenac Company VII, LLC, which is the sole general partner of Frontenac VII Limited Partnership and Frontenac Masters VII Limited Partnership. As a result, Mr. Cowie may be deemed to have beneficial ownership of the shares held by such entities. Mr. Cowie disclaims beneficial ownership of these shares except to the extent of his pecuniary interest.

(5)

Includes 44,839 shares owned by Mr. Pigott's spouse, 156,941 shares owned by Pigott Family Partnership of which Mr. Pigott is the general partner and 47,353 shares owned by The Dearborn Foundation, of which Mr. Pigott is a director. Mr. Pigott disclaims beneficial ownership of all such attributed shares.

(6)

The address for Frontenac VI Limited Partnership and Frontenac VII Limited Partnership is c/o Frontenac Company, 135 South LaSalle Street, Suite 3800, Chicago, Illinois 60603. Mr. Cowie has voting or investment control over the common stock held by Frontenac VI Limited Partnership, Frontenac VII Limited Partnership and Frontenac Masters VII Limited Partnership.

(7)

Shares beneficially owned prior to this offering and number of shares being offered include 549,824 shares of common stock to be issued upon exercise of an outstanding warrant. The address for J.P. Morgan Partners (23A SBIC), LLC is c/o JP Morgan Partners, 1221 Avenue of Americas, 39th Floor, New York, New York 10020.

(8)

The address for Claire Reid is P.O. Box 576, Unionville, Pennsylvania 19375.

(9)

The names of the selling stockholders and the number of securities held by the selling stockholders will be provided in a pre-effective amendment to this registration statement.

(10)

Shares beneficially owned prior to this offering and number of shares being offered represent shares of common stock to be issued upon exercise of an outstanding warrant.

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DESCRIPTION OF CAPITAL STOCK

        The following information describes our common stock and preferred stock, as well as options and warrants to purchase our common stock, and provisions of our certificate of incorporation and our bylaws. This description is only a summary. You should also refer to the certificate and bylaws which have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part.

        Upon completion of this offering, our authorized capital stock will consist of                        shares of common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

        As of June 30, 2002, there were 17,378,236 shares of common stock outstanding and held of record by 108 stockholders, including 748,000 redeemable shares of common stock. The shares of redeemable common stock are subject to put options granted by us to a former officer as part of an incentive, put and noncompetition agreement.

        There will be                        shares of common stock outstanding upon the closing of this offering, which gives effect to the issuance of                        shares of common stock offered by us under this prospectus.

        Each share of common stock will have identical rights and privileges in every respect upon the closing of this offering. The holders of our common stock are entitled to vote upon all matters submitted to a vote of our stockholders and are entitled to one vote for each share of common stock held. Subject to the prior rights and preferences, if any, applicable to shares of our preferred stock, the holders of common stock are entitled to receive such dividends, payable in cash, stock or otherwise, as may be declared by our board of directors out of any funds legally available for the payment of dividends. If we voluntarily or involuntarily liquidate, dissolve or wind-up, the holders of common stock will be entitled to receive after distribution in full of the preferential amounts, if any, to be distributed to the holders of preferred stock or any series of preferred stock, all of the remaining net assets available for distribution ratably in proportion to the number of shares of common stock held by them. Holders of common stock have no preferences or any preemptive conversion or exchange rights.

Preferred Stock

        Our certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock, par value $0.01 per share. As of June 30, 2002, there were no shares of preferred stock outstanding. Our board of directors is authorized to provide for the issuance of shares of preferred stock in one or more series, and to fix for each series voting rights, if any, designation, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions as may be provided in a resolution or resolutions adopted by the board of directors. The board of directors may authorize the issuance of shares of preferred stock with terms and conditions which could discourage a takeover or other transaction that holders of some or a majority of shares of common stock might believe to be in their best interests or in which holders of common stock might receive a premium over the market price for their shares.

Options

        As of June 30, 2002, options to purchase a total of 4,930,985 shares of our common stock were outstanding at a weighted average exercise price of $2.94. Options to purchase a total of 2,500,000 shares of common stock may be granted under our 2002 Stock Incentive Plan.

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Warrants

        As of June 30, 2002, we had outstanding a warrant to purchase 549,824 shares of common stock to J.P. Morgan Partners (23A SBIC), LLC at an exercise price of $0.23375 per share and a warrant to purchase 182,170 shares of common stock to U.S. Bancorp Piper Jaffray at an exercise price of $5.38 per share. The J.P. Morgan warrant was issued in 1996 and is currently exercisable. The U.S. Bancorp Piper Jaffray warrant was issued in 2000 in connection with U.S. Bancorp Piper Jaffray's efforts in leading a private equity financing for Eduprise. This warrant was assumed by us in connection with the Eduprise acquisition. The U.S. Bancorp Piper Jaffray warrant is currently exercisable. In connection with this offering, the warrant holders have decided to exercise all outstanding warrants and offer the 731,994 shares of common stock issuable thereby as selling stockholders. See "Principal and Selling Stockholders."

Anti-Takeover Effects of Certain Provisions of Delaware Law and the Certificate of Incorporation and Bylaws

        Some provisions of our certificate of incorporation and bylaws, which provisions are summarized in the following paragraphs, may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders.

Delaware Anti-Takeover Law

        We are subject to Section 203 of the Delaware General Corporation Law, or DGCL Section 203, which regulates corporate acquisitions. DGCL Section 203 prevents certain Delaware corporations, including those whose securities are listed for trading on the Nasdaq National Market, from engaging, under certain circumstances, in a "business combination" with any "interested stockholder" for three years following the date that such stockholder became an interested stockholder. For purposes of DGCL Section 203, a "business combination" includes, among other things, a merger or consolidation involving us and the interested stockholder and the sale of more than 10% of our assets. In general, DGCL Section 203 defines an "interested stockholder" as any entity or person beneficially owing 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person. A Delaware corporation may "opt out" of DGCL Section 203 with an express provisions in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from amendments approved by the holders of at least a majority of the corporation's outstanding voting shares. We have not "opted out" of the provisions of DGCL Section 203.

Classified Board of Directors

        Our board of directors is divided into three classes of directors serving staggered three-year terms. As a result, approximately one-third of the board of directors will be elected each year. These provisions, when coupled with the provision of our certificate of incorporation authorizing the board of directors to fill vacant directorships or increase the size of the board of directors, may deter a stockholder from removing incumbent directors and simultaneously gaining control of the board of directors by filling the vacancies created by such removal with its own nominees.

Cumulative Voting

        Our certificate of incorporation expressly denies stockholders the right to cumulate votes in the election of directors.

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Stockholder Action; Special Meeting of Stockholders

        Our certificate of incorporation eliminates the ability of stockholders to act by written consent. Our bylaws further provide that special meetings of our stockholders may be called at any time only by the chairman of the board or the president or at the written request of a majority of the board of directors and by no other persons.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

        Our bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors at an annual meeting of stockholders, must provide timely notice in writing. To be timely, a stockholder's notice must be delivered to or mailed and received at our principal executive offices not less than sixty days nor more than ninety days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, that in the event that the annual meeting is called for a date that is not within thirty days before or after such anniversary date, notice by the stockholder in order to be timely must be received not later than the close of business on the tenth day following the date on which notice of the date of the annual meeting was mailed to stockholders or made public, whichever first occurs. Our bylaws also specify certain requirements as to the form and content of a stockholder's notice. These provisions may preclude stockholders from bringing matters before an annual meeting of stockholders or from making nominations for directors at an annual meeting of stockholders.

Authorized But Unissued Shares

        The authorized but unissued shares of common stock and preferred stock are available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Amendments; Supermajority Vote Requirements

        The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or bylaws, unless a corporation's certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our certificate of incorporation requires the affirmative vote of the holders of 66²/3% of the outstanding shares of our common stock to approve a business combination transaction that is not approved by a majority of the board of directors or amend the provisions of our certificate of incorporation and bylaws, including those provisions relating to the classified board of directors, action by written consent and the ability of stockholders special meetings.

Transfer Agent and Registrar

        The transfer agent and registrar for our common stock is LaSalle Bank National Association.

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SHARES ELIGIBLE FOR FUTURE SALE

        Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of our common stock in the public market could adversely affect prevailing market prices. Furthermore, since no shares will be available for sale shortly after this offering because of contractual and legal restrictions on resale as described below, sales of substantial amounts of our common stock in the public market after these restrictions lapse could adversely affect the prevailing market price and our ability to raise equity capital in the future.

        Upon completion of this offering, we will have outstanding an aggregate of                        shares of common stock, assuming no exercise of the underwriters' over-allotment option and no exercise of outstanding options after                        , 2002. Of these shares, all of the shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, unless these shares are purchased by "affiliates" as that term is defined in Rule 144 under the Securities Act. The remaining                        shares of common stock held by existing stockholders are restricted securities. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration described below under Rules 144 or 144(k) promulgated under the Securities Act.

        As a result of the contractual restrictions described below and the provisions of Rules 144 and 144(k), the restricted shares will be available for sale in the public market as follows:

•

none of our currently outstanding restricted shares will be eligible for sale upon completion of this offering;



•

shares will be eligible for sale upon the expiration of the lock-up agreements, described below, beginning 180 days after the date of this prospectus;



•

shares will be eligible for sale upon the exercise of vested options 180 days after the date of this prospectus; and



•

shares will be eligible for sale upon the exercise of vested options at various times after the date of this prospectus.

Lock-Up Agreements

        All of our officers, directors, existing stockholders and warrant holders and substantially all of our option holders have agreed to the lock-up restrictions described in "Underwriting."

Rule 144

        In general, under Rule 144 as currently in effect, beginning ninety days after the date of this prospectus, a person or persons whose shares are aggregated, who has beneficially owned restricted securities for at least one year, including the holding period of any prior owner except an affiliate, would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•

1% of the number of shares of our common stock then outstanding, which will equal approximately                shares immediately after this offering; or



•

the average weekly trading volume of our common stock on the Nasdaq National Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

        Sales under Rule 144 are also subject to matter of sale provisions and notice requirements and to the availability of current public information about us.

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Rule 144(k)

        Under Rule 144(k), a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner except an affiliate, is entitled to sell these shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Upon the expiration of the 180-day lock-up period,                         shares of our common stock will qualify as "144(k) shares."

Options

        Following the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act covering                         shares of common stock reserved for issuance under our stock option plan. The registration statement will become effective automatically upon filing. Upon completion of this offering, options to purchase                        shares of common stock are expected to be issued and outstanding, of which                        shares are expected to be vested. Accordingly, shares registered under the registration statement will, subject to vesting provisions and Rule 144 volume limitations applicable to our affiliates, be available for sale in the open market immediately after the 180-day lock-up agreements expire.

Registration Rights

        At any time six months following the effective date of this offering, the holders of 30% or more of the shares of common stock held by our existing stockholders will be entitled to demand, under certain circumstances, the registration of their shares under the Securities Act. We are not required to effect more than one registration for such holders pursuant to these demand registration rights, under certain circumstances. We may postpone for a period not to exceed 90 days the filing or effectiveness of any registration statement filed in connection with a demand registration if we determine in good faith that such filing would require disclosure of a material fact that would have a material adverse effect on us to engage in any acquisition of assets or any merger, consolidation or tender offer. Additionally, subject to certain conditions and limitations, we have agreed to permit our existing stockholders to include their shares of common stock in any primary offering pursuant to a registration statement filed with the SEC or whenever our securities then issued and outstanding are to be registered under the Securities Act upon compliance with certain notice provisions set forth in the agreement. These registration rights are subject to conditions and limitations, including the right of the underwriters of an offering to limit the number of shares of common stock held by security holders with registration rights to be included in such registration.

        We are generally required to bear all expenses arising from these registrations. We have further agreed to indemnify, to the fullest extent permitted by law, each stockholder and certain of their affiliates against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any registration statement, any prospectus or preliminary prospectus or any amendment thereof or supplement thereto, any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation of federal or state blue sky laws.

        Registration of any of the shares of our common stock held by security holders with registration rights would result in such shares becoming freely tradable without restriction under the Securities Act immediately upon effectiveness of such registration.

        All holders with registration rights have agreed not to exercise their registration rights until 180 days following the date of this prospectus without the prior written consent of Credit Suisse First Boston Corporation.

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Certain United States Federal Tax Considerations for Non-U.S. Holders

        The following is a summary of certain U.S. federal income and estate tax consequences of the acquisition, ownership, and disposition of our common stock purchased pursuant to this offering by a holder that, for U.S. federal income tax purposes, is not a "U.S. person", as that term is defined below. A beneficial owner of our common stock who is not a U.S. person is referred to below as a "non-U.S. holder." This summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder, judicial opinions, administrative rulings of the U.S. Internal Revenue Service (the "IRS") and other applicable authorities, all as in effect as of the date hereof. These authorities may be changed, possibly retroactively, resulting in United States federal tax consequences different from those set forth below. We have not sought, and will not seek, any ruling from the IRS or opinion of counsel with respect to the statements made in the following summary, and there can be no assurance that the IRS will not take a position contrary to such statements or that any such contrary position taken by the IRS would not be sustained.

        This summary is limited to non-U.S. holders who purchase our common stock issued pursuant to this offering and who hold our common stock as a capital asset (generally, property held for investment). This summary also does not address the tax considerations arising under the laws of any foreign, state or local jurisdiction, or under United States federal estate or gift tax laws (except as specifically described below). In addition, this summary does not address tax considerations that may be applicable to an investor's particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

•

banks, insurance companies or other financial institutions;



•

U.S. expatriates;



•

tax-exempt organizations;



•

dealers in securities or currencies;



•

traders in securities that use a mark-to-market method of accounting for their securities holdings;



•

holders whose "functional currency" is not the United States dollar;



•

persons that will hold common stock as a position in a hedging transaction, "straddle" or "conversion transaction" for tax purposes; or



•

persons deemed to sell common stock under the constructive sale provisions of the Code.

        In addition, if a partnership (including any entity treated as a partnership for United States federal income tax purposes) is a holder, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A HOLDER THAT IS A PARTNERSHIP, AND PARTNERS IN SUCH PARTNERSHIP, SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE DIRECT OR INDIRECT PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK.

        For purposes of this discussion, a U.S. person means any one of the following:

•

a citizen or resident of the U.S.;



•

a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) or partnership (including any entity treated as a partnership for U.S. federal income tax purposes) created or organized in the U.S. or under the laws of the U.S. or of any political subdivision of the U.S.;

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•

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or



•

a trust, the administration of which is subject to the primary supervision of a U.S. court and one or more U.S. persons have the authority to control all substantial decisions of the trust, or, if the trust was in existence on August 20, 1996 and meets certain requirements, has elected to continue to be treated as a U.S. person.

        YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF OUR COMMON STOCK.

Dividends

        We do not have a present intention to pay dividends on our shares of common stock. In general, however, if distributions are paid on shares of our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, and any excess will constitute a return of capital that is applied against and reduces your adjusted tax basis in our common stock, and then any remainder will constitute gain on the common stock. Dividends paid to a non-U.S. holder will generally be subject to withholding of U.S. federal income tax at the rate of 30% or such lower rate as may be specified by an applicable income tax treaty. If the dividend is effectively connected with the non-U.S. holder's conduct of a trade or business in the U.S. or, if a tax treaty applies, attributable to a U.S. permanent establishment maintained in the U.S. by such non-U.S. holder, the dividend will not be subject to U.S. federal withholding tax (provided certain certification requirements are met, as described below) but will be subject to U.S. federal income tax imposed on net income on the same basis that applies to U.S. persons generally, and in such case, the non-U.S. holder would be required to file a U.S. federal tax return. Additionally, a non-U.S. holder that is treated as a corporation for U.S. federal income tax purposes may be subject to the branch profits tax at a rate of 30% or such lower rate that may be specified in an applicable income tax treaty on the actual or deemed repatriation of its "effectively connected earnings and profits," subject to certain adjustments and exceptions.

        In order to claim the benefit of a tax treaty or to claim exemption from withholding because the income is effectively connected with the conduct of a trade or business in the U.S., a non-U.S. holder must provide a properly executed IRS Form W-8BEN for treaty benefits or W-8ECI for effectively connected income (or such successor forms as the IRS designates), prior to the payment of dividends. These forms must be periodically updated. Non-U.S. holders may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund.

Gain on Disposition

        A non-U.S. holder will generally not be subject to U.S. federal income tax, including by way of withholding, on gain recognized on a sale or other disposition of our common stock unless any of the following is true:

•

the gain is effectively connected with the non-U.S. holder's conduct of a trade or business in the U.S. or, if a tax treaty applies, is attributable to a U.S. permanent establishment maintained in the U.S. by such non-U.S. holder;

61

•

the non-U.S. holder is a nonresident alien individual present in the U.S. for 183 or more days in the taxable year of the disposition and certain other requirements are met;



•

our common stock constitutes a United States real property interest by reason of our status as a "United States real property holding corporation" (a "USRPHC") for U.S. federal income tax purposes at any time during the shorter of (i) the period during which you hold our common stock or (ii) the 5-year period ending on the date you dispose of our common stock; or



•

the holder is subject to tax pursuant to U.S. federal income tax provisions applicable for certain expatriates.

        Because the determination of whether we are a USRPHC depends on the fair market value of our United States real property interests relative to the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. As long as our common stock is regularly traded on an established securities market, however, such common stock will be treated as United States real property interests only if, in general, a non-U.S. holder holds more than 5 percent of such regularly traded common stock.

        Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to the U.S. federal income tax imposed on net income on the same basis that applies to U.S. persons generally and, for corporate holders under certain circumstances, the branch profits tax, but will generally not be subject to U.S. federal income tax withholding. Gain described in the second bullet point above will be subject to a flat 30% U.S. federal income tax, which may be offset by U.S. source capital losses. Non-U.S. holders should consult any applicable income tax treaties that may provide for different rules.

U.S. Federal Estate Taxes

        Our common stock owned or treated as owned by an individual who at the time of death is a non-U.S. holder will be included in his or her estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

        Under U.S. Treasury regulations, we must report annually to the IRS and to each non-U.S. holder the amount of dividends paid to such non-U.S. holder and the tax withheld with respect to those dividends. These information reporting requirements apply even if withholding was not required because the dividends were effectively connected dividends or withholding was reduced or eliminated by an applicable tax treaty. Pursuant to an applicable tax treaty, that information may also be made available to the tax authorities in the country in which the non-U.S. holder resides.

        Backup withholding generally will not apply to payments of dividends made by us or our paying agents, in their capacities as such, to a non-U.S. holder of our common stock if the holder has provided the required certification (e.g. IRS Form W-8BEN) that it is not a U.S. person as described above or certain other requirements are met. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person.

        Payments of the proceeds from a disposition or a redemption effected outside the U.S. by a non-U.S. holder of our common stock made by or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, information reporting (but not backup withholding) generally will apply to such a payment if the broker has certain connections with the U.S. unless the broker has documentary evidence in its records that the beneficial owner is a non-U.S. holder and specified conditions are met or an exemption is otherwise established.

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        Payment of the proceeds from a disposition by a non-U.S. holder of common stock made by or through the U.S. office of a broker is generally subject to information reporting and backup withholding unless the non-U.S. holder certifies as to its non-U.S. holder status under penalties of perjury (and we and our paying agent do not have actual knowledge, or reason to know, that the holder is a U.S. person) or otherwise establishes an exemption from information reporting and backup withholding.

        Backup withholding is not an additional tax. Any amounts that we withhold under the backup withholding rules will be refunded or credited against the non-U.S. holder's U.S. federal income tax liability if certain required information is furnished to the IRS. Non-U.S. holders should consult their own tax advisors regarding application of backup withholding in their particular circumstance and the availability of, and procedure for obtaining an exemption from, backup withholding under current Treasury regulations.

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UNDERWRITING

        Under the terms and subject to the conditions contained in an underwriting agreement dated                        , 2002, we and the selling stockholders have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston Corporation, Banc of America Securities LLC and U.S. Bancorp Piper Jaffray Inc. are acting as representatives, the following respective numbers of shares of common stock:

Underwriter		Number of Shares
Credit Suisse First Boston Corporation
Banc of America Securities LLC
U.S. Bancorp Piper Jaffray Inc.
	Total

        The underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

        The selling stockholders have granted to the underwriters a 30-day option to purchase on a pro rata basis up to an aggregate of        additional outstanding shares at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of common stock.

        The underwriters propose to offer the shares of common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $    per share. The underwriters and selling group members may allow a discount of $    per share on sales to other broker/dealers. After the initial public offering, the representatives may change the public offering price and concession and discount to broker/dealers.

        The following table summarizes the compensation and estimated expenses we will pay:

	Per Share		Total
	Without Over-allotment	With Over-allotment	Without Over-allotment	With Over-allotment
Underwriting Discounts and Commissions paid by us	$	$	$	$
Expenses payable by us	$	$	$	$
Underwriting Discounts and Commissions paid by selling stockholders	$	$	$	$

        The representatives have informed us and the selling stockholders that they do not expect discretionary sales to exceed 5% of the shares of common stock being offered.

        We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston Corporation for a period of 180 days after the date of this prospectus, except (i) issuances pursuant to the exercise of

64

currently outstanding warrants or options and (ii) grants of employee stock options pursuant to the plans described in the prospectus.

        Our officers, directors, stockholders, including the selling stockholders, and warrant holders and substantially all of our option holders have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse First Boston Corporation for a period of 180 days after the date of this prospectus.

        The underwriters have reserved for sale, at the initial public offering price, up to                        shares of the common stock for employees, directors and other persons associated with us who have expressed an interest in purchasing common stock in the offering. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares.

        We and the selling stockholders have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

        We will apply to list the shares of common stock on The Nasdaq National Market subject to official notice of issuance under the symbol "CLGS."

        Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiation between us and the representatives, provided that the offering price will be no higher than the price recommended by Credit Suisse First Boston Corporation, as the qualified independent underwriter. The principal factors that will be considered in determining the public offering price will include:

•

the information set forth in this prospectus and otherwise available to the representatives;



•

market conditions for initial public offerings;



•

the history of, and the prospects for, us and the industry in which we compete;



•

our past and present operations;



•

our past and present earnings and current financial position;



•

the ability of our management;



•

the prospects for, and the timing of, our future earnings;



•

the present state of our development and our current financial condition;



•

the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies; and



•

the general condition of the securities markets at the time of the offering.

        We offer no assurances that the initial public offering price will correspond to the price at which the common stock will trade in the public market subsequent to the offering or that an active trading market for the common stock will develop and continue after the offering.

65

        In January 2000, U.S. Bancorp Piper Jaffray received from Eduprise, Inc. a warrant to purchase shares of Eduprise Series A preferred stock for providing financial services in connection with a private equity financing. At that time, five employees of U.S. Bancorp Piper Jaffray also purchased shares of Eduprise Series A preferred stock. The exercise price of the warrant and the purchase price of the common stock equaled the per share purchase price paid by all investors in the private equity financing. In connection with our acquisition of Eduprise in August 2001, we issued U.S. Bancorp Piper Jaffray a replacement warrant to purchase 182,170 shares of our common stock at an exercise price of $5.38 and issued the five U.S. Bancorp Piper Jaffray employees an aggregate of 18,575 shares of our common stock in exchange for all of their shares of Eduprise Series A preferred stock. In response to recently adopted NASD rules regarding conflicts of interest, U.S. Bancorp Piper Jaffray will exercise its warrant in full on the offering date and it and its employees will sell all the stock they beneficially own in the offering. The offering therefore is being conducted in accordance with the applicable provisions of Rule 2720 of the NASD Conduct Rules. Rule 2720 requires that the initial public offering price of the shares of common stock not be higher than that recommended by a "qualified independent underwriter" meeting certain standards. Accordingly, Credit Suisse First Boston Corporation is assuming the responsibilities of acting as the qualified independent underwriter in pricing the offering and conducting due diligence. The initial public offering price of the shares of common stock will be no higher than the price recommended by Credit Suisse First Boston Corporation.

        Certain of the shares to be sold by the selling stockholders were acquired by such selling stockholders in connection with our reacquisition of Eduprise in August 2001. See "Related Party Transactions" for more detailed information regarding this transaction.

        In connection with the offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.

•

Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.



•

Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.



•

Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.



•

Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

66

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time.

        A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters or selling group members, if any, participating in this offering. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

67

NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

        The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we and the selling stockholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are made. Any resale of the common stock in Canada must be made under applicable securities laws, which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock.

Representations of Purchasers

        By purchasing common stock in Canada and accepting a purchase confirmation, a purchaser is representing to us, the selling stockholders and the dealer from whom the purchase confirmation is received that:

•

the purchaser is entitled under applicable provincial securities laws to purchase the common stock without the benefit of a prospectus qualified under those securities laws,



•

where required by law, the purchaser is purchasing as principal and not as agent, and



•

the purchaser has reviewed the text above under "Resale Restrictions."

Rights of Action — Ontario Purchasers Only

        Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares, for rescission against us and the selling stockholders in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us or the selling stockholders. In no case will the amount recoverable in any action exceed the price at which the shares were offered to the purchaser, and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we and the selling stockholders will have no liability. In the case of an action for damages, we and the selling stockholders will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

        All of our directors and officers as well as the experts named herein and the selling stockholders, may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

68

Taxation and Eligibility for Investment

        Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and about the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation.

LEGAL MATTERS

        The validity of the shares of common stock offered hereby will be passed upon for us by Winston & Strawn, Chicago, Illinois. Stanford J. Goldblatt, a partner of Winston & Strawn, owns 37,769 shares of our common stock and 43,722 options to purchase shares of our common stock. Certain legal matters will be passed upon for the underwriters by Katten Muchin Zavis Rosenman, Chicago, Illinois.

