ScheinDesign Interactive™ – Kaplan Proposal January 2010

ScheinDesign Interactive™ Draft Proposal Version 1.0 Kaplan, Inc.™ – January 2010 Kaplan University, Kaplan Higher Education, Kaplan Test Prep & Admissions, Kaplan Professional, Kaplan K12

I. Executive Summary:

Kaplan, Inc. (herein “KAP”). Reference to other KAP business units will be preceded by KAP- and abbreviated with the first letters of each word capitalized. E.g. Kaplan University will be: KAP-KU. Based on past and present knowledge, analysis, press releases, news releases, customer feedback, competitive landscape, online presence, partnerships, acquisitions and researchable and downloadable documentation, ScheinDesign Interactive™ (herein “SDI™”) has prepared this draft proposal to provide the basis for additional discussions and progress towards defining opportunities for KAP, KAP-KU, KAP-HE, KAP-TPA, KAP-PU and KAP-K12.

The initial release of Version 1.0 is designed to provide the foundation for long-term business relationship and goals, as the first list of 10 proposed deliverables to be executed in a phased approach. Version 1.0 will also act as a draft proposal, while maintaining flexibility to qualify and quantify a final proposal to be followed by mutually agreeable terms in the form of a contract, which will include a fee structure, timeline and list of deliverables to be delivered by both SDI™ and KAP in completion of the proposed projects listed below.

SDI™'s suggested Version 1.0 approach will focus primarily on goals and deliverables, existing SDI services and opportunities as we further define the development schedule and budget for customizing and developing an additional online presence and product offerings while scheduling and planning future partnerships and acquisitions as it relates to the specific needs of KAP and its separate, online and offline business units and courses.

II. ScheinDesign Interactive™ Overview:

ScheinDesign Interactive™ (SDI™) is a multi-disciplinary Interactive Agency, which launched its business in 1999. With its humble beginnings in print and multimedia, SDI™ expanded its knowledge and success into the Interactive World under the tutelage and working relationship with such Industry Leaders as Apple, AOL, Time Warner and Kaplan. SDI™ is one of the first online Agencies to bridge the gap between the creative vision and business development. Today, SDI™ continues to work with its clients to reinvent their global brand while repackaging their products and services. With a team of extraordinary talent and a network of industry visionaries, SDI™ is developing new and exciting opportunities for an interactive, global economy. The NEW Enterprise of today is working with Agencies like SDI™ that brings with them the creative wisdom and business savvy that is necessary to take today’s PATH TO SUCCESS that speaks to the 21st Century interactive, social media customer and consumer. With a passion for excellence, SDI™ is positioned to bring its clients winning results and Return On Investment 2.

II. SDI™ Proposal:

Goals and Objectives for Kaplan, Inc. and Business Units (Version 1.0)

The following proposal, Version 1.0, includes website analysis and suggested development, online marketing, strategic partnerships, acquisitions and competitive/analytical due diligence. As a follow-up to the conversation and email between Phillip Schein of SDI™ and Andy Rosen, CEO & Chairman Kaplan, Inc., towards the end of Q4 of 2009, this proposal will identify discussed and additional business and Internet-based ideas and solutions to continue the successful extension of the KAP brand.

As requested by Andy S. Rosen, I’ve included Melissa Mack, SVP, Marketing, Kaplan, Inc. and John Polstein, CEO, Kaplan Test Prep in the emailing of this proposal. Since there is overlap in the following proposed new and existing business opportunities along with attention to functional and information-based design, programming and brand extension/awareness, it seemed most appropriate to email this proposal to ALL.

I look forward to further discussion on how these opportunities as they align with KAP’s short and long-term goals for 2010 and beyond.

