exv10w28



 






Exhibit
10.28


Execution




SHAREHOLDERS’ AGREEMENT




     THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”) is made and entered into as of October
22, 2007, by and among Apollo Global, Inc., a Delaware corporation (the “Company”), Apollo
Group, Inc., an Arizona corporation (“Apollo”), Carlyle Venture Partners III, L.P., a
Delaware limited partnership (“Carlyle” and, together with Apollo and each Affiliate of
Carlyle and Apollo that hereafter becomes a Shareholder, collectively the “Investor
Shareholders”), and the Persons listed on Schedule I attached hereto or who otherwise
agree to be bound by the provisions hereof as an Other Shareholder by executing a joinder agreement
(the “Other Shareholders”). Apollo, Carlyle and the Other Shareholders are collectively
referred to herein as the “Shareholders.” Unless otherwise indicated herein, capitalized
terms used herein are defined in paragraph 13 hereof.



RECITALS




     Apollo and Carlyle are parties to a Joint Venture Agreement dated as of the date hereof (the
“Joint Venture Agreement”), and the closing of the initial purchase and sale of the
Company’s common stock pursuant to the Joint Venture Agreement is conditioned, among other things,
on the execution and delivery of this Agreement.



     The parties hereto are entering into this Agreement to establish the composition of the
Company’s board of directors (the “Board”), to restrict the sale, assignment, transfer,
encumbrance or other disposition of the Shareholder Shares (as defined below) and to provide for
certain rights and obligations in respect thereto as hereinafter provided.



AGREEMENT




     NOW, THEREFORE, the parties to this Agreement agree as follows:



     1. Voting Agreement and Proxy.



     (a) From and after the date hereof and until the provisions of this paragraph 1 cease to be
effective, each Shareholder shall vote all of his or its Shareholder Shares which are voting shares
and any other voting securities of the Company over which such Shareholder has voting control and
shall take all other necessary or desirable actions within such holder’s control (whether in such
holder’s capacity as a shareholder, director, member of a board committee or officer of the Company
or otherwise, and including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the
Company shall take all necessary or desirable actions within its control (including, without
limitation, calling special board and shareholder meetings), so that:



          (i) the authorized number of directors on the Board shall be seven (7);




          (ii) four directors shall be designated by Apollo, which representatives shall, as of the date
of this Agreement, be Gregory Cappelli, Brian Mueller, Roy Herberger and Peter Sperling (the
“Apollo Directors”);




 









 








          (iii) two directors shall be designated by Carlyle, which representatives shall, as of the
date of this Agreement, be Brooke B. Coburn and Charles C. Moore (the “Carlyle Directors”),
provided however that on any date that Carlyle and its Affiliates do not own, in the aggregate,
either (x) ten percent (10%) (or more) of the issued and outstanding Shareholder Shares or (y)
shares of the Company Stock with a Fair Market Value of one hundred million dollars ($100,000,000)
(or more), one director shall be designated by Carlyle;




          (iv) the President of the Company shall be a director;




          (v) the removal from the Board without cause of any of the Apollo Directors under paragraph
1(a)(ii) above shall be at Apollo’s written request, and only upon such written request and under
no other circumstances; and




          (vi) the removal from the Board without cause of any of the Carlyle Directors under paragraph
1(a)(iii) above shall be at Carlyle’s written request, and only upon such written request and under
no other circumstances. Carlyle agrees to remove one of the Carlyle Directors promptly after any
date that Carlyle and its Affiliates do not own, in the aggregate, either (x) ten percent (10%) (or
more) of the issued and outstanding Shareholder Shares or (y) shares of the Company Stock with a
Fair Market Value of one hundred million dollars ($100,000,000) (or more).




     (b) In the event that any representative designated hereunder by any party ceases to serve as
a member of the Board during his term of office for any reason, the resulting vacancy on the Board
will be filled by a representative selected by the party entitled to designate such representative
pursuant to paragraph 1(a). The parties agree that any director may be removed from the Board for
cause by resolution adopted by a majority of the remaining directors.



     (c) Each of Apollo and Carlyle, for so long as it remains a Shareholder hereunder, shall have
the right to designate and remove two representatives (each such representative, a “Board
Observer”) who shall (1) have the right to receive due notice of and to attend and participate
in discussions at (but not vote on any matters on which the directors are entitled to vote) all
meetings of the Board and all meetings of committees of the Board, (2) have the right to receive
copies of all documents and other information, including minutes, consents, business plans,
presentation materials, budgets and financial information furnished generally to members of the
Board and committees thereof, and (3) be entitled to be indemnified by the Company pursuant to the
Certificate of Incorporation of the Company to the same extent mutatis mutandis as if he or she
were a member of the Board (and the Company hereby agrees to so indemnify each Board Observer).
Notwithstanding the preceding sentence, on any date that Carlyle and its Affiliates do not own, in
the aggregate, either (i) ten percent (10%) (or more) of the issued and outstanding Shareholder
Shares or (y) shares of the Company Stock with a Fair Market Value of one hundred million dollars
(or more), Carlyle shall have the right to designate and remove one Board Observer.



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          (d) The Company will pay or promptly reimburse the actual reasonable out-of-pocket expenses
incurred by each member of the Board and each Board Observer in connection with attending meetings
of the Board or any committee of the Board.




          (e) In order to secure the obligations of each Other Shareholder who now or hereafter holds
any voting securities to vote such Person’s Shareholder Shares in accordance with the provisions of
this paragraph 1, each Other Shareholder hereby appoints Apollo as his or its true and lawful proxy
and attorney-in-fact, with full power of substitution, to vote all of his or its Shareholder Shares
for the election and/or removal of directors and all such other matters as expressly provided for
in paragraph 1. Apollo may exercise the irrevocable proxy granted to it hereunder by any Other
Shareholder at any time if any such Other Shareholder fails to comply with the provisions of this
Agreement. The proxies and powers granted by each such Other Shareholder pursuant to this
paragraph 1(e) are coupled with an interest and are given to secure the performance of such Other
Shareholder’s obligations under this Agreement. Such proxies and powers shall be irrevocable until
termination of this paragraph 1 and shall survive the death, incompetency, disability, bankruptcy
or dissolution of each such Shareholder and the subsequent holders of his or its Shareholder
Shares. No Shareholder shall grant any proxy or become party to any voting trust or other
agreement which is inconsistent with, conflicts with or violates any provision of this Agreement.




          (f) The provisions of this paragraph 1 shall terminate automatically and be of no further
force and effect upon the earlier to occur of (i) the consummation of an Approved Sale and (ii) a
Public Offering.




          2. Matters Requiring Specific Approval.




          (a) Matters Requiring Approval of the Board. The business and affairs of the Company
shall be managed by the Board as described in Section 141 of the Delaware General Corporation Law.
Without limiting the generality of the preceding sentence, the Company shall not take any of the
following actions without the prior approval of at least a majority of the Board of Directors and
as provided in the Company’s Bylaws:





               (i) acquire or sell any interest in any Person or business; provided,
however, that any acquisition or sale of a Person or business involving, individually or
in the aggregate, consideration in excess of $50,000,000 shall be subject to paragraph 2(b)(2)(v)
below;




               (ii) incur any Company Indebtedness, or issue or sell any debt securities or other rights to
acquire any debt securities of the Company or any of its Subsidiaries, except for transactions
between the Company and any of its Subsidiaries; provided, however, that any
security interests in connection with such debt arrangements shall be limited solely to the
Company’s assets unless otherwise approved by the Investor Shareholders;



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                    (iii) declare, set aside or pay any dividends on, or make any other distributions (whether
in cash, stock or property) in respect of, any of its capital stock;




                    (iv) hire or terminate the employment of the Company’s President, Chief Financial Officer or
Chief Operating Officer, subject to paragraph 2(b)(2)(iv) below;




                    (v) establish or materially modify the compensation or benefits payable or to become payable
by the Company to the Company’s President, Chief Financial Officer or Chief Operating Officer,
other than benefits generally provided to senior management or employees on the same terms; or




                    (vi) approve the annual operating plan and budget.



     (b) Matters Requiring Approval of Carlyle.



               (1) The Company shall not, without the prior written consent of Carlyle (which consent may be
given or withheld in Carlyle’s sole discretion):





               (i) (a) dissolve or wind-up the Company, (b) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (c) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or the filing of any
petition seeking relief under Title 11 of the United States Code, or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (d) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Company or any Subsidiary or for a substantial part of the property or assets of the Company
or any Subsidiary, (e) file an answer admitting the material allegations of a petition filed
against it in any proceeding described in clause (b) above, (f) make a general assignment for the
benefit of creditors, or (g) take any action for the purpose of effecting any of the foregoing.




               (ii) amend, revise, modify, supplement or discontinue the Investment Scope; or




               (iii) amend, modify or restate the Certificate of Incorporation or Bylaws of the Company in
any respect that is adverse to Carlyle or the ownership of Shareholder Shares by Carlyle.



               (2) On any date that Carlyle and its Affiliates own, in the aggregate, either (i) ten percent
(10%) (or more) of the issued and outstanding Shareholder Shares or (ii) shares of the Company
Stock with a Fair Market Value of one hundred million dollars (or more), the Company shall not,
without the prior written consent of Carlyle (which consent may be given or withheld in Carlyle’s
sole discretion):



               (i) issue any new class or series of stock, or any other equity securities, or any other
securities convertible into equity securities of the Company, other than any shares or



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equity securities issued pursuant to (x) the Joint Venture Agreement or (y) an employee stock
option plan or similar arrangement approved by the Board to the extent that the limit described in
paragraph 6 is not exceeded for all employee plans and arrangements;




          (ii) approve any employee stock option or similar arrangement or reserve or issue shares of
the Company Stock thereunder to the extent that the limit described in paragraph 6 is exceeded in
the aggregate by all employee plans and arrangements;




          (iii) redeem or repurchase any equity securities of the Company (except for acquisitions of
Common Stock by the Company pursuant to (x) agreements which permit the Company to repurchase such
shares upon termination of services to the Company, and (y) the Joint Venture Agreement);




          (iv) hire or terminate the employment of the Company’s President and Chief Executive Officer,
provided that determination of the compensation of the President and Chief Executive
Officer shall be at the discretion of the Board and Carlyle will not have the right to approve such
compensation;




          Additionally, in the event the Company does not have a President or Chief Executive Officer at
anytime, the duties of the President or Chief Executive Officer will be performed by the Board or
its designee in accordance with Section 2(a).




          (v) acquire or sell any interest in any business or entity with, individually or in the
aggregate, an enterprise value in excess of $50,000,000 and that requires the Company to incur
incremental debt or equity financing;




          (vi) initiate or settle any litigation, action or proceeding to which the Company is, or may
be, a party in which the amount in controversy would reasonably be expected to exceed ten percent
(10%) of the current Fair Market Value;




          (vii) make any loan (other than intercompany loans) to any Person which either (a) is outside
of the ordinary course of business of the Company and (b) equals or exceeds $1,000,000, subject in
each case to the provisions of paragraph 2(c);




          (viii) approve the Company’s principal outside counsel and, if different, principal
transaction counsel, and any change in such counsel and, to the extent that the Company’s
independent auditors are not Apollo’s independent auditors, approve the Company’s independent
auditors and any change to such independent auditors; or




          (ix) make or commit to make any capital expenditure outside of the ordinary course of business
and in excess of $10,000,000 that requires incremental debt or equity financing.




     (c) Matters Requiring Approval of Unaffiliated Investor Shareholders.



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          (i) The Company shall not, without the prior written consent or affirmative vote of Apollo,
enter into or be a party to any material transaction with Carlyle or any Affiliate, member,
partner, director, officer or employee of Carlyle or any “associate” (as defined in Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) of any
such Person or Carlyle, except for transactions expressly provided for in this Agreement or the
Joint Venture Agreement.




          (ii) The Company shall not, without the prior written consent or affirmative vote of Carlyle,
enter into or be a party to any material transaction with Apollo or any Affiliate, member, partner,
director, officer or employee of Apollo or any “associate” (as defined in Rule 12b-2 promulgated
under the Exchange Act) of any such Person or Apollo, except for (w) transactions contemplated by
this Agreement or the Joint Venture Agreement, (x) the employment of persons currently employed by
Apollo, (y) reimbursement of amounts paid by Apollo to professionals after the date of this
Agreement and before the execution of the Support Services Agreement for such professionals’
reasonable fees and expenses for the due diligence of potential investments within the Investment
Scope, or (z) pursuant to a Support Services Agreement between Apollo and the Company whereby
Apollo will provide services to the Company upon terms and conditions satisfactory to Apollo and
Carlyle.




     (d) EITF No. 96-16. Apollo and Carlyle acknowledge that the approval rights granted
to Carlyle as set forth in paragraph 2(b) above are intended to be “protective rights” rather than
“participating rights”, as described in Emerging Issues Task Force Issue No. 96 -16 (“EITF No.
96-16”). Apollo and Carlyle further acknowledge that, unless otherwise agreed by Apollo and
Carlyle, none of the approval rights granted to Carlyle hereunder will be in any way amended,
terminated or revoked to the extent that at anytime hereafter any of the approval rights granted to
Carlyle hereunder are re-characterized as being “participating rights” and not “protective rights”
under EITF No. 96-16 or any successor to it, or under any other accounting policy, standard or
procedure which may become applicable to the same subject matter as comprehended by EITF No. 96-16.



     (e) The Company’s accounting methods and policies shall be consistent with the accounting
methods and policies of Apollo except as required by GAAP;



     3. Restrictions on Transfer of Shareholder Shares.



     (a) Transfer of Shareholder Shares. No holder of Shareholder Shares may sell,
transfer, assign, pledge, encumber or otherwise directly or indirectly dispose of (a
“Transfer”) any Shareholder Shares or any interest in any Shareholder Shares, including to
the Company or any of its Subsidiaries, other than Permitted Transfers, prior to the fifth
anniversary of the date hereof and, following such date, may Transfer Shareholder Shares or an
interest in Shareholder Shares only pursuant to and in accordance with paragraphs 3(b), 3(c), 3(d),
5 or 9 below.



     (b) Right of First Offer. Prior to making any Transfer, other than as permitted under
paragraph 3(d) below, a holder of Shareholder Shares wishing to transfer such Shareholder



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Shares (the “Selling Shareholder”) shall deliver written notice in accordance with
paragraph 21 (the “Transfer Notice”) to each Investor Shareholder and the Company. The
Transfer Notice shall disclose in reasonable detail the number of Shareholder Shares to be
transferred, the cash purchase price (the “Offer Price”) at which the Selling Shareholder
proposes to sell such number of Shareholder Shares, and the terms and conditions of the proposed
Transfer. The Transfer Notice shall constitute a binding offer to sell the subject Shareholder
Shares to the Investor Shareholders (other than the Selling Shareholder) and, if and to the extent
that any such Shareholder Shares are not purchased by such Selling Shareholders, to the Company, in
each case on the terms and conditions set forth in the Transfer Notice and in accordance with this
paragraph 3(b). The Investor Shareholders may elect to purchase, pro-rata based on the number of
Shareholder Shares held by each, all or any portion of the Shareholder Shares to be transferred
upon the same economic terms and conditions as those set forth in the Transfer Notice by delivering
a written notice of such election to the Selling Shareholder and the Company within 10 business
days after the Transfer Notice has been delivered pursuant to this paragraph 3(b), provided that
all elections by Carlyle’s Affiliates shall be made by Carlyle on behalf of its Affiliates. If the
Investor Shareholders have not elected to purchase all of the Shareholder Shares to be transferred,
the Company may elect to purchase all, but not less than all, of the remaining Shareholder Shares
to be transferred upon the same economic terms and conditions as those set forth in the Transfer
Notice by delivering written notice in accordance with paragraph 21 of such election to the Selling
Shareholder within 15 business days after the Transfer Notice has been delivered pursuant to this
paragraph 3(b) (such date, the “Authorization Date”). If the Investor Shareholders and the
Company do not elect to purchase all of the Shareholder Shares specified in the Transfer Notice,
the Selling Shareholder may Transfer the remaining Shareholder Shares specified in the Transfer
Notice at a cash price no less than the Offer Price and on terms no more favorable to the Proposed
Purchaser than those specified in the Transfer Notice during the 60 day period immediately
following the Authorization Date. If the Investor Shareholders or the Company have elected to
purchase Shareholder Shares pursuant to this paragraph 3(b), the Transfer of such shares shall be
consummated as soon as practicable after the delivery of the election notice(s) to the Selling
Shareholder, but in any event within 30 days after the Authorization Date.




