-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ICplm81ipneeVPISOKrDtCOGFYeM4C6pvssgZ5tBJr+XSHvXxgOEY6l1UvaKVbi1 VhG1aU+HRNGdfGReQWueyw== 0000912057-96-027048.txt : 19961121 0000912057-96-027048.hdr.sgml : 19961121 ACCESSION NUMBER: 0000912057-96-027048 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961119 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA CULINARY ACADEMY INC CENTRAL INDEX KEY: 0000858915 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 943042862 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21932 FILM NUMBER: 96669395 BUSINESS ADDRESS: STREET 1: 625 POLK ST CITY: SAN FRANCISCO STATE: CA ZIP: 94102 BUSINESS PHONE: 4157713536 MAIL ADDRESS: STREET 1: 625 POLK ST CITY: SAN FRANCISCO STATE: CA ZIP: 94102 10QSB 1 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly report pursuant section 13 or 15(d) of the Securities and Exchange Act of 1934 for the quarterly period ended September 30, 1996. [ ] Transition report pursuant to section 13 or 15(d) of the Securities and Exchange Act of 1934 for the transition period from to . COMMISSION FILE NUMBER: 0-21932 CALIFORNIA CULINARY ACADEMY, INC. (Exact name of small business issuer in its charter) California 94-3042862 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 625 Polk Street San Francisco, CA 94102 (Address of principal executive offices) (Zip Code) Issuer's Telephone Number: (415) 771-3536 check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ------- ------- The number of shares outstanding of the registrant's Common Stock as of October 31, 1996, was 3,293,860. Transitional Small Business Disclosure Format. Yes No X . --------- --------- CALIFORNIA CULINARY ACADEMY, INC. BALANCE SHEET SEPTEMBER 30, 1996 ASSETS (Unaudited) Current Assets: Cash and cash equivalents (including restricted cash equivalents of $615,000) $3,383,000 Accounts receivable, net of allowance of $280,000 2,993,000 Inventories 214,000 Prepaid expenses and other assets 259,000 Deferred tax asset 114,000 ------------- Total Current Assets 6,963,000 ------------- Property and equipment, net of depreciation and amortization 4,681,000 Intangible assets, net 513,000 Other assets 576,000 ------------- TOTAL ASSETS $12,733,000 ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $626,000 Accrued liabilities 286,000 Dividends payable 11,000 Deferred revenue 3,833,000 Student prepayments 339,000 Current portion of note payable 814,000 Current portion of capital lease obligations 67,000 ------------- Total Current Liabilities 5,976,000 ------------- Note payable 81,000 Capital lease obligations 199,000 Other non-current liabilities 428,000 Shareholders' Equity: Preferred stock, no par value, 5,000,000 shares authorized, 254,541 shares issued and outstanding 988,000 Common stock, no par value, 20,000,000 shares authorized, 3,312,719 shares issued and outstanding 9,112,000 Retained deficit (4,051,000) ------------- Total Shareholders' Equity 6,049,000 ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,733,000 ------------- ------------- CALIFORNIA CULINARY ACADEMY, INC. STATEMENTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited) Three Months Ended September 30, -------------------------------- 1996 1995 --------------- ------------- Revenues: Culinary arts education $2,995,000 $2,876,000 Restaurants & catering 379,000 429,000 Retail, media and other 155,000 145,000 ------------ ------------ Total revenues 3,529,000 3,450,000 Cost of sales Food & beverage 371,000 418,000 Program supplies 176,000 133,000 Scholarships & grants 46,000 38,000 Merchandise & other 109,000 139,000 ------------ ------------ 702,000 728,000 ------------ ------------ Gross Margin 2,827,000 2,722,000 Fixed costs Occupancy 445,000 438,000 Repairs & maintenance 95,000 133,000 Telephone, security & other 97,000 108,000 Depreciation & amortization 266,000 256,000 ------------ ------------ Total fixed costs 903,000 935,000 Operating expenses Compensation & benefits 1,331,000 1,550,000 Outside services 122,000 275,000 Advertising & promotion 148,000 157,000 Legal & other 240,000 438,000 ------------ ------------ 1,841,000 2,420,000 Interest income (expense) (6,000) 7,000 ------------ ------------ Income (loss) before provision for income taxes 77,000 (626,000) Income tax provision (benefit) 31,000 (202,000) ------------ ------------ Net income (loss) $46,000 $(424,000) ------------ ------------ ------------ ------------ Primary earnings (loss) per share $0.01 $(0.13) ------------ ------------ ------------ ------------ Weighted average common shares and equivalents 3,228,732 3,308,805 ------------ ------------ ------------ ------------ CALIFORNIA CULINARY ACADEMY, INC. STATEMENTS OF CASH FLOWS FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited) Quarter Ended September 30 -------------------------- 1996 1995 ------------ ------------ Cash Flows From Operating Activities: Net income (loss) $46,000 $(424,000) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 266,000 256,000 Tax provision 31,000 (202,000) Provision for losses on accounts receivable 58,000 Loss on disposal of property 1,000 Deferred rent (1,000) Changes in assets and liabilities: Accounts receivable (206,000) 280,000 Inventories (6,000) (18,000) Prepaid expenses and other assets (120,000) 9,000 Accounts payable (123,000) 15,000 Accrued and other liabilities (179,000) (17,000) Deferred revenues 37,000 (455,000) Student prepayments 81,000 Other long-term obligations (5,000) ------------ ------------ Net Cash Provided By Operating Activities (173,000) (503,000) ------------ ------------ Cash Flows From Investing Activities: Acquisition of property and equipment (798,000) (16,000) Decrease in long-term investments 646,000 ------------ ------------ Net Cash Used In Investing Activities (152,000) (16,000) ------------ ------------ Cash Flows From Financing Activities: Borrowings under term loan agreements 157,000 Principal payments on term loan agreements (77,000) (63,000) Principal payments on capital lease obligations (25,000) (16,000) Proceeds from exercise of stock options and warrants 1,087,000 33,000 Repurchase of Common Stock (717,000) ------------ ------------ Net Cash Provided By Financing Activities 425,000 (46,000) ------------ ------------ Net Increase In Cash and Cash Equivalents 100,000 (565,000) Cash and cash equivalents, beginning of period 3,283,000 2,359,000 ------------ ------------ Cash and cash equivalents, end of period $3,383,000 $1,794,000 ------------ ------------ ------------ ------------
CALIFORNIA CULINARY ACADEMY, INC. STATEMENTS OF CASH FLOWS Supplemental disclosure of non-cash investing and financing activities: The Academy paid approximately $81,000 and $19,000 in interest for the three months ended September 30, 1996 and 1995, respectively. The Academy paid approximately $1,000 and $6,000 in income taxes for the three months ended September 30, 1996 and 1995, respectively. CALIFORNIA CULINARY ACADEMY, INC. CONDENSED NOTES TO FINANCIAL STATEMENTS NOTE 1 -- BASIS OF PRESENTATION The accompanying condensed financial statements and related footnotes have been prepared in accordance with generally accepted accounting principles. The balance sheet as of September 30, 1996 and related statements of operations and statements of cash flows for the three months ended September 30, 1996 and 1995 are unaudited, but have been prepared on substantially the same basis as the annual audited financial statements. In the opinion of management, the unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position, operating results and cash flows for those periods presented. The unaudited results for the three months ended September 30, 1996 are not necessarily indicative of results to be expected for the entire year. Certain prior year amounts have been reclassified to conform to current year presentation. NOTE 2 - INCOME TAXES Deferred taxes are recorded based upon differences between the financial statement and tax basis of assets and liabilities and available tax carryforwards. The principal temporary differences that result in deferred tax assets and liabilities are certain expenses accrued for financial reporting purposes not deductible for tax purposes until paid, depreciation for income tax purposes in excess of depreciation for financial reporting purposes and unused net operating losses. As of September 30, 1996 the Academy has federal and California net operating loss carryforwards, for tax return purposes, of approximately $1,906,000 and $1,092,000, respectively, which are available to offset future taxable income, if any. A valuation allowance has been provided for the prior year net operating loss and deferred assets since it is more likely than not that the future tax benefits of these items will not realized. NOTE 3 -- NET INCOME PER SHARE Net income per share is based on the weighted average number of shares outstanding during each of the respective periods, including the dilutive effect of stock options, warrants and any other common stock equivalents using the treasury stock method. NOTE 4 -- BANK DEBT As of September 30, 1996, the Academy had a term loan with a bank. The term loan provides for borrowings up to $750,000 with interest at 1% above the prime rate of the bank, the proceeds of which are to be used to finance the purchase of new equipment. The term loan is collateralized by all of the Academy's equipment and a certificate of deposit, the balance of which shall not at any time be less than 50% of the principal balance outstanding under the term note. As of September 30, 1996, the Academy maintained a certificate of deposit of $355,000 with the bank, of which $115,000 was collateral for the term loan. The financing agreement contains various affirmative covenants including certain covenants and ratios which the Academy must maintain. As of September 30, 1996, the Academy was in violation of certain covenants. As of September 30, 1996, the term loan was classified as current and was repaid during October 1996. In June 1996, the Academy obtained a term loan from a bank in the amount of $500,000, the proceeds of which were used for working capital requirements. The term loan provides for interest paid monthly at 1% above the bank's index rate for 90-day business certificate of deposits. The line of credit is collateralized by a certificate of deposit at the same bank in the amount of $500,000. As of September 30, 1996, the term loan was classified as current and was repaid during October 1996. NOTE 5- PREFERRED STOCK During March 1996 and July 1996, the Board of Directors and shareholders, respectively, authorized the Academy to issue up to 5,000,000 shares of Preferred Stock in one or more series to be determined by the Board of Directors from time to time. An amendment to the Articles of Incorporation authorizing the issuance of Preferred Stock was filed with the California Secretary of State in August 1996. On August 23, 1996, the Academy became legally authorized to issue up to 700,000 shares of Series A Preferred Stock. On the same date, the entire issue of Convertible Subordinated Notes in the aggregate principal amount of $1,400,000 automatically converted to 254,541 shares of Series A Preferred Stock. The Academy plans to file a registration statement to register for resale the Common Stock underlying the Series A Preferred Stock and will use its best efforts to effect such registration before November 23, 1996, the date after which an agreed upon $14,000 per month penalty provision takes effect. The non-redeemable Series A Preferred Stock into which the Notes converted provides for quarterly dividends at an annual rate of 7.5% per share from the date of first issuance, when and if declared by the Board of Directors, with a liquidation preference of $5.50 per share, plus accrued dividends. Although the Series A Preferred Stock is nonvoting, in the event the Academy fails to pay a quarterly dividend, the holder of the Series A Preferred Stock will be entitled to elect one-third of the Academy's Board of Directors at the next meeting held for the election of directors. Each share of Series A Preferred Stock is convertible at the option of the holder into the Academy's Common Stock at the conversion price of $5.50 per share. After February 23, 1997, each share of Series A Preferred Stock will convert automatically if the closing price of the Common Stock equals or exceeds $8.00 for 20 consecutive days. Certain provisions for price protection are set forth in the terms of the Series A Preferred Stock, but in no event will the conversion price be less than $3.50. The terms of the Convertible Subordinated Notes and the subsequent conversion to Series A Preferred Stock provide for certain registration rights. Certain penalties are payable to the Preferred shareholders in an amount equal to one percent of the principal per month in the event that a registration statement covering the resale of the Common Stock issuable upon conversion is not effective within 90 days of (i) the date on which the Academy becomes legally authorized to issue the Series A Preferred Stock and the Notes automatically convert into Preferred Stock, or (ii) the date on which 100% of the Notes have been converted to Common Stock. The penalty becomes payable as of November 23, 1996 unless the Common Stock issuable upon conversion of the Series A Preferred Stock has been declared effective by the Securities and Exchange Commission. NOTE 6 - REPURCHASE OF STOCK In July 1996, a prior executive officer of the Academy elected to exercise approximately 112,000 vested stock options. The Academy subsequently entered into a transaction with this prior officer, wherein the Academy purchased and retired this stock in exchange for approximately $717,000, which approximated fair market value and was comprised of approximately $560,000 in cash and $157,000 in promissory notes bearing an interest rate jof 8.75%. NOTE 7 - RELATED-PARTY TRANSACTIONS In July 1996, the Academy entered into a five-year lease for an approximately 3,800 square foot facility in Salinas, California. The lessor is a partnership controlled by the principal shareholder, Chief Executive Officer and Chairman of the Board of Directors and another principal shareholder and member of the Board of Directors. The new facility will be an extension campus opened in October 1996. The monthly rent for the facility will be the greater of $3,900 or 8% of gross sales plus a share of common area and exterior maintenance charges. The Academy paid a lease acquisition fee of $150,000 upon execution of the lease agreement. The lease agreement includes a termination clause subject to revenue performance at the extension campus during the first twelve months of operations and a termination fee should the Academy invoke the termination clause. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The Academy's revenues are derived primarily from culinary arts education as well as restaurant, retail and media operations. Culinary arts education primarily consists of the A.O.S. Culinary Arts Degree Program, the 30-week Baking & Pastry Arts Certificate Program, and consumer education classes. Starting in June 1996, the A.O.S. Culinary Arts Degree Program began enrollment on a two week cycle. The program can accommodate up to 29 students per enrollment period. Previously the A.O.S. Degree Program enrolled an average of approximately 80 students per enrollment period with six enrollments per year. The 30-week Baking & Pastry Arts Certificate Program enrolled classes ranging from 15 to 20 students. As of September 30, 1996, there were approximately 540 A.O.S. students and 60 Baking & Pastry students enrolled in the Academy. The change in class size and the change in the enrollment cycle for the A.O.S. program from every two months to every two weeks was made to enable student enrollments to be managed more effectively. With an increased number of choices of start dates for students, the Academy is better able to manage individual student start dates to optimize class sizes. Additionally, the Academy is able to manage faculty labor costs and other program costs due to more predictable class sizes. Further, the Academy is able to utilize space in its teaching facility more effectively because it is able to free up previously underutilized space for other revenue producing activities, such as contract training. Consumer education consists of avocational and team building programs. The Academy's team building programs offer groups the use of the Academy's professional kitchens under the guidance of a chef instructor. This form of team building is an alternative to other forms of combined business and social interaction such as river rafting and sporting event outings. Restaurant and retail operations include two restaurants and two private dining rooms generally open to the public seven days per week, banquet services generally offered seven days per week and a small on-site retail shop offering student prepared foods, beverages, cookbooks, video tapes, kitchen wares and selected clothing. Media operations primarily consist of the marketing of the "Cooking at the Academy" television series and the licensing of the Academy's name and cookbook content for use in a series of cookbooks. The Academy believes that manageable growth is achievable through the addition of remote training facilities such as its culinary arts training center at Salinas, California (opened in October 1996) and by the addition of programs to be offered to the food industry such as contract training and research and development in the areas of product development, menu development, and restaurant design. In order to facilitate this revised strategy, the Academy formed the CCA Development Company whose mission is to provide the food service industry with knowledge based resources, which complement the education the Academy's degree programs offer. While management believes that this revised strategy will enable it to significantly increase revenues by providing additional educational, training and consultative resources to the food industry, there can be no assurance that management will be able to successfully implement such a strategy. Except for historical information contained herein this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements contained herein are based upon current expectations, and actual results may differ materially. Forward-looking statements contained in this Report involve numerous risks and uncertainties, including those discussed in this Report and the Academy's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996, that could cause actual results to differ materially from those projected. The primary risks and uncertainties that could affect future results include, without limitation, (i) the inability of management to successfully implement and manage the Academy's new growth strategy of adding more remote training facilities and new programs to be offered to the foodservice industry: (ii) uncertainties associated with overhauling the structure of the A.O.S. degree program enrollment process and the inability of the Academy to make appropriate adjustments in a timely manner; (iii) the increased competition from both for-profit and non-profit culinary arts education institutions; (iv) the continued dependence on financial aid programs to fund a majority of Academy's students' education, thereby providing a significant portion of the Academy's revenues, together with the uncertainty that budgetary constraints or other factors in the future could impact the availability and amount of both public and private sources of financial aid; and (v) the possibility that regulatory agencies that dirctly or indirectly impact aspects of the Academy's business could revise regulations in such a way that the Academy would not be able to comply with new regulations in a timely manner. Investors are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Academy undertakes no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. RESULTS OF OPERATIONS The Academy had net income of $46,000 or $0.01 per share for the quarter ended September 30, 1996 ("Q1-97"), compared to net loss of $(424,000), or $(0.13) per share for the quarter ended September 30, 1995 ("Q1-96"). Total revenues increased 2.3% for Q1-97 to $3,529,000 from $3,450,000 for Q1-96. Revenues from culinary arts education, which typically account for approximately 80% of total revenues, increased $119,000 or 4.1% as compared to the same quarter from the prior fiscal year. Revenues from restaurant and retail sales, media and other decreased $33,000, or 5.9%, for the quarter over the same quarter from the prior fiscal year. Total culinary arts education revenues for Q1-97 were $2,995,000 compared to $2,876,000 for the Q1-96. The increase of $119,000, or 4.1%, is primarily to higher program fees and costs. Restaurants and catering revenues for Q1-97 were $379,000 compared to $429,000 for Q1-96. The decrease of $50,000 or 11.6% is primarily related to related to closure of the restaurants for remodeling and scheduled "black out" periods. Retail, media and other revenues for Q1-97 were $155,000 compared to $145,000 for Q1-96. The increase of $10,000 or 6.9% is primarily related to increased contract training and R&D revenue, royalties from book sales offset by lower than expected revenues in the Academy's retail shop. Total cost of sales for Q1-97 were $702,000 compared to $728,000 for Q1-96. The decrease of $26,000 or 3.6% is primarily related to lower food and beverage costs due to better cost control, and lower merchandise costs due to lower activity in the Academy's retail shop offset by higher supply costs. Total fixed costs for Q1-97 were $903,000 compared to $935,000 for Q1-96. The decrease of $32,000 or 3.4% is primarily related to lower repairs and maintenance expense. Total operating expenses for Q1-96 were $1,841,000 compared to $2,422,000 for Q1-96. The decrease of $581,000 or 24.0% is primarily related to lower compensation and benefits expense and outside service costs resulting from the Academy's restructuring plan implemented during the fourth quarter of fiscal year 1996. LIQUIDITY AND CAPITAL RESOURCES Historically, the Academy financed its growth from the issuance of equity securities in private and public transactions, borrowings from related parties, lease and debt financing obligations and through cash flow provided by operations. At September 30, 1996, the Academy's principal sources of liquidity included cash and cash equivalents of $3,284,000, including $615,000 of restricted cash equivalents held in certificates of deposit and pledged as collateral for term loans, and net accounts receivable of $2,993,000. The Academy has long-term obligations of $708,000 and working capital of $888,000 at September 30, 1996. Long-term obligations reflects the conversion of $1,400,000 Convertible Notes into Series A Preferred Stock on August 23, 1996. As of September 30, 1996 the Academy was indebted for a term loan that provides for borrowings up to $750,000 with interest at 1% above the prime rate of the bank, the proceeds of which are to be used to finance the purchase of new equipment. The outstanding principal balance of the term loan is to be repaid in 36 monthly installments of approximately $21,000. This term loan is collateralized by all of the Academy's equipment and a certificate of deposit, the balance of which shall not at any time be less than 50% of the principal balance outstanding under the term loan. As of September 30, 1996, the Academy had approximately $229,000 outstanding under this term loan and maintained a certificate of deposit for $355,000 in accordance with this provision. The term loan agreement contains various affirmative covenants including certain covenants and ratios which the Academy must maintain. As of September 30, 1996, the Academy was in violation of certain covenants. As of September 30, 1996, the term loan was classified as current and was repaid during October 1996. During September, the Academy terminated a $500,000 revolving line of credit with this bank. The Academy had no outstanding borrowings under the line of credit. In June 1996, the Academy obtained a term loan from another bank in the amount of $500,000, the proceeds of which were used for working capital requirements. Any outstanding principal balance under the second term loan shall be due and payable on July 15, 1997. The term loan provides for interest to be paid monthly at 1% above the bank's index rate for 90-day business certificate of deposits. The second term loan is collateralized by a certificate of deposit at the same bank in the amount of $500,000. As of September 30, 1996, the Academy had $500,000 outstanding under the term loan and maintained a certificate of deposit of $500,000 in accordance with this provision. The loan was classified as a current liability and was repaid during October 1996. PART II ITEM 1. LEGAL PROCEEDINGS There are various legal claims and lawsuits pending by and against the Academy that, in the opinion of management, after consultation with legal counsel, are not expected to have in any material adverse effect on the results of operations or financial position of the Academy. ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a.) EXHIBITS Exhibit No. Description ----------- -------------------------------------------------- 10.29 Lease for premises at Natividad Plaza, Salinas, CA 10.30 Agreement between Registrant and Noel-Levitz, Inc. dated July 1, 1996 11.0 Statement re: Computation of Earnings per Share 27.0 Financial Data Schedule (b.) REPORTS ON FORM 8-K None SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CALIFORNIA CULINARY ACADEMY, INC. November 19, 1996 By: /s/ Robert A. Stoffregen ------------------------------------------ Robert A. Stoffregen Chief Financial Officer and Director of Development EX-10.29 2 EXHIBIT 10.29 LEASE AGREEMENT EXHIBIT 10.29 LEASE AGREEMENT THIS LEASE is entered into this 15th day of July, 1996, in the county of Monterey, State of California, by and between NATIVIDAD PLAZA PARTNERS [hereinafter called "Landlord"] and The California Culinary Academy, Inc., a California Corporation, [hereinafter called "Tenant"]. Landlord hereby leases to Tenant and Tenant hires from Landlord those certain premises situated in the County of Monterey, State of California, commonly known as Space F-1, Natividad Plaza Shopping Center, Salinas, California, consisting of approximately 3780 square feet, and more particularly shown in the drawing attached hereto as Exhibit "A". 1. LEASE TERM. The term of this lease shall be for a period of five years, commencing on July 1, 1996, and expiring on midnight of the last day of June 2001. Should Tenant hold over and continue in possession after expiration of the term of this lease or any extension thereof, Tenant's continued occupation shall be considered a month-to-month tenancy subject to all the terms and conditions of this lease. Notwithstanding any provision in this lease to the contrary, Tenant shall have the right, upon thirty (30) days notice to Landlord, to terminate this lease if, within the twelve month period following the commencement of the first class at the Food Service Center, the aggregate gross revenues from tuition, product sales and all related revenues derived from the conduct of the Food Service Center during such period are less than $700,000.00. In the event that Tenant elects to terminate on the foregoing basis, the sum of $100,500.00 shall be promptly paid to Tenant as a refund of unamortized leasehold improvement cost which are hereby deemed to have been paid for by Tenant. 2. RENT. Upon the first day of each month, during the lease term, beginning January 1, 1997 through the month of June 2001, Tenant shall pay to Landlord the greater of either sum of Three Thousand Eight Hundred Seventy Dollars ($3,870.00), or 8% of gross sales for the training facility at this location. All rental payments for the balance of the lease term shall be made on the first day of each month. Tenant shall pay additional rent as set forth in this Lease Agreement. 3. COST OF LIVING ADJUSTMENTS. There shall be no Cost of Living Adjustments to this lease during its initial term. 4. LATE CHARGES AND DISHONORED CHECKS. If Tenant shall fail to pay any monthly rent payment by the 20th day of the month such payment is due, a late charge shall be assessed equal to six per cent (6%) of the rent payment. In the event that any check or other instrument tendered by Tenant is dishonored, in addition to late charges as specified above, Tenant shall pay an additional fee of $10.00 to reimburse Landlord for administrative costs incurred in connection with such dishonored instrument. 