Restructuring, Security And Guaranty Agreement

Exhibit 10(i)


FIRST AMENDMENT
TO THE
RESTRUCTURING, SECURITY AND GUARANTY AGREEMENT


THIS AGREEMENT, made and entered into as of the 30th day of December, 1993, (the "First Amendment") by and among CENCOR, INC., a Delaware corporation ("CenCor"); CONCORDE CAREER COLLEGES, INC., a Delaware corporation ("Concorde"); MINNESOTA INSTITUTE OF MEDICAL AND DENTAL ASSISTANTS, INC., a Minnesota corporation ("Minnesota"); TEXAS COLLEGE OF MEDICAL AND DENTAL ASSISTANTS, INC., a Texas corporation ("Texas"); UNITED HEALTH CAREERS INSTITUTE, INC., a California corporation ("United"); SOUTHERN CALIFORNIA COLLEGE OF MEDICAL AND DENTAL ASSISTANTS, INC., a California corporation ("Southern California"); CONCORDE CAREERS - FLORIDA, INC., a Florida corporation ("Florida"); COLLEGES OF DENTAL AND MEDICAL ASSISTANTS, INC., a California corporation ("Dental"); and COMPUTER CAREER INSTITUTE, INC., an Oregon corporation ("Computer") (Minnesota, Texas, United, Southern California, Florida, Dental, and Computer being herein- after referred to collectively as "Guarantors" and each individually as a "Guarantor") amends that certain Restructuring, Security and Guaranty Agreement (the "Agreement") between the parties dated as of October 30, 1992.


RECITALS


(i) Pursuant to the Agreement entered into by CenCor, Concorde and the Guarantors, Concorde issued a debenture to CenCor in the principal amount of $5,422,307, dated October 30, 1992 (the "Debenture").


(ii) Under the terms of the Agreement and the Debenture, the interest due on the principal amount of the Debenture is to be accrued until the commencement of quarterly payments on September 30, 1995.


(iii) At this time Concorde wishes to pay to CenCor all interest accrued on the Debenture through and including December 31, 1993, totaling $559,353 (the "Accrued Interest"), by the assignment of certain of Concorde's receivables to CenCor, all on the terms and conditions set forth below.


(iv) CenCor wishes to receive payment of the Accrued Interest at this time through the assignment of such receivables, all on the terms and conditions set forth below.


(v) Concorde and CenCor wish to amend the Agreement to provide for such payment of the Accrued Interest.


(vi) The Guarantors, each a wholly-owned subsidiary of Concorde, wish to reduce the amount of their guaranteed


obligations through such payment of the Accrued Interest and thus consent to the amendment of the Agreement to provide for such payment.


AGREEMENT


In consideration of the premises and the mutual covenants and agreements herein contained, CenCor, Concorde and Guarantors agree as follows:


ARTICLE I
DEFINITIONS


1.1 CERTAIN DEFINED TERMS. The following terms used herein shall have the meanings set forth in this Article and in the other parts of this Agreement referred to in this Article, and such meanings shall apply to both the singular and plural forms of such terms.


(a) "Allowable Collection Expenses" shall mean those out-of-pocket
fees and expenses actually paid by CenCor to independent unaffiliated third
party collection agents or legal counsel engaged to collect Receivables
(the "Collection Agents"). It is agreed that selection of a Collection
Agent and the terms of its engagement shall be approved by Concorde, as set
forth in Section 3.2.


(b) "Gross Collections" shall mean the amount of funds collected by
CenCor on the Receivables, provided that if a Student has entered into a
settlement agreement with CenCor which provides for instalment payments,
"Gross Collections" shall only include payments that have been actually
received by CenCor.


(c) "Outstanding Unworked Receivables" means those Receivables at any
given time which (i) have not been collected, either in full, or in part
pursuant to a settlement agreement with the Student, (ii) for which there
is not an installment settlement agreement with the Student, or (iii) for
which all Collection Efforts have not been completed.


(d) "Receivables" shall mean the receivables due on all Accounts (as
defined in the Agreement), itemized on Schedule I (subject to adjustment to
reflect payments received through December 31, 1993) to the Assignment and
Acceptance Agreement, attached hereto as Exhibit A and hereby incorporated
herein by reference (the "Assignment"), having aggregate balances due of
$8,400,071.38, plus any Substituted Receivables subsequently assigned to


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CenCor pursuant to Section 4.1, hereof, it being understood that all
Receivables are accounts or notes receivable which have previously been
written off by Concorde or a Guarantor for financial statement purposes,
pursuant to Concorde's historical accounting practices.


(e) "Remainder of Accrued Interest" shall mean the amount by which,
if any, the amount of Accrued Interest exceeds CenCor's Gross Collections
net of Allowable Collection Expenses.


(f) "Students" shall mean the obligors on the Receivables.


(g) "Worked Receivables" are those Receivables which remain
uncollected (and for which no settlement agreement has been entered into)
after completion of all Collection Efforts with respect to each such
Receivable.


1.2 OTHER TERMS. All capitalized terms used herein, not defined in Section 1.1 or elsewhere in this First Amendment, shall have the meanings and be as defined in the Agreement.


ARTICLE II
ASSIGNMENT AND PAYMENT OF ACCRUED INTEREST


2.1 ASSIGNMENT OF RECEIVABLES. Subject to the terms and conditions contained herein, Concorde hereby transfers, assigns and conveys the Receivables having an aggregate face value of $8,390,000, to CenCor.


2.2 ACCEPTANCE OF PAYMENT OF ACCRUED INTEREST. Subject to the terms and conditions contained herein, including without limitation the execution and delivery to CenCor of all consents, releases and other documents set forth in Article VII, CenCor hereby accepts the assignment of the Receivables, as payment in full of the Accrued Interest, which totaled $559,353 at December 31, 1993.


2.3 ASSIGNMENT OF FUTURE PAYMENTS. In the event any Students make payments on the Receivables to Concorde or a Guarantor after the date hereof, it is agreed that any such payments shall be delivered to CenCor.


2.4 WITHOUT RECOURSE. This assignment shall be without recourse, and CenCor shall fully assume all risks of nonpayment of the Receivables, subject to the limited Right of Substitution set forth in Section 4.1


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ARTICLE III
TERMS OF ASSIGNMENT


3.1 DELIVERY OF DOCUMENTATION. Commencing on or about March 4, 1994 Concorde will deliver to CenCor all relevant documentation underlying each of the Receivables, including copies of ledger cards, enrollment agreements, promissory notes (if existing), and any documentation, available to either Concorde or the Guarantors, concerning prior collection efforts on the part of any of them or their agents. In order to facilitate the efficient and orderly recording and processing of this documentation, itemized deliveries will be made weekly, each such delivery covering groups of Receivables aggregating $750,000 to $1,000,000 in face value, until the documentation for all the Receivables has been delivered. Deliveries shall be made to CenCor at its offices at City Center Square, 1100 Main Street, Suite 2350, Kansas City, Missouri 64105, or such other location that CenCor shall designate in writing.


3.2 COLLECTION EFFORTS. In consideration of the Right of Substitution afforded to CenCor and in light of the Right of Credit, CenCor agrees that it will take reasonable steps to collect, in full or part, in a lump sum or in installment payments, each of the Receivables (the "Collection Efforts"), including, but not necessarily limited to reasonable search efforts to locate the Student (if necessary) and if the Student's location is known or determined:


(a) initial telephone contact with the Student and, if collection is
not obtained as a result thereof;


(b) the sending of a default letter, outlining liability and
penalties for failure to pay or settle the Receivable, by certified mail to
Student and, if collection is not obtained as a result thereof;


(c) reasonable follow-up telephone contact with the Student and, if
collection is not obtained as a result thereof;


(d) management review as to feasibility of legal action to collect.


These Collection Efforts shall be made by a Collection Agent or Agents hired by CenCor, subject to Concorde's reasonable approval as to such employment and the terms of engagement (including fee schedules, acceptable collection procedures and settlement parameters, and provision of adequate indemnification of Concorde for any liability resulting from such agent's collection or settlement activities, which is secured by adequate insurance coverage). Furthermore, Concorde shall have the right to reasonably request that CenCor terminate its


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engagement with a given Collection Agent within 30 days of such written request. In addition to the Collection Efforts, CenCor may elect to (i) settle a Receivable for a partial payment, in cash or in installments, (ii) turn a Receivable over to legal counsel for collection, or (iii) make such other efforts through a Collection Agent to obtain collection as CenCor deems appropriate.


3.3 RECORD KEEPING AND REPORTS. CenCor shall maintain, or cause its Collection Agents to maintain, a record on each Receivable as to efforts made to collect each such Receivable; the terms of any settlement entered into with respect to each such Receivable; all amounts received by CenCor in connection with each such Receivable; and the amount, if any, of Allowable Collection Expenses actually paid with respect to each such Receivable. CenCor shall provide, or cause its Collection Agents to provide, to Concorde (with copies to Mark Twain Kansas City Bank, a Missouri banking corporation ["Mark Twain"]) reports, at least quarterly, which set forth the foregoing and report, in aggregate:


(a) the amount of Gross Collections, in the preceding period and from
contract inception to date; and


(b) the amount of Allowable Collection Expenses paid by CenCor (and
to whom) on the Receivables, in the preceding period and from contract
inception to date.


ARTICLE IV
RIGHTS OF SUBSTITUTION AND CREDIT


4.1 RIGHT OF SUBSTITUTION. Subject to the provisions set forth herein, provided that CenCor has not yet recouped an amount equal to one hundred percent (100%) of the Accrued Interest, and a Remainder of Accrued Interest exists, CenCor shall have a limited right of substitution as to the Receivables (the "Right of Substitution"), and may elect to reassign certain Worked Receivables to Concorde in exchange for the assignment from Concorde or the Guarantors of additional receivables of equal face value ("Substituted Receivables").


(a) This Right of Substitution may be exercised once every six
months, commencing six months after the date of the first delivery of
Receivables, pursuant to Section 3.1, by CenCor giving written notice of
its election to exercise its Right of Substitution to Concorde. This Right
of Substitution shall terminate at such time as CenCor has recouped an
amount equal to one hundred percent (100%) of the Accrued Interest.


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(b) The amount of Receivables as to which CenCor may exercise this
Right of Substitution shall be limited to the amount of Receivables that
constitute Worked Receivables on the date of exercise of the right, up to a
maximum face amount equal to the then current Remainder of Accrued Interest
multiplied by fifteen.


(c) The amount of Worked Receivables to be Substituted may only be
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