KUE financial disclosures reveal $200M promissory note and $150M term loan tied to Milken principals

Name Position Lowell Milken Co-Founder, President and Chief Executive Officer of KUE Michael Milken Co-Founder and Chairman of KUE Steven Green Vice Chairman of KUE, and Chairman and CEO of k1 Ventures and Greenstreet Real Estate Partners Ted Sanders Vice Chairman of KUE Stephen Goldsmith Senior Vice President of Strategic Planning and Worldwide Government Programs Nina Rees Senior Vice President, Strategic Initiatives Jeffrey Safchik Chief Financial Officer Richard Sandler General Counsel Adam Cohn Senior Vice President, Business Development Geoffrey Moore Senior Vice President, Corporate Communications Michael Neumann Vice President, Business Development Name Position Les Biller Retired Vice Chairman & Chief Operating Officer of Wells Fargo and Company Ted Mitchell CEO of the New Schools Venture Fund Tsvi Gal Chief Technology Officer for Deutsche Bank Asset Management 9.2. Note Payable to KULG by KU Education, Inc. On January 6, 2005, KU Education, Inc., a Delaware corporation and subsidiary of KUE ("KUE Inc.”) executed a promissory note in favor of KULG, an entity controlled by the Principals, in the amount of $200.0 million, the proceeds of which were used in connection with the acquisition of KinderCare by KLC. This note has a seven year maturity and accrues interest at the “reference rate” set by Bank of America plus 1.25% per annum. The note may be prepaid, in whole or in part, without any premium or penalty. As of April 1, 2006, KUE Inc. owes approximately $183.9 million under the note. 9.3. Term Loan Facility On March 29, 2006, Knowledge Universe Education LLC, a Delaware limited liability company (“KUE LLC”), entered into a six-month $150 million term loan facility with an affiliate of Credit Suisse, one of the Agents. The proceeds of the $150 million term loan were used to repay existing debt of KUE LLC to entities controlled by Michael Milken. The term loan facility is fully and unconditionally guaranteed by KUE LLC's direct and indirect parents and the parent guaranty is several. Upon contribution of assets to KUE by KUE LLC, KUE will become a co- borrower. It is expected that this Term Loan Facility will be repaid with the proceeds of this offering. The term loan bears interest at either the reserve adjusted LIBOR rate plus 0.125% or the base rate (generally the applicable prime lending rate, as announced from time to time), at KUE’s option and is secured by cash collateral. KUE is permitted to voluntarily prepay the term loan, in whole or in part, without premium or penalty, upon the giving of proper notice. 74 HOUSE_OVERSIGHT_024507