1 5. COMMON AREA AND EXTERIOR MAINTENANCE COSTS. As additional rent, Tenant shall pay to Landlord an amount equal to 10.36% of the actual cost of common area and exterior maintenance for Natividad Plaza Shopping Center. Common area and exterior maintenance are defined as all areas and facilities outside the premises described in Exhibit "A" and within the shopping center project that are provided and designated by Landlord from time to time for the general nonexclusive use of Landlord, Tenant, and other Tenants of the shopping center project and their respective employees, suppliers, customers, and invitees, including but not limited to exterior surfaces of the buildings, including roofs, common entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking areas, loading and unloading areas, trash areas, roadways, sidewalks, landscaped areas, and the cost of operating, managing, insuring, equipping, lighting, repairing, replacing and maintaining, and fire protection for the same. For the first year, Tenant shall pay to Landlord the sum of $1036.00 monthly, on the first day of each month, which represents an estimate of the actual common area and exterior maintenance costs chargeable to Tenant; annually Landlord shall furnish to Tenant the actual charges incurred, and any excess over the estimate shall be paid by Tenant to Landlord within ten (10) days, or any overage paid by Tenant to Landlord shall be returned by Landlord to Tenant within (10) days. At the beginning of each successive year of the term of this Lease and all options, extensions, and renewals thereof, Landlord shall provide Tenant with an estimate of the actual common area and exterior maintenance costs chargeable to Tenant, as a monthly sum, and Tenant shall pay said sum on the first day of each month, subject to annual adjustment as provided above. Payments due for common area and exterior maintenance costs shall be subject to the provisions of Paragraph 4 of this Lease relating to late charges and dishonored checks. Tenant has the non-exclusive right to use the common areas. 6. USE OF PREMISES. The leased premises shall be used for the sole purpose of operating and conducting thereon and therein a Food Service Center to include culinary training, restaurant and bakery operations and retail sales of culinary supplies and merchandise and for such purposes as may be reasonably incidental thereto, and none other, without the written consent of Landlord. Tenant shall be permitted to use the parking lot for marketing and promotional events subject to Landlord's approval. 7. UTILITIES. Tenant shall pay all utility costs incurred in connection with Tenant's occupation and use of the leased premises. 8. SECURITY DEPOSIT. Tenant shall upon execution of this lease deposit with Landlord $0 as security for the full and faithful performance of each and every term, provision, covenant, and condition of this lease. In the event that Tenant defaults in respect of any term, provision, covenant, or condition of this lease, including but not limited to the payment of rent, Landlord may use, apply or retain the whole or any part of the deposit for the payment of any other sum which Landlord may spend or be required to spend by reason of Tenant's default. Any remaining portion of this security deposit, after any lawful deductions as above, shall be returned to Tenant no later than two weeks after termination of the tenancy, directed to the address left by Tenant or to Tenant's last known address. Tenant shall not be entitled to interest on said security deposit. 9. REAL PROPERTY TAXES. As additional rent, Tenant shall pay to Landlord an 2 amount equal to 10.36% of the actual amount of all real property taxes assessed against Natividad Plaza Shopping Center. During the first year of this Lease, on the first day of each month, Tenant shall pay to Landlord the sum of $233.00, which represents an estimate of the actual amount of real property taxes chargeable to Tenant; annually, Landlord shall furnish to Tenant the actual charges incurred for real property taxes, and any excess over the estimate shall be paid by Tenant to Landlord within ten (10) days, or any overage paid by Tenant to Landlord shall be returned by Landlord to Tenant within ten (10) days. At the beginning of each successive year of the term of this Lease and all options, extensions, and renewals thereof, Landlord shall provide Tenant with an estimate of the actual property tax amounts chargeable to Tenant, as a monthly sum, and Tenant shall pay said sum on the first day of each month, subject to annual adjustment as provided above. Payments due for real property taxes shall be subject to the provisions of Paragraph 4 of this Lease relating to late charges and dishonored checks. Real property tax shall include any form of real estate tax or assessment, general or special, ordinary or extraordinary, and any commercial rental tax, improvement bond or bonds, levy or tax imposed on the property or any portion thereof by any authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, sanitary, fire, street, drainage, or other improvement district thereof. 10. MAINTENANCE BY TENANT. Tenant shall at Tenant's own cost and expense, keep and maintain all interior portions of the leased premises in good order and repair and in as safe and clean a condition as they were when received by Tenant, reasonable use, casualty and wear excepted. Said obligations shall include maintenance of exterior entrances, all partitions, doors, door jambs, door closes, door hardware, fixtures, equipment and appurtenances thereof, and plumbing, electrical, lighting, and heating systems which protrude in the leased premises. Tenant shall at Tenant's sole cost and expense repair and replace the glass in any display window on the premises that becomes broken, regardless of cause. If Tenant refuses or neglects to repair items properly required under this paragraph as soon as reasonably possible after written demand, Landlord may make such repairs without any liability to Tenant for any loss or damage that may accrue to Tenant's merchandise, fixtures, or other property or the Tenant's business by reason thereof, and upon completion thereof, Tenant shall pay Landlord's costs for making such repairs plus 20% for overhead, upon presentation of bill therefore, as additional rent. 11. MAINTENANCE BY LANDLORD. Landlord shall maintain in good condition and repair the exterior roof, exterior walls and structural supports, and all other portions of the building in which the leased premises are situated except as provided in the preceding paragraph. There shall be no obligation for the Landlord to repair pursuant to this section until after the expiration of three (3) days' written notice from Tenant to Landlord of the need for such repair. The cost thereof shall be borne pursuant to Paragraph 5 of this Lease Agreement. 12. ALTERATIONS. Tenant shall not have the right to make any alterations, improvements or additions to the leased premises without first obtaining the Landlord's written consent. Such consent shall not be unreasonably withheld. Tenant shall present to Landlord plans and specifications for such work at the time consent is sought. Tenant shall not cause or permit any lien to be placed on or accrue upon the leased premises or any part thereof by reason of anything done or omitted to be done upon said premises by or with the permission of Tenant. All alterations, additions, improvements, and fixtures, except furniture and trade fixtures, made or 3 placed in or on the premises by Tenant or any other person shall be the property of Landlord, and upon termination of this lease shall remain upon and be surrendered with the premises as a part thereof. Any floor covering affixed to the floor of the premises shall be and become the property of Landlord. 13. INSTALLATION AND REMOVAL OF TRADE FIXTURES. Tenant at Tenant's sole cost and expense may install in the leased premises such fixtures and equipment as Tenant deems advisable, and may remove the same from the leased premises at any time during the term of the lease; provided, however, that no injury shall be done to the structural strength of the building when said fixtures or equipment are removed, and the building shall be restored to substantially its original condition, casualty, reasonable wear and tear excepted. Any trade fixtures not removed from said premises by Tenant prior to the expiration or sooner termination of this lease shall be deemed abandoned by Tenant and shall become the property of Landlord. 14. ACCESS BY LANDLORD. Landlord or its designee shall be permitted to enter upon the leased premises at reasonable times during business hours, and in emergencies at all times, to inspect the premises, to make repairs, additions or alterations to the premises, the building of which the premises form a part, or any property owned or controlled by Landlord, or to exhibit the premises to prospective tenants 90 days prior to the end of the lease term. 15. SIGNS. Tenant shall be entitled to maintain a sign consistent with those found in Natividad Plaza Shopping Center, pursuant to approval of the City of Salinas. Tenant shall not place or maintain, nor permit any other person to place or maintain, any sign, awning, canopy, marquee, or other advertising on the premises owned or controlled by Landlord without the prior written consent of Landlord. 16. EXTERIOR DISPLAYS. Tenant shall not keep or display any merchandise on or otherwise obstruct the common area or the sidewalks, walkways or courtyards adjacent to the building of which the leased premises are a part without Landlord's consent. 17. INDEMNIFICATION OF LANDLORD. Tenant agrees to indemnify and save Landlord harmless from and against any and all claims arising from any act, omission or neglect of Tenant, or its agents, servants, employees, contractors, licensees, or arising from any accident, injury or damage whatsoever caused to any person or property occurring on, in or about the leased premises. 18. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in full force during the term of this lease or any extension thereof, a policy of comprehensive public liability insurance, insuring Tenant and Landlord, against any liability arising out of the ownership, use, occupancy, or maintenance of the premises and all areas appurtenant thereto. Such insurance shall be in the amount of not less than One Million Dollars ($1,000,000.00) for combined single limit bodily injury and property damage coverage. The limit of any such insurance shall not, however, limit the liability of the Tenant hereunder. Tenant may provide this insurance under a blanket policy, provided that said insurance shall have a Landlord's protective liability endorsement attached thereto. If Tenant shall fail to procure and maintain said insurance, Landlord may, but shall not be required to procure and maintain same, and at the expense of 4 Tenant. Tenant shall deliver to Landlord, prior to right of entry, copies of policies of liability insurance required herein, or certificates evidencing the existence and amounts of such insurance, with loss payable clauses satisfactory to Landlord. No Policy shall be cancelable, or subject to reduction of coverage without thirty (30) days' notice to Landlord at the address indicated below. All such policies shall be written as primary policies, not contributing with and not in excess of coverage which Landlord may carry. 19. WAIVER OF SUBROGATION. Each of the parties hereto waives any and all rights of recovery against the other or against any other Tenant or occupant of the subject premises or against the officers, employees, agents, representative, customers and business visitors of such other party or of such other tenant or occupant of the subject premises for loss of or damage to such waiving party or its property or the property of others under its control, arising from any cause insured against under the standard form of fire insurance policy with all permissible extension endorsements covering additional perils or under any other policy of insurance carried by such waiving party in lieu thereof, to the extent such loss or damage is insured against by such policy. Such waiver shall not be binding on either party unless the same is permitted by each party's insurance carrier without the payment of additional premium. 20. EMINENT DOMAIN. Should during the term of this lease title to all of the leased premises or so much thereof be taken by any public or quasi-public use under any statute or by right of eminent domain, so that a reasonable amount of reconstruction of the premises will not result in the premises being reasonably suitable for Tenant's continued occupancy for the use and purposes for which the premises are leased, this lease shall terminate as of the date that possession of said premises, or part thereof, be taken. If any part of the premises shall be so taken and the remaining part thereof (after reconstruction of the then existing buildings in which the premises are located) is reasonably suited for Tenant's occupancy, this lease shall, as to the part so taken, terminate as of the date that possession of said part be taken, and the rent shall be reduced in proportion to the amount of floor area taken. All compensation awarded or paid upon such a total or partial condemnation shall belong to and be the sole property of Landlord; provided, however, that Tenant shall be entitled to any award made for loss of business, depreciation to and cost of removal of stock and fixtures. 21. SURRENDER OF PREMISES. On expiration or sooner termination of this lease, or any extensions or renewals of this lease, Tenants shall promptly surrender and deliver the leased premises to Landlord in as good condition as they now are at the date of this lease, casualty and reasonable wear and tear excepted. 