CORINTHIAN COLLEGES INC
EXHIBIT 10.66
<DOCUMENT>
<TYPE>EX-10.66
<SEQUENCE>3
<FILENAME>a87583exv10w66.txt
<DESCRIPTION>EXHIBIT 10.66
<TEXT>
<PAGE>

                                                                   Exhibit 10.66

                            ASSET PURCHASE AGREEMENT

            This Asset Purchase Agreement, dated as of December 17, 2002 (this
"AGREEMENT"), is entered into by and among Corinthian Colleges, Inc., a Delaware
corporation, ("BUYER"), Learning Tree University, Inc., a California nonprofit
public benefit corporation (hereinafter "LTU"), LTU Extension, Inc., a
California corporation (hereinafter "LTUX" and referred to herein collectively
with LTU as the "SELLERS" and individually as a "SELLER"), and Michael Gould
(referred to herein as "GOULD").

                                   BACKGROUND

            A. LTU owns and operates two institutions of higher education known
as Learning Tree University located in Chatsworth and Costa Mesa, California,
which provide courses in information technology, business and management,
design, education, health and recreation, language and psychology and writing,
and offer online courses, and sell textbooks and other course-related materials
(hereinafter collectively referred to as the "SCHOOLS," and individually, as a
"SCHOOL"). LTUX provides management oversight and administrative services to LTU
in connection with LTU's operation of the Schools.

            B. Buyer desires to buy, through the payment of cash and the
assumption of certain liabilities of Sellers, and Sellers desires to sell,
substantially all of the assets and properties owned by Sellers and used in the
business of the Schools, upon the terms and conditions hereinafter set forth.

                                    AGREEMENT

            In consideration of the mutual covenants contained in this Agreement
and intending to be legally bound hereby, the parties hereto agree as follows:


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<PAGE>

                     ARTICLE I. SALE AND PURCHASE OF ASSETS

SECTION 1.01 PURCHASED ASSETS TO BE TRANSFERRED. Subject to the terms and
conditions of this Agreement, Sellers hereby agrees to sell, assign, convey,
transfer and deliver to Buyer at the Closing (as defined herein), and Buyer
hereby agrees to purchase from Sellers, all of the Sellers' right, title and
interest in, to and under all of the business, properties, assets, goodwill,
rights and claims and property owned by Sellers and used in the business of the
Schools of the types set forth below (the "PURCHASED ASSETS"), free and clear of
all mortgages, pledges, liens, claims, restrictions, encumbrances and security
interests of any kind or nature except for the "Permitted Exceptions" (as such
term is defined in Section 5.07(c)), and except for the Excluded Assets (as
defined in Section 1.02 hereof):

      (a)   ACCOUNTS RECEIVABLE. All of Sellers' accounts receivable, notes
            receivable and other receivables (and causes of action related to
            any of the foregoing) ("ACCOUNTS RECEIVABLE");

      (b)   INVENTORY. All of Sellers' inventory, including without limitation,
            textbooks, course materials and supplies;

      (c)   PROPERTY, PLANT AND EQUIPMENT. All of Sellers' property, plant and
            equipment, including, without limitation, computer hardware,
            printers, other data processing equipment, other machinery and
            equipment, furniture, fixtures, leasehold improvements, furnishings,
            classroom equipment and other tangible personal property used at the
            Schools and/or owned by the Sellers;

      (d)   RECORDS. All of Sellers' records related to or used in connection
            with the operation of the Schools or pertaining to the Purchased
            Assets, including, without limitation, all student records, ledgers,
            financial statements and records, operating data, correspondence,
            employment records, placement records, marketing materials,
            information and data, mailing lists and copies of all documents and
            other information and data filed by Sellers with any state, federal
            or local government authority or any guaranty or accrediting agency,
            whether on computer disk, in paper form or otherwise;

      (e)   CONTRACTS AND LEASES. All of the rights of Sellers under contracts,
            purchase orders and leases applicable to the Schools to which any
            Seller is a party entered into in the course of Sellers' business,
            including, without limitation, those identified as Material Assumed
            Contracts in Schedule 5.08;

      (f)   INTELLECTUAL PROPERTY. All rights of Sellers with respect to
            patents, trademarks, service marks, logos, licenses and copyrights
            (whether or not registered) and all applications and registrations
            therefor, owned or licensed by Sellers, and all rights of Sellers
            with respect to computer programs and software, including those
            described in Schedule 5.09;

      (g)   WARRANTY RIGHTS. All rights of Sellers relating to or arising out of
            express or implied warranties, representations or guarantees from
            suppliers with respect to any of the Purchased Assets, and all
            causes of action arising therefrom;

      (h)   PREPAID EXPENSES AND REFUNDABLE DEPOSITS. All of Sellers' prepaid
            security, vendor, utility and other deposits and expenses;

      (i)   PERMITS. To the extent transferable, Sellers' licenses, permits,
            certifications, approvals and other governmental and regulatory
            authorizations required under all laws, rules and regulations
            applicable to or affecting the Schools, including those described in
            Schedule 5.05(a);


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<PAGE>

      (j)   GOODWILL AND OTHER INTANGIBLES. All of the goodwill and going
            concern value of the Schools and all other intangibles used in
            connection with the Schools;

      (k)   CURRICULUM MATERIALS. All rights of Sellers with respect to
            Curriculum used in connection with the educational programs of the
            Schools, whether proprietary or licensed from third parties
            (including all periodic updates to the curriculum as developed or
            used by Sellers or any such third parties); and

      (l)   OTHER ASSETS. All other assets and property of any kind, wherever
            located, which is owned, leased or licensed by Sellers and used in
            the business of the Schools (other than the Excluded Assets),
            including, without limitation, promotional and marketing materials.

SECTION 1.02 EXCLUDED ASSETS. The Excluded Assets shall not be conveyed
hereunder. The "EXCLUDED ASSETS" means:

      (a)   CASH. All of Sellers' cash or cash equivalents, certificates of
            deposit and marketable securities on hand at the Closing and
            Sellers' bank accounts relating thereto; and

      (b)   OTHER ASSETS. Such other assets as are identified on Schedule
            1.02(b) attached hereto.

                           ARTICLE II. CONSIDERATION

SECTION 2.01 PURCHASE PRICE. The purchase price payable to Sellers in connection
with the transfer to Buyer of the Purchased Assets shall be (i) the cash
consideration referred to in Section 2.02, plus (ii) the assumption of
liabilities of Sellers referred to in Section 2.03, plus (iii) the possibility
of additional Earn-Out Consideration (as defined below) as set forth in Section
2.08 (collectively, the "PURCHASE PRICE").

SECTION 2.02 CASH CONSIDERATION. The cash consideration portion of the Purchase
Price (the "CASH PORTION") shall be Three Million Three Hundred Thousand Dollars
($3,300,000.00) (of which $3,275,000 shall be payable to LTU and $25,000 shall
be payable to LTUX subject to the terms and conditions set forth below), subject
to subsequent decrease pursuant to the Post-Closing Purchase Price Adjustment
and payable as follows, by wire transfer of immediately available funds to each
of the Sellers in the amounts set forth below and to the account number(s)
designated by the Sellers on Schedule 2.02: (A) within two (2) business days of
the date of this Agreement, Buyer shall pay to LTU the sum of Six Hundred
Thousand Dollars ($600,000) as a good faith deposit securing Buyer's obligations
hereunder (the "Deposit"), which Deposit shall be credited against Buyer's
obligations to pay the Cash Portion (LTU's and Buyer's rights and obligations
regarding the Deposit if the Closing fails to occur are set forth in Article
IV), and (B) at the Closing, Buyer shall pay to LTU One Million, Thirty-seven
Thousand Five Hundred Dollars ($1,037,500.00), and Buyer shall pay to LTUX
Twelve Thousand Five Hundred Dollars ($12,500) (collectively, the "CLOSING
PAYMENTS"), (C) three (3) business days following the final determination of the
Post-Closing Purchase Price Adjustment in accordance with Section 2.06, Buyer
shall pay to LTU an amount equal to (x) One Million, Three Hundred Ten Thousand
Dollars ($1,310,000.00), MINUS (y) LTU's pro rata (as such term is defined
below) portion of the Post-Closing Purchase Price Adjustment , and Buyer shall
pay to LTUX an amount equal to (x) Ten Thousand Dollars ($10,000.00), MINUS (y)
LTUX's pro rata share of the Post-Closing Purchase Price Adjustment
(collectively, the "SECOND PAYMENTS"), and (D) on August 31, 2004, Buyer shall
pay to LTU Three Hundred Twenty-seven Thousand Five Hundred Dollars ($327,500),
MINUS LTU's pro rata share of the amount of any of Buyer's Losses claimed under
Sections 9.12 and 9.14 that remain unpaid as of such time, and Buyer shall pay
to LTUX Two Thousand Five Hundred Dollars ($2,500), MINUS LTUX's pro rata share
of the amount of any of Buyer's Losses claimed under Sections 9.12 and 9.14 that
remain unpaid as of such time. For purposes hereof, the term


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<PAGE>

"PRO RATA" shall mean pro rata among Sellers in accordance with the following
percentages: ninety-nine and two-tenths percent (99.2%) to LTU and eight tenths
(0.8%) to LTUX.

SECTION 2.03 OBLIGATIONS AND LIABILITIES TO BE ASSUMED. Upon the terms and
subject to the conditions contained herein, at the Closing, Buyer shall, by an
instrument of assumption to be executed and delivered at the Closing
substantially in the form of Exhibit A hereto (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT"), assume only the following liabilities (the "ASSUMED LIABILITIES")
of Sellers and the Schools: (i) current trade accounts payable (except to the
extent such accounts payable relate to liabilities of the types described in
clauses (i) through (viii) in Section 2.04 below), (ii) other current
liabilities consisting solely of (A) accrued expenses (except to the extent such
accrued expenses relate to liabilities of the types described in clauses (i)
through (viii) in Section 2.04 below), and (B) pre-collected tuition, (iii) all
liabilities related to capital lease obligations (including current portion) of
the Sellers as of the Closing Date, (iv) the Schools' teach-out obligation with
respect to students enrolled as of the Closing Date, and (v) obligations arising
under written contracts in connection with the operation of the Schools (the
"Assumed Contracts"); provided, however, that none of the obligations of either
LTU or LTUX under that certain management agreement between LTU and LTUX shall
be assumed by Buyer. The terms "current liabilities" and "current trade accounts
payable" shall mean, for the purposes of this Agreement, those obligations whose
liquidation is reasonably expected to be required within one (1) calendar year.

SECTION 2.04 EXCLUDED LIABILITIES. Buyer shall not assume, or otherwise be
responsible for, any liabilities or obligations (whether actual or contingent,
matured or unmatured, liquidated or unliquidated, or known or unknown)
(collectively, the "EXCLUDED LIABILITIES") of Sellers, any other owner or
operator of the Schools prior to the Closing Date, or any Affiliate of any of
the foregoing, other than those liabilities and obligations which have been
specifically assumed by Buyer pursuant to Section 2.03. The "Excluded
Liabilities" shall include, without limitation, any liabilities or obligations
to the extent that they relate to, are connected with, are based upon or arise
out of the following: (i) regulatory liabilities imposed by the U.S. Department
of Education (the "DOE") and/or all regulatory and licensing agencies with
regulatory authority over the Sellers and/or the Schools for periods prior to
the Closing Date, (ii) liabilities relating to employees of Sellers and the
Schools for periods prior to the Closing Date (including, without limitation,
salary, bonuses, payroll taxes payable, accrued vacation liability or other
compensation or benefits), (iii) liabilities with respect to accounts payable
incurred on or before the Closing Date that are set forth on Schedule 2.04, (iv)
Tax liabilities of Sellers or Gould (including, without limitation, sales and
income tax liabilities in connection with this Agreement), (v) liabilities with
respect to the claims referenced on Schedule 5.13 hereto, (vi) liabilities
associated with any lines of credit or other long-term debt of Sellers
(including current portion), (vii) any intercompany payables or debt to any
parent or stockholder of any of the Sellers (whether to Gould or any Affiliate
of Sellers or Gould) and (viii) any other liability or obligation which has not
been specifically assumed by Buyer pursuant to Section 2.03.

SECTION 2.05 ALLOCATION OF PURCHASE PRICE. Buyer and Sellers agree that the
Purchase Price shall be allocated among the Purchased Assets in accordance with
the allocation set forth in Schedule 2.05 attached hereto. Buyer and Sellers
agree that each will report the federal, state and local income Tax and other
Tax consequences of the purchase and sale contemplated hereby in a manner
consistent with such allocation set forth in Schedule 2.05 and that neither will
take any position inconsistent therewith upon examination of any Tax return, in
any refund claim, in any litigation or otherwise. For the purposes of this
Agreement, the term "TAX" or "TAXES" means any foreign, federal, state, county
or local income, sales and use, excise, franchise, real and personal property,
transfer, gross receipt, capital stock, production, business and occupation,
disability, employment, payroll, severance or withholding tax or


                                      -4-
<PAGE>

charge imposed by any governmental entity, and any interest and penalties (civil
or criminal) related thereto or to the nonpayment thereof.

SECTION 2.06 POST-CLOSING PURCHASE PRICE ADJUSTMENT.