     (c) Participation Rights.



          (i) At least 30 days prior to any Transfer of shares of Company Stock by any of Apollo or any
of its Affiliates (the “Transferring Apollo Shareholder”) for value (other than pursuant to
a Permitted Transfer or an Approved Sale as to which Carlyle has an independent right to approve
under paragraph 5(a) as a consequence of Carlyle and its Affiliates owning, in the aggregate,
either (i) seven and one-half percent (7.5%) (or more) of issued and outstanding Shareholders
Shares or (ii) shares of the Company Stock with a Fair Market Value of seventy-five million dollars
($75,000,000) (or more)), the Transferring Apollo Shareholder will deliver written notice in
accordance with paragraph 21 (the “Sale Notice”) to the Company, the other Investor
Shareholders (including Carlyle and its Affiliates) and the Other Shareholders, specifying in
reasonable detail the identity of the Proposed Purchaser and the terms and conditions of the
Transfer. Notwithstanding any of the restrictions contained in this paragraph 3, any or all of the
other Investor Shareholders (including Carlyle and its Affiliates) and Other Shareholders may



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elect to participate in the contemplated Transfer by delivering written notice in accordance
with paragraph 21 (a “Tag-Along Notice”) to the Transferring Apollo Shareholder within 15
business days after the date that such Sale Notice is deemed given pursuant to paragraph 21,
provided that all Tag-Along Notices of Carlyle’s Affiliates shall be delivered by Carlyle on behalf
of its Affiliates. If no Tag-Along Notice is received by the Transferring Apollo Shareholder
within such 15 business day period, the other Investor Shareholders and the Other Shareholders
shall not have the right to participate in the Transfer, and the Transferring Apollo Shareholder
shall have the right, during the succeeding three-month period, to transfer to the Proposed
Purchaser up to the number of shares of Common Stock stated in the Sale Notice, on terms and
conditions no more favorable to the Transferring Apollo Shareholder than those stated in the Sale
Notice. If any of the other Investor Shareholders or Other Shareholders have elected to
participate in such Transfer (such Shareholders, “Participating Shareholders”), each of the
Transferring Apollo Shareholder and each Participating Shareholder will be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, up to a number of shares of Common
Stock which is determined by multiplying (i) the number of shares of Common Stock owned by such
Participating Shareholder on the date that the Tag-Along Notice is furnished by (ii) a fraction,
the numerator of which is the number of shares of Common Stock which the Proposed Purchaser desires
to purchase and the denominator of which is the sum of (x) the number of shares of Common Stock
which are owned by the Transferring Apollo Shareholder and (y) the aggregate number of shares of
Common Stock owned by all of the Participating Shareholders on the date that the Tag-Along Notice
is furnished.




          (ii) The Transferring Apollo Shareholder will use reasonable efforts to obtain the agreement
of the Proposed Purchaser to the participation of the Participating Shareholders in any
contemplated Transfer, and the Transferring Apollo Shareholder will not transfer any of its Common
Stock to the Proposed Purchaser unless (A) simultaneously with such Transfer, the Proposed
Purchaser purchases from the Participating Shareholders the number of shares of Common Stock which
such Participating Shareholders are entitled to sell to the Proposed Purchaser under paragraph
3(c)(i) or (B) simultaneously with such Transfer, the Transferring Apollo Shareholder purchases (at
the same price and on the same terms and conditions on which such shares were sold to the Proposed
Purchaser) the number of shares of Common Stock from the Participating Shareholders which the
Participating Shareholders are entitled to sell to the Proposed Purchaser under paragraph 3(c)(i).




          (iii) The Transferring Apollo Shareholder and the Participating Shareholders will bear their
pro-rata share (based upon the number of shares of Common Stock sold by such Person in relation to
the number of shares of Common Stock sold by all Persons in such Transfer) of the out-of-pocket
costs of any Transfer pursuant to this paragraph 3(c) which are borne by the Transferring Apollo
Shareholder to the extent such costs are incurred for the benefit of all Persons participating in
the Transfer and are not otherwise paid by the Company or the acquiring party. Costs incurred by
the Participating Shareholders participating in the Transfer on their own behalf will not be
considered costs of the Transfer hereunder.




          (iv) No Participating Shareholder participating in a sale of shares of the Common Stock
pursuant to this paragraph 3(a) shall be required to provide any indemnification



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other than on a several basis with such Participating Shareholder’s indemnification obligation
to the Proposed Purchaser (or Transferring Apollo Shareholder in the event that it purchases shares
of the Common Stock pursuant to paragraph 3(c)(ii)) limited to the pro rata share of the aggregate
purchase price received by all Shareholders that such Participating Shareholder receives at the
closing of the Transfer. Notwithstanding the foregoing, if a Participating Shareholder electing to
participate does not agree to execute and deliver or does not execute and deliver any documentation
required by this paragraph 3(c)(iv) within ten (10) days after receipt thereof in connection with
the Transfer, such Participating Shareholder shall be deemed to have withdrawn its request to
participate and shall not be entitled to participate in the proposed Transfer.




     (d) Permitted Transfers. The restrictions contained in paragraph 3 will not apply to
(i) a Public Sale, (ii) an Approved Sale, (iii) a Transfer of Shareholder Shares by any Shareholder
to a trust solely for the benefit of such Shareholder and such Shareholder’s spouse and/or
descendants (or a re-Transfer of such Shareholder Shares by such trust back to such Shareholder
upon the revocation of any such trust) or pursuant to the laws of descent and distribution, (iv) a
Transfer by any Shareholder to an Affiliate of such Shareholder (and subsequent Transfers by such
Affiliates to other Affiliates of such Shareholder), so long as such Transfer does not cause the
Company to be subject to the reporting requirements of the Exchange Act pursuant to Section 12(g)
thereof; provided that the restrictions contained in this Agreement will continue to apply
to the Shareholder Shares after any Transfer pursuant to clauses (iii) or (iv) above and the
transferees of such Shareholder Shares pursuant to such clauses shall agree in writing to be bound
by the provisions of this Agreement. Upon the Transfer of Shareholder Shares pursuant to clauses
(iii) or (iv) of this subparagraph 3(d), the transferor will deliver a written notice to the
Company and the Investor Shareholders, which notice will disclose in reasonable detail the identity
of such transferee.



     (e) Termination of Restrictions. The rights and restrictions set forth in this
paragraph 3 will continue with respect to each Shareholder Share until the first to occur of (i):
date on which such Shareholder Share has been transferred in a Public Sale; (ii) the consummation
of an Approved Sale; (iii) a closing described in paragraph 9(c) or (iv) the eighth anniversary of
the date of this Agreement.