22. INSOLVENCY OF TENANT. Tenant agrees that in the event all or substantially all of the tenant's assets are placed in the hands of a receiver or trustee, and such receivership or trusteeship continues for a period of thirty (30) days, or should Tenant make an assignment for the benefit of creditors or be adjudicated a bankrupt, or should Tenant institute any proceedings under the bankruptcy act or under any amendment thereof which may hereafter be enacted, or under any other act relating to the subject of bankruptcy wherein Tenant seeks to be adjudicated a 5 bankrupt, or to be discharged of its debts, or to effect a plan of liquidation, composition, arrangement or reorganization, or should any involuntary proceeding be filed against Tenant under any such bankruptcy laws and Tenant consent thereto or acquiesce therein by pleading or default, then this lease or any interest in and to the leased premises shall not become an asset in any of such proceedings, and, in any such event and in addition to any and all rights and remedies of Landlord hereunder or by law provided, it shall be lawful for Landlord to declare the term hereof ended and to reenter the leased premises and take possession thereof and remove all persons therefrom, and Tenant shall have no further claim thereon or hereunder. 23. ASSIGNMENT AND SUBLETTING. Tenant shall not transfer, assign or sublet the leased premises in whole or in part, or any right or interest in said premises, without the express written consent of Landlord first obtained. Landlord shall not unreasonably withhold such consent. A consent by Landlord to one transfer, assignment, or subletting, or one occupation of the premises by another person shall not be deemed a consent to any subsequent transfer, assignment, subletting or occupation. Should Tenant attempt to make or suffer to be made any such transfer, assignment, subletting or occupation, except with the consent of Landlord as provided above, or should any of Tenant's rights under this lease be sold or otherwise transferred by or under court order or legal process or otherwise, or should Tenant be adjudged insolvent or bankrupt, then in any of the foregoing events Landlord may, at its option, terminate this lease forthwith by written notice thereof to Tenant. Any request for assignment or subletting shall be made by the Tenant in writing, to the Landlord, and shall include the following documentation: (1) all transaction documents; (2) all financing documents; (3) the identity of any formal escrow holder; (4) escrow instructions; (5) a summary of the proposed assignee's or sublessee's business history; (6) a personal financial statement of the proposed assignee or sublessee or proposed guarantor; (7) proposed assignee's or sublessee's business and personal tax returns for the past three years; (8) a copy of the proposed assignee's or sublessee's business plan; (9) a list of all key employees, partners, and financial backers in the proposed venture; (10) a description of improvements to be made to the premises and how they are to 6 be financed; and (11) business, trade, and personal references. 24. REFINANCING BY LANDLORD. Landlord shall have the right at any time to sell the premises and assign its interest in the lease without further recourse on the part of Tenant. In the event that Landlord shall sell its interest in the premises during the term of this lease, then after the effective date of such transfer Landlord shall be released and discharged from any and all further obligations and responsibilities under this lease except those already accrued. 25. ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a lessor amount than the rent herein provided shall be deemed to be other than on account of the earliest rent due and payable hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept any such check of payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other proper remedy. 26. SUBORDINATION AND OFFSET. Tenant agrees that this lease shall be subject to any mortgage, trust deed, or encumbrance hereafter placed upon said property by Landlord or its successors in interest to secure the payment of monies loaned, interest thereon, and other obligations. Tenant also agrees to execute, acknowledge and deliver to Landlord, from time to time upon request, an offset statement or estoppel certificate containing such facts pertaining to this lease as a purchaser or lender may require, provided such facts are within the knowledge of or are available to Tenant. 27. DEFAULT. In the event of default in the payment of any installment of rent, or in the performance of any other covenant or condition of this lease, which default may continue for ten (10) days after notice and demand in writing by Landlord to correct such default, or if Tenant abandons the property prior to the expiration of the term provided for in this agreement, the Landlord may at his option terminate this lease and recover damages from Tenant, including (a) the worth at the time of award of the unpaid rent which has been earned at the time of termination; (b) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; (c) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss for such period that Tenant proves could be reasonably avoided; and (d) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform his obligations under this lease, or which in the ordinary course of things would be likely to result therefrom. Alternatively, in the event of such default, Landlord may elect not to terminate the Tenant's right to possession, and the lease shall then remain in effect and Landlord may enforce rights and remedies under the lease, including the right to recover rent as it becomes due. 28. CUMULATIVE REMEDIES. All remedies given to Landlord in this lease shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law. 7 29. TENANT'S PROPERTY. Tenant agrees to insure the contents of the building against fire, theft, vandalism, and such other hazards as are readily insurable under a normal "fire and extended coverage" policy, and to provide Landlord with a copy of such policy or any policies, and any modifications or replacements thereto, within thirty (30) days of execution of this lease. Tenant shall be responsible for and shall pay before delinquency all municipal, county or state taxes assessed during the term of this lease against any leasehold interest or personal property of any kind, owned by or placed in, upon, or about the leased premises by Tenant. 30. LOSS AND DAMAGE TO TENANT'S PROPERTY. Landlord shall not be liable for any damage to property of Tenant or of others located on the leased premises, nor for the loss of or damage to any property of Tenant or of others by theft or otherwise. Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, gas, electricity, water, rain or leaks from any part of the leased premises or the common areas, or from the pipes, appliances or plumbing works or from the rook, street or subsurface or from any other place or by any other cause of whatsoever nature. Landlord shall not be liable for any such damage caused by other tenants or persons in the leased premises, occupants of adjacent property, of the common area, or the public, or caused by operations and construction of any private, public or quasi-public work. All property of Tenant kept of stored on the leased premises shall be so kept or stored at the risk of Tenant only and Tenant shall hold Landlord harmless from any claims arising out of such damage to the same, including subrogation claims by Tenant's insurance carriers, unless such damage shall be caused by the willful act or gross neglect of Landlord, and through no fault of Tenant. 31. WAIVER. The failure of Landlord to enforce any right or remedy for violation by Tenant of any term or condition of this agreement shall not be deemed to be a consent by Landlord to such violation, and shall not bar, estop or prevent Landlord from enforcing such right or remedy either for such violation or for any subsequent breach of any term, condition or covenant hereof. 32. LEGAL EXPENSES. Tenant shall pay to Landlord all amounts for reasonable attorneys' fees incurred by Landlord in connection with any breach or default under this lease or incurred in order to enforce the terms or provisions hereof. Such amount shall be payable upon demand. In addition, in the event that any action shall be instituted by either of the parties hereto for the enforcement of any of its rights or remedies in or under this lease, the prevailing party shall be entitled to recover from the other party, all costs incurred by said prevailing party in said action, including reasonable attorneys' fees to be fixed by the court therein. 33. NOTICES. All notices in writing required by this agreement may be personally served or may be mailed to the following addresses: Landlord: Natividad Plaza Partners c/o Central California Management Co. 80 Garden Ct., Ste. 210 Monterey, CA 93940 Phone (408) 646-1900 Fax (408) 656-1299 8 Tenant: The California Culinary Academy 625 Polk St. San Francisco, CA 95102 34. TIME. Time is of the essence of this agreement. 35. ENTIRE AGREEMENT. This agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and to the leased premises, and supersedes all prior and contemporaneous leaves, agreements, representations, and understandings of the parties. No supplement, modification, or amendment shall be binding unless executed in writing by all of the parties. 36. PARTIAL INVALIDITY. If any term, covenant, or condition of this lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this lease, or the application of such term, covenant, or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant, or condition of this lease shall be valid and be enforced to the fullest extent permitted by law. 37. SUCCESSORS. All rights and liabilities herein given to, or imposed upon, the respective parties hereto shall extend to and bind the several respective heirs, executors, administrators, successors, and assigns of the said parties; and if there shall be more than one tenant, they shall all be bound jointly and severally by the terms, covenants and agreements herein. No rights, however, shall inure to the benefit of any assignee of Tenant, unless the assignment to such assignee has been approved by Landlord as provided above. 38. NO REPRESENTATIONS. Tenant agrees that Landlord has not made and Tenant is not relying on any representations, whether verbal or written, by Landlord, his agents or employees. 39. CHRONIC DELINQUENCY. Chronic delinquency by Tenant with payment of rent, monthly charges, periodic charges or any other amounts required to be paid by Tenant under this Lease shall constitute a breach of this Lease. Chronic delinquency shall be defined as any failure by Tenant to pay or submit within ten (10) days of the due date its rent and/or charges required for any three (3) months, consecutive or nonconsecutive, during any twelve (12) month period. 40. HAZARDOUS AND TOXIC SUBSTANCES. Tenant shall not use, generate, store or dispose, or give consent to anyone else to use, generate, store or dispose, any hazardous, toxic, or radioactive materials [hereinafter referred to collectively as "Hazardous Materials"]. As herein used, Hazardous Materials shall include, without limitation, those materials identified in Sections 66680 through 66685 of Title 22 of the California Administrative Code Division 4, Chapter 30, as amended from time to time, and those substances defined as "hazardous substances", "hazardous materials', and "hazardous waste", or other similar designations in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 USC, Section 9601 ET SEQ., the Hazardous Materials Transportation Act, 49 USC, Section 1801 ET SEQ., and any other governmental statutes, laws, ordinances, rules, and regulations now or hereafter in effect. Tenant 9 shall indemnify, defend and hold Landlord from and against any and all claims, damages, costs and liabilities, including all foreseeable and unforeseeable consequential damages, directly or indirectly arising out of the use, generation, storage, or disposal of Hazardous Materials by Tenant or any person claiming under Tenant, including, without limitation, the cost of any required or necessary repair, cleanup, or detoxification and the preparation of any closure or other required plans, whether such action is required or necessary prior to or following the termination of this lease, to the full extent that such action is attributable, directly or indirectly, to the use, generation, storage, or disposal of Hazardous Materials by Tenant or any person claiming under Tenant. Neither the written consent by Landlord to the use, generation, storage or disposal of Hazardous Materials nor the strict compliance by Tenant with all statutes, laws, ordinances, rules and regulations pertaining to Hazardous Materials shall excuse Tenant from Tenant's obligation of indemnification pursuant to this paragraph. Tenant's obligation pursuant to the foregoing indemnity shall survive the termination of this lease. 41. WAIVER OF JURY. Landlord and Tenant hereby waive their respective right to to trial by any cause of action, claim, counterclaim or cross-complaint in any action, proceeding and/or hearing brought by either Landlord against Tenant or Tenant against Landlord on any matter whatsoever arising out of, or in any way connected with, this lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, or any claim of injury or damage, or the enforcement of any remedy under any law, statute, or regulation, emergency or otherwise, now or hereafter in effect. 42. OPTION. In the event that Tenant is not in default with respect to any of the provisions of this Lease agreement, Tenant shall have the right to extend the lease term for one additional period(s) of five (5) years provided that Tenant notifies Landlord in writing not less than ninety (90) days prior to the termination of the initial lease term of Tenant's intention to extend. The amount of monthly rental shall be the fair market rental as of the date of commencement of the option period as mutually agreed upon by the parties, and shall otherwise be subject to all of the terms and conditions of this Lease, including but not limited to triple net charges and CPI adjustments. In the event the parties cannot agree upon the amount of fair market rental, the parties shall agree upon an appraiser to fix the rental for the option period at fair market rental. In the event the parties cannot agree upon an appraiser, either party may petition the Superior Court of the State of California for the County of Monterey to have the court appoint such an appraiser with each party to bear one-half of the cost of such appraiser. 