1
Exhibit 10.9

RIVERSIDE COUNTY SUPERINTENDENT OF SCHOOLS
3939 Thirteenth Street/P.O. Box 868
Riverside, California 92505

MASTER CONTRACT
FOR NONPUBLIC, NON SECTARIAN SCHOOL AGENCY SERVICES
(Education Code Sections 56365 et seq.)

This Agreement, made and entered into this 8th day of August, 1997,
between DALE S. HOLMES, Riverside County Superintendent of Schools, hereinafter
referred to as the "SUPERINTENDENT," and Advocate Schools, hereinafter referred
to as the "CONTRACTOR" for the purposes of providing special education or
related services to individuals with exceptional needs under the authorization
of Education Code Sections 56366.5 and 56740; and

The SUPERINTENDENT determined that the need for such services exists;
CONTRACTOR is a nonpublic school or agency holding all required certificates and
licenses; and that CONTRACTOR is capable of and willing to provide such
services;

In consideration of the mutual promises contained herein, it is
mutually agreed between the parties as follows:

1. INDEPENDENT CONTRACTOR STATUS: This contract is by and between two
independent agents and is not intended to and shall not be construed to
create the relationship of agent, servant, employee, partnership, joint
venture or association.

2. For the purpose of this contract, a parent is the natural parent,
legal guardian or surrogate.

3. CONTRACTOR shall provide appropriately credentialed teachers or
licensed personnel consistent with the California Administrative Code,
Title 5, the California Education Code and SUPERINTENDENT requirements,
as specified, to provide service(s) to pupils under this general
contract, unless a written waiver has been granted by the
Superintendent of Public Instruction. CONTRACTOR shall be responsible
for verification of credentials and licenses held by its employees,
agents and subcontractors. Credentials shall be on file at
SUPERINTENDENT'S office.

CONTRACTOR shall immediately notify SUPERINTENDENT and provide copies
of appropriate credential(s) and/or license(s) if change of staff
occurs which directly affects the pupils.

4. SUPERINTENDENT shall provide CONTRACTOR with copy of each pupil's
Individualized Education Program. SUPERINTENDENT will provide pupils a
program of instruction within the nonpublic school or agency which is
consistent with each pupil's Individualized Education Program as
specified in the Individual Service Contract/Agreement. The program of
instruction shall be described in writing by CONTRACTOR and a copy
provided to SUPERINTENDENT prior to the effective date of this
contract.

5. CONTRACTOR shall allow periodic monitoring of the pupil's instructional
program by SUPERINTENDENT and shall be invited to participate in the
review of the pupil's progress by the SUPERINTENDENT. Representatives
of SUPERINTENDENT shall have access to observe the pupil at work, to
monitor the instructional setting, to interview CONTRACTOR, and to
review the pupil's progress. CONTRACTOR agrees that SUPERINTENDENT
representative may make unannounced monitoring visits upon presentation
of identification at site office.

6. GRADUATION REQUIREMENTS: If the pupil is of secondary school age, the
SUPERINTENDENT will list the course requirements to be satisfied by the
CONTRACTOR leading toward graduation and specify levels of proficiency
in basic skills as measured by SUPERINTENDENT approved proficiency
tests.

7. CONTRACTOR will provide for reasonable parental visits to all the
school facilities including, but not limited to, the instructional
setting attended by the pupil, school and recreational activity areas
and pupil's living quarters.

8. CONTRACTOR'S operating programs with residential components shall
cooperated with parent's reasonable requests for pupil visits in their
home including, but not limited to, holidays and weekends.

9. Progress reports and other data required for review shall be sent by
CONTRACTOR to SUPERINTENDENT no later than (see student's
Individualized Education Program).

An updated report shall be submitted if there is no current progress
report when pupils are scheduled for a review by the SUPERINTENDENT'S
Individualized Education Program team or when a pupil is terminated.

10. CONTRACTOR agrees to provide a written accident report to the
SUPERINTENDENT when a pupil has suffered an injury that requires
medical attention.

11. CONTRACTOR shall immediately report to SUPERINTENDENT, if a pupil is
removed from school by the parent, or if the pupil absents himself from
school without permission.

12. In the event of five (5) consecutive days of a pupil's excused
absence, CONTRACTOR shall immediately notify SUPERINTENDENT
thereof in writing. SUPERINTENDENT shall not be responsible for any
payment of more than five (5) consecutive days of excused absence
unless a written time extension is granted by SUPERINTENDENT; and in
no event shall SUPERINTENDENT be responsible for any payment of more
than ten (10) consecutive days of excused absence. This applies only
to the basic education program. SUPERINTENDENT shall be responsible
for payment of nly the first day of related services (including
transportation) in the event of consecutive days of excused absence.
The one day payment only applies to the first day of a pupil's excused
absence. SUPERINTENDENT shall not be responsible for any payment of
a pupil's absence due to he/she being placed in juvenile hall or
temporarily placed out of the home by a state agency (other than
educational).

13. CHANGE OF RESIDENCE: CONTRACTOR shall notify SUPERINTENDENT in writing
of pupil's changes of residence within three (3) days after CONTRACTOR
becomes aware of said change. CONTRACTOR shall notify parents in
writing of their obligation to notify CONTRACTOR of changes of pupil's
residence. If CONTRACTOR neglects to follow these procedures, costs for
services delivered after CONTRACTOR becomes aware of a pupil's change
of residence to another SUPERINTENDENT shall be assumed by CONTRACTOR.

14. CONTRACTOR assures SUPERINTENDENT that it does not discriminate on the
basis of race, religion, sex, national origin, age or disability in
employment or operation of its programs.

15. No charge of any kind to parents shall be made by SUPERINTENDENT for
mandated educational and designated instruction and services, including
screening or interviews which may occur prior to a pupil's enrollment,
under the terms of this contract.

16. CONTRACTOR shall keep attendance of each pupil daily and shall report
attendance monthly to SUPERINTENDENT. Such attendance shall be kept
on attendance registers approved by SUPERINTENDENT and the original and
copies of such registers shall be filed with monthly invoices to
SUPERINTENDENT within thirty (30) days of the close of the school
month. Separate attendance registers must be submitted for all related
services as specified on Individualized Education Program. Original
attendance registers submitted to the SUPERINTENDENT with invoices for
payment must be completed by the service provider whose signature must
appear on said register. CONTRACTOR is responsible for verifying
accuracy of said registers and for informing service providers of their
personal responsibility for the completion and accuracy of said
attendance registers.

CONTRACTOR shall permit SUPERINTENDENT representatives, upon reasonable
notice, to meet with staff of CONTRACTOR for the purpose of auditing
attendance reporting.

17. A unit of service for payment purposes is equivalent to one day of
attendance or excused absence as defined in Education Code Section
46010. SUPERINTENDENT shall not be responsible for payment of services
for days on which a pupil's attendance or absence does not qualify for
reimbursement under state law. Per diem rates for pupils whose
Individualized Education Programs authorize less than a full
instructional day may be adjusted.

18. RATE SCHEDULE: Educational service(s) offered by CONTRACTOR in
accordance with the Individualized Educational Program and the charges
for such service(s) during the term of this contract, shall be
as follows:

a. Basic Education Program Rate Period
(Specify)
Education Program $119.75 per day
------- ---
b. Related Services per
---------------- -------------------- --------------------
(1) *Transportation per
-------------------- --------------------
(2) (a) Counseling - Group per
-------------------- --------------------
(b) Counseling - Individual per
-------------------- --------------------
(3) Adapted Physical Education per
-------------------- --------------------
(4) Language/Speech Therapy NTE $80.00 per hour
---------- ----
(5) Room and Board per
-------------------- --------------------
(6) Occupational Therapy $100.00 per hour
------------------------------------- ------- ----
(7) One-on-One Aide $88.56 per day
------------------------------------- ------ ---
(8) Speech Evaluation NTE$240.00 per 3 hour period
------------------------------------- ---------- -------------

*TRANSPORTATION

1-20 Miles $13.62
21-35 Miles $24.10
36-50 Miles $30.97
51-75 Miles $48.20
76-95 Miles $64.53
96-120 Miles $70.67
121-171 Miles $80.16
172-220 Miles $108.20

TRANSPORTATION OF STUDENTS WITH UNEXCUSED OR TRUANT ABSENCES WILL BE
REIMBURSED AT 50% OF THE DAILY TRANSPORTATION RATE FOR NO MORE THAN
FIVE (5) CONSECUTIVE DAYS OF UNEXCUSED OF TRUANT ABSENCES. IN NO EVENT
SHALL SUPERINTENDENT BE RESPONSIBLE FOR PAYMENT FOR MORE THAN FIVE (5)
CONSECUTIVE DAYS OF UNEXCUSED OR TRUANT ABSENCES.

NOT TO EXCEED 215 DAYS

19. In no event shall the total dollar amount of this contract exceed the
sum of $6,724,000.00.

20. PAYMENT DEMAND: CONTRACTOR shall submit written demand monthly for
payment. Said demand shall be made in the manner prescribed by the
SUPERINTENDENT. CONTRACTOR shall submit said demands for payment for
services rendered no later than thirty (30) days from the end of the
attendance accounting period in which said services are actually
rendered. Upon approval of said payment demand, SUPERINTENDENT shall
make payment in an amount equal to the number of creditable days of
attendance multiplied by the agreed upon unit amount. Payment shall be
made within forty-five (45) days of receipt by the SUPERINTENDENT of
invoices properly submitted.

21. RIGHT TO WITHHOLD: SUPERINTENDENT has the right to withhold payment to
CONTRACTOR when, in the opinion of SUPERINTENDENT expressed in writing
within ten (10) days to CONTRACTOR:

a. CONTRACTOR'S performance, in whole or in part, either has not
been carried out or is insufficiently documented;

b. CONTRACTOR has neglected, failed or refused to furnish
information or to cooperated with the inspection, review or audit
of its program, work or records;

c. When service is provided by personnel who are not appropriately
credentialed/licensed or whose credential(s)/license(s) are not
on file as specified in paragraph 3 of this contract;

d. When properly submitted payment demand is not received by
SUPERINTENDENT with thirty (30) days from the end of the
attendance accounting period.

In the event of such an expression of opinion by SUPERINTENDENT,
CONTRACTOR shall have fourteen (14) days from date of receipt of said
writing hereinabove referred to, to correct such deficiency. Upon
written request from SUPERINTENDENT documenting reasonable
justification, SUPERINTENDENT shall agree to an extension of an
additional fourteen (14) days for correction.

22. NOTICES: All notices provided for in this contract shall be in
writing and shall be delivered by certified or registered mail,
postage prepaid. Notices to Superintendent shall be mailed to
address on first page of this contract. The effective date of notice
shall be the date of receipt by addressee.

23. DISPUTES: Disagreements between SUPERINTENDENT and CONTRACTOR
concerning the meaning, requirements, or performance of this contract
shall be submitted to the State Superintendent of Public Instruction.
The determination of the Superintendent of Public Instruction shall be
made in writing and shall be binding upon both parties.

24. SUBCONTRACT AND ASSIGNMENT: CONTRACTOR shall not enter into
subcontracts for any of the work contemplated under this contract
without first obtaining written approval from SUPERINTENDENT. Such
approval shall be attached and made a part of this contract.
Subcontracts may be entered into only with nonpublic agencies
certified by the California State Department of Education. This
contract binds the heirs, successors, assignees and representative of
CONTRACTOR.

25. INSURANCE: During the entire term of this contract and any extension
or modification thereof, CONTRACTOR shall keep in effect a policy or
policies of liability insurance, including coverage of owned and
non-owned automobiles of a least $1,000,000 per occurrence, for all
damages arising out of death, bodily injury, sickness or disease from
any one accident or occurrence, and $1,000,000 for all damages and
liabilities arising out of injury to or destruction of property for
each accident or occurrence. Not later than the effective date of this
contract, CONTRACTOR shall provide SUPERINTENDENT with satisfactory
evidence of insurance, naming the SUPERINTENDENT as additional
insured, including a provision for a twenty (20) calendar day written
notice to SUPERINTENDENT before cancellation or material change,
evidencing the above specified coverage. The SUPERINTENDENT shall at
its own cost and expense procure and maintain insurance under the
Worker's Compensation Law of California.

