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                                                                     EXHIBIT 2.2

                           STOCK PURCHASE AGREEMENT

                                    BETWEEN

                       EDUCATION MANAGEMENT CORPORATION

                                      AND

                             MICHAEL C. MARKOVITZ

                                  Dated as of

                                 July 9, 2001
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                           STOCK PURCHASE AGREEMENT
                           Dated as of July 9, 2001


     The parties to this Stock Purchase Agreement (this "Agreement") are Michael
C. Markovitz ("Seller"), a stockholder of Argosy Education Group, Inc., an
Illinois corporation (the "Company") and Education Management Corporation, a
Pennsylvania corporation (the "Buyer").

     The Company, along with its Subsidiaries, owns and operates the Schools (as
defined below). The Seller is the owner directly or indirectly of 4,900,000
shares of Class B common stock, $.01 par value per share of the Company
("Company Class B Common Stock") (the "Shares"). The Seller desires to sell and
the Buyer desires to purchase all of the Shares. As of the date hereof, Buyer,
HAC Inc. ("HAC"), a wholly owned subsidiary of the Buyer and the Company have
entered into that certain Agreement and Plan of Merger dated July 9, 2001
providing for the merger of HAC with and into the Company (the "Merger
Agreement"). In consideration of the mutual promises, covenants and agreements
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:


                                  ARTICLE I.

                                  DEFINITIONS

          When used in this Agreement, and in addition to the other terms
defined herein, the following terms shall have the meanings specified:

          "ACCREDITING BODY" shall mean any entity or organization, whether
private or quasi-private, whether foreign or domestic, which engages in the
granting or withholding of accreditation of private post secondary schools in
accordance with standards and requirements relating to the performance,
operations, financial condition and/or academic standards of such schools.

          "AFFILIATE" shall mean, in relation to any party hereto, any entity
directly or indirectly controlling, controlled by or under common control with
such party and shall include a party's executive officers, directors and with
respect to natural persons shall include such person and his or her spouse,
siblings, or ancestors, any lineal descendants, or their siblings, or ancestors,
or trust for the benefit of the foregoing.

          "ANTITRUST LAWS" shall have the meaning set forth in Section 6.1(b).

          "BALANCE SHEET" shall mean the May 31, 2001 balance sheet of the
Company provided to the Buyer.
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          "BALANCE SHEET DATE" shall mean May 31, 2001.

          "BANKRUPTCY EXCEPTION" shall have the meaning set forth in Section
3.2.

          "BUYER DAMAGES" shall have the meaning set forth in Section 8.2

          "BUYER INDEMNITEES" shall have the meaning set forth in Section 8.2,

          "CLOSING" shall have the meaning set forth in Section 2.3.

          "CLOSING DATE" shall have the meaning set forth in Section 2.3.

          "COMPANY CLASS B COMMON STOCK" shall have the meaning set forth in the
recitals.

          "COMPANY COMMON STOCK" shall mean the Company Class A Common Stock,
$.01 par value per share, and the Company Class B Common Stock.

          "COMPANY FINANCIAL STATEMENTS" shall mean the audited Consolidated
Balance Sheets, Consolidated Statement of Operations, Consolidated Statement of
Cash Flows and Consolidated Statement of Shareholders' Equity of the Company,
and the related notes thereto, for the most recent two (2) fiscal years, and the
unaudited interim consolidated financial statements of the Company for the nine
(9) month period ended and at May 31, 2001.

          "DOE" shall mean the United States Department of Education.

          "EFFECTIVE TIME" shall mean the time at which the Merger becomes
effective, pursuant to the Merger Agreement.

          "ESCROW ACCOUNT" shall have the meaning set forth in Section 2.4(a).

          "ESCROW AGENT" shall have the meaning set forth in Section 2.4(a).

          "ESCROW AGREEMENT" shall have the meaning set forth in Section 2.4(a).

          "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.

          "GAAP" shall mean United States generally accepted accounting
principles consistently applied.

          "GOVERNMENTAL ENTITY" shall mean any federal, state, local or foreign
court, arbitral tribunal, administrative agency or commission or other
governmental or regulatory authority or administrative agency or commission.

          "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.

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          "INCUMBENT DIRECTORS "shall have the meaning set forth in Section 2.5.

          "INDEMNIFIED PARTY" shall have the meaning set forth in Section 8.4.

          "INDEMNITY THRESHOLD" shall have the meaning set forth in Section 8.2.

          "KNOWLEDGE" shall mean the actual Knowledge after reasonable inquiry
of the Seller.

          "LAW" shall mean any foreign, federal, state or local governmental
law, rule, regulation or requirement, including any rules, regulations and
orders promulgated thereunder and any orders, decrees, consents or judgments of
any governmental regulatory agencies and courts having the force of law other
than any Environmental Laws.

          "LIEN" shall mean, with respect to any asset (real, personal or
mixed): (a) any mortgage, pledge, lien, easement, lease, title defect or
imperfection or any other form of security interest, whether imposed by Law or
by contract; and (b) the interest of a vendor or lessor under any conditional
sale agreement, financing lease or other title retention agreement relating to
such asset.

          "MATERIAL ADVERSE EFFECT" means any effect, change, event,
circumstance or condition which when considered with all other effects, changes,
events, circumstances or conditions has materially and adversely affected or
could reasonably be expected to materially and adversely affect the results of
operations, financial condition, assets, liabilities or business of the Buyer or
the Company, in each case including its respective Subsidiaries together with it
taken as a whole, as the case may be.

          "MERGER" shall have the meaning set forth in Section 5.19.

          "MERGER AGREEMENT" shall have the meaning set forth in the recitals.

          "OTHER APPROVALS" shall have the meaning set forth in Section 2.4(b)

          "PARTY" shall mean each of the Seller and the Buyer.

          "PERSON" shall mean a natural person, corporation, limited liability
company, association, joint stock company, trust, partnership or any other legal
entity.

          "PPPAs" shall have the meaning set forth in Section 2.4(b).

          "PURCHASE PRICE" shall have the meaning set forth in Section 2.1.

          "SCHOOL" shall mean any school regulated as such by the DOE, other
Governmental Entity or Accrediting Body and owned or operated by the Company or
any of its Subsidiaries, including the American Schools of Professional
Psychology, Medical Institute of

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Minnesota, PrimeTech Institute, University of Sarasota, John Marshall Law School
and Western State University College of Law.

          "SCHOOLS' ACCREDITING BODIES" shall have the meaning set forth in
Section 2.4(b).

          "SEC" shall mean the Securities and Exchange Commission.

          "SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations thereunder.

          "SELLER DAMAGES" shall have the meaning set forth in Section 8.3.

          "SELLER INDEMNITEES" shall have the meaning set forth in Section 8.3.

          "SHARES" shall have the meaning set forth in the recitals.

          "STOCKHOLDERS" shall mean all Persons owning any shares of Company
Common Stock.

          "STUDENT FINANCIAL ASSISTANCE PROGRAMS" shall mean those programs
created by the Higher Education Act of 1965, as amended, and administered by the
DOE, as well as any state student assistance programs or other government-
sponsored student assistance programs.

          "SUBSIDIARY" shall mean any entity, a majority of the outstanding
equity of which (or any class or classes, however designated, having ordinary
voting power for the election of members of the board of directors of such
entity) shall at the time be owned by the relevant Person directly or through
one or more corporations which are themselves Subsidiaries.

          "TAX" or "TAXES" shall mean any and all federal, state, local and
foreign taxes, assessments and other governmental charges, duties, impositions
and liabilities relating to taxes, including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and including any liability for taxes of a
predecessor entity.

          "TITLE IV " shall mean Subchapter IV of the Higher Education Act of
1965, as amended, 20 U.S.C.A. (s)1070 et seq. and any amendments or successor
statutes thereto.

          "TITLE IV PROGRAM" shall mean any program of student financial
assistance administered pursuant to Title IV.

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                                  ARTICLE II.

                                THE TRANSACTION

          2.1.   SALE AND PURCHASE OF SHARES. At the Closing referred to in
Section 2.3, upon the terms and subject to the conditions of this Agreement, the
Seller shall sell to the Buyer and the Buyer shall purchase from the Seller the
Shares for a purchase price of $12.00 per Share (the "Purchase Price").

          2.2.   PAYMENT OF CONSIDERATION; DELIVERY OF SHARES. At the Closing,
the Buyer shall deliver the Purchase Price to the Escrow Agent (as defined in
Section 2.4(a)) at the Closing by either, at Buyer's election, (a) wire transfer
of federal funds or (b) deposit of a letter of credit from a financial
institution reasonably acceptable to Seller and the Seller shall deliver the
certificate(s) for the Shares together with duly executed stock powers executed
in blank to the Escrow Agent. At the Closing, title to the Shares shall pass to
Buyer. At the Closing, Seller shall deliver the Shares free and clear of any
Liens, encumbrances or adverse claims of any nature.

          2.3.   CLOSING. The closing of the sale and purchase of the Shares
(the "Closing") shall take place as soon as practicable following the
satisfaction or waiver of all conditions to the obligations of the parties to
this Agreement to consummate the transactions contemplated hereby as set forth
in Sections 6.1 and 6.2 (other than conditions with respect to actions to be
taken at the Closing itself) (the "Closing Date") at the offices of Kirkpatrick
& Lockhart LLP, Henry W. Oliver Building, 535 Smithfield Street, Pittsburgh, PA
15222, or at such other place and time as the parties may agree upon in writing


          2.4.   ESCROW; DEPARTMENT OF EDUCATION APPROVAL.

          (a)    Escrow. The parties shall appoint an institution mutually and
                 ------
reasonably acceptable to Buyer and Seller to act as escrow agent (the "Escrow
Agent") pursuant to an escrow agreement substantially in the form attached
hereto as Exhibit A (the "Escrow Agreement"). The Purchase Price or letter of
          ---------
credit payable in accordance with Section 2.2 shall be deposited with the Escrow
Agent to be held in an escrow account (the "Escrow Account") subject to the
terms and conditions set forth in this Section 2.4.

          (b)    Escrow Release. On the next business day following satisfaction
                 --------------
(or, written waiver by Buyer) of the following conditions, the Escrow Agent
shall pay to the Seller the Purchase Price, less the amount of any claims for
Buyer Damages under Section 8.2 (the "Escrow Release"), and any interest earned
on the funds escrowed shall be paid to Buyer:

                 (i)  receipt of (A) a provisional program participation
agreement for each of the Schools from the DOE to allow the Schools to continue
to participate after the Closing under the same conditions as they currently do
in the programs of Title IV and without adversely affecting the financial aid
benefits available to the current students of the Schools and

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prospective students of the Schools (collectively, the "PPPAs") and (B) all
final approvals to the extent required to be obtained from the following
relevant Accrediting Bodies: American Bar Association, North Central Association
of Colleges and Schools, American Psychological Association, Southern
Association of Colleges and Schools, Accrediting Bureau of Health Educational
Schools, Western Association of Schools and Colleges, National Accrediting
Agency for Clinical Laboratory Sciences, Committee on Accreditation for Medical
Assistant Education, Joint Review Committee on Education in Radiologic
Technology, American Veterinary Medical Association, and Commission on Dental
Accreditation of the American Dental Association (the above listed Accrediting
Bodies shall be collectively referred to herein as the "Schools' Accrediting
Bodies") in order for the Schools to continue to operate in the manner in which
they currently operate and have historically operated (or, to the extent such
operation is changed by the restructuring of certain schools into Argosy
University, in a manner consistent with such restructuring) (collectively, the
"Other Approvals"), and

                    (ii) the closing of the Merger pursuant to, and in
accordance with, the Merger Agreement.

Each Party hereby agrees to cooperate fully with the other Party in promptly
seeking the PPPAs and the Other Approvals and promptly supplying any information
that may be requested by the DOE and the Schools' Accrediting Bodies or any
other Accrediting Body. Any one or more of the conditions set forth in clauses
(i) or (ii) may be waived in whole or in part by the Buyer in its sole
discretion.

          (c)       Rescission. If the Escrow Release has not occurred for any
                    ----------
reason by December 31, 2001, the transactions contemplated by this Agreement
shall be automatically rescinded.

          (d)       Upon rescission, no party shall have any liability to any
other party other than in respect of any prior breach of this Agreement, and the
amount deposited in the Escrow Account, together with interest thereon, shall be
returned to the Buyer immediately and the stock certificate(s) representing the
Purchased Shares shall be returned to the Seller immediately.

          (e)       Effect of Rescission. In the event of a rescission of the
                    --------------------
Closing, this Agreement (other than Sections 2.5 and 2.6 hereof) shall forthwith
become void and there shall be no liability or obligation on the part of Buyer
or Seller hereunder thereafter; provided further, however, that nothing herein
shall relieve any party for liability for any breach hereof prior to such
rescission.

          2.5       VOTING.

          (a)       Seller hereby agrees that, prior to the Closing Date and
after any rescission under Section 2.4, at any meeting of the Stockholders,
however called, and at every adjournment or postponement thereof, and in any
action by written consent of the Stockholders, he shall (i) appear at the
meeting or otherwise cause the Shares to be counted as present thereat for
purposes

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of establishing a quorum, (ii) vote the Shares in favor of the Merger and
approval and adoption of the Merger Agreement, and any action required in
furtherance thereof, (iii) vote the Shares against any action or agreement that
would result in a breach in any material respect of any representation, warranty
or covenant of the Company in the Merger Agreement, and (iv) vote the Shares
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger, including any other extraordinary
corporate transaction, such as a merger, reorganization or liquidation involving
the Company and a third party or any other proposal of a third party to acquire
the Company. Without limiting the generality of the foregoing, Seller shall
irrevocably vote all of the Shares in favor of the Merger promptly upon the
setting of a record date for the meeting of Stockholders at which the Merger
will be submitted to a vote of Stockholders. Seller's obligation under this
Section 2.5 shall terminate on the termination of the Merger Agreement.

          (b)  Buyer hereby agrees that, after the Closing Date and until the
earlier of the Effective Time of the Merger or the Escrow Release, at any
meeting of the Stockholders, however called, and at every adjournment or
postponement thereof, and in any action by written consent of the Stockholders,
it shall (i) appear at the meeting or otherwise cause the Shares to be counted
as present thereat for purposes of establishing a quorum, (ii) vote the Shares
in favor of the Company's directors who are the current incumbent directors at
the time of the signing of this Agreement (the "Incumbent Directors") and any
persons nominated by the Incumbent Directors to fill any vacancies that may be
created on the Company's Board of Directors (other than any persons designated
by or affiliated or associated with any person or entity that is proposing to
engage in any acquisition of an interest in, or business or business combination
with, the Company), (iii) vote the Shares against any action or agreement that
would result in a breach in any material respect of any representation, warranty
or covenant of the Company in the Merger Agreement, and (iv) vote the Shares
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger, including any other extraordinary
corporate transaction, such as a merger, reorganization or liquidation involving
the Company and a third party or any other proposal of a third party to acquire
the Company.

          2.6  IRREVOCABLE PROXY. Each of the parties agrees that, in the event
it shall fail to comply with the provisions of Section 2.5 hereof, such failure
shall result in the irrevocable appointment of the other as its attorney and
proxy, with full power of substitution and resubstitution, to vote the Shares at
any meeting of Stockholders, however called, or in connection with any action by
written consent by the Stockholders, in each case only as and to the extent
provided in Section 2.5 hereof; provided, however, that, without limiting the
foregoing, in any such vote or other action pursuant to such proxy, no party
shall have the right (and such proxy shall not confer the right) to vote against
the Merger, to vote to reduce the Merger Consideration (as defined in the Merger
Agreement) or otherwise modify or amend the Merger Agreement to reduce the
rights or benefits of the Company or any Stockholders (including Seller) under
this Agreement or the Merger Agreement or to reduce the obligations of Buyer,
HAC or the Company thereunder; and provided, further, that the proxy granted
pursuant

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to this Section 2.6 shall irrevocably cease and shall be of no further force or
effect upon the earlier of the Escrow Release or the termination of the Merger
Agreement or this Agreement in accordance with its terms. THIS PROXY AND POWER
OF ATTORNEY IS IRREVOCABLE, SUBJECT TO THE FOREGOING AND SECTION 2.5 HEREOF, AND
COUPLED WITH AN INTEREST. Each of the parties hereby revokes all other proxies
and powers of attorney with respect to the Shares that it may have heretofore
appointed or granted, and no subsequent proxy or power of attorney shall be
given or written consent executed (and if given or executed, shall not be
effective) with respect thereto, other than as contemplated by Section 2.5
hereof.

                                 ARTICLE III.

                        REPRESENTATIONS AND WARRANTIES
                                 OF THE SELLER

     As an inducement to the Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, the Seller represents and warrants to the
Buyer as follows:

          3.1.      SHARES. The Shares are validly issued, fully paid and
nonassessable. All of the Shares are owned of record, legally, beneficially and
exclusively by the Seller, except for the Shares held by the MCM Trust and the
MCM Dynastic Trust (the "Seller Trusts"). Seller has full and sole power to vote
and dispose of the Shares owned by the Seller Trusts. The Seller holds the
exclusive right and power to vote and dispose of the Shares owned by him or the
Seller Trusts. The Shares are free and clear of any and all Liens or other
encumbrances. Upon delivery of certificates representing the Shares under this
Agreement, the Buyer will acquire good and valid legal and exclusive title to
the Shares, free and clear of any Liens or other encumbrances or any adverse
claims of any nature. There are no outstanding subscriptions, options, warrants,
preemptive rights, exercise rights, exchange rights, appreciation, phantom stock
or other rights to acquire from the Seller any of the Shares.

          3.2.      AUTHORIZATION; ENFORCEABILITY. This Agreement constitutes
the valid and binding obligation of the Seller and is, and the other documents
and instruments required by this Agreement to be executed and delivered by the
Seller will be, when executed and delivered by the Seller, enforceable against
the Seller in accordance with their respective terms, except as such enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws generally affecting the rights of creditors (the
"Bankruptcy Exception") and subject to general equity principles and an implied
covenant of good faith and fair dealing.

          3.3.      NO VIOLATION OR CONFLICT. Subject to the receipt of the
clearance or expiration or termination of the waiting period described in
Section 6.1(b) and the approvals described in Section 6.1(c) and on Section 4.4
of the Company Disclosure Letter to the Merger Agreement, the execution and
delivery of this Agreement by the Seller and all documents and instruments
required by this Agreement to be executed and delivered by the Seller do not,
and the

                                      -8-
<PAGE>

consummation by the Seller of the other transactions contemplated hereby and the
Seller's compliance with the provisions hereof will not, result in any violation
of, or default under any agreement, contract or binding commitment to which
Seller or any Seller Trust is a party to or by which Seller or any Seller Trust
is bound.

          3.4.      NO LITIGATION. There are no actions, suits, investigations,
injunctions, orders, decrees, claims or proceedings of any nature or kind
whatsoever, at law or in equity, instituted, or pending against Seller or any
Seller Trust, or to Seller's Knowledge, threatened by any Person or any
outstanding orders, judgments, injunctions, awards or decrees which are intended
to, or might reasonably be expected to, prohibit any of the transactions
contemplated hereby or impair Seller's ability to fulfill his obligations under
this Agreement.

          3.5.      NO BROKER OR FINDER. No broker, finder or other party is
entitled to any fee or other compensation in connection with the sale of Shares
contemplated under this Agreement, other than J.P. Morgan (pursuant to the
letter dated May 25, 2001, a copy of which has been provided to Buyer).

          3.6.      TAX MATTERS. Seller will furnish Buyer and/or Escrow Agent
all taxpayer information reasonably necessary to determine any withholding
obligation that may be imposed with respect to the payment of the consideration
to Seller for the Purchased Shares under applicable tax law.

          3.7.      ABSENCE OF COMPANY BREACH. Seller has no Knowledge of any
breach of any representation and warranty made by the Company in the Merger
Agreement.

          3.8.      DISCLOSURE. None of the representations or warranties of the
Seller contained herein is false or misleading in any material respect or omits
to state a fact necessary to make the statements herein not misleading in any
material respect.


                                  ARTICLE IV.

                  REPRESENTATIONS AND WARRANTIES OF THE BUYER

     As an inducement to the Seller to enter into this Agreement and consummate
the transactions contemplated hereby, the Buyer represents and warrants to the
Seller as follows:

          4.1.      ORGANIZATION; BUSINESS. Buyer is a corporation duly and
validly organized and existing under the Laws of the jurisdiction of its
incorporation and is qualified to do business as a foreign corporation and in
good standing in the jurisdictions where the ownership or leasing of property or
the conduct of its business requires qualification as a foreign corporation by
Buyer except where the failure to so qualify could not reasonably be expected to
have a Material Adverse Effect on Buyer.

                                      -9-
<PAGE>

               4.2.  AUTHORIZATION; ENFORCEABILITY. The execution,
delivery and performance by Buyer of this Agreement is within the corporate
power and authority of Buyer and, subject to the provisions hereof, has been
duly authorized by the Board of Directors of Buyer. No other corporate
proceeding (including a vote of the stockholders of the Buyer) or action on the
part of Buyer is necessary to authorize the execution and delivery by Buyer of
this Agreement and the consummation by Buyer of the transactions contemplated
hereby. This Agreement is, and the other documents and instruments required by
this Agreement to be executed and delivered by Buyer will be, when executed and
delivered by Buyer, the valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms, except as the
enforcement thereof may be limited by the Bankruptcy Exception and subject to
general equity principles and an implied covenant of good faith and fair
dealing.

               4.3.  NO VIOLATION OR CONFLICT. Subject to the receipt of
the clearance or expiration or termination of the waiting period described in
Section 6.1(b) and the approvals described in Section 6.1(c), the execution and
delivery of this Agreement by Buyer and all documents and instruments required
by this Agreement to be executed and delivered by Buyer does not, and the
consummation by Buyer of the transactions contemplated hereby and Buyer's
compliance with the provisions hereof will not, result in any violation of any
provision of the certificate of incorporation, bylaws or contracts of Buyer
except such as could not reasonably be expected to have a Material Adverse
Effect.

               4.4.  SUFFICIENT FUNDS. Buyer has received a commitment
letter from National City Bank pursuant to which Buyer expects to have available
to it, at the Effective Time, sufficient funds to consummate the transactions
contemplated by this Agreement, including payment of the Purchase Price and all
related costs and expenses.

               4.5.  INVESTMENT INTENT. Buyer hereby represents that the
Purchased Shares it is acquiring pursuant to this Agreement are being purchased
for its own account for purposes of investment and not with a view to, or for
sale in connection with, any public distribution thereof. In addition, Buyer
acknowledges that the Purchased Shares being purchased pursuant to this
Agreement have not been registered under the Securities Act, and may not be
resold without registration under such Act or unless an exception or exemption
therefrom is available.

               4.6.  BROKER'S AND FINDER'S FEE. The Buyer has not incurred any
brokers', finders' or any similar fee in connection with the transaction
contemplated by this Agreement.

               4.7.  DISCLOSURE. None of the representations or warranties of
the Buyer contained herein is false or misleading in any material respect or
omits to state a fact necessary to make the statements herein not misleading in
any material respect.

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                                  ARTICLE V.

                           COVENANTS AND AGREEMENTS

               5.1.  REGULATORY AND OTHER APPROVALS.

               (a)   The Seller and the Buyer will (i) within a reasonable
period of time after execution of this Agreement take any reasonable actions
necessary to file notifications under the HSR Act and any applicable laws of
Canada, (ii) comply within a reasonable period of time with any binding request
for additional information received from the Federal Trade Commission or
Antitrust Division of the Department of Justice pursuant to the HSR Act or from
request early termination of the applicable waiting period.

               (b)   The Seller shall use all commercially reasonable efforts to
cause the Company and each of its Subsidiaries to cooperate with Buyer to take
all commercially reasonable steps necessary or desirable, and proceed diligently
and in good faith and use all commercially reasonable efforts, as promptly as
practicable to (i) solicit input from Governmental Entities and Accrediting
Bodies regarding the process of obtaining regulatory, Accrediting Body and DOE
approvals, obtain all state education regulatory body, Accrediting Body and DOE
approvals, make all filings with and give all notices to Governmental Entities
and Accrediting Bodies, and obtain all licenses required of the Company to
consummate the transactions contemplated hereby, including without limitation
those described in the Company Disclosure Letter to the Merger Agreement, (ii)
provide such other information and communications to such Governmental Entities
and Accrediting Bodies or other persons as Buyer or such Governmental Entities
and Accrediting Bodies may request and (iii) obtain all state education
regulatory body, Accrediting Body and DOE approvals, making all filings with and
giving all notices to Governmental Entities and Accrediting Bodies and obtaining
all licenses required of Buyer to consummate the transactions contemplated
hereby. The Seller will use his commercially reasonable efforts to cause the
Company to provide prompt notification to Buyer when any such state education
regulatory body, Accrediting Body or DOE approval or license referred to in
clause (i) above is obtained, taken, made or given, as applicable, and will
promptly advise Buyer of any communications (and promptly provide copies of any
such communications that are in writing or filings) with any Governmental Entity
or Accrediting Body regarding the transactions contemplated by this Agreement.
In addition:

                     (i)   The Seller shall use all commercially reasonable
efforts to cause the Company, within ten (10) days from the date of this
Agreement, to file a pre-acquisition application with DOE in order to obtain a
written statement from DOE, to the satisfaction of Buyer in its sole discretion,
that the DOE does not see any impediment to issuing the PPPAs to the Company
following the Closing, which agreement will prevent any interruption of Title IV
Program funds from the DOE to the Company and will not include (A) unusual or
burdensome conditions, including, but not limited to, any requirement to
administer Title IV Program funds

                                      -11-
<PAGE>

on a reimbursement or cash monitoring basis or to post a letter of credit or
other financial security with the DOE in an amount which is reasonably expected
by Buyer to materially reduce the economic benefits that Buyer or its Affiliates
anticipated to receive in this transaction, or (B) any requirement that would
impose restrictions or limitations on the activities of Buyer or its Affiliates
unrelated to the Company or its Schools; provided, however, that the filing
                                         --------  -------
deadline contained in this Section 5.1(b)(i) shall be contingent on the Buyer
cooperating fully with the Company to provide all information and materials
necessary for the Company timely to file such pre-acquisition application.

                     (ii)  The Seller and Buyer will cause their representatives
to promptly and regularly advise each other and the Company concerning the
occurrence and status of any discussions or other communications, whether oral
or written, with any state education regulating body, Accrediting Body or
Governmental Entity or other third party with respect to any consent or the
PPPAs, including any difficulties or delays experienced in obtaining any
consent, and of any conditions proposed, considered, or requested by any consent
or the PPPAs.

                     (iii) Buyer will cooperate fully with the Seller and the
Company in their efforts to obtain any consents and the PPPAs, but Buyer will
not be required to (i) make any expenditure or payment of funds (other than fees
and expenses of Buyer's counsel, if any) or (ii) permit any adverse changes in,
or the imposition of any adverse condition to, any approval, license, or
contract as a condition to obtaining any consent or the PPPAs. Such cooperation
shall include Buyer's full cooperation in timely filing applications and other
documents (including applications and other documents filed prior to the
Closing) necessary to obtain any consent or the PPPAs.

                     (iv)  Buyer will allow the Seller's and the Company's
agents and representatives to participate in any meetings or telephone calls
with any state education regulatory body, Accrediting Body or Governmental
Entity to discuss the status of any consent or the PPPAs; provided, however,
that the Seller and his agents will confer in advance with Buyer to agree on the
issues to be discussed in such meeting or telephone call and will not introduce
any issues that are not agreed to in advance and will not respond to any
compliance issues first introduced in such meeting or telephone call by the
state education regulatory body, Accrediting Body or Governmental Entity.

                     (v)   The Seller will use all commercially reasonable
efforts to cause the Company to ensure that its appropriate officers and
employees shall be available to attend, as any Governmental Entity may
reasonably request, any scheduled hearings or meetings in connection with
obtaining any consent or the PPPAs.

               (c)   Subject to the terms and conditions herein provided, the
Seller and Buyer will take all reasonable steps necessary or desirable, and
proceed diligently and in good faith and use all reasonable efforts to obtain
all approvals required by any contract to consummate the transactions
contemplated hereby.

                                      -12-
<PAGE>

               (d)   Each of Buyer and the Seller shall use all commercially
reasonable efforts to resolve such objections, if any, as may be asserted by any
United States Governmental Entity with respect to the transactions contemplated
by this Agreement under the Antitrust Laws. In connection therewith, if any
administrative or judicial action or proceeding is instituted (or threatened to
be instituted) challenging any transaction contemplated by this Agreement as
violative of any Antitrust Law, and, if by mutual agreement, the Buyer and the
Seller decide that litigation is in their best interests, each of the Buyer and
the Seller shall cooperate and use all commercially reasonable efforts to
vigorously contest and resist any such action or proceedings and to have
vacated, lifted, reversed, or overturned any decree, judgment, injunction or
other order, whether temporary, preliminary or permanent, that is in effect and
that prohibits, prevents, or restricts consummation of any such transaction.
Each of Buyer and the Seller shall use all commercially reasonable efforts to
take such action as may be required to cause the expiration of the notice
periods under the HSR Act or any applicable laws of Canada with respect to such
transactions as promptly as commercially reasonable after the date of this
Agreement. The obligations of Buyer and Seller under this Section 5.1 with
respect to the Antitrust Laws shall not require Buyer or Seller to obtain or
attempt to obtain any such waiver, permit, consent, approval or authorization if
obtaining such waiver, permit, consent, approval or authorization would require
disposition of any assets of Buyer or Seller or any affiliate of either.

               5.2.  PUBLICITY. The Buyer shall consult with the Seller before
issuing any press release or otherwise making any public announcements,
including any announcement to employees and current or prospective students,
with respect to this Agreement or the transactions contemplated hereby (except
to the respective directors and officers of the Company and the Buyer), and
shall not issue any such press release or make any such public announcement
prior to such consultation, except as required by Law, including but not limited
to applicable securities laws and Nasdaq National Market listing requirements or
rules. The Seller shall not make any press release or public announcement
regarding this Agreement or the transactions contemplated hereby.

               5.3.  COSTS AND EXPENSES. The Buyer and the Seller shall each pay
all their own costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby, including all accounting, legal and
appraisal fees and settlement charges, except that the Company shall pay
Seller's reasonable costs and expenses associated with the transactions
contemplated hereby. The Seller shall pay all sales or other transfer taxes on
the sale of the Shares and timely pay such amounts to the appropriate
authorities. The Buyer shall pay the Hart-Scott-Rodino filing fee required in
connection herewith.

               5.4.  NOTIFICATION OF CERTAIN MATTERS. Between the date of this
Agreement and the Closing Date, the Seller will promptly notify the Buyer in
writing if it becomes aware of any development, fact or condition that (i) is
reasonably likely, individually or with other existing developments, facts or
conditions, to result in a Material Adverse Effect with respect to the Company
or any of its Subsidiaries, or (ii) causes or constitutes a breach of any
agreement or covenant under this Agreement applicable to him or of his
representations and warranties as of the date of this Agreement, or if he
becomes aware of the occurrence after the

                                      -13-
<PAGE>

date of this Agreement of any fact or condition that would cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition.

               5.5.  STOCKHOLDER LITIGATION. The parties shall cooperate and
consult with one another, to the fullest extent possible, in connection with any
stockholder litigation against any of them with respect to the transactions
contemplated by this Agreement. In furtherance of and without in any way
limiting the foregoing, each of the parties shall use its respective
commercially reasonable efforts to prevail in such litigation so as to permit
the consummation of the transactions contemplated by this Agreement in the
manner contemplated by this Agreement. No party shall consent to any settlement
or order that would have the effect of prohibiting the transactions contemplated
hereby or by the Merger Agreement without the consent of the other party.

               5.6.  EXCLUSIVITY. Until the earlier of the Closing Date or such
date as this Agreement is terminated, the Seller will not, and will use all
commercially reasonable efforts to cause the Company to not, directly or
indirectly, communicate with any party other than the Buyer concerning (a) the
sale or other disposition of the Shares and (b) except in his capacity as an
executive officer or director of the Company, in either case acting in
accordance with a decision of the full Board of Directors, any material portion
of the equity or assets of the Company by merger, consolidation, operation of
law or otherwise.


               5.7.  MERGER AGREEMENT. Seller shall use all commercially
reasonable efforts to cause the Company to comply with all of its obligations
pursuant to, and satisfy the conditions to closing under, the Merger Agreement.

               5.8.  UNDERTAKING OF SELLER - EXCLUDED ASSETS.

               (a)   Seller hereby undertakes that if the Company is directed by
Buyer to sell, divest, donate or otherwise dispose of the stock of John Marshall
Law School, Inc. ("JMLS") and/or PrimeTech Canada, Inc. ("PrimeTech") pursuant
to Section 6.23 of the Merger Agreement, Seller will, at the request of the
Company, offer to purchase the stock of JMLS and/or PrimeTech, as the case may
be, and all associated assets and liabilities, for a purchase price of $1.00.
Seller hereby agrees that in connection with any purchase of the stock of JMLS
and/or PrimeTech, such purchase shall be made by Seller without recourse to the
Company and the Company shall make no representations or warranties or other
undertakings to the Seller in connection therewith, and the closing of such
purchase by Seller shall be conditioned solely on obtaining all material
regulatory approvals necessary in order to transfer control of such entity or
entities to Seller. Within 15 days of receipt of notice from Buyer, Seller will,
and will cause the Company to, apply for all requisite regulatory approvals and
will use all (and will cause the Company to use all) commercially reasonable
efforts to obtain such approvals, and will close the purchase of JMLS and/or
PrimeTech as promptly as practicable.

                                      -14-
<PAGE>

               (b)   Buyer hereby waives any and all claims against Seller, his
affiliates and agents and representatives in connection with such sale, other
than any claims arising out of a breach of the provisions of this Section 5.8.

               (c)   In connection with the purchase of JMLS and/or PrimeTech,
Seller shall cause JLMS and/or PrimeTech to enter into an indemnity agreement
reasonably satisfactory to Buyer pursuant to which JMLS and PrimeTech will hold
the Company harmless from claims, obligations and liabilities of or relating to
it or its operations.

               5.9.  LEEDS LETTER AGREEMENT. Seller hereby agrees and undertakes
to satisfy any and all obligations of the Company incident to that certain
letter from the Company to Leeds Equity Associates, L.P. and its affiliates
dated June 7, 2001 (and to reimburse the Company prior to the Closing for any
payments made thereunder).

               5.10  NO LIENS, ETC. Seller shall not dispose of any of the
Shares or any interest herein or grant any power of attorney or proxies with
respect thereto. Seller shall not permit any Liens or other encumbrances or
adverse claims of any nature to exist with respect to any of the Shares.


                                  ARTICLE VI.

                        CONDITIONS PRECEDENT TO CLOSING

               6.1.  CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER. The
obligations of the Buyer under this Agreement are subject to the fulfillment,
prior to the Closing, of each of the following conditions (any one or more of
which may be waived in whole or in part by the Buyer at the Buyer's sole option
and which conditions are set out herein for the exclusive benefit of the Buyer):

               (a)   Representations and Warranties; Covenants. Each of the
                     ------------------------------
representations and warranties of the Seller under this Agreement shall be true
and correct as of the date of this Agreement and shall be true and correct at
and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on, as of and with reference to the
Closing Date. The Seller shall have performed and complied in all respects with
all obligations, covenants and conditions required by this Agreement to be
performed or complied with by him prior to or on the Closing Date.

               (b)   Clearances. The expiration of all applicable waiting
                     ----------
periods in connection with the transactions contemplated hereby and by the
Merger Agreement pursuant to the HSR Act, and the receipt of all required
approvals from any Governmental Entity and the expiration of all required
waiting periods pursuant to any material applicable statutes, rules,
regulations, orders or decrees of Canada that are designed to prohibit, restrict
or regulate actions having the purpose

                                      -15-
<PAGE>

or effect of monopolization or restraint of trade (together with the HSR Act,
the "Antitrust Laws"), shall have been obtained by Buyer, Seller and the
Company.

               (c)   Education Department Approvals. The issuance of the
                     ------------------------------
following Permits, approvals and permissions to the extent required for the
continued operation of each of the Schools in the same manner as currently
operated: (i) final approval by the California Bureau for Private Postsecondary
and Vocational Education, Georgia Nonpublic Post-secondary Education Commission,
Illinois Board of Higher Education, Tennessee Higher Education Commission,
Arizona State Board for Private Postsecondary and Vocational Education, Florida
State Board of Private Postsecondary and Vocational Education, Washington Higher
Education Coordinating Board, Minnesota Higher Education Services Office,
Virginia State Council for Higher Education, The Supreme Court of Georgia,
Committee of Bar Examiners of the State Bar of California, and Ontario Ministry
of Education and any successor to such agencies, (ii) receipt of a pre-
acquisition review by the DOE acceptable to the Buyer, including any required
approvals of governmental authorities or Accrediting Bodies in connection
therewith, and (iii) receipt of DOE approval, in connection with the proposed
reorganization of certain of the Company's Schools into Argosy University.

               (d)   Consents and Other Approvals. The conditions set forth in
                     ----------------------------
Section 7.3(e) and (f) of the Merger Agreement shall have been satisfied.

               (e)   Litigation. No statute, regulation or order of any
                     ----------
governmental body shall be in effect that prohibits the transactions
contemplated by this Agreement or the Merger Agreement or that would limit or
adversely affect the Buyer's ownership of the Shares or control of the Company.
There shall not have been threatened, nor shall there be pending, any action or
proceeding by or before any governmental body challenging the lawfulness of or
seeking to prevent or delay any aspect of such transactions or seeking monetary
or other relief by reason of the consummation of any of such transactions.

               (f)   No Breach of Merger Agreement. The Company shall not be in
                     -----------------------------
material breach of any provision of the Merger Agreement.

               (g)   Closing Certificate and Documents. The Seller shall have
                     ---------------------------------
executed and delivered a certificate dated the Closing Date to Buyer stating
that all representations and warranties of the Seller under this Agreement are
true and correct and that all obligations of Seller set forth in this Agreement
have been complied with.

               (h)   No Material Adverse Change. From the date of this Agreement
                     --------------------------
to the Closing Date there shall not have been any event or development which
could reasonably be expected to result in a Material Adverse Effect with respect
to the Company.

               (i)   Vote of the Seller on Merger. The Company shall have set a
                     ----------------------------
record date for the meeting of Stockholders at which the Merger is to be
submitted to the Stockholders, and

                                      -16-
<PAGE>

Seller shall have voted all of the Shares owned by him and by the Seller Trusts
as of such record date in favor of the Merger as contemplated by Section 2.5(b).

               (j)   Board of Directors. Arrangements satisfactory to Buyer
                     ------------------
shall have been made to ensure that the Board of Directors of the Company shall
be reconstituted in a manner satisfactory to Buyer promptly following the Escrow
Release.

               (k)   Ownership of Shares. Buyer shall have received evidence
                     -------------------
satisfactory to it that the representations made by Seller in Section 3.1 with
respect to the Seller Trusts and the Shares owned by the Seller Trusts are
accurate, it being understood that if Buyer is not satisfied that this condition
has been met, it may elect to exclude the Shares held by one or more of the
Seller Trusts from the Shares to be purchased at the Closing hereunder.


               6.2.  CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER. The
obligations of the Seller to proceed with the Closing hereunder are subject to
the fulfillment prior to or at the Closing of the following conditions (any one
or more of which may be waived in whole or in part by the Seller at his sole
option and which conditions are set out herein for the exclusive benefit of the
Seller).

               (a)   Representations and Warranties: Covenants. Each of the
                     ------------------------------
representations and warranties of the Buyer contained in this Agreement shall be
true and correct in all material respects, as of and with reference to the
Closing Date, with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, and with reference to
such date. The Buyer shall have performed and complied with all obligations,
covenants and conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing Date.

               (b)   Litigation. No order of any governmental body shall be in
                     ----------
effect that restrains or prohibits the transactions contemplated hereby.

               (c)   Clearances. The waiting period pursuant to the HSR Act
                     ----------
shall have expired, and all required clearances from any Governmental Entity
pursuant to any material applicable statutes, rules, regulations, orders or
decrees from Canada that are designed to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade, shall have
been obtained by the Buyer, the Seller and the Company or all applicable waiting
periods thereby required shall have expired or been terminated.

               (d)   Closing Certificates. The Buyer shall have furnished to the
                     --------------------
Seller a certificate of one of its officers, dated on the Closing Date,
certifying to the fulfillment of the conditions set forth in subparagraph (a) of
this Section 6.2.

               (e)   The Buyer shall have executed an Employment Agreement with
Seller in the form attached as Exhibit C to the Merger Agreement and such
Employment Agreement shall not have been terminated by Buyer.

                                      -17-
<PAGE>

                                 ARTICLE VII.

                  COVENANT AGAINST COMPETITION AND DISCLOSURE


               7.1.  NON-COMPETITION BY THE SELLER. To afford to the Buyer the
full value of its purchase, the Seller, for a period of three (3) years after
the Closing Date, shall not directly or indirectly (a) engage or become
interested in (as owner, stockholder, partner or otherwise) the operation of any
business which owns, operates, administers or establishes any post-secondary
proprietary program or institution that, in the Buyer's reasonable judgment,
competes with the Buyer or any of the Schools, (b) disclose to anyone, or use in
competition with any of the Schools, any information with respect to any
confidential or secret aspect of the operations of any of the Schools, (c)
solicit or recruit, directly or indirectly, call on, accept business from,
interfere with, or attempt to divert or entice away any person who at any time
is an employee or student or a prospective student of any of the Schools, or (d)
contact any current or past representatives of any of the Schools for purposes
of recruiting students for other schools; provided, however, that nothing in
this Section 7.1 shall be deemed to preclude Seller from (i) lecturing or
teaching, whether paid or unpaid and whether for a competitor of the Buyer or
otherwise, (ii) writing or publishing academic materials so long as it is not
for a competitor of the Company or (iii) owning one percent (1%) or less of the
stock of a publicly held corporation whose stock is traded on a national
securities exchange or nationally recognized stock market or three percent (3%)
or less of a private equity fund. It is further acknowledged by the parties that
Seller's ownership of JMLS and/or PrimeTech pursuant to Section 5.8 shall not be
considered to be in violation of this Section 7.1.

               7.2.  REMEDIES. The Seller acknowledges that the remedy at law
for breach of the provisions of Section 7.1 will be inadequate and that, in
addition to any other remedy the Buyer and each of the Schools may have, the
Buyer and each of the Schools will be entitled to an injunction restraining any
such breach or threatened breach, without any bond or other security being
required.

               7.3.  BLUE-PENCIL. If any court construes the covenant in Section
7.1, or any part thereof, to be unenforceable because of its duration or the
area covered thereby, the court shall have the power to reduce the duration or
area to the extent necessary so that the provision is enforceable, and such
provision, as reduced, shall then be enforceable.

                                 ARTICLE VIII.

                 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

               8.1.  SURVIVAL OF REPRESENTATIONS. All representations,
warranties and agreements made by any party in this Agreement or pursuant
hereto, other than those made in Section 3.7 shall survive the Closing for a
period of two (2) years from the date of Closing, but all claims for damages
made by virtue of such representations, warranties and agreements shall

                                      -18-
<PAGE>

be made under this Article VIII. Notwithstanding the foregoing, Seller's
representations pursuant to Section 3.1 shall survive the Closing without regard
to the time limitation set forth in the preceding sentence.

               8.2 INDEMNIFICATION BY THE SELLER. The Seller shall indemnify,
defend, save and hold the Buyer and its officers, directors, employees, agents,
representatives and affiliates (collectively, the "Buyer Indemnitees") harmless
from and against all demands, claims, actions or causes of action, assessments,
losses, damages, deficiencies, liabilities, costs and expenses, including
reasonable attorneys' fees, interest, penalties, and all reasonable amounts paid
in investigation, defense or settlement of any of the foregoing (collectively,
"Buyer Damages") asserted against, imposed upon, resulting to or incurred by any
of Buyer Indemnitees, directly or indirectly, in connection with, or arising out
of, or resulting from (i) a breach of any of the representations and warranties
made by the Seller in this Agreement, or in any certificate or document
furnished pursuant hereto by the Seller, (ii) any claim or other cause of action
asserted or brought by an unaffiliated third party which alleges any state of
facts or other circumstances which if meritorious would result in or constitute
a breach or violation of any of the representations and warranties made by the
Seller in this Agreement, or in any certificate or document furnished pursuant
hereto by the Seller, and (iii) a breach or non-fulfillment of any of the
covenants or agreements made by the Seller in or pursuant to this Agreement

               Seller shall not have any liability for indemnification pursuant
to this Article VIII for breaches of representations, warranties, covenants or
agreements unless and until the aggregate amount of all Buyer Damages incurred
by Buyer Indemnitees exceeds in the aggregate $100,000 (the "Indemnity
Threshold"), at which point Seller shall be liable for all Buyer Damages. The
maximum Buyer Damages Seller shall be responsible for shall be the aggregate
Purchase Price. Notwithstanding anything to the contrary contained herein, the
limitations set forth above shall not apply to claims based on fraud or
intentional misrepresentation.

               8.3 INDEMNIFICATION BY THE BUYER. The Buyer shall indemnify,
defend, save and hold the Seller and his agents and representatives
(collectively, the "Seller Indemnitees") harmless from and against any and all
demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses, including reasonable attorneys'
fees, interest, penalties, and all reasonable amounts paid in investigation,
defense or settlement of any of the foregoing (collectively, "Seller Damages")
asserted against, imposed upon or resulting to or incurred by any Seller
Indemnitees, directly or indirectly, in connection with, or arising out of, or
resulting from, (i) a breach of any of the representations and warranties made
by the Buyer in this Agreement or in any certificate or document furnished
pursuant hereto by the Buyer, and (ii) a breach of any of the covenants or
agreements made by the Buyer in or pursuant to this Agreement.

               8.4 NOTICE OF CLAIMS. If any Buyer Indemnitee or Seller
Indemnitee (an "Indemnified Party") believes that it has suffered or incurred
any Buyer Damages or Seller Damages, as the case may be ("Damages") for which it
is entitled to indemnification under this Article VIII, such Indemnified Party
shall so notify the party or parties from whom

                                      -19-
<PAGE>

indemnification is being claimed (the "Indemnifying Parties") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Parties
of such action or suit. The failure of an Indemnified Party to give any notice
required by this Section 8.4 shall not affect any of such party's rights under
this Article VIII except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.

          8.5  THIRD PARTY CLAIMS. The Indemnifying Party shall have the right
to conduct and control, through counsel of its choosing and reasonably
acceptable to the Indemnified Parties, any third party claim, action or suit,
and the Indemnifying Party may compromise or settle the same, provided that the
Indemnifying Party shall give the Indemnified Parties advance notice of any
proposed compromise or settlement. The Indemnifying Party shall permit the
Indemnified Parties to participate in the defense of any such action or suit
through counsel chosen by them, provided that the fees and expenses of such
counsel shall be borne by the Indemnified Parties. If the Indemnifying Parties
undertake, conduct and control the conduct and settlement of such action or
suit, (i) the Indemnifying Parties shall not thereby permit to exist any lien,
encumbrance or other adverse charge upon any asset of the Indemnified Party;
(iii) the Indemnifying Parties shall not consent to any settlement that does not
include as an unconditional term thereof the giving of a complete release from
liability with respect to such action or suit to the Indemnified Party; (iii)
the Indemnifying Parties shall permit the Indemnified Party to participate in
(but not control) such conduct or settlement, at the Indemnified Party's sole
expense, through counsel chosen by the Indemnified Party; and (iv) the
Indemnifying Parties shall agree promptly to reimburse the Indemnified Party for
the full amount of any Damages including fees and expenses of counsel for the
Indemnified Party incurred after giving the foregoing notice to the Indemnifying
Parties and prior to the assumption of the conduct and control of such action or
suit by the Indemnifying Parties.


                                  ARTICLE IX.

                                 MISCELLANEOUS

          9.1. TERMINATION.

          (a)  the parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;

          (b)  the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing if the Closing has not occurred
on or before January 31, 2002, unless failure results primarily from the Buyer
itself breaching any representation, warranty or covenant contained in this
Agreement, or unless an extension is mutually agreeable to the Seller and the
Buyer; and

                                      -20-
<PAGE>

          (c)  the Seller may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing if the Closing has not occurred on
or before January 31, 2002, unless failure results primarily from the Seller
itself breaching any representation, warranty or covenant contained in this
Agreement, or unless an extension is mutually agreeable to the Seller and the
Buyer.

          9.2. CONSTRUCTION. As used herein, unless the context otherwise
requires: references to "Article" or "Section" are to an article or section
hereof; "include", "includes" and "including" are deemed to be followed by
"without limitation" whether or not they are in fact followed by such words or
words of like import; "hereof," "herein," "hereunder" and comparable terms refer
to the entirety of this Agreement and not to any particular article, section or
other subdivision hereof or attachment hereto; references to an agreement or
other instrument or law, statute or regulation are referred to as amended and
supplemented from time to time (and, in the case of a statute or regulation, to
any successor provision) and all regulations, rulings and interpretations
promulgated pursuant thereto; and the headings of the various articles, sections
and other subdivisions hereof are for convenience of reference only and shall
not modify, define or limit any of the terms or provisions hereof.

          9.3. NOTICES. All notices, and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made the second day after mailing, if sent by registered or
certified mail, return receipt requested, upon delivery, if sent by hand
delivery, when received, if sent by prepaid overnight carrier, with a record of
receipt, or the first day after dispatch, if sent by cable, telegram, facsimile
or telecopy (with a copy simultaneously sent by registered or certified mail,
return receipt requested), to the parties at the following addresses:

          (i)  if to the Buyer to:

               Education Management Corporation
               300 Sixth Avenue
               Pittsburgh, PA 15222
               Facsimile: (412) 562-0934
               Attention: John R. McKernan, Jr.

               and

               Kirkpatrick & Lockhart LLP
               1251 Avenue of the Americas, 45/th/ Floor
               New York, NY 10020
               Telephone: (212) 536-4090
               Facsimile: (212) 536-3901
               Attention: William J. Phillips, Esq.

                                      -21-
<PAGE>

          (ii) if to the Seller:

               Michael C. Markovitz, Ph.D.
               c/o Argosy Education Group, Inc.
               20 South Clark Street, Suite 300
               Chicago, IL 60603
               Telephone: (312) 899-9900
               Facsimile: (312) 201-1907
               and

               Kirkland & Ellis
               200 E. Randolph Drive
               Chicago, IL 60601
               Telephone (312) 861-2000
               Facsimile: (312) 861-2200
               Attention: Gerald T. Nowak

                                      -22-
<PAGE>

Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.

