thinkorswim is a rapidly growing online brokerage firm that focuses primarily on self-directed investors. Ranked #1 by Barron's for options traders in March 2006, thinkorswim's retail trading platform and functionality are recognized among the industry's best for execution, professional analytics and real-time position management. thinkorswim also has an institutional platform targeting professionals, broker dealers and hedge funds as well as an asset management arm servicing retail investors seeking discretionary money management.

This transaction combines two rapidly growing, highly innovative and free cash flow generating companies, which have complementary businesses and customer bases. Strategic rationale behind the merger include the following:

• The combination of INVESTools' education capabilities with thinkorswim's best-in-class trading platform creates a unique business model with the ability to offer differentiated product offerings for the retail investor;
• The combination of INVESTools' education capabilities with thinkorswim's best-in-class trading platform creates a unique business model with the ability to offer differentiated product offerings for the retail investor;
• INVESTools' continuing education offerings, which represent more than 80% of its sales, are principally based on options, complementing thinkorswim's award-winning options-oriented execution platform;
• The combination of two leading technology-based companies will create operating leverage in product innovation resulting in increased lifetime value and recurring revenue from each student.

"INVESTools has been committed to educating investors since 1983. With over 80% of our sales transaction volume originating from the purchase of our continuing education products, our students have become among the most confident, active and knowledgeable individual investors in the market. With the majority of our continuing education programs based on options strategies, our students have been demanding a seamless education to the execution learning experience in both stock and options securities," said Lee K. Barba, Chairman and CEO of INVESTools. "This merger creates that student experience for the first time."

"This is a strategic, transforming merger based on account acquisition synergies generated by INVESTools' students who can now be educated and trade on an integrated platform with top-rated technology. When our students succeed, our shareholders benefit - this merger represents the first time that the economics of account acquisition for an online broker are turned on their head and account acquisition becomes a profit center rather than a cost, in the process originating an account whose owner knows how to use the award wining applications and technology to their fullest to achieve better results," added Mr. Barba.

Tom Sosnoff, thinkorswim CEO stated, "It's time to take our customers to another level and this merger brings the resources to thinkorswim to accomplish that. INVESTools has the passion and spirit to empower investors through education, which has also been the cornerstone of thinkorswim's success. The new firm will be a powerful combination of great educational services and advanced trading technology from which all our customers will benefit."

Financial and Operational Highlights

INVESTools expects the acquisition to be accretive during 2007, and to extend lifetime customer value and to enhance customer retention. Underlying the expected synergies are the following factors:

• The demographics of INVESTools' educated student base provide an attractive cross-selling opportunity. INVESTools' more than 250,000 graduates, including 42,700 new graduates in the past twelve months, are expected to more than double thinkorswim's 15,300 accounts within twelve months following closing;
• The combination of INVESTools' educational products with thinkorswim's powerful trading platform is expected to create a compelling offering to attract new customers and enhance student retention;
• The merger will leverage INVESTools' student acquisition costs with a leading brokerage platform that will increase and extend lifetime value of the student.

For the 12 months ended June 30, 2006, thinkorswim generated revenue and net income of $45.1 million and $11.2 million, respectively, after adjusting for certain items. Key retail performance metrics for August 2006 for thinkorswim include the following:

• Total funded accounts: 15,300;
• Daily average revenue trades (DARTs): 7,500;
• Client assets: $826 million;
• Annual churn rate: 12%.

Transaction Terms and Structure

The Boards of Directors of both companies have unanimously approved the merger transaction. The terms of the transaction include:

• thinkorswim shareholders will receive 50% of merger consideration in cash, and 50% in stock, representing approximately $170 million in cash and 19.1 million IEDU common shares;
• # JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. will provide INVESTools a senior secured term loan of $125 million to fund a portion of the cash transaction and will also provide an unfunded committed senior secured revolving credit facility of $25 million;
• Following the transaction, thinkorswim shareholders will have a 30% ownership stake in INVESTools;
• thinkorswim will receive two seats on an expanded eight-member INVESTools' Board of Directors;
• thinkorswim employees will be eligible to receive a $20 million retention pool that will be paid over 3 years and 2.2 million INVESTools options vesting over 4 years, of which 50% will be at the market price at transaction closing, and 50% will be at 150% of the market price at closing.

Approvals

The merger is subject to NASD and INVESTools shareholder approval, and is expected to be completed by the first quarter of 2007. A special meeting of INVESTools shareholders will be announced following preparation and filing of proxy materials with the Securities and Exchange Commission.