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ScheinDesign Interactive™ – Kaplan Proposal January 2010

1. KapTV.com (or iKapTV.com, KapTV.tv, KaplanTV.com, iKapTV.tv) – It’s time to take the mission and message from home study kits, books, authors, software, videos, JV partnerships and acquisitions worldwide and package the content for a Cable TV Syndicated Program. With assets, top teachers, presenters, authors, students, Doctors, celebrity-like professionals in their respective fields, etc. (diverse, smart, funny and brand building for the course-specific customer and demographics), KAP is ready for the next BIG move! Online to CABLE NETWORK! It’s time to extend the KAP Brand beyond courseware and online certification. It’s time to launch KapTV; syndicated globally and represented online: KAP-TPA, KAP-KU and KAP-KU are clearly the best and freshest content to build and create a “treatment” and “syndicated cable program”. a. KAP-TPA would be an untapped and natural continuation of KAP-TPA’s SAT, GMAT, GRE, USMLE, TOEFL, MCAT, etc. existing classroom, online and community audience of Mother’s, Teenagers, College Students and the International Community looking to change their lives. TV’s and mobile devices (cell phones) are in more countries and homes than a computer. Even the most third-world, underdeveloped countries, has a TV with Cable and/or a mobile device. Europe, Asia, Latin America, South America and Africa are more Technology advanced than the US when it come to Telecommunications and a “common network” for both TV and mobile devices. b. As for KAP’s largest piece of the pie, KAP-KU owns 50% or more of today’s growing revenue. I believe this is because KAP was willing to take chances and throw money at an opportunity that had (and has) the potential on paper to bring KAP unbelievable reach and rewards. If the plan failed, the LOSS in brand equity would almost $0 dollars as it affected the rest of the KAP businesses, but the REWARD could be huge and ongoing! This was proven in KAP-KU’s number and percent of the $5 billion dollar Enterprise. This why KAP-TV, even after the numbers are crunched, will be the best “target case”. c. Production Options: Harpo Communications, Discovery Communications and/or Sony Pictures Television to develop a syndicated daytime and evening programming from existing KAP Content, but reformatted into several treatments from a Q&A Show like Dr. Oz (KapTV – A Higher Education), with guest appearances based on that days show: i. The idea or concept ii. The treatment iii. Set up the meeting iv. Choose the right network and production company v. Organize the content vi. A professional like “Jeff Arnold” or a “Lawyer” to pitch the meeting and treatment d. Discovery Communications is a perfect partner for KAP. They have “Discovery Health”, “Science Channel”, “Discovery Kids”, “HowStuffWorks”, and “Discovery Education”. It’s a natural addition to add KAPTV (branding a NEW name is needed) to the Network to increase their product offering to their viewers. Adding College, Professional, Online Degrees, K-12 and Community to their channels would be GREAT! e. Jeff Arnold and I worked together back in the early days of “HowStuffWorks”. Jeff’s history really got his start with creating WebMD. Today, he works for Discovery as Chief of Global Digital Strategy and HowStuffWorks.com Chairman Emeritus. Recently with Discovery Communications he launched “ShareCare”, an online experience leveraging the reach and tools of social networking, through both corporate and professional partnerships like Dr. Oz, publishing companies, world renowned Hospitals and much more, bringing online healthcare into the 21st Century Online Communities. f. Example of KAPTV’s, Edutainment Educators, Professionals and Industry-specific Celebrities are endless and below I have identified 2 that represent the “real world” success stories and celebrities in their own right that represent the KAP-KU customer and TV educator/entertainer: i. Nutrition BS Certification: Heidi Skolnik – (http://www.nutritionconditioning.net/) a 30 year friend who has presented on Good Morning America, Early Show, Food Network, 20/20, etc. and has been published in several trade and National magazine as a columnist which includes First for Women, Woman's Day, Ladies Home Journal, Good housekeeping, Parents, Real Simple, SELF, InStyle, Natural Health, Teen Vogue, Glamour, Men's Health, American Baby, Parenting, Oxygen and many more. She’s also the author of the “Reverse Diet”. 1. Credentials: Heidi also has expertise within the corporate wellness arena, working with top companies such as Morgan Stanley, Becton-Dickinson, Johnson and Johnson, Colgate- Palmolive and Merrill-Lynch. 2. Heidi holds two Masters Degrees and is a New York State Certified Nutritionist. She is a Fellow with the American College of Sports Medicine (ACSM) and is ACSM certified as a Health Fitness Instructor. Heidi is the president of Nutrition Conditioning, Inc., a nutrition consulting practice, serving the greater New York Metropolitan area.

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ScheinDesign Interactive™ – Kaplan Proposal January 2010

3. Owner of Nutrition Conditioning, Inc., a nutrition consulting practice that helps individuals, teams and organizations achieve health and performance goals, serving the greater New York Metropolitan area. 4. Senior Nutritionist at The Women's Sports Medicine Center at the Hospital for Special Surgery, a nationally recognized integrated medical practice and health resource for active women of all ages and abilities and the first of its kind in the United States. 5. Sports Nutrition Consultant to the New York Giants football team, New York Knicks basketball team, the School of American Ballet and The Juilliard School. ii. Professor Marshall Brain: Fonder and creator of HowStuffWorks (I met Marshall when I was involved in packaging and identifying financing for HowStuffWorks). HowStuffWorks is a commercial edutainment website that was founded by Marshall Brain with the goal of giving its target audience an insight into the way in which many things work. The site uses various media in its effort to explain complex concepts, terminology and mechanisms, including photographs, diagrams, videos and animations, and articles written in language that is designed to be easy enough to be understood by the average layperson. Today, Marshall is still involved with HowStuffWorks and has a separate business that offers his services (http://marshallbrain.com). 1. Founder of HowStuffWorks.com in 1988 2. Sold business to Discovery Communications and Jeff Arnold in 2002 to Discovery Channel. 3. Turned content into TV Series as well as used the content for other successful cable shows like “Modern Marvels”. 4. Used content for successful, ad generating Podcasts* hosted by its staff writers.

2. * Podcasts: Another channel to be monetized by KAP, Inc. and all its business units. Downloadable audio or video file (or series of files) - for example, interviews, audio excerpts, recorded lectures, music, or news reports—that you can download individually or subscribe to receive automatically. You can then listen to (certain devices let you see visuals, graphics and ads – infomercials) to those files with software like iTunes or a portable device like the iPod. KAP-KU, KAP-HE, KAP-TPA, KAP-PU and KAP-K12 can ALL offer FREE podcasts post “subscribing” (which is great for marketing and with a short form, promotions, etc., you get the subscribers to “opt-in” for additional information and upsell courseware, software, online degrees, etc. to the customers) - When you subscribe to any of the KAP products and services, you don’t have to constantly check our website for new content—your podcatcher will do that work for you, finding the latest podcasts and downloading them on a regular basis. When you subscribe, new podcasts are automatically delivered to your “podcatching” software or service (e.g., iTunes, Juice, Fireant, jPodder and Yahoo!) and downloaded to your iPod, iPhone, or other MP3/video players you use to synchronize with that software or service. a. Should reside under the “Community” section of each business unit. b. Syndicate for use by applications called “Podcatchers”. i. iTunes ii. Juice iii. NewsFire iv. Zune c. Used as part of online distant learning. Package player with course. i. Bundled with classroom-based course (bundle player with co-op advertising and revenue share with podcatcher devices.) ii. Receive free with signing up for online course. d. Ad dollars with syndication of content: Podcast audience expected to jump to 55 million by 2011 (450% growth). i. Apple iTunes replace Album Art with Course covers and Ads.

3. KAP-KP JV and/or acquisition discussions with NYREI (New York Real Estate Institute): The New York Real Estate Institute is the gold standard in the industry since 1987. Among our more than 50,000 graduates are some of the most successful real estate professionals in New York thanks to our real estate classes. We are the region’s number one learning institution with real estate classes for licensed real estate professionals and for those looking to be real estate investors. The New York Real Estate Institute started in 1987 with a commitment to meet the education requirements of busy people who want to become licensed real estate sales people and individuals who might be interested in buying a home, coop or simply considering investing in real estate. The New York Real Estate Institute came up with a novel approach of offering a weekly, rotating - START ANY TIME – real estate course. This means that a salesperson candidate can start any day and finish in ten days or take up to four months to complete the course. Each real estate class session (module) can be taken during the mornings, afternoons, evenings, or weekends. NYREI offers the largest selection of continuing education courses and real estate classes

