Common use of Financial Statements; Indebtedness Clause in Contracts

Financial Statements; Indebtedness. Attached hereto as Schedule -------- 5.11(a) are the following audited financial statements of Seller: Consolidated ------- Balance Sheets at December 31, 1995, 1994 and 1993; Consolidated Statements of Operation and Consolidated Statements of Cash Flows for the three years in the period ended December 31, 1995 (including, for fiscal years ending December 31, 1994 and 1995, consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the School in the form appropriate for filing with the USED, and for the fiscal year ending December 31, 1993, unaudited internal management reports of the Statement of Assets and Liabilities and Statement of Operations of the School) (collectively, the "Financial Statements"). The basis of presentation of the financial statements of the School is disclosed on Schedule 5.11(b) attached hereto. Except as disclosed on Schedule 5.11(b), the balance sheets included in the Financial Statements present fairly in accordance with generally accepted accounting principles ("GAAP") the assets and liabilities of the School 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 the School for the respective periods covered thereby. The Financial Statements for the School (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 the School 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 School in ---------------- accordance with applicable laws, rules and regulations and with GAAP, 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 School. On the date hereof, the School does not have any material liabilities required to be set forth in a balance sheet prepared in accordance with GAAP, that were not included in the consolidating balance sheets schedule of the School included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller is not required to ---------------- provide any letters of credit, guaranty or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the School's business. As of the date hereof, the School 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(a) are the following audited financial statements of Seller: Consolidated ------- (a) audited Balance Sheets at December 31, 19952003, 1994 2002 and 1993; Consolidated 2001 and audited Statements of Operation Operations and Consolidated Statements of Cash Flows for the three years in the period ended December 31, 1995 2003, 2002 and 2001 (including, for fiscal years ending December 31, 1994 and 1995, including consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the School in the form appropriate for filing with the USED, DOE) and for the fiscal year ending December (b) an unaudited Balance Sheet at March 31, 1993, 2004 and an unaudited internal management reports of the Statement of Assets and Liabilities Operations and Statement of Operations of Cash Flows for the School) three month period ended March 31, 2004 (collectively, the "“Financial Statements"”). The basis of presentation of the financial statements Financial Statements of the Seller and the School is disclosed on Schedule 5.11(b) attached heretohereto 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 generally accepted accounting principles ("GAAP") GAAP the assets and liabilities of Seller and the School 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 the School for the respective periods covered thereby. The Financial Statements for the School (i) have been prepared based upon the books and records of Seller in a manner consistent with Seller's ’s standard internal accounting practices, consistently applied applied, and (ii) fairly present the financial position of the School Seller as of the dates of such Financial Statements, 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 School in ---------------- accordance with applicable laws, rules and regulations and with GAAPGAAP 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 School. On the date hereof, Seller and the School does not have any material liabilities required to be set forth in a balance sheet prepared in accordance with GAAP, that were not included in the consolidating balance sheets schedule of the School included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller is not required to ---------------- provide any letters of credit, guaranty guarantees or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the School's ’s business. As of the date hereofhereof and as of the Closing Date, the School 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(a) are the following audited financial statements of Sellerthe Company: Consolidated (a) audited ------- Balance Sheets at December 31, 19951999, 1994 1998 and 1993; Consolidated 1997 and audited Statements of Operation Operations and Consolidated Statements of Cash Flows for the three years in the period ended December 31, 1995 1999, 1998 and 1997 (including, for fiscal years ending December 31, 1994 and 1995, including consolidating schedules containing corresponding Statements of Assets and Liabilities and Statements of Revenue and Expenses of the School Schools in the form appropriate for filing with the USEDDOE), and for the fiscal year ending December 31(b) an unaudited Balance Sheet at September 30, 1993, 2000 and an unaudited internal management reports of the Statement of Assets and Liabilities Operations and Statement of Operations of Cash Flows for the School) nine months ended September 30, 2000 (collectively, the "Financial Statements"). The basis of presentation of the financial statements Financial Statements of the School Company is disclosed on Schedule 5.11(b) attached heretoin the notes thereto. Except as disclosed on Schedule 5.11(b), the balance sheets included in the ---------------- Financial Statements present fairly in accordance with generally accepted accounting principles ("GAAP") GAAP the assets and liabilities of the School Company 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 the School Company for the respective periods covered thereby. The Financial Statements for the School (i) have been prepared based upon the books and records of Seller the Company in a manner consistent with Sellerthe Company's standard internal accounting practices, consistently applied applied, and (ii) fairly present the financial position of the School Company as of the dates of such Financial Statements, Statements and the results of operations for the periods covered by such Financial Statements. Except as disclosed on Schedule 5.11(b), Seller the Company has maintained ---------------- the books and records of the School Company and the Schools in ---------------- accordance with applicable laws, rules and regulations and with GAAPGAAP 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 SchoolCompany and the Schools. On the date hereof, the School does not have any material Company has no liabilities required to be set forth in a balance sheet prepared in accordance with GAAP, GAAP and GAGAS that were not included in the consolidating latest balance sheets schedule of the School sheet for such entity included in the Financial Statements. Except as provided in Schedule 5.11(c), Seller neither the Company nor MMC is not required to ---------------- provide any ---------------- letters of credit, guaranty guarantees or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the School's Schools' business. As of the date hereof, the School Company 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(a) are Seller has previously ---------------------------------- furnished to Buyer the following audited financial statements of Sellerstatements: Consolidated ------- reviewed Balance Sheets at December 31, 19951990, 1994 and 1993; Consolidated Statements of Operation and Consolidated Statements of Cash Flows for the three years in the period ended December 31, 1995 (including1991, for fiscal years ending audited Balance Sheets at December 31, 1993, December 31, 1994 and December 31, 1995, consolidating schedules containing corresponding ; reviewed Cash Flow Statements of Assets and Liabilities and Statements of Revenue and Expenses of the School in the form appropriate for filing with the USED, and for the fiscal year ending years ended December 31, 1990 and December 31, 1991, and audited Cash Flow Statements for the fiscal years ended December 31, 1993, unaudited internal management reports December 31, 1994 and December 31, 1995; reviewed Statements of Operations and Deficit for the Statement of Assets fiscal years ended December 31, 1990 and Liabilities December 31, 1991 and audited Statement of Operations and Deficit for the fiscal year ended December 31, 1993 and audited Statement of the School) Operations and Stockholder Equity for December 31, 1994 and December 31, 1995 (collectively, the "Financial Statements"). The basis of presentation of the financial statements of the School is disclosed on Schedule 5.11(b) attached hereto. Except as disclosed on Schedule 5.11(b), the balance sheets included in the Financial Statements present fairly in accordance with generally accepted accounting principles ("GAAP") the assets and liabilities of the School covered thereby as of the respective dates thereof, and the related statements of revenue and expenses operations present fairly in accordance with GAAP the results of operations of the School for the respective periods covered thereby. The Financial Statements for the School (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 applied, are substantially correct and (ii) complete and fairly present the financial position of the School as of the dates of such Financial Statements, and the results of operations and changes in financial position 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 School in ---------------- accordance with applicable laws, rules and regulations and with GAAP, 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 School. On the date hereof, the School does not have any material liabilities required to be set forth in a balance sheet prepared in accordance with GAAP, that were not included in the consolidating balance sheets schedule of the School included in the Financial Statements. Except as provided in Schedule 5.11(c)5.11, Seller is not required to ---------------- provide any letters of ------------- credit, guaranty or other financial security arrangements in connection with any transactions, approvals or licenses in the ordinary course of the School's business. As Except as disclosed on Schedule 5.14, as of the date hereof, the ------------- School has no indebtedness, liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, other than: