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


This Transition and Operations Support Agreement (together with the Exhibits hereto, this “Agreement”), dated _____________ __, 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”), and Purdue NewU, Inc., an Indiana nonprofit, public benefit corporation (“New University”).  The Trustees of Purdue University, an Indiana body corporate that manages and conducts Purdue University, the State of Indiana’s land-grant university (“Purdue”), joins as a Party to this Agreement solely for the purpose of being bound by the Purdue Provisions.  The term “Party” refers to Contributor, New University, or Purdue, and the term “Parties” refers collectively to Contributor, New University and Purdue; provided that, each of “Party” and “Parties” applies to Purdue only to the extent applicable pursuant to the Purdue Provisions.  Capitalized terms not otherwise defined in this Agreement have the meanings set forth in Exhibit A (Definitions).

A.  Prior to the Effective Date, Contributor owned and operated an accredited, Title IV-participating, post-secondary educational institution (“ED Institution”) known as “Kaplan University” or “KU”, which consisted 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.

B.  Prior to the Effective Date, Purdue had contemplated ways in which it could expand its academic services and offerings for the benefit of the State of Indiana and its citizens.

C.  Based on their mutual interests and goals, Contributor and Purdue proposed an agreement between Contributor and New University to enable New University to acquire the ED Institution and the institutional assets and operations of Kaplan University.  The intent of Contributor and Purdue in proposing this acquisition was to enable New University to deliver 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.

D.  Toward these ends, New University intends to utilize the ED Institution and assets acquired from Contributor, together with other assets owned by Contributor or its Affiliates, including, among others, test preparation, professional education and international student recruitment businesses, to advance and deliver its educational offerings.

E.  To enable the establishment of New University, Contributor, Purdue and New University entered into a Contribution and Transfer Agreement, dated April 27, 2017 (the “Transfer Agreement”), pursuant to which, among other things, Contributor agreed to contribute to New University the ED academic operations of Kaplan University (as defined in the Transfer Agreement, the “Institutional Assets”).  That transfer is being consummated concurrently with the execution of this Agreement.

F.  The Transfer Agreement specifies that the consideration for Contributor’s irrevocable transfer of the Institutional Assets is the execution and delivery of this Agreement by the Parties hereto at the time of consummating such transfer, and performance of this Agreement in accordance with its terms.  The terms of this Agreement, and the Transfer Agreement, provide financial guarantees and priorities to New University 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 consummating such transfer:  (i) the Parties’ belief that Contributor’s support of New University pursuant to this Agreement would create the best opportunity