43. CONDITION OF PREMISES AND CONTINGENCY. Tenant agrees to promptly apply for necessary permits, consents and a certificate of occupancy. In the event that Tenant is not able to obtain such permits, consents or certificate of occupancy without agreeing to conditions which in Tenant's sole judgement are unduly burdensome to Tenant, Tenant shall have the right to terminate this lease and receive a full refund of any moneys paid to Landlord hereunder. Tenant shall not unreasonably terminate this lease. Landlord warrants that the premises are in compliance with the Americans with Disabilities Act as of the date hereof. 44. TENANT IMPROVEMENTS. All tenant improvements shall be paid for by Tenant. Tenant agrees to pay Landlord One Hundred Fifty Thousand Dollars ($150,000.00) for all existing Tenant improvements. Tenant agrees to deposit said sum with Landlord as consideration 10 for early possession, free rent and other lease concessions on July 1, 1996. 45. APPROVAL OF PLANS. Tenant shall submit all plans, specifications, and proposed choice of contractor to Landlord for approval; Landlord shall not unreasonably withhold approval of the same. Landlord's approval or disapproval shall be communicated in writing within five (5) business days of submission of the same to Landlord. In the event Landlord does not approve the same, Tenant may terminate this Lease, with neither party having any obligation to the other, provided that Tenant gives written notice of the same to the Landlord within five (5) days of the date Landlord's approval or disapproval was required to be furnished. 46. LIENS. Tenant agrees to keep all of the leased premises and every part thereof and all buildings and other improvements within which the same are located free and clear of and from any and all mechanic's, materialmen's and other liens for work or labor done, service performed, materials, appliances, transportation or power contributed, used or furnished to be used in or about the leased premises to or on the order of Tenant, and Tenant shall promptly and fully pay and discharge any and all claims upon which any such lien may or could be based within ten (10) days after learning of the existence thereof and Tenant shall save and hold Landlord and all of the leased premises and all buildings and improvements within which the same are contained free and harmless of and from any and all such liens and claims of liens and suits or other proceedings arising out of materials or services furnished to or on the order of Tenant. Tenant shall provide Landlord five (5) business days' notification prior to the commencement of any work or improvement to allow Landlord opportunity to post a notice of nonresponsibility. TENANT: LANDLORD: CALIFORNIA CULINARY ACADEMY NATIVIDAD PLAZA PARTNERS By illegible By illegible ------------------------- ----------------------- 11 EXHIBIT "A" [Restaurant Floor Plan] EX-10.30 3 EXHIBIT 10.30 MEMORANDUM OF AGREEMENT EXHIBIT 10.30 MEMORANDUM OF AGREEMENT THIS AGREEMENT is made the 1st day of July 1996, by and between California Culinary Academy (hereinafter referred to as "Institution") and Noel-Levitz Centers, Inc., d/b/a USA Group/Noel-Levitz (hereinafter referred to as "Noel-Levitz"). FOR CONSIDERATION of the mutual promises and covenants contained in this document, the Institution and Noel-Levitz agree as follows: I. PROJECT SCOPE A. Noel-Levitz agrees: 1. To provide 12 months of Ongoing Enrollment Consulting. This will include specific, on-site, monthly assistance, and constant monitoring, in building a prospecting, marketing, recruiting, and communication systems. Specifically, this will include: a. Assistance in developing and implementing the master enrollment plan; b. Assistance in designing and implementing a comprehensive written/personal communication system; c. Creating a detailed plan for generating inquiries from among those students that fit your Institutional priorities; d. Developing an integrated system for qualifying, grading and managing the prospect pool; e. Creating a management reporting structure to track and evaluate results; f. Monitoring all results and systems in order to make recommendations about mid-course corrections; and g. Outlining 30 and 90 day successive action plans and progress benchmarks. 2. To provide the Effective Admissions Counselor Training Program, a two-day on-campus training program for admissions recruiters. 3. License EMASPLUS (the "System") to the Institution pursuant to the terms of the EMASPLUS License Agreement attached hereto as Exhibit A (the "License Agreement"). The License Agreement will allow the Institution to concurrently use the System on a maximum of 10 computer work stations. 4. Provide the following services (the "Services") in connection with implementation of the System: a. One day on-campus visit to identify and address software administration, integration and data exchange needs; b. Provide documentation and telephone consultation to assist the Institution in its preparation of data exchange and the requirements necessary to interface with the Institution's current systems (the Institution will be responsible for making any necessary changes to allow the System to interface correctly with the Institution's current systems); c. Ordering the Microsoft FoxPro-TM- software and Symantec THE NORTON pcANYWHERE-TM- software on behalf of the Institution and coordinating the shipment of such software directly to the Institution; d. Telephone consultation to confirm that the Institution has appropriately completed the System preparation activities; e. Two-day on-campus installation and training session for the Institution's key personnel responsible for operating the System, including providing assistance to the Institution's network administrator in installing the System on the Institution's computer system network (the Institution will be responsible for any necessary changes to the Institution's computer system network); f. Three-day on-campus training session for all professional and support staff who will be using the System; and g. Two-day on-campus telecounseling training session for up to 20 of the Institution's student telecounselors and key personnel responsible for the operation of the telecounseling component of the System. 5. Provide two years of technical support services and maintenance (the "Technical Support and Maintenance") on the System pursuant to the terms of the EMASPLUS Technical Support and Maintenance Agreement attached hereto as Exhibit B (the "Technical Support and Maintenance Agreement"). Additional years of Technical Support and Maintenance will be provided to the Institution at the annual fee set forth in the Technical Support and Maintenance Agreement. 6. To assist the Institution using ForecastPLUS-TM- to identify those students most and least likely to enroll for the 1997-98 academic year. We will build Institution specific models to predict probability of enrollment at all stages of the enrollment funnel: prospectus to inquiry, inquiry to applicant and acceptance to matriculant. Specifically, this includes: a. Demographic analysis of the Institution's enrollment data; b. One day on-campus presentation of the models, including a written report with recommendations for integrating the models into Institutional marketing and recruiting strategies; c. An algorithm for Institutional implementation of the scoring process for admitted to enrolled students; and d. External scoring of the institutional database with the probability rating; once for the prospect file, three times for the inquiry file and once for the admitted file, annually. 7. To advise the Institution using the Financial Aid Leverage Analysis regarding the formulation and implementation of financial aid awarding and packaging strategies designed to support new student enrollment and revenue goals over the next two years. This component includes: a. An annual historical comparison of financial aid packages offered to enrolled and non enrolled students for up to five unique populations for admitted students, as 2 defined by the institution, including a one day on-campus visit for data collection discussions; b. Up to three days of annual on-site assistance with institutional, admission/financial aid goal-setting based upon analysis and interpretation of the historical analysis; c. Annual assistance with formulating recommended awarding strategies that support institutional enrollment goals; d. Annual assistance in implementing the Awarding Strategy; e. Annual assistance in managing and monitoring progress toward goals; f. Annual return (retention) analysis; g. Annual four year enrollment and net revenue projection modeling; and h. Annual assistance to implement the Early Estimator Program to pre-qualify students whose decisions to apply and enroll at the Institution and might be influenced adversely by the cost of attendance. This includes: 1.) An annual customizable early estimating form; 2.) Four key implementation letters and promotional strategies; 3.) Annual software to estimate eligibility and generate periodic management reports; and 4.) Staff training to ensure effective presentation and implementation of the strategy. In the event that the Institution provides written notification to Noel-Levitz by February 1, 1997 of its desire not to conduct the Financial Aid Leverage Analysis, then Noel-Levitz will be released from its obligation to perform the Financial Aid Leverage Analysis, with the exception of one (single year) Annual Return Analysis for which data currently exists. B. The Institution agrees: 1. To identify the person(s) who will be the Institutional contact(s) for the project. 2. To provide the historical data requisite for the Financial Aid Leverage Analysis and ForecastPLUS in a manner and in a form Noel-Levitz specifies which permits the successful and timely completion of the analyses. 3. To provide personnel, equipment and facilities to utilize the programs and software provided by Noel-Levitz. 4. To provide the computer hardware (including modem and dedicated analog telephone line) required to operate the System, and to ready this hardware for installation of the System. System technical specifications are attached hereto as Exhibit C. 5. To have a computer systems network in place and operational prior to installation of the System and to have the Institution's network administrator available during installation of the System to make necessary configuration changes. 3 6. To provide conversion test data by a mutually agreed upon date. The Institution understands that if such data is not provided by such date, a substantial delay in the installation of the System and the completion of the project is likely to occur. 7. To provide an adequately equipped on-campus training facility to be used by Noel-Levitz personnel during System training. 8. To execute and conform to the provisions of the License Agreement. 9. To execute and conform to the provisions of the Technical Support and Maintenance Agreement. 10. That it is responsible for the actual implementation of all suggested actions. A representative of Noel-Levitz will work closely with the administrative staff on the implementation of the enrollment program. 11. That all financial aid goal setting, awarding, packaging, and net revenue decisions which are made are Institutional decisions. 12. To take full responsibility for the actual mailing, communication, goal setting, awarding, packaging, and net revenue decisions and their outcomes. 13. That Noel-Levitz shall not be responsible for reviewing or providing any advice regarding the Institution's compliance with any Federal, state or local statutes or regulations pertaining to financial aid programs. 14. It understands that Noel-Levitz will be working with other colleges and universities throughout the United States and Canada, providing services similar to those described herein. 