<PAGE>

                      [LETTERHEAD OF EARLYCHILDHOOD.COM]


                                                                   EXHIBIT 10.20


Dear Lisa Derian

     In May, 1999 when QTL Corporation and Educational Products, Inc. joined
with William E. Simon and Sons in creating Earlychildhood.com LLC (the
"Company"), I wanted to make sure that certain employees could obtain equity
interests in the new company in recognition of their exceptional performance and
as an incentive for them to continue to contribute to the Company's growth and
progress. The option to purchase those equity interests has now been set forth
in detail in the Company's 2000 Management Equity Incentive Option Plan (the
"Plan") and the Company's Operating Agreement (the "Operating Agreement"). I am
happy to inform you that you are entitled to participate in that Plan as
described in the enclosed Management Incentive Interest Option Agreement (the
"Agreement").

     As a California limited liability company, Earlychildhood.com is owned by
its "members." (This different than a corporation, which is owned by its
"shareholders.") Each member of the Company owns a percentage of the total
interests owned by all members of the Company. (This is also different than a
corporation, where ownership is through "shares" rather than through percentage
interests.) Under the Plan, you will be granted an option to purchase a 0.1%
interest in the Company. Your option is subject to a three-year vesting
schedule, after which time you will be fully vested and able to purchase the
entire 0.1% interest.

     If you exercise your option, your interest will be subject to a right of
repurchase by the Company in one of two ways. First, if you are terminated for
"cause" (as defined by the Plan) or if you voluntarily resign, the Company can
repurchase your interest at the lesser of the price you paid to exercise your
option (the "exercise price") or the fair market value of your interest. In that
scenario, the Company's right to repurchase at the exercise price decreases over
five years from the date of this letter (the date you were issued the original
option under the Plan). Secondly, if your employment is terminated for other
than "cause" or voluntary resignation, then the Company can repurchase your
interest only at the fair market value of your interest. In that case, the
Company's repurchase right does not decrease or expire.

     Earlychildhood.com has four classes of members, Class A through Class D,
each of which holds interests in accordance with their relative investment in
the Company. Pursuant to the Plan, you will be granted an option to purchase an
equity interest as a Class C member of the Company.

<PAGE>

     If you exercise your opinion to purchase an equity interest in the Company,
the "value" of that equity interest will be based on a complicated formula
contained in the Company's Operating Agreement.  Under that formula, the Class
A and Class B members (including William E. Simon & Sons, QTL Corporation and
Richard and Ronald Phelan), each of which made significant financial investments
in the Company, are given priority in the distributions from the Company.  As a
Class C member, your interest will nevertheless also be tied to the Company's
financial health.

     Because Earlychildhood.com anticipates strong growth and reinvestment of
its earnings, it is unlikely that your membership interest will result in
distributions to you during the COmpany's initial years of operation.  Given
that likelihood, the Company has set the price of your option at $42.50 per .01%
interest.  As the Company grows and becomes more profitable, however, I hope
that if you exercise your option, the value of your membership interest will be
significantly higher than your option exercise price.

     Please note that Earlychildhood.com is governed exclusively by its
Management Committee.  Therefore, neither your option, nor your future equity
interest, includes any voting rights or right to participate in the overall
management of the Company.

     This letter is only a brief summary; your rights are governed by the Plan,
the Agreement, and the Operating Agreement.  Therefore, please take the time to
review the enclosed Plan and Agreement, as well as the attachments.  Also, there
are very important tax consequences associated with any decision you may make in
the future to exercise your option under the Plan.  Therefore, you should
contact a contact a tax professional prior to making a decision to exercise your
option.

     If you choose to participate in the Management Equity Incentive Option
Plan, please date and sign the Agreement and return it to Jeffrey Grace, the
Company's Vice President - Finance.  If you have any questions regarding the
Plan, or your option under the Plan, it would be helpful if you would put those
questions in writing and submit them to Jeffrey Grace, who will attempt to
answer the questions as soon as possible thereafter.

     I am very happy that you will have the opportunity to become a part owner
of Earlychildhood.com LLC, and to benefit from its anticipated growth.