            (A) Sellers and Gould agree that immediately following the Closing
            on the Closing Date, the consolidated financial condition of Sellers
            shall have a "NET WORKING CAPITAL" (as defined below) of no less
            than $1.00, in each case calculated in accordance with generally
            accepted accounting principles ("GAAP"), applied on a basis
            consistent with the Buyer's historical accounting practices. Such
            amounts shall be determined and such requirements calculated based
            upon the Consolidated Closing Balance Sheet described in Section
            2.07. If the Sellers' Net Working Capital immediately following the
            Closing on the Closing Date is less than $1.00, then the Purchase
            Price shall be reduced, dollar-for-dollar, by an amount equal to the
            smallest amount of cash which would be required to bring such
            requirement into compliance with the Net Working Capital target set
            forth in this Section 2.06.

            (B) Any reduction in the Purchase Price under subsection (A) of this
            Section 2.06 is referred to herein as the "POST-CLOSING PURCHASE
            PRICE ADJUSTMENT." If the Post-Closing Purchase Price Adjustment
            results in a decrease in the Purchase Price which is less than the
            aggregate amount of the Second Payments, then the amount of the
            Second Payments to be paid by Buyer to Sellers in accordance with
            Section 2.02(B) shall be reduced by the amount of the Post-Closing
            Purchase Price Adjustment, as set forth therein. If the Post-Closing
            Purchase Price Adjustment is greater than the aggregate amount of
            the Second Payments, then Buyer shall not be required to make the
            Second Payments to Sellers in accordance with Section 2.02(B), and
            Seller shall pay pro rata to Buyer, within three (3) business days
            following the final determination of the Post-Closing Purchase Price
            Adjustment by wire transfer of immediately available funds to the
            account number designated by Buyer, the amount by which the
            Post-Closing Purchase Price Adjustment exceeds the Second Payment.

            (C) For purposes of this Agreement, "NET WORKING CAPITAL" shall mean
            the sum of (A) all current Purchased Assets of the Sellers as
            reflected on the Consolidated Closing Balance Sheet, minus the sum
            of (B) all current Assumed Liabilities of the Sellers as reflected
            on the Consolidated Closing Balance Sheet.

SECTION 2.07 POST-CLOSING AUDIT; DETERMINATION OF CONSOLIDATED CLOSING BALANCE
SHEET.

            (A) Within five (5) business days of the Closing Date, the Sellers
            shall deliver to Buyer true and correct copies of all financial
            books and records of the Sellers necessary for Buyer to prepare a
            consolidated balance sheet of both Sellers dated as of the Closing
            Date. Within thirty (30) business days after receipt of such books
            and records from the Sellers, Buyer shall prepare (in accordance
            with the procedures set forth in Section 2.07(B) below), have
            audited (at Buyer's expense), and deliver to the Sellers a
            consolidated balance sheet reflecting all of the Purchased Assets
            and Assumed Liabilities of the Sellers dated as of the Closing Date
            (the "CONSOLIDATED CLOSING BALANCE SHEET"), from which Buyer shall
            compute the Net Equity and the Net Working Capital as of the Closing
            Date (which computations shall be set forth on, or attached to, the
            Consolidated Closing Balance Sheet).

            (B) The Consolidated Closing Balance Sheet shall be prepared in
            accordance with GAAP, applied on a basis consistent with Buyer's
            past accounting practices, and audited by Almich & Associates
            ("ALMICH") in accordance with Generally Accepted Auditing Standards
            ("GAAS")


                                      -5-
<PAGE>

            (the "POST-CLOSING AUDIT"). Upon receipt of the Consolidated Closing
            Balance Sheet prepared by Buyer, Sellers shall have thirty (30) days
            in which to review it and either accept it or identify objections to
            it by written notice to Buyer. If, within thirty (30) days following
            delivery of the Consolidated Closing Balance Sheet to Sellers,
            Sellers have not given notice to Buyer of objections to the
            Consolidated Closing Balance Sheet (or of the related computation of
            Net Working Capital) (such notice shall be in writing and must
            contain a statement of the basis of Sellers' objections in
            reasonable detail), then the calculation of Net Working Capital as
            determined from the Consolidated Closing Balance Sheet shall be used
            in computing the Post-Closing Purchase Price Adjustment, if any. If
            exceptions or objections are noted by Sellers, Buyer, Sellers and
            their respective accountants shall meet to resolve the dispute. If
            such dispute has not been fully resolved within fifteen (15)
            business days after Sellers gave notice of an objection, then the
            issues remaining in dispute shall be submitted to one of the "Big
            Four" accounting firms with which neither Sellers nor the Buyer has
            a prior business relationship (the "ACCOUNTANTS") for resolution. If
            the issues are submitted to the Accountants for resolution: (i)
            Buyer and Sellers will furnish to the Accountants such work papers
            and other documents and information relating to the disputed issues
            as the Accountants may reasonably request and are available to such
            party (or its accountants), and will be afforded the opportunity to
            present to the Accountants any material relating to the
            determination and to discuss the determination with the Accountants;
            (ii) the determination by the Accountants, as set forth in a written
            notice delivered to the parties within fifteen (15) business days
            following submission of the dispute to the Accountants, will be
            binding and conclusive on the parties; and (iii) Buyer, on the one
            hand, and Sellers, on the other hand, will each bear 50% of the fees
            of the Accountants for such determination. The Net Equity and the
            Net Working Capital for all purposes of this Agreement shall be as
            determined in accordance with this Section 2.07.

SECTION 2.08 EARN-OUT CONSIDERATION. Subject to the terms and conditions set
forth in this Section 2.08, Buyer shall pay to LTU additional cash consideration
as part of the Purchase Price, in an amount up to Two Million Dollars
($2,000,000) (the "EARN-OUT CONSIDERATION"), as follows:

      (a)   NEW DIVISION. Following the Closing (as defined below), Buyer shall
            create a new operating division consisting solely of the Purchased
            Assets and the Assumed Liabilities as used in the operation of the
            Schools prior to the Closing (the "NEW DIVISION").

      (b)   CALENDAR YEAR 2003. If the New Division achieves an amount of EBITDA
            in the calendar year ending December 31, 2003 equal to at least the
            2003 EBITDA Target (as hereinafter defined), then Buyer shall pay to
            LTU, by wire transfer of immediately available funds to the same
            account number set forth next to LTU's name on Schedule 2.02 (or as
            otherwise instructed in writing by LTU), One Million Dollars
            ($1,000,000) (the "2003 EARN-OUT PAYMENT"); provided, however, that
            if the New Division does not achieve the 2003 EBITDA Target, but
            does achieve EBITDA of no less than negative $217,000 (the "EBITDA
            FLOOR") (i.e., an EBITDA loss which is no worse than such amount),
            then the 2003 Earn-Out Payment shall be One Hundred Thousand Dollars
            ($100,000), plus a proration amount so that for each full Thirty
            Thousand Dollars ($30,000) of EBITDA achieved above the EBITDA
            Floor, LTU shall receive an additional One Hundred Thousand Dollars
            ($100,000) or ten percent (10%) of the 2003 Earn-Out Payment. The
            following chart illustrates the amounts of the 2003 Earn-Out Payment
            at each relevant 10 percent (10%) threshold of New Division EBITDA:


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<PAGE>

<TABLE>
<CAPTION>
            NEW DIVISION'S 2003 EBITDA      2003 EARN-OUT PAYMENT
            --------------------------      ---------------------
<S>                                         <C>
            ($217,001) or worse             Zero Earn-Out Payment

            ($217,000) to ($187,001)                     $100,000

            ($187,000) to ($157,001)                     $200,000

            ($157,000) to ($127,001)                     $300,000

            ($127,000) to ($97,001)                      $400,000

            ($97,000) to ($67,001)                       $500,000

            ($67,000) to ($37,001)                       $600,000

            ($37,000) to ($7,001)                        $700,000

            ($7,000) to $22,999)                         $800,000

            $23,000 to $52,999                           $900,000

            $53,000 or better                          $1,000,000
</TABLE>

(c)   CALENDAR YEAR 2004. If the New Division achieves an amount of EBITDA in
      the calendar year ending December 31, 2004 of at least the 2004 EBITDA
      Target (as hereinafter defined), then the Buyer shall pay to LTU, by wire
      transfer of immediately available funds to the same account number set
      forth next to LTU's name on Schedule 2.02 (or as otherwise instructed in
      writing by LTU), One Million Dollars ($1,000,000) (the "2004 EARN-OUT
      PAYMENT"); provided, however, that if the New Division does not achieve
      the 2004 EBITDA Target, but does achieve positive EBITDA of a lesser
      amount for such calendar year, then the 2004 Earn-Out Payment shall be
      prorated so that for each full Sixty-Four Thousand Dollars ($64,000) of
      EBITDA achieved, LTU shall receive One Hundred Thousand Dollars ($100,000)
      or ten percent (10%) of the 2004 Earn-Out Payment. The following chart
      illustrates the amounts of the 2004 Earn-Out Payment at each relevant 10
      percent (10%) threshold of New Division EBITDA:

<TABLE>
<CAPTION>
            NEW DIVISION'S 2004 EBITDA         2004 EARN-OUT PAYMENT
            --------------------------         ---------------------
<S>                                            <C>
            $63,999 or less                    Zero Earn-Out Payment

            $64,000 to $127,999                             $100,000

            $128,000 to $191,999                            $200,000

            $192,000 to $255,999                            $300,000

            $256,000 to $319,999                            $400,000

            $320,000 to $383,999                            $500,000

            $384,000 to $447,999                            $600,000

            $448,000 to $511,999                            $700,000

            $512,000 to $575,999                            $800,000

            $576,000 to $639,999                            $900,000

            $640,000 or more                              $1,000,000
</TABLE>


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<PAGE>

      (d)   DEFINITIONS.

            (i)   For purposes of this Agreement, the "2003 EBITDA TARGET" shall
                  mean Fifty-Three Thousand Dollars ($53,000), and the "2004
                  EBITDA TARGET" shall mean Six Hundred Forty Thousand Dollars
                  ($640,000).

            (ii)  For purposes of this Agreement, the term "EBITDA" shall mean
                  the consolidated net income of the New Division for the period
                  indicated, plus (A) interest expense, (B) income tax expense,
                  (C) depreciation expense, (D) amortization expense, and (E)
                  any "non-recurring expense" mutually agreed to in advance in
                  writing by both Buyer and LTU (provided that the writing
                  evidencing such agreement is signed by an authorized
                  representative of both LTU and Buyer, describes the
                  "non-recurring expense" in reasonable detail and refers
                  specifically to this Section 2.08(d)(ii)), each for the New
                  Division for the same period. In the event of any controversy
                  regarding the determination of EBITDA, EBITDA shall be
                  determined in accordance with the past practices of Buyer as
                  evidenced by Buyer's audited financial statements for its most
                  recently ended fiscal year.

      (e)   FINANCIAL INFORMATION; DISPUTES.

            (i)   For so long as payments are required to be made under this
                  Section 2.08, Buyer shall deliver to LTU, as soon as available
                  and in any event within 90 days after the end of each of the
                  calendar years ending December 31, 2003 and December 31, 2004,
                  (A) an internally prepared balance sheet of the New Division
                  as of such December 31, (B) an internally prepared statement
                  of income and an internally prepared statement of cash flows
                  of the New Division for such calendar year, and (C) together
                  with Buyer's computation of the New Division's EBITDA for such
                  period. In determining "EBITDA" for the New Division for
                  purposes of this Section 2.08, (i) no "burden" shall be
                  deducted for any employee benefits and employer paid taxes
                  related to instructors of the Learning Tree Division for all
                  periods prior to April 1, 2003, (ii) the "burden" of employee
                  benefits and employer paid taxes related to instructors of the
                  Learning Tree Division for all periods from and after April 1,
                  2003 shall equal 12.52% of all such instructors' gross
                  compensation, and (iii) the "burden" of employee benefits and
                  employer paid taxes for all other employees of the Learning
                  Tree Division shall equal 21.0% of all such other employees'
                  gross compensation. In determining "EBITDA" for the New
                  Division for purposes of this Section 2.08, (with the
                  exception of the provision for benefits of Learning Tree
                  Division employees as set forth in the preceding sentence) no
                  costs or expenses incurred by Buyer at its "Corporate
                  Headquarters" shall be charged against the New Division's
                  consolidated net income unless such costs or expenses relate
                  solely to the operations of the New Division. By way of
                  illustration only, if one or more of Buyer's employees were
                  used to create budgets for the New Division, no portion of the
                  salary or "burden" associated with such employee would be


                                      -8-
<PAGE>

                  included in the operating expenses of the New Division unless
                  such employee were employed solely and exclusively, on a full
                  time basis, for the New Division. Additionally, for purposes
                  of calculating "EBITDA" of the New Division, the portion of
                  Gould's compensation which consists of "bonus" shall not be
                  included as operating expenses of the New Division (provided,
                  however, that all other components of Gould's compensation
                  shall be included in the New Division's operating expenses).
                  For purposes of this Section 2.08, the term "Corporate
                  Headquarters" shall mean any location operated by the Buyer in
                  which no students or other customers of Buyer receive goods or
                  services.