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ScheinDesign Interactive™ – Kaplan Proposal January 2010

to be taken in the classroom or online. We also offer the following courses every month: Broker Licensing; Property Management; Mortgage Broker; Title Closing; Appraiser Licensing; Florida Broker Licensing and Florida Mortgage Broker Licensing (both exclusive to NYREI); Notary and many Real Estate Investment Courses. a. #1 Real Estate School in NYC and surrounding Boroughs (Google NY Real Estate Education – NYREI comes up 7 times, KAP doesn’t make first page result. Organic or sponsored links). i. Live courses with schools in NY, LI, Brooklyn and Queens. ii. Classroom Courses: iii. Licensing Courses iv. Career Courses v. Investment Courses vi. Continuing Education vii. Online Courses viii. Tutoring ix. Seminars x. Job Placement xi. Bookstore 4. KAP FuncSpec (KAP Functional Specification) Website analysis and recommendations for future updates and development (refer to Amendment A: “funcspec”). As an overview of the 30-page funcspec on ALL KAP’s business units, the following ‘bugs’ have been identified. e. Mobile readiness – most KAP sites and business units are not coded appropriately to function of Smart Phones and PDA’s. Refer to number 5 *. f. Multiple sites and brands for the same business with different looks, URL’s and function. g. SEO/SEM as it relates to contextual, indents and sponsored links are misrepresented on Google (*see 16 below). h. Brand Identity is not following a style manual based on multiple and different use of the same brand and logo. i. Social Media: The leading social media sites are being managed and represented by to many KAP business units and subsidiaries around the world: i. YouTube ii. Facebook iii. Twitter j. URL’s are being overused, forwarded and linked to very different homepages representing the same, but different business from look, branding, content, navigation and more.

5. Mobile Optimization: * E.g. http://portal.kaplan.com – KAP-KU: It will display very poorly on a mobile phone. Your mobile readiness score is calculated from many more results than displayed below. Here is an overview. a. Test Summary: Overall score was “Fair” and test summary was as follows: i. Passes – 17 (green) ii. Warnings – 4 (blue) iii. Fails – 8 (red) iv. Comments – 1 (grey) 1. XHTML Mobile Profile: Failed - (a sample of code that should be placed into site for Mobile Devices). For XHTML-MP, the recommended MIME type is application/vnd.wap.xhtml+xml or application/xhtml+xml. Unlike HTML, XHTML-MP should not be served as text/html. Web servers are often set up correctly for common document types such as HTML and CSS, but often do not have the correct doc types for XHTML-MP. 2. No Frames 3. Valid Markup 4. MIME types 5. Objects or scripts b. KAP-KU: NO Mobile Code: c. Mobile Code:

6. KAP Affiliate Program: reviewed, restructured and updated. a. The KAP-TPA affiliate program based on due diligence and review of online affiliate partners is not being managed to assure that the KAP brand is not diluted by letting the “wrong”, defined as inappropriate content, amending and altering the content or tapping the SEO success of KAP and the business units to drive traffic to the affiliates and promote KAP-TPA and other KAP products.

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ScheinDesign Interactive™ – Kaplan Proposal January 2010

b. E.g.1: http://www.docstoc.com, http://www.docstoc.com/docs/9129196/Kaplan-University-Academic- Worksheet, docstoc is not only storing documents, but sharing, ranking them, storing competitive data and capturing the keyword, linkbacks and metadata organically earned and successfully built by KAP and their business units. E.g. 2: http://www.educationmajorsu.com, http://www.educationmajorsu.com/kaplan- university.php. Ranked #216,207. This is based on once again, tapping titles, linkbacks and metadata organically earned and successfully built by KAP and their business units. c. LinkShare™ i. Is LinkShare managing the program as stated in the Kaplan Affiliate Agreement and The LinkShare Network. ii. Here's a bottom line example: Merchant A: Kaplan –Let's take a single PPC campaign. KAP is paying Google, Yahoo, MSN, and LinkShare, the affiliate and network (plus a monthly LinkShare account/management fee). If KAP's cost per sale is 25% (about average) on PPC, and KAP is paying 10% commission, plus the 3% network fee, it's actually costing KAP more than 38% of the order amount! I would believe that tracking and reporting affiliates is more cost-effective in-house! iii. It’s been said that merchants like KAP have their affiliate lists of consumers poached. A good test would be to load the affiliate program and type in the ID# and see if real and appropriate affiliates appear in the browser.