EXPERTS

        The financial statements of Collegis, Inc. as of December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001 and the financial statements of Eduprise, Inc. as of December 31, 2000 and 1999, and for the year ended December 31, 2000 and the period from June 1, 1999 to December 31, 1999, included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports appearing herein, and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

ADDITIONAL INFORMATION

        We have filed with the SEC a registration statement on Form S-1 (including exhibits, schedules and amendments) under the Securities Act of 1933 with respect to the shares of common stock to be sold in this offering. This prospectus does not contain all the information set forth in the registration statement. For further information with respect to us and the shares of common stock to be sold in this offering, reference is made to the registration statement. Statements contained in this prospectus as to the contents of any material contract, agreement or other document referred to are not necessarily complete. Whenever a reference is made in this prospectus to any material contract or other document of ours, the reference may not be complete, and you should refer to the exhibits that are a part of the registration statement for a copy of the contract or document.

        You may read and copy all or any portion of the registration statement or any other information we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings, including the registration statement, are also available to you on the SEC's web site (http://www.sec.gov).

        As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act of 1934, and, in accordance with those requirements, will file periodic reports, proxy statements and other information with the SEC.

69

INDEX TO FINANCIAL STATEMENTS

Collegis, Inc.

Independent Auditors' Report	F-2
Balance Sheets as of December 31, 2000 and 2001 and March 31, 2002 (unaudited)	F-3
Statements of Income for each of the fiscal years in the three-year period ended December 31, 2001 and for the three months ended March 31, 2001 and March 31, 2002 (unaudited)	F-4
Statements of Stockholders' Equity for each of the fiscal years in the three-year period ended December 31, 2001 and for the three months ended March 31, 2001 and March 31, 2002 (unaudited)	F-5
Statements of Cash Flows for each of the fiscal years in the three-year period ended December 31, 2001 and for the three months ended March 31, 2001 and March 31, 2002 (unaudited)	F-6
Notes to Financial Statements	F-7
Eduprise, Inc.
Independent Auditors' Report	F-21
Balance Sheets as of December 31, 1999 and 2000 and August 31, 2001 (unaudited)	F-22
Statements of Operations for year ended December 31, 2001, period from June 1, 1999 to December 31, 1999 and eight months ended August 31, 2001 (unaudited)	F-23
Statements of Stockholders' Equity (Deficit) for year ended December 31, 2000, period from June 1, 1999 to December 31, 1999 and eight months ended August 31, 2001 (unaudited)	F-24
Statements of Cash Flows for year ended December 31, 2000, period from June 1, 1999 to December 31, 1999 and eight months ended August 31, 2001 (unaudited)	F-25
Notes to Financial Statements	F-26

F-1

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Collegis, Inc.

        We have audited the accompanying balance sheets of Collegis, Inc. (formerly CollegisEduprise, Inc. and COLLEGIS, Inc.) (the "Company") as of December 31, 2001 and 2000, and the related statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such financial statements present fairly, in all material respects, the financial position of Collegis, Inc. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America.

/s/  DELOITTE & TOUCHE LLP    
Boston, Massachusetts
February 22, 2002

F-2

COLLEGIS, INC.

BALANCE SHEETS

(amounts in thousands)

			December 31,						March 31,
			2000			2001			2002
									(Unaudited)
ASSETS
Current Assets:
	Cash and cash equivalents		$	8,237		$	14,710		$	13,842
	Trade accounts receivable			6,053			6,178			8,509
	Unbilled receivables on contracts			2,555			4,836			5,248
	Income taxes receivable			—			384			—
	Prepaid expenses			581			784			1,113
	Deferred income taxes (Note 13)			591			492			590
		Total current assets		18,017			27,384			29,302
Property and Equipment — Net (Note 7)				1,164			2,210			2,025
Other Assets				221			190			191
Intangible Assets (Note 2)				—			960			840
Goodwill (Note 2)				—			9,383			9,383
Deferred Income Taxes (Note 13)				127			4,730			4,730
Total Assets			$	19,529		$	44,857		$	46,471
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
	Current portion of long-term debt (Notes 6 and 12)		$	3,186		$	2,306		$	1,822
	Accounts payable and accrued expenses (Note 8)			3,205			5,275			5,093
	Deferred revenue			4,596			6,146			7,151
	Income taxes payable			416			—			—
		Total current liabilities		11,403			13,727			14,066
Long-term Debt (Notes 6 and 12)				1,863			71			—
Note Payable — Related party (Note 9)				1,652			1,652			1,652
Stockholders' Equity:
	Preferred stock, $.01 par value, 1,000 shares authorized, none issued (Note 3)			—			—			—
	Common stock, $.01 par value, 25,000 authorized at December 31, 2001 and March 31, 2002, 13,177, 17,377, and 17,378 shares outstanding at December 31, 2000, December 2001, and March 31, 2002 (Note 3)			131			174			174
	Warrants (Notes 2, 4 and 6)			404			438			438
	Additional paid-in capital			14,254			28,622			28,627
	Deferred compensation (Notes 2 and 10)			—			(908	)		(793	)
	Treasury stock — at cost			(18,943	)		(11,731	)		(11,731	)
	Retained earnings			8,765			12,812			14,038
		Total stockholders' equity		4,611			29,407			30,753
Total Liabilities and Stockholders' Equity			$	19,529		$	44,857		$	46,471

See notes to financial statements.

F-3

COLLEGIS, INC.

STATEMENTS OF INCOME

(amounts in thousands, except per share data)

				December 31,									March 31,
				1999			2000			2001			2001			2002
													(Unaudited)
Revenue				$	49,707		$	56,376		$	70,359		$	15,851		$	22,790
Operating Expenses:
	Cost of services				30,361			34,022			42,893			9,739			14,263
	Selling, general and administrative expenses				11,526			12,539			18,709			3,757			5,909
	Depreciation and amortization				429			1,312			1,297			143			407
	Stock compensation expense (Notes 2, 9 and 10)				—			797			679			—			115
	Terminated transaction costs (Note 8)				702			—			—			—			—
			Total operating expenses		43,018			48,670			63,578			13,639			20,694
Operating Income					6,689			7,706			6,781			2,212			2,096
Interest Expense					(555	)		(618	)		(366	)		(77	)		(152	)
Interest Income					201			336			308			50			100
Income Before Income Taxes					6,335			7,424			6,723			2,185			2,044
Income Tax Expense (Note 13)					(2,535	)		(2,972	)		(2,676	)		(874	)		(818	)
Income from Continuing Operations					3,800			4,452			4,047			1,311			1,226
Loss from Discontinued Operations —
	Net of income tax benefit of $368 (Note 5)				(551	)		—			—			—			—
Net Income				$	3,249		$	4,452		$	4,047		$	1,311		$	1,226
Earnings Per Share
	Basic:
		Income from continuing operations		$	0.27		$	0.34		$	0.28		$	0.10		$	0.07
		Discontinued operations			(0.04	)		—			—			—			—
		Net income		$	0.23		$	0.34		$	0.28		$	0.10		$	0.07
		Weighted average shares outstanding			14,026			13,282			14,504			13,075			17,378
	Diluted:
		Income from continuing operations		$	0.25		$	0.31		$	0.26		$	0.09		$	0.07
		Discontinued operations			(0.04	)		—			—			—			—
		Net income		$	0.21		$	0.31		$	0.26		$	0.09		$	0.07
		Weighted average shares outstanding			15,682			14,258			15,516			13,948			18,659

F-4

COLLEGIS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(amounts in thousands)

			Common Stock							Treasury Stock
															Additional Paid-In Capital			Deferred Compen- sation			Share- holder note			Retained Earnings
			Shares		Par			Warrants		Shares		Cost															Total
Balance, January 1, 1999			14,021		$	140		$	404	11,274		$	(18,943	)	$	16,820		$	—		$	(571	)	$	2,269		$	119
	Exercise of stock options (Note 10)		13													9												9
	Income tax effect of terminated options															(906	)											(906	)
	Net income																								3,249			3,249
Balance, December 31, 1999			14,034			140			404	11,274			(18,943	)		15,923			—			(571	)		5,518			2,471
	Exercise of stock options (Note 10)		332			3										185												188
	Income tax effect of exercised options															4												4
	Repayment of shareholder note (Note 9)																					571						571
	Repurchase of shares (Notes 9 and 10)		(1,291	)		(12	)									(1,858	)								(1,205	)		(3,075	)
	Net income																								4,452			4,452
Balance, December 31, 2000			13,075			131			404	11,274			(18,943	)		14,254			—			—			8,765			4,611
	Exercise of stock options (Note 10)		10													17												17
	Income tax effect of exercised options															5												5
	Issuance in connection with acquisition (Note 2):
		Common stock	4,292			43				(4,292	)		7,212			12,102												19,357
		Options														1,389			(733	)								656
		Warrants							34																			34
		Extension of option terms														464												464
	Issuance of stock options (Note 10)															391			(391	)								—
	Amortization of deferred compensation																		216									216
	Net income																					—			4,047			4,047
Balance, December 31, 2001			17,377			174			438	6,982			(11,731	)		28,622			(908	)		—			12,812			29,407
	Exercise of stock options (unaudited)		1													4												4
	Income tax effect of exercised options (unaudited)															1												1
	Amortization of deferred compensation (unaudited)																		115									115
	Net income (unaudited)																					—			1,226			1,226
Balance, March 31, 2002 (unaudited)			17,378		$	174		$	438	6,982		$	(11,731	)	$	28,627		$	(793	)	$	—		$	14,038		$	30,753
See notes to financial statements.

F-5

COLLEGIS, INC.

STATEMENTS OF CASH FLOWS

(amounts in thousands)

					December 31,									March 31,
					1999			2000			2001			2001			2002
														(unaudited)
Cash Flows from Operating Activities:
	Net income				$	3,249		$	4,452		$	4,047		$	1,311		$	1,226
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				429			1,312			1,297			143			407
		(Gain) loss on disposition of assets				—			6			(2	)		—			—
		Stock compensation expense (Notes 2 and 9)				—			797			679			—			115
		Deferred income taxes (Note 13)				1,030			(423	)		140			(464	)		(98	)
		Deferred tax effect of terminated options (Note 11)				(906	)		—			—			—			—
		Loss from discontinued operations				551			—			—			—			—
		Changes in:
			Accounts receivable and unbilled receivables			(2,442	)		(883	)		(1,110	)		371			(2,743	)
			Prepaid expenses			(27	)		(232	)		150			7			(329	)
			Other assets and liabilities			(36	)		(87	)		108			(22	)		(1	)
			Accounts payable and accrued expenses			1,420			(574	)		974			(324	)		(182	)
			Deferred revenue			602			2,233			574			(571	)		1,005
			Income taxes receivable and payable			(131	)		406			(798	)		395			384
				Cash provided by (used in) continuing operations		3,739			7,007			6,059			846			(216	)
				Cash used in discontinued operations		(147	)		—			—			—			—
				Net cash provided by (used in) operating activities		3,592			7,007			6,059			846			(216	)
Cash Flows from Investing Activities:
	Purchases of property and equipment					(536	)		(781	)		(903	)		(321	)		(101	)
	Proceeds from sale of assets					—			23			3			—			—
	Acquisition (Note 2)					—			—			4,103			—			—
	Proceeds from shareholder note (Note 9)					—			571			—			—			—
	Capitalized computer software costs					(297	)		—			—			—			—
				Net cash used in investing activities		(833	)		(187	)		3,203			(321	)		(101	)
Cash Flows from Financing Activities:
	Repayments of long-term debt					(1,250	)		(1,851	)		(2,806	)		(128	)		(555	)
	Repurchase of stock (Notes 9 and 10)					—			(2,221	)		—			—			—
	Exercise of stock options					9			193			17			—			4
				Net cash used in financing activities		(1,241	)		(3,879	)		(2,789	)		(128	)		(551	)
Net Increase (Decrease) in Cash and Cash Equivalents						1,518			2,941			6,473			397			(868	)
Cash and Cash Equivalents, January 1						3,778			5,296			8,237			8,237			14,710
Cash and Cash Equivalents, end of period					$	5,296		$	8,237		$	14,710		$	8,634		$	13,842
Supplemental Cash Flow Disclosures:
	Cash paid for interest				$	533		$	686		$	217		$	100		$	100
	Cash paid for income taxes					2,261			2,730			3,308			300			215

See notes to financial statements.

F-6

COLLEGIS, INC.

NOTES TO FINANCIAL STATEMENTS

(amounts in thousands, except per share data)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations — On August 31, 2001 COLLEGIS, Inc. ("COLLEGIS") acquired Eduprise, Inc. ("Eduprise") (see Note 2). The merged entity was renamed CollegisEduprise, Inc. and in May 2002 the name was changed to Collegis, Inc. (the "Company" or "Collegis"). The combined enterprise is focused on the higher education market and offers a comprehensive set of services from strategic consulting, instructional development, program management, business planning, marketing services, software integration services, hosting and help desk and complete management services outsourcing.

        COLLEGIS has provided services in the areas that include academic and instructional systems, administrative applications and networking and Internet services. These services have normally been bundled into a multi-year contract with lengths ranging from three to seven years. COLLEGIS also provided services in strategic consulting, instructional design and support, course development, program management and application hosting services.

        Eduprise has provided services related to the integration of Internet technologies into the learning process. Its revenues have been generated from the provision of strategic consulting, instructional design and support, course development, program management, and software application hosting services.

        Eduprise was a division of the Company until its sale to a minority shareholder of the Company in June 1999. COLLEGIS and Eduprise continued to have certain common shareholders and directors.

Basis of Presentation — These financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition — Substantially all of the Company's revenues are generated under multi-year, fixed-priced contracts. Revenues are recognized as services are provided, primarily on a straight-line basis over each contract year. Revenues generated from strategic consulting, instructional design and support, course development and program management services are recognized as the services are performed. For these contracts, changes in scope of services to be provided, estimates of percentage completed or profitability may result in revisions to revenue and are recognized in the period in which such revisions are determined. Revenue includes reimbursable expenses charged to the client. Billings are based on payment schedules that may differ from the timing of revenue recognition. These differences are reflected in the balance sheets as either unbilled receivables on contracts or deferred revenue.

        Cost of Services — Cost of services are the direct costs to provide services to customers and primarily consists of salaries and wages and related fringe benefits. Costs of services also includes any cost of subcontractors and outside consultants and other direct costs (some of which may be reimbursed by clients), such as travel expenses.

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Cash and Cash Equivalents — Cash and cash equivalents consist primarily of amounts held in demand deposit accounts and amounts in highly liquid time deposit instruments having an original maturity of three months or less, and are recorded at cost which approximates fair value.

Property and Equipment — Property and equipment is stated as cost less accumulated depreciation and is depreciated over the estimated useful lives of the related assets under the straight-line method. The estimated useful lives range from three to seven years.

Income Taxes — The provision for income taxes is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference, if any, between the financial statement and tax bases of assets and liabilities at the enacted tax rates.

Financial Instruments — The carrying amounts for cash and cash equivalents, trade accounts receivable, unbilled receivables on contracts, income taxes receivable, prepaid expenses, accounts payable, accrued expenses and certain other assets and liabilities approximate fair value because of the short-term nature of these items. Because of its variable interest rate, the carrying amount of the long-term debt approximates its fair value.

        Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company believes that concentrations of credit risk are limited due to the credit quality of the Company's customers (see Note 14). Trade receivable credit losses for the three years ended December 31, 2001 were not material.

Business Combinations — Statement of Financial Accounting Standard ("SFAS") No. 141 "Business Combinations" requires all business combinations initiated after June 30, 2001 to be accounted for under the purchase method. Accordingly, the acquisition of Eduprise was accounted under the purchase method. SFAS 141 also sets forth guidelines for applying the purchase method of accounting in the determination of intangible assets, including goodwill acquired in a business combination, and expands financial disclosures concerning business combinations.

Goodwill and Intangibles — SFAS 142 "Goodwill and Other Intangible Assets" requires the use of a non-amortization approach to account for purchased goodwill and intangible assets with indefinite lives. Other intangible assets will continue to be amortized over their estimated useful lives. Under the non-amortization approach, goodwill and intangible assets with indefinite lives will not be amortized, but be tested for impairment annually, or more frequently if events or changes in circumstances indicate that these assets might be impaired. The provisions of SFAS 142 were effective for the goodwill and intangible assets arising in the acquisition of Eduprise.

Software — The Company has developed selected software products for sale in connection with its instructional and Internet service offerings. These products first achieved technological feasibility in 1998. Computer software development and production costs have been capitalized in accordance with SFAS 86, "Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed." Such costs are capitalized once technological feasibility has been achieved. Capitalized software development costs are reported at the lower of amortized cost or net realizable value. Commencing upon initial product release, these costs were amortized over their estimated economic life, generally five years, under the straight-line method. At December 31, 2000, the remaining carrying value of the capitalized software costs (of $206) was written off (see Note 5). Amortization of software development costs was $475 and $185 during 2000 and 1999, respectively. The amortization and write off of software costs are included in depreciation and amortization expenses.

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Earnings Per Share — Basic earnings per share is computed based on the average number of common shares outstanding. Diluted earnings per share reflect the increase in average shares outstanding that would result from the assumed exercise of outstanding stock options and warrants, calculated using the treasury stock method. The denominator in the calculation is based on the following weighted-average number of common shares:

	December 31,			March 31,
	1999	2000	2001	2002
				(Unaudited)
Basic	14,026	13,282	14,504	17,378
Dilutive effect of stock and warrants	1,656	976	1,012	1,281
Diluted	15,682	14,258	15,516	18,659

Interim Financial Information — The financial information as of March 31, 2002 and for the three month periods ended March 31, 2002 and 2001 are unaudited and have been prepared on the same basis as the audited financial statements included herein. In the opinion of management, the unaudited financial statements include all adjustments, consisting only of normal recurring items, necessary to present fairly the periods indicated. Results of operations for the interims periods are not necessarily indicative of the results for the full year.

2. ACQUISITION OF BUSINESS

        The acquisition of Eduprise closed on August 31, 2001, at which time COLLEGIS acquired 100% of the capital stock of Eduprise and all outstanding and unexercised options and warrants of Eduprise were converted into options or warrants to purchase the Company's Common Stock (see Note 3). The purchase price, aggregating $20.34 million, consisted of 4,292 shares of Common Stock with a fair value of $19.36 million; replacement options for 160 shares of Common Stock, for Eduprise option holders whose options were vested, with a fair value of $.66 million; replacement warrants to purchase 182 shares of Common Stock, with a fair value of $.03 million; and professional fees and other costs aggregating $.29 million. Replacement options to purchase 320 shares of Common Stock were issued to Eduprise option holders whose options were not vested. The fair value of these unvested replacement options of $733 was charged to deferred compensation and is being amortized over the remaining vesting period. The fair value of the stock was determined by an independent valuation. The fair value of options and warrants were determined using the Black-Scholes option-pricing model. Additionally, the Company agreed to issue options to purchase an aggregate of up to 1,149 shares of Common Stock to certain Eduprise employees at an exercise price equal to fair market value at the closing date and extended the term of options to purchase 148 shares of Common Stock held by certain former Eduprise employees (the options were to have expired in 2001). The intrinsic value of the extended options of $464 was expensed in 2001.

        The assets acquired and liabilities assumed were recorded at estimated fair values as determined by the Company's management based on information available and on assumptions as to future operations. The Company obtained independent appraisals of the fair values of the acquired property and equipment and identified intangible assets and their remaining useful lives. The Company also completed the review and determination of the fair values of the other assets acquired and liabilities

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assumed. A summary of the allocation of the purchase price to the assets acquired and liabilities assumed in the acquisition follows:

Cash acquired	$	4,103
Other working capital		(55	)
Property and equipment		961
Deferred taxes		4,642
Long-term debt		(134	)
Intangible assets		1,440
Goodwill		9,383
Total purchase price	$	20,340

        The intangible assets relate to contractual customer relationships and will be amortized on the straight-line method over three years. Amortization expense in 2001 was $480. The goodwill is not deductible for income tax purposes.

        The results of Eduprise have been included in the financial statements since August 31, 2001. The following unaudited pro forma financial information for the years ended December 31, 2001 and 2000, assumes the Eduprise acquisition occurred as of the beginning of the respective periods, after giving effect to certain adjustments, including the amortization of intangible assets and the related tax effects. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the operating results that would have occurred had the acquisition been consummated as of the dates indicated, nor are they necessarily indicative of future operating results.

	Pro Forma
	2000			2001
Revenue	$	60,455		$	75,756
Stock compensation expense		1,720			922
Operating income (loss)		(1,416	)		1,908
Net income (loss)		(609	)		1,225
Net income (loss) per share — diluted		(0.03	)		0.07

3. STOCKHOLDERS' EQUITY

Common Stock — Prior to the acquisition of Eduprise, on August 31, 2001 the capitalization of COLLEGIS included the following series of common stock, all having a par value of $.01:

•

Series A Voting (10,000 shares authorized), 3,799 shares issued and outstanding (3,799 at December 31, 2000, 4,399 at December 31, 1999)



•

Series A Non-voting (10,000 shares authorized), 8,796 shares issued and outstanding (8,796 at December 31, 2000 and 1999)



•

Series B Non-voting (8,000 shares authorized), 489 shares issued and outstanding (479 at December 31, 2000 and 838 at December 31, 1999)

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•

Series C (10,000 shares authorized), no shares issued

        All series had the same rights except that (i) Series A Non-voting and Series B had no right to vote and (ii) Series A was senior to the Series B and Series C with respect to dividend and liquidation preferences.

        Coincident with the acquisition of Eduprise, the Series A and Series B shares were converted into voting common stock with no preferences and designated "Common Stock" ($.01 par value), the authorization to issue Series A, Series B and Series C was cancelled, and the outstanding COLLEGIS warrants and options were amended to provide for the purchase of Common Stock. Subsequent to the conversion, the Company has 17,377 shares outstanding and has authorized the issuance of 25,000 shares.

Redeemable Common Stock — Included in the number of Common Stock shares issued and outstanding are 748 redeemable shares at December 31, 2001, 2000 and 1999 (the "Redeemable Common Stock"). The Redeemable Common Stock is subject to a put option granted by the Company to a former officer as part of an Incentive, Put and Noncompetition Agreement (the "Put Agreement"). In the event of a triggering sale, as defined, the former officer may sell her shares to the Company at a price of $1.22 per share. The Put Agreement expires upon the completion of an IPO or other qualifying sale. At December 31, 2001 and 2000, the fair market value of the underlying common stock was in excess of the maximum redemption price.

4. WARRANTS

        Warrants to purchase 550 shares of Common Stock at a price of $0.23375, issued to a former lender, and warrants to purchase 182 shares of Common Stock at a price of $5.38, issued to replace a warrant issued by Eduprise, were outstanding at December 31, 2001.

5. RELATED PARTIES AND DISCONTINUED OPERATIONS

        In June of 1999, the Company sold its Collegis Learning Network division ("CLN") to Eduprise. Located in North Carolina, CLN was principally engaged in the development of the Company's instructional and Internet software applications, providing outsourcing services related to the hosting, maintenance and support of the software as part of the Company's overall service contracts with selected institutions.

        CLN had service revenue of $865 in 1999. Proceeds from the sale were $30, which approximated the book value of the net assets sold. The assets sold consisted principally of property and equipment and lease deposits with a net book value of $460. Eduprise assumed $430 of deferred revenue and accrued expenses. The 1999 financial statements reflect CLN as a discontinued operation.

        In connection with the transaction, the Company retained the rights to the computer software and related intellectual property developed by CLN up to the date of the sale, and granted a royalty-free license to Eduprise for the use of this intellectual property. The Company continued to provide related services under the terms of its existing service contracts, but outsourced these services to Eduprise at negotiated rates. Service fees charged to the Company by Eduprise were $287 in 2001 (for the eight months ended August 31, 2001), $430 in 2000 and $301 in 1999.

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        During 2000, Eduprise announced that it would no longer support the computer software developed by CLN. As a result, the remaining carrying value of the capitalized software costs was charged to expense, as the recoverability of such amounts was doubtful.

        The Company has a consulting agreement with Salt Creek Ventures ("Salt Creek"). The principal of Salt Creek is the Chairman of the Company's Board of Directors, who was also the Chief Executive Officer of the Company from September 2001 to January 2002, and the agreement relates to the provision of services by the Chairman. Amounts paid to Salt Creek in 2001, 2000 and 1999 were $163, $125 and $50, respectively.

6. LONG-TERM DEBT

        The Company has a credit agreement with a lender that provides for maximum borrowings of up to $9,500, reduced annually through scheduled principal/commitment reductions, as defined; calls for additional mandatory principal reductions in the event the Company has excess cash flows, as defined; and expires December 31, 2003 (the "Credit Agreement"). Borrowings under the Credit Agreement bear interest at either the prime rate plus a variable spread (as defined in the Credit Agreement, 5.25% and 10.00% at December 31, 2001 and 2000, respectively) or LIBOR plus a variable spread (as defined in the Credit Agreement, 5.31% and 8.62% at December 31, 2001 and 2000, respectively) at the option of the Company. Interest is payable quarterly. At December 31, 2001 and 2000, the Company had $1,822 and $4,649 designated as LIBOR borrowings, respectively. At December 31, 2001 and 2000, the Company had $438 and $400 designated as prime borrowings, respectively. Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company.

        The Credit Agreement restricts dividends and loans without the prior written consent of the lender, makes the Company subject to certain covenants and requires the Company to maintain certain financial ratios. At December 31, 2001, the Company was in compliance with all covenants and ratios.

        Debt issuance costs of $91 incurred in connection with the Credit Agreement have been capitalized and are reflected in the Balance Sheets at December 31, 2001 and 2000 net of accumulated amortization of $65 and $49, respectively.