            (ii)  The financial statements to be provided to LTU pursuant to
                  this Section 2.08 shall be prepared in accordance with GAAP,
                  applied on a basis consistent with the Buyer's past practices.
                  Upon receipt of the financial statements prepared by Buyer,
                  LTU shall have thirty (30) days in which to review them and
                  either accept them or identify objections to them by written
                  notice to Buyer. If, within thirty (30) days following receipt
                  of the financial statements by LTU, LTU has not given notice
                  to Buyer of objections to the financial statements (or of the
                  related computation of the New Division's EBITDA) (such notice
                  shall be in writing and must contain a statement of the basis
                  of LTU's objections in reasonable detail), then the
                  calculation of the New Division's EBITDA as determined from
                  the financial statements shall be used in computing the 2003
                  or 2004 Earn-Out Payment, as applicable. If exceptions or
                  objections are noted by LTU, Buyer, LTU and their respective
                  accountants shall meet to resolve the dispute. If such dispute
                  has not been fully resolved within fifteen (15) business days
                  after LTU gave notice of an objection, then the issues
                  remaining in dispute shall be submitted to the Accountants for
                  resolution. If the issues are submitted to the Accountants for
                  resolution: (i) Buyer and LTU will furnish to the Accountants
                  such work papers and other documents and information relating
                  to the disputed issues as the Accountants may reasonably
                  request and are available to such party (or its accountants),
                  and will be afforded the opportunity to present to the
                  Accountants any material relating to the determination and to
                  discuss the determination with the Accountants; (ii) the
                  determination by the Accountants, as set forth in a written
                  notice delivered to the parties within fifteen (15) business
                  days following submission of the dispute to the Accountants,
                  will be binding and conclusive on the parties; and (iii)
                  Buyer, on the one hand, and LTU, on the other hand, will each
                  bear 50% of the fees of the Accountants for such
                  determination. EBITDA for all purposes of this Agreement shall
                  be as determined in accordance with this Section 2.08.

      (f)   PAYMENT

            Within five (5) business days of final determination of the New
            Division's EBITDA for each relevant calendar year in the manner set
            forth above, Buyer shall pay to LTU, by check or wire transfer of
            same day funds, an amount equal to the relevant Earn-Out Payment for
            such calendar year.

                              ARTICLE III. CLOSING

SECTION 3.01 CLOSING. Consummation of the purchase and sale of the Purchased
Assets contemplated hereby is referred to herein as the "CLOSING," and the date
on which the Closing takes place is referred to herein as the "CLOSING DATE."
The Closing shall take place, as soon as practicable following satisfaction or
waiver of all conditions precedent to the parties' obligations to close, at the
offices of Buyer at 6 Hutton Centre Drive, Suite 400, Santa Ana, California.
Delivery of documents at the Closing may be accomplished by facsimile, to be
followed by delivery of originals by overnight courier of national reputation on
the day after the Closing. The Closing shall be effective at 12:01 a.m. on the
Closing


                                      -9-
<PAGE>

Date. Notwithstanding anything to the contrary, the parties hereby agree that
for legal and accounting purposes following the Closing they will treat the
Closing Date as having occurred on January 1, 2003.

SECTION 3.02 DELIVERIES BY SELLERS AND GOULD AT CLOSING. At the Closing, Sellers
and Gould shall deliver or cause to be delivered to Buyer the following:

      (a)   Certified resolutions of Sellers' Boards of Directors and, if
            required by applicable law, Sellers' stockholders or members, as
            applicable, authorizing the execution, delivery and performance of
            this Agreement and the consummation of the transactions contemplated
            herein;

      (b)   a Duly executed Bill of Sale substantially in the form of Exhibit B
            hereto (the "BILL OF SALE") and such other instruments of conveyance
            as shall, in the opinion of Buyer and its counsel, be necessary to
            vest in Buyer title to the Purchased Assets;

      (c)   a Duly executed Assignment and Assumption Agreement;

      (d)   An officers' certificate signed by the President and the Chief
            Financial Officer of each of the Sellers, or such other officers
            reasonably acceptable to Buyer, certifying (i) as to the
            representations, warranties and covenants of Sellers made herein as
            provided in Sections 8.01(a) and 8.01(c), and (ii) as to the absence
            of a material adverse change as provided in Section 8.01(b);

      (e)   [intentionally omitted];

      (f)   Duly executed Assignment, Assumption and Amendment of Lease
            agreements for each of the Leased Facilities in Costa Mesa and
            Chatsworth, California in substantially the forms attached hereto as
            Exhibit C (the "LEASE ASSIGNMENTS");

      (g)   A Non-Competition Agreement in substantially the form attached
            hereto as Exhibit D (the "NON-COMPETITION AGREEMENT"), executed by
            Sellers and Gould;

      (h)   Any third party consents required or reasonably requested by Buyer
            in order to complete the transactions contemplated by this
            Agreement;

      (i)   A full and complete release of all liens against the property or
            assets of the Sellers held by any creditor of the Sellers, except
            for the "Permitted Exceptions" (as defined in Section 5.07);

      (j)   An Employment Agreement in the substantially the form attached
            hereto as Exhibit E (the "EMPLOYMENT AGREEMENT"), executed by Gould,
            regarding the employment of Gould by the Buyer following the Closing
            Date;

      (k)   Evidence satisfactory to Buyer that all debts incurred through the
            Closing Date relating to the School, including lender and other
            payables, regulatory fines, repayment, refunds, and all known
            obligations or liens (other than Assumed Liabilities) have been
            satisfied and paid in full or will be satisfied and paid in full
            from the Cash Consideration immediately after the Closing; except
            for (i) any debts listed on Schedule 2.04, (ii) any amounts payable
            to Gould, and (iii) any amounts payable by LTU or LTUX to the other;
            and

      (l)   Any other documents reasonably requested by Buyer and its counsel to
            effectuate the transactions contemplated hereby.


                                      -10-
<PAGE>

SECTION 3.03 DELIVERIES BY BUYER AT CLOSING. At the Closing, Buyer shall deliver
or cause to be delivered the following:

      (a)   The Closing Payments to the Sellers;

      (b)   Certified resolutions of the Board of Directors of Buyer authorizing
            the execution, delivery and performance of this Agreement and the
            consummation of the transactions contemplated herein;

      (c)   A duly executed Assignment and Assumption Agreement;

      (d)   A duly executed Lease Assignments for each of the Third Party Leased
            Facilities;

      (e)   A duly executed Non-Competition Agreement;

      (f)   A duly executed Employment Agreement; and

      (g)   Any other documents reasonably necessary to effectuate the
            transactions contemplated hereby.

                            ARTICLE IV. TERMINATION

SECTION 4.01 TERMINATION. This Agreement may be terminated only as follows and
in each case only by written notice:

      (a)   At any time prior to the Closing by mutual written consent of Gould,
            Sellers and Buyer;

      (b)   Prior to the Closing, by Buyer if Sellers or Gould shall be in
            breach of any covenant, undertaking, representation or warranty
            contained herein, which breach either (a) materially misrepresents
            the business, operations or financial condition of the Sellers as of
            the date hereof, (b) causes a material adverse change in the
            business, operations or financial condition of the Schools or (c)
            prohibits the satisfaction of a condition to the Closing that if
            waived and not cured would result in a cost or expense to Buyer of
            an amount equal to or greater than $10,000; or

      (c)   If the Closing has not occurred by 11:59 p.m., Pacific Time, on
            January 7, 2003, by Sellers and Gould (acting together) or by Buyer,
            by notice to all other parties, at any time thereafter and before
            the Closing; provided, however, that no party shall be entitled to
            terminate this Agreement pursuant to this Section 4.01(c) if such
            party's material breach of this Agreement has prevented the
            consummation of the transactions contemplated hereby.

SECTION 4.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Buyer or Sellers in accordance with the applicable
provisions above, this Agreement shall forthwith terminate upon notice thereof
duly given in accordance with the provisions hereof, and there shall be no
liability of any nature on the part of either Buyer, Sellers or Gould (or their
respective officers or directors, if applicable) to the other, except for
liabilities arising from a breach of this Agreement prior to such termination;
provided, however, that Sellers' and Gould's obligations under the last sentence
of Section 5.19 shall survive the termination of this Agreement; provided
further, however, that the obligations of the parties pursuant to that certain
letter agreement regarding confidentiality and nondisclosure dated as of July 9,
2002, shall survive the termination of this Agreement under Section 4.01; and
provided further, however, that the maximum amount of damages for which Sellers,
on the one hand, or Buyer, on the other hand, shall be liable for breach of this
Agreement prior to termination shall be Six Hundred Thousand Dollars
($600,000.00) (inclusive of the retention of the Deposit by LTU if LTU is
entitled to keep the Deposit pursuant to the penultimate sentence of this
Section 4.02). Notwithstanding the


                                      -11-
<PAGE>

foregoing, in the event of a termination of this Agreement, no party shall be
liable to any other party for any punitive or exemplary damages. Upon the
termination of this Agreement, LTU shall return the Deposit to Buyer within five
(5) business days; provided, however, that if Sellers and Gould terminate this
Agreement pursuant to Section 4.01(c) following the failure of the Closing to
occur on or before 11:59 p.m., Pacific Time, on January 7, 2003, which failure
was caused exclusively by either (A) the failure or refusal of Buyer to
consummate the Closing, or (B) the failure to occur of a condition to Closing
which was solely in the control of Buyer, then (1) LTU shall be entitled to keep
the full amount of the Deposit as liquidated damages under applicable California
law and (2) the parties agree that it would be impracticable and difficult to
fix the actual damages that LTU would sustain, and that the Deposit is a
reasonable estimate of the amount of those actual damages, based upon the
circumstances existing on the effective date of this Agreement. For purposes of
the immediately preceding sentence only (i.e., determining whether the failure
to occur of a condition to Closing was solely in the control of Buyer) and LTU's
right to keep the Deposit following termination of the Agreement by Sellers and
Gould pursuant to Section 4.01(c) (but not for purposes of determining whether
Buyer is otherwise obligated to consummate the Closing), the deliveries required
by Sellers pursuant to Sections 3.02(h) and 3.02(l) shall be deemed to have been
given, and the Conditions to Closing set forth in Sections 8.01(b), 8.01(g) and
8.01(i) shall be deemed satisfied or waived, as of the date of this Agreement.
Any retention of the Deposit by LTU is not intended as a forfeiture or penalty
within the meaning of California Civil Code Sections 3275 or 3369.

       ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE GOULD

            As a material inducement to Buyer to enter into this Agreement, to
purchase the Purchased Assets and to assume the Assumed Liabilities, each of the
Sellers and the Gould, jointly and severally, hereby make the representations
and warranties set forth in this Article V (a) as of the date hereof and (b) as
of the Closing Date.

SECTION 5.01 ORGANIZATION AND CORPORATE POWER. Sellers are corporations, duly
organized, validly existing and in good standing under the laws of the states
set forth next to such entities' names in the introductory paragraph of this
Agreement, the jurisdiction in which each is incorporated. Sellers have all
requisite power and authority to own and operate their respective properties, to
carry on their respective businesses as now conducted, to enter into this
Agreement and to consummate the transactions contemplated hereunder. Sellers are
duly qualified to do business in each jurisdiction in which the failure to be so
qualified would have an adverse effect on the operation of such entities or the
Schools. True and correct copies of Sellers' articles of incorporation and
bylaws have been furnished to Buyer and reflect all amendments made thereto at
any time prior to the date of this Agreement and the Closing Date.

SECTION 5.02 CAPACITY; AUTHORIZATION; BINDING EFFECT. Sellers have the power,
legal capacity and authority to execute, deliver and perform this Agreement and
each other document being executed in connection herewith to which it is a
party. Sellers have the power, legal capacity and authority to transfer, convey
and deliver the Purchased Assets, free and clear of all liens, claims,
encumbrances, options, rights and restrictions, except as otherwise disclosed in
Schedule 5.07(c). All corporate and other proceedings required to be taken by or
on the part of Sellers, including all action required to be taken by the
directors or stockholders of Sellers, to authorize Sellers to enter into and
carry out this Agreement and the related documents contemplated herein, have
been duly and properly taken. This Agreement has been, and each of the related
documents will be at Closing, duly executed and delivered by Sellers and
constitute, or will when delivered constitute, the valid and binding obligations
of Sellers, enforceable against Sellers in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies


                                      -12-
<PAGE>

generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

SECTION 5.03 OWNERSHIP OF SCHOOLS. The Schools are owned and operated by LTU
directly in the manner set forth in the Background of this Agreement, and no
other Person has any ownership interest in the Schools. No other Person has any
right, option, subscription or other arrangement to purchase or otherwise
acquire any interest in the Schools. For purposes of this Agreement, the term
"PERSON" shall include any individual, corporation, partnership, joint venture,
trust, unincorporated association or government or any agency or political
subdivisions thereof.

SECTION 5.04 NO CONFLICTS. The execution, delivery and performance of this
Agreement and each other document being executed by Sellers and Gould in
connection herewith, and the consummation by Sellers and Gould of the
transactions contemplated hereby and thereby will not: (a) violate any
provisions of law applicable to Sellers; (b) with or without the giving of
notice or the passage of time, or both, conflict with or result in the breach of
any provision of the articles of incorporation or bylaws of Sellers, or any
instrument, license, agreement or commitment to which Sellers are a party or by
which any of their respective assets or properties is bound, including the
Material Assumed Contracts (as defined in Section 5.08 hereof); (c) constitute a
violation of any order, judgment or decree to which Sellers is a party or by
which any of its assets or properties is bound; or (d) require any approval of,
or filing or registration with, any governmental entity or regulatory authority
other than those set forth or described on Schedule 5.04 or Schedule 6.03
attached hereto.