7. PERSONALIZED Search Engine (site-wide with advanced features for business-specific and community-based search that increases relevance within the Enterprise). It is time for KAP and ALL the business units and their sub- divisions to be integrated into a Search Engine. I know from my history that KAP has been tagging and putting its content into XML format for over 10 years. KAP can choose to build (writing a search algorithm today is not what application development was like in the ‘90’s). It’s easier and cost-effective for the short-term and long-term efforts. On a broader scale, the Personalized Search comes in many Social Networking forms. Examples are: a. Google b. Yahoo c. Microsoft Levels of personalization: Personalized search – the common elements to build personalization into search relevance. a. Types of Personalization i. Geo-graphic ii. Localized TLD iii. IP address iv. Query analysis v. Technical b. Browser i. OS function ii. Cookie standards iii. Toolbar c. Time based i. Time of day ii. Time of year iii. Historical data d. Behavioral i. Query history ii. SERP interaction iii. Selection and bounce rates iv. Interactions with advertising v. Surfing habits This list comes from engineers and technology evangelists who have created some of the great search engines and algorithms that we work with every day online today. Search is once again, not a luxury, but a necessity and the KAP family of businesses, courses, leaders, teachers, students and community need to be able to access their information faster and better. Google search results are great to get to KAP, but once you’ve landed, you should never want to leave. I give you the KAP Personalized Search!

8. * SEO/SEM: KAP, KAP-KU, KAP-HE, KAP-TPA, KAP-PU and KAP-K12: SEO needs to be managed beyond the automated, spidered and incorrect organic results on Google. This includes managing Google AdWords and other SEO and SEM Marketing opportunities. I have identified several errors and misuse of the KAP Brand.

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ScheinDesign Interactive™ – Kaplan Proposal January 2010

SEO/SEM: Without changing, but rather optimizing and monetizing through Web Analytics and taking action on these results. a. Some examples of where analytics is necessary and accurate as a powerful tool: i. A/B and multivariate testing ii. Optimizing PPC Campaigns iii. Optimizing Organic SEO Campaigns iv. Segmenting visitor traffic There are clearly more specific examples to be listed. The critical lesson is the relative measurements and how they’re worth their weight in gold. Think "Money Back Guarantee". In other words if your analytics tells you that Page A converts better than Page B, you have a campaign. Or if the results tell you which keywords offer the best conversion rates, that's a customer and money in the bank. Or, if it says that International traffic enrolls in more TOEFL or USMLE courses online vs. classroom than North American visitors, the campaign becomes more targeted and converts a browser into a buyer. b. Double-indents that don’t belong to KAP+ need to be removed and cleaned up (E.G. take the keyword phrase in the anchor text and link from first to second page. You’ll just need a few quality backlinks. c. Indenting Google listings can double your SERP real estate without effecting positioning. d. Organizing and updating the URL addresses from forwarding to linking. Today, the search results are to many and confusing to the customer of which is the “right and appropriate” site for them and for KAP and its business units to capture the PPC and CPC and convert into a transaction. e. Link building is great, but it’s important not to forget the basics when you launch a new or update an existing site. For example: i. Build internal contextual links before worrying about external links. ii. Evaluate your PageRank and make sure unimportant pages are not coming up in search results before important information like a “terms and condition” before a “product page”. iii. Title tags, H1 tags, internal site-wide contextual linking and original content. iv. Manage your Ad dollars and cost-effectiveness, locally, nationally and worldwide. There is clearly much more to cover and discuss on SEO/SEM on an ongoing basis, but these are a few of the salient points I wanted to address as an opening to an extended dialogue and effort going forward.