        In June of 1999, the Company amended the Credit Agreement to provide for additional borrowings under a revolving line of credit of up to $3,000, based on eligible accounts receivable ("Line of Credit"). Borrowings under the Line of Credit bear interest at either the prime rate plus a variable spread or LIBOR plus a variable spread (as defined in the Credit Agreement), at the option of the Company. Interest is payable quarterly. Outstanding borrowings are payable in June of 2002. At December 31, 2001 and 2000, the Company had no amounts outstanding under the Line of Credit.

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7. PROPERTY AND EQUIPMENT

        Property and equipment consist of the following at December 31:

	2000			2001
Furniture and equipment	$	1,571		$	3,406
Leasehold improvements		353			587
Computer software		449			891
		2,373			4,884
Accumulated depreciation and amortization		(1,209	)		(2,674	)
Property and equipment — net	$	1,164		$	2,210

        Depreciation and amortization expense related to property and equipment was $802, $615 and $229 in 2001, 2000 and 1999, respectively.

8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

        The following summarizes accounts payable and accrued expenses at December 31:

	2000		2001
Accounts payable and accrued liabilities	$	1,609	$	2,295
Accrued compensation		1,081		2,137
Accrued group health insurance		515		843
Total accounts payable and accrued liabilities	$	3,205	$	5,275

Accrued Group Health Insurance — The Company is self-insured for portions of its group medical and dental liability costs. The amounts in excess of the self-insurance levels are fully insured. Accruals are based on claims filed and an estimate for claims incurred but not reported.

Terminated Transaction Costs — During 1999, the Company incurred $702 of legal, accounting and other miscellaneous costs in connection with two anticipated merger transactions. These transactions were not completed. $118 was paid in 1999, the remainder in 2000.

9. NOTE PAYABLE — RELATED PARTY

        In December 1998, as part of a severance agreement with a former officer and in order to finance the officer's exercise of an option to acquire 600 shares of Series A Voting, the Company loaned the former officer $571. The loan was secured by the former officer's 600 shares of Series A Voting and was repayable under a full recourse promissory note (the "Note"). The sale or transfer of the former officer's Series A Voting shares was restricted during the time the loan remained unpaid. The Note bore interest at 7% per annum. Interest was payable quarterly and principal was due on December 31, 2000.

        In March 2000, the former officer exercised 327 options to purchase shares of Series B at $0.56 per share. Simultaneously, the Company repurchased and retired all of the former officer's shares, including the 600 shares of Series A Voting and 501 shares (including the 327 shares above) of Series B, for total consideration of $3,303. The former officer received a promissory note from the

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Company in the amount of $1,652 (the "Note Payable"), and the remainder in cash. The cash received by the former officer was used to pay all amounts outstanding under the Note. Interest on the Note Payable accrues at a rate of 6.5% and is payable quarterly. The Note Payable matures on March 31, 2003.

        In accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), the Company recognized $797 of special compensation expense related to the repurchase of the 327 shares of Series B, representing the difference between the fair market value of the stock on the date of repurchase and the exercise price of the related options.

10. STOCK OPTION PLANS

        The COLLEGIS, Inc. 1996 Stock Option Plan (the "1996 Plan") was adopted on June 19, 1996. Under the provisions of the 1996 Plan, options to purchase shares of Series B may be granted to selected directors, officers, employees, and consultants of the Company at the discretion of the Board of Directors. Option terms, including the number of shares subject to the options, the exercise price and the conditions with respect to the vesting or exercisability of such options, are determined at the sole discretion of the Board of Directors. During 2000, the Board of Directors increased the maximum number of shares authorized to be issued under the 1996 Plan to 7,400 shares. During 2001 and 2000, options were generally granted with exercise prices greater than or equal to the fair value of the Series B at the date of grant. In 2001, options to purchase 259 shares granted within six months of the acquisition of Eduprise had exercise prices below $4.51. The intrinsic value of these options was remeasured using a fair value of $4.51 and the resulting intrinsic value of $391 was charged to deferred compensation. Options generally vest over four to six years and expire seven years from the date of grant.

        In connection with a former officer's severance agreement dated December 31, 1999, the Company agreed to repurchase the former officer's 190 outstanding Series B shares for $3.00 per share. The share repurchase was completed in January 2000 and the related shares were retired. In addition, the officer's remaining 660 options were cancelled. The termination of the options resulted in a charge to equity of $906 in 1999, related to the deferred tax impacts of compensation expense recorded in 1998 related to these options.

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        The following summarizes changes in stock options under the 1996 Plan:

	Shares		Weighted-avg. exercise price		Weighted-avg. fair value of options granted
Outstanding at January 1, 1999	3,476		$	1.89
Granted	68			3.53	$	1.89
Exercised	(13	)		1.69
Cancelled or forfeited	(731	)		2.96
Outstanding at December 31, 1999	2,800			1.91
Granted	1,384			3.00		0.75
Exercised	(332	)		0.57
Cancelled or forfeited	(502	)		2.71
Outstanding at December 31, 2000	3,350			2.37
Granted	1,789			3.53		0.82
Exercised	(10	)		1.69
Cancelled or forfeited	(229	)		2.96
Outstanding at December 31, 2001	4,900			2.78
Exercisable at December 31, 2000	1,574			1.63
Exercisable at December 31, 2001	2,465		$	2.17

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        The following summarizes the option shares outstanding and exercisable, by exercise price, at December 31:

	2001
Exercise Price	Options Outstanding	Weighted-avg. Remaining Life	Options Exercisable	Weighted-avg. Remaining Life
$0.57	573	1.6	573	1.6
0.87	344	4.7	142	4.6
1.38	724	2.5	740	2.5
2.00	142	3.3	109	3.3
3.00	1,642	5.8	334	5.8
4.51	1,111	6.6	278	6.6
4.88	364	3.9	288	3.9
Total	4,900	4.7	2,464	3.5

	2000
Exercise Price	Options Outstanding	Weighted-avg. Remaining Life	Options Exercisable	Weighted-avg. Remaining Life
$0.57	573	2.6	573	2.6
1.38	791	3.5	654	3.5
2.00	191	4.3	118	4.3
3.00	1,385	6.7
4.88	411	4.9	229	4.9
Total	3,351	4.9	1,574	3.4

        The fair value of each option grant has been estimated on the date of grant using the Black-Scholes option-pricing model based on the following weighted-average assumptions for options granted in 2001 and 2000:

	1999		2000		2001
Expected future dividend yield	0.00	%	0.00	%	0.00	%
Risk-free interest rate	5.12	%	5.91	%	4.51	%
Expected life (years)	5.00		5.00		5.00

        As the Company's stock is not publicly traded, the effects of volatility have been ignored.

        In October 1995, Statement of Financial Accounting Standards No. 123, ("SFAS 123") "Accounting for Stock-Based Compensation", was issued and is effective for financial statements for fiscal years beginning after December 15, 1995. As permitted by that statement, the Company will continue to measure compensation cost for stock option plans in accordance with APB 25. Had compensation cost

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for the Company's stock option plans been determined consistent with the fair value method prescribed by SFAS 123, the impact on the Company's net income would have been as follows:

		1999		2000		2001
Income from continuing operations:
	As reported	$	3,800	$	4,452	$	4,047
	Pro forma		3,584		4,666		4,334
Net income:
	As reported		3,249		4,452		4,047
	Pro forma		3,033		4,666		4,334
Net income per share — diluted:
	As reported		0.21		0.31		0.26
	Pro forma		0.24		0.31		0.28

        The special compensation expense recorded in 2000 related to the repurchase of shares from a former officer (see Note 9) are not reflected in the pro forma amounts above, as such compensation expense would not be recorded under the provisions of SFAS 123.

11. EMPLOYEE BENEFIT PLAN

        The Company has a 401(k) defined contribution profit-sharing plan for all eligible employees. The Company provides matching contributions of 50% of employee contributions up to 6% of the employees' compensation and may contribute additional amounts at the discretion of the Board of Directors. The Company made matching contributions of $760, $519 and $399 in 2001, 2000 and 1999, respectively.

12. COMMITMENTS AND CONTINGENCIES

Leases — The Company leases certain equipment and office facilities under agreements classified as operating and capital leases. These leases contain renewal options for terms up to 10 years, with adjustments in annual rentals for inflationary increases. Rental expense charged to operations for all

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operating leases was approximately $1,315 and $523 in 2001 and 2000, respectively. The following represents future minimum lease commitments under noncancellable leases at December 31, 2001:

Year Ending December 31	Operating Leases		Capital Leases
2002	$	1,857	$	57
2003		1,189		57
2004		507		20
2005		18		—
Future minimum lease payments	$	3,571		134
Less imputed interest				(17	)
Total capital lease obligation				117
Short-term portion				(46	)
Long-term portion			$	71

        From time to time, the Company is engaged in litigation incidental to its business; however, in the judgment of the Company's management, there are no significant legal proceedings pending against the Company that could have a material adverse impact on the financial condition or results of operations of the Company.

Employment Agreements — The Company's Chief Executive Officer has an employment agreement under which, if he is terminated without cause, he is entitled to receive a cash payment of up to a year's salary and benefits.

13.    INCOME TAXES

        The components of income tax expense for 2001, 2000 and 1999 were as follows:

		2001			2000			1999
Current:
	Federal	$	2,221		$	2,660		$	929
	State		595			736			284
Deferred:
	Federal		(89	)		(337	)		770
	State		(51	)		(87	)		184
Total income tax expense			2,676			2,972			2,167
Benefit allocated to discontinued operations			—			—			368
Income tax expense		$	2,676		$	2,972		$	2,535

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        The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows at December 31:

		2000		2001
Deferred tax assets:
	Net operating loss	$	—	$	5,493
	Accrued expenses and other		341		375
	Deferred revenue		417		656
	Amortization of bond discount related to warrants		175		170
	Other		—		112
Total gross deferred tax assets			933		6,806
Deferred tax liabilities:
	Prepaid expenses		117		142
	Property and equipment		45		82
	Intangible assets		—		402
	Other		53		—
Total gross deferred tax liabilities			215		626
Total gross deferred taxes			718		6,180
Valuation allowance			—		(958	)
Net deferred taxes		$	718	$	5,222

        The Company has operating loss carryforwards of $14,300 at December 31, 2001, expiring through 2020. The Company has established a valuation reserve at December 31, 2001 for potential limitations of the Eduprise net operating loss carryforwards as a result of the acquisition. Management believes it is more likely than not that the deferred tax assets, except for those related to the Eduprise net operating loss carryforwards, will be fully realized as the Company anticipates future taxable income sufficient to support the net deferred tax asset at December 31, 2001.

        A reconciliation of the provision for income taxes is as follows:

	1999		2000		2001
Tax at federal statutory rate	34.0	%	34.0	%	34.0	%
State taxes	5.7		5.7		5.5
Permanent differences and other	0.3		0.3		0.5
Effective rate	40.0	%	40.0	%	40.0	%

14. CUSTOMER CONCENTRATION

        The Company operates primarily in one industry segment. The Company has derived and expects to continue to derive a significant portion of its revenues from a relatively limited number of customers. During 2001 and 2000, no single customer accounted for more than 6.8% and 6.3% of total revenues, respectively.

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        Additionally, the Company derives a significant portion of its revenues from public institutions whose fiscal stability is dependent, in part, on state and local government funding. A decrease in government funding in a state or local municipality in which the Company derives a significant portion of its revenue could have a material adverse effect on the Company's business, financial condition or results of operations. During the years ended December 31, 2001 and 2000, the Company derived 16% and 18%, respectively, of its revenue from services provided to New Jersey-based community colleges, and 16% and 13%, respectively, from services provided to Florida-based community colleges.

******

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
    Eduprise, Inc.
Morrisville, North Carolina

        We have audited the accompanying balance sheets of Eduprise, Inc. as of December 31, 2000 and 1999, and the related statements of operations, stockholders' equity (deficit), and cash flows for the year ended December 31, 2000 and for the period from June 1, 1999 through December 31, 1999. These financial statements are the responsibility of Eduprise, Inc.'s management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as, evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such financial statements present fairly, in all material respects, the financial position of Eduprise, Inc. as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the year ended December 31, 2000 and for the period from June 1, 1999 through December 31, 1999 in conformity with accounting principles generally accepted in the United States of America.

/s/  DELOITTE & TOUCHE LLP

Raleigh, North Carolina
April 17, 2001

F-21

EDUPRISE, INC.

BALANCE SHEETS

DECEMBER 31, 1999 AND 2000 AND AUGUST 31, 2001 (UNAUDITED)

			1999			2000			2001
									(Unaudited)
ASSETS
Current Assets:
	Cash and cash equivalents		$	612,776		$	8,746,657		$	4,102,632
	Accounts receivable			159,080			543,758			979,310
	Unbilled accounts receivable			—			258,057			316,914
	Prepaid assets			109,230			139,203			355,562
	Other current assets			14,000			34,536			76,262
	Due from related party (Note 8)			86,918			68,283			—
		Total current assets		982,004			9,790,494			5,830,680
Property and Equipment, Net (Note 2)				601,565			985,801			961,492
Total Assets			$	1,583,569		$	10,776,295		$	6,792,172
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
	Accounts payable		$	207,018		$	125,139		$	136,683
	Accrued expenses			135,017			457,970			352,582
	Accrued incentive compensation			—			205,000			222,815
	Accrued sales and use tax payable			147,519			91,335			91,645
	Current portion of capital lease obligations (Note 3)			—			21,338			45,146
	Deferred revenue			272,201			490,444			976,061
	Due to related party (Note 8)			167,012			—			—
		Total current liabilities		928,767			1,391,226			1,824,932
Capital Lease Obligations (Note 3)				—			42,996			89,302
Commitments and Contingencies (Note 3)
Series A Convertible Redeemable Preferred Stock (Note 5) — $.01 par value; 5,227,152 shares authorized, issued, and outstanding at December 31, 2000 and August 31, 2001; aggregate liquidation preference and redemption amount of $16,874,998 at December 31, 2000 and August 31, 2001				—			14,769,404			14,982,744
Stockholders' Equity (Deficit) (Note 6):
	Common stock — $.01 par value; 6,000,000 shares authorized, issued, and outstanding at December 31, 1999 and 2000 and Augut 31, 2001			60,000			60,000			60,000
	Additional paid-in capital			3,520,645			5,634,878			5,815,000
	Accumulated deficit			(2,925,843	)		(11,122,209	)		(15,979,806	)
		Total stockholders' equity (deficit)		654,802			(5,427,331	)		(10,104,806	)
Total Liabilities and Stockholders' Equity (Deficit)			$	1,583,569		$	10,776,295		$	6,792,172

See notes to financial statements.

F-22

EDUPRISE, INC.

STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 AND

PERIOD FROM JUNE 1, 1999 TO DECEMBER 31, 1999 AND

EIGHT MONTHS ENDED AUGUST 31, 2001 (UNAUDITED)

			1999			2000			2001
									(Unaudited)
Revenues:
	Revenues		$	1,399,202		$	4,077,138		$	5,397,137
	Revenues from related party (Note 8)			301,000			430,000			287,000
		Total revenues		1,700,202			4,507,138			5,684,137
Operating Expenses:
	Professional services			1,103,829			2,906,565			3,750,752
	Sales and marketing			964,278			3,216,938			2,680,941
	General and administrative (Notes 7 and 8)			1,930,859			4,552,425			3,597,627
	Research and development			453,271			1,740,347			—
	Stock compensation charges (Note 6)			80,645			374,586			180,122
	Depreciation (Note 2)			99,397			291,910			285,038
		Total operating expenses		4,632,279			13,082,771			10,494,480
Operating Loss				(2,932,077	)		(8,575,633	)		(4,810,343	)
Other Income (Expense):
	Interest income			23,733			682,736			203,362
	Interest expense (Note 8)			(17,499	)		—			(10,533	)
		Other income, net		6,234			682,736			192,829
Net Loss				(2,925,843	)		(7,892,897	)		(4,617,514	)
Accretion of Discount on Series A Preferred Stock (Note 5)				—			(303,469	)		(240,083	)
Net Loss Applicable to Common Stockholders			$	(2,925,843	)	$	(8,196,366	)	$	(4,857,597	)

See notes to financial statements.

F-23

EDUPRISE, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM JUNE 1, 1999 TO

DECEMBER 31, 1999 AND EIGHT MONTHS ENDED AUGUST 31, 2001 (UNAUDITED)

		Number of Shares		Common Stock		Additional Paid-in Capital		Accumulated Deficit			Total
	Issuance of shares in formation of company	1,000		$	10	$	29,990	$	—		$	30,000
	Cancellation of common stock	(1,000	)		—		—		—			—
	Sale of common stock	6,000,000			59,990		3,410,010		—			3,470,000
	Compensation for stock options issued	—			—		80,645		—			80,645
	Net loss	—			—		—		(2,925,843	)		(2,925,843	)
Balance, December 31, 1999		6,000,000			60,000		3,520,645		(2,925,843	)		654,802
	Issuance of warrants for common stock and beneficial conversion feature	—			—		1,739,647		—			1,739,647
	Compensation for stock options issued	—			—		374,586		—			374,586
	Net loss	—			—		—		(7,892,897	)		(7,892,897	)
	Accretion of discount on Series A Preferred Stock	—			—		—		(303,469	)		(303,469	)
Balance, December 31, 2000		6,000,000			60,000		5,634,878		(11,122,209	)		(5,427,331	)
	Compensation for stock options issued (unaudited)	—			—		180,122		—			180,122
	Net loss (unaudited)	—			—		—		(4,617,514	)		(4,617,514	)
	Accretion of discount on Series A Preferred Stock (unaudited)	—			—		—		(240,083	)		(240,083	)
Balance, August 31, 2001 (unaudited)		6,000,000		$	60,000	$	5,815,000	$	(15,979,806	)	$	(10,104,806	)

See notes to financial statements.

F-24

EDUPRISE, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2000 AND
PERIOD FROM JUNE 1, 1999 TO DECEMBER 31, 1999 AND
EIGHT MONTHS ENDED AUGUST 31, 2001 (UNAUDITED)

					1999			2000			2001
											(Unaudited)
Operating Activities:
	Net loss				$	(2,925,843	)	$	(7,892,897	)	$	(4,617,514	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Loss on disposal of property and equipment				—			5,158			33,862
		Depreciation				99,397			291,910			285,038
		Compensation for stock options issued				80,645			374,586			180,122
	Changes in operating assets and liabilities:
		Accounts receivable and amounts due from related party				(245,998	)		(624,100	)		(426,126	)
		Prepaid expenses and other current assets				(115,752	)		(50,509	)		(258,085	)
		Accounts payable and amounts due to related party				258,090			(248,891	)		11,544
		Accrued expenses				89,046			471,769			(87,263	)
		Deferred revenue				52,451			218,243			485,617
				Net cash used in operating activities		(2,707,964	)		(7,454,731	)		(4,392,805	)
Investing Activities —
	Purchases of property and equipment					(149,260	)		(616,970	)		(205,559	)
Financing Activities:
	Proceeds from sale of Series A preferred stock, net					—			14,465,935			(26,743	)
	Proceeds from sale of common stock					3,470,000			—			—
	Issuance of notes payable to related parties					1,000,000			—			—
	Repayment of notes payable to related parties					(1,000,000	)		—			—
	Repayment of capital lease obligation											(18,918	)
	Proceeds of warrants and beneficial conversion feature					—			1,739,647
				Net cash provided by (used in) financing activities		3,470,000			16,205,582			(45,661	)
Net Increase (Decrease) in Cash and Cash Equivalents						612,776			8,133,881			(4,644,025	)
Cash and Cash Equivalents:
	Beginning of year					—			612,776			8,746,657
	End of year				$	612,776		$	8,746,657		$	4,102,632
Supplemental Disclosure of Cash Flow Information:
	Cash paid for interest				$	17,499			—		$	10,533
Supplemental Schedule of Non-Cash Investing and Financing Activities:
	During 1999, Eduprise, Inc. was formed in a spin-off transaction from COLLEGIS, Inc. as noted in Note 1. In connection with this transaction the following assets and liabilities were assumed:
			Property and equipment								$	551,702
			Other assets								$	7,478
			Deferred revenue								$	219,750
			Other liabilities								$	309,430
	During the eight months ended August 31, 2001 and the year ended December 31, 2000, Eduprise, Inc., recorded dividends totaling $240,083 and $303,469, respectively, on its Series A Preferred Stock related to the accretion of the initial discount on the stock.
	During the eight months ended August 31, 2001 and the year ended December 31, 2000, Eduprise, Inc., acquired property totaling $89,032, and $64,334 respectively, under capital leases.

See notes to financial statements.

F-25

EDUPRISE, INC.

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM JUNE 1, 1999

TO DECEMBER 31, 1999 AND EIGHT MONTHS ENDED AUGUST 31, 2001,

(unaudited as to August 31, 2001 information)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

        Eduprise, Inc. ("Eduprise" or the "Company") is a service and solutions provider for the e-learning marketplace which assists organizations in integrating Internet technologies into the learning process. The Company's revenues are generated from the provision of a comprehensive set of services including strategic consulting, instructional design and support, course development, program management, and application hosting services. All of the Company's operations are focused in one segment.

        The Company was originally incorporated in the State of Delaware on December 31, 1998 as CLN, Inc., a wholly owned subsidiary of COLLEGIS, Inc. ("Collegis"). On May 17, 1999, CLN, Inc. changed its name to Eduprise.com, Inc.

        On May 31, 1999, Collegis transferred all of the assets and liabilities of its Collegis Learning Network business, with a fair value of approximately $30,000, to Eduprise.com. Prior to acquiring the Collegis Learning Network business, Eduprise.com had not commenced operations. Collegis then sold all of the outstanding common shares of Eduprise.com (1,000 common shares) to Mr. John Canning, a minority shareholder (approximately 1.0% ownership interest) of Collegis for $30,000. The sale of assets has been accounted for in accordance with the purchase method of accounting. A summary of the purchase price allocation for the Collegis transaction is as follows:

Property and equipment	$	551,702
Other assets		7,478
Deferred revenue		(219,750	)
Liabilities assumed		(309,430	)
	$	30,000

        On August 31, 1999, Mr. Canning contributed all 1,000 outstanding shares of Eduprise.com to EDU, L.L.C. ("EDU"), a limited liability corporation owned by Mr. Canning. EDU then transferred $3,470,000 in cash to Eduprise.com in exchange for 6,000,000 shares of Eduprise's common stock, $0.01 par value, at a price of approximately $.58 per share. The original 1,000 shares of Eduprise.com then owned by EDU were cancelled in connection with this transaction.

        On September 22, 2000 the Company changed its name from Eduprise.com, Inc. to Eduprise, Inc.

        The following is a summary of the Company's significant accounting policies:

Unaudited Financial Statements — The financial statements as of August 31, 2001, and for the eight months ended August 31, 2001, are unaudited. In addition, disclosure information subsequent to April 17, 2001, (the original issuance date of the 2000 financial statements) is unaudited. In the opinion of management, the unaudited balance sheet at August 31, 2001, and the unaudited statements of operations, stockholders' equity (deficit), and cash flows for the eight months ended August 31, 2001, include all adjustments, which include only normal recurring adjustments, necessary to present the financial position and results of operations and cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. The results of operations for

F-26

the eight months ended August 31, 2001, are not necessarily indicative of results to be expected for a full fiscal year or any other period.

Cash and Cash Equivalents — The Company considers all money market accounts, debt instruments purchased with an original maturity of three months or less, and other highly liquid investments to be cash equivalents.

Property and Equipment — Property and equipment is carried at cost and is being depreciated using the straight-line method over the estimated useful lives of the related assets over periods ranging from 3 to 7 years. Maintenance and repairs are charged to expense when incurred; improvements are capitalized. Upon the sale or retirement of assets, the cost and accumulated depreciation are removed from the account and any gain or loss is recognized.

Fair Value of Financial Instruments — The carrying amounts for cash and cash equivalents, trade accounts receivable, unbilled receivables on contracts, prepaid expenses, accounts payable, accrued expenses, and certain other assets and liabilities approximate fair value because of the short-term nature of these items. The carrying amounts of capital leases approximate fair value as the terms of the lease approximated market conditions at December 31, 2000 and 1999.

Income Taxes — The tax effect of losses for all periods presented are recorded under the provisions of Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes. Under SFAS No. 109, deferred income taxes are recognized for the tax consequences of "temporary" differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is more likely than not expected to be realized. As of August 31, 2001 and December 31, 2000 and 1999, the net deferred tax assets have been fully reserved.

Revenue Recognition — Eduprise derives revenues from the provision of a comprehensive set of services including strategic consulting, instructional design and support, course development, program management, and software application hosting services. Eduprise's customers do not have the contractual right to take possession of the Company's proprietary software. Therefore, in accordance with Emerging Issues Task Force ("EITF") Abstract 00-3, Application of AICPA Statement of Position 97-2, Software Revenue Recognition, to Arrangements That Include the Right to Use Software Stored on Another Entity's Hardware, licensing and hosting revenues from contractual arrangements are generally recognized ratably over the contractual period. All other revenues are recognized as the services are performed. Amounts billed or received for which services have not yet been provided are recorded as deferred revenues in the current liabilities section of the accompanying balance sheet.

Stock Split — On March 10, 2000, the Company effected a six-for-one stock split of the Company's capital stock. All references to authorized and issued common shares, options and warrants in the accompanying financial statements and notes have been retroactively adjusted to reflect this stock split for all periods presented.

F-27

Stock Compensation — For stock and equity instruments granted to employees, Eduprise follows Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Eduprise follows the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation. For stock and equity instruments issued to non-employees, the Company follows the provisions of SFAS No. 123 and EITF Abstract 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.

Stock Warrants — Warrants to purchase preferred stock issued in connection with equity financings are recorded at amounts based on the warrant's relative estimated fair values at time of issuance and credited to additional paid-in capital. Any resulting discount is amortized as dividends over the term of the equity's minimum redemption period using the interest method.

Beneficial Conversion Features — Beneficial conversion features resulting from the issuance of equity instruments with an effective conversion price less than current fair market value are computed in accordance with EITF 00-27, Application of EITF Issue 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios to Certain Convertible Instruments. Any resulting discount is amortized as dividends over the term of the equity's minimum redemption period using the interest method.

Comprehensive Income (Loss) — Eduprise follows the guidance of SFAS No. 130, Reporting Comprehensive Income. SFAS No. 130 requires that an enterprise (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the balance sheet. There were no items of other comprehensive income during 1999, 2000 or 2001.

Customer Concentrations — Accounts receivable are unsecured, and the Company is at risk to the extent that such amounts become uncollectible. Ongoing credit evaluations of customers' financial condition are performed by management. Actual bad debt expense and the allowance for uncollectible receivables as of August 31, 2001, and December 31, 2000 and 1999 are insignificant.

        At December 31, 1999, one account represented approximately 34% of gross trade receivables. At December 31, 2000, two accounts represented approximately 35% of gross trade receivables. At August 31, 2001, three accounts represented approximately 36% of gross trade receivables.

        During 1999, three customers each accounted for more than 10% of the Company's total revenue. These three customers accounted for a total of 55% of the Company's total revenue. During 2000, one customer accounted for more than 10% of the Company's total revenue. This one customer accounted for a total of 13% of the Company's total revenue. During the eight months ended August 31, 2001, one customer accounted for more than 10% of the Company's revenue. This customer accounted for a total of 10.2% of the Company's total revenue. In addition, Collegis, a related party, accounted for approximately 17.6% of total revenues for the period from June 1, 1999 to December 31, 1999. During 2000, Collegis accounted for approximately 9.5% of total revenues. During the eight months ended August 31, 2001, Collegis accounted for approximately 5.1% of total revenues.

F-28

Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates.

Reclassifications — Certain 1999 and 2000 amounts have been reclassified to conform to the 2001 presentation.

Recent Accounting Pronouncements — In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Eduprise adopted the new reporting guidelines on January 1, 2001. The initial adoption of SFAS No. 133 did not have a significant impact on its financial position or results of operations.

2. PROPERTY AND EQUIPMENT

        Property and equipment at December 31, 1999 and 2000 and August 31, 2001 are summarized as follows:

	Depreciable Lives	1999			2000			2001
								(Unaudited)
Fixtures and furniture	7 years	$	224,619		$	397,254		$	473,287
Equipment	3 years		421,545			803,091			860,319
Software	3 years		52,817			163,858			217,170
Leasehold improvements and other	3 years		1,981			10,096			79,845
Total			700,962			1,374,299			1,630,621
Less accumulated depreciation			(99,397	)		(388,498	)		(669,129	)
Property and equipment, net		$	601,565		$	985,801		$	961,492

3. LEASE COMMITMENTS

Leases — The Company leases certain equipment and office facilities under agreements classified as operating and capital leases. These leases contain renewal options for terms up to 10 years, with adjustments in annual rentals for inflationary increases. Rental expense charged to operations for all operating leases totaled approximately $302,000 for the eight month period ended August 31, 2001, $313,500 for the year ended December 31, 2000 and $158,000 for the period from June 1, 1999 to

F-29

December 31, 1999. As of August 31, 2001, future minimum lease commitments on leases that had initial or remaining non-cancelable lease terms of one year or longer, are as follows:

Year Ending December 31	Operating Leases		Capital Leases
2001	$	475,488	$	19,068
2002		1,343,147		57,204
2003		1,188,527		57,204
2004		507,439		19,885
2005		18,193		—
Future minimum lease payments	$	3,532,794		153,361
Less imputed interest				(18,913	)
Total capital lease obligation				134,448
Short-term portion				(45,146	)
Long-term portion			$	89,302

4. INCOME TAXES

        The components of Eduprise's net deferred tax asset as of December 31, 2000 and 1999 and August 31, 2001, are as follows:

		1999			2000			2001
								(Unaudited)
Deferred tax assets:
	Net operating loss carryforwards	$	1,056,000		$	3,984,000		$	5,506,000
	Organizational costs		31,000			24,000			20,000
	Compensation for nonqualified stock options		32,000			176,000			245,000
	Other		11,000			(40,000	)		79,000
	Total deferred tax assets		1,130,000			4,144,000			5,850,000
	Valuation allowance		(1,130,000	)		(4,144,000	)		(5,850,000	)
Net deferred tax assets		$	—		$	—		$	—

        Based on management's evaluation of the positive and negative evidence impacting the realization of the deferred tax assets, a valuation allowance has been provided. Management has considered Eduprise's history of losses and concluded that as of December 31, 1999 and 2000 and August 31, 2001, the net deferred tax assets should be fully reserved as it is uncertain that the deferred tax assets will be realized.

F-30

        For the period from June 1, 1999 to December 31, 1999, the year ended December 31, 2000 and the eight months ended August 31, 2001, reported income taxes differ from income tax benefit that would result from applying the federal statutory rate of 34% to pretax loss due to the following:

	1999			2000			2001
							(Unaudited)
Computed expected tax benefit	$	(994,000	)	$	(2,684,000	)	$	(1,570,000	)
State tax benefit, net of federal benefit		(150,000	)		(365,000	)		(213,000	)
Meals and entertainment		4,000			20,000			13,000
Other		10,000			15,000			64,000
Change in valuation allowance		1,130,000			3,014,000			1,706,000
Income tax benefit	$	—		$	—		$	—

        Eduprise has operating and economic loss carryforwards of approximately $14.3 million at August 31, 2001 and $10 million at December 31, 2000, expiring through 2020, which can be offset against future federal and state taxable income. Under the Tax Reform Act of 1986, the amounts of and benefits from net operating losses carried forward may be impaired or limited in certain circumstances. Events which might cause limitations in the amount of net operating losses that Eduprise may utilize in any one year include, but are not limited to, a cumulative change in ownership of more than 50% over a three-year period. At December 31, 2000, the effect of such limitations, if imposed, is not expected to be significant. The completion of the acquisition of Eduprise by Collegis on August 31, 2001 (see Note 9) may limit future utilization of such loss carryforwards.

5. PREFERRED STOCK

        On January 28, 2000, the Company completed the sale of 4,607,640 shares of Series A convertible redeemable preferred stock to several financial investors and several private investors for cash consideration of $14,874,998 ($3.23 per share). The Company's net proceeds from the sale totaled $14,271,154 (net of offering costs of $603,844).

        In January 2000, in connection with the Series A preferred stock offering, the Company issued a warrant to U.S. Bancorp Piper Jaffray to purchase 303,870 shares of preferred stock. The exercise price is $3.23 per share. The warrant expires on the earlier of the second anniversary of an initial public offering of the Company's capital stock or January 28, 2005. The value of the warrant, as determined under the Black-Scholes model, was determined to be $869,824. In addition, the Series A preferred stock contained a beneficial conversion feature with an intrinsic value of $869,825. The amount of the proceeds allocated to the warrants and the beneficial conversion feature was accounted for as a discount on the preferred stock and is being amortized as dividends over the term of the equity's minimum redemption period using the interest method.

F-31

        On March 20, 2000, Eduprise completed the sale of 619,195 shares of its Series A preferred stock to EDU at a price of $3.23 per share. Total proceeds of the sale were $2,000,000 (net of offering costs of $65,672). During 2001, the Company paid additional offering costs for two investors totaling $26,743.

Dividends Rights — The Series A preferred stock bears cumulative dividends at 8.0% per annum, when and if declared by the Board of Directors. As of August 31, 2001, the Board of Directors have not declared any dividends, therefore, no dividends are accrued.

Conversion Rights — Each holder of Series A preferred stock shall have the right to convert all such shares at any time into shares of Eduprise's common stock at a 1:1 conversion ratio. Interest on such dividends shall not compound with respect to the accrued and unpaid dividends of any prior year. The Series A preferred stock automatically converts into common stock upon (a) the election of two-thirds of the Series A preferred shares then outstanding or (b) immediately prior to closing of an initial public offering of common stock under the Securities Act of 1933 with net proceeds of at least $25,000,000 and a per share offering price of at least $6.46 per share (subject to adjustment for subsequent splits of the common stock). Upon the conversion of any Series A preferred share into common stock, the holder of each Series A preferred share shall receive in cash the aggregate amount of dividends on their preferred shares, if any, that have been declared by the Board of Directors but not yet paid. Accrued but undeclared dividends do not convert into common stock.

Liquidation Privileges — Upon the dissolution, liquidation, or winding up of Eduprise, whether voluntary or involuntary, each share of Series A shall be entitled to receive, prior to and in preference to any distribution of any assets of the Company to the holders of common stock, an amount of $3.23 per Series A share, plus declared but unpaid dividends. Upon the Series A liquidation preference, the remaining assets of the Company shall be distributed between the holders of Series A preferred stock ratably until the holders shall receive the full amount to which they would otherwise be entitled.

Mandatory Redemption Features — One-third of the Series A preferred stock is redeemable at the option of the holder on January 31, 2005, 2006, and 2007, at a price equal to the original purchase price plus any declared and unpaid dividends. As of December 31, 2000 and August 31, 2001, the minimum mandatory redemption amounts totaled approximately $5,625,000 in 2005, 2006, and 2007. The carrying value of the Series A Preferred stock will be increased by periodic accretion, in the form of accrued dividends, so that the carrying value will equal the mandatory redemption value on the final mandatory redemption date. Such accretion totaled $303,469 in 2000 and $240,083 for the eight months ended August 31, 2001.

6. COMMON STOCK AND STOCK OPTIONS

        As discussed in Note 1, Eduprise was originally capitalized as a wholly owned subsidiary of Collegis, with 1,000 shares of common stock outstanding. On May 31, 1999, Collegis sold its interest in Eduprise to Mr. John Canning, a minority shareholder of Collegis and a founding member of EDU. In August 1999, Mr. Canning contributed the 1,000 outstanding shares of Eduprise to EDU. In August 1999, Eduprise issued 6,000,000 shares to EDU, L.L.C. in exchange for $3,500,000 in cash. The original 1,000 shares then owned by EDU were cancelled in this transaction.

F-32

        The Company has adopted and approved the 1999 Stock Option Plan (the "Plan") which provides for the issuance of up to 1,741,950 incentive or nonstatutory stock options thereunder to directors, officers and employees of the Company. On February 9, 2000, the Company amended the Plan whereby the total aggregate number of options that may be granted increased to 3,600,000. Generally, options vest 25% each year over a four-year period. Stock compensation expense of $177,284, $310,459 and $80,645, respectively, was recognized for the eight month period ended August 31, 2001, and the periods ended December 31, 2000 and 1999 for options granted to employees during those respective periods. Stock compensation expense of $2,838 and $64,127 was recognized for the eight month period ended August 31, 2001 and the year ended December 31, 2000, respectively, for options granted to nonemployees in 2000. Had compensation cost for all options granted been determined based on the fair value at the grant date for awards under the Plan consistent with the method of SFAS No. 123, Accounting for Stock-Based Compensation, the effect on the Company's net loss would have been to increase the net loss by approximately $4,300 for the eight-month period ended August 31, 2001, to increase the net loss by approximately $19,000 in 2000 and to increase net loss by approximately $5,000 in 1999.

        The estimated weighted-average grant-date fair value of options granted for the years ended December 31, 1999 and 2000 and eight months ended August 31, 2001 are as follows:

		1999		2000		2001
						(Unaudited)
Exercise price less than market price:
	Weighted-average exercise price	$	0.17	$	0.17	$	—
	Weighted-average grant-date fair value	$	0.50	$	0.90	$	—
Exercise price greater then market price:
	Weighted-average exercise price	$	—	$	2.50	$	1.15
	Weighted-average grant-date fair value	$	—	$	0.02	$	0.10

        The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants in 2001, 2000 and 1999, respectively: dividend yield of 0% for all periods, risk-free interest rates of 6.0%, 5.15% and 6.4%, expected lives of 4 years, and volatility of 142%. Volatility is used only for those options granted to non-employees in 2001 and 2000. No options were granted to non-employees in 1999. A summary of

F-33

the status of the Company's Plan as of August 31, 2001 and December 31, 2000 and 1999 and changes during these periods ended on those dates is presented below:

	1999			2000			2001
	Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price
							(Unaudited)
Outstanding at beginning of period	—	$	—	1,741,938	$	0.17	2,436,659	$	0.61
Granted	1,741,938	$	0.17	1,111,250	$	1.24	378,325	$	1.15
Exercised	—	$	—	—	$	—	—	$	—
Terminated	—	$	—	416,529	$	0.49	367,841	$	0.82
Outstanding at end of year	1,741,938	$	0.17	2,436,659	$	0.61	2,447,143	$	0.65
Options exercisable at period end	—	$	—	396,776	$	0.17	815,841	$	0.43

        The following table summarizes information about fixed stock options outstanding at December 31, 2000:

	Options Outstanding				Options Exercisable
Exercise Prices	Number Outstanding at 12/31/00	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable at 12/31/00	Weighted- Average Exercise Price
$0.17	1,982,909	2.63	$	0.17	396,776	$	0.17
$2.50	458,750	3.25	$	2.50	—	$	0.00
	2,441,659	2.75	$	0.61	396,776	$	0.17

        The following table summarizes information about fixed stock options outstanding at August 31, 2001 (unaudited):

	Options Outstanding				Options Exercisable
Exercise Prices	Number Outstanding at 8/31/01	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable at 8/31/01	Weighted- Average Exercise Price
$0.17	1,751,618	1.96	$	0.17	650,809	$	0.17
$1.00	288,650	3.58	$	1.00
$2.50	406,875	2.58	$	2.50	165,032	$	2.50
	2,447,143	2.28	$	0.65	815,841	$	0.43

F-34

        In January 2000, in connection with the Series A offering, the Company issued a warrant to U.S. Bancorp Piper Jaffray, Inc. to purchase 303,870 shares of Series A preferred stock. The exercise price is $3.23. The warrant has a term of 5 years and expires on the earlier of the second anniversary of an initial public offering of the Company's capital stock or January 28, 2005. The fair value of the warrant as of the grant date was estimated at $2.86 per share.

7. EMPLOYEE BENEFIT PLAN

        The Company has a 401(k) plan for all eligible employees. Eduprise provides a matching contribution as a percentage of employee contributions. This matching percentage, which was 50% of the first 6% of employee contributions through August 31, 2001, is determined based on management's discretion each year. Employer matching contributions vest over a three-year period as follows: 33% at the end of year one, 66% at the end of year two and 100% at the end of year three. Eduprise's contributions to the plan amounted to approximately $108,000 for the eight month period ended August 31, 2001, $143,000 in 2000 and $46,000 in 1999.

8. RELATED PARTY TRANSACTIONS

        On May 31, 1999, Eduprise entered into a mutual support agreement with Collegis. This agreement specifies Eduprise's right to the perpetual use of intellectual property that was developed by Collegis and the performance of various services for Collegis for agreed-upon fees. In connection with this agreement, Eduprise recognized approximately $287,000, $430,000 and $301,000 of services revenue from Collegis during the eight month period ended August 31, 2001, and the periods ended December 31, 2000 and 1999, respectively. The support agreement terminates on January 1, 2019.

        In connection with the formation of the Company, Eduprise assumed the rights and obligations of Collegis' services agreement with the Collegis Research Institute ("CRI"), a not-for-profit research organization related to the Company through common directors. In connection with the services agreement, Eduprise was obligated to provide to CRI outsourcing, management and administrative services and to serve as liaison on behalf of CRI with outside advisors, to the extent such services are authorized by the President of CRI. CRI has agreed to reimburse the Company for its costs in providing such services. Amounts received from CRI as reimbursement of the cost of services provided are accounted for as a reduction of the related expense amounts in the statement of operations. During 1999, the Company provided approximately $150,000 in services and costs to CRI. At December 31, 1999 amounts were due from CRI in the amount of approximately $87,000 and are classified as due from related party in the accompanying balance sheet. This agreement was terminated in 2000, and no amounts were due from CRI at December 31, 2000.

        During 1999, the Company issued a $1,000,000 note payable to a shareholder. The note was due on demand, bore interest at 7.0% per annum, and was repaid in full during 1999.

        In connection with the initial formation of the Company as a wholly owned subsidiary of Collegis, the Company recognized a liability to Collegis of approximately $116,000. As of December 31, 1999, Eduprise owed Collegis approximately $167,000, which was due on demand. This was repaid during

F-35

2000. At December 31, 2000 amounts due from Collegis totaled $68,283. At August 31, 2001, no amounts were due to or from Collegis.

9. SUBSEQUENT EVENT (UNAUDITED)

        On August 31, 2001, Collegis acquired all of the capital stock of Eduprise. The merged entity was renamed CollegisEduprise, Inc. All outstanding shares of preferred and common stock of Eduprise were exchanged for shares of common stock of Collegis and all outstanding and unexercised options and warrants of Eduprise were converted into options or warrants to purchase Collegis common stock. The aggregate purchase price of the acquisition was approximately $20.34 million. The accompanying financial statements of Eduprise as of August 31, 2001 are presented immediately prior to the closing of the Collegis acquisition.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

        The following table sets forth fees payable by us in connection with the issuance and distribution of our common stock in this offering. Collegis, Inc. will bear all of the expenses shown below. All such fees and expenses, except the Securities and Exchange Commission registration fee and the NASD filing fee, are estimated:

Securities and Exchange Commission Registration Fee		$	6,900
NASD Filing Fee			8,000
Nasdaq Stock Market Listing Fee			*
Transfer Agent Fees and Expenses			*
Printing and Engraving Fees and Expenses			*
Legal Fees and Expenses			*
Accounting Fees and Expenses			*
Director and Officer Insurance			*
Miscellaneous			*
	Total	$	*

*

To be provided by amendment

Item 14. Indemnification of directors and officers

        Subsection (a) of Section 145 of the Delaware General Corporation Law ("DGCL") provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor, against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or such other court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

        Our Certificate of Incorporation and By-Laws provide that indemnification shall be to the fullest extent permitted by the DGCL for all of our current or former directors or officers.

II-1

        As permitted by the DGCL, our Certificate of Incorporation provides that directors shall have no personal liability to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except (i) for any breach of a director's duty of loyalty, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violations of law, (iii) under Section 174 of the DGCL or (iv) for any transaction in which a director derives an improper personal benefit.

Item 15. Recent Sales of Unregistered Securities

        Since January 1, 1999, we have issued the following securities which were not registered under the Securities Act:

          (i)  Stock Option Plan Issuances: Since January 1, 1999, we have issued options to purchase an aggregate of 3,675,302 shares of our common stock to our non-employee directors, employees and consultants. The weighted average exercise price of these options is equal to $3.47. The actual per share exercise price of each of these options is equal to the fair market value of the shares of our common stock as of the date of each grant; and

        (ii)  On August 31, 2001, in connection with the Eduprise acquisition, we issued 4,291,950 shares of our common stock with a fair market value at that time of $19.36 million to the former shareholders of Eduprise, replacement options for 160,068 shares of our common stock to former holders of Eduprise options, with a fair market value at that time of $0.66 million, replacement warrants to purchase 182,170 shares of our common stock issued to a former holder of Eduprise warrants, with a fair market value at that time of $0.03 million. Prior to our acquisition of Eduprise, there were 13 direct holders of shares of capital stock of Eduprise. All 13 direct holders were either "accredited investors" within the meaning of the Securities Act, or were sophisticated investors with such knowledge and experience in financial and business matters that he, she or it was capable of evaluating the merits and risks of the transaction. One direct holder, EDU, LLC, served as an investment vehicle in Eduprise for approximately 80 investors; investment control over the securities owned by EDU, LLC was vested in the managers. These members were "accredited investors" within the meaning of the Securities Act, or were sophisticated investors with such knowledge and experience in financial and business matters that he, she or it was capable of evaluating the merits and risks of the transaction. Upon consummation of the acquisition, EDU, LLC dissolved and distributed the shares of Collegis common stock it received in the acquisition to its members. All investors were provided with a notice summarizing the material terms of the transactions, including a description of our business, financial results, management and the risks associated with owning our common stock. In addition, the investors were presented with an opportunity to ask questions and receive answers concerning the terms and conditions of the transaction and to obtain any additional information about the transaction which we possessed or could acquire without unreasonable effort or expense.

        In each of the above instances, exemption from registration was claimed on the grounds that the issuance of such securities did not involve any public offering within the meaning of Section 4(2) of the Securities Act.

II-2

Item 16. Exhibits and Financial Statement Schedules

(a)

Exhibits

Exhibit Number	Description
1.1	Form of Underwriting Agreement.*
3.1	Amended and Restated Certificate of Incorporation of Collegis, Inc.*
3.2	Amended and Restated By-laws of Collegis, Inc.
4.1	Specimen Certificate for Collegis, Inc. common stock.
4.2	Amended and Restated Registration, Stockholders' and Joinder Agreement between Collegis, Inc. and the stockholders named therein, dated as of August 31, 2001.**
5.1	Opinion of Winston & Strawn (including consent).
10.1	Stock Option Plan of Collegis, Inc., dated as of April 11, 1996 and subsequently amended.**
10.2	Form of 1996 Stock Option Plan Agreement.**
10.3	2002 Collegis, Inc. Stock Incentive Plan.
10.4	2002 Collegis, Inc. Employee Stock Purchase Plan.
10.5	Letter Agreement between Collegis, Inc. and Thomas V. Huber dated as of September 20, 2000.**
10.6	Salt Creek Ventures Consulting Agreement.
23.1	Consents of Deloitte & Touche, LLP.
23.2	Consent of Winston & Strawn (contained in the opinion filed as Exhibit 5.1).
24.1	Power of Attorney (included in signature pages).

*

To be filed by amendment

**

Previously filed.

(b)

Financial Statement Schedules

None.

Item 17. Undertakings

        (a)  Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-3

        (b)  The undersigned Registrant hereby undertakes that:

        (1)  For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

        (2)  For the purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (c)  The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Maitland, in the State of Florida, on the 10^th day of July, 2002.

COLLEGIS, INC.
By:	/s/  THOMAS V. HUBER
	Name:	Thomas V. Huber
	Title:	President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act, this Amendment No. 1 to Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  ROBERT E. KING* Robert E. King	Chairman of the Board of Directors	July 10, 2002
/s/  THOMAS V. HUBER Thomas V. Huber	Director, President and Chief Executive Officer (Principal Executive Officer)	July 10, 2002
/s/  ROBERT C. BOWERS Robert C. Bowers	Director, Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	July 10, 2002
/s/  MARVIN WACHMAN* Marvin Wachman	Director, Chairman Emeritus of Board of Directors	July 10, 2002
/s/  DR. WILLIAM H. GRAVES* Dr. William H. Graves	Director, Vice Chairman	July 10, 2002
/s/  ROBERT H. ATWELL* Robert H. Atwell	Director	July 10, 2002
/s/  JAMES E. COWIE* James E. Cowie	Director	July 10, 2002

II-5

/s/  BERNARD GOLDSTEIN* Bernard Goldstein	Director	July 10, 2002
/s/  DR. THURSTON E. MANNING* Dr. Thurston E. Manning	Director	July 10, 2002
/s/  KENNETH G. PIGOTT* Kenneth G. Pigott	Director	July 10, 2002
/s/  JANE RYLAND* Jane Ryland	Director	July 10, 2002

*By:
/s/  THOMAS V. HUBER Thomas V. Huber
Attorney-in-fact

II-6

QuickLinks

TABLE OF CONTENTS
Dealer Prospectus Delivery Obligation
PROSPECTUS SUMMARY
Our Company
The Offering
SUMMARY FINANCIAL DATA
RISK FACTORS
FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED FINANCIAL DATA
UNAUDITED PRO FORMA FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
Summary Compensation Table
Option Grants in Last Fiscal Year
RELATED PARTY TRANSACTIONS
PRINCIPAL AND SELLING STOCKHOLDERS
DESCRIPTION OF CAPITAL STOCK
SHARES ELIGIBLE FOR FUTURE SALE
UNDERWRITING
NOTICE TO CANADIAN RESIDENTS
LEGAL MATTERS
EXPERTS
ADDITIONAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
COLLEGIS, INC. BALANCE SHEETS (amounts in thousands)
COLLEGIS, INC. STATEMENTS OF INCOME (amounts in thousands, except per share data)
COLLEGIS, INC. STATEMENTS OF CASH FLOWS (amounts in thousands)
COLLEGIS, INC. NOTES TO FINANCIAL STATEMENTS (amounts in thousands, except per share data)
EDUPRISE, INC. BALANCE SHEETS DECEMBER 31, 1999 AND 2000 AND AUGUST 31, 2001 (UNAUDITED)
EDUPRISE, INC. STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM JUNE 1, 1999 TO DECEMBER 31, 1999 AND EIGHT MONTHS ENDED AUGUST 31, 2001 (UNAUDITED)
EDUPRISE, INC. STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM JUNE 1, 1999 TO DECEMBER 31, 1999 AND EIGHT MONTHS ENDED AUGUST 31, 2001 (UNAUDITED)
EDUPRISE, INC. STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM JUNE 1, 1999 TO DECEMBER 31, 1999 AND EIGHT MONTHS ENDED AUGUST 31, 2001 (UNAUDITED)
EDUPRISE, INC. NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM JUNE 1, 1999 TO DECEMBER 31, 1999 AND EIGHT MONTHS ENDED AUGUST 31, 2001, (unaudited as to August 31, 2001 information)
PART II INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution
Item 14. Indemnification of directors and officers
Item 15. Recent Sales of Unregistered Securities
Item 16. Exhibits and Financial Statement Schedules
Item 17. Undertakings

SIGNATURES

EX-3.2

                                                                     Exhibit 3.2

                          AMENDED AND RESTATED BY-LAWS
                                       OF
                                 COLLEGIS, INC.

                                    ARTICLE I

                              STOCKHOLDERS MEETINGS

         Section 1.1. ANNUAL MEETINGS.

         (a) An annual meeting of stockholders shall be held for the election of
directors at such date, time and place as may be fixed by resolution of the
Board of Directors from time to time. Subject to paragraph (b) of this Section
1.1, any other proper business may be transacted at an annual meeting.

         (b) Only such business shall be conducted at an annual meeting of
stockholders as shall have been properly brought before the meeting. For
business to be properly brought before the meeting, it must be: (i) authorized
by the Board of Directors and specified in the notice, or a supplemental notice,
of the meeting, (ii) otherwise brought before the meeting by or at the direction
of the Board of Directors or the chairman of the meeting or (iii) otherwise
properly brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given written notice thereof to the Secretary, delivered or mailed to and
received at the principal executive offices of the Corporation not less than 60
days nor more than 90 days prior to the meeting; PROVIDED, that in the event the
annual meeting is called for a date that is not within thirty (30) days before
or after such anniversary date, notice by the stockholder in order to be timely
must be received not later than the close of business on the tenth day following
the date on which notice of the date of the annual meeting was mailed to
stockholders or made public, whichever first occurs. A stockholder's notice to
the Secretary shall set forth as to each item of business the stockholder
proposes to bring before the meeting (1) a brief description of such item and
the reasons for conducting such business at the meeting, (2) the name and
address, as they appear on the Corporation's records, of the stockholder
proposing such business, (3) the class and number of shares of stock of the
Corporation which are beneficially owned by the stockholder (for purposes of the
regulations under Sections 13 and 14 of the Securities Exchange Act of 1934, as
amended) and (4) any material interest of the stockholder in such business. No
business shall be conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the meeting at which
any business is proposed by a stockholder shall, if the facts warrant, determine
and declare to the meeting that such business was not properly brought before
the meeting in accordance with the provisions of this paragraph (b), and, in
such event, the business not properly before the meeting shall not be
transacted.

         Section 1.2. SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called at any time only by the Chairman of the Board,
if any, or the President, and shall be called by the President or the Secretary
at the written request of a majority of the Board of Directors, and by no other
person. The business transacted at a special meeting of



stockholders shall be limited to the purpose or purposes for which such meeting
is called, except as otherwise determined by the Board of Directors or the
chairman of the meeting.

         Section 1.3. NOTICE OF MEETINGS. A written notice of each annual or
special meeting of stockholders shall be given stating the place, date and time
of the meeting, and, in the case of a special meeting, the purpose or purposes
for which the meeting is called. Unless otherwise provided by law, the Amended
and Restated Certificate of Incorporation or these Amended and Restated By-Laws,
such notice of meeting shall be given not less than 10 nor more than 60 days
before the date of the meeting to each stockholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be given when deposited
in the mail, postage prepaid, directed to the stockholder at such stockholder's
address as it appears on the records of the Corporation.

         Section 1.4. ADJOURNMENTS. Any annual or special meeting of
stockholders may be adjourned from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if the
date, time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting any business may be transacted
which might have been transacted at the original meeting. If the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the adjourned meeting in
accordance with Section 1.3.

         Section 1.5. QUORUM. Except as otherwise provided by law, the Amended
and Restated Certificate of Incorporation or these Amended and Restated By-Laws,
the presence in person or by proxy of the holders of stock having a majority of
the votes which could be cast by the holders of all outstanding stock entitled
to vote at the meeting shall constitute a quorum at each meeting of
stockholders. In the absence of a quorum, the stockholders so present may, by
the affirmative vote of the holders of stock having a majority of the votes
which could be cast by all such holders, adjourn the meeting from time to time
in the manner provided in Section 1.4 until a quorum is present. If a quorum is
present when a meeting is convened, the subsequent withdrawal of stockholders,
even though less than a quorum remains, shall not affect the ability of the
remaining stockholders lawfully to transact business.

         Section 1.6. ORGANIZATION. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or if there is none or in his or her
absence, by the President, or in his or her absence, by a chairman designated by
the Board of Directors, or in the absence of such designation by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his or her absence the chairman of the meeting may appoint any person to act
as secretary of the meeting.

         Section 1.7. VOTING.

         (a) Except as otherwise provided by the Amended and Restated
Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
such stockholder which has voting power on the matter in question.


                                     - 2 -


         (b) Voting at meetings of stockholders need not be by written ballot.
Unless otherwise provided in the Amended and Restated Certificate of
Incorporation, directors shall be elected by a plurality of the votes cast in
the election of directors. Each other question shall, unless otherwise provided
by law, the Amended and Restated Certificate of Incorporation or these Amended
and Restated By-Laws, be decided by the vote of the holders of stock having a
majority of the votes which could be cast by the holders of all stock entitled
to vote on such question which are present in person or by proxy at the meeting.

         (c) Stock of the Corporation standing in the name of another
corporation and entitled to vote may be voted by such officer, agent or proxy as
the Amended and Restated By-Laws or other internal regulations of such other
corporation may prescribe or, in the absence of such provision, as the board of
directors or comparable body of such other corporation may determine.

         (d) Stock of the Corporation standing in the name of a deceased person,
a minor, an incompetent or a debtor in a case under Title 11, United States
Code, and entitled to vote may be voted by an administrator, executor, guardian,
conservator, debtor-in-possession or trustee, as the case may be, either in
person or by proxy, without transfer of such shares into the name of the
official or other person so voting.

         (e) A stockholder whose voting stock of the Corporation is pledged
shall be entitled to vote such stock unless on the transfer records of the
Corporation the pledgor has expressly empowered the pledgee to vote such shares,
in which case only the pledgee, or such pledgee's proxy, may represent such
shares and vote thereon.

         (f) If voting stock is held of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety or otherwise, or if two or more persons have
the same fiduciary relationship respecting the same shares, unless the Secretary
is given written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(i) if only one votes, such act binds all; (ii) if more than one votes, the act
of the majority so voting binds all; and (iii) if more than one votes, but the
vote is evenly split on any particular matter each faction may vote such stock
proportionally, or any person voting the shares, or a beneficiary, if any, may
apply to the Court of Chancery of the State of Delaware or such other court as
may have jurisdiction to appoint an additional person to act with the persons so
voting the stock, which shall then be voted as determined by a majority of such
persons and the person appointed by such Court. If the instrument so filed shows
that any such tenancy is held in unequal interests, a majority or even split for
the purpose of this subsection shall be a majority or even split in interest.

         (g) Stock of the Corporation belonging to the Corporation, or to
another corporation a majority of the shares entitled to vote in the election of
directors of which are held by the Corporation, shall not be voted at any
meeting of stockholders and shall not be counted in the total number of
outstanding shares for the purpose of determining whether a quorum is present.
Nothing in this Section 1.7 shall limit the right of the Corporation to vote
shares of stock of the Corporation held by it in a fiduciary capacity.


                                     - 3 -


         Section 1.8. PROXIES.

         (a) Each stockholder entitled to vote at a meeting of stockholders may
authorize another person or persons to act for such stockholder by proxy filed
with the Secretary before or at the time of the meeting. No such proxy shall be
voted or acted upon after three years from its date, unless the proxy provides
for a longer period. A duly executed proxy shall be irrevocable if it states
that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy that is not irrevocable by attending the meeting and voting in
person or by filing with the Secretary an instrument in writing revoking the
proxy or another duly executed proxy bearing a later date.

         (b) A stockholder may authorize another person or persons to act for
such stockholder as proxy (i) by executing a writing authorizing such person or
persons to act as such, which execution may be accomplished by such stockholder
or such stockholder's authorized officer, director, partner, employee or agent
(or, if the stock is held in a trust or estate, by a trustee, executor or
administrator thereof) signing such writing or causing his or her signature to
be affixed to such writing by any reasonable means, including, but not limited
to, facsimile signature, or (ii) by transmitting or authorizing the transmission
of a telegram, cablegram, telecopy or other means of electronic transmission (a
"Transmission") to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly
authorized by the person who will be the holder of the proxy to receive such
Transmission; provided that any such Transmission must either set forth or be
submitted with information from which it can be determined that such
Transmission was authorized by such stockholder.

         (c) Any inspector or inspectors appointed pursuant to Section 1.9 shall
examine Transmissions to determine if they are valid. If no inspector or
inspectors are so appointed, the Secretary or such other person or persons as
shall be appointed from time to time by the Board of Directors shall examine
Transmissions to determine if they are valid. If it is determined a Transmission
is valid, the person or persons making that determination shall specify the
information upon which such person or persons relied. Any copy, facsimile
telecommunication or other reliable reproduction of such a writing or
Transmission may be substituted or used in lieu of the original writing or
Transmission for any and all purposes for which the original writing or
Transmission could be used; provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or Transmission.

         Section 1.9. VOTING PROCEDURES AND INSPECTORS OF ELECTIONS.

         (a) The Board of Directors shall, in advance of any meeting of
stockholders, appoint one or more inspectors (individually an "Inspector" and
collectively the "Inspectors") to act at such meeting and make a written report
thereof. The Board of Directors may designate one or more persons as alternate
Inspectors to replace any Inspector who shall fail to act. If no Inspector or
alternate is able to act at such meeting, the chairman of the meeting shall
appoint one or more other persons to act as Inspectors. Each Inspector, before
entering upon the discharge of his or her duties, shall take and sign an oath
faithfully to execute the duties of Inspector with strict impartiality and
according to the best of his or her ability.


                                     - 4 -


         (b) The Inspectors shall (i) ascertain the number of shares of stock of
the Corporation outstanding and the voting power of each, (ii) determine the
number of shares of stock of the Corporation present in person or by proxy at
such meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the Inspectors and
(v) certify their determination of the number of such shares present in person
or by proxy at such meeting and their count of all votes and ballots. The
Inspectors may appoint or retain other persons or entities to assist them in the
performance of their duties.

         (c) The date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote at a meeting shall be
announced at such meeting. No ballots, proxies or votes, nor any revocations
thereof or changes thereto, shall be accepted by the Inspectors after the
closing of the polls unless the Court of Chancery of the State of Delaware upon
application by any stockholder shall determine otherwise.

         (d) In determining the validity and counting of proxies and ballots,
the Inspectors shall be limited to an examination of the proxies, any envelopes
submitted with such proxies, any information referred to in paragraphs (b) and
(c) of Section 1.8, ballots and the regular books and records of the
Corporation, except that the Inspectors may consider other reliable information
for the limited purpose of reconciling proxies and ballots submitted by or on
behalf of banks, brokers, their nominees or similar persons which represent more
votes than the holder of a proxy is authorized by a stockholder of record to
cast or more votes than such stockholder holds of record. If the Inspectors
consider other reliable information for the limited purpose permitted herein,
the Inspectors, at the time they make their certification pursuant to paragraph
(b) of this Section 1.9, shall specify the precise information considered by
them, including the person or persons from whom such information was obtained,
when and the means by which such information was obtained and the basis for the
Inspectors' belief that such information is accurate and reliable.

         Section 1.10. FIXING DATE OF DETERMINATION OF STOCKHOLDERS OF RECORD.

         (a) In order that the Corporation may determine the stockholders
entitled (i) to notice of or to vote at any meeting of stockholders or any
adjournment thereof, (ii) to receive payment of any dividend or other
distribution or allotment of any rights, (iii) to exercise any rights in respect
of any change, conversion or exchange of stock or (iv) to take, receive or
participate in any other action, the Board of Directors may fix a record date,
which shall not be earlier than the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which (1) in the case of a
determination of stockholders entitled to notice of or to vote at any meeting of
stockholders or adjournment thereof, shall, unless otherwise required by law, be
not more than 60 nor less than 10 days before the date of such meeting; and (2)
in the case of any other action, shall be not more than 60 days before such
action.

         (b) If no record date is fixed, (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; and (ii) the record date for
determining


                                     - 5 -


stockholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.

         (c) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting, but the Board of Directors may fix a new record date for the adjourned
meeting.

         Section 1.11. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary
shall prepare, at least 10 days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least 10 days prior to the meeting, either at
a place within the city where the meeting is to be held, which place shall be
specified in the notice of meeting, or, if not so specified, at the place where
the meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof and may be inspected by
any stockholder who is present. The stock ledger shall be the only evidence as
to who are the stockholders entitled to examine the stock ledger, the list of
stockholders or the books of the Corporation, or to vote in person or by proxy
at any meeting of stockholders.

                                   ARTICLE II

                               BOARD OF DIRECTORS

         Section 2.1. POWERS; NUMBER; QUALIFICATIONS. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, except as otherwise required by law or provided in the Amended and
Restated Certificate of Incorporation. The Board of Directors shall consist of
not less than one nor more than 15 directors, the number thereof to be
determined from time to time by resolution of the Board of Directors. Directors
need not be stockholders.

         Section 2.2.  ELECTION; RESIGNATION; VACANCIES.

         (a) At each annual meeting at which the term of office of a class of
directors expires, the stockholders shall elect directors of such class each to
hold office until the annual meeting at which the terms of office of such class
of directors expire and the election and qualification of his or her successor,
or until his earlier death, resignation or removal.

         (b) Only persons who are nominated in accordance with the procedures
set forth in this paragraph (b) shall be eligible for election as directors of
the Corporation. Nominations of persons for election to the Board of Directors
may be made at a meeting of stockholders by the Board of Directors or by any
stockholder of the Corporation entitled to vote in the election of directors at
the meeting who complies with the notice procedures set forth in this paragraph
(b). Any nomination by a stockholder must be made by written notice to the
Secretary delivered or mailed to and received at the principal executive offices
of the Corporation (i) not less than 60 days nor more than 90 days prior to the
meeting, or (ii) if an annual meeting is called for a date that is not within
thirty (30) days before or after the anniversary date of the previous annual
meeting, notice by the stockholder in order to be timely must be received not
later than the close


                                     - 6 -


of business on the tenth day following the date on which notice of the date of
the annual meeting was mailed to stockholders or made public, whichever comes
first. A stockholder's notice to the Secretary shall set forth (x) as to each
person whom the stockholder proposes to nominate for election or re-election as
a director: (1) the name, age, business address and residence address of such
person, (2) the principal occupation or employment of such person, (3) the class
and number of shares of stock of the Corporation which are beneficially owned by
such person (for the purposes of the regulations under Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended), and (4) any other information
relating to such person that would be required to be disclosed in solicitations
of proxies for the election of such person as a director of the Corporation
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended, and such person's written consent to being named in any proxy statement
as a nominee and to serving as a director if elected; and (y) as to the
stockholder giving notice (5) the name and address, as they appear on the
Corporation's records, of such stockholder and (6) the class and number of
shares of stock of the Corporation which are beneficially owned by such
stockholder (determined as provided in clause (x)(3) above). At the request of
the Board of Directors any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary that information required
to be set forth in a stockholder's notice of nomination which pertains to the
nominee. The chairman of the meeting at which a stockholder nomination is
presented shall, if the facts warrant, determine and declare to the meeting that
such nomination was not made in accordance with the procedures prescribed by
this paragraph (b), and, in such event, the defective nomination shall be
disregarded.

         (c) Any director may resign at any time by giving written notice to the
Chairman of the Board, if any, the President or the Secretary. Unless otherwise
stated in a notice of resignation, it shall take effect when received by the
officer to whom it is directed, without any need for its acceptance.

         (d) Any newly created directorship or any vacancy occurring in the
Board of Directors for any reason may be filled by a majority of the remaining
directors, although less than a quorum, or a sole remaining director. Each
director elected to replace a former director shall hold office until the
expiration of the term of office of the director whom he or she has replaced and
the election and qualification of his or her successor, or until his or her
earlier death, resignation or removal. A director elected to fill a newly
created directorship shall serve until the annual meeting at which the terms of
office of the class of directors to which he or she is assigned expire and the
election and qualification of his or her successor, or until his or her earlier
death, resignation or removal.

         Section 2.3. REGULAR MEETINGS. A regular annual meeting of the Board of
Directors shall be held, without call or notice, immediately after and at the
same place as the annual meeting of stockholders, for the purpose of organizing
the Board of Directors, electing officers and transacting any other business
that may properly come before such meeting. Additional regular meetings of the
Board of Directors may be held without call or notice at such times as shall be
fixed by resolution of the Board of Directors.

         Section 2.4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, if any, or the President
and shall be called by the President or the Secretary at the request in writing
of a majority of the Board of Directors. Notice of a special


                                     - 7 -


meeting of the Board of Directors shall be given by the person or persons
calling the meeting at least 24 hours before the special meeting. The purpose or
purposes of a special meeting need not be stated in the call or notice.

         Section 2.5. ORGANIZATION. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or if there is none or in
his or her absence, by the President, or in his or her absence by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his or her absence the chairman of the meeting may appoint any person to act
as secretary of the meeting. A majority of the directors present at a meeting,
whether or not they constitute a quorum, may adjourn such meeting to any other
date, time or place without notice other than announcement at the meeting.

         Section 2.6. QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Unless the Amended and Restated
Certificate of Incorporation or these Amended and Restated By-Laws otherwise
provide, the vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.

         Section 2.7. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one or more
committees, each committee to consist of one or more directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members present at any meeting and not
disqualified from voting, whether or not a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in place of any
such absent or disqualified member. Any such committee, to the extent permitted
by law and provided in the resolution of the Board of Directors designating such
committee, or an amendment to such resolution, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it.

         Section 2.8. TELEPHONIC MEETINGS. Directors, or any committee of
directors designated by the Board of Directors, may participate in a meeting of
the Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section 2.8 shall constitute presence in person at such meeting.

         Section 2.9. INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted
by the Amended and Restated Certificate of Incorporation or these Amended and
Restated By-Laws, any action required or permitted to be taken at any meeting of
the Board of Directors, or of any committee thereof, may be taken without a
meeting if all members of the Board of Directors or such committee, as the case
may be, consent thereto in writing (which may be in counterparts), and the
written consent or consents refiled with the minutes of proceedings of the Board
of Directors or such committee.


                                     - 8 -


         Section 2.10. COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each such committee shall conduct its business in the same manner as the Board
of Directors conducts its business pursuant to this Article II.

         Section 2.11 RELIANCE UPON RECORDS. Every director, and every member of
any committee of the Board of Directors, shall, in the performance of his or her
duties, be fully protected in relying in good faith upon the records of the
Corporation and upon such information, opinions, reports or statements presented
to the Corporation by any of its officers or employees, or committees of the
Board of Directors, or by any other person as to matters the director or member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Corporation, including, but not limited to, such records, information, opinions,
reports or statements as to the value and amount of the assets, liabilities
and/or net profits of the Corporation, or any other facts pertinent to the
existence and amount of surplus or other funds from which dividends might
properly be declared and paid, or with which the Corporation's capital stock
might properly be purchased or redeemed.

         Section 2.12 INTERESTED DIRECTORS. A director who is directly or
indirectly a party to a contract or transaction with the Corporation, or is a
director or officer of or has a financial interest in any other corporation,
partnership, association or other organization which is a party to a contract or
transaction with the Corporation, may be counted in determining whether a quorum
is present at any meeting of the Board of Directors or a committee thereof at
which such contract or transaction is considered or authorized, and such
director may participate in such meeting and vote on such authorization to the
extent permitted by applicable law, including Section 144 of the General
Corporation Law of the State of Delaware.

         Section 2.13 COMPENSATION. Unless otherwise restricted by the Amended
and Restated Certificate of Incorporation, the Board of Directors shall have the
authority to fix the compensation of directors. The directors shall be paid
their reasonable expenses, if any, of attendance at each meeting of the Board of
Directors or a committee thereof and may be paid a fixed sum for attendance at
each such meeting and an annual retainer or salary for services as a director or
committee member. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.

         Section 2.14 PRESUMPTION OF ASSENT. Unless otherwise provided by the
laws of the State of Delaware, a director who is present at a meeting of the
Board of Directors or a committee thereof at which action is taken on any
matter shall be presumed to have assented to the action taken unless his or
her dissent shall be entered in the minutes of such meeting or unless he or
she shall file his or her written dissent to such action with the person
acting as secretary of such meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary immediately after
the adjournment of such meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.

                                     - 9 -


                                   ARTICLE III

                                    OFFICERS

         Section 3.1. EXECUTIVE OFFICERS; ELECTION; QUALIFICATION; TERM OF
OFFICE. The Board of Directors may elect, if it so determines, a Chairman of the
Board from among its members. The Board of Directors shall elect a President and
a Secretary and may also elect one or more Executive Vice Presidents, Senior
Vice Presidents, Vice Presidents, Chief Executive Officer, Assistant Secretaries
or Assistant Treasurers. Any number of offices may be held by the same person.
Each officer shall hold office until the first meeting of the Board of Directors
after the annual meeting of stockholders next succeeding his or her election,
and until his or her successor is elected and qualified or until his or her
earlier death, resignation or removal.

         Section 3.2. RESIGNATION; REMOVAL; VACANCIES. Any officer may resign at
any time by giving written notice to the Chairman of the Board, if any, the
President or the Secretary. Unless otherwise stated in a notice of resignation,
it shall take effect when received by the officer to whom it is directed,
without any need for its acceptance. The Board of Directors may remove any
officer with or without cause at any time, but such removal shall be without
prejudice to the contractual rights of such officer, if any, with the
Corporation. A vacancy occurring in any office of the Corporation may be filled
for the unexpired portion of the term thereof by the Board of Directors at any
regular or special meeting.

         Section 3.3. POWERS AND DUTIES OF EXECUTIVE OFFICERS. The officers of
the Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed by the Board of Directors and, to the extent
not so provided, as generally pertain to their respective offices, subject to
the control of the Board of Directors. The Board of Directors may require any
officer, agent or employee to give security for the faithful performance of his
or her duties.

         Section 3.4. CHIEF EXECUTIVE OFFICER. Unless the Board of Directors
elects a Chairman of the Board who is designated as such, the President shall be
the Chief Executive Officer of the Corporation and shall in general supervise
and control all of the business affairs of the Corporation, subject to the
direction of the Board of Directors. The President may execute, in the name and
on behalf of the Corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors or a committee thereof has authorized
to be executed, except in cases where the execution shall have been expressly
delegated by the Board of Directors or a committee thereof to some other officer
or agent of the Corporation.

         The President may appoint persons assigned to a particular division or
other business unit of the Corporation as officers of such division or business
unit and having such titles as the President shall deem appropriate; provided
that the president or other equivalent senior officer of such division or
business unit shall be elected by the Board of Directors. Any such officer
appointed by the President may be removed by the President whenever in his or
her judgment the best interests of the Corporation would be served thereby. The
term of office, compensation, powers and duties and other terms of employment of
appointed officers shall be such as the


                                     - 10 -


President may from time to time deem proper, and the authority of such officers
shall be limited to acts pertaining to the business of such division or business
unit.

         Section 3.5. SECRETARY. In addition to such other duties, if any, as
may be assigned to the Secretary by the Board of Directors, the Chairman of the
Board, if any, or the President, the Secretary shall (i) keep the minutes of
proceedings of the stockholders, the Board of Directors and any committee of the
Board of Directors in one or more books provided for that purpose; (ii) see that
all notices are duly given in accordance with the provisions of these Amended
and Restated By-Laws or as required by law; (iii) be the custodian of the
records and seal of the Corporation; (iv) affix or cause to be affixed the seal
of the Corporation or a facsimile thereof, and attest the seal by his or her
signature, to all certificates for shares of stock of the Corporation and to all
other documents the execution of which under seal is authorized by the Board of
Directors; and (v) unless such duties have been delegated by the Board of
Directors to a transfer agent of the Corporation, keep or cause to be kept a
register of the name and address of each stockholder, as the same shall be
furnished to the Secretary by such stockholder, and have general charge of the
stock transfer records of the Corporation.

                                   ARTICLE IV

                        STOCK CERTIFICATES AND TRANSFERS

         Section 4.1. CERTIFICATE. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the Corporation by the Chairman
of the Board, if any, or the President or a Vice President, and by the Secretary
or an Assistant Secretary, of the Corporation, certifying the number of shares
owned by such stockholder in the Corporation. Any of or all the signatures on
the certificate may be facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if such officer, transfer agent or registrar continued to be such
at the date of issue.

         Section 4.2. LOST, STOLEN OR DESTROYED CERTIFICATES; ISSUANCE OF NEW
CERTIFICATES. The Corporation may issue a new certificate for stock in the place
of any certificate theretofore issued by it, alleged to have been lost, stolen
or destroyed, and the Corporation may require the owner of the lost, stolen or
destroyed certificate, or such stockholder's legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.

         Section 4.3 TRANSFERS OF STOCK. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for stock of the
Corporation duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer or, if the relevant stock certificate is
claimed to have been lost, stolen or destroyed, upon compliance with the
provisions of Section 4.2, and upon payment of applicable taxes with respect to
such transfer, and in compliance with any restrictions on transfer applicable to
such stock certificate or the shares represented thereby of which the
Corporation shall have notice and subject to such rules and regulations as the
Board of Directors may from time to time deem advisable concerning the


                                     - 11 -


transfer and registration of stock certificates, the Corporation shall issue a
new certificate or certificates for such stock to the person entitled thereto,
cancel the old certificate and record the transaction upon its books. Transfers
of stock shall be made only on the books of the Corporation by the registered
holder thereof or by such holder's attorney or successor duly authorized as
evidenced by documents filed with the Secretary or transfer agent of the
Corporation. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of transfer
if, when the certificate or certificates representing such stock are presented
to the Corporation for transfer, both the transferor and transferee request the
Corporation to do so.

         Section 4.4 STOCKHOLDERS OF RECORD. The Corporation shall be entitled
to treat the holder of record of any stock of the Corporation as the holder
thereof and shall not be bound to recognize any equitable or other claim to or
interest in such stock on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise required by the laws
of the State of Delaware.

