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GRAHAM HOLDINGS CO filed this Form 8-K on 04/27/2017
Entire Document

This Contribution and Transfer Agreement (together with the Exhibits and Schedules hereto, this “Agreement”), dated April 27, 2017 (the “Effective Date”), is made by and among Kaplan Higher Education, LLC, a Delaware limited liability company (“KHE”), Iowa College Acquisition, LLC, a Delaware limited liability company (“ICA”) (KHE and ICA, collectively, “Contributor”), The Trustees of Purdue University, an Indiana body corporate that manages and conducts Purdue University, the State of Indiana’s land-grant university (“Purdue”), and Purdue NewU, Inc., an Indiana nonprofit, public benefit corporation (“NewU”).  “Party” refers, as the context provides, to any of Contributor, Purdue and NewU; and “Parties” refers to Contributor, Purdue and NewU collectively.  “Purdue Parties” refers to Purdue and NewU collectively.  Capitalized terms not otherwise defined in this Agreement have the meanings set forth in Exhibit A (Definitions).
A.            Contributor and Purdue have proposed that Contributor, on the one hand, and NewU, on the other hand, enter into an agreement to enable NewU to acquire the accredited, Title IV-participating, post-secondary ED Institution known as “Kaplan University” and its institutional assets and operations for the purpose of delivering a broad range of educational offerings in support of the efforts of Purdue, as the State of Indiana’s land-grant university, to: (i) expand access to higher education for adult learner and other non-traditional students, (ii) enhance and accelerate online and hybrid online/ground higher education offerings aimed at workforce and economic development goals within and for the State of Indiana, and (iii) extend those same offerings to a national and international student audience, thereby expanding access to education while also building Purdue’s higher education brand nationally and internationally and providing a source of incremental revenue for the advancement of Purdue’s missions of learning, discovery and engagement.
B.            Contributor owns and operates Kaplan University which, as of the Effective Date, consists of seven schools and colleges offering more than 100 diplomas, certificates, associates, bachelors, masters and doctoral degrees, as well as fifteen campus and learning center locations and three military base locations.
C.            Contributor wishes to contribute to NewU, and the Purdue Parties wish for NewU to accept from Contributor at Closing, the Institutional Assets in order to ensure a smooth and seamless transition of Kaplan University’s Academic Functions for the benefit of Kaplan University’s students.
D.            Contributor will support the transition and operations of NewU under an agreement substantially in the form attached as Exhibit B (the “Transition and Operations Support Agreement”).  The consideration for Contributor’s irrevocable transfer of the Institutional Assets hereunder at the Closing is the execution, delivery and performance of the Transition and Operations Support Agreement.  The terms hereof and of the Transition and Operations Support Agreement provide financial guarantees and priorities to NewU that create significant economic risk to Contributor.  Contributor’s willingness to irrevocably transfer its Institutional Assets without any upfront consideration or payment was based upon the following, each of which Contributor has relied upon in agreeing to consummate the transfer:  (i) the Parties’ beliefs that Contributor’s support of NewU would create the best opportunity for NewU to succeed and fulfill the goals described in the Transition and Operations Support Agreement and serve the best interests of the students of Kaplan University and NewU, and (ii) NewU’s agreement to perform pursuant to the terms of the Transition and Operations Support Agreement.
E.            The purpose of the transactions contemplated by this Agreement and the Transition and Operations Support Agreement is to establish a long-term relationship pursuant to which the Purdue Affiliate that owns and operates the Institutional Assets will deliver a set of high quality, affordable and effective education offerings via an online and hybrid online/ground higher education institution, which will be supported by Contributor pursuant to the Transition and Operations Support Agreement.