26. COMPLIANCE WITH LAWS: During the term of this agreement, CONTRACTOR
shall comply with all applicable federal, state, State Board of
Education, and local statutes, laws, ordinance, rules and regulations
relating to the required special education services and facilities for
individuals with exceptional needs.

27. AUDIT EXCEPTIONS: CONTRACTOR agrees to accept responsibility for
receiving, replying to, and/or complying with, any audit exceptions by
appropriate state or federal audit agencies occurring as a result of
the CONTRACTOR'S performance of this contract. CONTRACTOR also agrees
to pay SUPERINTENDENT within thirty (30) days of demand by
SUPERINTENDENT the full amount of SUPERINTENDENT'S liability to the
state, if any, resulting from any audit exceptions, to the extent such
are attributable to CONTRACTOR'S failure to perform properly any of
its obligations under this contract.

28. INSPECTION AND AUDIT: CONTRACTOR shall provide access to or forward
copies of any books, documents, papers, reports, records or other
matter relating to the contract upon request by the SUPERINTENDENT
except as otherwise provided by law.

29. INDEMNIFICATION: CONTRACTOR shall defend, save harmless, and indemnify
SUPERINTENDENT and its officers, agents and employees from all
liabilities and claims for damages for death, sickness or injury to
persons or property including, without limitation, all consequential
damages, from any cause whatsoever arising from or connected with its
service hereunder, whether or not resulting form the negligence of
CONTRACTOR, its agents or employees.

30. CONFLICTS OF INTEREST: CONTRACTOR agrees to furnish, upon request, to
SUPERINTENDENT a valid copy of the most recently adopted partnership
agreements or bylaws and articles of the corporation and also a
complete and accurate list of the Governing Board of Directors ( or
Trustees or Partners) and to timely update said information as changes
in such governance occur. CONTRACTOR promises and attests that the
CONTRACTOR and any Board of Directors of the CONTRACTOR shall avoid
any actual or potential conflict of interest including, but not
limited to, employment with SUPERINTENDENT.

31. TERM: The term of this agreement shall be from July 1, 1997, to and
including June 30, 1998.

32. TERMINATION: This agreement may be terminated for cause. Cause shall
include, but not be limited to, nonmaintenance of current nonpublic
school/agency certification. To terminate this contract, either party
shall give twenty (20) calendar days written notice. Upon termination
without default of CONTRACTOR, SUPERINTENDENT shall pay, without
duplication, for all services performed and expenses incurred to date
of termination. In consideration of this payment, CONTRACTOR waives
all right to any further payment or damage, and shall turn over to
SUPERINTENDENT everything pertaining to its services hereunder,
possessed by CONTRACTOR or under its control at the time of
termination.

33. MODIFICATIONS AND AMENDMENTS: This contract may be amended only by the
mutual written consent of the parties hereto, except that the
SUPERINTENDENT may unilaterally amend the contract to accomplish the
below-listed changes:

a. Increase in dollar amounts.
b. Administrative changes.
c. Changes as required by law.

The parties hereto have executed this agreement by and through their
duly authorized agents or representatives.

DALE S. HOLMES Advocate Schools
Riverside County 22365 Barton Road, Suite 300
Superintendent of Schools 119 South Mt. Vernon Avenue
Grand Terrance, CA 92324-5172

Signed Signed
------------------------- -------------------------
Deputy Contractor

Date Date
--------------------------- ---------------------------

Approved as to form: ----------------------------
WILLIAM C. KATZENSTEIN Name and Title (Please Print)
Riverside County Counsel
-----------------------------
By Tax Identification Number
--------------------------
Date
-------------------------