Sincerely,

/s/ Ron Elliott
Ron Elliott
President

<PAGE>

                            EARLYCHILDHOOD.COM LLC

                MANAGEMENT INCENTIVE INTEREST OPTION AGREEMENT
                ----------------------------------------------

     THIS MANAGEMENT INCENTIVE INTEREST OPTION AGREEMENT (this "Agreement") is
made and entered into as of September 1, 2000 (the "Effective Date") by and
between EarlyChildhood.com LLC, a California limited liability company (the
"Company"), and ______________________ ("Optionee").  Capitalized terms used in
this Agreement but not otherwise defined herein shall have their respective
meanings set forth in the 2000 Management Equity Incentive Option Plan of
EarlyChildhood.com LLC (the "Plan") and the Company's Amended and Restated
Operating Agreement dated as of May 5, 1999, as amended from time to time (the
"Operating Agreement").

     THE PARTIES HERETO AGREE AS FOLLOWS:

     1.  Grant of Option.
         ---------------

    Pursuant to the Plan, the Company hereby grants to Optionee, an Option to
purchase Class C Interests in the Company representing a _____ Percentage
Interest, subject to dilution, (together with any successor securities to the
Interest, the "Interests") of the Company as described below in consideration of
the Optionee's agreement to provide services to the Company on the terms and
conditions set forth herein, in the Plan and in the Operating Agreement;
provided, however, that the provisions of the Plan shall prevail over any
inconsistent provisions of this Agreement, and, only to the extent specifically
provided in the Plan, over any inconsistent provisions of the Operating
Agreement:

     Grant Date:                        September 1, 2000

     Exercise Price:                    $42.50 per .01% interest

     Expiration Date:                   The tenth anniversary of the Grant Date.


     2.  Exercise of Option.  This Option is exercisable as follows:
         ----------------------------------------------------------

         (a)   Right to Exercise; Vesting.
               --------------------------

               (i)    Optionee's entitlement to the Option is subject to the
vesting requirements set forth herein. The Option shall vest 1/3 on each of the
three (3) successive anniversaries of the Grant Date, resulting in the full
vesting of the Right on the third (3rd) anniversary of the Grant Date; provided,
however, that vesting shall terminate upon the effective date of a Termination
of Employment or Termination of Consultancy. The portion of the Right that has
vested as of a given date of determination shall be known as the "Vested
Portion" and the portion that has not vested as of such date shall be known as
the "Unvested Portion."
<PAGE>

               (ii)   In the event of Optionee's death, disability or
Termination of Employment or Termination of Consultancy, the exercisability of
the Option after any such event will be governed by Sections 7, 8 and 9 below.

               (iii)  In no event may this Option be exercised after the
Expiration Date of this Option as set forth above.

           (b)  Method of Exercise.  This Option shall be exercisable by
                ------------------
written Notice (in the form attached as Exhibit A).  The Notice must state
                                        ---------
the amount of Percentage Interests, subject to dilution, represented by the
Interests for which the Option is being exercised, and such other
representations and agreements that the Committee may require, in its reasonable
discretion. The Notice must be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The Notice must be
accompanied by payment of the Exercise Price, including payment of any
applicable withholding tax and an executed joinder agreement (in a form
acceptable to the Committee), or other evidence acceptable to the Committee of
execution of the Operating Agreement (including the execution of counterpart
signature pages thereto). This Option shall be deemed to be exercised upon
receipt by the Company of such written Notice accompanied by such joinder
agreement or other evidence of execution of the Operating Agreement, the
Exercise Price and payment of any applicable withholding tax. For income tax
purposes, the Interests shall be considered transferred to the Optionee on the
date on which the Option is exercised with respect to such Interests.

     3.  Optionee's Representations.  If the Interests purchasable pursuant to
         --------------------------
the exercise of this Option have not been registered under the Securities Act,
-----------------------------------------------------------------------------
at the time this Option is exercised, Optionee shall, if required by the
-----------------------------------------------------------------------------
Committee, concurrently with the exercise of all or any portion of this Option,
-----------------------------------------------------------------------------
deliver to the Company his or her Investment Representation Statement in the
-----------------------------------------------------------------------------
form attached hereto as Exhibit B.
---------------------------------

     4.  Market Standoff.  Optionee hereby agrees that if so requested by the
         -----------------------------------------------------------------------
Company or any representative of the underwriters (the "Managing Underwriter")
-----------------------------------------------------------------------------
 in connection with any registration of the offering of any securities of the
-----------------------------------------------------------------------------
Company or any successor thereto under the Securities Act, Optionee and the
-----------------------------------------------------------------------------
Company (or such successor) shall execute a Market Standoff Agreement
-----------------------------------------------------------------------------
substantially in the form attached hereto as Exhibit C, pursuant to which
-----------------------------------------------------------------------------
Optionee shall agree that if so requested by the Company (or such successor) or
-------------------------------------------------------------------------------
any representative of the underwriters in connection with any registration of
-----------------------------------------------------------------------------
the offering of the securities of the Company (or such successor), Optionee
-----------------------------------------------------------------------------
shall not sell or dispose of the Interests for a period of 180 days following
-----------------------------------------------------------------------------
the effective date of a Registration Statement filed under the Securities Act.
-----------------------------------------------------------------------------

     5.  Method of Payment.  Payment of the Exercise Price shall be by any of
         --------------------------------------------------------------------
the following, or a combination thereof, at the election of the Optionee:
------------------------------------------------------------------------

          (a)  cash;

          (b)  check;

                                       2
<PAGE>

          (c) with the consent of the Committee and to the extent permitted by
law, a full recourse promissory note bearing interest (at no less than such rate
as shall then preclude the imputation of interest under the Code), payable upon
such terms and in such form as may be prescribed by the Committee;

          (d)  with the consent of the Committee, surrender of other Interests
of the Company which (A) in the case of Interests acquired from the Company,
have been owned by the Optionee for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Interests as to which the Option is being exercised;

          (e)  with the consent of the Committee, a written agreement to
withhold from issuance a portion of the Interests otherwise issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise equal
to the aggregate Exercise Price of the Option or exercised portion thereof; or

          (f) with the consent of the Committee, property of any kind which
constitutes good and valuable consideration.

     6.  Restrictions on Exercise.  This Option may not be exercised until the
         ------------------------
Plan has been approved by the Members of the Company. If the issuance of
------------------------------------------------------------------------
Interests upon such exercise or if the method of payment for such Interests
---------------------------------------------------------------------------
would constitute a violation of any applicable federal or state securities or
-----------------------------------------------------------------------------
other law or regulation, then the Option may also not be exercised. The
-----------------------------------------------------------------------
Committee may require Optionee to make any representation and warranty to the
-----------------------------------------------------------------------------
Company as may be required by any applicable law or regulation before allowing
------------------------------------------------------------------------------
the Option to be exercised.
--------------------------

     7.  Termination of Relationship.
         ---------------------------

         (a)  If Optionee ceases to be a service provider to the Company on
account of a Termination of Employment for Cause or a Termination of Consultancy
for Cause, the Option granted hereunder shall cease to be exercisable and shall
terminate on the date upon which such Termination of Employment or Termination
of Consultancy is effective.

          (b)  If Optionee ceases to be a service provider to the Company on
account of a Termination of Employment or a Termination of Consultancy (other
than for Cause or death or total and permanent disability as defined in Code
Section 22(e)(3)), the Optionee may exercise the Option to the extent the Option
was vested at the date on which Optionee ceases to be a service provider, but
only within thirty (30) days from such date (and in no event later than the
Expiration Date of this Option as set forth in Section 1 of this Agreement). If
Optionee does not exercise such Option within such thirty (30) day period, the
Option shall terminate.

          8.  Disability of Optionee.  If Optionee ceases to be a service
              ------------------------------------------------------------------
provider to the Company as a result of his or her total and permanent disability
--------------------------------------------------------------------------------
as defined in Code Section 22(e)(3), Optionee may exercise the Option to the
----------------------------------------------------------------------------
extent the Option was vested at the date on which Optionee ceases to be a
-------------------------------------------------------------------------
service provider, but only within twelve (12) months from such
--------------------------------------------------------------

                                       3
<PAGE>

date (and in no event later than the Expiration Date of this Option as set forth
--------------------------------------------------------------------------------
in Section 1 of this Agreement). If Optionee does not exercise such Option
--------------------------------------------------------------------------
within the time specified herein, the Option shall terminate.
------------------------------------------------------------


     9.  Death of Optionee.  If Optionee ceases to be a service provider to the
         ----------------------------------------------------------------------
Company as a result of the death of Optionee, the vested portion of the Option
------------------------------------------------------------------------------
may be exercised at any time within twelve (12) months following the date of
----------------------------------------------------------------------------
death (and in no event later than the Expiration Date of this Option as set
---------------------------------------------------------------------------
forth in Section 1 of this Agreement) by Optionee's estate or by a person who
-----------------------------------------------------------------------------
acquires the right to exercise the Option by bequest or inheritance.  If the
----------------------------------------------------------------------------
Option is not exercised within the time specified herein, the Option shall
--------------------------------------------------------------------------
terminate.
---------