     4. Preemptive Rights.



     (a) If the Company or any of its Subsidiaries proposes to issue and sell any of its equity
securities or any securities containing options or rights to acquire any equity securities or any
securities convertible into equity securities for value, the Company will offer in a written notice
furnished in accordance with paragraph 21 to sell to each Investor Shareholder a portion of the
number or amount of such securities proposed to be sold in any such transaction or series of
related transactions equal to the product of the percentage each such Investor Shareholder holds of
all Common Stock then held by all of the Shareholders by the number of securities proposed to be
issued and sold by the Company in any such transaction or series of related transactions, all for
the same price and upon the same economic terms and otherwise on the same terms and conditions as
the securities that are being offered in such transaction or series of transactions. If any
Investor Shareholder having preemptive rights under this paragraph 4 fails to



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accept such offer in whole or in part within the period provided below in paragraph 4(c), the
Company shall offer in a written notice furnished in accordance with paragraph 21 the securities
that were not so accepted to all Investor Shareholders who elected to accept such offer in whole or
in part, in the same proportion as the respective Common Stock held by such electing Investor
Shareholder bears to the aggregate Common Stock held by all Investor Shareholders who elected to
accept such initial offer in whole or in part. Each electing Investor Shareholder shall have an
additional period of ten days from and after the date of the Company’s re-offer within which to
accept such re-offer in whole or in part. If an Investor Shareholder elects to accept such offer
in whole or in part, such Investor Shareholder shall so accept by written notice to the Company
given within such 10-day period, provided that all acceptances by Carlyle’s Affiliates shall be
made by Carlyle on behalf of its Affiliates. No further offer to the Investor Shareholders under
this paragraph 4 is then required with respect to the same offering of securities, except as
otherwise required in paragraph 4(c).




     (b) Notwithstanding the foregoing, the provisions of this paragraph 4 shall not be applicable
to the issuance of equity securities (i) pursuant to the Joint Venture Agreement, (ii) upon the
exercise of warrants or options or upon the conversion of shares of one class of capital stock into
shares of another class in accordance with the provisions of the Company’s Certificate of
Incorporation, or (iii) as a stock dividend or any stock split or other subdivision or combination
of the outstanding equity securities; provided, however, the provisions of this
paragraph 4 shall terminate upon completion of a Public Offering.



     (c) The Company will cause to be given to the Investor Shareholders a written notice delivered
in accordance with paragraph 21 setting forth in reasonable detail the terms and conditions upon
which they may purchase such shares or other securities, including, without limitation, the number
of shares or other securities offered by the Company, the price at which such shares or other
securities are being offered and the date on which the sale is to be completed (the “Preemptive
Notice”). After receiving a Preemptive Notice, if any of the Investor Shareholders wishes to
exercise the preemptive rights granted by this paragraph 4 it must give notice to the Company in
writing, within 15 business days after the date that such Preemptive Notice is deemed given
pursuant to paragraph 21 (subject to extension in the event of a re-offer described in paragraph
3(a) above), stating the quantity of the shares or other securities offered pursuant to this
paragraph 4 it agrees to purchase on the terms and conditions set forth in the Preemptive Notice
(the “Preemptive Reply”), provided that all Preemptive Replies by Carlyle’s Affiliates
shall be made by Carlyle on behalf of its Affiliates. The closing for the sale of the shares or
other securities subject to the Preemptive Notice shall occur no earlier than 5 business days after
the Preemptive Reply. If the Investor Shareholders fail to make a Preemptive Reply in accordance
with this paragraph 4 within the 15-business day period specified in this paragraph 4(c) (subject
to extension in the event of a re-offer described in paragraph 3(a) above), shares or other
securities offered to it in accordance with this paragraph 4 may thereafter, for a period not
exceeding 120 days following the expiration of such 15-business day period, be issued, sold or
subjected to rights or options to any purchaser at a price not less than the price at which they
were offered to such Investor Shareholders and on other terms and conditions no more favorable to
the purchasers thereof than those offered to the Investor Shareholders. Any such shares or other
securities not so issued, sold or subjected to rights or options to any purchaser during such



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120-day period will thereafter again be subject to the preemptive rights provided for in this
paragraph 4.




     5. Sale of the Company.



     (a) If Shareholders holding a majority of the outstanding Common Stock and Carlyle approve
(and, in the case of any sale or other fundamental change which requires the approval of the board
of directors of a Delaware corporation pursuant to the Delaware General Corporation Law, the Board
shall have approved such sale or other fundamental change) a sale of all or substantially all of
the Company’s assets determined on a consolidated basis or a sale of a majority of the Company’s
outstanding capital stock (whether by merger, recapitalization, consolidation, reorganization,
combination or otherwise) to any Independent Third Party or group of Independent Third Parties
(collectively an “Approved Sale”), the Company shall deliver written notice to the
Shareholders setting forth in reasonable detail the terms and conditions of the Approved Sale
(including, to the extent then determined, the consideration to be paid with respect to each class
of the Company’s capital stock), provided however that on any date that Carlyle and its Affiliates
do not own, in the aggregate, either (i) seven and one-half percent (7.5%) (or more) of the issued
and outstanding Shareholder Shares or (ii) shares of the Company Stock with a Fair Market Value of
seventy-five million dollars ($75,000,000) (or more), Carlyle shall not have an independent right
to approve an Approved Sale. Each holder of Shareholder Shares will consent to and raise no
objections against such Approved Sale. If the Approved Sale is structured as (i) a merger or
consolidation, each holder of Shareholder Shares will waive any dissenter’s rights, appraisal
rights or similar rights in connection with such merger or consolidation or (ii) sale of stock
(including by recapitalization, consolidation, reorganization, combination or otherwise), each
holder of Shareholder Shares will agree to sell all of its Shareholder Shares and rights to acquire
Shareholder Shares on the terms and conditions approved by the Board and such Shareholders. Each
holder of Shareholder Shares shall be obligated to join, severally and not jointly, on a pro rata
basis (based on the number of shares of the applicable class or series of Company Stock to be sold,
and, in the case of an asset sale, based upon the number of shares of Company Stock (and the
relative liquidation preferences of each class of Company Stock) owned beneficially on a Fully
Diluted Basis) in any indemnification or other obligations that the sellers of Shareholder Shares
are required to provide in connection with the Approved Sale (other than any such obligations that
relate solely to a particular Shareholder, such as indemnification with respect to representations
and warranties given by a Shareholder regarding such Shareholder’s title to and ownership of
Shareholder Shares being sold, in respect of which only such Shareholder shall be liable);
provided, that no holder shall be obligated in connection with such indemnification or
other obligations with respect to any amount in excess of the consideration received by such holder
in connection with such transfer. Each holder of Shareholder Shares will take all required actions
in connection with the consummation of the Approved Sale as reasonably requested. Notwithstanding
the provisions of this paragraph 5, neither Carlyle nor its Affiliates shall have any obligation
under this paragraph 5 to the extent that Carlyle has an independent right to approve an Approved
Sale under this paragraph 5 and Carlyle has not approved such Approved Sale. Notwithstanding the
provisions of this paragraph 5, neither Carlyle nor its Affiliates shall be required to provide any
indemnification other than on a several basis with the indemnification obligation of Carlyle and
its Affiliates limited to the pro



11









 




rata share of the aggregate purchase price received by all Shareholders at the closing of the
Approved Sale.




     (b) The obligations of the holders of Company Stock with respect to an Approved Sale are
subject to the satisfaction of the following conditions in addition to the conditions described in
paragraph 5(a): (i) upon the consummation of the Approved Sale, each holder of Company Stock will
receive the same form of consideration and the same portion of the aggregate consideration that
such holders of Company Stock would have received if such aggregate consideration had been
distributed by the Company in complete liquidation pursuant to the rights and preferences set forth
in the Company’s Certificate of Incorporation as in effect immediately prior to such Approved Sale;
(ii)  if any holders of a class of Company Stock are given an option as to the form and amount of
consideration to be received, each holder of such class of Company Stock will be given the same
option; and (iii) each holder of then currently exercisable rights to acquire shares of a class of
Company Stock will be given an opportunity to (A) exercise such rights prior to the consummation of
the Approved Sale and participate in such sale as holders of such class of Company Stock or (B)
make a direct transfer of such rights.



     (c) If the Company or the holders of the Company’s securities enter into any negotiation or
transaction for which Rule 506 (or any similar rule then in effect) promulgated by the Securities
and Exchange Commission may be available with respect to such negotiation or transaction (including
a merger, consolidation or other reorganization), the holders of Shareholder Shares that do not
qualify as “accredited investors” (as such term is defined in Rule 501 (or any similar rule then in
effect) promulgated by the Securities And Exchange Commission) will, at the request of the Company,
appoint a “purchaser representative” (as such term is defined in Rule 501 promulgated by the
Securities and Exchange Commission) reasonably acceptable to the Company. If any holder of
Shareholder Shares appoints a purchaser representative designated by the Company, the Company will
pay the fees of such purchaser representative, but if any holder of Shareholder Shares declines to
appoint the purchaser representative designated by the Company, such holder will appoint another
purchaser representative, and such holder will be responsible for the fees of the purchaser
representative so appointed.



