<PAGE>

                                                                    EXHIBIT 10.1

                            STOCK PURCHASE AGREEMENT

          This Stock Purchase Agreement (this "Agreement"), dated as of December
29, 2000 (the "Effective Date"), is entered into by and among Corinthian
Schools, Inc., a Delaware corporation ("Buyer"), Grand Rapids Educational
Center, Inc., a Michigan corporation (the "Company"), Malone Management Company,
a Michigan corporation ("MMC") and Robert J. Malone and Mary C. Malone (Robert
J. Malone and Mary C. Malone collectively referred to herein as "Sellers").


                                   BACKGROUND

          A.  Sellers are the sole stockholders of the Company, which owns,
operates and administers those certain proprietary, post-secondary, vocational
training schools collectively known as (i) Grand Rapids Educational Center,
located at (A) 1710 and 1750 Woodworth N.E., Grand Rapids, Michigan, and (B)
5349 W. Main Street, Kalamazoo, Michigan, and (ii) Horizon Career College,
located at 8315 Virginia Street, Merrillville, Indiana (collectively, the
"Schools," and individually, a "School").

          B.  The only outstanding shares of capital stock of the Company
consist of 14,500 shares (the "Shares") of Class A Common stock, par value $1.00
per share.

          C.  Buyer desires to purchase, and Sellers desire to sell, all of the
issued and outstanding Shares of the Company (subject to the redemption by the
Company of certain shares of Class A Common stock held by Sellers as described
in Article I) and to enter into certain ancillary arrangements for the
consideration and on the terms set forth in this Agreement.


                                   AGREEMENT

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


                                   ARTICLE I
                     SALE, PURCHASE AND DELIVERY OF SHARES

          1.1  Redemption of Common Stock Prior to the Closing.  Immediately
prior to the Closing, the Company will redeem a portion of Sellers' Class A
Common stock in exchange for the assignment of certain related party accounts
receivable and cash held by the Company.  The redemption amount shall be a sum
determined by Sellers, but in no event more than that necessary to keep the
Stockholders' Equity of the Company above the Stockholders' Equity Target and to
keep the Net Working Capital of the Company above $1.00, both as set forth in
Section 2.2, based upon up-to-date financial information of the Company.  It is
anticipated that approximately fifteen percent (15%) of the Sellers' collective
shares will be redeemed, depending on the balance of accounts at the time of the
Closing.  For purposes of this Agreement, the term "Shares" shall mean only
those shares of Class A Common stock of the Company outstanding after redemption
by the Company of the shares of Class A Common stock set forth in this Section
1.1.

          1.2  Purchase and Sale of the Shares.  Subject to the terms and
conditions of this Agreement, Sellers agree to sell the Shares and deliver the
certificates evidencing the Shares to Buyer at the Closing.  The certificates
representing the Shares will be properly endorsed for transfer to or accompanied
by a duly executed stock power in favor of Buyer or its nominee and otherwise in
a form acceptable for transfer on the books of the Company.  Sellers shall pay
all transfer taxes, income taxes,

                                      -1-
<PAGE>

capital gains taxes and other taxes that become payable directly as a result of
the transfer of the Shares to Buyer.


                                   ARTICLE II
                                 CONSIDERATION

          2.1  Purchase Price.  (A)  The purchase price payable to Sellers in
connection with the transfer to Buyer of the Shares shall be Two Million, Six
Hundred and Six Thousand Dollars ($2,606,000.00) (the "Purchase Price"), subject
to subsequent increase or decrease pursuant to the Post-Closing Purchase Price
Adjustment (as defined in Section 2.2 herein), payable as follows: (i) at the
Closing, Two Million, Two Hundred and Ninety-six Thousand Dollars ($2,296,000)
payable by Buyer to Sellers, by certified check or wire transfer (the "Closing
Payment"), and (ii) on the eighteen (18) month anniversary of the Closing Date,
subject to Section 9.12 and Section 9.14, Three Hundred and Ten Thousand Dollars
($310,000) (the "Holdback"), plus interest at the rate of six percent (6%) per
annum on the amount of the Holdback actually distributed to Sellers at such time
(after deduction of all amounts by which the Holdback is reduced to Sellers
pursuant to Sections 9.12 and 9.14).

          (B) Related Agreements.  At the Closing, Buyer shall enter into a Non-
Competition Agreement with Sellers and MMC, as described in Section 3.2(7), for
which Buyer shall pay to each of the Sellers an additional sum of Two Hundred
Thousand Dollars ($200,000) (a total of Four Hundred Thousand Dollars ($400,000)
to the Sellers collectively) and to MMC One Hundred Thousand Dollars ($100,000),
pursuant to the terms of the Non-Competition Agreement.

          2.2  Post-Closing Purchase Price Adjustment.  (A)  (i) If the
Stockholders' Equity of the Company at 12:01 a.m. on the Closing Date is less
than Forty-three Thousand Dollars ($43,000.00) (the "Stockholders' Equity
Target"), and/or (ii) if the Net Working Capital of the Company at 12:01 a.m. on
the Closing Date is less than One Dollar ($1.00), then the Purchase Price shall
be reduced, dollar-for-dollar, by an amount equal to the larger of such
deficiencies.  "Stockholders' Equity of the Company" means the excess of the
consolidated assets (including accounts receivable) of the Company over the
consolidated liabilities of the Company, as adjusted and calculated in
accordance with the procedure established for determining the Closing Balance
Sheet in Section 2.3.  "Net Working Capital" means (i) all cash and cash
equivalents, accounts receivable (including trade accounts receivable and notes
receivable), inventories, deferred tax assets, refundable income taxes, prepaid
expenses and other current assets of the Company, minus (ii) all accounts
payable, accrued expenses, current portion of long-term debt, income taxes
payable, unearned tuition and other current liabilities, as adjusted and
calculated in accordance with the procedure established for determining the
Closing Balance Sheet in Section 2.3.

          (B) So long as the Net Working Capital of the Company at 12:01 a.m. on
the Closing Date is equal to or greater than One Dollar ($1.00) and the
Stockholders' Equity of the Company at 12:01 a.m. on the Closing Date is more
than the Stockholders' Equity Target, then the Purchase Price shall be
increased, dollar-for-dollar, by an amount equal to the lesser of the following
two amounts: (i) the amount by which the Stockholders' Equity of the Company
exceeds the Stockholders' Equity Target, or (ii) the amount by which the Net
Working Capital of the Company is greater than One Dollar ($1.00).

          (C) The sum of any reductions or increases in the Purchase Price under
Subsections (A) and (B) of this Section 2.2 are referred to herein as the "Post-
Closing Purchase Price Adjustment."  If the Post-Closing Purchase Price
Adjustment results in an increase in the Purchase Price for the Shares, Buyer
shall pay to Seller, within five (5) business days of final determination of the

                                      -2-
<PAGE>

Post-Closing Purchase Price Adjustment, an amount of cash equal to the Post-
Closing Purchase Price Adjustment, by certified check or wire transfer.  If the
Post-Closing Purchase Price Adjustment results in a decrease in the Purchase
Price for the Shares, the Sellers, jointly and severally, shall pay to Buyer,
within five (5) business days of final determination of the Post-Closing
Purchase Price Adjustment, an amount of cash equal to the Post-Closing Purchase
Price Adjustment, by certified check or wire transfer.

          2.3.  Post-Closing Audit.  (A) Within fifteen (15) business days of
the Closing Date, Sellers shall deliver to Buyer true and correct copies of all
financial books and records of the Company necessary for Buyer to prepare a
balance sheet of the Company dated as of the Closing Date.  Within fifteen (15)
business days after receipt of such books and records from Sellers, Buyer shall
prepare, and have audited, a balance sheet dated as of the Closing Date (the
"Closing Balance Sheet") on which shall be shown the Stockholders' Equity of the
Company and Net Working Capital of the Company as of the Closing Date.

          (B) The Closing Balance Sheet shall be prepared in accordance with
Generally Accepted Accounting Principles ("GAAP"), applied on a basis consistent
with the Company's past practices, and audited by Almich & Associates ("Almich")
in accordance with Generally Accepted Government Auditing Standards ("GAGAS").
Upon receipt of the Closing Balance Sheet prepared by Buyer, Sellers shall have
fifteen (15) business days in which to review it and either accept it or
identify objections by written notice to Buyer.  If, within fifteen (15)
business days following delivery of the Closing Balance Sheet to Sellers,
Sellers have not given notice to Buyer of objections to the Closing Balance
Sheet (such notice must contain a statement of the basis of Sellers' objections
in reasonable detail), then the calculation of Stockholders' Equity of the
Company and Working Capital of the Company as shown on the 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 resolved within fifteen (15) business days after Sellers give notice of
an objection, then the issues in dispute shall be submitted to one of the "Big
Five" accounting firms with which neither Sellers nor the Buyer has a prior
relationship (the "Accountants") for resolution.  If the issues are submitted to
the Accountants for resolution: (i) each party will furnish to the Accountants
such work papers and other documents and information relating to the disputed
issues as the Accountants may 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
notice delivered to the parties, 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.


                                  ARTICLE III
                                    CLOSING

          3.1  Closing.  Consummation of the purchase and sale of the Shares
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 Date.

                                      -3-
<PAGE>

          3.2  Deliveries by Seller at Closing.  Unless Buyer has waived the
delivery of such item as a condition to Closing pursuant to Section 8.1, at the
Closing, Sellers shall deliver or cause to be delivered to Buyer the following:

               (1) Certificates representing the Shares, duly endorsed (or
     accompanied by duly executed stock powers) and notarized for transfer to
     Buyer;

               (2) Certified resolutions of the Company's Board of Directors
     and, if required by applicable law, the Company's shareholders, authorizing
     the execution, delivery and performance of this Agreement and the
     consummation of the transactions contemplated herein;

               (3) A release of the Company from all liabilities to Sellers in
     the form attached hereto as Exhibit A.
                                 ---------

               (4) An officers' certificate signed by each of the Sellers and
     the President and the Chief Financial Officer of the Company, or such other
     officer reasonably acceptable to Buyer, certifying (i) as to the
     representations, warranties and covenants of Sellers and the Company made
     herein as provided in Sections 8.1(1), and 8.1(3), and (ii) as to the
     absence of a material adverse change as provided in Section 8.1(2);

               (5) Duly executed estoppel certificates and consents to
     assignment of lease (if required by the lease documents) for each of the
     Facilities located in Merrillville, Indiana and Kalamazoo, Michigan
     (executed by the landlords of such Facilities (as defined below));

               (6) resignation letters of the board of directors and the
     officers of the Company appointed before the Closing Date, in form and
     substance reasonably satisfactory to Buyer, effective as of the Closing
     Date;

               (7) A Non-Competition Agreement in substantially the form of

     Exhibit B hereto (the "Non-Competition Agreement"), executed by each of the
     ---------
     Sellers and MMC, in which Sellers and MMC shall have agreed to not
     participate in the business of proprietary, post-secondary education in the
     States of Michigan, Indiana and Illinois for a period of five (5) years
     after the Closing Date;

               (8) A lease agreement by and between Woodworth One, LLC, a
     Michigan limited liability company ("Woodworth") and Corinthian Colleges,
     Inc., a Delaware corporation ("CCi"), with respect to the Facilities
     located in Grand Rapids, Michigan, in substantially the form attached
     hereto as Exhibit C (with such modifications to the form of Lease as are
               ---------
     mutually acceptable to both Woodworth and CCi) (the "Grand Rapids Lease"),
     duly executed by Woodworth;

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

               (10) A legal opinion from counsel for Sellers covering the
     matters set forth in Exhibit D, in form and substance satisfactory to
                          ---------
     Buyer's counsel;

               (11) A full and complete release of all liens against the
     property or assets of the Company held by any creditor of the Company or
     MMC;

                                      -4-
<PAGE>

               (12) A release by all creditors of MMC of any guarantees by the
     Company of MMC debts or obligations to such creditors; and

               (13) Any other documents reasonably requested by Buyer and its
     counsel to effectuate the transactions contemplated hereby (including,
     without limitation, assignment by MMC to GREC of the equipment leased by
     MMC for the benefit of the Schools which are listed on Schedule 5.9(b)).

          3.3  Deliveries by Buyer at Closing.  At the Closing, Buyer shall
deliver or cause to be delivered to Seller the following:

               (1)  The Closing Payment;

               (2)  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;

               (3)  Duly executed leases and lease assignments for each of the
     Facilities if required by the lease agreements for such Facilities;

               (4)  A duly executed Non-Competition Agreement;

               (5)  the Grand Rapids Lease, duly executed by CCi;

               (6)  An employment agreement by and between Buyer and George
     Grayeb for a period of six (6) months following the Closing Date (the
     "Employment Agreement") substantially in the form attached hereto as
     Exhibit E, duly executed by Buyer (it being expressly acknowledged and
     ---------
     agreed by Sellers, the Company and MMC that (i) the failure by Mr. Grayeb
     to countersign the Employment Agreement in substantially the form attached
     hereto as Exhibit E shall not constitute a failure of the conditions to
               ---------
     Closing set forth in Article VIII or a breach of Buyer's delivery
     obligations under this Section 3.3, and (ii) any other agreement by and
     between Buyer or the Company and Mr. Grayeb with respect to Mr. Grayeb's
     employment by the Company following the Closing Date shall satisfy the
     conditions to Closing set forth in Article VIII and Buyer's delivery
     obligations under this Section 3.3); and

               (7)  Any other documents reasonably necessary to effectuate the
     transactions contemplated hereby (including, without limitation, assumption
     by GREC of the equipment leased by MMC for the benefit of the Schools which
     are listed on Schedule 5.9(b)).


                                   ARTICLE IV
                                  TERMINATION

          4.1  Termination.  This Agreement may be terminated only as follows
and in each case only by written notice:

               (1)  At any time by mutual written consent of the Company,
     Sellers and Buyer;

               (2)  Prior to the Closing, by Buyer if Sellers or the Company
     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

                                      -5-
<PAGE>

     of the Company 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;

               (3)  Prior to the Closing, by Buyer if the DOE, the States of
     Michigan or Indiana or any of their respective agencies, any applicable
     regulatory body, any guaranty agency or any accreditation agency which
     provides accreditation for any of the Schools determines that the Company
     or the Schools, or any of their respective programs, will not be certified
     as eligible to receive funds administered under Title IV of the Higher
     Education Act of 1965, as amended (hereinafter, "Title IV");

               (4)  Prior to the Closing, by Buyer, at its sole and absolute
     discretion, if, based on the DOE pre-review of the application for
     certification and provisional extension of certification, Buyer determines
     that the Schools will be unable to obtain certification by the DOE
     subsequent to the Closing Date at any time, in a timely matter, or without
     being subject to material adverse conditions;

               (5)  Prior to the Closing, by Buyer, if, in Buyer's sole and
     absolute discretion, the results of Buyer's due diligence investigation
     have been unsatisfactory;

               (6)  Prior to the Closing, by Seller, if Buyer is in breach of
     any covenant, undertaking, representation or warranty contained herein,
     which breach either (a) materially damages the business, operations or
     financial condition of the Company, or (b) directly and permanently
     prevents the satisfaction of a condition to the Closing; or

               (7)  If the Closing has not occurred on or before February 28,
     2001, by Sellers or Buyer, by notice to all other parties, at any time
     thereafter and before the Closing.

          4.2  Effect of Termination.  In the event of termination of this
Agreement by either Buyer or Seller 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, the Company, MMC or Sellers (or their
respective officers or directors) to the other, except for liabilities arising
from a breach of this Agreement prior to such termination; provided, however,
                                                           --------  -------
that Sellers' and the Company's obligations under the last sentence of Section
5.20 shall survive the termination of this Agreement, and Buyer's obligations
under Section 7.8 shall survive the termination of this Agreement.


                                   ARTICLE V
           REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLERS

          Attached hereto is a disclosure schedule made up of various schedules
numbered to correspond to the sections of this Article V of this Agreement (the
"Disclosure Schedule"). Notwithstanding any cross-references between any section
of this Agreement and any part of the Disclosure Schedule, and vice versa, any
                                                               ----------
matter which is disclosed in any particular schedule or section of the
Disclosure Schedule shall be deemed to be disclosed in all schedules and
sections of the Disclosure Schedule and to qualify all of the representations
and warranties of the Company, MMC and Sellers contained in this Agreement;

provided, however, that in cases where disclosures are not explicitly cross-
--------  -------
referenced, (a) the cross-applicability of the contents of any given schedule to
another schedule must be reasonably apparent from the disclosure set forth in
the first schedule and (b) the schedule must, when cross-applied, reasonably
apprise the reader of the nature and magnitude of the

                                      -6-
<PAGE>

item disclosed. Subject to the foregoing, and as a material inducement to Buyer
to enter into this Agreement, Sellers, MMC and the Company, jointly and
severally, hereby represent and warrant (a) as of the date hereof and (b) as of
the Closing Date, that:

          5.1  Organization and Corporate Power.  The Company is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Michigan, the jurisdiction in which it is incorporated.  The Company
has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted, to enter into this
Agreement and to consummate the transactions contemplated hereunder.  The
Company is 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 the
Schools.  True and correct copies of the Company's 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.

          5.2  Capacity; Authorization; Binding Effect.  The Company and each of
the 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. All corporate and other proceedings required to
be taken by or on the part of the Company, including all action required to be
taken by the directors or stockholders of the Company, to authorize the Company
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 the Company and constitute, or will when delivered
constitute, the valid and binding obligations of the Company and Sellers,
enforceable against the Company and Sellers in accordance with their respective
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).

          5.3  Ownership of Schools.  Except as set forth on Schedule 5.3, the
Schools are owned and operated by the Company directly, 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 or any of their assets.  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.

          5.4  No Conflicts.  The execution, delivery and performance of this
Agreement and each other document being executed by the Sellers and the Company
in connection herewith, and the consummation by Sellers and the Company of the
transactions contemplated hereby and thereby will not:  (a) violate any
provisions of law applicable to Seller or the Company; (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 the
Company, or any instrument, license, agreement or commitment to which Sellers or
the Company 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 Sellers or the
Company is a party or by which any of the Company's 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 5.4 or Schedule 6.3 attached hereto.
             ------------    ------------

          5.5  Compliance with Laws; Licenses and Permits.  Except as disclosed
in Schedule 5.5, the Company is not in violation of any law, regulation or
   ------------
requirement of any governmental authority and neither the Company nor Sellers
have received notice of any such violation.

                                      -7-
<PAGE>

The Company currently maintains all licenses, accreditations, certificates,
permits, consents, authorizations and other governmental or regulatory approvals
(the "Licenses and Permits") necessary for the Company to conduct the business
and 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. Each program offered by the Schools is an
eligible program in compliance with the requirements of 34 C.F.R. (S) 668.8. The
Company and/or 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 the
Company for any Licenses and Permits during the last five years has been denied.
Schedule 5.5(a) attached hereto is a true, correct and complete list of all
--------------
Licenses and Permits held by the Company with respect to the Schools and the
governmental authority or accrediting body granting such Licenses and Permits.
The Company has delivered to Buyer true and correct copies of all such Licenses
and Permits. The Company has 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 5.5(b) attached
                                                       ---------------
hereto, are certified by the DOE as an eligible institution under Title IV and
are parties to, and in compliance with, valid program participation agreements
with the DOE with respect to the Schools' respective operations, and are
authorized by the state in which they are located to operate for-profit
postsecondary educational institutions. The Company has 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 and the Company have disclosed in writing their receipt and disposition
to Buyer prior to the execution of this Agreement. Other than as set forth on
Schedule 5.5(c) attached hereto, Sellers and the Company are not aware of any
---------------
investigation or review of the Company's student financial aid programs or any
review of any School's state license accreditation by any Person.

          5.6  Recruitment; Admissions Procedures; Attendance; Reports.

Schedule 5.6(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, including (a) procedures for assisting in the
application by prospective students for direct or indirect state or federal
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; and (c) procedures for encouraging and
verifying attendance, minimum required attendance policies, and other relevant
criteria relating to course completion and certification (collectively, the
"Policy Guidelines").  Schedule 5.6(b) attached hereto sets forth a list of the
                       ---------------
Policy Guidelines with respect to those students continuing in the Schools after
the Closing Date (the "Disclosed Guidelines").  Sellers and the Company have
delivered to Buyer true, correct and complete copies of all Policy Guidelines,
Disclosed Guidelines and all documents and other information disseminated to
students or prospective students.  The Company's 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 the Company
participates, and other applicable laws or regulations.  The Company has
submitted all reports, audits, and other information, whether periodic in nature
or pursuant to specific requests, including, without limitation, all annual
compliance audits and audited financial statements, for the Schools to all
agencies or other entities with which such filings are required relating to its
compliance with (i) applicable accreditation standards governing its activities
and (ii) laws or regulations governing programs pursuant to which the Schools or
its students receive funding.  Complete and accurate records for all present and
past students attending the Schools have been

                                      -8-
<PAGE>

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 and the Company 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. Sellers covenant and agree
that they shall reimburse Buyer for and indemnify Buyer against any fines,
penalties, expenses, costs and other losses Buyer may incur as a result of any
pre-eligibility funding of students enrolled at the Schools prior to the Closing
Date. The records of each student at the Schools conform in form and substance
to all relevant regulatory requirements.

          5.7  Cohort Default Rate.  Schedule 5.7 attached hereto sets forth the
                                     ------------
cohort default rate for the Schools, calculated in the manner prescribed by the
DOE, of all students attending the Schools receiving assistance pursuant to
Title IV programs for the federal fiscal years 1993 through 1998 (except for the
School located in Merrillville, Indiana, the rates for which are calculated
solely for the years 1996-1998).  Such schedule is correct and accurate in all
material respects (it being understood and agreed that any rate reported on
Schedule 5.7 as being under 25% percent, but which is actually 25% or more,
shall be deemed to be materially incorrect).

          5.8  Title to and Condition of the Company's Assets.

               5.8.1  Leased Facilities.  The leased facilities described on
Schedule 5.8(a) (the "Facilities") constitute the only real property used in
---------------
connection with the operation of the Schools by the Company.

               5.8.2  Laws and Regulations; Records.  Except as set forth on
Schedule 5.8(b), all of the Company's operations with respect to the Schools are
---------------
conducted at the Facilities, and all of the tangible assets and records relating
to intangible assets of the Schools are located at the Facilities. The Company
is not under any contractual or other legal obligation, and has not entered into
any commitment, to make capital improvements or alterations to the Facilities.
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 (i) the Facilities located in Grand
Rapids, Michigan are not subject to any condemnation proceedings, and (ii) to
the knowledge of Sellers, the Facilities located in Kalamazoo, Michigan and
Merrillville, Indiana are not subject to any condemnation proceedings. Each
Facility which is owned by any of the Sellers, the Company, MMC (or any
Affiliate of the foregoing) is in compliance with all laws, including, without
limitation, the Americans with Disabilities Act, and, to the best of Sellers'
knowledge, each Facility which is not owned by Sellers, the Company, or MMC (or
any Affiliate of the foregoing) is in compliance with all laws, including,
without limitation, the Americans with Disabilities Act.

               5.8.3  Title.  The Company owns outright, and has good and
marketable title to, all of the assets used in the operation of the Schools,
free and clear of all liens, claims and encumbrances, options, rights, and
restrictions, other than as set forth on Schedule 5.8(c). All leases for
                                         ---------------
tangible personal property used by the Company in connection with the operation
of the Schools are (i) valid and in full force and effect, (ii) are enforceable
in accordance with their terms, and (iii) will remain in full force and effect
notwithstanding the sale of the Shares and the transfer thereof to Buyer
following the Closing. Neither the Company 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.

                                      -9-
<PAGE>

               5.8.4  Condition of Assets.  The tangible assets and properties
of the Schools which are owned or leased by the Company and used in connection
with the operation of the Schools are in 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. The Company has not
received notice of any violation of or default under any law, ordinance, order,
regulation or requirement relating to any of the assets of the Company which
remains uncured or has not been resolved.

               5.8.5  Title; Condition and Quality of the Curriculum.
(a) Except as set forth on Schedule 5.8(d), to Sellers' best knowledge, the
                           ---------------
Company has the right to use the Curriculum of the Schools as presently used,
and the execution and performance of this Agreement will have no effect on the
Company's use of the Curriculum. No employee or Affiliate of the Company or any
of Sellers owns or has any interest, directly or indirectly, in any part of the
Curriculum, except as set forth on Schedule 5.8(d). Except as set forth on
                                   ---------------
Schedule 5.8(d), the Company is not required to and does not make any payments
---------------
to others with respect to the Curriculum. To the best knowledge of Sellers, 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 the Company's past and current use of any part of the
Curriculum does not infringe upon or violate any such right. Schedule 5.8(e)
                                                             ---------------
sets forth, in tabular format, the person or entity from whom the Company
acquired or purchased the Curriculum for each of its programs. 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 to the extent owned by the Company
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 the
Company during its period of operation of the Schools from the beginning of time
through the Closing Date.

          5.9  Material Contracts.  Schedule 5.9 attached hereto lists each
                                    ------------
material contract of the Company (the "Material Contracts") relating to the
Schools or to which any of the Company's assets is subject or bound and that
individually, or together as a series of related contracts involving the same
party or parties or the successors to such party or parties:  (a) obligates the
Company or its Affiliates to pay an amount of $10,000 or more in any calendar
year, (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 way otherwise material to the operation of the Schools.  Each Material
Contract is valid and binding on the parties thereto.  The Company has duly
performed all its obligations under the Material Contracts to the extent that
such obligations to perform have accrued.  Neither the Company nor Sellers have
received written notice of any alleged breach or default, and, to the best
knowledge of Sellers, no event which would (with the passage of time, notice or
both) constitute a material breach or default by the Company or any other party
or obligor with respect thereto has occurred.  True and correct copies of the
Material Contracts, including all amendments and supplements thereto, have been
delivered to Buyer or are attached to Schedule 5.9. Each of the Material
                                      ------------
Contracts is (i) enforceable in accordance with their terms, and (ii) will
remain in full force and effect notwithstanding the sale of the Shares and the
transfer thereof to Buyer following the Closing.   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.

                                      -10-
<PAGE>

          5.10  Tradenames; Confidential Information.  All tradenames,
trademarks or service marks and all forms, derivatives and graphic presentations
thereof of the Company having any value to the operation of the Company or the
Schools are set forth or described on Schedule 5.10 attached hereto
                                      -------------
(collectively, the "Tradenames").  To the Sellers' best knowledge, the Company
has exclusive right to the use of each Tradename as an assumed business name in
the states in which such Tradename is used, and Schedule 5.10 lists all
                                                -------------
registrations of each Tradename as a trademark, servicemark or assumed name.
The Company has not licensed any other Person to use any Tradename.  The Company
has not been sued or threatened with suit for infringement, violation or breach
with respect to any Tradename, and, to the best knowledge of Sellers, no basis
exists for any such suit.  Except as disclosed on Schedule 5.10, the Company is
                                                  -------------
not on notice of any infringement, violation or breach of the Tradename by any
other Person.  The Company has the right to use, free and clear of any claims or
rights of any third party, all trade secrets, know-how and any other
confidential information required for or used in the operation of the Schools.
To the best knowledge of Sellers, the Company is 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 the
Company in connection with the operation of the Schools.

          5.11  Financial Statements; Indebtedness.  Attached hereto as Schedule
                                                                        --------
5.11(a) are the following financial statements of the Company:  (a) audited
-------
Balance Sheets at December 31, 1999, 1998 and 1997 and audited Statements of
Operations and Statements of Cash Flows for the years ended December 31, 1999,
1998 and 1997 (including consolidating schedules containing corresponding
Statements of Assets and Liabilities and Statements of Revenue and Expenses of
the Schools in the form appropriate for filing with the DOE), and (b) an
unaudited Balance Sheet at September 30, 2000 and an unaudited Statement of
Operations and Statement of Cash Flows for the nine months ended September 30,
2000  (collectively, the "Financial Statements").  The basis of presentation of
the Financial Statements of the Company is disclosed in the notes thereto.
Except as disclosed on Schedule 5.11(b), the balance sheets included in the
                       ----------------
Financial Statements present fairly in accordance with GAAP the assets and
liabilities of the Company as of the respective dates thereof, and the related
statements of revenue and expenses present fairly in accordance with GAAP the
results of operations of the Company for the respective periods covered thereby.
The Financial Statements (i) have been prepared based upon the books and records
of the Company in a manner consistent with the Company's standard internal
accounting practices, consistently applied, and (ii) fairly present the
financial position of the Company as of the dates of such Financial Statements
and the results of operations for the periods covered by such Financial
Statements.  Except as disclosed on Schedule 5.11(b), the Company has maintained
                                    ----------------
the books and records of the Company and the Schools in accordance with
applicable laws, rules and regulations and with GAAP and GAGAS, and such books
and records are, and during the periods covered by the Financial Statements
were, materially correct and complete, fairly reflecting the income, expenses,
assets and liabilities of the Company and the Schools.  On the date hereof, the
Company has no liabilities required to be set forth in a balance sheet prepared
in accordance with GAAP and GAGAS that were not included in the latest balance
sheet for such entity included in the Financial Statements.  Except as provided
in Schedule 5.11(c), neither the Company nor MMC is 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, the Company has 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 balance sheet of
     the Company as of September 30, 2000, to the extent set forth, reserved
     against or disclosed;

                                      -11-
<PAGE>

               (2) those incurred since September 30, 2000 in the ordinary
     course of business of the Schools and consistent in nature with past
     practice, and in an individual amount of not more than $20,000.00; and

               (3) those described in the Schedules attached hereto (including
     specifically those disclosed on Schedule 5.11(d)).

There exists no condition relating to the Schools, whether absolute, accrued,
contingent or otherwise, which is reasonably expected to have an adverse effect
on the properties, business, assets, results of operations or condition
(financial or otherwise) of 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.

          Also attached hereto as part of Schedule 5.11(a) are the unaudited
balance sheets and income statement of MMC for the fiscal years ending on
December 31, 1998 and 1999, and for the period ending on October 31, 2000
(collectively the "MMC Financial Statements"). The MMC Financial Statements are
internally generated tax basis statements, and have not been compiled or
reviewed by outside auditors or accountants.  The MMC Financial Statements have
been prepared based upon the books and records of MMC in a manner consistent
with MMC's standard internal accounting practices, consistently applied, and
fairly present the financial position of MMC as of the dates of such MMC
Financial Statements and the results of operations for the periods covered by
such MMC Financial Statements.

          5.12  Receivables.  Except as set forth on Schedule 5.12, the accounts
                                                     -------------
receivable of the Company, 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 the
Company and the Schools, are recorded correctly on the books and records of the
Company and the Schools, and the Company has 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 the Company's most
recent unaudited Balance Sheet, the Company has not discounted or sold such
accounts receivable or any portion thereof (either to the debtor(s) or in
connection with the sale of such receivables to a third party).

          5.13  Inventories.  The only inventories maintained by the Company in
connection with the operation of the Schools consist of supplies used in the
ordinary course of business of the Schools and are reflected on the Financial
Statements as "inventories."  Such supplies are reflected at cost (subject to
the following sentence), are usable in the ordinary and regular course of
business, are fit and sufficient for the purpose for which they were purchased,
and, at the date of this Agreement, are in customary amounts appropriate to the
Company's operations of the Schools.  All excess or obsolete items have been
written down to net realizable value or written off.

          5.14  Litigation.  Except as set forth in Schedule 5.14 attached
                                                    -------------
hereto, (i) there are no actions, suits, proceedings, orders, investigations or
claims pending or 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 the

                                      -12-
<PAGE>

Company, MMC or the Schools, (ii) neither the Company 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 best knowledge of Sellers, there is no
basis for any of the foregoing.

          5.15  Insurance.  Schedule 5.15 attached hereto sets forth the
                            -------------
insurance coverages maintained by the Company on the Facilities 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 and other insurance held by the Company 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.  The insurance coverage maintained by the Company for the Schools is
sufficient and is customary for adequately insured schools of similar size and
engaged in similar lines of business.  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 5.15, neither the execution, delivery and
                       -------------
performance of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in the loss to the Company of any of the
insurance policies listed or impair the rights of the Company with respect to
liabilities arising in connection with the operation of the Schools prior to the
Closing.  Within the five years prior to the date hereof, the Company has not
been denied insurance for the Schools, or been offered insurance for the Schools
only at a commercially prohibitive premium.

          5.16  Environmental Matters.  Except as disclosed on Schedule 5.16, in
connection with the operations of the Schools, the Company has not generated,
transported, stored, treated or disposed, nor has the Company 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 has the Company
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 Company in connection with its
operation of the Schools in violation of applicable laws.  The Company has not
received notification, nor is it aware of, any past or present failure by the
Company to comply with any environmental laws, regulations, permits, franchises,
licenses or orders applicable to the Schools or its operations.  The Company has
not received any notification, nor is it aware of, any past or present failure
to comply with any environmental laws, regulations, permits, franchises,
licenses or orders applicable to its 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, assessment or other encumbrance against the assets of the Company.  No
Facility owned by any of the Sellers, the Company, MMC (or any Affiliate of the
foregoing) contain asbestos or polychlorinated biphenyls or any underground
storage tanks, and, to the best knowledge of Sellers, no Facility which is not
owned by Sellers, the Company, or MMC (or any Affiliate of the foregoing)
contains asbestos or polychlorinated biphenyls or any underground storage tanks.

          5.17  Employee Benefit Plans.  Schedule 5.17 attached hereto sets
                                         -------------
forth a complete accurate and detailed description of all of the Company's
employee welfare and benefit plans ("Plans").  The Company has never sponsored,
administered or contributed to any employee benefit plan within the

                                      -13-
<PAGE>

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, the Company does
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").

          5.18  Employment Matters.  The Company and MMC 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
neither the Company nor MMC is engaged in any unfair labor practices with
respect to employees of the Schools; there are no complaints against the Company
or MMC 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 Company or MMC; no labor
organization activities have occurred with respect to employees of the Company
or MMC during the past three years; there are no collective bargaining
agreements binding on the Company or MMC relating to the operation of the
Schools; no grievances have been asserted against the Company or MMC with
respect to employees of the Schools; and neither the Company nor MMC has
experienced any work stoppage by its employees at the Schools during the last
three years.

          5.19  Tax Matters.  Except as disclosed on Schedule 5.19, Sellers, the
                                                     -------------
Company and MMC 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 Schools, and such returns are true and
correct.  Sellers, the Company and MMC, 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 Date.  Neither the Company, Sellers nor
MMC 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.  The term "Taxes" shall
mean any tax (including, without limitation, any income tax, capital gain tax,
franchise tax, value-added tax, sales tax, property tax, use tax, gift tax, or
estate tax), estimated tax payment, levy, assessment, tariff, duty, (including
any custom duty), deficiency, or other fee, and any related charge or amount
(including any fine, penalty, interest, or addition to tax), imposed, assessed,
or collected by or under the authority of any governmental body or quasi-
governmental body (including, without limitation, accrediting agencies with
respect to the Schools) or payable pursuant to any tax-sharing agreement or any
other contract related to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.

          5.20  Brokers or Finders.  No agent, broker, investment banker or
other firm or person retained by Sellers, the Company or MMC 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.  Sellers
and MMC, jointly and severally, agree to defend, indemnify and hold harmless
Buyer and its Affiliates from and against any and all claims arising in
connection with its or their discussions and/or use of the services of any
finder or broker.

                                      -14-
<PAGE>

          5.21  Absence of Certain Changes.  Except as contemplated by this
Agreement or as set forth on Schedule 5.21 attached hereto, since September 30,
                             -------------
2000, there has not been, occurred or arisen with respect to the Company or MMC:

                (1) any sale, lease, transfer, abandonment or other disposition
     of any right, title or interest in or to any of the properties or assets of
     the Company or MMC used in connection with the operations of the Schools
     (tangible or intangible) in excess of $20,000.00, in the aggregate;

                (2) (i) any approval or action to put into effect any increase
     in any compensation or benefits payable to any employee, agent or officer
     of the Company or MMC 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 the Company or MMC 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;

                (3) any material adverse change in the financial condition,
     assets, liabilities (absolute, accrued, contingent or otherwise), reserves
     or operations of the Company;

                (4) any damage, destruction or loss to the assets, business or
     operations of the Company, whether or not covered by insurance in excess of
     $20,000.00, in the aggregate;

                (5) any material change in the business policies or practices of
     the Company 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 the
     Company 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;

                (6) any agreement, whether in writing or otherwise, to take any
     action described in this Section 5.21; or

                (7) 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, or any termination
     or suspension of eligibility to participate in the federal student
     financial aid programs authorized by Title IV, for the Schools, or any
     program offered by the Schools.

