Common use of Financial Statements; Indebtedness Clause in Contracts

Financial Statements; Indebtedness. Attached hereto as Schedule -------- 5.11(a) are the following financial statements of Seller: (a) audited Balance ------- Sheets at November 30, 1999, 1998 and 1997 and audited Statements of Operations and Statements of Cash Flows for the years ended November 30, 1999, 1998 and 1997 (including consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the Schools in the form appropriate for filing with the DOE), and (b) an unaudited Balance Sheet at June 30, 2000 and an unaudited Statement of Operations and Statement of Cash Flows for the seven months ended June 30, 2000 (collectively, the "Financial Statements"). The basis of presentation of the Financial Statements of the Seller and each of the Schools is disclosed on Schedule 5.11(b) attached ---------------- hereto or in the notes thereto. Except as disclosed on Schedule 5.11(b), the ---------------- balance sheets included in the Financial Statements present fairly in accordance with GAAP the assets and liabilities of Seller and each of the Schools as of the respective dates thereof, and the related statements of revenue and expenses present fairly in accordance with GAAP the results of operations of Seller and each of the Schools for the respective periods covered thereby. The Financial Statements (i) have been prepared based upon the books and records of Seller in a manner consistent with Seller's standard internal accounting practices, consistently applied, and (ii) fairly present the financial position of Seller as of the dates of such Financial Statements and the results of operations for the periods covered by such Financial Statements. Except as disclosed on Schedule 5.11(b), Seller has maintained the books and records of the Seller and ---------------- the Schools in accordance with applicable laws, rules and regulations and with GAAP and GAGAS, and such books and records are, and during the periods covered by the Financial Statements were, materially correct and complete, fairly reflecting the income, expenses, assets and liabilities of the Seller and the Schools. On the date hereof, Seller does not have any liabilities required to be set forth in a balance sheet prepared in accordance with GAAP and GAGAS that were not included in the latest balance sheet included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller is not required to ---------------- provide any letters of credit, guarantees or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the Schools' business. As of the date hereof, Seller has no indebtedness, liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, other than:

Financial Statements; Indebtedness. Attached hereto as Schedule -------- 5.11(aSection 3.5(a) of the Seller Disclosure Letter are (a) Seller’s unaudited consolidated balance sheet as of December 31, 2011 and the following related financial statements for the year then ended, (b) Seller’s audited consolidated balance sheet as of December 31, 2012 and the related financial statements for the year then ended and (c) the audited consolidated balance sheet of Seller as of December 31, 2013 (the “Seller Balance Sheet”) and the related financial statements for the year then ended (all of the foregoing financial statements of Seller: (a) audited Balance ------- Sheets at November 30, 1999, 1998 Seller and 1997 and audited Statements of Operations and Statements of Cash Flows for any notes thereto are hereinafter collectively referred to as the years ended November 30, 1999, 1998 and 1997 (including consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the Schools in the form appropriate for filing with the DOE), and (b) an unaudited Balance Sheet at June 30, 2000 and an unaudited Statement of Operations and Statement of Cash Flows for the seven months ended June 30, 2000 (collectively, the "“Seller Financial Statements"”). The basis of presentation of the Seller Financial Statements of the Seller and each of the Schools is disclosed on Schedule 5.11(b) attached ---------------- hereto or fairly present, in the notes thereto. Except as disclosed on Schedule 5.11(b)all material respects, the ---------------- balance sheets included in the Financial Statements present fairly in accordance with GAAP the assets and liabilities financial condition of Seller at the dates therein indicated and each of the Schools as of the respective dates thereof, and the related statements of revenue and expenses present fairly in accordance with GAAP the results of operations of Seller for the periods therein specified in accordance with United States generally accepted accounting principles (“GAAP”), except that the unaudited consolidated financial statements do not contain footnotes. The financial records of Seller, all of which Seller has made available to Parent, are true, correct and each complete and represent actual, bona fide transactions and have been maintained in accordance with sound business practices, including the maintenance of an adequate system of internal controls. Section 3.5(b) of the Schools Seller Disclosure Letter lists all Indebtedness of Seller and specifies any property affected by such Indebtedness. Seller is, and after giving effect to the transactions contemplated hereby, will be Solvent. The inventory of Seller shown on the face of the Seller Balance Sheet and Closing Statement, (a) all of such inventory is merchantable and fit for the respective periods covered thereby. The Financial Statements purpose for which it was procured or produced, (ib) have been prepared based upon all of such inventory other than written off inventory, except to the books extent of reserves shown on the face of such balance sheet, consists of a quality and records quantity usable and salable in its Ordinary Course of Seller in a manner consistent with Seller's standard internal accounting practicesBusiness, consistently applied(c) none of such inventory is obsolete, damaged or defective, and (iid) fairly the quantities of each item of such inventory are not excessive and are reasonable in the present the financial position of Seller as circumstances of the dates of such Financial Statements and the results of operations for the periods covered by such Financial Statements. Except as disclosed on Schedule 5.11(b), Seller has maintained the books and records of the Seller and ---------------- the Schools in accordance with applicable laws, rules and regulations and with GAAP and GAGAS, and such books and records are, and during the periods covered by the Financial Statements were, materially correct and complete, fairly reflecting the income, expenses, assets and liabilities of the Seller and the Schools. On the date hereof, Seller does not have any liabilities required to be set forth in a balance sheet prepared in accordance with GAAP and GAGAS that were not included in the latest balance sheet included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller is not required to ---------------- provide any letters of credit, guarantees or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the Schools' business. As of the date hereof, Seller has no indebtedness, liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, other than:Business.

Financial Statements; Indebtedness. Attached hereto as Schedule -------- 5.11(a) are the following financial statements of Seller: Seller has delivered or otherwise made available to Parent (a) Seller’s audited Balance ------- Sheets at November 30balance sheet as of each of December 31, 19992014, 1998 2013 and 1997 2012 and audited Statements the related financial statements for each of Operations and Statements of Cash Flows for the years then ended November 30, 1999, 1998 and 1997 (including consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the Schools in the form appropriate for filing with the DOE), and (b) an the unaudited Balance Sheet at June balance sheet of Seller as of April 30, 2000 2015 (the “Seller Balance Sheet”) and an the related unaudited Statement statement of Operations and Statement operations of Cash Flows Seller for the seven months year then ended June 30, 2000 (collectively, all of the "foregoing financial statements of Seller and any notes thereto are hereinafter collectively referred to as the “Seller Financial Statements"”). The basis of presentation of the Seller Financial Statements of the Seller and each of the Schools is disclosed on Schedule 5.11(b) attached ---------------- hereto or fairly present, in the notes thereto. Except as disclosed on Schedule 5.11(b)all material respects, the ---------------- balance sheets included in the Financial Statements present fairly in accordance with GAAP the assets and liabilities financial condition of Seller at the dates therein indicated and each of the Schools as of the respective dates thereof, and the related statements of revenue and expenses present fairly in accordance with GAAP the results of operations of Seller for the periods therein specified in accordance with United States generally accepted accounting principles (“GAAP”), in each case, as applied in the Ordinary Course of Business, except that the unaudited financial statements do not contain footnotes. The financial records of Seller, all of which Seller has made available to Parent, are true, correct and each complete and represent actual, bona fide transactions and have been maintained in accordance with sound business practices, including the maintenance of an adequate system of internal controls. Section 3.5 of the Schools Seller Disclosure Letter lists all Indebtedness of Seller and specifies any property affected by such Indebtedness. Seller is, and after giving effect to the transactions contemplated hereby, will be Solvent. With respect to the inventory of Seller shown on the face of the Seller Balance Sheet and Closing Statement, (a) all of such inventory is merchantable and fit for the respective periods covered thereby. The Financial Statements purpose for which it was procured or produced, (ib) have been prepared based upon all of such inventory other than written off inventory, except to the books extent of reserves shown on the face of such balance sheet, consists of a quality and records quantity usable and salable in its Ordinary Course of Seller in a manner consistent with Seller's standard internal accounting practicesBusiness, consistently applied(c) none of such inventory is obsolete, damaged or defective, and (iid) fairly the quantities of each item of such inventory are not excessive and are reasonable in the present the financial position of Seller as circumstances of the dates of such Financial Statements and the results of operations for the periods covered by such Financial Statements. Except as disclosed on Schedule 5.11(b), Seller has maintained the books and records of the Seller and ---------------- the Schools in accordance with applicable laws, rules and regulations and with GAAP and GAGAS, and such books and records are, and during the periods covered by the Financial Statements were, materially correct and complete, fairly reflecting the income, expenses, assets and liabilities of the Seller and the Schools. On the date hereof, Seller does not have any liabilities required to be set forth in a balance sheet prepared in accordance with GAAP and GAGAS that were not included in the latest balance sheet included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller is not required to ---------------- provide any letters of credit, guarantees or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the Schools' business. As of the date hereof, Seller has no indebtedness, liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, other than:Business.

Financial Statements; Indebtedness. Attached hereto as Schedule -------- 5.11(a) are the following financial statements of Seller: (a) audited Balance ------- Sheets at November 30December 31, 1999, 1998 and 1997 and audited Statements of Operations and Statements of Cash Flows for the years ended November 30December 31, 1999, 1998 and 1997 (including consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the Schools in the form appropriate for filing with the DOE), and (b) an unaudited Balance Sheet at June 30, 2000 and an unaudited Statement of Operations and Statement of Cash Flows for the seven six months ended June 30, 2000 (collectively, the "Financial Statements"). The basis of presentation of the Financial Statements of the Seller and each of the Schools is disclosed on Schedule 5.11(b) attached hereto ---------------- hereto or in the notes thereto. Except as disclosed on Schedule 5.11(b), the balance ---------------- balance sheets included in the Financial Statements present fairly in accordance with GAAP the assets and liabilities of Seller and each of the Schools as of the respective dates thereof, and the related statements of revenue and expenses present fairly in accordance with GAAP the results of operations of Seller and each of the Schools for the respective periods covered thereby. The Financial Statements (i) have been prepared based upon the books and records of Seller in a manner consistent with Seller's standard internal accounting practices, consistently applied, and (ii) fairly present the financial position of Seller as of the dates of such Financial Statements and the results of operations for the periods covered by such Financial Statements. Except as disclosed on Schedule 5.11(b), Seller has maintained the books and records of the Seller and ---------------- the Schools in accordance with applicable laws, rules and regulations and with GAAP and GAGAS, and such books and records are, and during the periods covered by the Financial Statements were, materially correct and complete, fairly reflecting the income, expenses, assets and liabilities of the Seller and the Schools. On the date hereof, Seller does not have any liabilities required to be set forth in a balance sheet prepared in accordance with GAAP and GAGAS that were not included in the latest balance sheet included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller is not required to ---------------- provide any letters of credit, guarantees or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the Schools' business. As of the date hereof, Seller has no indebtedness, liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, other than: