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                                                                    Exhibit 10.3

                                 PROMISSORY NOTE



$10,000,000                                       DATED AS OF: NOVEMBER 12, 1999


         FOR VALUE RECEIVED, the undersigned, EDISON SCHOOLS INC., a Delaware
corporation (the "BORROWER"), hereby absolutely and unconditionally promises to
pay to IMPERIAL BANK (the "HOLDER"), or order, on or before the FINAL MATURITY
DATE, the principal sum of TEN MILLION DOLLARS ($10,000,000), or, if less, the
aggregate unpaid principal amount of all of the Loans made by the original
Holder hereof to the Borrower from time to time pursuant to the Credit Agreement
referred to below. The Borrower also promises to pay interest from the date
hereof, computed as provided in the Credit Agreement, on the principal amount of
the Loans from time to time unpaid at the per annum rates applicable to such
unpaid principal as provided in the Credit Agreement and to pay interest, to the
extent not prohibited by Applicable Law, on overdue interest and other overdue
sums payable hereunder at the rates specified in the Credit Agreement, all such
interest being payable at the times specified in the Credit Agreement, except
that all accrued unpaid interest shall in any event become and be absolutely and
unconditionally due and payable at the stated or accelerated maturity hereof or
upon the prepayment in full hereof.

         This Note evidences Loans made under, is entitled to the benefits of,
and is subject to the provisions of, the Revolving Credit Agreement, dated as of
November 12, 1999 (as amended, supplemented, amended and restated or otherwise
modified and from time to time in effect, the "CREDIT AGREEMENT"), between the
Borrower and the original Holder hereof. The principal of this Note is repayable
and prepayable in the amounts and under the circumstances set forth in the
Credit Agreement, and may be prepaid in whole or from time to time in part, all
as set forth in the Credit Agreement. Terms defined in the Credit Agreement are
used herein with the meanings given thereto in the Credit Agreement.

         In case any Event of Default shall at any time occur, the entire unpaid
principal of and all unpaid interest accrued on this Note may become or be
declared due and payable in the manner and with the effect provided in the
Credit Agreement.

         THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA AND, IN
THE CASE OF PROVISIONS RELATING TO INTEREST RATES, ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.

         Should all or any part of the Indebtedness represented by this Note be
collected by action at law, or in Bankruptcy or Insolvency Proceedings or other
court proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the Borrower hereby
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promises to pay to the Holder of this Note, upon demand by the Holder hereof at
any time and from time to time, in addition to principal, interest and all (if
any) other sums payable on or in respect of this Note or the Indebtedness
evidenced hereby, all court costs and reasonable attorneys' fees and all other
reasonable collection charges and expenses incurred or sustained by the Holder
hereof.

         The parties hereto, including the Borrower and all guarantors and
endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Note, except as specifically otherwise provided in the
Credit Agreement, and assent to all extensions of time of payment, forbearance
and all other indulgences, all without notice.

         IN WITNESS WHEREOF, this PROMISSORY NOTE has been duly executed as an
Instrument under seal by and on behalf of EDISON SCHOOLS INC. on and as of the
date first above written.


                                              THE BORROWER:

                  [SEAL]                      EDISON SCHOOLS INC.



         ATTEST:                              BY:_______________________________
                                                     NAME:
                                                     TITLE: