The American Education Corporation's Learning Pathways, Ltd., U.K. Subsidiary Wins Second Stage Development Agreement with the U.K.'s Northern Grid.

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OKLAHOMA CITY--(BUSINESS WIRE)--July 10, 2000

The American Education Corporation (OTCBB:AEDU) today announced that its Learning Pathways, Ltd. Subsidiary, based in Derby, U.K., has reached a formal agreement with the Northern Grid (NG) consortium of twelve local education authorities (or major school districts) in the Northeastern area of Great Britain. This Second Stage Agreement expands the initial pilot sites for the continued development of specialized literacy and numeracy content for grade levels equivalent to U.S. grades 1 - 9. The Initial Stage of this program incorporated pilot programs in approximately 60 NG schools in which anglicized versions of The American Education Corporation's A+dvanced Learning System(R) were installed for preliminary U.K. trials approximately nine months ago. The Second Stage Agreement provides for a cooperative effort between Learning Pathways and the curriculum specialists from the NG to develop additional and modified content to fully conform the A+dvanced Learning System's instructional curriculum to the QCA National Numeracy and Literacy Standards. There are approximately 2,500 individual schools in the NG that are operated by the twelve local education authorities.

The NG program was officially launched by Tony Blair, the Prime Minister of the United Kingdom, on June 23, 2000, in a public address.

Geoff Glossop, Managing Director for Learning Pathways, Ltd., stated, "The A+dvanced Learning System software already has a proven track record in schools within the NG and throughout the U.K. as a result of our extensive piloting activity. This Second Stage Agreement with the NG affords both parties the opportunity to develop software and customized assessment tests to improve literacy and numeracy throughout the NG and the rest of the U.K."

In commenting on this agreement, Jeffrey E. Butler, Chief Executive Officer, stated, "This is an important development for American Education for several reasons. The first is validation of the Company's design approach to software that allows authoring and rapid modification of content to meet the needs of local educators. The second is that as a result of Learning Pathways' market presence, permitting deployment of this technology in the U.K., we are faced with a major, future growth opportunity. By securing a rapidly expanding installed base in the NG of this co-developed software, we have the potential to significantly improve the Company's future growth and earnings."

The American Education Corporation's A+dvanced Learning System family of educational software products provides an integrated suite of grade level 1-12 software for Reading, Mathematics, Language Arts, Science, Writing, History, Government, Economics and Geography publications. In addition, the Company has developed companion academic skill assessment products, A+SSESS!, to provide educators with the means to more effectively target the use of the Company's curriculum content. Spanish language versions are available for Mathematics, and Language Arts for grade levels 1-9. The Company's curriculum content is electronically linked and aligned to the World Book Multimedia Encyclopedia, the leading reference encyclopedia for the school market allowing reference content from World Book's rich multimedia curriculum-based reference material to be accessed directly from A+LS lessons. The A+LS comprehensive family of educational software is now in use in over 8000 schools, centers of adult literacy and correctional institutions. The Company's new Java-based technology, A+nyWhere Learning System and A+SSESS! Version 3.0, is in beta testing and will provide for an updated software version to support the Company's extensive curriculum content and skills assessment tools in a fully managed solution that is designed to run over networks and the Internet by the midpoint of the year 2000. The Company's Learning Pathways, Ltd., Derby, U.K., subsidiary provides identical products for the school market in the U.K. The Company's Dolphin, Inc., subsidiary is a leading software development resource for U.S. and international publishers of electronic and print publications.

Note: Certain matters discussed above concerning the future performance of the Company are forward-looking statements intended to qualify for the safe harbors from liabilities established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified as such by words such as "believes," "anticipates," "plans," "expects" or words of similar import. The future performance of the Company is subject to a number of factors including, but not limited to, general economic conditions, competitive activity and funding available to schools.

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