                                    ARTICLE V

                                     NOTICES

         Section 5.1. MANNER OF NOTICE. Except as otherwise provided by law, the
Amended and Restated Certificate of Incorporation or these Amended and Restated
By-Laws, whenever notice is required to be given to any stockholder, director or
member of any committee of the Board of Directors, such notice may be given by
personal delivery or by depositing it, in a sealed envelope, in the United
States mails, first class, postage prepaid, addressed, or by delivering it to a
telegraph company, charges prepaid, for transmission, or by transmitting it via
telecopier, to such stockholder, director or member, either at the address of
such stockholder, director or member as it appears on the records of the
Corporation or, in the case of such a director or member, at his or her business
address; and such notice shall be deemed to be given at the time when it is thus
personally delivered, deposited, delivered or transmitted, as the case may be.
Such requirement for notice shall also be deemed satisfied, except in the case
of stockholder meetings, if actual notice is received orally or by other writing
by the person entitled thereto as far in advance of the event with respect to
which notice is being given as the minimum notice period required by law or
these Amended and Restated By-Laws.

         Section 5.2. DISPENSATION WITH NOTICE.

         (a) Whenever notice is required to be given by law, the Amended and
Restated Certificate of Incorporation or these Amended and Restated By-Laws to
any stockholder to whom (i) notice of two consecutive annual meetings of
stockholders, and all notices of meetings of stockholders or of the taking of
action by stockholders by written consent without a meeting to such stockholder
during the period between such two consecutive annual meetings, or (ii) all, and
at least two, payments (if sent by first class mail) of dividends or interest on
securities of the Corporation during a 12-month period, have been mailed
addressed to such stockholder at the address of such stockholder as shown on the
records of the Corporation and have been returned undeliverable, the giving of
such notice to such stockholder shall not be required. Any action or meeting
which shall be taken or held without notice to such stockholder shall have the
same


                                     - 12 -


force and effect as if such notice had been duly given. If any such stockholder
shall deliver to the Corporation a written notice setting forth the then current
address of such stockholder, the requirement that notice be given to such
stockholder shall be reinstated.

         (b) Whenever notice is required to be given by law, the Amended and
Restated Certificate of Incorporation or these Amended and Restated By-Laws to
any person with whom communication is unlawful, the giving of such notice to
such person shall not be required, and there shall be no duty to apply to any
governmental authority or agency for a license or permit to give such notice to
such person. Any action or meeting which shall be taken or held without notice
to any such person with whom communication is unlawful shall have the same force
and effect as if such notice had been duly given.

         Section 5.3. WAIVERS OF NOTICE. Any written waiver of notice, signed by
the person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular special meeting of the stockholders, directors, or members of a
committee or directors need be specified in any written waiver of notice.

                                   ARTICLE VI

                                     GENERAL

         Section 6.1. FISCAL YEAR. The fiscal year of the Corporation shall
begin on January 1 and end on December 31 of each year.

         Section 6.2. SEAL. The corporate seal shall have the name of the
Corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.

         Section 6.3. FORM OF RECORDS. Any records maintained by the Corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of photographs,
microphotographs, or any other information storage device, provided that the
records so kept can be converted into clearly legible form within a reasonable
time. The Corporation shall so convert any records so kept upon the request of
any person entitled to inspect the same.

         Section 6.4. INDEMNIFICATION.

                  (a) Each person who was or is a party or is threatened to be
made a party to or is involved in any action, suit or proceeding or alternative
dispute resolution procedure, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was a director or officer
serving at the request of the Corporation as a director, manager, officer,
partner, trustee, employee or agent of another corporation or of a partnership,
limited liability company, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, shall be indemnified and


                                     - 13 -


held harmless by the Corporation to the fullest extent authorized by the laws of
the State of Delaware as the same now or may hereafter exist (but, in the case
of any change, only to the extent that such change authorizes the Corporation to
provide broader indemnification rights than said law permitted the Corporation
to provide prior to such change) against all costs, charges, expenses,
liabilities and losses (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of his or her heirs, executors and
administrators. Until such time as there has been a final judgment to the
contrary, a person shall be presumed to be entitled to be indemnified under this
Section 6.4(a). The right to indemnification conferred in this Section shall be
a contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition upon receipt by the Corporation of an undertaking, by or on behalf
of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that the director or officer is not entitled to be
indemnified under this Section or otherwise. The Corporation may, by action of
its Board of Directors, provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing indemnification of
directors and officers.

                  (b) If a claim under subsection (a) of this Section is not
paid in full by the Corporation within thirty days after a written claim has
been received by the Corporation the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall also be entitled to be paid
the expense of prosecuting such claim. It shall be a defense to any action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the claimant has failed
to meet a standard of conduct which makes it permissible to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is permissible in the circumstances because he or she has met such
standard of conduct, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such standard of conduct, nor the termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall be a defense to the action or create a
presumption that the claimant has failed to meet the required standard of
conduct.

                  (c) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-laws, agreement, vote of stockholders or disinterested
directors or otherwise.

                  (d) The Corporation may maintain insurance, at its expense, to
protect itself and any director, manager, officer, partner, trustee, employee or
agent of the Corporation or another corporation, partnership, limited liability
company, joint venture, trust or other enterprise


                                     - 14 -


against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under Delaware law.

                  (e) To the extent that any director, officer, employee or
agent of the Corporation is by reason of such position, or a position with
another entity at the request of the Corporation, a witness in any proceeding,
he or she shall be indemnified against all costs and expenses actually and
reasonably incurred by him or her or on his or her behalf in connection
therewith.

                  (f) Notwithstanding any amendment of this section which may
have been approved by the stockholders, this section may be added to, altered,
amended or repealed pursuant to Section 6.5 of these by-laws.

                  (g) Any amendment, repeal or modification of any provision of
this Section by the stockholders or the directors of the Corporation shall not
adversely affect any right or protection of a director or officer of the
Corporation existing at the time of such amendment, repeal or modification.

         Section 6.5. AMENDMENT OF AMENDED AND RESTATED BY-LAWS. These Amended
and Restated By-Laws may be altered or repealed, and new Amended and Restated
By-Laws made, by the Board of Directors, but the stockholders may make
additional Amended and Restated By-Laws and may alter and repeal any Amended and
Restated By-Laws whether adopted by them or otherwise. In no event shall any of
the provisions of Sections 1.1, 1.2, 2.1, 2.2 or this Section 6.5 of these
Amended and Restated By-Laws be amended, altered or repealed without the vote of
the holders of at least two-thirds (2/3) of the Common Stock of the Corporation.


                                     - 15 -

EX-4.1

                                                                    EXHIBIT 4.1

NUMBER                                                                   SHARES


INCORPORATED UNDER THE LAWS                            OF THE STATE OF DELAWARE


                                  COLLEGIS, INC.


THIS CERTIFIES THAT _______________________________________ IS THE OWNER OF
__________________________________________________ FULL PAID AND NON-ASSESSABLE


TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY AUTHORIZED
ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.
IN WITNESS WHEREOF, THE SAID CORPORATION HAS CAUSED THIS CERTIFICATE TO BE
SIGNED BY ITS DULY AUTHORIZED OFFICERS AND SEALED WITH THE SEAL OF THE
CORPORATION,

THIS ________________________ DAY, OF _________________A.D._____


_________________________________                 _____________________________
                        SECRETARY                                     PRESIDENT


            FOR VALUE RECEIVED,____HEREBY SELL, ASSIGN AND TRANSFER
            UNTO ___________________________________________________
            __________________________________________________SHARES
            REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
            IRREVOCABLY CONSTITUTE AND APPOINT
            ________________________________________________ATTORNEY
            TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN
            NAMED CORPORATION WITH FULL POWER OF SUBSTITUTION IN
            THE PREMISES.
                DATED_____________________
                     IN PRESENCE OF

            ______________________________    _____________________


                   NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
              MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE
             FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
              ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.


                             THIS SPACE IS NOT TO BE
                               COVERED IN ANY WAY


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




                              (RESERVE THIS SPACE TO PASTE BACK CANCELLED STOCK CERTIFICATE)



- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
                                                                IF NOT AN ORIGINAL ISSUE SHOW DETAILS OF TRANSFER BELOW
                                                   --------------------------------------------------------------------------------
                                                                               ORIGINAL CERTIFICATE   NO. OF ORIGL.  NO. OF SHRS.
CERTIFICATE NO. __________FOR_______________SHARES   TRANSFERRED FROM             NO.      DATE          SHARES         TRANSF'D
                                                                               --------------------   -------------  --------------

            ______________________________________   ______________________________________________________________________________

                     DATED________________________   ______________________________________________________________________________

ISSUED TO ________________________________________   ______________________________________________________________________________

          ________________________________________   ______________________________________________________________________________

          ________________________________________   ______________________________________________________________________________
                                                             IF THIS CERTIFICATE IS SURRENDERED FOR TRANSFER SHOW DETAILS
          ________________________________________   ______________________________________________________________________________
                                                                                      NO. OF NEW             NO. OF SHARES
                                                       NEW CERTIFICATE ISSUED TO     CERTIFICATE              TRANSFERRED
                                                                                   ----------------   -----------------------------

DATE CERTIFICATE RECEIVED ________________________   ______________________________________________________________________________

         _________________________________________   ______________________________________________________________________________

DATE CERTIFICATE SURRENDERED _____________________   ______________________________________________________________________________

         _________________________________________   ______________________________________________________________________________

         _________________________________________   ______________________________________________________________________________

EX-5.1

                                                                    EXHIBIT 5.1




                             [Winston & Strawn Letterhead]





                                    July 10, 2002



Collegis, Inc.
2300 Maitland Center Parkway
Suite 340
Maitland, Florida 32751

                 RE:    REGISTRATION STATEMENT ON FORM S-1 (FILE NO. 333-89474)

Dear Sir or Madam:

      We refer to the Registration Statement on Form S-1, File No. 333-89474
(as amended the "REGISTRATION STATEMENT"), filed on May 31, 2002 by Collegis,
Inc. (the "COMPANY") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, (the "ACT"), relating to the registration
and sale of shares of Common Stock, $0.01 par value (the "SHARES"), of the
Company by the Company and certain selling stockholders.

      In connection with this opinion, we have examined and are familiar with
an original or copies, certified or otherwise identified to our satisfaction,
of (i) the Registration Statement; (ii) the Certificate of Incorporation of
the Company, as amended and as currently in effect; (iii) the By-laws of the
Company, as amended and as currently in effect; and (iv) resolutions of the
Board of Directors of the Company relating to, among other things, the filing
of the Registration Statement.  We have also examined and relied upon such
other certificates, documents and records as we have deemed necessary or
appropriate as a basis for the opinion set forth below.

      In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
and records submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents.  As to any facts
material to this opinion which we did not independently establish or verify,
we have relied upon oral or written statements and representations of
officers and other representatives of the Company and others.

      Based on and subject to the foregoing, we are of the opinion that when
the Registration Statement has become effective under the Act and the Shares
are issued and sold as contemplated by the Registration Statement, the Shares
will be validly issued, fully paid and non-assessable.




Collegis, Inc.
July 10, 2002
Page 2


      The foregoing opinion is limited to the federal laws of the United
States and the General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.

      We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Registration Statement.  In giving such consent, we do not
concede that we are experts within the meaning of the Act or the rules and
regulations thereunder or that this consent is required by Section 7 of the
Act. Very truly yours, Winston & Strawn


                                       Very truly yours,


                                       Winston & Strawn

EX-10.3

                                                                    Exhibit 10.3

                    COLLEGIS, INC. 2002 STOCK INCENTIVE PLAN

ARTICLE 1.  ESTABLISHMENT, OBJECTIVES AND DURATION

         1.1  ESTABLISHMENT OF THE PLAN. Collegis, Inc., a Delaware corporation,
has adopted this "Collegis, Inc. 2002 Stock Incentive Plan." Capitalized terms
used herein will have the meanings given to them in Article 2. The Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, and Performance Shares. In addition, the
Plan provides the opportunity for the deferral of the payment of salary, bonuses
and other forms of incentive compensation.

         1.2  OBJECTIVES OF THE PLAN. The Plan's objectives are to optimize the
profitability and growth of the Company through long-term incentives that are
consistent with the Company's objectives and that link Participants' interests
to those of the Company's stockholders; to provide Participants with an
incentive for excellence in individual performance; to promote teamwork among
Participants; and to give the Company a significant advantage in attracting and
retaining officers, key employees and directors.

         1.3  EFFECTIVE DATE AND TERM OF THE PLAN.

                  (a) The Plan will be effective on the effective date of the
         Company's Registration Statement on Form S-1 for the initial public
         offering of the Company's Common Stock. No Option granted under the
         Plan may be exercised, and no Shares will be issued under the Plan
         until the Company's stockholders approve the Plan. The Board (or its
         delegate) may grant Awards and issue Shares under the Plan at any time
         after the Effective Date and before the termination of the Plan.

                  (b) Subject to earlier termination pursuant to Section 13.1,
         the Plan will terminate upon the earliest of (i) the tenth anniversary
         of the Effective Date, (ii) the tenth anniversary of the date the
         Company's stockholders approve the Plan, or (iii) the date on which all
         Shares available for issuance under the Plan have been issued pursuant
         to the exercise of Options or the Award of Shares (whether vested or
         unvested) under the Plan. Upon such Plan termination, all Awards
         outstanding under the Plan will continue to have full force and effect
         in accordance with the terms of the Award Agreement evidencing such
         Award.

ARTICLE 2.  DEFINITIONS

         Whenever used in the Plan, the following terms have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
will be capitalized:

         "ADVISOR" means a consultant, advisor or other independent service
provider to any of the Company Parties, or an individual who is not an Employee
but is an employee of one of the Company Parties.

         "AFFILIATE" means any corporation that is a parent or subsidiary
corporation (as Code Sections 424(e) and (f) define those terms) with respect to
the Company.



         "AWARD" means, individually or collectively, a grant under this Plan to
a Participant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, or Performance Shares.

         "AWARD AGREEMENT" means an agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award or
Awards granted to the Participant.

         "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

         "CAUSE" will have the meaning set forth in any employment, consulting,
or other agreement between any of the Company Parties and the Participant. If
there is no employment, consulting, or other agreement between any of the
Company Parties and the Participant, or if such agreement does not define
"Cause," then "Cause" will mean the Participant's (i) theft or embezzlement, or
attempted theft or embezzlement, of money or property of any of the Company
Parties, perpetration or attempted perpetration of fraud, or participation in a
fraud or attempted fraud, on any of the Company Parties, or unauthorized
appropriation of, or attempt to misappropriate, any tangible or intangible
assets or property of any of the Company Parties, (ii) act or acts of
disloyalty, moral turpitude or material misconduct that is injurious to the
interest, property, value, operations, business or reputation of any of the
Company Parties, or conviction of a crime that results in injury to any of the
Company Parties or (iii) repeated refusal (other than by reason of Disability)
to carry out reasonable instructions from his or her superiors or the Board.

         "CHANGE IN CONTROL" means the occurrence of any of the following
events:

                  (a) An acquisition after the Effective Date by a Person of
         beneficial ownership (within the meaning of Rule 13d-3 promulgated
         under the Exchange Act) of 20% or more of either (a) the then
         outstanding shares of common stock of the Company (the "OUTSTANDING
         COMPANY COMMON STOCK") or (b) the combined voting power of the then
         outstanding voting securities of the Company entitled to vote generally
         in the election of directors (the "OUTSTANDING COMPANY VOTING
         SECURITIES"); excluding, however, the following: (i) any acquisition
         directly from the Company, other than an acquisition by virtue of the
         exercise of a conversion privilege unless the security being so
         converted was itself acquired directly from the Company or approved by
         the Incumbent Board (as defined below), (ii) any acquisition by the
         Company, (iii) any acquisition by any employee benefit plan (or related
         trust) sponsored or maintained by the Company or any entity controlled
         by the Company, (iv) any acquisition by an underwriter temporarily
         holding Company securities pursuant to an offering of such securities,
         or (v) any acquisition pursuant to a transaction that complies with
         clauses (i), (ii) and (iii) of subsection (c) of this definition; or

                  (b) A change in the composition of the Board such that the
         individuals who, as of the Effective Date, constitute the Board (such
         Board shall be hereinafter referred to as the "INCUMBENT BOARD") cease
         for any reason to constitute at least a majority of the Board;
         provided, however, for purposes of this Section, that any individual
         who becomes a member of the Board subsequent to the Effective Date,
         whose election, or nomination


- - 2 -


         for election by the Company's share owners, was approved by a vote of
         at least a majority of those individuals who are members of the Board
         and who were also members of the Incumbent Board (or deemed to be such
         pursuant to this proviso), either by a specific vote or by approval of
         the proxy statement of the Company in which such person is named as a
         nominee for director, without written objection to such nomination
         shall be considered as though such individual were a member of the
         Incumbent Board; but, provided further, that any such individual whose
         initial assumption of office occurs as a result of either an actual or
         threatened election contest with respect to the election or removal of
         directors or other actual or threatened solicitation of proxies or
         consents by or on behalf of a Person other than the Board shall not be
         so considered as a member of the Incumbent Board; or

                  (c) Consummation of a reorganization, merger or consolidation
         (or similar transaction), a sale or other disposition of all or
         substantially all of the assets of the Company, or the acquisition of
         assets or stock of another entity ("CORPORATE TRANSACTION"); in each
         case, unless immediately following such Corporate Transaction (i) all
         or substantially all of the individuals and entities who are the
         beneficial owners, respectively, of the Outstanding Company Common
         Stock and Outstanding Company Voting Securities immediately prior to
         such Corporate Transaction will beneficially own, directly or
         indirectly, more than 60% of, respectively, the outstanding shares of
         common stock, and the combined voting power of the then outstanding
         voting securities entitled to vote generally in the election of
         directors, as the case may be, of the corporation resulting from such
         Corporate Transaction (including, without limitation, a corporation
         which as a result of such transaction owns the Company or all or
         substantially all of the Company's assets either directly or through
         one or more subsidiaries) in substantially the same proportions as
         their ownership, immediately prior to such Corporate Transaction, of
         the Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (ii) no Person (other than the Company,
         any employee benefit plan (or related trust) of the Company or such
         corporation resulting from such Corporate Transaction) will
         beneficially own, directly or indirectly, 20% or more of, respectively,
         the outstanding shares of common stock of the corporation resulting
         from such Corporate Transaction or the combined voting power of the
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors, except to the extent that such
         ownership existed prior to the Corporate Transaction, and (iii)
         individuals who were members of the Incumbent Board at the time of the
         Board's approval of the execution of the initial agreement providing
         for such Corporate Transaction will constitute at least a majority of
         the members of the board of directors of the corporation resulting from
         such Corporate Transaction; or

                  (d) The approval by the stockholders of the Company of a
         complete liquidation or dissolution of the Company.

However, in no event will a Change in Control be deemed to have occurred, with
respect to a Participant, if the Participant is part of a purchasing group that
consummates the Change in Control transaction. A Participant will be deemed
"part of a purchasing group" for purposes of the preceding sentence if the
Participant is an equity participant in the purchasing company or group (except:
(i) passive ownership of less than 2% of the stock of the purchasing company; or


- - 3 -


(ii) ownership of equity participation in the purchasing company or group that
is otherwise not significant, as determined prior to the Change in Control by a
majority of the non-employee continuing Directors).

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

         "COMMITTEE" means, as specified in Article 3, the Compensation
Committee of the Board or such other committee as may be appointed by the Board
to administer the Plan.

         "COMMON STOCK" means the Company's Common Stock, par value $0.01 per
share.

         "COMPANY" means Collegis, Inc., a Delaware corporation, and any
successor thereto as provided in Article 15.

         "COMPANY PARTIES" means, collectively and without duplication, the
Company and any of its Affiliates.

         "DESIGNATED BENEFICIARY" means the Person or Persons the Participant
designates (who may be designated contingently or successively) from time to
time on a signed form prescribed by the Board, filed with the Company during the
Participant's lifetime, as the beneficiary of any amounts or benefits the
Participant owns or is to receive under the Plan. Each beneficiary designation
will revoke all prior designations by the same Participant. If the Participant
has not designated a beneficiary under the Plan, or if the Participant's
Designated Beneficiary is not living on the relevant date hereunder, the Company
will treat the Participant's estate as the Designated Beneficiary.

         "DIRECTOR" means any individual who is a member of the Board of
Directors.

         "DISABILITY" will have the meaning set forth in any employment,
consulting, or other agreement between any of the Company Parties and the
Participant. If there is no employment, consulting, or other agreement between
any of the Company Parties and the Participant, or if such agreement does not
define "Disability," then "Disability" will mean (i) any permanent physical or
mental incapacity or disability rendering the Participant unable or unfit to
perform effectively the duties and obligations of the Participant's Service, or
(ii) any illness, accident, injury, physical or mental incapacity or other
disability, which condition has rendered the Participant unable or unfit to
perform effectively the duties and obligations of the Participant's Service for
a period of at least 90 days in any 12-consecutive month period, in either case,
as determined in the Committee's good faith judgment.

         "EFFECTIVE DATE" means the effective date of the Company's Registration
Statement on Form S-1 for the initial public offering of the Company's Common
Stock.

         "EMPLOYEE" means a person employed by the Company or an Affiliate in a
common law employee-employer relationship.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.


- - 4 -


         "EXERCISE PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

         "FAIR MARKET VALUE" means as of any given date: (i) the average of the
high and low trading prices of the Common Stock on the national securities
exchange on which the Common Stock is listed (if the Common Stock is so listed)
or on the Nasdaq Stock Market (if the Common Stock is regularly quoted on the
Nasdaq Stock Market); (ii) if not so listed or regularly quoted, the mean
between the closing bid and asked prices of publicly traded Common Stock in the
over-the-counter market; and (iii) if such bid and asked prices are not
available, as reported by any nationally recognized quotation service selected
by the Committee or as determined by the Committee. Notwithstanding the
foregoing, for Awards granted in connection with, and as of the effective date
of the Company's Registration Statement on Form S-1 for the initial public
offering of the Company's Common Stock, "Fair Market Value" will be the "Price
to Public" as set forth in the final prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424 under the Securities Act.

         "GOOD REASON" will have the meaning set forth in any employment,
consulting, or other agreement between any of the Company Parties and the
Participant. If there is no employment, consulting, or other agreement between
any of the Company Parties and the Participant, or if such agreement does not
define "Good Reason," then "Good Reason" will mean the Company, without the
Participant's consent: (a) materially breaches any employment agreement, (b)
materially reduces the Participant's base salary, (c) assigns the Participant to
a position, responsibilities or duties of a materially lesser status or degree
of responsibility than the Participant's position, responsibilities or duties as
of the date of the applicable Award Agreement, or (d) requires that Participant
be based anywhere other than the Participant's location or locations of
employment duties as of the date of the applicable Award Agreement.

         "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 that is designated as an Incentive Stock Option and that
is intended to meet the requirements of Code Section 422.

         "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 that is not intended to meet the requirements of
Code Section 422.

         "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6.

         "PARTICIPANT" means a Person who has been selected to receive an Award
under the Plan pursuant to Section 5.2, or who has an outstanding Award granted
under the Plan.

         "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m) and any
regulations promulgated thereunder.

         "PERFORMANCE PERIOD" means the time period during which performance
objectives must be met in order for a Participant to earn Performance Shares
granted under Article 9.


- - 5 -


         "PERFORMANCE SHARE" means an Award with an initial value equal to the
Fair Market Value on the date of grant that is based on the Participant's
attainment of performance objectives, as described in Article 9.

         "PERSON" has the meaning ascribed to that term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof.

         "PLAN" means the Collegis, Inc. 2002 Stock Incentive Plan, as set forth
in this document.

         "RESTRICTION PERIOD" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance objectives, or the occurrence of other events as
determined by the Committee, at its discretion), and/or the Restricted Stock is
not vested.

         "RESTRICTED STOCK" means a contingent grant of stock awarded to a
Participant pursuant to Article 8.

         "RETIREMENT" will have the meaning set forth in any employment,
consulting, or other agreement between any of the Company Parties and the
Participant. If there is no employment, consulting, or other agreement between
any of the Company Parties and the Participant, or if such agreement does not
define "Retirement," then "Retirement" will mean the normal retirement age
specified under the Company's tax-qualified retirement plan.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, or any successor act thereto.

         "SERVICE" means the provision of services in the capacity of (i) an
Employee, (ii) a non-employee member of the Company's Board or the board of
directors of any of the Company Parties, or (iii) an Advisor.

         "SHARES" means the shares of the Company's Common Stock underlying an
Award or acquired pursuant to an Award.

         "STOCK APPRECIATION RIGHT" or "SAR" means an Award, granted alone or in
connection with a related Option, designated as an SAR pursuant to the terms of
Article 7.

         "TEN PERCENT OWNER" means an individual who, at the time an Award is
granted under this Plan, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Affiliate.

ARTICLE 3.  ADMINISTRATION

         3.1  PLAN ADMINISTRATION. The Plan will be administered by the
Compensation Committee of the Board, or by any other Committee appointed by the
Board, which Committee (unless otherwise determined by the Board) will satisfy:
(a) the "outside director" provisions of Code Section 162(m), or any successor
regulation or provision and (b) the "non-employee director" provisions of Rule
16b-3 promulgated under the Exchange Act. The members of the


- - 6 -


Committee will be appointed from time to time by, and serve at the discretion
of, the Board of Directors. The Committee will act by a majority of its members
at the time in office and eligible to vote on any particular matter, and
Committee action may be taken either by a vote at a meeting or in writing
without a meeting.

         3.2  AUTHORITY OF THE COMMITTEE. Except as limited by law and subject
to the provisions of this Plan, the Committee will have full power to: select
eligible persons to participate in the Plan; determine the sizes and types of
Awards; determine the class of the Company's Shares to which an Award relates;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 13) amend the
terms and conditions of any outstanding Award to the extent they are within the
discretion of the Committee as provided in the Plan. Further, the Committee will
make all other determinations that may be necessary or advisable to administer
the Plan. As permitted by law and consistent with Section 3.1, the Committee may
delegate some or all of its authority under the Plan.

         3.3  DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan will be final, conclusive and
binding on all persons, including, without limitation, the Company, its Board of
Directors, its stockholders, all Affiliates, Participants and their estates and
beneficiaries.

         3.4  AUTHORITY OF DESIGNATED OFFICERS. Notwithstanding any provision of
the Plan to the contrary, the Company may, by resolution of the Board, authorize
one or more officers of the Company or any Affiliate to designate Employees to
receive Awards under the Plan and to determine the number of Shares subject to
such Awards; provided, however, that the resolution authorizing any officer or
officers must specify the total number of Shares subject to Awards that the
officer or officers may award. No officer of officer may designate himself or
herself or a Director as a recipient of an Award pursuant to this Section 3.4.

ARTICLE 4.  SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

         4.1  NUMBER OF SHARES AVAILABLE FOR AWARDS. Subject to adjustment as
provided below and in Section 4.3, the maximum number of Shares that may be
issued or transferred to Participants under the Plan will be 2,500,000; provided
that, beginning January 1, 2003, and effective each January 1 thereafter, the
maximum number of Shares that may be issued or transferred to Participants under
the Plan will increase by an amount equal to two percent (2%) of the number of
Company Shares then outstanding (on a fully-diluted basis, counting all Shares
subject to Awards under this Plan as outstanding). Notwithstanding the
foregoing, the maximum number of Shares that may be issued or transferred to
Participants as Incentive Stock Options is 2,500,000, and the maximum number of
Shares that may be issued or transferred to Participants under Restricted Stock
is 2,500,000. The maximum number of Shares and Share equivalent units that may
be granted during any calendar year to any one Participant under all types of
Awards available under the Plan is 2,000,000 (on an aggregate basis); the
foregoing limit will apply whether the Awards are paid in Shares or in cash. All
limits described in this Section 4.1 are subject to adjustment as provided in
Section 4.3


- - 7 -


         4.2  LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires or lapses for any reason, any Shares subject to the Award
will again be available for the grant of an Award under the Plan.

         4.3  ADJUSTMENTS IN AUTHORIZED SHARES.

                  (a) If the Shares, as currently constituted, are changed into
         or exchanged for a different number or kind of shares of stock or other
         securities of the Company or of another corporation (whether because of
         merger, consolidation, recapitalization, reclassification, split,
         reverse split, combination of shares, or otherwise) or if the number of
         Shares is increased through the payment of a stock dividend, then the
         Committee will substitute for or add to each Share previously
         appropriated, later subject to, or which may become subject to, an
         Award, the number and kind of shares of stock or other securities into
         which each outstanding Share was changed for which each such Share was
         exchanged, or to which each such Share is entitled, as the case may be.
         The Committee, in its sole discretion, also may amend outstanding
         Awards as to price and other terms, to the extent necessary to reflect
         the events described above. If there is any other change in the number
         or kind of the outstanding Shares, of any stock or other securities
         into which the outstanding Shares have been changed, or for which they
         have been exchanged, the Committee, in its sole discretion, may adjust
         any Award already granted or which may be afterward granted.

                  (b) Fractional Shares resulting from any adjustment in Awards
         pursuant to this Section 4.3 may be settled in cash or otherwise as the
         Committee determines. The Company will give notice of any adjustment to
         each Participant who holds an Award that has been adjusted and the
         adjustment (whether or not such notice is given) will be effective and
         binding for all Plan purposes.

ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

         5.1  ELIGIBILITY. The following persons are eligible to receive Awards
under this Plan:

                  (a) any Employee;

                  (b) any Advisor; and

                  (c) any non-employee member of the Company's Board or the
         board of directors of any of the Company Parties.

         5.2  ACTUAL PARTICIPATION. Except as provided in Section 3.4, the
Committee will determine, within the limits set forth below, those eligible
persons to whom it will grant Awards. Each eligible person who has been selected
to receive an Award will become a Participant in the Plan upon execution of an
Award Agreement.

ARTICLE 6.  STOCK OPTIONS

         6.1  GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
the Committee may grant Options to any Employee, Advisor or non-Employee
Director in the


- - 8 -


number, and upon the terms, and at any time and from time to time, as the
Committee determines and set forth in the Award Agreement.

         6.2  AWARD AGREEMENT. Each Option grant will be evidenced by an Award
Agreement that specifies the duration of the Option, the number of Shares to
which the Option pertains, the class of the Company's Common Stock to which the
Option pertains, the manner, time, and rate of exercise and/or vesting of the
Option, and such other provisions as the Committee determines. The Award
Agreement will also specify whether the Option is intended to be an ISO or an
NQSO, and whether reload options will be granted.

         6.3  EXERCISE PRICE. Each Option grant and Award Agreement will specify
the Exercise Price for each Share subject to an Option, which Exercise Price
will be determined by the Committee and, if the Option is an ISO, will be at
least 100% of the Share's Fair Market Value on the date the Option is granted.
If the Option is an ISO and the Employee to whom the Option is granted is a Ten
Percent Owner, the Exercise Price for each Share subject to an Option will be at
least 110% of the Share's Fair Market Value on the date the Option is granted.

         6.4  DURATION OF OPTIONS. Each Option will expire at the time
determined by the Committee at the time of grant and specified in the Award
Agreement, but no later than the tenth anniversary of the date of grant.

         If the Option is an ISO and the Employee to whom the Option is granted
is a Ten Percent Owner, the Option will expire upon the earlier of (i) the time
specified by the Committee in the Award Agreement, or (ii) the fifth anniversary
of the date of grant.

         6.5  DIVIDEND EQUIVALENTS. The Committee may, but shall not be required
to, grant payments in connection with Options that are equivalent to dividends
declared and paid on the Shares underlying the Options. Such dividend equivalent
payments may be made in cash or in Shares, upon such terms as the Committee, in
its sole discretion, deems appropriate.

         6.6  EXERCISE OF OPTIONS. Options will be vested and exercisable at
such times and be subject to such restrictions and conditions as the Committee
in each instance approves, which need not be the same for each Award or for each
Participant, and sets forth in the Award Agreement.

         6.7  PAYMENT. The holder of an Option may exercise the Option only by
delivering a written notice of exercise to the Company setting forth the number
of Shares as to which the Option is to be exercised, together with full payment
at the Exercise Price for the Shares as to which the Option is exercised and any
withholding tax relating to the exercise of the Option.

         The Exercise Price and any related withholding taxes shall be payable
to the Company in full: (i) in cash, or its equivalent, in United States
dollars; (ii) if permitted by the governing Award Agreement, by tendering,
either by actual delivery or by attestation, of shares of Common Stock the
Participant has held for a period sufficient to avoid a charge to the Company's
earnings for financial reporting purposes, with such shares to be valued at the
Fair Market Value on the date of exercise; or (iii) in any combination of cash,
certified or cashier's check and shares of Common Stock described in clause
(ii).


- - 9 -


         The Committee may permit a Participant to elect to pay the Exercise
Price and any applicable withholding taxes through a special sale and remittance
procedure pursuant to which the Participant concurrently provides irrevocable
written instructions to (i) a Company-designated brokerage firm to effect the
immediate sale of the purchased Shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased Shares plus all applicable
federal, state and local income and employment taxes required to be withheld by
the Company by reason of such exercise, and (ii) the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order
to complete the sale. Cashless exercise must meet the requirements of the
Federal Reserve Board's Regulation T and any applicable securities law
restrictions.

         The Company will issue, in the name of the Participant (or, if
applicable, the legatee(s), executor(s), personal representative(s), or
distributee(s) of a deceased Participant), stock certificates representing the
total number of Shares issuable pursuant to the exercise of any Option as soon
as reasonably practicable after such exercise.

         6.8  RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose
such restrictions on any Shares acquired through exercise of an Option as it
deems necessary or advisable, including, without limitation, restrictions under
applicable federal securities laws, under the requirements of any stock exchange
or market upon which the Shares are then listed and/or traded, and under any
blue sky or state securities laws applicable to the Shares.

         6.9  TERMINATION OF SERVICE. Each Option Award Agreement will set forth
the extent to which the Participant has the right to exercise the Option after
his or her termination of Service. These terms will be determined by the
Committee in its sole discretion, need not be uniform among all Options, and may
reflect, among other things, distinctions based on the reasons for termination
of Service.

         6.10  NONTRANSFERABILITY OF OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all Options will be
exercisable during the Participant's lifetime only by the Participant or his or
her guardian or legal representative. The Committee may, in its discretion,
require a Participant's guardian or legal representative to supply it with the
evidence the Committee deems necessary to establish the authority of the
guardian or legal representative to act on behalf of the Participant.

         6.11  RELOAD OPTIONS. The Committee may provide, at the time of grant
of an Option, in its discretion, for the grant to a Participant who exercises
all or any portion of an Option (the "EXERCISED OPTION") and who pays all or
part of such Exercise Price with Shares, of an additional option (a "RELOAD
OPTION") for a number of Shares equal to the sum (the "RELOAD NUMBER") of the
number of Shares tendered or withheld in payment of such Exercise Price for the
Exercised Option plus, if so provided by the Committee, the number of Shares, if
any, tendered or withheld by the Participant or withheld by the Company in
connection with the exercise of the Exercised Option to satisfy any federal,
state or local tax withholding requirements. The terms of each Reload Option,
including the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the


- - 10 -


Exercised Option to which it relates, except that (i) the grant date for each
Reload Option shall be the date of exercise of the Exercised Option to which it
relates and (ii) the Exercise Price for each Reload Option shall be the Fair
Market Value of the Common Stock on the grant date of the Reload Option.

         6.12  LIMITATION ON GRANT OF INCENTIVE STOCK OPTIONS. The Committee may
grant Incentive Stock Options only to Employees. The Committee will not grant an
Option under this Plan as an incentive stock option if it would cause the
aggregate fair market value of stock with respect to which incentive options are
exercisable by the Participant for the first time during a calendar year (under
all plans of the Company and its Affiliates) to exceed $100,000.

ARTICLE 7.  STOCK APPRECIATION RIGHTS

         7.1  GRANT OF SARS. Subject to the terms and conditions of the Plan,
the Committee may grant SARs to Employees, Advisors and/or non-employee
Directors at any time and from time to time, as it determines. Within the limits
of Article 4, the Committee will have sole discretion to determine the number of
SARs granted to any Employee, Advisor and/or non-employee Director and,
consistent with the provisions of the Plan, to determine the terms and
conditions pertaining to SARs. The grant price of an SAR will equal the Fair
Market Value of a Share on the date of grant, and will be specified in the Award
Agreement.

         7.2  EXERCISE OF SARS. SARs may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes and sets forth in the
Award Agreement.

         7.3  AWARD AGREEMENT. Each SAR grant will be evidenced by an Award
Agreement that specifies the grant price, the term of the SAR and such other
provisions as the Committee determines.

         7.4  TERM OF SARS. The term of an SAR will be determined by the
Committee, in its sole discretion and set forth in the Award Agreement, but may
not exceed ten years.

         7.5  PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant will
be entitled to receive payment from the Company in an amount determined by
multiplying:

                  (a) the excess (or some portion of the excess as determined at
         the time of the grant by the Committee and specified in the Award
         Agreement) if any, of the Fair Market Value on the date of exercise of
         the SAR over the grant price specified in the Award Agreement; by

                  (b) the number of Shares as to which the SAR is exercised.

         At the discretion of the Participant, the payment upon SAR exercise may
be made in cash, in Shares of equivalent Fair Market Value or in some
combination of the two.

         7.6  TERMINATION OF SERVICE. Each SAR Award Agreement will set forth
the extent to which the Participant has the right to exercise the SAR after his
or her termination of Service. These terms will be determined by the Committee
in its sole discretion, need not be uniform


- - 11 -


among all SARs issued under the Plan, and may reflect, among other things,
distinctions based on the reasons for termination of Service.

         7.7  NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, all SARs will be exercisable during the
Participant's lifetime only by the Participant or the Participant's guardian or
legal representative. The Committee may, in its discretion, require a
Participant's guardian or legal representative to supply it with evidence the
Committee deems necessary to establish the authority of the guardian or legal
representative to act on behalf of the Participant.

ARTICLE 8.  RESTRICTED STOCK

         8.1  GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of
the Plan, the Committee may, at any time and from time to time, grant Restricted
Stock to Employees, Advisors, and/or non-employee Directors, in such amounts as
the Committee determines.

         8.2  DEFERRAL OF COMPENSATION INTO RESTRICTED STOCK. Subject to the
terms and provisions of the Plan, the Committee may, at any time and from time
to time, allow (or require, as to bonuses) selected Employees or non-employee
Directors to defer the payment of any portion of their fees, salary and/or
annual bonuses pursuant to this Section 8.2. A Participant's deferral under this
Section 8.2 will be credited to the Participant in the form of Shares of
Restricted Stock. The Committee will establish rules and procedures for the
deferrals, as it deems appropriate.

         In consideration for forgoing compensation, the dollar amount deferred
by a Participant may be increased by such percentage as the Committee may
determine for purposes of determining the number of Shares of Restricted Stock
to grant the Participant. If a Participant's compensation is deferred under this
Section 8.2, he or she will be credited, as of the date specified in the Award
Agreement, with a number of Shares of Restricted Stock equal to the amount of
the deferral (increased as described above) divided by the Fair Market Value of
the Common Stock on that date.

         8.3  AWARD AGREEMENT. Each Restricted Stock grant will be evidenced by
an Award Agreement that specifies the Restriction Periods, the number of Shares
granted, and such other provisions as the Committee determines.

         8.4  NONTRANSFERABILITY OF RESTRICTED STOCK. The Restricted Stock
granted herein may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution, until the end of the applicable Restriction Period as specified in
the Award Agreement, or upon earlier satisfaction of any other conditions
specified by the Committee in its sole discretion and set forth in the Award
Agreement. All rights with respect to Restricted Stock will be available during
the Participant's lifetime only to the Participant or the Participant's guardian
or legal representative. The Committee may, in its discretion, require a
Participant's guardian or legal representative to supply it with evidence the


- - 12 -


Committee deems necessary to establish the authority of the guardian or legal
representative to act on behalf of the Participant.

         8.5  OTHER RESTRICTIONS. The Committee may impose such other conditions
and/or restrictions on any Restricted Stock as it deems advisable and sets forth
in the applicable Award Agreement including, without limitation, restrictions
based upon the achievement of specific performance objectives (Company-wide,
business unit, and/or individual), time-based restrictions on vesting following
the attainment of the performance objectives, and/or restrictions under
applicable federal or state securities laws. The Committee may provide that
restrictions established under this Section 8.5 as to any given Award will lapse
all at once or in installments.

         The Company may retain the certificates representing Shares of
Restricted Stock in its possession until all conditions and/or restrictions
applicable to the Shares have been satisfied.

         8.6  PAYMENT OF AWARDS. Except as otherwise provided in this Article 8,
Shares covered by each Restricted Stock grant will become freely transferable by
the Participant after the last day of the applicable Restriction Period.

         8.7  VOTING RIGHTS. The applicable Award Agreement may specify that,
during the Restriction Period, Participants holding Shares of Restricted Stock
may exercise full voting rights with respect to those Shares.

         8.8  DIVIDENDS AND OTHER DISTRIBUTIONS. The applicable Award Agreement
may specify that, during the Restriction Period, Participants awarded Shares of
Restricted Stock thereunder will be credited with regular cash dividends paid on
those Shares. Dividends may be paid currently, accrued as contingent cash
obligations, or converted into additional Shares of Restricted Stock, upon such
terms as the Committee establishes and sets forth in the Award Agreement.

         The Committee may specify in the applicable Award Agreement, any
restrictions it deems advisable to the crediting and payment of dividends and
other distributions. Without limiting the generality of the preceding sentence,
if the grant or vesting of Restricted Stock is designed to qualify for the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to the Restricted
Stock, so that the dividends and/or the Restricted Stock continue to be eligible
for the Performance-Based Exception.

         8.9  TERMINATION OF SERVICE. Each Award Agreement will set forth the
extent to which the Participant has the right to retain unvested Restricted
Stock after his or her termination of Service. These terms will be determined by
the Committee in its sole discretion, need not be uniform among all Awards of
Restricted Stock, and may reflect, among other things, distinctions based on the
reasons for termination of Service.

ARTICLE 9.  PERFORMANCE SHARES

         9.1  GRANT OF PERFORMANCE SHARES. Subject to the terms of the Plan, the
Committee may grant Performance Shares to Participants in such amounts and upon
such terms, and at any time and from time to time, as the Committee determines
and sets forth in an Award Agreement.


- - 13 -


         9.2  VALUE OF PERFORMANCE SHARES. Each Performance Share will have an
initial value equal to the Fair Market Value on the date of grant. The Committee
will set performance objectives in its discretion that, depending on the extent
to which they are met, will determine the number and/or value of Performance
Shares that will be paid out to the Participant. For purposes of this Article 9,
the time period during which the performance objectives must be met will be
called a "PERFORMANCE PERIOD" and will be determined by the Committee in its
discretion and set forth in an Award Agreement.

         9.3  EARNING OF PERFORMANCE SHARES. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of Performance
Shares will be entitled to receive payout on the number and value of Performance
Shares earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding performance objectives
have been achieved.

         9.4  AWARD AGREEMENT. Each grant of Performance Shares will be
evidenced by an Award Agreement specifying the material terms and conditions of
the Award including the form of payment of earned Performance Shares, the class
of Shares to which the Award pertains, and such other provisions as the
Committee determines.

         9.5  FORM AND TIMING OF PAYMENT OF PERFORMANCE SHARES. Payment of
earned Performance Shares will be made as soon as practicable after the close of
the applicable Performance Period, in a manner determined by the Committee in
its sole discretion and set forth in an Award Agreement. The Committee will pay
earned Performance Shares in the form of cash, in Shares, or in a combination of
cash and Shares, as specified in the Award Agreement. Performance Shares may be
paid subject to any restrictions deemed appropriate by the Committee.

         9.6  TERMINATION OF SERVICE DUE TO DEATH OR DISABILITY. Unless
determined otherwise by the Committee and set forth in the Participant's Award
Agreement, if a Participant's Service is terminated by reason of death or
Disability during a Performance Period, the Participant will receive a prorated
payout of the Performance Shares, as specified by the Committee in its
discretion in the Award Agreement. Payment of earned Performance Shares will be
made at a time specified by the Committee in its sole discretion and set forth
in the Participant's Award Agreement.

         9.7  TERMINATION OF SERVICE FOR OTHER REASONS. If a Participant's
Service terminates during a Performance Period for any reason other than death
or Disability, the Participant will forfeit all Performance Shares to the
Company, unless the Participant's Award Agreement provides otherwise.

         9.8  NONTRANSFERABILITY OF PERFORMANCE SHARES. Except as otherwise
provided in a Participant's Award Agreement, Performance Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, a Participant's rights
under the Plan will be exercisable during the Participant's lifetime only by the
Participant or Participant's guardian or legal representative. The Committee
may, in its discretion, require a Participant's guardian or legal representative
to supply it with evidence the


- - 14 -


Committee deems necessary to establish the authority of the guardian or legal
representative to act on behalf of the Participant.

ARTICLE 10.  BREACH OF RESTRICTIVE COVENANTS

         An Award Agreement may provide that, notwithstanding any other
provision of this Plan to the contrary, if the Participant breaches the
non-compete, non-solicitation, non-disclosure or other restrictive covenants of
an Award Agreement, whether during or after termination of Service, in addition
to any other penalties or restrictions that may apply under any employment
agreement, state law, or otherwise, the Participant will forfeit:

                  (a) any and all Awards granted or transferred to him or her
         under the Plan, including Awards that have become vested and
         exercisable;

                  (b) any and all Shares awarded or transferred to him or her
         under the Plan, including Awards as to which all other applicable
         restrictions have lapsed; and/or

                  (c) the profit the Participant has realized on the exercise of
         any Options, which is the difference between the Exercise Price of the
         Options and the applicable Fair Market Value of the Shares (the
         Participant may be required to repay such difference to the Company).

ARTICLE 11.  DEFERRALS

         The Committee may permit or require a Participant to defer receipt of
cash or Shares that would otherwise be due to him or her by virtue of an Option
or SAR exercise, the lapse or waiver of restrictions on Restricted Stock, or the
satisfaction of any requirements or objectives with respect to Performance
Shares. If any such deferral election is permitted or required, the Committee
will, in its sole discretion, establish rules and procedures for such deferrals.
Notwithstanding the foregoing, the Committee in its sole discretion may defer
payment of cash or the delivery of Shares that would otherwise be due to a
Participant under the Plan if payment or delivery would result in the Company's
or any Company Parties' being unable to deduct compensation under Code Section
162(m). Deferral of payment or delivery by the Committee may continue until the
Company Party is able to deduct the payment or delivery under the Code.

ARTICLE 12.  RIGHTS OF PARTICIPANTS

         12.1  SERVICE. Nothing in the Plan will interfere with or limit in any
way the right of the Company or any Affiliate to terminate any Participant's
Service at any time, or confer upon any Participant any right to continue in the
Service of the Company or any Affiliate.

         12.2  PARTICIPATION. No Employee, Advisor, Director or Participant will
have the right to receive an Award under this Plan, or, having received any
Award, to receive a future Award.

ARTICLE 13.  AMENDMENT, MODIFICATION AND TERMINATION

         13.1  AMENDMENT, MODIFICATION AND TERMINATION. Subject to Section 13.2,
the Board may at any time and from time to time, alter, amend, modify or
terminate the Plan in


- - 15 -


whole or in part. Subject to the terms and conditions of the Plan, the Committee
may modify, extend or renew outstanding Awards under the Plan, or accept the
surrender of outstanding Awards (to the extent not already exercised) and grant
new Awards in substitution of them (to the extent not already exercised). The
Committee will not, however, modify any outstanding Incentive Stock Option so as
to specify a lower Exercise Price. Notwithstanding the foregoing, no
modification of an Award will, without the prior written consent of the
Participant, materially impair any rights or obligations under any Award already
granted under the Plan.

         13.2  ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. In recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.3) affecting
the Company or its financial statements, or in recognition of changes in
applicable laws, regulations, or accounting principles, and, whenever the
Committee determines that adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, the Committee may, using reasonable care, make
adjustments in the terms and conditions of, and the criteria included in,
Awards. In case of an Award designed to qualify for the Performance-Based
Exception, the Committee will take care not to make an adjustment that would
disqualify the Award.

         13.3  COMPLIANCE WITH CODE SECTION 162(m). Awards will comply with the
requirements of Code Section 162(m), unless the Committee determines that such
compliance is not desired with respect to an Award available for grant under the
Plan. In addition, if changes are made to Code Section 162(m) to permit greater
flexibility as to any Award available under the Plan, the Committee may, subject
to this Article 13, make any adjustments it deems appropriate.

ARTICLE 14.  WITHHOLDING

         14.1  TAX WITHHOLDING. The Company will have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
(either in cash or Shares) sufficient to satisfy federal, state, and local
taxes, domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising under this Plan. Each Award Agreement will
specify whether reload options will be granted in connection with payment of tax
withholding by tendering Shares owned by the Participant.

         14.2  SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
the Company may satisfy the minimum withholding requirement for supplemental
wages, in whole or in part, by withholding Shares having a Fair Market Value
(determined on the date the Participant recognizes taxable income on the Award)
equal to the withholding tax required to be collected on the transaction. The
Participant may elect, subject to the approval of the Committee, to deliver the
necessary funds to satisfy the withholding obligation to the Company, in which
case there will be no reduction in the Shares otherwise distributable to the
Participant.


- - 16 -


ARTICLE 15.  SUCCESSORS

         All obligations of the Company under the Plan or any Award Agreement
will be binding on any successor to the Company, whether the existence of the
successor results from a direct or indirect purchase of all or substantially all
of the Company's Shares, or a merger, consolidation, or otherwise.

ARTICLE 16.  LEGAL CONSTRUCTION

         16.1  NUMBER. Except where otherwise indicated by the context, any
plural term used in this Plan includes the singular and a singular term includes
the plural.

         16.2  SEVERABILITY. If any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as if
the illegal or invalid provision had not been included.

         16.3  REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares and/or cash payouts under the Plan will be subject to all applicable
laws, rules, and regulations, and to any approvals by governmental agencies or
national securities exchanges as may be required.

         16.4  SECURITIES LAW COMPLIANCE. As to any individual who is, on the
relevant date, an officer, director or ten percent beneficial owner of any class
of the Company's equity securities that is registered pursuant to Section 12 of
the Exchange Act, all as defined under Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the
extent any provision of the Plan or action by the Committee (or a designated
officer pursuant to Section 3.4) fails to so comply, it will be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.

         16.5  AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED
STATES. To the extent the Committee deems it necessary, appropriate or desirable
to comply with foreign law of practice and to further the purposes of this Plan,
the Committee may, without amending the Plan, (i) establish rules applicable to
Awards granted to Participants who are foreign nationals, are employed outside
the United States, or both, including rules that differ from those set forth in
this Plan, and (ii) grant Awards to such Participants in accordance with those
rules.

         16.6  UNFUNDED STATUS OF THE PLAN. The Plan is intended to constitute
an "unfunded" plan for incentive and deferred compensation. With respect to any
payments or deliveries of Shares not yet made to a Participant by the Company,
the Participant's rights are no greater than those of a general creditor of the
Company. The Committee may authorize the establishment of trusts or other
arrangements to meet the obligations created under the Plan, so long as the
arrangement does not cause the Plan to lose its legal status as an unfunded
plan.