SECTION 5.05 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Except as disclosed in
Schedule 5.05, Sellers are not in violation of any law, regulation or
requirement of any governmental authority and Sellers do not have notice of any
such violation. Sellers currently maintain all licenses, accreditations,
certificates, permits, consents, authorizations and other governmental or
regulatory approvals (the "LICENSES AND PERMITS") necessary for Sellers to
conduct their respective businesses and the operations of the Schools as
presently being conducted, including, without limitation, all requisite
approvals for the educational and training programs currently offered from the
Schools' institutional accrediting agency and the states in which the Schools
operate. Sellers have duly filed all reports and returns required to be filed by
them with respect to the Schools with governmental authorities and accrediting
bodies and complied with all stipulations, conditions or other requirements that
they have imposed. The Licenses and Permits for the Schools are in full force
and effect, and no proceedings for the suspension or cancellation of any of them
is pending or threatened. No application made by Sellers for any Licenses and
Permits during the last five years has been denied. Schedule 5.05(a) attached
hereto is a true, correct and complete list of all Licenses and Permits held by
Sellers with respect to the Schools and the governmental authority or
accrediting body granting such Licenses and Permits. Sellers have delivered to
Buyer true and correct copies of all such Licenses and Permits. Sellers have
received no notice that any of the Licenses and Permits will not be renewed and,
to Sellers' knowledge, there is no basis for nonrenewal. The Schools are
accredited as set forth on Schedule 5.05(b) attached hereto, and are authorized
by the State of California to operate not-for-profit postsecondary educational
institutions. Sellers have not received any notice, not previously complied
with, in respect of any alleged violation of the rules or regulations of the
DOE, any state licensing body, or any applicable accrediting body in respect of
the Schools, including sales and marketing activities, or the terms of any
program participation agreement to which it is or was a party. If any such
notices have been received and complied with, Sellers have disclosed in writing
their receipt and disposition to Buyer prior to the execution of this Agreement.
Other than as set forth on Schedule 5.05(c) attached hereto, Sellers are not
aware of any investigation or review of the Schools' student financial aid
programs or any review of any School's state license or accreditation by any
Person.


                                      -13-
<PAGE>

SECTION 5.06 RECRUITMENT; ADMISSIONS PROCEDURES; ATTENDANCE; REPORTS. Schedule
5.06(a) attached hereto is a complete list of all policy manuals and other
statements of procedures or instruction relating to recruitment of students for
the Schools at any time during the three previous years, including (a)
procedures for assisting in the application by prospective students for direct
or indirect state financial assistance; (b) admissions procedures, including any
descriptions of procedures for insuring compliance with state or federal or
other appropriate standards or tests of eligibility; (c) procedures for
encouraging and verifying attendance, minimum required attendance policies, and
other relevant criteria relating to course completion and certification, and (d)
compensation of admissions representatives (collectively, the "POLICY
GUIDELINES"). Sellers have delivered to Buyer true, correct and complete copies
of all Policy Guidelines and all documents and other information disseminated to
students or prospective students. Sellers' operations with respect to the
Schools have been conducted in accordance with the Policy Guidelines and all
relevant standards imposed by applicable accrediting bodies, agencies
administering state or federal governmental programs in which Sellers
participate, and other applicable laws or regulations. Sellers have submitted
all reports, audits, and other information, whether periodic in nature or
pursuant to specific requests, including, without limitation, all annual
compliance audits and financial statements, for the Schools to all agencies or
other entities with which such filings are required relating to its compliance
with applicable accreditation standards governing its activities. Complete and
accurate records for all present and past students attending the Schools have
been maintained consistent with the operations of a school business. All forms
and records with respect to the Schools have been prepared, completed,
maintained and filed in accordance with all applicable federal and state laws
and regulations, and are true and correct. All financial aid grants and loans,
disbursements and record keeping relating thereto have been completed in
compliance with all federal and state requirements, and there are no
deficiencies in respect thereto. The Schools have complied with the legal
requirements that no student at the Schools be funded prior to the date for
which such student was eligible for funding. The records of each student at the
Schools conform in form and substance to all relevant regulatory requirements.

          SECTION 5.07 TITLE TO AND CONDITION OF THE PURCHASED ASSETS.

      (a)   LEASED FACILITIES. Except as identified on Schedule 5.07(b), the
            facilities described on Schedule 5.07(a) constitute the only real
            property used in connection with the operation of the Schools by
            Sellers (collectively, the "FACILITIES", and each individually a
            "FACILITY"). Attached separately to Schedule 5.07(a) are all the
            leases (together with all amendments thereto) for all Facilities
            leased from parties that are not Affiliates of the Sellers or Gould.

      (b)   LAWS AND REGULATIONS; RECORDS. Except as set forth on Schedule
            5.07(b), all of Sellers' operations with respect to the Schools are
            conducted at the Facilities, and all of the tangible Purchased
            Assets and records relating to intangible Purchased Assets of the
            Schools are located at the Facilities. Sellers are not under any
            contractual or other legal obligation, and have not entered into any
            commitment, to make capital improvements or alterations to the
            Facilities, except as set forth on Schedule 5.07(b). The Facilities
            are not subject to any zoning ordinance or other restrictions which
            would prohibit the use and enjoyment of the Facilities in the manner
            in which the Facilities are currently used and the Facilities are
            not subject to any condemnation proceedings. Each Facility and
            Sellers' use thereof is in compliance with all laws, including,
            without limitation, the Americans with Disabilities Act.

      (c)   TITLE. Sellers own outright, and have good and marketable title to,
            all of the Purchased Assets, free and clear of all liens, claims and
            encumbrances, options, rights, and restrictions, other than as set
            forth on Schedule 5.07(c) and Schedule 5.09. All liens, claims and
            encumbrances, options, rights, and restrictions identified on
            Section 5.07(c) shall be released on or prior to the Closing as


                                      -14-
<PAGE>

            required pursuant to Section 3.02(i), except for such liens and
            encumbrances as are specifically identified on Schedule 5.07 (c) as
            the "Permitted Exceptions", which may remain following the Closing.
            All leases for tangible personal property used by Sellers in
            connection with the operation of the Schools (i) are valid and in
            full force and effect, (ii) are enforceable in accordance with their
            terms, and (iii) are capable of being assigned, and will in fact be
            assigned to Buyer, upon the execution and delivery by Buyer and
            Sellers of the Assignment and Assumption Agreement, other than as
            set forth on Schedule 5.07(c) Neither Sellers nor any of the other
            parties thereto is in default under any such lease, and no event,
            act or omission has occurred which (with or without notice, the
            passage of time or the happening or occurrence of any other event)
            would result in a default thereunder, other than as set forth on
            Schedule 5.07(c).

      (d)   CONDITION OF PURCHASED ASSETS. The tangible Purchased Assets and
            properties of the Schools which are owned or leased by Sellers and
            used in connection with the operation of the Schools are in
            materially good operating condition, order and repair, useable in
            the ordinary course of business consistent with past practice and
            are sufficient and adequate for all current operations. Sellers have
            not received notice of any violation of or default under any law,
            ordinance, order, regulation or requirement relating to any of the
            Purchased Assets which remains uncured or has not been resolved.

      (e)   TITLE; CONDITION AND QUALITY OF THE CURRICULUM. Sellers own
            outright, and have good and marketable title to, the Curriculum used
            in the Schools, free and clear of all encumbrances, and the
            execution of this Agreement will vest good and marketable title to
            the Curriculum in Buyer, free and clear of all encumbrances. No
            employee or Affiliate of Sellers or Gould or any other Person owns
            or has any interest, directly or indirectly, in any part of the
            Curriculum. Except as provided on Schedule 5.07(e), Sellers do not
            use any part of the Curriculum by consent of any other Person and
            are not required to and do not make any payments to others with
            respect thereto. No component of the Curriculum infringes or
            violates any copyright, patent, trade secret, trademark, service
            mark, registration or other proprietary right of any other Person,
            and Sellers' and Gould's past and current use of any part of the
            Curriculum does not infringe upon or violate any such right. To the
            knowledge of Gould, neither Sellers nor Gould have taken any action,
            or failed to take any action, to cause any part of the Curriculum to
            enter the public domain. The term "CURRICULUM," as used in this
            Agreement, means the curriculum used in the educational programs of
            the Schools in the form of computer programs, slide shows, texts,
            films, videos or any other form or media, including, without
            limitation, the following items: (1) course objectives, (2) lesson
            plans, (3) exams, (4) class materials (including interactive or
            computer-aided materials), (5) faculty notes, (6) course handouts,
            (7) diagrams, (8) syllabi, (9) sample externship and placement
            materials, (10) clinical checklists, (11) course and faculty
            evaluation materials, (12) policy and procedure manuals, and (13)
            other related materials. The Curriculum shall also include, without
            limitation, (a) all copyrights, copyright applications, copyright
            registrations and trade secrets relating to the above-listed items
            and (b) Revisions. The term "REVISIONS," as used in this Agreement,
            means all periodic updates or revisions to the Curriculum as
            developed or used by Sellers during their respective periods of
            operation of the Schools from the beginning of time through the
            Closing Date.

SECTION 5.08 ASSUMED CONTRACTS. Schedule 5.08 attached hereto lists each Assumed
Contract of Sellers relating to the Sellers' operations of the Schools or to
which any of the Purchased Assets is subject or bound that individually, or
together as a series of related contracts involving the same party or parties,
or the successors to such party or parties which: (a) obligates Sellers or any
of their respective Affiliates to pay an amount of $10,000 or more, (b) has an
unexpired term as of the date of this Agreement in excess of six months, (c) was
not made in the ordinary course of business, or (d) is in any


                                      -15-
<PAGE>

way otherwise material to the operation of the Schools (the "MATERIAL ASSUMED
CONTRACTS"). Each Material Assumed Contract is valid and existing. The
applicable Seller has duly performed all of its obligations under the Material
Assumed Contracts to the extent that such obligations to perform have accrued,
other than as set forth on Schedule 5.08. Sellers have not received written
notice of any alleged breach or default, and no event which would (with the
passage of time, notice or both) constitute a material breach or default by
Sellers or any other party or obligor with respect thereto has occurred, other
than as set forth on Schedule 5.08. True and correct copies of the Material
Assumed Contracts, including all amendments and supplements thereto, are
attached to Schedule 5.08. Each of the Material Assumed Contracts is (i)
enforceable in accordance with its terms, and (ii) is capable of being assigned
to Buyer and will in fact be assigned to Buyer upon the execution and delivery
by Buyer and Sellers of the Assignment and Assumption Agreement, except as
identified on Schedule 5.08. For purposes of this Agreement, the term
"AFFILIATE" of any Person means any other Person who directly or indirectly
controls, is controlled by, or is under common control with such Person.

SECTION 5.09 TRADENAMES; CONFIDENTIAL INFORMATION. All tradenames, trademarks or
service marks and all forms, derivatives and graphic presentations thereof of
Sellers having any value to the operation of the Schools are set forth or
described on Schedule 5.09 attached hereto (collectively, the "TRADENAMES").
Sellers have the right to the use of each Tradename as an assumed business name
in the states in which such Tradename is used, and Schedule 5.09 lists all
registrations of each Tradename as a trademark, servicemark or assumed name.
Sellers have not licensed any other Person to use any Tradename. Except as set
forth on Schedule 5.09, Sellers have not been sued or threatened with suit for
infringement, violation or breach with respect to any Tradename, and no basis
exists for any such suit. Except as disclosed on Schedule 5.09, Sellers are not
on notice of any infringement, violation or breach of the Tradename by any other
Person. Except as set forth on Schedule 5.09, Sellers have the right to use and
license, free and clear of any claims or rights of any third party, all trade
secrets, customer lists, know-how, curricula and any other confidential
information required for or used in the operation of the Schools. Sellers are
not in any way making any unlawful or wrongful use of any trade secrets,
customer lists, know-how, curricula or any other confidential information of any
third party, including, without limitation, any former employer of any present
or past employee of Sellers.

SECTION 5.10 FINANCIAL STATEMENTS; INDEBTEDNESS. Attached hereto as Schedule
5.10(a) are the following financial statements of Sellers: (a) compiled Balance
Sheets for LTU at December 31, 2001, 2000 and 1999 and compiled Statements of
Revenue and Expenses and Statements of Cash Flows for LTU for the years ended
December 31, 2001, 2000 and 1999, together with the related notes thereto, (b)
internally prepared Balance Sheets for LTUX at March 31, 2002, 2001 and 2000 and
internally prepared Income Statements for LTUX for the years ended March 31,
2002, 2001 and 2000 (c) an internally prepared Balance Sheet for LTU at
September 30, 2002 and internally prepared Statement of Revenue and Expenses and
Statement of Cash Flows for LTU for the nine months ended September 30, 2002,
and (d) an internally-prepared Balance Sheet for LTUX at September 30, 2002 and
an internally prepared Income Statement for LTUX for the nine months ended
September 30, 2002 (collectively, the "FINANCIAL STATEMENTS"). The basis of
presentation of the Financial Statements is disclosed on Schedule 5.10(b)
attached hereto or in the notes thereto. Except as disclosed on Schedule
5.10(b), the balance sheets included in the Financial Statements present fairly
in accordance with GAAP the consolidated assets and liabilities of Sellers as of
the respective dates thereof, and the related statements of revenue and expenses
present fairly in accordance with GAAP the consolidated results of operations of
Sellers for the respective periods covered thereby. The Financial Statements (i)
have been prepared based upon the books and records of Sellers in a manner
consistent with Sellers' standard internal accounting practices, consistently
applied, and (ii) fairly present the consolidated financial position of Sellers
as of the dates of such Financial Statements and the consolidated results of
operations of Sellers for the periods covered by such Financial Statements.
Except as disclosed on Schedule 5.10(b), Sellers


                                      -16-
<PAGE>

have maintained the books and records of the Sellers in accordance with
applicable laws, rules and regulations and with GAAP and GAAS, and such books
and records are, and during the periods covered by the Financial Statements
were, materially correct and complete, fairly reflecting the consolidated
income, expenses, assets and liabilities of the Sellers. Except as set forth on
Schedule 5.10(b), on the date hereof, Sellers do not have any liabilities
required to be set forth in a balance sheet prepared in accordance with GAAP and
GAAS that were not included in the latest consolidated balance sheet included in
the Financial Statements. Except as provided in Schedule 5.10(c), Sellers are
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, Sellers
have no indebtedness, liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise, other than:

      1)    those set forth or reserved against in the consolidated balance
            sheet as of September 30, 2002, to the extent set forth, reserved
            against or disclosed;

      2)    those incurred since September 30, 2002 in the ordinary course of
            business of the Schools and consistent in nature with past practice,
            and in an aggregate amount of not more than $20,000 greater than the
            liabilities reflected on the consolidated balance sheet of the
            Sellers as of September 30, 2002; and

      3)    those described in the Schedules attached hereto;

provided, however, that the parties mutually acknowledge and agree that any
liability of the Sellers which is included in the liabilities reflected on the
Consolidated Closing Balance Sheet shall be deemed to have been included in the
Schedules to this Agreement.

Except as set forth on Schedule 5.10(b), there exists no condition relating to
the Schools, whether absolute, accrued, contingent or otherwise, which could
have an adverse effect on the properties, business, Purchased Assets, results of
operations or condition (financial or otherwise) of the Sellers or the Schools
or which would prevent the operations of the Schools from being carried on in
the future in substantially the same manner as they are presently being
conducted. Except as set forth on Schedule 5.10(d) attached hereto, there are no
long-term fixed or contractual liabilities relating to the operation of the
Schools which are required to be assumed by Buyer in order to continue to
operate the Schools as presently operated by Sellers, the annual expense of
which are not reflected in the Financial Statements.

SECTION 5.11 RECEIVABLES. The Accounts Receivable, except to the extent of the
allowance for doubtful accounts set forth in the Financial Statements, are bona
fide receivables, arose out of arms' length transactions in the normal and usual
practices of Sellers, are recorded correctly on the books and records of
Sellers, and Sellers have no reason to believe that such Accounts Receivables
will not be collected in full in the ordinary course of business within the
ordinary time frame for such receivables. Such receivables are not subject to
any defense, counterclaim or setoff or discounts or credits not reflected in the
Financial Statements (other than tuition refund policies administered in
accordance with all applicable legal requirements and the applicable Policy
Guidelines, and as reflected in reserves or allowance for doubtful accounts
shown on the Financial Statements), and (A) no facts or circumstances exist
which would cause any of such Accounts Receivable to have to be written down or
written off, and (B) since the date of most recent Balance Sheet included in the
Financial Statements, Sellers have not discounted or sold any accounts
receivable or any portion thereof (either to the debtor(s) or in connection with
the sale of such receivables to a third party).


                                      -17-
<PAGE>

SECTION 5.12 INVENTORIES. Except as set forth in Schedule 5.12 attached hereto,
the only inventories maintained by Sellers in connection with the operation of
the Schools consist of supplies, books and program materials used in the
ordinary course of business of the Schools and that (i) are reflected on the
Financial Statements as "inventories", (ii) are reflected at cost (subject to
the following sentence), (iii) are usable in the ordinary and regular course of
business, (iv) are fit and sufficient for the purpose for which they were
purchased, and, (v) are in customary amounts appropriate to Sellers' operations
of the Schools. Except as set forth in Schedule 5.12 attached hereto, all excess
or obsolete items have been written down to net realizable value or written off.

SECTION 5.13 LITIGATION. Except as set forth in Schedule 5.13 attached hereto,
(i) there are no actions, suits, proceedings, orders, investigations or claims
pending or, to the knowledge of Sellers, threatened against or affecting the
Schools or their respective operations at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality or
accrediting body pertaining to or affecting Sellers or the Schools, (ii) neither
Sellers, Gould nor the Schools is the subject of any governmental investigations
or inquiries (including inquiries as to the qualification to hold or receive any
of the Licenses and Permits with respect to the Schools) and (iii) to the
knowledge of Sellers, there is no basis for any of the foregoing.

SECTION 5.14 INSURANCE. Schedule 5.14 attached hereto sets forth the insurance
coverages maintained by Sellers on the Facilities, the Purchased Assets and the
operations of the Schools, including all policies or binders of fire, extended
coverage, general and vehicular, fidelity and fiduciary liability, workers'
compensation, key-man life, general commercial liability and other insurance
held by Sellers and all binders for insurance to be purchased on or before
Closing, in order to replace policies expiring prior to the Closing or
otherwise. Such policies and binders are in full force and effect, and there is
no breach or default with respect to any provision contained in any such policy
or binder, and all premiums, to the extent due and payable, have been paid or
the liability therefor properly accrued. Except as set forth in Schedule 5.14
attached hereto, there are no claims pending or threatened under any of said
policies pertaining to the Schools or disputes with underwriters regarding
coverage under such policies pertaining to the Schools. Except as set forth on
Schedule 5.14, neither the execution, delivery and performance of this
Agreement, nor the consummation of the transactions contemplated hereby, will
result in the loss to Sellers of any of the insurance policies listed or impair
the rights of Sellers with respect to liabilities arising in connection with the
operation of the Schools prior to the Closing.

SECTION 5.15 ENVIRONMENTAL MATTERS. Sellers have not generated, transported,
stored, treated or disposed, nor have Sellers allowed or arranged for any third
persons to transport, store, treat or dispose, any hazardous substance to or at:
(a) any location other than a site lawfully permitted to receive such hazardous
substance for such purposes; or (b) any location designated for remedial action
pursuant to federal, state or local statute and relating to the environment or
waste disposal; nor have Sellers performed or arranged for or allowed by any
method or procedure such transportation or disposal in contravention of any laws
or regulations or in any other manner which may result in liability for
contamination or threat of contamination of the environment. No generation, use,
handling, storage, treatment, release, threat of release, discharge, spillage or
disposal of any hazardous substance, has occurred or is occurring at the
Facilities or any other facilities or properties owned or operated by the
Sellers in connection with their operation of the Schools. Sellers have not
received notification, nor are they aware of, any past or present failure by
Sellers to comply with any environmental laws, regulations, permits, franchises,
licenses or orders applicable to the Schools or its operations. Sellers have not
received any notification, nor are they aware of, any past or present failure to
comply with any environmental laws, regulations, permits, franchises, licenses
or orders applicable to their respective operations of the Schools which may
result in judicial, regulatory or other legal proceedings having a material
adverse impact on the operations of the Schools or result in the imposition of
any lien, claim,


                                      -18-
<PAGE>

assessment or other encumbrance against the Sellers or the Purchased Assets. To
the knowledge of Sellers or Gould, the Facilities do not contain asbestos or
polychlorinated biphenyls or any underground storage tanks. Sellers acknowledge
that Buyer is not assuming any of Sellers' liabilities with respect to the
matters addressed in this Section 5.15 and that any liabilities of Sellers
related to the matters addressed herein are Excluded Liabilities.

SECTION 5.16 EMPLOYEE BENEFIT PLANS. Schedule 5.16 attached hereto sets forth a
complete accurate and detailed description of all of Sellers' employee welfare
and benefit plans ("PLANS"). Sellers acknowledge that Buyer is assuming none of
the Plans operated by Sellers. Sellers have never sponsored, administered or
contributed to any employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1976, as amended ("ERISA"), that
is subject to Title IV of ERISA. There are no accrued liabilities under any
Plans, programs or practices maintained on behalf of the employees of the
Schools which are not provided for on its books or in the Financial Statements
or which have not been fully provided for by contributions to such Plans,
programs or practices. As of the date hereof, Sellers do not maintain any
employee welfare benefit plans, as defined in Section 3(1) of ERISA, which
provide post-retirement benefits to former employees of the Schools and to
current employees of the Schools after their termination of employment
(including, without limitation, medical and life insurance benefits), other than
as may be required by the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended and interpreted by regulations thereunder ("COBRA"). Sellers
shall provide any notices required under COBRA for events occurring on or prior
to the Closing Date and shall provide all benefits required pursuant to COBRA in
connection therewith.

SECTION 5.17 EMPLOYMENT MATTERS. Sellers are in compliance with all federal,
state and local laws, rules and regulations affecting employment and employment
practices with respect to the Schools, including terms and conditions of
employment, employment discrimination and wages and hours, and Sellers are not
engaged in any unfair labor practices with respect to employees of the Schools.
Except as listed on Schedule 5.17, there are no complaints against Sellers with
respect to employees of the Schools pending before the National Labor Relations
Board or any similar state or local labor agency. There are no labor strikes,
slow-downs or stoppages or other labor troubles pending or threatened with
respect to any employees of the Schools. No labor organization activities have
occurred with respect to employees of the Schools during the past three years.
There are no collective bargaining agreements binding on Sellers relating to the
operation of the Schools. No grievances have been asserted against Sellers with
respect to employees of the Schools and Sellers have not experienced any work
stoppage by their respective employees at the Schools during the last three
years.

SECTION 5.18 TAX MATTERS. Except as disclosed on Schedule 5.18, Sellers and
Gould have completed and filed on or before the due dates thereof or within
applicable extension periods all returns for Taxes required to be filed with
respect to the operations of the Sellers and the Schools, and such returns are
true and correct. Sellers and/or Gould, as applicable, have paid all Taxes shown
to be due and payable on such returns to the extent that the same have become
due and payable on or before the Closing. Neither Sellers nor Gould is a party
to, nor expected to become a party to, any pending or threatened action or
proceeding, assessment or collection of Taxes by any governmental authority
relating to the operations of the Schools.

SECTION 5.19 BROKERS OR FINDERS. No agent, broker, investment banker or other
firm or person retained by Sellers or Gould is or will be entitled to any
broker's or finder's fee or any similar commission or fee in connection with any
of the transactions contemplated by this Agreement, except for Pacific Gemini
Partners ("BROKER"), the responsibility for the payment of whose fee shall be
solely and exclusively that of Sellers and Gould. Sellers and Gould, jointly and
severally, agree to defend, indemnify and hold harmless Buyer and its Affiliates
from and against any and all claims arising in


                                      -19-
<PAGE>

connection with its or their discussions and/or use of the services of Broker or
any other finder or broker.

SECTION 5.20 ABSENCE OF CERTAIN CHANGES. Except as contemplated by this
Agreement or as set forth on Schedule 5.20 attached hereto, since September 30,
2002, there has not been, occurred or arisen with respect to the Schools:

      (a)   any sale, lease, transfer, abandonment or other disposition of any
            right, title or interest in or to any of the properties or assets
            used in connection with the operations of the Schools (tangible or
            intangible), except for any single sale, lease, transfer or
            abandonment of any asset or property valued at less than $5,000
            which was conducted in the ordinary course of business;

      (b)   (i) any approval or action to put into effect any increase in any
            compensation or benefits payable to any employee, agent or officer
            of Sellers employed or providing services in connection with the
            operation of the Schools or any payment, grant or accrual to or for
            the benefit of any such employee, agent or officer of any bonus,
            service award, percentage compensation or other benefit, (ii) any
            adoption or amendment of any Plans, or any severance agreement or
            employment contract to which any such employee, agent or officer of
            Sellers is a party or (iii) any entering into of any employment,
            deferred compensation or other agreements with respect to bonuses,
            service awards, percentage compensation or other benefits with any
            such employee, agent or officer;

      (c)   any materially adverse change in the financial condition, assets,
            liabilities (absolute, accrued, contingent or otherwise), reserves
            or operations of the Schools;

      (d)   any damage, destruction or loss to the assets, business or
            operations of the Schools in excess of $10,000 in the aggregate ,
            whether or not covered by insurance;

      (e)   any change in the business policies or practices of the Schools or a
            failure to operate the business of the Schools in the ordinary
            course with a view to (i) preserving such business intact, (ii)
            retaining the services of the present officers, employees and agents
            of Sellers employed or providing services in connection with the
            operation of the Schools, and (iii) preserving the business
            relationships of the Schools with, and the goodwill of, students,
            sales representatives, suppliers, accrediting bodies, governmental
            authorities and others;

      (f)   any agreement, whether in writing or otherwise, to take any action
            described in this Section 5.20; or

      (g)   any withdrawal, revocation or denial of accreditation, or order to
            show cause why accreditation should not be revoked, or any
            revocation, termination or denial of license to operate, , for the
            Schools, or any program offered by the Schools.

SECTION 5.21 DELIVERY OF DOCUMENTS. True and complete copies of all documents,
instruments, agreements and records of Sellers relating to the Purchased Assets,
the Assumed Liabilities, the representations and warranties of Sellers and the
Gould contained in this Agreement and/or the operation of the Schools have been
delivered to Buyer or will be delivered to Buyer as of the Closing Date.

SECTION 5.22 ACCREDITING BODY AND GOVERNMENTAL APPROVALS. To the knowledge of
Sellers, there exist no facts or circumstances attributable to Sellers or the
Schools that would cause the DOE, or any other governmental authority or
accrediting body (including, without limitation, the Accrediting Counsel for
Continuing Education & Training (hereinafter, "ACCET")) whose authorization,
consent or similar


                                      -20-
<PAGE>

approval is required for the consummation of the transactions contemplated by
this Agreement or the operation of the Schools after the Closing Date, to refuse
to deliver such authorization, consent or similar approval.

SECTION 5.23 CAPITALIZATION AND VOTING RIGHTS. Gould is the owner of all of the
issued and outstanding capital stock of LTUX in the amounts set forth on
Schedule 5.23, free and clear of any liens or encumbrances or other rights in
favor of any third party. Neither Gould nor LTUX are a party or subject to any
agreement or understanding which affects or relates to the voting or giving of
written consents with respect to any security of LTUX. The membership of the
Board of Directors of LTU is set forth on the attached Schedule 5.23 and LTU has
no "members" as such term is defined in the California Corporations Code.

SECTION 5.24 CORPORATIONS CODE COMPLIANCE. Sellers have complied with, or
concurrently with the execution of this Agreement will comply with, all of the
requirements of the California Corporations Code, including, without limitation,
Sections 5910, 5911, 5912 and 5913 thereof, to the extent that such sections are
applicable to Sellers. Any and all filing made with the Attorney General of the
State of California have been and will be true and correct in all material
respects.

SECTION 5.25 DISCLOSURE. To the knowledge of Sellers, neither this Agreement nor
any of the schedules, exhibits, attachments, documents, certificates or other
items prepared or supplied to Buyer by or on behalf of Sellers and Gould with
respect to the transactions contemplated hereby contains any untrue statement of
a material fact or omits to state a material fact necessary to make any such
other statements not misleading in light of the circumstances in which such
statements were made. There is no currently existing fact or circumstance of
which Gould is aware which Gould has not disclosed to Buyer in writing which has
had or is reasonably likely to have a material adverse effect upon the existing
or expected financial condition, operating results, assets, employee relations,
accreditation, reputation or business of the Schools.

              ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER

            As a material inducement to Sellers and Gould to enter into this
Agreement and to sell the Purchased Assets, Buyer hereby represents and warrants
that:

SECTION 6.01 ORGANIZATION AND CORPORATE POWER. Buyer is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, the jurisdiction in which it is incorporated. Buyer has the corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereunder.

SECTION 6.02 CAPACITY; AUTHORIZATION; BINDING EFFECT. Buyer has the power, legal
capacity and authority to execute, deliver and perform this Agreement and each
other document being executed in connection herewith to which it is a party. All
corporate and other proceedings required to be taken by or on the part of Buyer
to authorize Buyer to enter into and carry out this Agreement and the related
documents contemplated herein, have been duly and properly taken. This Agreement
has been duly executed and delivered by Buyer and constitutes valid and binding
obligations of Buyer, enforceable against Buyer in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).

SECTION 6.03 NO CONFLICTS. The execution, delivery and performance of this
Agreement and each other document being executed by Buyer in connection
herewith, and the consummation by Buyer of the


                                      -21-
<PAGE>

transactions contemplated hereby and thereby will not: (a) violate any
provisions of law applicable to Buyer; (b) with or without the giving of notice
or the passage of time, or both, conflict with or result in the breach of any
provision of the articles of incorporation or bylaws of Buyer (as heretofore
amended), any instrument, license, agreement or commitment to which Buyer is a
party or by which any of its assets or properties is bound; (c) constitute a
violation of any order, judgment or decree to which Buyer is a party or by which
any of its assets or properties is bound; or (d) require any approval of, or
filing or registration with, any governmental entity or regulatory authority
other than those set forth or described on Schedule 5.04 attached hereto or
Schedule 6.03 attached hereto.

SECTION 6.04 BROKERS OR FINDERS. Buyer represents that no agent, broker,
investment banker or other firm or person retained by Buyer is entitled to any
broker's or finder's fee or any similar commission or fee in connection with any
of the transactions contemplated by this Agreement.

                             ARTICLE VII. COVENANTS

SECTION 7.01 COVENANTS OF SELLERS AND GOULD PRIOR TO THE CLOSING. Sellers and
Gould covenant and agree with Buyer that, from and after the date hereof and
until the earlier of the Closing Date or the termination of this Agreement
pursuant to Article IV hereof, Sellers and Gould (i) shall use their best
efforts to attempt to fulfill or satisfy, or cause to be fulfilled or satisfied,
all of the conditions precedent to Sellers' and Buyer's obligations to
consummate and complete the sale provided herein and to take all other steps and
do all other things required to consummate this Agreement in accordance with its
terms (including, without limitation, making all appropriate regulatory filings
and taking all reasonable actions requested or required by the Attorney General
of the State of California and/or other applicable regulatory authorities), (ii)
shall not interfere with the performance by Buyer of its obligations under this
Agreement, (iii) shall not fail to pay any Taxes, assessments, governmental
charges or levies imposed upon it or its income, profits or assets or otherwise
required to be paid by it, (iv) shall not make any capital expenditure in excess
of $15,000 without Buyer's prior written consent, (v) shall not engage in any
sale or discount of Sellers' Accounts Receivable (whether by discount to the
debtors or by sale to any third party), (vi) shall promptly notify Buyer (A) of
any notice from any governmental or regulatory agency or authority, (B) of any
fact or circumstance which would make any representation or warranty set forth
herein untrue or inaccurate as of the Closing Date, or (C) any planned or
threatened labor dispute, organization efforts, strike or collective work
stoppage affecting the employees of Sellers and (vii) shall not take any action
that would cause Buyer to be unable to obtain good and marketable title to the
Purchased Assets to be transferred to Buyer at the Closing (including pledging
any of such assets as security for obligations of Gould or Sellers). Until the
termination of this Agreement, Sellers and Gould will not directly or indirectly
solicit, respond to or negotiate with or release any information relative to the
Sellers or the Schools to any potential buyer other than Buyer.

SECTION 7.02 COVENANTS OF BUYER PRIOR TO THE CLOSING. Buyer covenants and agrees
with Sellers that from and after the date hereof and until the earlier of the
Closing Date or the termination of this Agreement pursuant to Article IV hereof,
Buyer (i) shall use its best efforts to fulfill or satisfy, or to cause to be
fulfilled or satisfied, all of the conditions precedent to Sellers' and Buyer's
obligations to consummate and complete the sale provided herein and to take all
other steps and do all other things reasonably required to consummate this
Agreement in accordance with its terms (including, without limitation, providing
to Sellers' landlords all financial and other information reasonably requested
by such landlords to effectuate the assignment of Sellers' facility leases), and
(ii) shall not interfere with the performance by Sellers of its obligations
under this Agreement.


                                      -22-
<PAGE>

SECTION 7.03 CLOSING AND POST-CLOSING COVENANTS.

      (a)   FURTHER ASSURANCES. From time to time after the Closing, (i) Sellers
            and Gould will execute and deliver such instruments of conveyance,
            sale or assignment as Buyer may reasonably request, to more
            effectively vest, confirm or evidence Buyer's title to or rights in
            any of the Purchased Assets and to otherwise carry out the purpose
            and intent of this Agreement, and (ii) Buyer will execute and
            deliver such instruments as Sellers may reasonably request to more
            effectively assure the assignment to and assumption by Buyer of the
            obligations and liabilities of Sellers to be assumed by Buyer
            pursuant to this Agreement and to otherwise carry out the purpose
            and intent of this Agreement.

      (b)   MUTUAL COOPERATION. The parties shall use reasonable efforts to
            cooperate fully with each other and with their respective counsel
            and accountants in connection with any steps required to be taken to
            consummate the transactions contemplated hereby and transition
            management and ownership of the Schools from Sellers to Buyer.
            Before and after the Closing, Sellers and Gould shall use their best
            efforts to assist Buyer in obtaining any required accreditation
            reasonably necessary for Buyer's operation of the Schools, including
            furnishing Buyer such information and assistance as Buyer may
            request in connection with its preparation of filings, submissions
            or accreditation applications to any governmental agency in
            connection with the transactions contemplated hereby.

      (c)   ACCESS TO EMPLOYEES. From and after the Closing, each of Buyer and
            Sellers (the "REQUESTED PARTY") shall afford to the other party (the
            "REQUESTING PARTY"), its officers, counsel, accountants and other
            authorized representatives reasonable access to the Requested
            Party's employees who formerly were or currently are employed by the
            Requested Party, without cost to the Requesting Party (other than
            payment of out-of-pocket costs not including personnel costs) and as
            reasonably required by the Requesting Party in connection with (i)
            any claim, action, litigation or other proceeding involving Sellers,
            Buyer or the Schools, and (ii) the preparation of the Post-Closing
            Audit. Each party shall use its best efforts to cause such employees
            to cooperate with and assist the Requesting Party in its prosecution
            or defense of such claims, actions, litigation and other
            proceedings, which cooperation shall include, without limitation,
            preparing and providing written and oral discovery and attending and
            testifying at depositions, hearings, motions and trials, all as
            necessary in the reasonable opinion of the Requesting Party or its
            counsel. Any such access shall take place only during normal
            business hours in such a manner as not to interfere unreasonably
            with the operation of the business of the other party.

      (d)   SATISFACTION AND PAYMENT OF THE EXCLUDED LIABILITIES. Sellers and
            Gould shall pay and satisfy, or cause to be paid and satisfied, all
            debts of Sellers incurred prior to the Closing Date relating to the
            Schools that constitute the Excluded Liabilities, except for (i) any
            debts listed on Schedule 2.04, (ii) any amounts payable to Gould,
            and (iii) any amounts payable by LTU or LTUX to the other.

      (e)   Attached hereto as Schedule 7.03(e) is a capital expenditures budget
            for the existing Schools of the New Division for the calendar years
            2003 and 2004 (the "Capital Expenditures Budget"). The Capital
            Expenditures Budget has been prepared by Gould and reflects Gould's
            best estimate of all capital expenditures that will be reasonably
            required by the New Division to meet the 2003 EBITDA Target and the
            2004 EBITDA Target set forth above. Buyer has reviewed and approved
            the Capital Expenditures Budget as of the date of this Agreement
            based on the information in Buyer's possession at such time. The
            parties mutually acknowledge and agree that Buyer has the right to
            make any and all capital expenditure decisions for the New Division


                                      -23-
<PAGE>

            as it deems reasonable and prudent, in its sole discretion, as of
            the time such capital expenditures are made during calendar years
            2003 and 2004.

SECTION 7.04 EXCISE AND PROPERTY TAXES. Sellers and Gould shall pay all Taxes
arising out of the transfer of the Purchased Assets. Each of Buyer and Sellers
shall pay its respective portion, prorated as of the Closing, of state and local
real and personal property taxes of the business of the Schools.

SECTION 7.05 ADMINISTRATION IN ACCORDANCE WITH ACCREDITATIONS. From and after
the date of this Agreement through the Closing Date, Sellers, at Sellers' sole
cost and expense, shall administer and operate the Schools in accordance with
all federal and state laws, statutes, rules and regulations and in accordance
with all permits, accreditations, authorizations and agreements issued by or
entered into with any federal, state or local governmental or quasi-governmental
entity in any way regulating or otherwise relating to the administration and
operation of the Schools. Subject to the terms and provisions of this Agreement,
Buyer and Sellers shall work together cooperatively and in good faith to obtain
any and all approvals from the DOE, any state education regulatory authority and
any other governmental or quasi-governmental entity that may be necessary or
appropriate to vest in Buyer at the Closing the right and authority in all
material respects to administer and operate the Schools and to release Sellers
from further liability or obligations in connection with the administration or
operation of the Schools.

SECTION 7.06 ACCESS AND MAINTENANCE OF RECORDS. From and after the Closing, each
of Buyer and Sellers (the "REQUESTED PARTY") shall afford to the other party
(the "REQUESTING PARTY"), its officers, counsel, accountants and other
authorized representatives and regulatory authorities access to its properties,
books and records, including those maintained by its accountants, at any time
and from time to time upon reasonable notice from the Requesting Party, as
reasonably required by the Requesting Party in connection with (i) performance
by the Requesting Party of any of its obligations under the terms and conditions
of this Agreement, including, without limitation, any liability or obligation of
Sellers not assumed by Buyer pursuant to this Agreement, (ii) any claim, action,
litigation or other proceeding involving the Requesting Party or the Schools,
(iii) the Requesting Party's preparation of its financial statements and Tax
returns, (iv) any other essential business purpose of the Requesting Party. In
addition, the Requesting Party, at its expense, may make copies of any such
records as may be necessary or appropriate for the Requesting Party's use. Each
party shall maintain all such records in accordance with, and subject to all
restrictions imposed by, all laws, rules and regulations. Any such access shall
take place only during normal business hours in such a manner as not to
interfere unreasonably with the operation of the business of the other party.

SECTION 7.07 EMPLOYMENT MATTERS.