9. KAP Content Management System and Cloud Computing: a. KAP-KP has integrated Interwoven’s “WorkSite” as the document management tool of choice. It’s interesting because when we first beta-tested Vignette StoryServer which was then, only available as an Enterprise Application with no web-presence and a proprietary technology called “tickle”, I voted for Interwoven being the first and leader in Enterprise CMS. KAP did everything from StoryServer to having General Dynamic’s, an educational division of the government’s larger vendor; we tried to build our own CMS product, converting ALL content into meta data. Interwoven is a great product and needs to be deployed, if it hasn’t already, across all business units. KAP-TPA used a SMB Companies CMS, which probably still runs, the site. Reasons to convert under one solution: i. Convert content (all formats and archives), graphics, video, code (HTML, XHTML, javascript) and multimedia into one format to access by keyword, meta tags, metadata, xml, etc. ii. One format for ease of access across all repositories and storage. iii. Build applications faster within open source SDK’s. iv. Collaboration and ease of access and control of the content. b. Cloud Computing: Storage, Security, SLA’s, on-demand SaaS and return for the Enterprise on risk vs. reward. i. KAP needs to pilot a Cloud program to test the waters. ii. ETS is already using the “server overload and redundancy” – the Surge! By using Amazon’s Cloud services. However, SLA’s and Security is still an issue. iii. KAP-KU and KAP-KP have a reason a necessity for Cloud Computing with ALL the online applications and offerings. In is not cost-effective to build out a server farm internally and traditional mirrored or redundant servers that don’t offer Cloud are just HOSTS! iv. Universities are using Cloud Computing and to reduce the “bad feedback” that KU is getting from traditional Colleges and Universities, Cloud Computing and JV’ing with the naysayers by offering them a revenue share that might mitigate the bad and increase the good press – PR Damage Control.

10. KAP Magazine: After research and discussions with several national Publisher’s and colleagues, I am convinced that even with the growing digital and Internet World, there is still plenty of room and opportunity for the magazine subscription. I have concluded that with the right partner who can minimize production costs, access to their vast

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database of KAP-centric demographics and a more content-focused, entertaining and interactive magazine, a KAP, KAP-KU, KAP-HE, KAP-TPA, KAP-PU and KAP-K12 magazine can bring and reach consumers in a traditional way, bundled with so many optional products and services from the KAP list of offerings. A publication can be created for business units, course-specific, age-specific and/or gender focused customer. a. Business Development: i. By end of December, the new magazine launches totaled 74 new titles divided between 21 regularly published titles and 53 annuals and specials, bringing the total number of new magazines published in 2009 to 734 compared to the final tally of 685 in 2008. ii. Surveys and recent Market Research reveals that the latest attitudes towards magazines, as well as consumer buying habits are being changed and reinvented by the role that young people (in addition to men: ages 25-50 and woman: ages 25-35) are playing as buyers in the magazine sector and interestingly, have less money to spend. iii. Buying habits are slightly shifting between the different socio-economic groups. Even though a high proportion of adults are buying fewer magazines in early 2009 than in 2008, there is an evident trend from national surveys that a higher percentage of women than men in Q4 2009 and Q1 2010 are once again, buying more magazines as advertising is up and content, once again is becoming the primary focus. iv. By integrating KAP's editorial expertise as well as each business units leader with first-hand knowledge of there respective market intelligence under the global, household brand, KAP, you can publish and quickly switch/add new ideas faster and more effectively with greater impact for your audience and customer. This is also available and evident in the improved production life- cycle and supply-chain for producing a magazine in 2010. v. b. Business Benefits: i. One thing all those new magazines share in common: they are more than content. They are trying to create an experience that goes beyond content. Each and every one of those December new launches may have content that you can find on the internet, however the experience you get from picking up the magazines and flipping through their pages goes way beyond the content delivery, but the experience and interaction. KAP has the content and brand equity to offer this experience! ii. Magazine industry advocate’s and leading publishers name a number of reasons for the optimism in the future growth and success of the Magazine Market. The consistent agreement is that they have begun to sell experiences rather than content, making ink on paper or pixels on a screen more than just content, but the creation of a necessary, sufficient and relevant magazine. iii. Twenty years ago you used to pick up a magazine and find engaging material that will keep you busy for a long time. Publishers and analysts agree that “content is worth the price” is what is needed and must create in 2010, regardless of the medium. c. Revenue Opportunity: i. If magazines were only content, that medium would have died years ago. Magazines are experiences and those experiences will continue to evolve and change year after year. ii. We have all learned that customers have a great appetite for content, and they want access in a variety of ways – on their mobile devices/smart phones, e-book's via e-readers, the web and in print. By leading with core strength – KAP has the ability and opportunity to have greater flexibility and control on how, what and where to publish vast amounts of content from each business unit in the ways that KAP's vast, diverse and customer-centric divisions require. iii. What this means for KAP is taking an old business model of bundling products into 1 offering in an integrated solution. A sampling of a KAP bundle can include; home study kit, a book, a web- based micro-site (like when Pfizer launches a new Drug) and a printed magazine (option to take the content and add on ad hoc basis, for each launch, another format, product or service, e.g. e- Book, software, etc.) – under the globally recognized KAP brand. iv. It is the “Must Have” magazines that will survive the future not the “Nice to Have.” d. JV Partners: i. F&W Media (there are several JV partners that meet the criteria): 1. Overview: F+W Media, Inc., a leading multimedia company. For nearly a century F+W has provided information and inspiration for core enthusiast communities, including writing, art, graphic design, outdoors, antiques & collectibles, woodworking, among others. The Company’s charter publications Writer’s Digest magazine and Writer’s Market, continue to be the key resources for aspiring and published writers alike. In addition to more than 500 new book titles a year, the Company maintains a backlist of