15. That it understands that Noel-Levitz reserves the right to assign this agreement in full to the USA Group or any of its affiliates or subsidiaries. C. The term of this Agreement shall be for 24 months, beginning July 1, 1996, and ending June 30, 1998. Neither party shall have any right to terminate this agreement prior to the end of the term of this agreement. The payment schedule set forth in this agreement is solely for the fiscal convenience of the institution; therefore, in the event that the parties mutually agree in writing to an earlier termination date, the institution shall pay Noel-Levitz for the value of the products delivered and services rendered through such early termination date. D. The Institution has the option to continue Noel-Levitz services after this agreement is completed. The price of any additional services will be negotiated at that time. E. Noel-Levitz warrants that if the System fails to substantially conform to the specifications in the System documentation and if the non-conformity is reported in writing by the 4 Institution to Noel-Levitz within 90 days from the later of the date that the System license is purchased or the date the installation is completed, then Noel-Levitz will, at its option, either remedy the non-conformity or offer to refund the license fee to the Institution upon return of all copies of the System software and System documentation to Noel-Levitz. In the event of a refund the System license shall terminate. The foregoing warranty shall apply provided that: (a) the System is not modified, changed, or altered by anyone other than Noel-Levitz, unless authorized by Noel-Levitz in writing; (b) the Institution's computer equipment is in good operating order and is installed in a compatible environment; (c) the non-conformity is not caused by a third party or by the Institution, its agent, employees or contractors; and (d) the data and/or database used with the System are not modified, changed or altered by any means other than through the normal operation of the System. F. Additional services (the "Additional Services") related to the Services that are not set forth in this Agreement may be purchased from Noel-Levitz from time to time by the placement of a written work order (a "Work Order"). No obligation for services or costs shall be incurred by either party unless and until a Work Order has been executed by both parties. Each Work Order shall contain, among other provisions, a description of the services to be performed, the delivery or performance schedule and an estimate of the costs to be charged. The Additional Services provided pursuant to any Work Order shall be subject to the terms and conditions contained in this Agreement. II. PAYMENT A. Payment for the services and software outlined in I,A of this Agreement will total $220,300, two hundred twenty thousand three hundred dollars, plus actual travel, lodging, and subsistence. - July 15, 1996 $83,650 - August 15, 1996 $8,300 - September 1, 1996 $8,300 - October 15, 1996 $8,300 - November 15, 1996 $8,300 - December 15, 1996 $8,300 - January 15, 1997 $8,300 - February 15, 1997 $8,300 - March 15, 1997 $8,300 - April 15, 1997 $8,300 - May 15, 1997 $8,300 - June 15, 1997 $8,300 - July 15, 1997 $40,000 - August 15, 1997 $5,350 The price per element is: Ongoing Enrollment Consulting $5,500/month Effective Admissions Counselor Training Program $4,290 5 EMASPLUS $42,260 EMASPLUS Annual Maintenance Year 1 $5,350 EMASPLUS Annual Maintenance Year 2 $5,350 ForecastPLUS $37,050 Financial Aid Leverage Analysis Year 1 $41,280 Financial Aid Leverage Analysis Year 2 $18,720 In the event that the Institution provides written notification to Noel-Levitz of its desire not to conduct the Financial Aid Leverage Analysis as provided for in I(A)(7), then Noel-Levitz will be released from its obligation to perform the Financial Aid Leverage Analysis, except for one (single year) Return Analysis. Payment for the services and software will then total $184,300, one hundred eighty four thousand three hundred dollars, plus actual travel, lodging, subsistence. - July 15, 1996 $75,650 - August 15, 1996 $10,300 - September 1, 1996 $10,300 - October 15, 1996 $8,300 - November 15, 1996 $8,300 - December 15, 1996 $8,300 - January 15, 1997 $8,300 - February 15, 1997 $8,300 - March 15, 1997 $8,300 - April 15, 1997 $8,300 - May 15, 1997 $8,300 - June 15, 1997 $6,300 - July 15, 1997 $10,000 - August 15, 1997 $5,350 The price per element is: Ongoing Enrollment Consulting $5,500/month Effective Admissions Counselor Training Program $4,290 EMASPLUS $42,260 EMASPLUS Annual Maintenance Year 1 $5,350 EMASPLUS Annual Maintenance Year 2 $5,350 ForecastPLUS $37,050 Return Analysis $24,000 B. Payment of expenses will be invoiced monthly with appropriate receipts or invoices for travel, lodging, subsistence, and transportation, express mail charges, and the cost of presentation visuals. C. All fees will be payable in U.S. dollars and do not include any taxes. If Noel-Levitz is required to pay sales or other taxes based upon the license granted, the use of the Noel-Levitz product(s), or services rendered, the Institution will reimburse Noel-Levitz the 6 amount of taxes paid by Noel-Levitz. If the Institution does not remit payment to Noel-Levitz within 30 days after receipt of an invoice, the Institution will pay Noel-Levitz a late charge of the lesser of 1.5% per month or the maximum amount permitted by applicable state law for unpaid amounts due Noel-Levitz. Collection costs incurred by Noel-Levitz, including reasonable attorney fees, will be reimbursed by the Institution. D. Invoices shall be sent to the following address: Ms. Sandra Weber Director of Alumni and Career Services and Enrollment Management California Culinary Academy 625 Polk Street San Francisco, CA 94102 E. Checks should be made payable to Noel-Levitz and mailed to: Noel-Levitz Centers, Inc. 2101 ACT Circle Iowa City, IA 52245 III. DISCLAIMER OF WARRANTIES; LIMITATION ON LIABILITY EXCEPT AS SPECIFICALLY PROVIDED HEREIN, NOEL-LEVITZ MAKES NO WARRANTY, REPRESENTATION, PROMISE OR GUARANTEE, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SOFTWARE OR SERVICES, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOEL-LEVITZ'S AGGREGATE LIABILITY, AND THE INSTITUTION'S SOLE AND EXCLUSIVE REMEDY FOR ANY CAUSE WHATSOEVER, REGARDLESS OF THE FORM OF ACTION, ARISING FROM OR RELATING TO THIS AGREEMENT IS LIMITED TO THE TOTAL OF ALL PAYMENTS MADE BY OR FOR THE INSTITUTION TO NOEL-LEVITZ FOR THE SOFTWARE OR SERVICES INVOLVED IN ANY SUCH CLAIM. NOEL-LEVITZ SHALL NOT IN ANY CASE BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, INDIRECT OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES OR COSTS RELATING TO ENROLLMENT SUCCESS, LOSS OF PROFITS OR REVENUE, BUSINESS INTERRUPTION, LOSS OF GOODWILL, OR LOSS OF THE USE OF ANY DATA) ARISING FROM THE SOFTWARE OR SERVICES PROVIDED BY NOEL-LEVITZ HEREUNDER, EVEN IF NOEL-LEVITZ HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES OR THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE LIMITATIONS OR EXCLUSIONS MAY NOT APPLY TO THE INSTITUTION. 7 IV. CONFIDENTIALITY During the course of performance of this Agreement, the Institution may be given access to information that relates to Noel-Levitz's past, present and future research, development, business activities, products, services or technical knowledge. All of such information shall be deemed to be "Confidential Information" unless otherwise indicated by Noel-Levitz in writing at or after the time of disclosure. The Confidential Information may be used by the Institution only in connection with its internal business. Access to the Confidential Information shall be restricted to those of Institution's personnel, representatives and contractors on a need to know basis solely in connection with Institution's internal business. The Institution further agrees that it will (i) take all necessary steps to inform any of its personnel, representatives or contractors to whom Confidential Information may be disclosed of the Institution's obligations hereunder and (ii) cause said personnel, representatives and contractors to agree to be bound by the terms of this Agreement by executing a confidentiality agreement containing the same restrictions contained herein or some other method acceptable to Noel-Levitz. Institution agrees to protect the confidentiality of the Confidential Information in the same manner that it protects the confidentiality of its own proprietary and confidential information of like kind. The Institution agrees to notify Noel-Levitz of any unauthorized use or disclosure of Confidential Information and to take all actions reasonably necessary to prevent further unauthorized use or disclosure thereof. The terms of this Section shall survive the expiration or termination of this Agreement. V. MISCELLANEOUS This Agreement constitutes the entire agreement between Noel-Levitz and the Institution relating to the subject matter contained herein. There are no understandings, representations or warranties, express or implied, that are not specified herein. No change will be made in any of the terms of this Agreement, nor any provision waived, without the prior written consent of Noel-Levitz and the Institution. Noel-Levitz will not have any liability for the failure to carry out its obligations in the manner specified herein due to any circumstances beyond its reasonable control. All notices and consents required or permitted herein will be made in writing and will be mailed by certified mail, return receipt requested, to the addresses specified herein or such other addresses designated by Noel-Levitz or the Institution. If any provision of this Agreement is declared invalid or unenforceable, the remaining provisions will remain in force. This Agreement will be construed in accordance with the laws of the State of Indiana, without giving effect to conflict of law provisions. This Agreement will constitute a license of application software and an agreement to provide services and will not be construed as a contract for the sale of goods subject to the provisions of the Uniform Commercial Code. Until accepted by Noel-Levitz, this Agreement will be considered an offer by the Institution. 8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date written below. California Culinary Academy San Francisco, California Illegible Sandra Weber By: __________________________ By: ______________________________ CFO Dir., Enrollment Management Title: _______________________ Title: ___________________________ 7/18/96 7-18-96 Date: ________________ Date: ________________ Noel-Levitz Centers, Inc. Iowa City, Iowa By: __________________________ Title: _______________________ Date: ________________ 9 EXHIBIT A EMASPLUS LICENSE AGREEMENT CALIFORNIA CULINARY ACADEMY PLEASE READ CAREFULLY: THIS LICENSE AGREEMENT (THE "AGREEMENT") IS MADE EFFECTIVE THIS 1ST DAY OF JULY, 1996 BETWEEN CALIFORNIA CULINARY ACADEMY, A CALIFORNIA CORPORATION (THE "INSTITUTION"), WITH OFFICES AT 625 POLK STREET, SAN FRANCISCO, CA 94102 AND NOEL-LEVITZ CENTERS, INC., D/B/A USA GROUP NOEL-LEVITZ, AN IOWA CORPORATION, HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 2101 ACT CIRCLE, IOWA CITY, IA 52245 ("NOEL-LEVITZ"). IF THE INSTITUTION DOES NOT AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE INSTITUTION SHOULD NOT SIGN THIS AGREEMENT AND THE INSTITUTION SHOULD RETURN ALL PROGRAM DISKETTES AND DOCUMENTATION IMMEDIATELY TO NOEL LEVITZ. DEFINITIONS "DOCUMENTATION" means the printed materials provided by Noel-Levitz with the Software. "LICENSE" means the license purchased and granted pursuant to this Agreement. "LICENSED NETWORK SERVER" means the Institution's computer network server on which the Software is licensed to be installed. "SOFTWARE" collectively means the EMASPLUS software and any other software the Institution has received from Noel-Levitz with this License, except Third Party Software products. "THIRD-PARTY SOFTWARE" means software products owned by third parties (including Microsoft FoxPro-TM- and Symantec THE NORTON pcANYWHERE-TM-) that are required to operate the Software. LICENSE AND PROTECTION 1. LICENSE GRANT: Noel-Levitz grants to the Institution, subject to the following terms and conditions, a non-exclusive, non-transferable right to use the Software and Documentation solely for the Institution's internal business operations on as many as 10 computers or workstations used concurrently with a single database on the Licensed Network Server. The Software and Documentation are for internal use only and may not be used or distributed outside of the Institution. Noel-Levitz reserves all rights not expressly granted herein to the Institution. Payment for the Software shall be made in accordance with the payment schedule established in the Memorandum of Agreement between Noel-Levitz and the Institution. Additional concurrent users may be licensed by the Institution at Noel-Levitz's then current price in effect. Page 1 2. THIRD-PARTY SOFTWARE: Certain Third Party Software products are required to operate the Software. Although Noel-Levitz does not sell the Third Party Software, it will coordinate on behalf of this Institution the purchase of FoxPro and pcANYWHERE and the shipment of such products directly to the Institution. The Institution is responsible for registering the license for Third Party Software products in its own name and for acquiring and maintaining current versions required to operate the Software. Noel-Levitz will notify the Institution of changes in versions of Third Party Software products required to run the Software. 3. PROTECTION OF SOFTWARE: The Software source code represents and embodies trade secrets of Noel-Levitz. Such source code and embodied trade secrets are not licensed to the Institution and any modification, addition, or deletion is strictly prohibited. The Institution agrees to treat the Software and Documentation as confidential and to take all reasonable steps to protect the Software and Documentation from unauthorized copy or use. The Institution agrees not to disassemble, decompile, or otherwise reverse engineer the Software in order to discover the source code and/or the trade secrets contained in the source code. The Institution agrees to take appropriate action by instruction or agreement with its employees and independent contractors who are permitted access to any of the materials related to this Agreement to comply with the Institution's obligations hereunder. This paragraph 3 shall survive the expiration or termination of this Agreement. 4. COPIES AND ADAPTATIONS: The Institution may make or authorize the making of copies or adaptations of the Software, provided that any new copy or adaptation created is for archival purposes only, and the Institution does not receive any payment, commercial benefit, or other consideration for the reproduction. All proprietary rights and notices must be faithfully reproduced and included on all copies and adaptations. The Documentation may be duplicated for internal use only. 5. OWNERSHIP: Ownership of, and title to, the Software and Documentation (including any adaptations, copies or derivative works) shall be retained and held by Noel-Levitz. 6. RESTRICTIONS: Except as expressly authorized in this Agreement, the Institution agrees not to sell, rent, lease, sub-license, distribute, transfer, copy, reproduce, display, modify, time-share, or act as a service bureau with respect to the Software or Documentation. 7. DATA INTEGRATION: Using the Software's standard import and export files, the Institution can move data to and from the EMASPLUS database. It is the responsibility of the Institution to format and prepare the date properly to use the import and export files and achieve data integration. 8. INSTITUTION'S SOFTWARE PROGRAMS: The development, maintenance and accuracy of the Institution's custom software programs and modules that interface with the Software Page 2 (for example, calling specific EMASPLUS modules) or modify the EMASPLUS database are the sole and entire responsibility of the Institution. 9. TERM: This License is effective from the date the Institution signs this Agreement and will remain in force until terminated. The Institution may terminate this License at any time by destroying the Documentation and the Software together with all copies and adaptations thereof. This License shall automatically terminate if the Institution breaches any of the material terms or conditions of this Agreement. The Institution agrees to destroy the original and all adaptations or copies of the Software and Documentation, or to return them to Noel-Levitz promptly upon termination of this License. 10. INDEMNIFICATION: Noel-Levitz does indemnify and shall hold harmless the Institution against any claims by any third parties that the Software or Documentation infringes any United States copyright, patent or trademark. If the Software or Documentation becomes, or in Noel-Levitz's reasonable opinion is likely to become, the subject of any such claim which impairs the Institution's right to use the Software or Documentation, Noel-Levitz shall, at its option and at no additional cost to the Institution, (i) replace or modify the Software and/or Documentation with functionally equivalent and conforming Software and/or Documentation, (ii) obtain for the Institution the right to continue using the Software and/or Documentation, or (iii) in exchange for termination of this Agreement, refund the license fees paid by the Institution pursuant to this Agreement prorated over a four-year period from the date of delivery. Noel-Levitz's obligations hereunder are subject to the following: (1) the Institution shall promptly notify Noel-Levitz in writing of any such claim; (2) Noel-Levitz shall have sole control of the defense or settlement of any such claim; and (3) the Institution shall cooperate with Noel-Levitz, at Noel-Levitz's expense, in a reasonable way to facilitate the settlement or defense of any such claim. Noel-Levitz shall not be responsible for any cost, expense, or compromise incurred or made by the Institution in connection with the defense of any such claim without Noel-Levitz's prior written consent. Noel-Levitz's obligations under this section shall not apply to claims of infringement based upon (i) use of other than the latest unmodified release of the Software made available by Noel-Levitz to the Institution if such infringement would have been avoided by the use of such release of the Software, (ii) combination, operation or use of the Software with any non-Noel-Levitz programs or data if such infringement would not have occurred without such combination, operation or use, or (iii) use of the Software after receiving written notice from Noel-Levitz that the Software infringes a United States copyright, patent or trademark of a third party. Noel-Levitz's obligations under this section constitute the Institution's sole and exclusive remedy for a claim, suit or proceeding for an intellectual property infringement. Page 3 LIMITED WARRANTY AND LIMITED LIABILITY 11. COMPATIBILITY: This software is only compatible with the computers and operating systems set forth on the EMASPLUS technical specifications sheet; the Software is not warranted for non-compatible systems. 12. MAGNETIC MEDIA AND DOCUMENTATION: Noel-Levitz warrants that if the magnetic media on which the Software is distributed or Documentation are in a damaged or physically defective condition at the time that the License is purchased, and if they are returned to Noel-Levitz within 90 days of purchase, Noel-Levitz will provide the Institution with replacements at no charge. Any unauthorized modification or misuse of the Software will void the foregoing warranty. 13. SOFTWARE: Noel-Levitz warrants that if the Software fails to substantially conform to the specifications in the Documentation and if the non-conformity is reported in writing by the Institution to Noel-Levitz within 90 days from the later of the date that the License is purchased or the date the installation is completed, then Noel-Levitz will, at its option, either remedy the non-conformity or offer to refund the license fee to the Institution upon return of all copies of the Software and Documentation to Noel-Levitz. In the event of a refund this License shall terminate. The foregoing warranty shall apply provided that: (a) the Software is not modified, changed, or altered by anyone other than Noel-Levitz, unless authorized by Noel-Levitz in writing; (b) the Institution's computer equipment is in good operating order and is installed in a compatible environment; (c) the non-conformity is not caused by a third party or by the Institution, its agent, employees or contractors; and (d) the data and/or database used with the Software are not modified, changed or altered by any means other than through the normal operation of the Software. 14. DISCLAIMER OF WARRANTIES: EXCEPT AS SPECIFICALLY PROVIDED HEREIN, NOEL-LEVITZ MAKES NO WARRANTY, REPRESENTATION, PROMISE OR GUARANTEE, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SOFTWARE, THE DOCUMENTATION OR ANY RELATED TECHNICAL SUPPORT, INCLUDING, WITHOUT LIMITATION, THEIR QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE LIMITATION MAY NOT APPLY TO THE INSTITUTION. 15. LIMITATION OF LIABILITY: EXCEPT AS SET FORTH IN SECTION 10 HEREOF, NOEL-LEVITZ'S AGGREGATE LIABILITY, AND THE INSTITUTION'S SOLE AND EXCLUSIVE REMEDY FOR ANY CAUSE WHATSOEVER, REGARDLESS OF THE FORM OF ACTION, ARISING FROM OR RELATING TO THIS AGREEMENT OR THE SOFTWARE OR DOCUMENTATION IS LIMITED TO THE TOTAL OF ALL PAYMENTS MADE BY OR FOR THE INSTITUTION TO NOEL-LEVITZ FOR THE PARTICULAR SOFTWARE, DOCUMENTATION OR SERVICES INVOLVED IN ANY CLAIM MADE BY THE INSTITUTION. NOEL- Page 4 LEVITZ SHALL NOT IN ANY CASE BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, INDIRECT OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES OR COSTS RELATING TO ENROLLMENT SUCCESS, LOSS OF PROFITS OR REVENUE, BUSINESS INTERRUPTION, LOSS OF GOODWILL, LOSS OF THE USE OF THE SOFTWARE, OR LOSS OF ANY DATA) ARISING OUT OF THE USE OF OR INABILITY TO USE THE SOFTWARE, DOCUMENTATION OR RELATED TECHNICAL SUPPORT, EVEN IF NOEL-LEVITZ HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO THE INSTITUTION. GENERAL CONDITIONS 16. GOVERNING LAW: This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Indiana and of the United States of America (without regard to conflict of law principles). 17. ENTIRE AGREEMENT: This Agreement sets forth the entire understanding and agreement between the Institution and Noel-Levitz relating to the subject matter contained herein and may be amended only in writing signed by both parties. No vendor, distributor, dealer, retailer, sales person, or other person is authorized to modify this Agreement or to make any warranty, representation, or promise different from, or in addition to, the representations or promises contained in this Agreement. 18. WAIVER: No waiver of any right under this Agreement shall be effective unless in writing, signed by a duly authorized representative of Noel-Levitz. No waiver of any past or present right arising from any breach or failure to perform shall be deemed to be a waiver of any future right arising under this Agreement. 19. SEVERABILITY: If any provision in this Agreement is invalid or unenforceable, that provision shall be construed, limited, modified, or, if necessary, severed to the extent necessary, to eliminate its invalidity or unenforceability, and the other provisions of this Agreement shall remain unaffected. 20. EXPORT: The Institution agrees to comply with all export and re-export restriction and regulations ("Export Restrictions") imposed by the government of the United States or the country to which the Software is shipped to the Institution. The Institution will not commit any act or omission which will result in a breach of any such Export Restrictions; the Institution agrees that it will comply in all respects with any governmental laws, orders or other restrictions on the export of the Software (and related information and documentation) which may be imposed from time to time by the governments of the United States and Canada or the country to which the Software Page 5 is shipped by Noel-Levitz. This Section shall survive the expiration or termination of this Agreement. 21. U.S. GOVERNMENT RESTRICTED RIGHTS: Use, duplication, or disclosure by the United States Government is subject to restrictions as set forth in FAR 52.227-14 (June 1987) Alternate III(g)(3) (June 1987), FAR 52.227-19 (June 1987), or DFARS 52.227-7013 (c)(1)(ii) (June 1988), as applicable. Contractor/Manufacturer is Noel-Levitz Centers, Inc., 2101 ACT Circle, Iowa City, Iowa 52245. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date written below. California Culinary Academy Noel-Levitz Centers, Inc. By: _______________________ By: _____________________ Name: _____________________ Name: Robert C. Dickeson, Ph.D. Title: ____________________ Title: President & CEO Page 6 EXHIBIT B EMASPLUS SOFTWARE MAINTENANCE AGREEMENT CALIFORNIA CULINARY ACADEMY This Software Maintenance Agreement (the "Agreement") is made effective this _______ day of May, 1996 between the California Culinary Academy (the "Institution") with offices at 625 Polk Street, San Francisco, CA 94102 and Noel-Levitz Centers, Inc., d/b/a USA Group Noel-Levitz ("Noel-Levitz") having its principal place of business at 2101 ACT Circle, Iowa City, IA 52245. WHEREAS, Noel-Levitz and Institution have entered into a certain license agreement dated May __, 1996 (the "License Agreement") pursuant to which Noel-Levitz agreed to license to Institution its EMASPLUS software (the "Product"); and WHEREAS, Noel-Levitz desires to maintain, and Institution desires to obtain the maintenance of, the Product on the terms and conditions hereinafter provided: 1. MAINTENANCE SERVICES. The maintenance services to be provided hereunder (the "Maintenance Services") shall consist of: (a) reasonable efforts to correct defects, provided that such defects are not the result of any change made to the Product (other than improvements provided by Noel-Levitz under this Agreement); (b) reasonable telephone support through Noel-Levitz's telephone support line during Noel-Levitz's then current published standard support line hours, which at a minimum will be Monday through Friday (excluding holidays) from 8:00 a.m. to 5:00 p.m. (CT), to Institution personnel that are fully trained by Noel-Levitz in the use of the Product; (c) distribution by Noel-Levitz to the Institution at no charge of regular enhancements to the Product which may be developed from time to time by Noel-Levitz (provided that the Institution has purchased continuous support of the Product from Noel-Levitz since installation of the Product); and (d) registration for one person at one Noel-Levitz software related workshop for each year that this Agreement remains in effect. 2. LIMITATIONS. Noel-Levitz's obligations under this Agreement will be limited to the then current unmodified release and the immediately preceding unmodified release of the Product. Noel-Levitz provides no guarantees or assurance that any new release, version, modification or enhancement to the Product will be compatible with (i) any Product that has been modified or customized, or (ii) any Product data and/or database that has modified by any means other than through the normal operation of the Product. All improvements, meaning Maintenance Services, enhancements and new releases, will be part of the Product and subject to all terms and conditions of the License Agreement and this Agreement. Page 1 3. APPLICABILITY OF LICENSE AGREEMENT. This Agreement and all software, documentation, and media provided under it is subject to all the terms and conditions of the License Agreement, including, but not limited to, the Disclaimer of Warranties and Limitation of Liability. 4. MAINTENANCE FEES. Noel-Levitz shall provide the Maintenance Services to the Institution for an annual fee equal to 10% of the then current list price for the Product (based on the number of concurrent users that the Institution is permitted pursuant to its license to use the Product), so long as the Institution continues maintenance uninterrupted and so long as Noel-Levitz operates a maintenance program on the Product. The initial maintenance fee is due upon delivery of the Product to the Institution. Thereafter, the maintenance fee is payable annually on the anniversary date of the training provided by Noel-Levitz to the Institution (the "Anniversary Date"). Unless the Institution notifies Noel-Levitz in writing that this Agreement shall terminate, for whatever reason, on the Anniversary Date, this Agreement shall be extended and renewed on each Anniversary Date for an additional one year period. Noel-Levitz may cancel the automatic renewal terms by notifying the Institution that Noel-Levitz does not want to renew this Agreement. If the Institution does not remit payment to Noel-Levitz within 30 days after receipt of an invoice, the Institution will pay Noel-Levitz a late charge of the lasser of 1.5% a month or the maximum amount permitted by applicable state law for unpaid amounts due Noel-Levitz. 5. ADDITIONAL COSTS. If Noel-Levitz can reasonably demonstrate that a malfunction is caused by the failure of the Institution's operating environment or by the improper use of the Product by the Institution or its contractors and the Institution requests assistance from Noel-Levitz, then the Institution shall pay Noel-Levitz an additional amount for its work performed in connection therewith on a per-hour basis, at Noel-Levitz's standard hourly rates then in effect. Institution also will reimburse Noel-Levitz for all reasonable travel and living expenses incurred by Noel-Levitz personnel who provide requested services. 6. ADDITIONAL SERVICES. At the request of the Institution, and with the consent of Noel-Levitz, Noel-Levitz also may provide technical, operational, implementation, migration, or other assistance or consulting to Institution in excess of the services included as the Maintenance Services in Section 1 herein at Noel-Levitz's standard hourly rates then in effect. 7. INSTITUTION REQUIREMENTS. Noel-Levitz's obligation to provide Maintenance Services hereunder is contingent upon the Institution providing Noel-Levitz with access to necessary Institution systems (including the Product as installed on the Institution's computer network system) by (i) providing a modem line and modem which meet Noel-Levitz's technical specifications, and (ii) installing Symantec's THE NORTON pcANYWHERE-TM- software product to operate unattended in host auto answer mode. Page 2 8. CONDITIONS. The termination of the License Agreement, or of the license granted therein, shall automatically result in the termination of this Agreement. 9. DISCLAIMER OF WARRANTIES; LIMITATIONS OF LIABILITY. NOEL-LEVITZ MAKES NO WARRANTY WITH RESPECT TO THIS AGREEMENT, EXPRESS OR IMPLIED, INCLUDING THE WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OF ANY KIND WHATSOEVER, AND ALL SUCH WARRANTIES ARE HEREBY EXCLUDED BY NOEL-LEVITZ AND WAIVED BY THE INSTITUTION. NOEL-LEVITZ SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR SPECIAL, CONSEQUENTIAL, EXEMPLARY, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES OR COSTS RELATING TO ENROLLMENT SUCCESS, LOSS OF PROFITS OR REVENUE, BUSINESS INTERRUPTION, LOSS OF GOODWILL, LOSS OF THE USE OF THE PRODUCT, OR LOSS OF ANY DATA) EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT NOEL-LEVITZ'S MAXIMUM LIABILITY TO THE INSTITUTION HEREUNDER SHALL BE LIMITED TO THE AMOUNTS ACTUALLY PAID BY THE INSTITUTION TO NOEL-LEVITZ HEREUNDER DURING THE IMMEDIATELY PRECEDING TWELVE MONTHS. 10. TERMINATION. Either party will have the right to terminate this Agreement if the other party breaches or fails to perform any material term or condition of this Agreement. Either party, if it has a right of termination as provided above, may terminate this Agreement at any time while the event or condition giving rise to that right of termination exists, by giving the other written notice of that event or condition and describing that event or condition in reasonable detail. Upon receipt of that notice, the other party will have 30 days to correct or cure that event or condition to the reasonable satisfaction of the party desiring termination. If the event or condition giving rise to the termination is not so corrected or cured within that period, this Agreement will terminate as of the end of the 30-day period automatically, without further act by any party. 11. NOTICES. All notices and other communications required or permitted under this Agreement will be in writing and will be deemed given when delivered personally, three days following being sent by United States registered or certified mail, return receipt requested, or one business day following being sent by overnight courier to the address stated herein for Noel-Levitz, to the address stated herein for the Institution, or such other address as the parties hereto designate from time to time. 12. CHOICE OF LAW; SEVERABILITY. This Agreement will be governed by and construed in accordance with the laws of the State of Indiana (without giving effect to conflict of law provisions). If any provision of this Agreement is found invalid or unenforceable, it will be Page 3 enforced to the maximum extent permissible, and the legality and enforceability of the other provisions of this Agreement will not be affected. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date written below. California Culinary Academy Noel-Levitz Centers, Inc. By:____________________________ By:_____________________________ Name:__________________________ Name: Robert C. Dickeson, Ph.D. Title:_________________________ Title: President & CEO Date:__________________________ Date:___________________________ EXHIBIT B CONFIDENTIALITY AGREEMENT This CONFIDENTIALITY AGREEMENT ("Agreement") is made this _____ day of ____________, 1996 by California Culniary Academy (the "Recipient") and USA Group Noel-Levitz, Inc., an Indiana corporation (the "Company"). RECITALS A. The Company has developed a multi-institutional delivery program (the "Delivery Program") in connection with the Company's customized enrollment prediction system ForecastPlus-TM- (the "Product"). B. Recipient desires to participate in the Delivery Program, and the Company desires to have Recipient participate in the Delivery Program. C. In the course of the Delivery Program, other educational institutions that are participating in the Delivery Program (a "Participant") may disclose to Recipient confidential and proprietary information of that Participant. D. In connection with, and as a condition to becoming a participant in the Delivery Program, the Company requires that Recipient agree to the provisions set forth below. E. Recipient is willing to enter into this Agreement in order for it to participate in the Delivery Program. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained in this Agreement and of other good and valuable consideration, the receipt of which is hereby acknowledged, the Recipient agrees as follows: 1. DEFINITION. (a) "Participant Confidential Information" shall mean all institution specific data and/or information disclosed by a Participant or the Company to Recipient during and/or in connection with the Delivery Program. 2. NON-USE AND NON-DISCLOSURE. Recipient agrees that it will maintain in confidence and will not communicate, divulge or use any Participant Confidential Information which is communicated and/or transmitted to it by the Company or a Participant, subject to the exceptions of Section 3 below. As part of the confidential treatment required hereunder, Recipient agrees that no copies of Participant Confidential Information shall be made by Recipient except as authorized in writing by the Participant. Nothing in this paragraph shall prohibit Recipient from using Participant Confidential Information for the sole purpose of participating in the Delivery Program. Recipient further agrees that it will (i) take all necessary steps to inform any of its employees, representatives or agents to whom Participant Confidential Information may be disclosed of Recipient's obligations hereunder and (ii) cause said employees, representatives and agents to agree to be bound by the terms of this Agreement, either by signing a blank copy of this Agreement or some other method acceptable to the Company. Recipient shall indemnify and hold the Company harmless from all costs, expenses (including attorneys' fees, whether or not suit be brought), damages, losses or claims arising from or relating to any breach or default by any employee, representatives or agent of Recipient of any provision of this Agreement. Recipient agrees to notify the Company and the Participant, as applicable, of any unauthorized use or disclosure of Participant Confidential Information and to take all actions reasonably necessary to prevent further authorized use or disclosure thereof. The confidentiality obligations set forth in this Agreement shall continue to apply with respect to each item of Participant Confidential Information until such item ceases (other than due to actions or failures of Recipient) to be secret or confidential. 3. EXCEPTIONS. The restrictions of Section 2 shall not apply to: (a) Information which is generally available to the public or to the relevant industry prior to receipt from the Company or Participant, as applicable, or which later becomes such, other than due to action or failure by Recipient, its agents, representatives or employees; (b) Information which, prior to disclosure hereunder, is already in the rightful possession of Recipient; or (c) Information which Recipient receives from a third party not known by Recipient, acting reasonably, to be in violation of a confidential relationship with the Company or Participant, as applicable. 4. SEVERABILITY. Should any part of this Agreement be declared invalid by a court of law, such decision shall not affect the validity of any remaining portion, which shall remain in full force and effect as if the invalid portion was never a part of this Agreement. 5. NO ASSIGNMENT. This Agreement shall be binding upon Recipient and its heirs, successors and assigns and inure to the benefit of the Company or Participant, as applicable, and its successors and assigns, but Recipient shall not, directly or indirectly, assign or purport to assign this Agreement or any of its rights or obligations hereunder in full or in part to any third party without the prior written consent of the Company. 6. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana without giving effect to conflict of law provisions. 7. INTEGRATION. This Agreement constitutes the entire agreement and understanding relating to the subject matter hereof. 8. REMEDIES. Company shall be entitled to obtain injunctive or other equitable relief, in addition to other available remedies, in the event of a breach or threatened breach of this Agreement by Recipient. 9. AMENDMENTS; WAIVERS. This Agreement may be amended or modified, and any of the terms or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver or modification, express or implied, by any party hereto of any term or condition in this Agreement will operate as such only in the specific instance and will not be construed as a waiver or modification of any condition or term generally or in any other instance. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. COMPANY: RECIPIENT: USA Group Noel-Levitz, Inc. California Culinary Academy. By:________________________ By:_________________________ Name: Name: ___________________________ ____________________________ Title: Title: ___________________________ ____________________________ EXHIBIT C EMASPLUS TECHNICAL SPECIFICATIONS EMASPLUS runs in a standard MS-DOS environment. Any network operating system that guarantees 100% DOS compatibility, such as Novell Netware, will be able to run it. Although EMASPLUS was developed and tested in Novell 3.11 and Novell 4.1 environments, a conscious effort was made not to use any Novell-specific features that would limit cross-platform compatibility. RECOMMENDED MINIMUM REQUIREMENTS These minimum requirements are intended to illustrate the existing equipment that could be used to operate EMASPLUS. Due to rapid advances in hardware power and lowering costs, we recommend substantially more powerful equipment for any new purchases. Because of the substantial differences in local requirements and options available, USAGroup Noel-Levitz cannot be responsible for configuring your network. Your data center support staff or other local support resources should be able to provide guidance and assistance in configuring an appropriate network and workstations. HARDWARE FILE SERVER Uninterruptible power supply providing 10-15 minutes reserve power is highly recommended. DOS-compatible network software is required. We also recommend that equipment and procedures be in place for regular system back-up. Hard drive requirements are highly dependent on your usage of EMASPLUS and other intended uses of the network. 35 Megabytes of disk space are required for the software and support tables. Typical users reserve approximately 600 Megabytes of disk space for every 50,000 records. This can vary substantially. RECOMMENDED WORKSTATIONS For new purchases and workstations used for batch processes such as reporting, and importing and exporting, the following workstation is recommended: Pentium processor, VGA color monitor w/100MB available hard disk space*, 12MB RAM, and DOS 6.0 or higher. * EMASPLUS TAKES SUBSTANTIAL ADVANTAGE OF PERFORMANCE GAINED BY TEMPORARY WORK FILES OF 20 TO 60 MB LOCAL AT THE WORKSTATION. DISKLESS WORKSTATIONS MAY BE USED BUT ADEQUATE INDIVIDUAL WORKSPACE WILL BE REQUIRED ON A NETWORK SERVER. EXPERIENCE INDICATES THAT DISKLESS WORKSTATIONS WILL EXPERIENCE DRAMATICALLY SLOWER PERFORMANCE DUE TO EXTRA NETWORK TRAFFIC. MINIMUM WORKSTATIONS Existing equipment can be used for telecounseling if it meets the following minimium requirements: 486 CPU, VGA color monitor w/100MB available hard disk space*, 8MB RAM, and DOS 6.0 or higher. PERFORMANCE Certain processes require adequate system performance to be time-efficient. For example, import speed is highly dependent upon your hardware and network configuration. For example, clients using various hardware and network configurations report import speeds varying from 4 to 12 records per minute. This speed depends on the combined performance of your server, network, and individual work stations. MODEM A 28.8 Hayes-compatible modem on one workstation and a dedicated analog telephone line are required for technical support. PRINTERS EMASPLUS supports printing with HP LaserJet III and higher printers. *EMASPLUS TAKES SUBSTANTIAL ADVANTAGE OF PERFORMANCE GAINED BY TEMPORARY WORK FILES OF 20 TO 60 MB LOCAL AT THE WORKSTATION. DISKLESS WORKSTATIONS MAY BE USED BUT ADEQUATE INDIVIDUAL WORKSPACE WILL BE REQUIRED ON A NETWORK SERVER. EXPERIENCE INDICATES THAT DISKLESS WORKSTATIONS WILL EXPERIENCE DRAMATICALLY SLOWER PERFORMANCE DUE TO EXTRA NETWORK TRAFFIC. EX-11 4 EX 11 Exhibit 11 CALIFORNIA CULINARY ACADEMY, INC. STATEMENT RE: EARNINGS PER SHARE
Quarter Ended September 30 -------------------------- 1996 1995 ---- ---- Primary Fully Diluted Primary Fully Diluted ----------- ----------------- ----------- --------------- Net earnings (loss) $46,000 $46,000 $(424,000) $(424,000) ----------- ----------------- ----------- --------------- Weighted average common shares outstanding: Common shares 3,228,732 3,228,732 3,308,805 3,308,805 Common equivalent shares: Stock options and warrants ----------- ----------------- ----------- --------------- Weighted average common and common equivalent shares outstanding 3,228,732 3,228,732 3,308,805 3,308,805 ----------- ----------------- ----------- --------------- ----------- ----------------- ----------- --------------- Earnings (loss) per share $0.01 $0.01 $(0.13) $(0.13) ----------- ----------------- ----------- --------------- ----------- ----------------- ----------- ---------------
EX-27 5 EXHIBIT 27 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000858915 CALIFORNIA CULINARY ACADEMY, INC. 1,000 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 3383 0 2713 280 214 6963 8810 4129 12733 5976 0 0 988 9112 (4051) 12733 535 3529 415 702 2744 0 6 77 31 46 0 0 0 46 $0.01 $0.01
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