          5.22  Delivery of Documents.  True, correct and complete copies of all
documents, instruments, agreements and records of the Company which have been
requested by Buyer relating to (i) the representations and warranties of
Sellers, MMC and the Company contained in this Agreement, and/or (ii) the
operation of the Schools have been delivered to Buyer.

          5.23  Program Revenues.  For each of the Company's fiscal years ending
on December 31, 1998, 1997 and 1996, none of the Schools have received greater
than eighty-five percent

                                      -15-
<PAGE>

(85%) of such School's respective revenues from programs authorized by Title IV
or other federal student financial aid funds, and for the Company's fiscal year
ending on December 31, 1999, no greater than ninety percent (90%), of such
School's respective revenues from programs authorized by Title IV or other
federal student financial aid funds, and each of the Schools satisfies the
requirements regarding Title IV program funds established by the DOE as set
forth at 34 C.F.R. (S)600.5. The attached Schedule 5.23 contains a correct
                                          -------------
statement of each School's percentage of revenue from such federal funding
sources.

          5.24  Accrediting Body and Governmental Approvals.  There exist no
facts or circumstances attributable to the Company or the Schools that would
cause the DOE, or any other governmental authority or accrediting body
(including without limitation the States of Michigan and Indiana, and ABHES and
CAAHEP) whose authorization, consent or similar 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.

          5.25  Capitalization and Voting Rights.  (A) The authorized capital of
the Company consists of (i) 25,000 shares of Class A Voting Common stock, par
value $1.00 per share, of which 14,500 shares are issued and outstanding, and
(ii) 25,000 shares of Class B Non-voting Common stock, par value $1.00 per
share, of which no shares are issued and outstanding.  The Shares are all duly
and validly authorized and issued, fully paid and nonassessable, and were not
issued in violation of the terms of any agreement or other understanding, and
were not issued in violation of any laws, including, without limitation, all
applicable federal and state securities or "blue sky" laws and regulations.  The
Shares constitute the only issued and outstanding shares of capital stock of the
Company.  Sellers own such Shares of record and beneficially, free and clear of
any liens, trusts (constructive and other), equities, equities, claims, marital
rights, encumbrances or other rights in favor of any third party, as follows:
Robert J. Malone owns Seven Thousand, Two Hundred and Fifty (7,250) Shares and
Mary C. Malone owns Seven Thousand, Two Hundred and Fifty (7,250) Shares.  There
are no outstanding options, warrants, rights (including conversion, subscription
or preemptive rights) or agreements, commitments or letters of intent for the
purchase or acquisition from the Sellers or the Company of any shares of the
Company's capital stock.  Neither the Sellers nor the Company is 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 the Company.

          (B)  On the Closing Date, all consents, approvals, authorizations and
orders necessary for the sale and delivery of the Shares to be sold by Sellers
hereunder will have been obtained, and Sellers will have full right, power,
authority and capacity to sell, assign, transfer and deliver the Shares pursuant
to this Agreement.  Upon delivery of the Shares by Sellers hereunder and payment
of the consideration therefor pursuant to this Agreement, good and valid title
to the Shares, free and clear of any and all liens, trusts (constructive and
other), equities, claims, marital rights or other encumbrances, will pass to
Buyer.

          5.26  Disclosure.  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 the Company or Sellers 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 fact which Sellers have not disclosed to Buyer in
writing and of which Sellers are aware 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.

                                      -16-
<PAGE>

                                  ARTICLE VI
                    REPRESENTATIONS AND WARRANTIES OF BUYER

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

          6.1  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.

          6.2  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).

          6.3  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 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 5.4 attached hereto or Schedule 6.3 attached hereto.
                ------------                    ------------

          6.4  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.

          6.5  Securities Matters.

               6.5.1  As of the Date hereof and as of the Closing Date, Buyer
     has, and will have, a net worth in excess of $1,000,000, and, after giving
     effect to the purchase of the Shares, will have no more than ten percent
     (10%) of its total assets invested in the stock of the Company.

               6.5.2  Buyer has been informed and understands that the Shares
     have not been registered under the Securities Act of 1933, as amended (the
     "Securities Act"), or the Michigan Uniform Securities Act (Chapter, 451,
     Michigan Compiled Laws), as amended.

               6.5.3  Buyer is purchasing the Shares solely for investment
     purposes and does not intend to divide the Shares with others or to resell
     or otherwise dispose of all or any part of the Shares unless the Shares
     have been registered under the Securities Act (and any applicable

                                       17
<PAGE>

     state securities or "blue sky" laws), or unless an exemption from
     registration under such act is available.

               6.5.4  Buyer has been informed that unless the Shares are
     registered under the Securities Act (and any applicable state securities or
     "blue sky" laws), or unless an exemption from registration under such acts
     is available, Buyer may not resell, hypothecate, transfer or assign or make
     other disposition of the Shares.

                                  ARTICLE VII
                                   COVENANTS

          7.1  Covenants of Sellers, MMC and the Company Prior to the Closing.
Sellers, MMC and the Company 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, MMC and the Company (i)
shall use reasonable efforts to fulfill or satisfy, or cause to be fulfilled or
satisfied, all of the conditions precedent to Sellers', MMC's and Buyer's
obligations to consummate and complete the transactions provided herein and to
take all other steps and do all other things required to consummate this
Agreement in accordance with its terms, (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 for the Company in excess of $5,000
without Buyer's prior written consent, (v) shall not engage in any sale or
discount of the Company's accounts receivable (whether by discount to the
debtors or by sale to any third party), except for the redemption transaction
described in Section 1.1, (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 MMC or the Company, and (vii) shall not take any
action that would cause Buyer to be unable to obtain good and marketable title
to the Shares at the Closing (including pledging any of such Shares as security
for obligations of Sellers or the Company).  Until the termination of this
Agreement, Sellers, the Company and MMC will not directly or indirectly solicit,
respond to or negotiate with or release any information relative to the Company
or the Schools to any potential buyer other than Buyer.

          7.2  Covenants of Buyer Prior to the Closing.  Buyer covenants and
agrees with Sellers and the Company 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 reasonable 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 and (ii) shall not interfere with the performance by Sellers of their
obligations under this Agreement.

          7.3  Closing and Post-Closing Covenants.

               7.3.1  Further Assurances; Encumbrance Release. From time to time
after the Closing, Sellers and MMC 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 the Shares
and to otherwise carry out the purpose and intent of this Agreement. As soon as
possible after the Closing Date, Sellers shall, at their sole cost and expense,
obtain releases, in form and substance satisfactory to Buyer, of all
encumbrances against the assets of the Company as of the Closing Date.

                                       18
<PAGE>

               7.3.2  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 the Schools and
ownership of the Company from Sellers to Buyer. Before and after the Closing,
Sellers shall use their reasonable efforts to assist Buyer and the Company in
obtaining any required accreditation reasonably necessary for the Company's
operation of the Schools after the Closing Date, 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.
Buyer shall change the registered agent of the Company as soon as reasonably
practicable after the Closing.

               7.3.3  Access to Employees.  From and after the Closing, each of
Buyer, Sellers, the Company and MMC (the "Requested Party") shall afford to the
other parties (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, the Company or the Schools, and (ii) the preparation
of the Post-Closing Audit and the Company's student financial aid audit for
periods prior to the Closing Date.  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.

               7.3.4  Certification.  Sellers and the Company hereby acknowledge
and agree that the transactions contemplated hereby are subject to the usual and
customary conditions relating to a change of ownership resulting in a change of
control of a postsecondary educational institution certified as eligible to
participate in the student financial assistance programs authorized under Title
IV, including the following:  (1) approval by the States of Michigan and
Indiana; (2) approval by all accrediting agencies which accredit the Schools,
including but not limited to ABHES; (3) the issuance by the DOE of a temporary
Provisional Program Participation Agreement extending the Schools' certification
to participate in Title IV funding programs immediately following the Closing;
and (4) the issuance of a new Provisional Program Participation Agreement
permitting the Schools to resume participation in Title IV funding under the new
ownership.  Prior to and after the Closing, Sellers, the Company and Buyer shall
provide to the DOE and to all state regulatory agencies and accrediting bodies
all information required or reasonably requested by any of them, and shall use
their reasonable efforts to satisfy all requirements and demands of the DOE or
any such agency or body requisite to obtaining certification of the Schools as
eligible to participate in the Title IV programs after the Closing.  Sellers and
MMC shall cooperate with Buyer and the Company to ensure that a materially
complete application for recertification and provisional extension of
certificate (the "Application") for the Schools is filed with the DOE no later
than ten (10) business days following the Closing.  For purposes of this
Agreement, a materially complete Application consists of a completed application
for approval to participate in federal student financial aid programs and the
following:  (i) a copy of the Schools' state licenses or other equivalent
document currently authorizing the Schools to provide a program of postsecondary
education in the States of Michigan and Indiana; (ii) copies of documentation
from the Schools' accrediting agency demonstrating that the Schools currently
are accredited and that the accrediting agency has approved or accredited all
programs offered by the Schools; (iii) audited

                                       19
<PAGE>

financial statements of the Company's two most recently completed fiscal years
that are prepared in accordance with GAAP published by the Financial Accounting
Standards Board and audited in accordance with GAGAS published by the
Governmental Accounting Standards Board; and (iv) audited financial statements
of the Buyer's two most recently completed fiscal years that are prepared in
accordance with GAAP and audited in accordance with GAGAS, or acceptable
equivalent information. Sellers shall further cooperate with Buyer to ensure
that the following are filed with the DOE by the last day of the month following
the month in which the Closing occurred: (i) a balance sheet showing the
financial position of the Company and Schools, as of the date of the Closing
Date, that is prepared in accordance with GAAP and audited in accordance with
GAGAS; (ii) approval of the change of ownership from the States of Michigan and
Indiana; (iii) approval of the change of ownership from the Schools' accrediting
agency; and (iv), if necessary, a default management plan. At Buyer's option, as
soon as practicable after the date of this Agreement, Buyer, the Company and
Sellers shall provide the DOE with all information necessary to obtain a pre-
Closing review of the Application. If, on the basis of the pre-Closing
submission to the DOE, Buyer determines or is informed that it will not be able
to obtain certification of the Schools subsequent to the Closing at any time, in
a timely manner, or without being subject to material adverse conditions, then
notwithstanding any other provision hereof, Buyer may elect to terminate this
Agreement pursuant to Section 4.1(4) of this Agreement. Buyer may withdraw its
election if, subsequent to the giving of notice, Buyer is satisfied that the
basis cited in the notice has been satisfactorily resolved. Buyer's
determination, in its sole and absolute discretion, shall be dispositive.
Termination of the Agreement pursuant to this Section 7.3.4 must be made, if at
all, prior to the Closing, and the Closing shall waive the condition herein.

          7.4  Taxes; Tax Returns.

               7.4.1  Sellers' Tax upon Sale of Shares.  Sellers will pay all
     transfer taxes, income taxes, capital gains taxes and other taxes that
     become payable directly as a result of the transfer of the Shares to Buyer.

               7.4.2  Tax Returns for the Company.  Sellers shall be responsible
     for all Taxes of the Company with respect to any taxable period ending on
     or prior to the Closing Date (a "Pre-Closing Period"), and shall pay all
     Taxes with respect to which the Company is liable for any such period in
     one of the two following ways: (i) to the extent the Company has fully
     accrued for Taxes as a liability on its balance sheet as of the Closing
     Date, the Company will prepare Tax returns and pay such Taxes as they come
     due, whether prior to or after the Closing Date; and (ii) to the extent the
     Company has not fully accrued for Taxes as a liability on its balance sheet
     as of the Closing date (including but not limited to such amounts of income
     tax as may owed by Sellers with respect to the Company under any Subchapter
     S election), Sellers shall prepare and file all Tax returns and shall
     directly pay all Taxes with respect to which the Company or any Seller is
     liable for any Pre-Closing Period.  Buyer will cooperate with Sellers in
     the preparation and filing of any such Tax returns required to be prepared
     by Sellers and shall grant Sellers reasonable access to any applicable
     records and work papers of the Company necessary for preparation of the Tax
     returns.  At least thirty (30) days prior to the due date (including
     extensions) of any such return, the Tax return shall be delivered to Buyer
     for review, and the Seller(s) shall thereafter cause such Tax return to be
     filed in a timely manner, as prepared, unless Buyer shall deliver an
     opinion of its accounting or law firm that there is not a reasonable basis
     for any position taken on such return.  No new elections or any changes in
     current elections with respect to Taxes of the Company or affecting the
     Company shall be made after the date of this Agreement without the prior
     written consent of Buyer.

                                       20
<PAGE>

               7.4.3  Carrybacks.  If the Company is required to carry back any
     item of loss, deduction or credit that arises in any taxable period ending
     after the Closing Date to a Tax return of Sellers or the Company for any
     taxable period ending on or before the Closing Date, Buyer or the Company,
     as the case may be, will be entitled to an amount equal to the refund or
     credit of Taxes realized by Sellers as a result thereof.

               7.4.4  Short Period Election.  For purposes of this Agreement,
     if, for any federal, state or local income tax purpose, a taxable period of
     the Company does not terminate on the Closing Date, the Company shall, to
     the extent permitted by applicable law, elect with the relevant taxing
     authority to treat such taxable period for all purposes as a short taxable
     period ending as of 12.01 a.m.on the Closing Date, and such short taxable
     period shall be treated as a Pre-Closing Period for purposes of this
     Agreement.  In any case where applicable law does not permit such election
     to be made, then, for purposes of this Agreement, the taxable income of the
     Company for the entire taxable period shall be allocated as agreed by Buyer
     and Sellers between the Pre-Closing Period and the remainder of the taxable
     period using an interim-closing-of-the-books method.  In no event shall
     taxable income arising from events following the Closing Date be allocated
     to a Pre-Closing Period.

               7.4.5  Contest.  Sellers shall have the right, at Sellers' own
     expense, to control any audit or determination by any authority, initiate
     any claim for refund, amend any Tax return, or contest, resolve and defend
     against any assessment, notice of deficiency or other adjustment or
     proposed adjustment of income taxes for any Tax return prepared by them for
     a Pre-Closing Period; provided, however, that Sellers shall not agree to
                           --------  -------
     any assessment, deficiency, settlement or other adjustment or proposed
     adjustment that would have an adverse effect on the Company without written
     consent of Buyer.  Buyer shall have the right to review any such Tax return
     of the Company or to otherwise participate in such contest, at its expense,
     for any such taxable period.

               7.4.6  Assistance.  After the Closing Date, Buyer and Sellers
     shall provide each other with such assistance as may be reasonably required
     in connection with the preparation of any income tax return, audit or other
     examination by any taxing authority, or any judicial or administrative
     proceeding relating to liability for Taxes of the Company.  The party
     requesting assistance hereunder shall reimburse the other parties for
     reasonable out-of-pocket expenses incurred in providing such assistance.
     No party shall request an income tax audit of the Company.

          7.5  Administration in Accordance with Accreditations.  From and after
the date of this Agreement through the Closing Date, Sellers and the Company, at
the Company's 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, the Company 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 the Company
at the Closing the right and authority in all material respects to administer
and operate the Schools following the Closing.

          7.6  Access and Maintenance of Records.  From and after the Closing,
each of Buyer, the Company and Sellers (the "Requested Party") shall afford to
the other parties (the

                                       21
<PAGE>

"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, (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 and student financial aid audits, (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, regulations and accrediting standards. 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.

          7.7  Employment Matters.

          Sellers and MMC hereby jointly and severally represent and warrant
that all Persons employed in the operations of the Schools prior to the Closing
Date have been and/or will be employed by MMC.  Buyer, Sellers and MMC agree
that neither Buyer nor the Company have assumed, nor shall assume, any
obligations to (or regarding the employment of) any Persons employed by MMC
prior to the Closing Date.  As of the Closing Date, MMC shall terminate all of
its employees employed at the Schools in accordance with all applicable laws
and, prior to the Closing Date, shall provide any required notices in a timely
manner in connection therewith.  All of MMC's 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 MMC as of the day prior to the Closing Date;
provided, however, that Buyer agrees to give credit to and accrue vacation
------------------
benefits for the former employees of MMC who are employed by the Buyer or the
Company after the Closing Date (and Sellers agree that the amount of such
liability shall be reflected as a liability on the Closing Balance Sheet as
calculated in accordance with the Closing Audit procedures set forth in Section
2.3).

               7.7.1  As of the Closing Date, Buyer or the Company may, at their
option and in their sole and absolute discretion, offer employment to any
current or former employee of MMC on such terms and conditions as may be
mutually agreed upon by Buyer or the Company and such employees; provided
                                                                 --------
however, that the group of Persons employed by MMC as of the Closing Date to
-------
whom Buyer or the Company does not offer employment (on terms reasonably
consistent with such Persons' prior employment with MMC) will not exceed ten
(10) Persons.  Buyer shall use its reasonable best efforts to provide to
Sellers, at least ten (10) business days prior to the Closing Date, a list of
all employees of MMC to whom Buyer has offered, or expects to offer, employment
as of the Closing Date.  Buyer agrees that, for purposes of Buyer's or the
Company's employee benefits and other employment programs (excluding bonuses to
managers), the pre-Closing service to MMC by each Person who accepts such offer
shall be considered past service to Buyer or the Company (as applicable,
depending on which entity offers employment to such Persons).  MMC shall use its
reasonable best efforts to assist Buyer and/or the Company in hiring any such
employees with respect to whom Buyer or the Company elects to offer employment.
MMC shall not take any action, directly or indirectly, to prevent or discourage
any such employee from being employed by Buyer or the Company after the Closing
Date and shall not solicit, invite, induce or entice any such employee to remain
in the employ of Seller or otherwise attempt to retain the services of any such
employee, except with the prior written consent of Buyer.

                                       22
<PAGE>

               7.7.2  Notwithstanding any possible inferences to the contrary,
neither Sellers, MMC, the Company nor Buyer intends for this Section 7.7 to
create any rights or obligations except as between Sellers, MMC and Buyer, and
no past, present or future employees of Seller, MMC or Buyer shall be treated as
a third-party beneficiary of this Section 7.7.

          7.8  Confidential Information.  (A) Prior to the Closing, Buyer, it
agents and employees will treat as confidential and proprietary all information
which has been or may hereafter be made available to Buyer, directly or
indirectly, by the Company, or any Person acting on the Company's behalf.  This
information shall include, without limitation, all financial statements, sheets
or other financial information, pro forma financial information, lease
agreements, intellectual property, student or vendor lists, agreements with
third parties, Company equipment or other assets, personal employee data, and
other such information ("Confidential Information"); provided, however, that the
                                                     -----------------
term "Confidential Information" shall not include information which (i) was
already in Buyer's possession prior to Buyer and Seller entering into
discussions regarding the transactions contemplated by this Agreement, (ii) has
become or subsequently becomes available to Buyer from a source other than the
Company, provided that such information is lawfully obtained, or (iii) becomes
generally available to the public other than directly or indirectly as a result
of a disclosure by the Buyer.  If the Buyer is requested or required by
applicable law (by interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) to disclose any
Confidential Information, Buyer will provide the Company with reasonable notice
of such request or requirement so that the Company may consider seeking a
protective order.  If in the absence of a protective order or the receipt of a
waiver hereunder Buyer is nonetheless, in the opinion of its counsel, compelled
to disclose any Confidential Information to any tribunal or any other person or
else stand liable for contempt or suffer other material censure or penalty,
Buyer may disclose such information to such tribunal or other party without
liability hereunder.  If this Agreement is terminated prior to Closing, Buyer
will, upon written request of the Company, promptly return all written material
containing Confidential Information.

          (B)  If this Agreement terminates prior to the Closing, Buyer agrees
that, without the prior written consent of the Company, for a period of one (1)
year from the date hereof, none of Buyer's employees who have had direct access
to the Confidential Information will directly or indirectly solicit the
employment of any person who is then employed by the Company or MMC and whose
name was included or referenced in the Confidential Information; provided
                                                                 --------
however, that this Section 7.8(B) shall not prohibit Buyer from hiring or
-------
soliciting the employment of any person who either (i) responds to a
solicitation of employment in any publication of reasonably broad circulation by
Buyer or any of Person representing Buyer, or (ii) sends to Buyer an unsolicited
resume or application for employment.

                                 ARTICLE VIII
                             CONDITIONS TO CLOSING

          8.1  Conditions Precedent to Obligations of Buyer.  The obligation of
Buyer to complete the purchase of the Shares 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.

               (1)    All representations and warranties of Sellers, MMC and the
     Company 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, and Buyer shall have received a certificate signed
     by each of the Sellers and the Chief Executive Officer of the Company to
     such effect;

                                       23
<PAGE>

               (2)    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 Company or any of
     the Schools from and after the date of this Agreement;

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

               (4)    All instruments and documents required on the Company's
     and/or Sellers' part to effectuate and consummate the transactions
     contemplated hereby as of the Closing, including those described in Section
     3.2, shall be delivered by Sellers and/or the Company and shall be in form
     and substance satisfactory to Buyer and its counsel;

               (5)    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;

               (6)    The Company 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 States of Michigan and Indiana and all
     local jurisdictions contained therein;

               (7)    Buyer shall be reasonably satisfied that, with respect to
     all required regulatory approvals that are not capable of being obtained
     prior to Closing (including, without limitation, the DOE), 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;

               (8)    Buyer shall have received satisfactory written assurance
     from ABHES and CAAHEP that all required accreditation approvals for the
     Schools will remain in good standing after the Closing Date, and Buyer
     shall be satisfied, in its sole and absolute discretion, that the Schools
     will be able to maintain such accreditation in good standing after the
     Closing Date;

               (9)    All third party consents required by the transactions
     contemplated hereby shall have been obtained;

               (10)   Buyer shall have received satisfactory evidence that all
     liens on the assets of the Company have been, or immediately following the
     Closing will be, terminated and completely released of record;

               (11)   Buyer shall have received from the landlords of the
     Facilities executed estoppel certificates and consents to assignment of
     lease (if so required by the lease agreements respecting such Facilities);
     and

                                       24
<PAGE>

               (12)   Buyer shall have completed its due diligence investigation
     of the Seller and the Schools, and shall be satisfied with the results of
     such investigation in its sole and absolute discretion; and

               (13)   Buyer shall have received a legal opinion from counsel for
     Sellers covering the matters set forth in Exhibit D, in form and substance
                                               ---------
     satisfactory to counsel for Buyer.

          8.2  Conditions Precedent to Obligations of Sellers and the Company.
The obligation of Sellers and the Company to complete the sale of Shares as
provided for herein are 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 in writing.

               (1)    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 an officer of Buyer to such effect;

               (2)    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 Seller shall have received a
     certificate signed by an officer of Buyer to such effect;

               (3)    All instruments and documents required on Buyer's part to
     effectuate and consummate the transactions contemplated hereby, including
     those described in Section 3.3, shall be delivered by Buyer;

               (4)    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

               (5)    There shall have been no material adverse change in the
     financial condition of the Company from and after the date of this
     Agreement in an aggregate amount of Five Hundred Thousand Dollars
     ($500,000) or more (or which, in the reasonable opinion of the Company's
     accountants, would require the Company to reserve an amount equal to or
     greater than Five Hundred Thousand Dollars ($500,000) on the Company's
     balance sheet as of the Closing Date to fairly represent the financial
     condition of the Company in accordance with GAAP as of such date) which is
     caused solely and exclusively by one or more of the following events or
     conditions: (A) an act of God (including, for example, but without
     limitation, fire, flood, earthquake, rain, or tornado), (B) the imposition
     of, or written threat to impose, a fine, penalty or other sanction or
     adverse action by any regulatory or governmental body, or (C) the filing
     of, or written threat to file, litigation against the Company by any third
     party.

                                  ARTICLE IX
                                 MISCELLANEOUS

          9.1  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

                                       25
<PAGE>

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).

          9.2  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, (c) transmitted by facsimile or other
telecommunications mechanism, provided that any notice so given is also sent or
mailed as provided in clauses (b) or (d), or (d) by registered or certified
mail, postage prepaid, return receipt requested, in each case addressed,

          if to Buyer (and/or the Company following the Closing Date), at:

               Corinthian Schools, Inc.
               [Grand Rapids Educational Center, Inc.,] [If after the Closing
               Date]
               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 (and/or the Company following the
          Closing Date), 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

          if to Sellers, MMC (and/or the Company prior to the Closing Date), at:

               Robert J. Malone
               Mary C. Malone
               Malone Management Company
               [Grand Rapids Educational Center, Inc.,] [If prior to the Closing
               Date]
               4330 44th Street, S.W.
               Grandville, MI 49418
               Facsimile:  (616) 530-9927

          with each such notice to Sellers, MMC (and/or the Company prior to the
          Closing Date), a copy to:

               Verspoor, Waalkes, Lalley, Slotsema & Talen, P.C.
               40 Pearl Street, NW,
               Suite 1020
               Grand Rapids, MI 49503
               Attention: Edward Talen
               Facsimile: (616) 459-2102

                                       26
<PAGE>

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 9.2.  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, (iii) on the day sent in the case of transmittal by facsimile or other
telecommunications mechanism (provided that electronic confirmation of delivery
is also received on such day by the sender), or (iv) 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.

          9.3  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.

          9.4  Nature and Survival of Representations.  The representations,
warranties, covenants and agreements contained in this Agreement, and all
statements contained on 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 eighteen (18)
months following the Closing Date.  Subject to the introductory language in
Article V regarding cross-applicability of scheduled information, the
representations and warranties set forth in Articles V and VI are cumulative,
and any limitation or qualification set forth in any one representation and
warranty therein shall not limit or qualify any other representation and
warranty therein.  After the Closing, the Company shall have no liability to
Sellers for any breach of any representation or warranty made by Sellers, MMC or
the Company to Buyer in this Agreement, in any certificate or document furnished
pursuant hereto by Sellers or the Company.

          9.5  Public Announcements.  Any public announcement or similar
publicity with respect to this Agreement will be issued, if at all, at such time
and in such manner as Buyer shall determine in its sole and absolute discretion.
Unless consented to by Buyer in advance, prior to the Closing Date, Sellers
shall, and shall cause the Company to, keep this Agreement strictly confidential
and may not make disclosure  of this Agreement to any Person, other than
employees of the Company or MMC.

          9.6  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.

          9.7  Governing Law.  This Agreement shall be construed and interpreted
according to the substantive laws of the State of Michigan without giving effect
to the principles of conflicts of law thereof.

                                       27
<PAGE>

          9.8  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.

          9.9  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.

          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.

          9.11 Time is of the Essence.  Seller 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.

          9.12 Indemnification by Sellers, MMC and, Prior to the Closing, the
Company.  Sellers, MMC and, prior to the Closing, the Company, jointly and
severally, hereby agree to indemnify, defend and hold harmless Buyer, its
Affiliates and, after the Closing, the Company, and their respective officers,
directors, stockholders, employees, agents, successors and assigns 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:

               (1)    any breach of, or any inaccuracy or misrepresentation in,
     any of the representations or warranties made by Sellers, MMC or the
     Company in Article V of this Agreement or any other agreement, statement or
     certificate delivered pursuant to or in respect of Article V;

               (2)    any breach of or violation by Sellers, MMC or the Company
     of any of the covenants made by Seller, MMC and/or the Company in any
     portion of this Agreement other than Article V or any other agreement,
     statement or certificate delivered pursuant hereto;

               (3)    any Tax payable by or on behalf of Sellers, or any of
     Sellers' Affiliates, or the Company, for any taxable period ending on or
     prior to the Closing Date, except to the extent that any such Tax has been
     accrued as a liability on the balance sheet of the Company as of the
     Closing Date;

               (4)    any actual or threatened claim, suit, action or proceeding
     arising out of or resulting from the conduct by the Company or MMC of their
     respective businesses or operations on or before the Closing Date (except
     for failure of the Company after the Closing Date to pay any accounts
     payable which are fully accrued and reserved for on the Closing Balance
     Sheet);

               (5)    any of the matters disclosed on Schedule 5.14, Schedule
                                                      -----------------------
     5.16 and Schedule 5.19;
     ----     -------------

               (6)    any determination by the DOE or any accrediting agency
     that the Company and/or the Schools have not demonstrated compliance with
     34 CFR 668.15 (Factors of Financial Responsibility) and 34 CFR 668.16
     (Standards of Administrative Capability) for dates and periods prior to
     Closing Date; and

                                       28
<PAGE>

               (7)    any actions, judgments, costs and expenses (including
     reasonable attorneys' fees, expert witness fees and all other 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.

          9.13 Indemnification by Buyer.  Buyer hereby agrees to indemnify and
hold harmless Sellers and their Affiliates (including, without limitation, MMC)
from and against:

               (1)    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;

               (2)    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;

               (3)    any Tax payable by or on behalf of the Company with
     respect to operations of the Company prior to the Closing Date that become
     due and payable after the Closing (all as prescribed in Section 7.4.4);

               (4)    any actual or threatened claim, suit, action or proceeding
     arising out of or resulting from the conduct by the Company of its business
     or operations after the Closing Date; and

               (5)    any actions, judgments, costs and expenses (including
     reasonable attorneys' fees, expert witness fees and all other 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.

          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 or, after the Closing, the Company, pursuant to Section 9.12, or
Sellers, pursuant to Section 9.13 (each such party an "Indemnitee"), against the
party agreeing to provide indemnification hereunder (the "Indemnitor").  The
Indemnitee shall promptly give notice hereunder to the Indemnitor, after
obtaining notice of any claim 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
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.  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

                                       29
<PAGE>

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 Seller, Buyer is hereby authorized at any time,
and from time to time, to set-off and/or apply any and all amounts owing by
Buyer to Sellers, whether under this Agreement or otherwise and including, but
not limited to, any amounts owed pursuant to the Non-Competition Agreement,
against any and all of the obligations of Sellers and/or MMC to Buyer hereunder,
including without limitation Sellers' and MMC's obligations pursuant to Section
9.12 hereunder.

          9.15 Dispute Resolution and Arbitration.

               9.15.1 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 and who are at a higher level of management (if any) than the
persons with direct responsibility for administration of this Agreement.  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.

               9.15.2 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
9.15.1 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. If
available, the arbitrator should have familiarity or experience in Title IV
funding matters. The arbitration shall be conducted in the State of Michigan and
shall be governed by the rules of civil procedure in the State of Michigan, 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 arbitrator may award
equitable relief in those

                                       30
<PAGE>

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.

          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.

          9.17 Expenses.  Except as otherwise expressly provided in this
Agreement, each party to this Agreement shall bear its respective expenses
incurred in connection with the negotiation, execution, delivery and performance
of its obligations under this Agreement, including all fees and expenses of
agents, representatives, counsel, and accountants; provided, however, that such
                                                   -----------------
expenses incurred by the Company prior to Closing shall be the sole
responsibility of the Sellers and the Company shall have not liability therefor.
In the event of termination of this Agreement, the obligation of each party to
pay its own expenses shall be subject to any rights of such party arising from a
breach of this Agreement by the other party.  Sellers shall reimburse and
indemnify the Company and Buyer from and against any and all fees and expenses
of agents, representatives, counsel, and accountants incurred by the Company
prior to the Closing Date.

          9.18 Limitation of Liability.  The parties' obligations under this
Agreement shall be subject to each of the following limitations.

               9.18.1 Time Limitation. The parties shall be obligated to
     indemnify each other by virtue of Sections 9.12(1) and 9.13(1), as
     applicable, only for those Losses as to which the party seeking
     indemnification has given the other party written notice thereof within
     eighteen (18) months after the Closing Date; provided, however, that with
                                                  --------  -------
     respect to any claim by Buyer for indemnification of Losses sustained by
     reason of a breach by Sellers or the Company of any representation or
     warranty relating to those matters governed by Sections 5.16, 5.17, 5.18
     and 5.19, Sellers' liability shall be limited to those Losses as to which
     such written notice shall have been given within the periods of the
     applicable federal and state statutes of limitations related to such
     matters; and provided further, that, with respect to any claim by Buyer for
                  -------- -------
     indemnification of Losses sustained by reason of a breach of any
     representation or warranty by Sellers or the Company relating to those
     matters governed by Sections 5.1, 5.2, 5.3, 5.20 and 5.25, Sellers'
     liability hereunder shall not be limited as to time (provided, however,
     that nothing herein shall be deemed to be a waiver by Sellers or MMC of any
     federal or state statutes of limitations as against Buyer or the Company).

               9.18.2 Threshold.  Sellers and MMC shall not be liable to Buyer
     for any individual Loss under Subsection 9.12(1) unless such individual
     Loss (any single event or occurrence that may constitute a breach of one or
     more representation and warranty provisions set forth in Article V hereof
     shall constitute an individual Loss) in each instance exceeds One Thousand
     Two Hundred and Fifty Dollars ($1,250.00) (the "Deductible") and unless and
     until the aggregate of Buyer's Losses (after, in each case, reduction of
     such Loss by the amount of the Deductible) thereunder shall equal or exceed
     Fifty Thousand Dollars ($50,000.00) (the "Threshold"); if Buyer's Losses
     (after, in the case of each Loss, reduction of such Loss by the amount of
     the Deductible) under Section 9.12(1) exceed the Threshold, Sellers and MMC
     shall jointly and severally indemnify Buyer for all such Losses without
     regard to the Threshold.

                                       31
<PAGE>

               9.18.3 Liability Cap.  In no event shall Sellers' and MMC's
     aggregate liability to Buyer under this Agreement exceed the sum of Two
     Million Five Hundred Thousand Dollars ($2.5 million).

               9.18.4 Insurance.  Buyer or the Company, as the case may be,
     shall have the option, at such party's sole discretion, of pursuing
     indemnity for any Losses sustained by Buyer or the Company from either or
     both of (i) Sellers pursuant to this Sections 9.12 and 9.14, or (ii) any of
     the insurance carriers whose policies are identified on Schedule 5.15, to
     the extent such Losses are covered under the scheduled policies. In the
     event Buyer or Company asserts a right of indemnity from Sellers or MMC,
     Buyer and Company, at the request of Sellers, shall reasonably cooperate
     with Sellers in pursuing a claim against any insurer who may cover the
     event or matter submitted for indemnity.  While Sellers shall be required
     to perform their obligations under this agreement, including those set
     forth in Sections 9.12 and 9.14, in no event shall Sellers be liable to
     Buyer or Company to the extent the insurer has actually paid the full
     amount of such Loss.  In the event the Sellers pay any Loss or asserted
     Loss under the indemnification provisions of this Agreement, Sellers shall
     receive an assignment of any rights the Company or Buyer may have against
     any insurer that may cover said Loss, and Buyer and Company shall cooperate
     in the assertion of any claim against said insurer(s) (at no cost or
     expense to the Company, other than paying salaries in the ordinary course
     for employees of the Company who would assist in such claim); provided,
                                                                   --------
     however, that the Company shall not be required to assist Sellers in making
     -------
     any claims that the Company, in its sole discretion, deems to be
     fraudulent.

               9.18.5 Fraud; Intentional Misrepresentation. The limitations set
     forth in this Section 9.18, inclusive, shall not apply to Losses of Buyer
     arising out of (i) fraud, or (ii) the breach of any representation or
     warranty contained herein if such representation or warranty was made with
     (x) actual knowledge that it contained an untrue statement of fact or (y)
     an intention to mislead by omitting to state a fact necessary to make the
     other statement of facts contained therein not misleading.

          9.19 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 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.

                                       32
<PAGE>

                         [SIGNATURES ON FOLLOWING PAGE]

                                      33

<PAGE>

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

                     "BUYER"

                     CORINTHIAN SCHOOLS, INC.,
                     a Delaware corporation


                     By: /s/ DENNIS N. BEAL
                        ________________________________
                       Name: ___________________________
                       Title:  EVP & CFO
                             ___________________________


                     "THE COMPANY"

                     GRAND RAPIDS EDUCATIONAL CENTER, INC.,
                     a Michigan corporation


                     By: /s/ ROBERT J. MALONE
                        _______________________________
                       Name: ___________________________
                       Title:  Chairman CEO
                             __________________________

                     "MMC"

                     MALONE MANAGEMENT COMPANY,
                     a Michigan corporation


                     By: /s/ ROBERT J. MALONE
                        _______________________________
                       Name: ___________________________
                       Title:  President CEO
                             __________________________


                     "SELLERS"

                     /s/ ROBERT J. MALONE
                     ___________________________________
                     Robert J. Malone

                     /s/ MARY C. MALONE
                     ___________________________________
                     Mary C. Malone

                                     S-34
<PAGE>

                                     S-35