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                                                                   Exhibit 10.77

                                 January 8, 1998

                            PERSONAL AND CONFIDENTIAL

Mr. Gary D. Kerber
Educational Medical, Inc.
1327 Northmeadow Parkway
Suite 132
Roswell, GA 30076

         Re:      Educational Medical, Inc. (the "Company")
                  Various Compensation Issues

Dear Gary:

         The Board of Directors (the "Board") has requested me to set forth the
agreement reached between the Board, on behalf of the Company, and yourself
concerning various compensation issues relating to any sale or change in control
of the Company resulting from the current undertaking to find a strategic or
financial buyer (an "Investment Transaction").

         If the Company completes any Investment Transaction with respect to
which the aggregate gross consideration per share (the "Purchase Price Per
Share") with respect to each share of the Company's outstanding Common Stock
equals or exceeds $10.00 per share, you and Mr. Pisano will receive, pro rata
based on your then current regular cash compensation, $500,000 plus 2% of the
amount by the total Purchase Price Per Share for all then outstanding shares
exceeds $10.00 per share. These payments will be made to you and Mr. Pisano
simultaneously with the closing of the Investment Transactions, but only if the
Board determines that each of you has made a good faith effort to complete the
Investment Transaction as intended and have taken no action which reasonably
could be considered as intended to impair the completion of the Investment
Transaction.

         Should you be terminated from your employment with the Company for any
reason other than for cause within twelve (12) months after the closing of an
Investment Transaction, you will receive monthly payments equaling one year's
salary, at your regular cash compensation level at the time of termination,
after offsetting any cash compensation you receive from any other employment or
consulting activities during such period. A reduction in salary or material
change in responsibility, exclusive of change in title only (e.g. becoming the
division head of a division operating substantially all of the Company's
business but without the title of Chief Executive Officer or President), will
constitute termination other than for


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Mr. Gary D. Kerber                                     PERSONAL AND CONFIDENTIAL
January 8, 1998
Page 2

cause. Except as otherwise provided in this Agreement, your employment is
subject to the terms of your existing employment contract with the Company.

         In the event that your employment with the Company is terminated
without cause within the twelve (12) month period following the completion of an
Investment Transaction, health and related benefits will be continued by the
Company for twelve (12) months following date of termination. Such health and
related benefits shall be continued at the level in place on the date of
termination. Additionally, the Company will provide, upon request, outplacement
services at a cost not to exceed $35,000.

         Stock options concerns have been addressed by separate correspondence.

         Should any element of this agreement be proposed for amendment by
management at a later date, all elements will be subject to reconsideration.

         If the above accurately reflects your understanding of the agreement
between yourself and the Board, please sign the enclosed duplicate copy of this
letter and return it to me at your earliest convenience.

                                               Sincerely,

                                               /s/ Morris C. Brown
                                               Morris C. Brown, Secretary

Acknowledged and Agreed:


         /s/ Gary D. Kerber
-----------------------------------
Gary D. Kerber

Date: January 8, 1998