     (d) Each holder of Shareholder Shares will bear its pro-rata share (based upon the number of
shares sold by such holder of Company Stock in relation to the number of shares sold by all holders
in such Approved Sale of Company Stock) of the out-of-pocket costs of any sale of Shareholder
Shares pursuant to an Approved Sale which are borne by either Investor Shareholder to the extent
such costs are incurred for the benefit of all holders of Shareholder Shares and are not otherwise
paid by the Company or the acquiring party. Costs incurred by holders of Shareholder Shares on
their own behalf will not be considered costs of the transaction hereunder.



     (e) In connection with an Approved Sale, each holder of Shareholder Shares (other than Carlyle
and its Affiliates) hereby appoints Apollo as its true and lawful proxy and attorney-in-fact, with
full power of substitution, to transfer such Shareholder Shares pursuant to the terms of such
Approved Sale and to execute any purchase agreement or other documentation



12









 




required to consummate such Approved Sale to the extent consistent with paragraph 5(a). Each
Shareholder agrees to execute and deliver any other documentation reasonably required to consummate
the Approved Sale to the extent consistent with paragraph 5(a). The powers granted in this clause
(e) shall be deemed to be coupled with an interest, shall be irrevocable and shall survive death,
incompetency or dissolution of any such holder of Shareholder Shares.




     (f) The provisions of this paragraph 5 will terminate upon the earlier to occur of (i) the
consummation of an Approved Sale and (ii) completion of a Public Offering.



     6. Employee Phantom Stock Plan.



     The parties agree that phantom stock or similar bonuses will be offered to the management,
consultants and key employees of the Company pursuant to a bonus plan or similar arrangement on
terms and conditions satisfactory to the Board which will contemplate aggregate payments
representing a value of between ten and fifteen percent (15%) of the Company’s Common Stock on a
Fully Diluted Basis (after giving effect to the transactions contemplated by the Joint Venture
Agreement).



     7. Public Offering; Apollo Call.



     (a) At any time after the fourth anniversary of the date of this Agreement (or as earlier
agreed by Carlyle and Apollo), each of Carlyle and Apollo may notify the other of its intent to
explore a public listing of the Common Stock. Following receipt of any such notice, the Company
will solicit proposals from one or more nationally recognized investment banks as to the
feasibility, expected valuation, structure and terms of the proposed listing of the Common Stock.
If, after receiving such proposals, either of Apollo or Carlyle determines in good faith that a
public listing of the Company is inadvisable for legitimate business reasons, Apollo or Carlyle may
elect to defer the listing process by a period of one (1) year. After the deferral period, if
applicable, Carlyle and Apollo shall thereafter again solicit proposals from one or more nationally
recognized investment banks as to the feasibility, expected valuation, structure and terms of the
proposed public listing of the Common Stock. If either of Apollo or Carlyle determines that the
proposed public listing of the Common Stock is then feasible, the parties shall, within sixty (60)
days thereafter, pursue in good faith the preparation of an S-1 (or F-1) registration statement
(“Registration Statement”) with the Securities and Exchange Commission. If neither Apollo
nor Carlyle determines that the proposed public listing is feasible within the time period
specified in the preceding sentence, the deferral described in this paragraph 7(a) shall be
repeated. Notwithstanding the provisions of this paragraph 7(a), on any date that Carlyle and its
Affiliates do not own, in the aggregate, either (i) ten percent (10%) (or more) of the Shareholder
Shares or (ii) shares of the Company Stock with a Fair Market Value of one hundred million dollars
($100,000,000), Carlyle shall not have any rights under this paragraph 7(a).



     (b) At any time prior to the effective date of the Registration Statement, Apollo shall have
an option to purchase the Company Stock held by Carlyle and its Affiliates at a price per share
equal to the midpoint of the filing range as set forth in the Company’s Registration Statement. If
Apollo elects to purchase Carlyle’s and its Affiliates’ Shares pursuant



13









 




to this paragraph 7(b), the transfer of such shares shall be consummated as soon as
practicable after the delivery of the notice(s) to Carlyle, but in any event within 30 days
thereafter. Carlyle agrees to execute and deliver any other documentation reasonably required to
consummate the transfer pursuant to this paragraph 7; provided that neither Carlyle nor its
Affiliates shall be required to provide any representations and warranties (other than those
relating to their respective existence, capacity, authorization, execution and delivery and
unencumbered title to securities).




     8. Scope of Investments.



     (a) The Company will make investments exclusively in educational services businesses with the
following characteristics (the “Investment Scope”):



          (i) principal operations and facilities outside of the United States (to include Latin
America, Asia and Europe);




          (ii) provide post-secondary education (both degree and certificate programs), secondary and
high school-level education, corporate or vocational training, or services related such educational
and training programs, including distance learning services;




          (iii) attractive organic growth characteristics with target growth rates higher than
experienced in the United States where possible;




          (iv) ability to generate strong positive cash flows and sustain a reasonable amount of
financial leverage, including debt; and




          (v) businesses in which the Company can initially acquire a controlling interest or that have
a path to acquiring a controlling interest.




     (b) Neither Carlyle nor Apollo may make any investment exceeding $ 20,000,000 in any Person
whose primary line of business is within the Investment Scope except in accordance with this
paragraph 8. Prior to making any such investment, the Investor Shareholder (the “Proposed
Investor”), shall deliver written notice in accordance with paragraph 21 (the “Investor
Notice”) to the Company and the other Investor Shareholders disclosing in reasonable detail the
terms of the prospective investment. The Proposed Investor shall not consummate any such
investment until 60 days after the Investor Notice is deemed given to the Company and the other
Investor Shareholders pursuant to paragraph 21 (the “Investor Notice Period”). Subject to the
provisions of paragraph 2(b)(2)(v), the Company may elect to make such investment upon the same
economic terms and conditions as those set forth in the Investor Notice by delivering written
notice of such election to the Proposed Investor and the other Investor Shareholder within the
Investor Notice Period. If the Company does not for any reason elect to make the investment
described in the Investor Notice, then for a period of thirty (30) days after the expiration of the
Investor Notice Period, Carlyle may, in its sole discretion, elect by written notice delivered to
the Proposed Investor pursuant to paragraph 21 either to (x) make (together with its Affiliates)
the investment at a price and on the terms thus described in the



14









 




Investor Notice or (y) co-invest (together with its Affiliates) in the investment described in
the Investor Notice with the Proposed Investor on the basis of 80.1% of the aggregate investment
being made by Apollo and its Affiliates and 19.9% of the aggregate investment being made by Carlyle
and its Affiliates, in each case at a price and on terms described in the Investor Notice. The
parties to each transaction described in clauses (x) and (y) of the preceding sentence shall use
commercially reasonable efforts to complete such transaction within ninety (90) days after the
expiration of the Investor Notice Period. If the Company elects to make the investment described
in the Investor Notice but Carlyle does not approve the investment pursuant to paragraph
2(b)(2)(v), the Proposed Investor may make the investment at a price and on terms no more favorable
to the Proposed Investor than those specified in the Investor Notice during the ninety (90) day
period following the Investor Notice Period.




     (c) Carlyle will use its reasonable best efforts to cause its Affiliates to refer equity
investment opportunities within the Investment Scope that are sourced by its Affiliates to the
Company, and will use its reasonable best efforts to cause its Affiliates to allow the Company to
co-invest alongside the applicable Carlyle Affiliate in any such transaction. Notwithstanding the
preceding sentence, Carlyle shall not have any obligation to use its reasonable best efforts under
this paragraph 8 to the extent that the use of such efforts is inconsistent with a fiduciary or
other obligation of Carlyle or any of its Affiliates.