     10.  Non-Transferability of Option.  This Option may not be transferred
          ------------------------------------------------------------------
in any manner except to Optionee's immediate family member(s) by will or by the
-------------------------------------------------------------------------------
laws of descent or distribution. It may be exercised during the lifetime of
---------------------------------------------------------------------------
Optionee only by Optionee. The terms of this Option shall be binding upon the
-----------------------------------------------------------------------------
executors, administrators, heirs, successors and assigns of the Optionee.
------------------------------------------------------------------------

     11.  Repurchase of Interests.  The provisions of Section 9.6 of the
          --------------------------------------------------------------
Operating Agreement shall be applicable to all Interests acquired pursuant to
-----------------------------------------------------------------------------
the exercise of the Option, except, if Optionee is an Employee (not a
---------------------------------------------------------------------
Consultant), to the limited extent provided in the following two sentences.
--------------------------------------------------------------------------
Notwithstanding the provisions of Section 9.6(b) of the Operating Agreement to
------------------------------------------------------------------------------
the contrary (which for the purpose of the Interests acquired by an Employee
----------------------------------------------------------------------------
pursuant to the exercise of the Option are superseded hereby), if Optionee's
----------------------------------------------------------------------------
Termination of Employment is for Cause or occurs as a result of his voluntary
-----------------------------------------------------------------------------
resignation or withdrawal, the right of the Company to repurchase such Interest
-------------------------------------------------------------------------------
may be exercised for a repurchase price equal to the lesser of (i) the Original
-------------------------------------------------------------------------------
Cost or (ii) the Fair Market Value of such Interest; provided, however, that the
--------------------------------------------------------------------------------
Company's right to repurchase such Interest at such repurchase price shall lapse
--------------------------------------------------------------------------------
at a rate of twenty percent (20%) for each year, measured from the Grant Date,
-----------------------------------------------------------------------------
that Optionee served as an Employee and, with respect to the percentage of such
-------------------------------------------------------------------------------
Interest with respect to which such lapse has occurred, the Company's right to
------------------------------------------------------------------------------
repurchase such Interest may only be exercised for a repurchase price equal to
------------------------------------------------------------------------------
the Fair Market Value of such Interest; provided, further, that for the
-----------------------------------------------------------------------
percentage of any such Interest with respect to which such lapse has not
------------------------------------------------------------------------
occurred, to the extent such Interest is purchased at the Original Cost, then,
-----------------------------------------------------------------------------
subject to the remaining provisions of Section 9.6 of the Operating Agreement,
-----------------------------------------------------------------------------
such purchase price shall be paid on the Repurchase Date. If Optionee is an
---------------------------------------------------------------------------
Employee (not a Consultant), then notwithstanding the provisions of Section
---------------------------------------------------------------------------
9.6(b) of the Operating Agreement to the contrary (which for the purpose of the
-------------------------------------------------------------------------------
Interests acquired pursuant to the exercise of the Option are superseded
------------------------------------------------------------------------
hereby), the Company's repurchase right with respect to Interests acquired
--------------------------------------------------------------------------
pursuant to the exercise of Options granted under this Plan: (a) may not be
---------------------------------------------------------------------------
exercised later than 90 days after the date of Termination of Employment, (b)
-----------------------------------------------------------------------------
may only be exercised for cash or cancellation of purchase money indebtedness,
-----------------------------------------------------------------------------
and (c) shall terminate upon the consummation of the Company's initial Public
-----------------------------------------------------------------------------
Offering.
--------

     12.  Term of Option.  Notwithstanding any other provision of this
          ------------------------------------------------------------
Agreement to the contrary, this Option shall terminate and cease to be
----------------------------------------------------------------------
exercisable effective on the Expiration Date set out in Section 1 of this
-------------------------------------------------------------------------
Agreement.
---------

                                       4
<PAGE>

     13.  Binding Effect.  Subject to the limitations set forth herein, this
          ------------------------------------------------------------------
Agreement shall be binding upon, and inure to the benefit of, the executors,
---------------------------------------------------------------------------
administrators, heirs, legal representatives, successors and assigns of the
---------------------------------------------------------------------------
parties hereto.
--------------

                            (Signature Page Follows)

                                       5
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one document.


                              EARLYCHILDHOOD.COM LLC,
                              a California limited liability company


                              By:
                                  ------------------------------------
                                  Name:  Ronald Elliott
                                  Title: President, CEO and Secretary





     OPTIONEE ACKNOWLEDGES AND AGREES THAT THE OPTION HEREIN GRANTED CONTINUES
     TO BE EXERCISABLE ONLY FOR PERIODS DETERMINED WITH REFERENCE TO THE PERIOD
     OF CONTINUED CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT
     THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
     INTERESTS HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
     NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S 2000 MANAGEMENT EQUITY
     INCENTIVE OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL
     CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT
     OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH
     OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT
     OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE OR NOTICE.



     Optionee acknowledges receipt of a copy of the Plan and the Operating
Agreement and represents that he is familiar with the terms and provisions
thereof.  Optionee hereby accepts this Option subject to all of the terms and
provisions hereof.  Optionee has reviewed the Plan, the Operating Agreement and
this Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option.  Optionee hereby agrees to accept as binding, conclusive and final
all decisions or

                                      S-1
<PAGE>

interpretations of the Committee upon any questions arising under the Plan or
this Option. Optionee further agrees to notify the Committee upon any change in
the residence address indicated below.

                              OPTIONEE:


                              ----------------------------------
                              (Sign Name)


                              ----------------------------------
                              (Print Name)



                               Residence Address:


                               ----------------------------------

                               ----------------------------------

                                       2
<PAGE>

                                   EXHIBIT A
                                   ---------

                             EARLYCHILDHOOD.COM LLC

                  2000 MANAGEMENT EQUITY INCENTIVE OPTION PLAN

                                EXERCISE NOTICE

EarlyChildhood.com LLC

Attention:  President

     1.  Exercise of Option.  Effective as of today, ___________, 2000, by
         ------------------
executing this notice (the "Notice") the undersigned (the "Optionee") hereby
elects to exercise such Optionee's option to purchase Class C Interests in
EarlyChildhood.com LLC (the "Company") representing a _________ Percentage
Interest (the "Interests") in the Company under and pursuant to the 2000
Management Equity Incentive Option Plan of EarlyChildhood.com LLC (the "Plan")
and the Management Incentive Option Interest Agreement dated September 1, 2000,
(the "Agreement").


     2.  Representations of Optionee.  Optionee acknowledges that Optionee has
         ---------------------------
received, read and understood the Plan, the Operating Agreement and the Option
Agreement.  Optionee agrees to abide by and be bound by their terms and
conditions.

     3.  Rights and Obligations as Member.  Upon exercise of the option in
         --------------------------------
compliance and accordance with the provisions of Section 5.3(c) through (e) of
the Plan, and compliance with Section 5.4 thereof, the Optionee shall become a
Class C Member and shall have all the rights of a Class C Member with respect to
said Interests as provided in the Operating Agreement, subject to the
restrictions in the Agreement.  Optionee shall enjoy rights as a Class C Member
and shall be subject to all of the limitations, restrictions and obligations
contained in the Operating Agreement as a Class C Member, until such time as
Optionee disposes of the Interests or the Company and/or its assignee(s)
exercises the Right of Repurchase provided under the Operating Agreement, as
modified by the Plan.  Upon such exercise, Optionee shall have no further rights
as a holder of the Interests so purchased except the right to receive payment
for the Interests so purchased in accordance with the provisions of this
Agreement and the Operating Agreement.

     4.  Company's Right of Repurchase.
         -----------------------------

          The Interests shall be subject to a right of repurchase in favor of
the Company (the "Right of Repurchase") in the event of the Termination of
Employment or Termination of Consultancy of the Optionee as provided in Section
9.6 of the Operating Agreement at the repurchase price and subject to such other
terms and conditions as specified therein, subject to Section 6.1 of the Plan.

                                      A-1
<PAGE>

     5.  Restrictions on Transfer of Interests.
         -------------------------------------

         The Interests acquired pursuant to the Option granted to Optionee under
this Agreement are subject to the terms of the Plan and the terms of the
Operating Agreement. As provided in the Operating Agreement, the Interests may
be transferred in certain limited and restricted circumstances. Any transferee
of Interests shall take such Interest subject to the terms of the Plan, this
Agreement, and the Operating Agreement, including, without limitation, the
transfer and repurchase restrictions set forth in Article 9 of the Operating
Agreement, subject to Section 6.1 of the Plan. Any such transferee must, upon
the request of the Company, execute an agreement agreeing to be bound by the
Operating Agreement. Notwithstanding any provisions to the contrary in the
Operating Agreement, Optionee may not dispose of or transfer any Option or
portion thereof under any circumstances other than (a) pursuant to a will or the
laws of descent and distribution or (b) pursuant to a DRO, and any attempted
transfer shall be null and void.

     6.  Interest Certificate Restrictive Legends.
         ----------------------------------------

         Certificates evidencing Interests, to the extent such certificates are
required to (or may) be issued, may bear such restrictive legends as the Company
and/or the Company's counsel may deem necessary or advisable under applicable
law or pursuant to this Agreement, including, without limitation, the following
legends:

     "THE OFFERING AND SALE OF THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
     ACT"). ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A
     REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS IN EFFECT AS TO SUCH
     TRANSFER OR IN THE OPINION OF COUNSEL FOR THE COMPANY SUCH REGISTRATION IS
     UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE SECURITIES ACT."

     "THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A RIGHT OF REPURCHASE
     (THE "RIGHT OF REPURCHASE") BY THE COMPANY AND RESTRICTIONS ON TRANSFER
     ("TRANSFER RESTRICTIONS") PURSUANT TO THE AMENDED AND RESTATED OPERATING
     AGREEMENT OF EARLYCHILDHOOD.COM LLC, DATED MAY 5, 1999, AND SUCH SECURITIES
     MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO THE PROVISIONS
     OF SUCH AGREEMENT."

     7.  Tax Advice.  The Company has made no warranties or representations to
         ----------
Optionee with respect to the income tax consequences of the transactions
contemplated by the grant of options or by this Agreement, and Optionee is in no
manner relying on the Company or its representatives for an assessment of such
tax consequences.

     8.  Remedies.
         --------

         Optionee shall be liable to the Company for all costs and damages,
including incidental and consequential damages, resulting from a disposition of
Interests which is not in

                                      A-2
<PAGE>

conformity with the provisions of this Agreement. Without limiting the
generality of the foregoing, Optionee agrees that the Company shall be entitled
to obtain specific performance of the obligations of Optionee under this
Agreement and immediate injunctive relief in the event any action or proceeding
is brought in equity to enforce the same. Optionee will not urge as a defense
that there is an adequate remedy at law.

     9.   Governing Law.
          -------------

         This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts entered into and
wholly to be performed within the State of California by California residents,
without regard to any otherwise governing principles of conflicts of law.

     10.  Survival of Representations and Warranties.
          ------------------------------------------

         The representations, warranties and covenants contained in Exhibit B
shall survive the later of the date of execution and delivery of this Agreement
or the issuance of the Interests.

     11.  Notices.
          -------

          All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method and an appropriate confirmation is received; the day after it is sent, if
sent for next day delivery to a domestic address by recognized overnight
delivery service (e.g. Federal Express); and upon receipt, if sent by certified
or registered mail, return receipt requested. Unless and until Optionee is
notified in writing to the contrary, all notices, communications and documents
directed to the Company and related to the Agreement, if not delivered by hand,
shall be mailed, addressed as follows:

          EarlyChildhood.com LLC
          Two Lower Ragsdale Drive, Suite 200
          Monterey, California  93940
          Attention:  Management Committee
          Telephone:  (831) 353-2000
          Facsimile:   (831) 333-2580

          Unless and until the Company is notified in writing to the contrary,
all notices, communications and documents intended for Optionee and related to
this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.

                                      A-3
<PAGE>

     12.  Counterparts.
          ------------

          This Agreement may be executed in any number of counterparts, any of
which may be executed and transmitted by facsimile, and each of which shall be
deemed to be an original, but all of which together shall be deemed to be one
and the same instrument.

     13.  Successors and Assigns.
          ----------------------

          Subject to the limitations set forth in this Agreement, this Agreement
shall be binding upon, and inure to the benefit of, the executors,
administrators, heirs, legal representatives, successors and assigns of the
parties hereto, including, without limitation, any business entity that succeeds
to the business of the Company.

     14.  Entire Agreement; Amendments and Waivers.
          ----------------------------------------

          This Agreement, together with all exhibits, annexes and schedules
hereto, and the Plan and the Operating Agreement, constitute the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. This Agreement may not be amended
except in an instrument in writing signed on behalf of each of the parties
hereto. No amendment, supplement, modification or waiver of this Agreement shall
be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.

     15.  Invalidity.
          ----------

          In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, then to the
maximum extent permitted by law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument.

     16.  Titles.
          ------

          The titles, captions or headings of the Articles and Sections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.


                            (Signature Page Follows)

                                      A-4
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                              EARLYCHILDHOOD.COM LLC,
                              a California limited liability company

                              By:
                                 ________________________________
                                 Name:
                                 Title:

     Optionee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement.


                              Optionee:

                              ___________________________________
                              (Sign Name)


                              ___________________________________
                              (Print Name)

     Optionee's spouse indicates by the execution of this Agreement his or her
consent to be bound by the terms herein as to his or her interests, whether as
community property or otherwise, if any, in the Interests.

                              Optionee's Spouse:

                              ___________________________________
                              (Sign Name)


                              ___________________________________
                              (Print Name)

                                      A-5
<PAGE>

                                   EXHIBIT B
                                   ---------

                      INVESTMENT REPRESENTATION STATEMENT


OPTIONEE    :  _____________________

COMPANY     :  EARLYCHILDHOOD.COM LLC

SECURITY    :  CLASS C INTERESTS

AMOUNT      :  _____________________

DATE        :  SEPTEMBER 1, 2000


In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

          (a)  Optionee is presently an Employee of or Consultant to the Company
and in such capacity has become personally familiar with the business of the
Company. Optionee has had the opportunity to ask questions of, and to receive
answers from, the Company with respect to the terms and conditions of the
transactions contemplated hereby and with respect to the business, affairs,
financial conditions, and results of operations of the Company.

          (b)  Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

          (c)  Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities

                                      B-1
<PAGE>

Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company and any other legend required
under applicable state securities laws.

          (d)  Optionee has been made aware of the provisions of Rule 701 and
Rule 144, each promulgated under the Securities Act, which, in substance, permit
only limited public resale of "restricted securities" acquired directly or
indirectly from the issuer thereof in a non-public offering, and impose certain
conditions on such resale.

          Rule 701 provides that if the issuer (in this instance, the Company)
qualifies under Rule 701 at the time of the grant of the Option to the Optionee,
the exercise will be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or
such longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of
the conditions specified by Rule 144, including that the resale must be made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a "market maker" (as defined under the Securities Exchange Act of
1934). In the case of an affiliate of the Company, resales are also subject to
the following conditions: (1) the availability of certain public information
about the Company, (2) the amount of Securities being sold during any three (3)
month period not exceeding the limitations specified in Rule 144(e), and (3) the
timely filing of a Form 144, if applicable. Under Rule 144, members of the
Company's Management Committee and officers of the Company are among the persons
deemed to be affiliates.

          If the Company does not qualify under Rule 701 at the time of grant of
the Option, then the Securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires the resale to occur not
less than one year after the date the Securities were sold by the Company to
Optionee and to be made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a "market maker."  In addition, in
the case of Securities held by an affiliate (regardless of the holding period)
or by a non-affiliate who has held the Securities less than two (2) years, the
conditions set forth in sections (1), (2) and (3) of the paragraph immediately
above must be satisfied.

          (e)  Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required in order for Optionee to resell the Securities; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the
staff of the Securities and Exchange Commission has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers

                                      B-2
<PAGE>

who participate in such transactions do so at their own risk. Optionee
understands that no assurances can be given that any such other registration
exemption will be available in such event.

                              Signature of Optionee:


                              ___________________________________


Date: _______________________, 20__

                                      B-3
<PAGE>

                                   EXHIBIT C
                                   ---------

                           MARKET STANDOFF AGREEMENT

     THIS MARKET STANDOFF AGREEMENT (the "Agreement") is made and entered into
as of September 1, 2000, between EarlyChildhood.com LLC, a California limited
liability company and any successor to the business of the Company (in either
case, the "Company"), and Lisa Derian ("Optionee").

                                R E C I T A L S
                                - - - - - - - -

     A.  As of the date hereof, Optionee is a Class C Member of the Company and
owns Class C Interests representing a 0.1 Percentage Interest (the "Interests")
of the Company that were granted pursuant to the 2000 Management Equity
Incentive Option Plan of EarlyChildhood.com LLC.  The term "Interests" refers to
such Interests presently held by Optionee and to all securities received in
addition thereto or in replacement thereof, pursuant to or in consequence of any
stock dividend, stock split, recapitalization, merger, reorganization or other
similar event.

     B.  In order to provide assurance to persons who may purchase securities of
the Company in the future and thereby to assist in the equity financing of the
Company, Optionee is willing to enter into this Agreement for the benefit of the
Company and any person or entity who holds securities of the Company from time
to time.

     THE PARTIES AGREE AS FOLLOWS:

     1.  Market Standoff.  Optionee hereby agrees that if so requested by the
         ---------------
Company or any representative of the underwriters in connection with any
registration of the offering of any securities of the Company under the
Securities Act of 1933, as amended (the "Act"), Optionee shall not directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of or transfer, any Interests or other securities of the Company during
the 180-day period following the effective date of a registration statement of
the Company filed under the Act or such shorter period of time as the
underwriters may require; provided, however, that such restriction shall apply
only to the first two registration statements of the Company to become effective
under the Act which include securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Act.  The Company may
impose stop-transfer instructions with respect to the securities subject to the
foregoing restrictions until the end of such 180-day period or such shorter
period.

     2.  Certificate Restrictive Legend.  Optionee agrees that the
         ------------------------------
certificate(s) representing the Interests, if any, shall bear the following
legend:

     "The securities represented hereby are subject to restrictions on transfer
for a period of 180 days following the effective date of a registration
statement under the Securities Act of 1933, as amended, for an offering of the
Company's securities as more fully provided in a Market Standoff Agreement
between the Company and the original holder of such securities."

                                      C-1
<PAGE>

     3.  Binding Effect.  Subject to the limitations set forth herein, this
         --------------
Agreement shall be binding upon, and inure to the benefit of, the executors,
administrators, heirs, legal representatives, successors and assigns of the
parties hereto, including, without limitation, any business entity that succeeds
to the business of the Company.

     4.  Damages.  Optionee shall be liable to the Company for all costs and
         -------
damages, including, without limitation, incidental and consequential damages,
resulting from a disposition of Interests which is not in conformity with the
provisions of this Agreement.

     5.  Governing Law.  This Agreement shall be governed by and construed in
         -------------
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed within the State of California by
California residents.  The parties agree that the exclusive jurisdiction and
venue of any action with respect to this Agreement shall be in the Superior
Court of California, County of Monterey, and each of the parties hereby submits
itself to the exclusive jurisdiction and venue of such courts for the purpose of
such action.  The parties agree that service of process in any such action may
be effected by delivery of the summons to the parties in the manner provided for
delivery of notices set forth in Section 6.

     6.  Notices.  All notices and other communications under this Agreement
         -------
shall be in writing.  Unless and until Optionee is notified in writing to the
contrary, all notices, communications and documents directed to the Company and
related to the Agreement, if not delivered by hand, shall be mailed, addressed
as follows:

          EarlyChildhood.com
          Two Lower Ragsdale Drive, Suite 200
          Monterey, California  93940
          Attention:  Management Committee
          Telephone:  831-333-2000
          Facsimile:   831-333-2580

     Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for Optionee and related to this
Agreement, if not delivered by hand, shall be mailed to Optionee's last known
address as shown on the Company's books.  Notices and communications shall be
mailed by registered or certified mail, return receipt requested, postage
prepaid.  All mailings and deliveries related to this Agreement shall be deemed
received only when actually received.

     7.  Counterparts.  This Agreement may be executed in any number of
         ------------
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.

                            (Signature Page Follows)

                                      C-2
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                              EarlyChildhood.com LLC,
                              a California limited liability company


                              By:
                                  ---------------------------
                                  Name:  Ronald Elliott
                                  Title: President, Chief Executive Officer and
                                  Secretary

     Optionee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement.

                              Optionee:


                              -------------------------------
                              (Sign Name)


                              -------------------------------
                              (Print Name)

     Optionee's spouse indicates by the execution of this Agreement his or her
consent to be bound by the terms herein as to his or her interests, whether as
community property or otherwise, if any, in the Interests.

                              Optionee's Spouse:

                              _______________________________
                              (Sign Name)


                              _______________________________
                              (Print Name)

                                      C-3