          9.4. ASSIGNMENT. This Agreement and all the rights and powers granted
hereby shall bind and inure to the benefit of the parties hereto and their
respective permitted heirs, successors and assigns. This Agreement and the
rights, interests and obligations hereunder may not be assigned by any party
hereto, without the prior written consent of the other parties hereto.

          9.5. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois without regard to its
conflict of law doctrines.

          9.6. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. The parties may by
mutual agreement amend this Agreement in any respect, and any party, as to such
party, may (i) extend the time for the performance of any of the obligations of
any other party, (ii) waive any inaccuracies in representations by any other
party, (iii) waive compliance by any other party with any of the agreements
contained herein and performance of any obligations by such other party, and
(iv) waive the fulfillment of any condition that is precedent to the performance
by such party of any of its obligations under this Agreement. To be effective,
any such amendment or waiver must be in writing and be signed by the party
against whom enforcement of the same is sought. Neither the failure of any party
hereto to exercise any right, power or remedy provided under this Agreement
where otherwise available in respect hereof at law or in equity, or to insist
upon compliance by any other party with its obligations hereunder, nor any
custom or practice of the parties at variance with the terms hereof, shall
constitute a waiver by such party of its right to exercise any such right, power
or remedy or to demand such compliance. The rights and remedies of the parties
hereto are cumulative and not exclusive of the rights and remedies that they
otherwise might have now or hereafter, at law, in equity, by statute or
otherwise.

          9.7. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
and the Schedules attached hereto set forth all of the promises, covenants,
agreements, conditions and undertakings of the parties hereto with respect to
the subject matter hereof, and supersede all prior and contemporaneous
agreements and understandings, negotiations, inducements or conditions, express
or implied, oral or written. This Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies
<PAGE>

hereunder, except the provisions of Sections 8.2 and 8.3 relating to Buyer
Indemnitees and Seller Indemnitees who are intended to benefit from such
indemnities.

          9.8. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.

          9.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.

                    [REST OF PAGE INTENTIONALLY LEFT BLANK]

                                      -2-
<PAGE>

          IN WITNESS WHEREOF, the parties have executed or have caused this
Agreement to be executed by their authorized officers as of the date first
written above.


                            EDUCATION MANAGEMENT CORPORATION


                            By: /s/ John R. McKernan, Jr.
                               --------------------------------------
                            Name:  John R. McKernan, Jr.
                            Title: Vice Chairman



                            SELLER


                                /s/ Michael C. Markovitz
                            -----------------------------------------
                            Michael C.Markovitz, Ph.D.
<PAGE>

                                                                K&L Draft 7/7/01

                                   Exhibit A
                                   ---------

                           FORM OF ESCROW AGREEMENT
                           ------------------------

          THIS ESCROW AGREEMENT ("Escrow Agreement") is made and entered into as
of the ___ day of ________, 2001 by and among Michael C. Markovitz, a
stockholder of Argosy Education Group, Inc. (the "Seller"), Education Management
Corporation, a Pennsylvania corporation (the "Buyer"), and ____________________,
as Escrow Agent (the "Escrow Agent").

                                  WITNESSETH:

          WHEREAS, Seller and Buyer have concurrently entered into that certain
Stock Purchase Agreement dated as of July 9, 2001, (the "Stock Purchase
Agreement"), pursuant to which Buyer agreed to purchase, and Seller agreed to
sell the Shares;

          WHEREAS, pursuant to the Stock Purchase Agreement, Buyer agreed to
deposit the Purchase Price and Seller agreed to deliver the certificates for the
Purchased Shares into escrow to be distributed in accordance with the terms and
conditions set forth in the Stock Purchase Agreement;

          WHEREAS, Seller and Buyer desire to appoint the Escrow Agent to hold
and disburse the Escrow Fund (as hereinafter defined);

          WHEREAS, unless otherwise defined herein, capitalized terms used in
this Escrow Agreement have the definitions ascribed to them in the Stock
Purchase Agreement.

          NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:


                                  ARTICLE I.

                          APPOINTMENT OF ESCROW AGENT
                          ---------------------------

          Seller and Buyer appoint [________________] as Escrow Agent to
receive, hold, administer and deliver the Escrow Fund in accordance with this
Escrow Agreement and the Escrow Agent accepts such appointment, all subject to
the terms and conditions set forth in this Escrow Agreement.
<PAGE>

                                  ARTICLE II.

                        DELIVERIES TO THE ESCROW AGENT
                        ------------------------------

                  2.1. Escrow Fund. Simultaneously with the execution of this
                       -----------
Escrow Agreement, the Buyer is depositing with the Escrow Agent, the principal
sum of $_______ (the "Principal Amount") and Seller is delivering the
certificate(s) representing the Purchased Shares together with duly executed
stock powers executed in blank. The Principal Amount together with any interest
thereon and the Purchased Shares are hereinafter collectively referred to as the
"Escrow Fund." The Escrow Agent shall invest the Escrow Fund in Permitted
Investments (as hereinafter defined) in accordance with joint written
instructions of Buyer and Seller. [Absent written instructions to the contrary,
the Escrow Agent shall invest the Escrow Fund in an Armada Money Market Fund,
for which the Escrow Agent or an affiliate serves as an investment advisor and
receives a fee.] [Agreement to be modified to permit deposit of LC a Buyer's
election.]



                                  ARTICLE III.

                  DISPOSITION OF THE ESCROW FUND AND DOCUMENTS
                  --------------------------------------------

                  3.1. Use of Escrow Fund. The rights of Seller and Buyer to the
                       ------------------
Escrow Fund shall be as set forth in the Stock Purchase Agreement. Seller and
Buyer covenant that they will not assign or encumber or attempt to assign or
encumber the Escrow Fund and neither the Escrow Agent nor its successors or
assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.

                  3.2. Request of the Parties. Upon receipt of a joint written
                       ----------------------
request (the "Request") from Seller and Buyer (the "Instructing Parties") to
disburse all or a portion of the Escrow Fund, the Escrow Agent shall disburse
the funds specified in the Request in accordance with such Request. In the event
the Escrow Agent receives a written objection to the Request the Escrow Agent
shall hold the Escrow Fund pending disbursement pursuant to Section 3.4.

                  3.3. Notice of Rescission. Unless the Escrow shall have
                       --------------------
previously released prior to December 31, 2001 (or the next preceding business
day), the Escrow Agent shall disburse the Principal Amount together with any
interest to Buyer and the Purchased Shares to Seller and the Escrow Agent shall
not be governed by any notice provisions or other objection period mechanisms
noted above.

                  3.4. Court Order or Joint Instructions. The Escrow Agent may
                       ---------------------------------
deposit the Escrow Fund with the Clerk of any court of competent jurisdiction
upon commencement of an action in the nature of interpleader or in the course of
any court proceeding. If at any time the Escrow Agent receives a final
non-appealable order of a court of competent jurisdiction or of an arbitrator
selected by the Buyer and the Seller directing delivery of the Escrow Fund, the
Escrow Agent shall comply with the order or instruction. The Escrow Agent shall
comply with joint written instructions signed by Buyer and Seller directing
delivery of the Escrow Fund. Upon any delivery or deposit of the entire Escrow
Fund as provided in this Section 3, the Escrow Agent shall not be governed by
any notice provisions or other objection period mechanisms noted above.

                                       3
<PAGE>

                                   ARTICLE IV.

                         DELIVERY OF NOTICES; STATEMENTS
                         -------------------------------

                  4.1. If Seller shall send any certificate, notice, request,
demand or other communication (each a "Certificate") to the Escrow Agent, Seller
shall simultaneously send such Certificate to Buyer by facsimile and certified
mail. If Buyer shall send a Certificate to the Escrow Agent, Buyer shall
simultaneously send such Certificate to Seller by facsimile and certified mail.

                  4.2. All Certificates hereunder or with respect hereto shall
be in writing and shall be deemed to have been duly given or made (i) upon the
third (3/rd/) business day after the date of mailing, if delivered by certified
mail, postage prepaid, (ii) upon delivery, if sent by hand delivery, (iii) upon
delivery, if sent by prepaid courier or overnight service (such as Federal
Express), with a record of receipt, or (iv) the next day after the date of
dispatch, if sent by cable, telegram, facsimile or telecopy (with a copy
simultaneously sent by registered or certified mail, postage prepaid, return
receipt requested), to the parties at the following addresses:

                  (i)    if to Seller:

                         Michael C. Markovitz, Ph.D.
                         c/o Argosy Education Group, Inc.
                         200 South Clark Street, Suite 300
                         Chicago, IL 60603
                         _______________________
                         ________________________
                         Telephone: (312) 899-9900
                         Facsimile: (312) 201-1907
                         and

                         Kirkland & Ellis
                         200 E. Randolph Drive
                         Chicago, IL 60601
                         Telephone: (312) 861-2000
                         Facsimile: (312) 861-2200
                         Attention: Gerald T. Nowak

                  (ii)   if to Buyer:

                         Education Management Corporation
                         300 Sixth Avenue
                         Pittsburgh, PA 15222
                         Attention: Robert T. McDowell
                         Senior Vice President and Chief Financial Officer
                         Telephone: (412) 562-0900
                         Facsimile: (412) 562-0934

                                       4
<PAGE>

                           and

                           Frederick W. Steinberg, Esquire
                           Vice President, General Counsel
                           and Secretary
                           Education Management Corporation
                           300 Sixth Avenue
                           Pittsburgh, PA 15222
                           Telephone: (412) 562-0900
                           Facsimile:  (412) 562-0934

                  (iii)    if to Escrow Agent, to:

                           [______________________]
                           _______________________
                           _______________________
                           _______________________
                           _______________________
                           Telephone: ____________
                           Facsimile: ____________

Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.

                  4.3. The Escrow Agent shall promptly deliver or cause to be
delivered to Seller and Buyer monthly bank statements reflecting the status of,
and any activity in, the account.



                                   ARTICLE V.

                                  ESCROW AGENT
                                  ------------

                  5.1. Compensation. Buyer shall pay any fees due to the Escrow
                       ------------
Agent for the services to be rendered by the Escrow Agent under this Escrow
Agreement (including indemnification, if any). Buyer agrees to pay Escrow Agent
reasonable compensation for the services to be rendered hereunder and will pay
or reimburse Escrow Agent upon request for all expenses, disbursements and
advances, including attorneys' reasonable fees, incurred or made by it in
connection with carrying out its duties hereunder.

                  5.2. Resignation. The Escrow Agent may resign at any time
                       -----------
after the date hereof upon giving Seller and Buyer not less than 30 days prior
written notice. In such event, the acting escrow agent shall deliver any part of
the Escrow Fund then in its possession to a successor escrow agent; the
successor escrow agent shall be such person, firm or corporation as shall be
mutually agreed upon by Seller and Buyer. Such resignation shall not be
effective until a successor agrees to act hereunder; provided, however, that if
                                                     --------  -------
no successor is appointed and acting hereunder within 30 days after such notice
is given, the Escrow Agent shall deliver the Escrow Funds into a court of
competent jurisdiction.

                                       5
<PAGE>

                                   ARTICLE VI.
               LIABILITIES AND INDEMNIFICATION OF THE ESCROW AGENT
               ---------------------------------------------------

                  The Escrow Agent shall not be liable for any damages, or have
any obligations other than the duties prescribed herein in carrying out or
executing the purposes and intent of this Escrow Agreement; provided, however,
                                                            --------  -------
that nothing herein contained shall relieve the Escrow Agent from liability
arising out of its own willful misconduct or gross negligence. The Escrow
Agent's duties and obligations under this Escrow Agreement shall be entirely
administrative and not discretionary. The Escrow Agent shall not be liable to
any party hereto or to any third party as a result of any action or omission
taken or made by the Escrow Agent in good faith. Buyer shall indemnify the
Escrow Agent, hold the Escrow Agent harmless, and reimburse the Escrow Agent
from, against and for, any and all liabilities, costs, fees and expenses
(including reasonable attorney's fees) the Escrow Agent may suffer or incur by
reason of its execution and performance of this Escrow Agreement. In the event
any legal questions arise concerning the Escrow Agent's duties and obligations
hereunder, the Escrow Agent may consult his counsel and rely without liability
upon written opinions given to it by such counsel.

                  The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, authorization, or other paper or document
which the Escrow Agent, in good faith, believes to be genuine and what it
purports to be.

                  In the event that there shall be any disagreement between any
of the parties to this Escrow Agreement, or between them or either of any of
them and any other person, resulting in adverse claims or demands being made in
connection with this Escrow Agreement, or in the event that Escrow Agent, in
good faith, shall be in doubt as to what action it should take hereunder, Escrow
Agent may, at its option, refuse to comply with any claims or demands on it or
refuse to take any other action hereunder, so long as such disagreement
continues or such doubt exists; and in any such event, Escrow Agent shall not be
or become liable in any way or to any person for its failure or refusal to act,
and Escrow Agent shall be entitled to continue to so refrain from acting until
the dispute is resolved by the parties involved.

                  [___________] is acting solely as Escrow Agent and is not a
party to, nor has it reviewed or approved the Stock Purchase Agreement or any
other agreement or matter of background related to this Escrow Agreement, other
than the Escrow Agreement itself, and has assumed, without investigation, the
authority of the individuals executing this Escrow Agreement to be so authorized
on behalf of the party or parties involved. Permitted Investments shall mean and
include any of the following securities:

                         (a)  Direct obligations of the United States of
America, unconditionally guaranteed as to the payment of interest and principal
by the United States of America.

                         (b)  Repurchase agreements or similar arrangements: (i)
with financial institutions, including the Escrow Agent if applicable, having or
the parent company of which shall have a current Standard & Poor's Corporation
or other equivalent rating for any purpose, including outstanding indebtedness,
of at least "A", pursuant to which there shall have been delivered to the Escrow
Agent, or its designee, Permitted Investments of the type set forth in
subsection (a) having at all times a fair market value of at least 100% of the
value of such agreement; or (ii) with financial institutions, including the
Escrow Agent if applicable, not meeting the rating requirements of (i) above
pursuant to which there shall have been delivered to the Escrow Agent or its
designee,
                                       6
<PAGE>

Permitted Investments of the type set forth in subsection (a) having at all
times a fair market value of at least 100% of the value of such agreement.

               (c)  Shares of an open-end, diversified investment company which
is registered under the Investment Company Act of 1940 and which (i) invests
exclusively in Permitted Investments of the types set forth in (a) or (b) above,
(ii) seeks to maintain a constant net asset value per share in accordance with
regulations of the Securities Exchange Commission, and (iii) has aggregate net
assets of not less than $50,000,000.00 on the date of purchase.

               (d)  Certificates of Deposit issued by national banks, including
the Escrow Agent, having combined capital and surplus of not less than
$100,000,000.00 and whose deposits are insured by Federal Deposit Insurance
Corporation and having a rating of its unsecured, senior debt obligations within
one of the three highest rating categories by any nationally recognized rating
service.


                                  ARTICLE VII.
                                  TERMINATION
                                  -----------

          This Escrow Agreement shall be terminated by (a) written mutual
consent signed by all parties, or (b) a final order, decree or judgment of a
court of competent jurisdiction, the time of perfection of any appeal of such
order, decree or judgment having expired. This Escrow Agreement shall
automatically terminate if and when all amounts due under the Stock Purchase
Agreement are paid in full.



                                 ARTICLE VIII.
OTHER PROVISIONS

          8.1.   Benefit and Assignment. This Escrow Agreement shall be binding
                 ----------------------
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. In the event that the bank acting as the Escrow Agent
merges or consolidates with another bank or sells or transfers all or
substantially all of its assets or trust business, then the successor or
resulting bank shall be the Escrow Agent hereunder without necessity of further
action or the execution of any document, so long as such successor or resulting
bank meets the requirements of a successor escrow agent hereunder.

          8.2.   Entire Agreement; Amendment. Except as set forth in the Stock
                 ---------------------------
Purchase Agreement, this Escrow Agreement contains all the terms agreed upon by
the parties with respect to the subject matter hereof. This Escrow Agreement may
be amended only by a written instrument signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

          8.3. Headings. The headings of the articles, sections and subsections
               --------
of this Escrow Agreement are for ease of reference only and do not evidence the
intentions of the parties.

          8.4. Counterparts. This Escrow Agreement may be executed in two or
               ------------
more counterparts, each of which shall be deemed to be an original but all of
which together shall be deemed to be one and the same instrument.

                                       7
<PAGE>

                    [Rest of Page Intentionally Left Blank]

                                       8
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Escrow Agreement as of the date first above written.



                            ______________________________________________
                            Michael C. Markovitz, Ph.D.
                            SSN ______-____-___________




                            EDUCATION MANAGEMENT CORPORATION

                            By:___________________________________________
                            Title:________________________________________
                            EIN:





                            [_____________________________________________]

                            ______________________________________________
                            Escrow Agent

                                       9