      (a)   Buyer and Sellers agree that Buyer has not assumed and shall not
            assume any obligations to (or regarding the employment of) any
            Persons previously or currently employed by Sellers. As of the close
            of business on the day prior to the Closing Date, Sellers shall
            terminate all of their respective employees employed at the Schools
            in accordance with all applicable laws and, prior to the Closing,
            shall provide any required notices in a timely manner in connection
            therewith. All of Sellers' obligations for compensation, wages,
            bonuses, severance pay, vacation time, pay in lieu of vacation,
            sickness and accident benefits, leaves of absence, and similar
            employee benefits accrued as of the Closing shall be paid by Sellers
            as of the day prior to the Closing Date.

      (b)   Buyer may, at its option and in its sole and absolute discretion
            (and consistent with its standard hiring and employment practices),
            offer employment to any current or former employee of Sellers on
            such terms and conditions as may be mutually agreed upon by Buyer
            and such employees. Sellers shall use its best efforts to assist
            Buyer in hiring any such employees with


                                      -24-
<PAGE>

            respect to whom Buyer elects to offer employment. Sellers shall not
            take any action, directly or indirectly, to prevent or discourage
            any such employee from being employed by Buyer after the Closing
            Date and shall not solicit, invite, induce or entice any such
            employee to remain in the employ of Sellers or otherwise attempt to
            retain the services of any such employee, except with the prior
            written consent of Buyer.

      (c)   Notwithstanding any possible inferences to the contrary, neither
            Sellers nor Buyer intends for this Section 7.07 to create any rights
            or obligations except as between Sellers and Buyer, and no past,
            present or future employees of Sellers or Buyer shall be treated as
            third-party beneficiaries of this Section 7.07.

                      ARTICLE VIII. CONDITIONS TO CLOSING

SECTION 8.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligation of
Buyer to complete the purchase of Purchased Assets as provided for herein is
subject to the fulfillment or satisfaction on or before the Closing Date of each
of the conditions set forth below, any of which may be waived by Buyer in
writing.

      (a)   All representations and warranties of Sellers contained in this
            Agreement or in any certificate or other document delivered to Buyer
            pursuant hereto shall be accurate, complete, true and correct as of
            the Closing Date with the same effect as though made at and as of
            the Closing Date (except to the extent such representations and
            warranties speak as of a particular date), and Buyer shall have
            received a certificate signed by a duly authorized officer of
            Sellers to such effect;

      (b)   There shall have been no material adverse change in the condition
            (financial or otherwise), assets, liabilities (absolute, accrued,
            contingent or otherwise), prospects, earning power, commercial
            relationships, reserves, business or operations of the Sellers or
            any of the Schools from and after the date of this Agreement;

      (c)   Sellers shall have performed all of the obligations, covenants and
            agreements contained in this Agreement to be performed by Sellers on
            or before the Closing Date, and Buyer shall have received a
            certificate signed by a duly authorized officer of Sellers to such
            effect;

      (d)   All instruments and documents required on Sellers' part to
            effectuate and consummate the transactions contemplated hereby as of
            the Closing, including all those deliveries described in Section
            3.02, shall be delivered by Sellers and Gould and shall be in form
            and substance reasonably satisfactory to Buyer and its counsel;

      (e)   No law or order shall have been enacted, entered, issued,
            promulgated or entered by any governmental entity which prohibits or
            restricts the transactions contemplated hereby, and there shall not
            have been threatened, nor shall there be pending, any action or
            proceeding by or before any court or governmental agency or other
            regulatory or administrative agency or commission, challenging any
            of the transactions contemplated by this Agreement or seeking
            monetary relief by reason of the consummation of such transactions;

      (f)   Sellers and Buyer shall have obtained all required regulatory
            approvals that are capable of being obtained prior to Closing,
            including, but not limited to, all registrations, licenses, permits
            and approvals required by any governmental entity or agency or other
            regulatory body to operate the Schools in the State of California;


                                      -25-
<PAGE>

      (g)   Buyer shall be reasonably satisfied that, with respect to all
            required regulatory approvals that are not capable of being obtained
            prior to Closing, Buyer will be able to obtain all such other
            required regulatory approvals within a reasonable time period after
            the Closing Date without material expense or undue burden;

      (h)   The Schools shall have received all required accreditation approvals
            and shall have received from all current accrediting agencies or
            bodies which accredit the Schools (with the exception of ACCET, the
            approval for which shall be obtained after the Closing) approval of
            the change of ownership of the Schools, and shall not have received
            from and after the date of this Agreement any "show cause" letter or
            other notice which would tend to call into question the validity of
            such accreditation or the ability of the Schools to maintain such
            accreditation in good standing at any time after the Closing Date;

      (i)   All third party consents required by the transactions contemplated
            hereby shall have been obtained (including, without limitation, all
            necessary consents of other parties to the Material Assumed
            Contracts);

      (j)   Buyer shall have received satisfactory evidence that all liens
            (other than the Permitted Exceptions) on the Purchased Assets have
            been terminated and completely released of record;

      (k)   Buyer shall have received from the landlords of the Facilities
            executed estoppel certificates and consents to the Lease
            Assignments;

      (l)   Buyer shall have received a certificate of the Secretary of LTU
            setting forth (A) that the transactions contemplated by this
            Agreement have been approved by the Board of LTU, that the notice
            required by Section 5913 of the California Corporations Code has
            been given, and (B) that the Attorney General for the State of
            California has declined to object to such transactions during the
            statutory review period therefor; and

      (m)   Seller shall have provided evidence satisfactory to Buyer that all
            debts incurred through the Closing Date relating to the School,
            including lender and other payables, regulatory fines, repayment,
            refunds, and all known obligations or liens (other than Assumed
            Liabilities) have been satisfied and paid in full or will be
            satisfied and paid in full from the Cash Consideration immediately
            after the Closing, except for (i) any debts listed on Schedule 2.04,
            (ii) any amounts payable to Gould, and (iii) any amounts payable by
            LTU or LTUX to the other.

SECTION 8.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS. The obligation of
Sellers and Gould to complete the sale of the Purchased Assets as provided for
herein is subject to the fulfillment or satisfaction on or before the Closing
Date of each of the conditions set forth below, any of which may be waived by
Sellers or Gould in writing.

      (a)   All representations and warranties of Buyer contained in this
            Agreement or in any certificate or other document delivered to
            Sellers pursuant hereto shall be complete, true and correct in all
            material respects as of the Closing Date, and Sellers shall have
            received a certificate signed by a duly authorized officer of Buyer
            to such effect;

      (b)   Buyer shall have performed all of the obligations, covenants and
            agreements contained in this Agreement to be performed by Buyer on
            or before the Closing Date, and Sellers shall have received a
            certificate signed by a duly authorized officer of Buyer to such
            effect;


                                      -26-
<PAGE>

      (c)   All instruments and documents reasonably required on Buyer's part to
            effectuate and consummate the transactions contemplated hereby,
            including those described in Section 3.03, shall be delivered by
            Buyer and shall be in form and substance reasonably satisfactory to
            Sellers and Gould and their respective counsels;

      (d)   No law or order shall have been enacted, entered, issued,
            promulgated or entered by any governmental entity which prohibits or
            restricts the transactions contemplated hereby, and there shall not
            have been threatened, nor shall there be pending, any action or
            proceeding by or before any court or governmental agency or other
            regulatory or administrative agency or commission, challenging any
            of the transactions contemplated by this Agreement or seeking
            monetary relief by reason of the consummation of such transactions;
            and

      (e)   The Sellers shall have complied with their obligation to give
            appropriate notice under the California Corporations Code and the
            Attorney General for the State of California shall have approved
            such transaction or shall have declined to object to such
            transactions during the statutory review period therefor.

                           ARTICLE IX. MISCELLANEOUS

SECTION 9.01 BINDING EFFECT. All terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement, nor the obligations of any party hereunder, shall be assignable or
transferable by any such party without the prior written consent of all parties
hereto, except that Buyer may assign its rights and obligations hereunder to an
Affiliate. No assignment of any right or delegation of any duty shall relieve
the assignor or delegator of any liabilities hereunder, except to the extent, if
any, so provided in a writing signed by the obligee(s).

SECTION 9.02 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be given or made (a) by personal
delivery, (b) by a nationally recognized courier service for overnight delivery,
charges prepaid, or (c) by registered or certified mail, postage prepaid, return
receipt requested, in each case addressed

                  if to Buyer, at:

                       Corinthian Colleges, Inc.
                       6 Hutton Centre Drive, Suite 400
                       Santa Ana, California 92707
                       Attention: David Moore and Stan A. Mortensen, Esq.
                       Facsimile: (714) 427-3013

                  with each such notice to Buyer, a copy to:

                       O'Melveny & Myers LLP
                       610 Newport Center Drive, Suite 1700
                       Newport Beach, California 92660
                       Attention: David A. Krinsky, Esq.
                       Facsimile: (949) 823-6994


                                      -27-
<PAGE>

                  if to Sellers or the Gould, at:

                       Learning Tree University, Inc.
                       LTU Extension, Inc.
                       Michael Gould
                       c/o Dan Bergman
                       Warner Center Plaza V
                       21800 Oxnard St.
                       Suite 790
                       Woodland Hills, CA 91367-3678
                       Facsimile: (818) 999-9184

                  with each such notice to Sellers and/or Gould, a copy to:

                       David C. Ruth
                       Stowell, Zeilenga & Ruth LLP
                       2815 Townsgate Road
                       Suite 330
                       Westlake Village, CA 91361
                       Facsimile: 805-446-1490

or at such other place as the party to whom such notice of communication is to
be addressed may have designated to the other parties by notice conforming to
this Section 9.02. Notices shall be deemed effective and received (i) on the
actual receipt in the case of hand delivery, (ii) on the next business day after
deposit in the case of notices by nationally recognized overnight courier
services, or (iii) on the third business day after the date of mailing in the
manner set forth herein. As used herein, notice to a party shall include
concurrent notice to that party's counsel as set forth herein.

SECTION 9.03 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein and to be delivered pursuant hereto constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior and contemporaneous agreements, understandings, negotiations,
representations, warranties and discussions of the parties, whether oral or
written; and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein or therein. No amendment, supplement,
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision of this Agreement, whether or not similar, nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

SECTION 9.04 NATURE AND SURVIVAL OF REPRESENTATIONS. The representations,
warranties, covenants and agreements of Buyer, Sellers and Gould contained in
this Agreement, and all statements contained in this Agreement or any Exhibit or
Schedule hereto or any certificate or financial statement delivered pursuant to
this Agreement, shall be deemed to constitute representations, warranties,
covenants and agreements of the respective party delivering the same. All such
representations, warranties, covenants and agreements shall survive the Closing
for a period of three (3) years.

SECTION 9.05 RISK OF LOSS OR DAMAGE; INSURANCE. It is understood and agreed that
all right, title and interest in and to the Purchased Assets and all risk of
loss or damage thereto shall not pass from Sellers to Buyer unless and until the
Closing occurs whereupon all risk of loss or damage shall pass to Buyer. In the
event of a casualty or condemnation in respect of any of the Purchased Assets
prior to the Closing,


                                      -28-
<PAGE>

Buyer shall have the right, at its sole option, to elect either (a) to terminate
this Agreement or (b) to accept the insurance proceeds in respect of such
casualty or condemnation and proceed to close otherwise in accordance with the
terms and conditions of this Agreement. Sellers agree to maintain the insurance
currently carried with respect to the Purchased Assets until the Closing Date.

SECTION 9.06 WAIVER. No waiver shall be deemed to have been made by any party of
any of its rights hereunder unless the same shall be in writing and shall be
signed by the waiving party. Such a waiver, if any, shall be a waiver only in
respect to the specific instance involved and shall in no way impair the rights
of the waiving party or the obligations of any other party in any other respect
at any other time.

SECTION 9.07 GOVERNING LAW. This Agreement shall be construed and interpreted
according to the substantive laws of the State of California without giving
effect to the principles of conflicts of law thereof.

SECTION 9.08 HEADINGS. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.

SECTION 9.09 COUNTERPARTS. This Agreement may be executed by the parties in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

SECTION 9.10 SEVERABILITY. In the event that any one or more terms or provisions
hereof shall be held void or unenforceable by any court or arbitrator, all
remaining terms and provisions hereof shall remain in full force and effect.

SECTION 9.11 TIME IS OF THE ESSENCE. Sellers, Gould and Buyer agree that time is
of the essence in connection with the implementation and performance by the
parties of all terms, conditions and obligations of this Agreement.

SECTION 9.12 INDEMNIFICATION BY SELLERS AND GOULD. Sellers and Gould, jointly
and severally, hereby agree to indemnify, defend and hold harmless Buyer and its
Affiliates and their respective officers, directors, stockholders, employees,
agents, successors and assigns (the "BUYER INDEMNITEES") from and against any
and all claims, liabilities, obligations, losses, costs, expenses (including,
without limitation, interest, penalties and attorneys' fees), fines, or damages
of any kind or nature (collectively "LOSSES"), as a result of, or based upon or
arising out of:

      (a)   any breach of, or any inaccuracy or misrepresentation in, any of the
            representations or warranties made by Sellers or Gould in this
            Agreement or any other agreement, statement or certificate delivered
            pursuant hereto;

      (b)   any breach of or violation by Sellers or Gould of any of the
            covenants made by Sellers and/or Gould in this Agreement or any
            other agreement, statement or certificate delivered pursuant hereto;

      (c)   any claim related to or arising out of Sellers' operation of the
            Schools prior to the Closing Date that are asserted with respect to
            any liabilities that are not Assumed Liabilities;

      (d)   any of the Excluded Liabilities (and/or Sellers' or Gould's failure
            or refusal to discharge any obligation related to the Excluded
            Liabilities);

      (e)   any of the matters disclosed on Schedule 5.13;


                                      -29-
<PAGE>

      (f)   any Tax payable by or on behalf of Sellers, Gould, or any of their
            respective Affiliates, for any taxable period ending on or prior to
            the Closing Date; and

      (g)   any actions, judgments, costs and expenses (including reasonable
            attorneys' fees, expert witness fees and all other out-of-pocket
            expenses incurred in investigating, preparing or defending any
            litigation or proceeding, commenced or threatened) incident to any
            of the foregoing or the enforcement of this Section 9.12.

Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, the Sellers' and Gould's obligation to indemnify the Buyer Indemnitees
pursuant to Section this 9.12 is expressly subject to the following limitations:

      (i)   written notice containing a description of the specific nature of
            such claimed Losses under this Section 9.12 shall have been given by
            Buyer to Gould and/or Sellers within three (3) years after the
            Closing;

      (ii)  neither Sellers nor Gould shall have any liability to Buyer under
            Section 9.12(a) unless the Buyer Indemnitees' Losses collectively
            aggregate to at least Fifty Thousand Dollars ($50,000) (the
            "Threshold Amount") (in which case Gould and Sellers shall be
            jointly and severally liable for all such Losses without regard to
            the Threshold Amount;

      (iii) the aggregate liability of Gould with respect to Losses incurred
            pursuant to Section 9.12(a) shall in no event exceed (A) the
            aggregate amount of all cash consideration actually received or
            receivable by Sellers hereunder as the Purchase Price (including (i)
            the Cash Portion (net of any Post-Closing Purchase Price
            Adjustment), and (ii) the Earn-Out Consideration), minus (B) the
            amount of cash actually paid by Sellers or Gould to unaffiliated
            third parties in connection with satisfying any Excluded Liabilities
            (including all costs and expenses incurred by Sellers in the
            negotiation and execution of this Agreement); and

      (iv)  the indemnification provided in this Section 9.12 shall be the sole
            and exclusive remedy available to the Buyer Indemnitees for any
            breach or inaccuracy of any representation or warranty set forth in
            this Agreement or any certificate delivered pursuant to Article III
            hereof or with respect to the transactions contemplated by this
            Agreement; provided, however, that the limitations set forth in
            items (i), (ii), (iii) and (iv) above shall not apply to Losses of
            Buyer Indemnitees arising out of (A) fraud, or (B) the breach of any
            representation or warranty contained herein if such representation
            or warranty was made with actual knowledge that it contained an
            untrue statement of material fact.

SECTION 9.13 INDEMNIFICATION BY BUYER. Buyer hereby agrees to indemnify and hold
harmless Sellers, Gould and their respective Affiliates from and against any and
all Losses arising out of or resulting from:

      (a)   any breach of, or any inaccuracy or misrepresentation in, any of the
            representations or warranties made by Buyer in this Agreement or any
            other agreement, statement or certificate delivered pursuant hereto;

      (b)   any breach of or violation by Buyer of any of the covenants made by
            Buyer in this Agreement or any other agreement, statement or
            certificate delivered pursuant hereto;

      (c)   all Losses arising out of or resulting from any claim or arising out
            of operation of the Schools on or after the Closing Date;


                                      -30-
<PAGE>

      (d)   all Losses arising out of or resulting from the Assumed Liabilities
            from the Sellers; and

      (e)   any actions, judgments, costs and expenses (including reasonable
            attorneys' fees, expert witness fees and all other out-of-pocket
            expenses incurred in investigating, preparing or defending any
            litigation or proceeding, commenced or threatened) incident to any
            of the foregoing or the enforcement of this Section 9.13.

SECTION 9.14 INDEMNIFICATION OF THIRD PARTY CLAIMS; RIGHT TO SET-OFF. (a) The
provisions of this Section 9.14 shall govern any claim for indemnification of
Buyer pursuant to Section 9.12, or Sellers or Gould pursuant to Section 9.13
(each such party an "INDEMNITEE"), against the party agreeing to provide
indemnification hereunder (the "INDEMNITOR"). The Indemnitee shall give notice
hereunder to the Indemnitor of claims as to which recovery may be sought against
the Indemnitor because of the indemnity in Section 9.12 or 9.13, and, if such
indemnity shall arise from the claim of a third party, the Indemnitee shall, if
requested, consent to the Indemnitor assuming the defense of any such claim;
provided that the Indemnitee shall not be required to permit the Indemnitor to
assume the defense of any third party claim (x) which, if not first paid,
discharged or otherwise complied with, would result in a material interruption
or cessation of the conduct of the business of the Indemnitee, or (y) if the
Indemnitee reasonably concludes that there may be a conflict of interest between
the Indemnitor, on the one hand, and the Indemnitee, on the other hand, in the
conduct of the defense of such action, or (z) which the Indemnitor makes any
claims or statements that the Indemnitee is entitled to anything less than
complete indemnification of all claims thereunder or for which the Indemnitor
fails or refuses to confirm its absolute and complete indemnification obligation
for Indemnitee. Failure by the Indemnitor to notify the Indemnitee of its
election to defend any such claim or action within 14 days of the date of notice
from the Indemnitee shall be deemed to constitute its consent to the
Indemnitee's assumption of such defense. If the Indemnitor assumes the defense
of such claim or litigation resulting therefrom, the obligations of the
Indemnitor hereunder as to such claim shall include taking all steps necessary
in the defense or settlement of such claim or litigation resulting therefrom
including the retention of counsel, which counsel must be to the Indemnitee's
reasonable satisfaction, and holding the Indemnitee harmless from and against
any and all Losses resulting from, arising out of, or incurred with respect to
any settlement approved by the Indemnitor or any judgment in connection with
such claim or litigation resulting therefrom. The Indemnitor shall not, in the
defense of such claim or litigation, (i) consent to the entry of any judgment
(other than a judgment of dismissal on the merits without costs) except with the
written consent of the Indemnitee, which consent shall not be unreasonably
withheld, or (ii) enter into any settlement (except with the written consent of
the Indemnitee, which consent shall not be unreasonably withheld), unless the
Indemnitee is released and held harmless from and against any and all Losses
resulting from, arising out of or incurred with respect to such judgment or
settlement. If the Indemnitor does not assume the defense of any such claim by a
third party or litigation resulting therefrom, the Indemnitee may defend against
such claim or litigation in such manner as it deems appropriate, and the
Indemnitee may settle such claim or litigation on such terms as it may deem
appropriate and the Indemnitor shall promptly reimburse the Indemnitee for the
amount of such settlement and for all Losses incurred by the Indemnitee in
connection with the defense against or settlement of such claim or litigation.

            (b) Upon notice to Sellers, Buyer is hereby authorized at any time,
and from time to time, to set-off and apply any and all amounts owing by Buyer
to Sellers, whether under this Agreement or otherwise, against any and all of
the obligations of Sellers and/or Gould to Buyer hereunder, including without
limitation Sellers' and Gould's obligations pursuant to Section 9.12 hereunder.


                                      -31-
<PAGE>

SECTION 9.15 DISPUTE RESOLUTION AND ARBITRATION.

      (a)   NEGOTIATION BETWEEN PARTIES. The parties shall attempt in good faith
            to resolve any dispute arising out of or relating to this Agreement
            promptly by negotiation between executives who have authority to
            settle the controversy. Any party may give the other party written
            notice of any dispute not resolved in the normal course of business.
            Within 15 days after delivery of the notice the receiving party
            shall submit to the other a written response. The notice and the
            response shall include (i) a statement of each party's position and
            a summary of arguments supporting that position, and (ii) the name
            and title of the executive who represents that party and of any
            other person who will accompany the executive. Within 10 days after
            delivery of the disputing party's notice, the executives of both
            parties shall meet at a mutually acceptable time and place, and
            thereafter as often as they reasonably deem necessary, to attempt to
            resolve the dispute. All reasonable requests for information made by
            one party to the other shall be honored. If the matter has not been
            resolved within 45 days of the disputing party's notice, or if the
            parties fail to meet within 10 days, either party may initiate
            arbitration of the controversy or claim as provided hereinafter. All
            negotiations pursuant to this clause are confidential and shall be
            treated as compromise and settlement negotiations for purposes of
            all applicable rules of evidence.

      (b)   ARBITRATION. Any dispute arising out of or relating to this
            Agreement or the breach, termination or the validity hereof, which
            has not been resolved by the nonbinding meet and confer provisions
            provided in Section 9.15(a) within 90 days of the initiation of such
            procedure, shall be settled by arbitration in accordance with the
            then-current Judicial Arbitration and Mediation Services (JAMS)
            rules for arbitration of business disputes by a sole arbitrator who
            shall be a former superior court or appellate court judge or justice
            with significant experience in resolving business disputes. The
            arbitration shall be governed by the rules of civil procedure in the
            jurisdiction in which such arbitration proceeding is initiated, and
            the parties intend this procedure to be specifically enforceable in
            accordance with such provisions. Judgment upon the award rendered by
            the arbitrator may be entered by any court having jurisdiction
            thereof. The place of arbitration shall be Orange County,
            California. The arbitrator may award equitable relief in those
            circumstances where monetary damages would be inadequate. The
            arbitrator shall be required to follow the applicable law as set
            forth in the governing law section of this Agreement.

SECTION 9.16 THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon, be
enforceable against, and inure to the benefit of the parties and their
respective successors and permitted assigns; otherwise, this Agreement shall
not, and shall not be deemed to, inure to the benefit of or be enforceable by
any third party.

SECTION 9.17 EXPENSES. Each party hereto shall bear its own expenses relating to
the transactions contemplated by this Agreement.

SECTION 9.18 REPRESENTATION BY COUNSEL. EACH PARTY HERETO REPRESENTS AND AGREES
WITH EACH OTHER THAT IT HAS BEEN REPRESENTED BY, OR HAD THE OPPORTUNITY TO BE
REPRESENTED BY, INDEPENDENT COUNSEL OF ITS OWN CHOOSING, AND THAT IT HAS HAD THE
FULL RIGHT AND OPPORTUNITY TO CONSULT WITH ITS RESPECTIVE ATTORNEY(S), THAT TO
THE EXTENT, IF ANY, THAT IT DESIRED, IT AVAILED ITSELF OF THIS RIGHT AND
OPPORTUNITY, THAT IT OR ITS AUTHORIZED OFFICERS (AS THE CASE MAY BE) HAVE
CAREFULLY READ AND FULLY UNDERSTAND THIS AGREEMENT IN ITS ENTIRETY AND HAVE HAD
IT FULLY EXPLAINED TO THEM BY SUCH PARTY'S RESPECTIVE COUNSEL, THAT EACH IS
FULLY AWARE OF THE CONTENTS THEREOF AND ITS MEANING, INTENT AND


                                      -32-
<PAGE>

LEGAL EFFECT, AND THAT IT OR ITS AUTHORIZED OFFICER (AS THE CASE MAY BE) IS
COMPETENT TO EXECUTE THIS AGREEMENT AND HAS EXECUTED THIS AGREEMENT FREE FROM
COERCION, DURESS OR UNDUE INFLUENCE. THIS AGREEMENT IS THE PRODUCT OF
NEGOTIATIONS BETWEEN THE PARTIES HERETO REPRESENTED BY COUNSEL AND ANY RULES OF
CONSTRUCTION RELATING TO INTERPRETATION AGAINST THE DRAFTER OF AN AGREEMENT
SHALL NOT APPLY TO THIS AGREEMENT AND ARE EXPRESSLY WAIVED. THE PROVISIONS OF
THIS AGREEMENT SHALL BE INTERPRETED IN A REASONABLE MANNER TO EFFECT THE
INTENTIONS OF THE PARTIES TO THIS AGREEMENT.

                         [SIGNATURES ON FOLLOWING PAGE]


                                      -33-
<PAGE>

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

                                        "BUYER"

                                        CORINTHIAN COLLEGES, INC.,
                                        a Delaware corporation

                                        By: ____________________________
                                        Name: __________________________
                                        Title: _________________________


                                        "SELLERS"

                                        LEARNING TREE UNIVERSITY, INC.,
                                        a California nonprofit public benefit
                                        corporation

                                        By: ____________________________
                                        Name: __________________________
                                        Title: _________________________


                                        LTU EXTENSION, INC.,
                                        a California corporation

                                        By: ____________________________
                                        Name: __________________________
                                        Title: _________________________


                                        "GOULD"

                                        ________________________________
                                        MICHAEL GOULD


                                      S - 1           (Asset Purchase Agreement)
<PAGE>

                            ASSET PURCHASE AGREEMENT

                       CORINTHIAN/LEARNING TREE UNIVERSITY

                                LIST OF EXHIBITS

<TABLE>
<CAPTION>
      Exhibit Designation    Exhibit Contents
      -------------------    ----------------
<S>                          <C>
      Exhibit A              Assignment and Assumption Agreement
      Exhibit B              Bill of Sale
      Exhibit C              Assignment and Assumption of Lease Agreements
      Exhibit D              Non-Competition Agreement
      Exhibit E              Employment Agreement
</TABLE>


                                      A - 1           (Asset Purchase Agreement)


</TEXT>
</DOCUMENT>