     (d) The provisions of this paragraph 8 will terminate upon the earlier to occur of (i) the
consummation of an Approved Sale, and (ii) completion of a Public Offering, provided that the
provisions of paragraph 8(c) will terminate upon the earlier to occur of (i) the consummation of an
Approved Sale, (ii) the completion of a Public Offering or (iii) the first date that Carlyle no
longer owns any shares of the Company Stock.



     9. Buy/Sell Agreement.



     (a) Each Shareholder shall have the right, after the fifth anniversary of the date of this
Agreement to provide a written notice in accordance with paragraph 21 (an “Offer”) to the
other Investor Shareholder (the “Offeree Shareholder”), to offer to sell all, but not less
than all, of the interest of the Selling Shareholder and its Affiliates in the Company to the
Offeree Shareholder at a per share purchase price and upon the other terms and conditions specified
in the Offer. Notwithstanding the immediately preceding sentence, no Shareholder may provide an
Offer at any time during the period which commences on the date that a Transfer Notice has been
provided pursuant to paragraph 3(b) and ends sixty-one (61) days after the Authorization Date
described in paragraph 3(b).



     (b) The Offeree Shareholder must elect by written notice (the “Notice of Election”) to
the Selling Shareholder within thirty (30) days after receipt of the Offer, either:



     (i) to sell the Offeree Shareholder’s entire interest in the Company to the Selling
Shareholder at the per share purchase price and on the other terms and conditions specified in the
Offer, or



15









 





     (ii) to purchase the entire interest of the Selling Shareholder and its Affiliates in the
Company at a purchase price equal to the price set forth in the Offer and on the other terms and
conditions specified in the Offer.


During such sixty (60) day period, subject to the terms of the Mutual Nondisclosure Agreement
between Carlyle Investment Management, L.L.C. and Apollo dated August 2, 2007 (the
“Confidentiality Agreement”), each of the Offeree Shareholder and the Selling Shareholder
may perform a confirmatory due diligence evaluation of the Company and its Subsidiaries, and the
Company shall, and shall cause its Subsidiaries to, afford to the Offeree Shareholder’s and the
Selling Shareholder’s respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents reasonable access to and the right to inspect, during normal business hours and
with reasonable advance notice, all of the real property, properties, assets, records, contracts
and other documents related to the Company and its Subsidiaries, and shall permit them to consult,
during normal business hours and with reasonable advance notice, with the officers, employees,
accountants, counsel and agents of the Company and its Subsidiaries for the purpose of making such
investigation of the Company and its Subsidiaries as the Offeree Shareholder and the Selling
Shareholder shall desire to make. The parties agree that Carlyle shall act in all respects under
this paragraph 9(b) on behalf of all of its Affiliates including without limitation providing
Notices of Election.




     (c) If the Offeree Shareholder elects clause (i) of paragraph 9(b), the Investor Shareholders
shall, within ninety (90) days after receipt of the Notice of Election, execute such documents and
instruments reasonably required by the Selling Shareholder to sell and transfer the Offeree
Shareholder’s interest in the Company to the Selling Shareholder at the purchase price and on the
other terms and conditions specified in the Offer, which purchase price shall be payable in
immediately available funds, and the closing of such sale shall take place at the principal office
of the Company as soon as practicable, but in any event within one hundred twenty (120) days after
receipt of the Offer. At such closing, the Offeree Shareholder shall sell and transfer its entire
interest in the Company, and shall cause its Affiliates to sell and transfer their entitle interest
in the Company, to the Selling Shareholder free and clear of pledges, liens, security interests and
other encumbrances other than pledges arising out of Company financing.



     (d) If the Offeree Shareholder elects clause (ii) of paragraph 9(b), the Selling Shareholder
will sell its entire interest in the Company, and will cause its Affiliates to sell their entire
interest in the Company, to the Offeree Shareholder at the purchase price and on the other terms
and conditions specified in the Offer, and the Selling Shareholders shall, within ninety (90) days
after receipt of the Notice of Election, execute such documents and instruments reasonably required
by the Offeree Shareholder to sell and transfer the Selling Shareholder’s interest in the Company
to the Offeree Shareholder at the purchase price and on the other terms and conditions specified in
the Offer, which purchase price shall be payable in immediately available funds, and the closing of
such sale shall take place at the office of the Company as soon as practicable, but in any event
within one hundred twenty (120) days after receipt of the Offer. At such closing, the Selling
Shareholder shall sell and transfer its entire interest in the Company to the Offeree Shareholder
free and clear of pledges, liens, security interests and other encumbrances other than pledges
arising out of Company financing.



16









 





     10. Representations and Warranties.



     (a) The Company represents and warrants to the Shareholders as follows:



          (i) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of Delaware with corporate power and authority to own, lease
and operate its properties, to conduct its business as currently conducted and as proposed to be
conducted and to enter into and perform its obligations under this Agreement.




          (ii) The Company has taken all actions necessary to authorize it (x) to execute, deliver and
perform all of its obligations under this Agreement and (y) to consummate the transactions
contemplated hereby.




          (iii) This Agreement is a legally valid and binding obligation of the Company, enforceable
against it in accordance with its terms, except for (a) the effect thereon of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or affecting the rights
of creditors generally and (b) limitations imposed by equitable principles upon the specific
enforceability of any of the remedies, covenants or other provisions thereof and upon the
availability of injunctive relief or other equitable remedies.




          (iv) Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by the Company with any of the provisions hereof
will (x) violate or conflict with any provisions of the Certificate of Incorporation or Bylaws of
the Company, or any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to the Company, or (y) violate, or conflict with, or result in a breach in
any provision of, or constitute a default (or any event that, with or without due notice or lapse
of time, or both, would constitute such a default) under, or result in the termination of,
accelerate the performance required by, or result in the creation of any lien, security interest,
charge or other encumbrance upon any of the properties or assets of the Company under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation of which the Company is a party or by which it
or any of its assets are bound.




          (v) No permit, application, notice, transfer, consent, approval, order, qualification, waiver
from, or authorization of, or declaration, filing or registration with, any governmental or
regulatory authority or third party is necessary in connection with the execution and delivery by
the Company of this Agreement or the consummation by the Company of the transactions contemplated
hereby.




     (b) Each Shareholder represents and warrants to each other Shareholder and to the Company as
follows:



17









 





          (i) It is a corporation, limited partnership, limited liability company or other entity duly
organized and validly existing under the laws of its respective state of organization;




          (ii) It has taken all actions necessary to authorize it (x) to execute, deliver and perform
all of its obligations under this Agreement and (y) to consummate the transactions contemplated
hereby.




          (iii) Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by the Shareholder with any of the provisions
hereof will (i) violate or conflict with the organic organizational documents of the Shareholder,
or any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to the Shareholder, or (ii) violate, or conflict with, or result in a breach in any
provision of, or constitute a default (or any event that, with or without due notice or lapse of
time, or both, would constitute such a default) under, or result in the termination of, accelerate
the performance required by, or result in the creation of any lien, security interest, charge or
other encumbrance upon any of the properties or assets of the Shareholder under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation of which the Shareholder is a party or by which it or
any of its assets are bound.




          (iv) No permit, application, notice, transfer, consent, approval, order, qualification, waiver
from, or authorization of, or declaration, filing or registration with, any governmental or
regulatory authority or third party is necessary on the part of the Shareholder in connection with
the execution and delivery by the Shareholder of this Agreement or the consummation by the
Shareholder of the transactions contemplated hereby.




     11. Legend. Each certificate evidencing Shareholder Shares and each certificate issued in
exchange for or upon the Transfer of any Shareholder Shares (if such shares remain Shareholder
Shares as defined herein after such Transfer) will be stamped or otherwise imprinted with a legend
in substantially the following form:




“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS PURSUANT TO A SHAREHOLDERS AGREEMENT
DATED AS OF OCTOBER 22, 2007, BY AND AMONG THE ISSUER OF SUCH
SECURITIES (THE “COMPANY”) AND CERTAIN OF THE COMPANY’S
SHAREHOLDERS. A COPY OF SUCH SHAREHOLDERS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST.”


The Company will imprint such legend on certificates evidencing Shareholder Shares. The legend set
forth above will be removed from the certificates evidencing any shares which cease




18









 







to be
Shareholder Shares in accordance with the definition of such terms as set forth in paragraph 13
hereof.




          12. Transfer. Prior to Transferring any Shareholder Shares (other than in a Public Sale or
in an Approved Sale) to any Person, the transferring Shareholder will cause the prospective
transferee to execute and deliver to the Company and the other Shareholders a Joinder Agreement.
The provisions of this paragraph 12 shall terminate upon the occurrence of (i) the consummation of
an Approved Sale and (ii) a Public Offering.




          13. Definitions.




     “Affiliate” of a Shareholder means any other Person, entity or investment or
co-investment fund directly or indirectly controlling, controlled by or under common control with
the Shareholder and, in the case of a Shareholder which is an entity, any shareholder, member,
partner or other equity holder of such Shareholder, which, in each case, beneficially owns at
least 10% of the outstanding voting interests of the Shareholder. Each fund managed by a Carlyle
or an Affiliate of Carlyle shall be an Affiliate of Carlyle for purposes of this Agreement, and no
portfolio company of Carlyle or its Affiliates shall be considered an Affiliate of Carlyle or such
Affiliate for purposes of this Agreement.



          “Certificate of Incorporation” means the Company’s certificate of incorporation in
effect at the time as of which any determination is being made.




          “Common Stock” means the Company’s Common Stock, par value $.001 per share.




          “Company Indebtedness” means all indebtedness of the Company (including without
limitation, any loans, advances, letters of credit, bank overdrafts, capital lease obligations and
all other indebtedness of any kind including interest, principal and fees).




          “Company Stock” means the Common Stock and any other class or series of shares of
capital stock hereafter created by the Company.




          “Fair Market Value” has the meaning ascribed to that term in the Joint Venture
Agreement.




          “Fully Diluted Basis” means, without duplication, all shares of the applicable class
of Company Stock issued or issuable directly or indirectly upon the exercise or exchange of all
outstanding options, warrants or similar rights, excluding outstanding options or warrants that are
Out of the Money or not then exercisable, and all shares of such class of Company Stock issuable
upon the conversion of any securities convertible into such class of Company Stock.




          “Independent Third Party” means any Person who (together with its Affiliates),
immediately prior to the contemplated transaction, (i) does not own, directly or indirectly, in
excess of 5% of any class of the Company Stock on a Fully-Diluted Basis (a “5% Owner”),
(ii) is not controlling, controlled by or under common control with any such 5% Owner, (iii) is not
the




19









 







spouse or descendant (by birth or adoption), parent or dependent of any such 5% Owner, (iv) is
not a trust for the benefit of such 5% Owner and/or any Person referenced in clause (ii) or (iii),
and (v) is not a group consisting of any of the foregoing.




     “Joinder Agreement” means a joinder agreement in substantially the form of Exhibit
A hereto pursuant to which transferees of shares of Company Stock which are permitted under
this Agreement become parties to this Agreement.



     “Out of the Money” means, in the case of an option or warrant, that the fair market
value per share of the shares of Company Stock which the holder thereof is entitled to purchase or
subscribe for is less than the exercise price per share of such option or warrant.



     “Person” means an individual, a partnership, a corporation, an association, a joint
stock company, a trust, a joint venture, a limited liability company, an unincorporated
organization and a governmental entity or any department, agency or political subdivision thereof.



     “Public Offering” means an initial public offering by the Company of its capital stock
to the public effected pursuant to an effective registration statement under the Securities Act, or
any comparable statement under any similar United States federal statute then in effect.



     “Public Sale” means any sale of Shareholder Shares to the public pursuant to an
offering registered under the Securities Act, to the public through a broker, dealer or market
maker pursuant to the provisions of Rule 144 adopted under the Securities Act or pursuant to the
provisions of Rule 144(k) adopted under the Securities Act.



     “Securities Act” means the Securities Act of 1933, as amended from time to time.



     “Securities and Exchange Commission” includes any governmental body or agency
succeeding to the functions thereof.



     “Shareholder Shares” means any Company Stock owned directly or indirectly by the
Shareholders. As to any particular shares constituting Shareholder Shares, such shares will cease
to be Shareholder Shares (A) upon the occurrence of a Public Offering, (B) upon the termination of
this Agreement, or (C) when they have been (i) effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering them, or (ii) sold to the public
through a broker, dealer or market maker pursuant to Rule 144 (or by similar provision then in
force) under the Securities Act.



     “Subsidiary” means with respect to any Person, any corporation, partnership, limited
liability company, association or other business entity of which (i) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, limited liability company, association or other
business entity, a majority of the partnership, membership or other similar ownership interest



20









 




thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons shall be allocated a majority of
such partnership, limited liability company, association or other business entity gains or losses
or shall be or control the managing director or general partner of such partnership, limited
liability company, association or business entity.




     “Valuation Firm” has the meaning ascribed to that term in the Joint Venture Agreement.



     14. Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any
Shareholder Shares in violation of any provision of this Agreement will be void, and the Company
will not record such Transfer on its books or treat any purported transferee of such Shareholder
Shares as the owner of such shares for any purpose.



     15. Amendment and Waiver. Except as otherwise provided herein, no modification, amendment
or waiver of any provision of this Agreement (including the schedules hereto) will be effective
against the Company or the Shareholders unless such modification, amendment or waiver is approved
in writing by each of the Company, Carlyle and the holders of at least a majority of the then
outstanding Shareholder Shares; provided that if such amendment or waiver would adversely
affect a holder or group of holders of Shareholder Shares in a manner different than any other
holders of Shareholder Shares, then such amendment or waiver will require the consent of such
holder or a majority of the Shareholder Shares held by such group of holders adversely affected.
The Company will give prompt written notice to the Shareholders of any amendments, modifications,
or waivers of the provisions of this Agreement. The failure of any party to enforce any of the
provisions of this Agreement will in no way be construed as a waiver of such provisions and will
not affect the right of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.



     16. Severability. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any
other provision or the effectiveness or validity of any provision in any other jurisdiction, and
this Agreement will
be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.



     17. Entire Agreement. Except as otherwise expressly set forth herein, this Agreement, the
Joint Venture Agreement, the Confidentiality Agreement and that certain Registration Rights
Agreement dated as of the date hereof between the Company and certain of its shareholders embody
the complete agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the subject matter hereof in any
way.



21









 





                    18. Successors and Assigns. Except as otherwise provided herein, this Agreement will bind
and inure to the benefit of and be enforceable by the Company and its successors and assigns and
the Shareholders and any subsequent holders of Shareholder Shares and the respective successors and
assigns of each of them, so long as they hold Shareholder Shares.




                    19. Counterparts. This Agreement may be executed in separate counterparts each of which
will be an original and all of which taken together will constitute one and the same agreement.




                    20. Remedies. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the Company and each
Shareholder will have the right to injunctive relief, in addition to all of its rights and remedies
at law or in equity, to enforce the provisions of this Agreement. Nothing contained in this
Agreement will be construed to confer upon any Person who is not a signatory hereto or any
successor or permitted assign of a signatory hereto any rights or benefits, as a third party
beneficiary or otherwise, except that each member of the Board and each Board Observer will be a
third party beneficiary of respect to the indemnification described in paragraph 1(c).




                    21. Notices. Any notice provided for in this Agreement will be in writing and will be
either (i) personally delivered, (ii) delivered by certified mail, return receipt requested, (iii)
sent by nationally recognized overnight courier service (charges prepaid) or (iv) faxed with a copy
following by any method described in the foregoing clauses (i) to (iii), to the address set forth
below or at any address listed in the Company’s records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice to the sending
party. Notices will be deemed to have been given hereunder when delivered personally, five days
after deposit in the U.S. mail and one day after deposit with a nationally recognized overnight
courier service.