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more than 2,500 titles, publishes nearly 40 magazines, owns and operates dozens of informational and subscription-based Web sites, and operates a growing number of successful consumer and trade shows annually. 2. F&W Current Magazines: , Bank Note Reporter, Blade, Coins Magazine, Coins Prices, Comics Buyer's Guide, Deer & Deer Hunting, Family Tree, Frame Building News, Goldmine, Gun & Knife Show Calendar, , Horticulture, HOW, I.D., Metal Roofing, Military Trader, Military Vehicles, Numismatics News, Old Cars Price Guide, Old Cars Weekly, Popular Woodworking, Print, Rural Builder, Scuba Diving, , 's Sports Collectors Monthly, The Artist's Magazine, The Pastel Journal, Timber Homes Illustrated, Trapper & Predator Caller, Turkey & Turkey Hunting, , Woodworking Magazine, World Coin News, Writer's Digest. 3. F&W’s CEO, David Nussbaum is a colleague and I believe would welcome the opportunity. ii. Business Development: 1. F&W bring a wealth of industry experience, a large database of customers to target (in addition to KAP’s opt-in list of past, current and signed-up customers) the launch of NEW publications on News Stands and Subscription-based. 2. F&W understands the Publishing business from magazines, to books, to backlists, to multi-media to online communities. Everything that KAP and their business units are achieving in other industries. 3. Several products from F&W can be offered/bundled into KAP-KP and KAP-KU offerings. Their leading creative and design magazines like HOW, Print, I.D., Military Trader, etc. and KAP-KP can tap content from F&W on Architecture, Engineering, Business, etc. iii. Revenue Opportunity: 1. Several of F&W’s current and leading magazines in specific targeted areas of information and education match the demographics of several of KAP’s business units and courses. This opens the door in negotiations to adding with F&W’s current magazines; rate cards, promotions, subscriptions and advertising for KAP and its subsidiaries. 2. JV with shared revenue and expenses. Percentage to be determined by structure of the business relationship.

III. Miscellaneous Business Terms

Acceptance of Proposal. KAP accepts the proposal set forth by SDI™ in mutual confidence. Additional consulting as it relates to exploring the aforementioned 10 proposed projects are subject to future research and development costs to be determined on an ongoing basis between SDI™ and KAP and their respective executives, not described in this proposal. Further discussions are warranted to determine and explore all or specific opportunities and will be provided to KAP for further review and final approval and additional deliverables, timelines and budgets.

Proposed by: Accepted by: ScheinDesign Interactive™ – Phillip A. Schein Kaplan, Inc.™ – Andy Rosen

By: ______By: ______

Name: ______(print) Name: ______(print)

Date: ______Date: ______

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