         16.7  GOVERNING LAW. To the extent not preempted by federal law, the
Plan and all agreements hereunder will be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without giving effect to
its conflict of laws principles.


- - 17 -


         16.8  NON-EXCLUSIVITY OF PLAN. Nothing in this Plan will limit or be
deemed to limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common Stock,
under any other plan or authority.

         16.9  NO RESTRICTION ON COMPANY POWERS. The existence of this Plan, the
Award Agreements, and the Awards granted hereunder, shall not limit, affect or
restrict in any way the right or power of the Board or the stockholders of the
Company to make or authorize: (a) any adjustment, recapitalization,
reorganization or other change in the Company's or any Affiliate's capital
structure or its business; (b) any merger, amalgamation, consolidation or change
in the ownership of the Company or any Affiliate; (c) any issue of bonds,
debentures, capital, preferred or prior preference stocks ahead of or affecting
the Company's capital stock or the rights thereof; (d) any dissolution or
liquidation of the Company or any Affiliate; (e) any sale or transfer of all or
any part of the Company's or any Affiliate's assets or business; or (f) any
other corporate act or proceeding by the Company or any Affiliate. No
Participant, Designated Beneficiary or any other Person shall have any claim
under any Award or Award Agreement against any member of the Board or the
Committee, or the Company or any employees, officers or agents of the Company or
any Affiliate, as a result of any such action.


- - 18 -

EX-10.4

                                                                    Exhibit 10.4

                   COLLEGIS, INC. EMPLOYEE STOCK PURCHASE PLAN

         1. PURPOSE. Collegis, Inc., a Delaware corporation (the "Company"), has
established this Collegis, Inc. Employee Stock Purchase Plan (the "Plan") to
encourage and enable its eligible employees and the eligible employees of its
Subsidiaries to acquire the Company's Common Stock, and to align more closely
the interests of those individuals and the Company's stockholders. The Company
intends that the Plan qualify as an "employee stock purchase plan" under Section
423 of the Internal Revenue Code of 1986, as amended.

         2. DEFINITIONS. Whenever used in the Plan, the following terms have the
meanings set forth below, and when the meaning is intended, the initial letter
of the word will be capitalized:

                  "BOARD" means the Company's Board of Directors.

                  "BUSINESS DAY" means any day the New York Stock Exchange is
open for business.

                  "CHANGE IN CONTROL" means the occurrence of any of the
following events:

                  (a) An acquisition after the Effective Date by a Person of
         beneficial ownership (within the meaning of Rule 13d-3 promulgated
         under the Exchange Act) of 20% or more of either (a) the then
         outstanding shares of Common Stock of the Company (the "OUTSTANDING
         COMPANY COMMON STOCK") or (b) the combined voting power of the then
         outstanding voting securities of the Company entitled to vote generally
         in the election of directors (the "OUTSTANDING COMPANY VOTING
         SECURITIES"); excluding, however, the following: (i) any acquisition
         directly from the Company, other than an acquisition by virtue of the
         exercise of a conversion privilege unless the security being so
         converted was itself acquired directly from the Company or approved by
         the Incumbent Board (as defined below), (ii) any acquisition by the
         Company, (iii) any acquisition by any employee benefit plan (or related
         trust) sponsored or maintained by the Company or any entity controlled
         by the Company, (iv) any acquisition by an underwriter temporarily
         holding Company securities pursuant to an offering of such securities,
         or (v) any acquisition pursuant to a transaction that complies with
         clauses (i), (ii) and (iii) of subsection (c) of this definition; or

                  (b) A change in the composition of the Board such that the
         individuals who, as of the IPO Date, constitute the Board (such Board
         shall be hereinafter referred to as the "INCUMBENT BOARD") cease for
         any reason to constitute at least a majority of the Board; provided,
         however, for purposes of this definition, that any individual who
         becomes a member of the Board subsequent to the IPO Date, whose
         election, or nomination for election by the Company's stockholders, was
         approved by a vote of at least a majority of those individuals who are
         members of the Board and who were also members of the Incumbent Board
         (or deemed to be such pursuant to this proviso), either by a specific
         vote or by approval of the proxy statement of the Company in which such
         person is named as a nominee for director, without written objection to
         such nomination shall be considered as though such individual were a
         member of the Incumbent Board; but, provided further, that



         any such individual whose initial assumption of office occurs as a
         result of either an actual or threatened election contest with respect
         to the election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Board shall not be so considered as a member of the Incumbent
         Board; or

                  (c) Consummation of a reorganization, merger or consolidation
         (or similar transaction), a sale or other disposition of all or
         substantially all of the assets of the Company, or the acquisition of
         assets or stock of another entity ("CORPORATE TRANSACTION"); in each
         case, unless immediately following such Corporate Transaction (i) all
         or substantially all of the individuals and entities who are the
         beneficial owners, respectively, of the Outstanding Company Common
         Stock and Outstanding Company Voting Securities immediately prior to
         such Corporate Transaction will beneficially own, directly or
         indirectly, more than 60% of, respectively, the outstanding shares of
         common stock, and the combined voting power of the then outstanding
         voting securities entitled to vote generally in the election of
         directors, as the case may be, of the corporation resulting from such
         Corporate Transaction (including, without limitation, a corporation
         that as a result of such transaction owns the Company or all or
         substantially all of the Company's assets either directly or through
         one or more subsidiaries) in substantially the same proportions as
         their ownership, immediately prior to such Corporate Transaction, of
         the Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (ii) no Person (other than the Company,
         any employee benefit plan (or related trust) of the Company or such
         corporation resulting from such Corporate Transaction) will
         beneficially own, directly or indirectly, 20% or more of, respectively,
         the outstanding shares of common stock of the corporation resulting
         from such Corporate Transaction or the combined voting power of the
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors, except to the extent that such
         ownership existed prior to the Corporate Transaction, and (iii)
         individuals who were members of the Incumbent Board at the time of the
         Board's approval of the execution of the initial agreement providing
         for such Corporate Transaction will constitute at least a majority of
         the members of the board of directors of the corporation resulting from
         such Corporate Transaction; or

                  (d) The approval by the stockholders of the Company of a
         complete liquidation or dissolution of the Company.

                  However, in no event will a Change in Control be deemed to
have occurred, with respect to a Participant, if the Participant is part of a
purchasing group that consummates the Change in Control transaction. A
Participant will be deemed "part of a purchasing group" for purposes of the
preceding sentence if the Participant is an equity participant in the purchasing
company or group (except: (i) passive ownership of less than 2% of the stock of
the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group that is otherwise not significant, as determined
prior to the Change in Control by a majority of the non-employee continuing
directors).

                  "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.

                  "COMMITTEE" means the Compensation Committee of the Board.


                                     - 2 -


                  "COMMON STOCK" means the Company's Common Stock, par value
$0.01 per share.

                  "COMPENSATION" means the Participant's total gross
compensation, including salary, bonuses and commissions, paid to the Participant
during a given payroll period, but excluding any amounts realized from the
exercise of a stock option or from the sale, exchange, or other disposition of
shares acquired under this Plan or any other stock purchase or option plan.

                  "DESIGNATED SUBSIDIARY" means any domestic or foreign
Subsidiary that the Board has designated from time to time, in its sole
discretion, as eligible to participate in the Plan.

                  "ELIGIBLE EMPLOYEE" means an employee who is eligible to
participate in the Plan pursuant to Section 4.

                  "EMPLOYEE" means each and every person employed by the Company
or a Designated Subsidiary, and whom the Company or Designated Subsidiary
classifies as a common law employee. For purposes of this definition of
Employee, and notwithstanding any other provisions of the Plan to the contrary,
individuals who are not classified by the Company or by a Designated Subsidiary,
in its discretion, as employees under Code Section 3121(d) (including, but not
limited to, individuals classified by the Company or a Designated Subsidiary as
independent contractors and non-employee consultants) and individuals who are
classified by the Company or by a Designated Subsidiary, in its discretion, as
employees of any entity other than the Company or a Designated Subsidiary, do
not meet the definition of Employee and are ineligible for benefits under the
Plan, even if the classification by the Company or Designated Subsidiary is
later determined to be erroneous, or is retroactively revised. In the event the
classification of an individual who is excluded from the definition of Employee
under the preceding sentence is determined to be erroneous or is retroactively
revised, the individual shall nonetheless continue to be excluded from the
definition of Employee and shall be ineligible for benefits for all periods
prior to the date the Company or Designated Subsidiary determines its
classification of the individual is erroneous or should be revised.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor act thereto.

                  "FAIR MARKET VALUE" means as of any given day: (i) the average
of the high and low trading prices of the Common Stock on the national
securities exchange on which the Common Stock is listed (if the Common Stock is
so listed) or on the Nasdaq Stock Market (if the Common Stock is regularly
quoted on the Nasdaq Stock Market); (ii) if not so listed or regularly quoted,
the mean between the closing bid and asked prices of publicly traded Common
Stock in the over-the-counter market; and (iii) if such bid and asked prices are
not available, as reported by any nationally recognized quotation service
selected by the Committee or as determined by the Committee.

                  "GRANT DATE" means the first day of a Purchase Period, each
January 1 and July 1.

                  "IPO DATE" means the effective date of the Company's
Registration Statement on Form S-1 for the initial public offering of the
Company's Common Stock.


                                     - 3 -


                  "OPTION" means an irrevocable option to purchase shares of
Common Stock under the Plan, pursuant to the terms and conditions thereof.

                  "PARTICIPANT" means an Eligible Employee who is participating
in the Plan pursuant to Section 5.

                  "PERSON" has the meaning ascribed to that term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.

                  "PLAN" means this Collegis, Inc. Employee Stock Purchase Plan,
as amended from time to time.

                  "PLAN ACCOUNT" means an account maintained by the Company or
its designated recordkeeper for each Participant, to which the Participant's
payroll deductions are credited, against which funds used to purchase shares of
Common Stock are charged and to which shares of Common Stock purchased are
credited.

                  "PLAN ADMINISTRATOR" means the Board, or such person or
persons, including a committee, as the Board (or the Committee) may appoint to
administer the Plan. The Board (or the Committee) may at any time remove or
replace the Plan Administrator.

                  "PURCHASE DATE" means except as provided in Sections 16 and
22, the last day of each Purchase Period, each June 30 and December 31.

                  "PURCHASE PERIOD" means a period of six months commencing on
January 1 and July 1 each year, except as otherwise set forth in the Plan.

                  "PURCHASE PRICE" means the Purchase Price of the shares of
Common Stock that are to be sold under the Plan on the Purchase Date next
following each Grant Date. The Purchase Price will be the lesser of: (i) 85% of
the Fair Market Value of Common Stock on the Grant Date; or (ii) 85% of the Fair
Market Value of Common Stock on the Purchase Date next following the Grant Date.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, or any successor act thereto.

                  "SUBSIDIARY" means any corporation, other than the Company, in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. Subsidiary status as to a
particular Option grant will be determined at the time the Option is granted. A
"domestic Subsidiary" is any Subsidiary organized under the laws of the United
States of America. A "foreign Subsidiary" is a Subsidiary organized outside the
laws of the United States of America.

         3. STOCK SUBJECT TO THE PLAN. Subject to Section 13, the aggregate
number of shares of Common Stock that may be sold under the Plan is 1,000,000.
The Company shall have the option to issue and sell authorized but unissued
shares, treasury shares, or shares purchased in the


                                     - 4 -


open market, or any combination thereof, to provide shares of Common Stock for
purchase under the Plan.

         4. ELIGIBLE EMPLOYEES. An "Eligible Employee" means at any time, each
active Employee of the Company or any Designated Subsidiary, except an Employee
who, as of the applicable Grant Date:

                  (a) has been employed for fewer than six months by the Company
         and the Designated Subsidiaries; or

                  (b) is an executive officer of the Company that is also a
         "highly compensated employee" as defined in Code Section 414(q).

         5. PARTICIPATION IN THE PLAN.

                  (a) An Eligible Employee may become a Participant in the Plan
         by completing and filing with the Company or its designated
         recordkeeper an election form that authorizes payroll deductions from
         the Eligible Employee's Compensation. Deductions will be made in
         accordance with the Eligible Employee's election, will begin on the
         first Grant Date after the election form has been filed, and will
         continue until the Eligible Employee terminates participation in the
         Plan or the Plan is terminated. An Eligible Employee may participate in
         the Plan only through payroll deductions.

                  (b) Notwithstanding the foregoing or any provision of the Plan
         to the contrary, an Eligible Employee will not be granted an Option on
         any Grant Date if, immediately after the Option is granted, he or she
         owns stock possessing 5% or more of the total combined voting power or
         value of all classes of stock of the Company or any Subsidiary. For
         purposes of this paragraph (c), the rules of Code Section 424(d) will
         apply to determine the Eligible Employee's stock ownership, and stock
         that an employee may purchase under outstanding options will be treated
         as stock owned by the Employee.

         6. PAYROLL DEDUCTIONS. This Plan shall be operated as a payroll
deduction plan.

                  (a) PURCHASE PERIODS. Each payroll period, the Company will
         make payroll deductions from the Compensation paid to each Participant
         in the percentage elected by the Participant in his or her election
         form. Deduction elections must be made in whole percentages of
         Compensation from 1 to 10%.

                  (b) LIMITATIONS ON OPTIONS. Notwithstanding the foregoing or
         any provision of the Plan to the contrary, no Eligible Employee will be
         granted an Option under this Plan if, as a result, during any calendar
         year the Option remained outstanding, he or she would first be able to
         exercise options under Section 423 Plans for stock with a Fair Market
         Value of more than $25,000 in the aggregate (determined as of each
         Grant Date). For purposes of this Section 6, "Section 423 Plans" means
         this Plan and all other plans of the Company and its Subsidiaries that
         are intended to qualify under Code Section 423.


                                     - 5 -


         7. CHANGES IN PAYROLL DEDUCTIONS. Subject to the minimum and maximum
deduction limits set forth above, a Participant may change the amount of his or
her payroll deductions as of the next Grant Date by filing a new election form
with the Company or its designated recordkeeper at least fifteen Business Days
before the next Grant Date. The new election form will be effective until
revoked in writing.

         8. TERMINATION OF PARTICIPATION IN PLAN. A Participant's participation
in the Plan will end when he or she ceases for any reason to be employed by the
Company or any Designated Subsidiary. Any payroll deductions credited to the
Plan Account of a former Participant who is no longer employed by the Company or
any of its Designated Subsidiaries, but not yet invested in Common Stock, will
be paid to the former Participant in cash as soon as practicable following his
or her employment termination. At any time and for any reason, a Participant may
voluntarily withdraw from participation in the Plan by delivering a written
notice of the termination to the Company or its designated recordkeeper. The
Company will cease making Plan payroll deductions from the Participant's
Compensation within fifteen days after it receives the notice. If an active
Employee of the Company or any Designated Subsidiary terminates his or her Plan
participation, any payroll deductions credited to his or her Plan Account will
be used to buy shares of Common Stock on the next Purchase Date. An Eligible
Employee who has voluntarily terminated his or her participation in the Plan may
rejoin the Plan by filing a new election form in accordance with Section 6(a).

         9. PURCHASE OF SHARES.

                  (a) On each Grant Date, each Participant will be deemed to
         have been granted an Option.

                  (b) On each Purchase Date, each Participant will be deemed,
         without any further action, to have purchased a number of whole or
         fractional shares (calculated to the fourth decimal place) of Common
         Stock determined by dividing the Purchase Price into the balance in the
         Participant's Plan Account on the Purchase Date. Any amount remaining
         in the Participant's Plan Account will be carried forward to the next
         Purchase Date unless the Plan Account is closed.

                  (c) As soon as practicable after each Purchase Date,
         individual statements showing the number of shares of Common Stock
         purchased on that Purchase Date on behalf of each Participant will be
         delivered to each Participant.

                  (d) Upon request, a Participant may receive a stock
         certificate for whole shares of Common Stock that are held in his or
         her Plan Account. Notwithstanding the preceding sentence, if the
         Participant's employment with the Company and all Designated
         Subsidiaries terminates, he or she will be issued a stock certificate
         for whole shares of Common Stock in his or her Plan Account as soon as
         administratively feasible after the termination. The Participant may
         elect whether the stock certificate will be issued in his or her name,
         or in his or her name and the name of another person as joint tenants
         with right of survivorship or as tenants in common. A cash payment will
         be made for any fraction of a share in the Participant's account, if
         necessary to close the Plan Account.


                                     - 6 -


         10. RIGHTS AS A STOCKHOLDER. A Participant shall not be treated as the
owner of Common Stock until the Purchase Date of such stock under the Plan. As
of the Purchase Date, a Participant will be treated as the record owner of
shares purchased for him or her under the Plan.

         11. RIGHTS NOT TRANSFERABLE. Rights under the Plan are not transferable
by a Participant other than by will or the laws of descent and distribution, and
are exercisable during the Participant's lifetime only by the Participant or by
the Participant's guardian or legal representative. No rights or payroll
deductions of a Participant will be subject to execution, attachment, levy,
garnishment or similar process.

         12. APPLICATION OF FUNDS. All funds of Participants received or held by
the Company under the Plan before purchase of shares of Common Stock will be
held by the Company without liability for interest or other increment.

         13. ADJUSTMENTS IN CASE OF CHANGES AFFECTING SHARES. In the event of
any dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, Change in Control or exchange of Common Stock or other
securities of the Company, or other corporate transaction or event that affects
the Common Stock: (a) the number of shares of Common Stock approved for the Plan
shall be increased or decreased proportionately, and (b) the Committee may
determine, in its sole discretion, that an adjustment is necessary or
appropriate in order to prevent dilution or enlargement of benefits or potential
benefits intended to be made available under the Plan.

         14. ADMINISTRATION OF THE PLAN. The Plan Administrator will administer
the Plan. The Plan Administrator has authority to make rules and regulations for
Plan administration, and full authority and discretion and authority to
interpret the Plan's terms and make decisions under it. The Plan Administrator's
interpretations and decisions regarding the Plan and its rules and regulations
will be final and conclusive. It is intended that the Plan at all times meet the
requirements of Code Section 423, and the Plan Administrator will, to the extent
possible, interpret the provision of the Plan so as to carry out that intent.

         15. AMENDMENTS TO THE PLAN. At any time or from time to time, the Board
may amend or modify the Plan. Notwithstanding the foregoing, other than as
provided in Section 13 or 16, the Plan may not be amended to increase or
decrease the number of shares authorized for purchase under the Plan, to
decrease the Purchase Price, or, except as needed to conform the Plan to the
requirements of the Code, to alter the Plan in any way that would cause it to
fail to meet the requirements of Code Section 423, or that would retroactively
and adversely affect the interests of Participants.

         16. TERMINATION OF PLAN. The Plan will terminate on the earlier of:

                  (a) the tenth anniversary of the IPO Date;

                  (b) the date as of which the Board terminates the Plan (as
         provided below); and


                                     - 7 -


                  (c) the date no more shares of Common Stock remain to be
         purchased under the Plan.

         The Board may terminate the Plan as of any date, and the date of
termination will be deemed a Purchase Date. If on that Purchase Date
Participants in the aggregate have Options to purchase more shares of Common
Stock than are available for purchase under the Plan, each Participant will be
eligible to purchase a reduced number of shares of Common Stock on a pro rata
basis, and any payroll deductions remaining in his or her Plan Account after
share purchases will be returned to the Participant, all as provided by rules
and regulations adopted by the Plan Administrator.

         17. COSTS. The Company will pay all costs and expenses incurred in
administering the Plan. Any costs or expenses of selling shares and
certificating shares of Common Stock acquired under the Plan will be borne by
the Participant.

         18. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and
deliver its Common Stock under the Plan is subject to any governmental approvals
required in connection with the authorization, issuance or sale of such stock.

         19. APPLICABLE LAW. This Plan will be interpreted under the laws of the
United States of America and, to the extent not inconsistent therewith, by the
laws of the State of Delaware. This Plan is not to be subject to the Employee
Retirement Income Security Act of 1974, as amended, but is intended to comply
with Code Section 423. Any provisions required to be set forth in this Plan by
Code Section 423 are hereby incorporated by reference.

         20. EFFECT ON EMPLOYMENT. The provisions of this Plan will not affect
the right of the Company, any Subsidiary or any Participant to terminate the
Participant's employment with the Company or any Subsidiary. Nothing in this
Plan will be deemed to create a contract for the employment of any person.

         21. WITHHOLDING. The Company reserves the right to withhold from shares
of Common Stock or cash distributed to a Participant any amounts it is required
by law to withhold.

         22. CHANGE IN CONTROL PROVISIONS. Notwithstanding any other provision
of the Plan to the contrary, in the event of a Change in Control, each Option
outstanding under the Plan shall be assumed or an equivalent option shall be
substituted by the successor corporation or a parent or subsidiary of such
successor corporation. If the successor corporation refuses or is unable to
assume or substitute for outstanding Options, the Purchase Period then in
progress shall be shortened and a new Purchase Date shall be set (the "NEW
PURCHASE DATE"), as of which date the Purchase Period then in progress will
terminate. The New Purchase Date shall be on or immediately before the effective
time of the Change in Control, and the Plan Administrator shall notify each
Participant in writing, at least 10 days before the New Purchase Date, that the
Purchase Date for his or her Option has been changed to the New Purchase Date,
and that the Participant's Option will be exercised automatically on the New
Purchase Date unless the Participant has withdrawn from the Plan pursuant to
Section 8.


                                     - 8 -


         23. EFFECTIVE DATE. The Plan will become effective as determined by the
Board in its discretion. Notwithstanding the foregoing or any other provision of
this Plan, the Plan will not become effective unless the stockholders of Company
approve it within twelve months after the date the Board adopts the Plan.

         24. NO CORPORATE ACTION RESTRICTION. The existence of the Plan and/or
the Options granted hereunder shall not limit, affect or restrict in any way the
right or power of the Board or the Company's stockholders to make or authorize
(a) any adjustment, recapitalization, reorganization or other change in the
Company's or any Subsidiary's capital structure or its business, (b) any merger,
consolidation or change in the ownership of the Company or any Subsidiary, (c)
any issue of bonds, debentures, capital, preferred or prior preference stocks
ahead of or affecting the Company's or any Subsidiary's capital stock or the
rights thereof, (d) any dissolution or liquidation of the Company or any
Subsidiary, (e) any sale or transfer of all or any part of the Company's or any
Subsidiary's assets or business, or (f) any other corporate act or proceeding by
the Company or any Subsidiary. No Participant, Employee, beneficiary or any
other person shall have any claim against any member of the Board or the
Committee, the Company or any Subsidiary, or any employees, officers,
stockholders or agents of the Company or any Subsidiary, as a result of any such
action.

         25. NOTICES. All notices or other communications by an Employee or
Participant to the Company under or in connection with the Plan shall be deemed
to have been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the receipt
thereof.


                                     - 9 -

EX-10.6

                                    AGREEMENT


     This agreement (this "Agreement") is dated as of the 17th day of July, 2002
by and between Collegis, Inc., a Delaware corporation ("Collegis") and Salt
Creek Ventures, LLC, a Delaware limited liability company ("Salt Creek").

     WHEREAS, Collegis wishes to continue receiving the administrative services
that have been provided to it by Salt Creek, and

     WHEREAS, Salt Creek wishes to continue to provide such services,

     NOW THEREFORE, the parties hereto agree as follows:

     1. During the Term of this Agreement, Salt Creek agrees to provide Collegis
with administrative, supervisory and oversight services on an as-needed basis,
including without limitation, (i) advisory services regarding corporate
development, acquisitions, joint ventures and strategic partnerships; (ii)
strategic planning; (iii) assessments regarding Collegis' competitive position;
and (iv) sales support through senior client relationships. Salt Creek further
agrees to provide supplemental services and support staff personnel to the board
of directors of Collegis. Salt Creek agrees to take all reasonable steps to
assure the availability of Robert E. King to perform the services to be provided
to Collegis hereunder.

     2. In consideration for the services to be provided by Salt Creek, Collegis
agrees to pay Salt Creek $62,500 per calendar quarter, payable in advance,
throughout the Term of this Agreement. No prior invoices for such amount shall
be required.

     3. The Term ("Term") of this Agreement shall commence on the date of this
Agreement indicated above and shall continue until terminated. This Agreement
may be terminated (a) at any time upon the mutual agreement of the parties, or
(b) by either party, upon one (1) year's prior notice. Notwithstanding the
foregoing, this Agreement may not terminate pursuant to subsection (b) during a
period commencing on the date of any Liquidity Event and ending on the first
anniversary thereof. For purposes of this Agreement, "Liquidity Event" means a
sale of all or substantially all of the assets of the business of Collegis or a
change in ownership control of Collegis.

     IN WITNESS WHEREOF, the parties have hereby executed this Agreement.

                                       COLLEGIS, INC.

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


                                       SALT CREEK VENTURES, LLC

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

EX-23.1

                                                                  EXHIBIT 23.1


INDEPENDENT AUDITORS' CONSENT

     We consent to the use in this Amendment No. 1 to Registration Statement
No. 333-89474 of Collegis, Inc. of our report dated February 22, 2002,
appearing in the Prospectus, which is part of such Registration Statement,
and to the reference to us under the heading "Experts" in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
July 10, 2002






INDEPENDENT AUDITORS' CONSENT

     We consent to the use in this Amendment No. 1 to Registration Statement
No. 333-89474 of Collegis, Inc. of our report on Eduprise, Inc. dated
April 17, 2001, appearing in the Prospectus, which is part of such
Registration Statement, and to the reference to us under the heading
"Experts" in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

Raleigh, North Carolina
July 10, 2002