If to the Company:



Apollo Global, Inc.

c/o Apollo Group, Inc.

4615 East Elwood Street

Phoenix, AZ 85040

Attn: Chief Financial Officer

Facsimile: (602) 383-5159



If to Apollo or its Affiliates:



The Apollo Group, Inc.

4615 East Elwood Street

Phoenix, AZ 85040

Attn: Chief Financial Officer

Facsimile: (602) 383-5159




22









 







With a required copy to:



Morgan, Lewis & Bockius LLP

One Market Street

San Francisco, CA 94105

Attn: William A. Myers, Esq.

Facsimile: (415) 442-1001



If to Carlyle or its Affiliates:



Carlyle Venture Partners III, L.P.

1001 Pennsylvania Avenue, N.W.

Suite 220 South

Washington, DC 20004-2505

Attention: Brooke B. Coburn and Charles C. Moore

Facsimile: (202) 347-1818



With a required copy to:



Dickstein Shapiro LLP

1825 Eye Street, NW

Washington, DC 20006-5403

Attn: Neil Lefkowitz

Facsimile: (202) 420-2201



If to any of the Other Shareholders:



At the address listed on Schedule I.




                    22. Governing Law. This Agreement shall be construed according to and governed by the laws
of the State of Delaware, without reference to conflicts of laws principles.




                    23. Descriptive Headings. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.




[Remainder of this page intentionally left blank]




23









 





          IN WITNESS WHEREOF, the parties hereto have executed this Shareholders Agreement on the day
and year first above written.




	 	 	 	 	 
	 	COMPANY:





APOLLO GLOBAL, INC.

 	 
	 	By:  	/s/ Jeff Langenbach
 	 
	 	 	Name:  	Jeff Langenbach 	 
	 	 	Title:  	President 	 
	 
	 	INVESTOR SHAREHOLDERS:





APOLLO GROUP, INC.

 	 
	 	By:  	/s/ Joseph L. D’Amico
 	 
	 	 	Name:  	Joseph L. D’Amico 	 
	 	 	Title:  	 	 
	 
	 	CARLYLE VENTURE PARTNERS III, L.P.





By: TCG VENTURES III, L.P.

      Its General Partner

 	 
	 	By:  	/s/ Brooke B. Coburn
 	 
	 	 	Name:  	Brooke B. Coburn 	 
	 	 	Title:  	Managing Director 	 
	 




 









 





SCHEDULE I




Other Shareholders




None as of October 22, 2007




 









 








Exhibit A




JOINDER AGREEMENT




Apollo Global, Inc.

c/o Apollo Group, Inc.

4615 East Elwood Street

Phoenix, AZ 85040




Ladies and Gentlemen,



Reference is hereby made to that certain Shareholders’ Agreement (the “Shareholders’
Agreement”), dated as of October 22, 2007, by and among Apollo Global, Inc., a Delaware
corporation (the “Company”), Apollo Group, Inc., an Arizona corporation, and Carlyle
Venture Partners III, L.P., a Delaware limited partnership. Capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to them in the Shareholders’ Agreement.



By execution and delivery of this Joinder Agreement, the undersigned hereby agrees as follows:



2. Shareholders’ Agreement. The undersigned acknowledges that it is acquiring shares of the
Company’s Common Stock (the “Purchased Shares”), subject to the terms and conditions of the
Shareholders’ Agreement, and agrees that it shall become, and by execution and delivery of this
Agreement does become, and assumes each and every obligation of, a “Shareholder” under and as
defined in the Shareholders’ Agreement as of the date set forth below (the “Effective
Date”). Notwithstanding the immediately preceding sentence, the undersigned does not hereby
assume, and will not otherwise become subject to, any liability resulting from any breach, default
or failure to comply with any provision of the Shareholders’ Agreement by or on behalf of any
Person other than the undersigned.



3. Representations and Warranties. The undersigned represents and warrants to the Company
and the existing Shareholders as of the Effective Date and, to the extent that the undersigned
purchases additional shares of Common Stock from the Company on any Subsequent Closing Date (as
defined in the Joint Venture Agreement dated as of October 22, 2007, by and among the Company,
Apollo Group, Inc. and Carlyle Venture Partners III, L.P.), the undersigned will represent and
warrant to the Company and the existing Shareholders on such Subsequent Closing Date as follows:




     3.1 Accredited Investor. The undersigned (a) is an “accredited investor” (as that term
is defined in Section 501(a) of Regulation D promulgated under the Securities Act of 1933, as
amended (the “Act”)) because it is either (x) a corporation not formed for the specific
purpose of acquiring the securities offered, and has total assets in excess of $5,000,000 or (y) an
entity in which all of the equity owners are accredited investors, (b) has such knowledge and
experience in financial and business matters to be capable of evaluating the merits and risks of
the investment contemplated hereby and (c) has reviewed the merits of such investment with tax and
legal counsel and other advisors to the extent deemed advisable. The undersigned will acquire the
Purchased Shares for its own account for investment and not with a view to the sale or



 









 




distribution thereof, and the undersigned has no present intention of distribution or selling
to others any of such interest.




     3.2 Access. The undersigned has had access to all the information it considers
necessary or appropriate to make an informed investment decision with respect to the investment in
the Purchased Shares. The undersigned further has had the opportunity to obtain all additional
information necessary to verify the information to which the undersigned has had access.



     3.3 Nature of Investment. The undersigned understands that the Purchased Shares are
characterized as “restricted securities” under the Act inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under the Act and related
regulations such securities may be resold under the Act only in certain limited circumstances. The
undersigned is familiar with and understands such resale limitations imposed by the Act and related
regulations and by the Shareholders’ Agreement. The undersigned understands that the Company has no
present intention to register any of the Purchased Shares.



     3.4 Authorization; Validity; No Conflicts. The undersigned is duly authorized
(including by all requisite corporate or stockholder (or equivalent, for entities other than
corporations) action on the part of the undersigned and its officers and directors and its direct
and indirect stockholders (or equivalent equity owners, for entities other than corporations)), and
has full power and authority, to execute and perform its obligations under this Joinder Agreement
and the Shareholders’ Agreement, and constitutes the undersigned’s legal, valid and binding
obligation enforceable against it in accordance with their respective terms except (i) as the same
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors’ rights generally and (ii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may be brought. The
execution, delivery and performance by the undersigned of this Joinder Agreement, the performance
by the undersigned of the Shareholders’ Agreement, and the consummation by the undersigned of the
transactions contemplated hereby and thereby will not (a) conflict with or constitute a default
under any agreement, indenture or instrument to which the undersigned is a party, (b) conflict with
or violate the undersigned’s organizational documents or (c) result in a violation of any order,
judgment or decree of any court or governmental or regulatory authority having jurisdiction over
the undersigned or any of its assets.


4. Sale of Purchased Shares. In reliance upon the representations and warranties made by
the undersigned in this Joinder Agreement and the undersigned’s agreement herein to be bound by the
Shareholders’ Agreement as a “Shareholder” (as such term is used in the Shareholders’ Agreement),
the Company shall sell to the undersigned, and the undersigned shall purchase from the Company, the
following Purchased Shares:




	 	 	 
	Number of shares:
	 
	Price per share:
	 
	Total Purchase Price:






[Remainder of page intentionally left blank]





 









 







IN WITNESS WHEREOF, the undersigned have executed this Joinder Agreement as of the date first set
forth below.




	 	 	 
	Date:	 	 
	 
	 	 
	 	 	 
	Investor:	 	 
	 
	 	 
	 	 	 
	Signature:	 	 
	 
	 	 
	 	 	 
	Printed Name:	 	 
	 
	 	 
	 	 	 
	Title (if applicable):	 	 
	 
	 	 
	 	 	 
	Address:	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 	 	 
	Phone No.:	 	 
	 
	 	 
	 	 	 
	Facsimile No.:	 	 
	 
	 	 





AGREED AND ACCEPTED:




APOLLO GLOBAL, INC.,

a Delaware corporation




By:                                                            

Name:

Title:




[Signature Page to Joinder Agreement]