THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Educate, Inc. (EEEE)

4/28/2006 Proxy Information

Educate and Laureate Education, Inc. entered into a Shared Services Agreement dated as of June 30, 2003 pursuant to which Educate provides to Laureate certain accounting, benefits, IT, human resources, purchasing and payroll services and Laureate provides to Educate certain tax, real estate, risk management, and treasury services. During 2005, pursuant to the agreement, Laureate incurred amounts due to Educate of $3.7 million and Educate incurred amounts due to Laureate of $0.7 million. The agreement expires on June 30, 2006. Educate and Laureate are currently negotiating the terms of an extension of the agreement. Mr. Hoehn-Saric is a Director, and Mr. Becker is Chairman and Chief Executive Officer, of Laureate.

On April 27, 2004, Educate entered into a new secured credit facility with a syndicate of lenders. Funds from the new facility were used in part to repay all amounts outstanding under a subordinated $55 million note issued to Laureate by Educate in connection with the acquisition by Educate on June 30, 2003 of Laureate’s pre-K-12 education business. Mr. Hoehn-Saric is a Director, and Mr. Becker is Chairman and Chief Executive Officer, of Laureate.

Educate subleases its corporate headquarters, consisting of 57,471 square feet of office space, from Laureate, pursuant to a lease which expires August 30, 2011. In addition, Educate subleases other property from Laureate. During 2005, Educate incurred $2.4 million as rent under the subleases. In March 2006, Educate and Laureate agreed to the terms of a Memorandum of Understanding concerning Educate leasing additional space in its corporate headquarters building currently leased and occupied by Laureate. Educate and Laureate, along with the owner of the building in which Educate has its corporate headquarters, are currently engaged in negotiations concerning the expansion of Educate’s space in its corporate headquarters building. Mr. Hoehn-Saric is a Director, and Mr. Becker is Chairman and Chief Executive Officer, of Laureate.

On September 20, 2004, Educate sold for $2,100,000 its ownership interest in Connections Academy, Inc., which operates virtual public and charter schools for K-8 students, to certain of Educate’s stockholders, including affiliates of Apollo Advisors, L.P. When Educate acquired Connections Academy from Laureate in June 2003, Educate agreed to pay to Laureate up to $10,000,000 of contingent consideration if Connections Academy achieved specified levels of earnings through 2007. As part of the sale, Educate transferred this contingent liability to the purchaser of Connections Academy. In connection with the sale, Educate and the entity which purchased Connections Academy entered into a transition services agreement, pursuant to which Educate provides certain services to Connections Academy. The agreement provides for payment to Educate of $24,000 on an annual basis. In addition, Connections Academy subleases office space from Educate. Connections Academy and Educate, along with the owners of the buildings in which Connections Academy and Educate have their respective corporate headquarters, are currently engaged in negotiations concerning the expansion and move of Connections Academy’s corporate headquarters from its current building to the building in which Educate has its corporate headquarters. Messrs. Berg, Gross and Weiner, who are Directors of Educate, are affiliated with Apollo. In addition, Messrs. Hoehn-Saric, Peter Cohen, Jeff Cohen and Shaffer, all of whom are officers of Educate, are stockholders of the entity which purchased Connections Academy.

As previously disclosed, in connection with the Company’s initial public offering, the Company entered into an agreement with Apollo pursuant to which Apollo has the right, at any time until Apollo or its affiliates no longer beneficially own at least 50% of the Company’s outstanding Common Stock and have sold at least one share of Common Stock other than in the Company’s initial public offering, to require the Company to increase the size of its Board by two and to fill those vacancies with directors nominated by Apollo. Until such time that Apollo or its affiliates no longer beneficially own at least 33% of the Company’s outstanding Common Stock and have sold at least one share of Common Stock other than in the initial public offering, Apollo will have the right to nominate four designees to the Company Board, and certain important matters relating to the operations of the Company will require the approval of the majority of directors nominated by Apollo, including:

• amendment, modification or repeal of any provision of the certificate of incorporation, bylaws or similar organizational documents in a manner that adversely affects Apollo;

• the redemption, purchase or acquisition of any of the Company’s securities or those of the Company’s subsidiaries;

• the issuance of additional shares of any class of capital stock (other than the grant of options or the issuance of shares upon the exercise of options);

• the payment or declaration of any dividend or other distribution, with respect to any shares of any class or series of capital stock;

• a consolidation or merger with or into any other entity, or transfer (by lease, assignment, sale or otherwise) of all or substantially all of the Company’s assets to another entity;

• a complete or partial liquidation, dissolution, winding-up, recapitalization, reclassification or reorganization;

• a split, combination or reclassification of any shares of capital stock;

• a disposition of any assets in excess of $5 million in the aggregate;

• consummation of any acquisition of the stock or assets of any other entity involving consideration in excess of $5 million in the aggregate;

• entering into certain transactions with affiliates;

• the incurrence of indebtedness aggregating more than $5 million, except for borrowings under a revolving credit facility that has previously been approved or is in existence (with no increase in maximum availability) on the date of closing of this offering;

• change in the Company’s chief executive officer; and

• change in size of the Company’s Board of Directors.

Messrs. Berg, Stone, and Weiner are affiliated with Apollo and, at the time of the Company’s initial public offering, Ms. Krongard was affiliated with Apollo.

4/14/2006 8K Information

In connection with the Company’s initial public offering, the Company entered into an agreement with Apollo pursuant to which Apollo has the right, at any time until Apollo or its affiliates no longer beneficially own at least 50% of the Company’s outstanding Common Stock and have sold at least one share of Common Stock other than in the Company’s initial public offering, to require the Company to increase the size of its Board by two and to fill those vacancies with directors nominated by Apollo. Until such time that Apollo or its affiliates no longer beneficially own at least 33% of the Company’s outstanding Common Stock and have sold at least one share of Common Stock other than in the initial public offering, Apollo will have the right to nominate four designees to the Board, and certain important matters relating to the operations of the Company will require the approval of the majority of directors nominated by Apollo.