KLC or to any other subsidiaries; (d) create liens on assets; (e) engage in transactions with affiliates; (f) sell assets, including capital stock of subsidiaries, except permitted real estate transfers and other permitted transfers; and (g) merge, consolidate or sell all or substantially all of KLC’s assets and the assets of KLC’s subsidiaries except permitted real estate transfers and other permitted transfers. 11.20. Stockholders Agreement of Knowledge Schools, Inc. KLC is a wholly owned subsidiary of KSI, and KS! pursues no other businesses independent of holding KLC’s stock/equity. KSI entered into a Stockholders Agreement on May 9, 2003 with Knowledge Universe Learning Corp. (the “KSI Parent’) and its minority stockholders (the “Stockholders’). The Agreement provides (a) the KSI Parent (and/or any “Parent Entities" designated by the KSI Parent, which include the KS] Parent and/or certain of the Principals and certain affiliates of the KS! Parent and the Principals) with a right of first refusal over proposed transfers of other Stockholders’ shares, subject to certain exceptions; (b) Stockholders, to the extent they are accredited investors, with a right to invest in new issuances of KSI shares; (c) Stockholders with tag-along rights in connection with a transfer of KSI common stock by any of the Parent Entities resulting in the Parent Entities owning less than 60% of KSI common stock then outstanding, or a transfer of securities by any of the Parent Entities resulting in the Parent Entities owning less than a majority of KSI common stock then outstanding. Stockholders are also subject to a drag-along provision, pursuant to which they may be required to sell a pro rata portion of their shares in the event of a proposed transfer of a majority of KS! common stock then outstanding. Each Stockholder and the KSi Parent are entitled ic receive certain financial information from KSi. The Agreement terminates upon a public offering of KSI, at the option of the KSI Pare