Document:

exv10w3

 

Exhibit 10.3

	 	 	 
	General Contract

	 	TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA
	Of Indemnity
(Form A)

	 	                                       Hartford, Connecticut 06183

We, the undersigned, hereinafter referred to, individually and/or collectively, as “Indemnitors,”
hereby request, have requested and/or will request TRAVELERS CASUALTY AND SURETY COMPANY OF
AMERICA, ST. PAUL FIRE AND MARINE INSURANCE COMPANY, any of their present or future direct or
indirect parent companies, any of the respective present or future direct or indirect affiliates or
subsidiaries of such companies and parent companies, and/or any of the aforementioned entities’
successors or assigns, hereinafter referred to, individually and/or collectively, as “Company,” to
execute or procure bonds, undertakings, guarantees, and/or contractual obligations, including
renewals and extensions thereof, whether before or after the date of this Agreement, and bonds and
undertakings for which Company has obligations as a result of an asset purchase, acquisition,
merger or like transaction, hereinafter referred to, individually and/or collectively, as
“Bond(s).” As an inducement therefore we make the following representations of fact, promises and
agreements:

REPRESENTATIONS OF FACT:

	1.	 	In the transaction of business one, some or all of the Indemnitors are required, or may
desire to give such Bond(s).
	 
	2.	 	Indemnitors have a substantial, material and beneficial interest (a) in the obtaining of
Bond(s) by any of the Indemnitors and (b) in the transaction(s) for which any other Indemnitor
has applied or will apply to Company for Bond(s) pursuant to this General Contract of
Indemnity, hereinafter referred to as “Agreement.” It is understood that the purpose of this
Agreement is to induce Company to furnish Bond(s); however, Company is under no obligation to
furnish Bond(s) to Indemnitors.
	 
	3.	 	Indemnitors have the full power and authority to execute, deliver and perform this Agreement
and to carry out the obligations stated herein. Indemnitors further acknowledge and agree
that (a) the execution, delivery and performance of this Agreement by such Indemnitors, (b)
the compliance with the terms and provisions hereof, and (c) the carrying out of the
obligations contemplated herein, do not, and will not, conflict with and will not result in a
breach or violation of any terms, conditions or provisions of the charter documents or bylaws
of such Indemnitors, or any law, governmental rule or regulation, or any applicable order,
writ, injunction, judgment or decree of any court or governmental authority against
Indemnitors, or any other agreement binding upon Indemnitors, or constitute a default
thereunder.

PROMISES AND AGREEMENTS: In consideration of the furnishing of any such Bond, the forbearance of
cancellation of any existing Bond(s) by Company, the assumption of obligations by Company of any
Bond, and for other valuable consideration, Indemnitors hereby jointly and severally promise and
agree as follows:

	1.	 	To pay all premiums for each Bond, as they fall due, until Company has been provided with
competent legal evidence that the Bond has been duly discharged.

 

 

	2.	 	To indemnify and exonerate Company from and against any and all loss, cost and expense of
whatever kind which it may incur or sustain as a result of or in connection with the
furnishing of Bond(s), the assumption of obligations by Company of Bond(s), and/or the
enforcement of this Agreement, including unpaid premiums, interest, court costs and counsel
fees, and any expense incurred or sustained by reason of making any investigation, hereinafter
referred to as “Loss.” To this end Indemnitors promise:

	 	(a)	 	To promptly reimburse Company for all sums paid on account of such Loss and it
is agreed that (1) originals or photocopies of claim drafts, or of payment records,
kept in the ordinary course of business, including computer printouts, verified by
affidavit, shall be prima fade evidence of the fact and amount of such Loss, and (2)
Company shall be entitled to reimbursement for any and all disbursements made by it,
under the belief that it was liable, or that such disbursement was necessary or
expedient.
	 
	 	(b)	 	To deposit with Company, on demand, the amount of any reserve against such Loss
which Company is required, or deems it prudent to establish whether on account of an
actual liability or one which is, or may be, asserted against it and whether or not any
payment for such Loss has been made.

	3.	 	This Agreement shall apply to any and all Bond(s) furnished as follows:

	 	(a)	 	If Company executes the Bond(s), procures the execution of Bond(s) by other
sureties, executes Bond(s) with co-sureties and/or obtains reinsurance;
	 
	 	(b)	 	For or on behalf of any or all of the following:

	 	(1)	 	One, some or all of the Indemnitors;
	 
	 	(2)	 	Any joint venture or other form of common enterprise in which
Indemnitors were members at the time the Bond(s) were furnished;
	 
	 	(3)	 	Any present or future affiliate and/or subsidiary of
Indemnitors;
	 
	 	(4)	 	Any third party at the request of Indemnitors, their
subsidiaries and/or affiliates.

	4.	 	(a) The validity and effect of this Agreement shall not be impaired by, and Company shall
incur no liability on account of, and Indemnitors need not be notified of:

	 	(1)	 	Company’s failure or refusal to furnish Bond(s), including
final Bond(s) where Company has furnished a bid Bond;
	 
	 	(2)	 	Company’s consent or failure to consent to changes in the terms
and provisions of any Bond, or the obligation or performance secured by any
Bond;

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	 	(3)	 	The taking, failing to take, or release of security,
collateral, assignment, indemnity agreements and the like, as to any Bond;
	 
	 	(4)	 	The release by Company, on terms satisfactory to it, of any
Indemnitors; or
	 
	 	(5)	 	Information which may come to the attention of Company which
affects or might affect its rights and liabilities or those of any of the
Indemnitors.

	 	(b)	 	The validity and effect of this Agreement shall not be impaired by, and Company
shall incur no liability on account of, the cancellation or termination of any Bond(s).

	5.	 	Indemnitors shall have no rights of indemnity, contribution or right to seek collection of
any other outstanding obligation against any other Indemnitors or their property until the
obligations of the Indemnitors to Company under this Agreement have been satisfied in full.
	 
	6.	 	Company shall have the right, in its sole discretion, (a) to deem this Agreement breached
should any Indemnitor become involved in any agreement or proceeding of liquidation,
receivership, bankruptcy, insolvency or creditor assignment, whether voluntarily or
involuntarily, or should any Indemnitor, if an individual, die, or be convicted of a felony,
become a fugitive from justice, or for any reason disappear and cannot immediately be found by
Company by use of usual methods, and (b) to adjust, settle, compromise or defend any claim,
demand, suit or judgment upon any Bond(s).
	 
	7.	 	If Company has or obtains collateral or letters of credit, Company shall not have any
obligation to release collateral or letters of credit or turn over the proceeds thereof until
it shall have received a written release in form and substance satisfactory to Company with
respect to each and every Bond. Any collateral or letters of credit provided to Company by
any Indemnitor or any third party, or the proceeds thereof, may be applied to any Loss.
	 
	8.	 	Indemnitors also understand and agree that their obligations remain in full force and effect
for any Bond(s) issued pursuant to this Agreement, notwithstanding that the entity on whose
behalf Bond(s) were issued has been sold, dissolved or whose ownership has been otherwise
altered in any way.
	 
	9.	 	This Agreement shall remain in full force and effect until terminated. Indemnitors may only
terminate participation in this Agreement by providing written notice to Company of
Indemnitors’ intent to terminate. Such notice shall be addressed to St. Paul Travelers Bond,
Attention: Senior Vice President Commercial Surety, One Tower Square, Hartford, Connecticut
06183. Such notice of termination shall become effective thirty (30) days after Company’s
receipt of the same. The obligations and liability of Indemnitors giving such notice shall
thereafter be limited to Bond(s) furnished before the effective date of the notice, which
liability shall include any Bond(s) which were originally issued prior to the effective date
of notice and renewed or otherwise extended subsequent to the notice or effective date of
termination.

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	10.	 	Indemnitors hereby expressly authorize Company to access credit records and to make such
pertinent inquiries as may be necessary from third party sources for underwriting purposes,
claim purposes and/or debt collection. To the extent required by law, Company will, upon
request, provide notice whether or not a consumer report has been requested by Company, and if
so, the name and address of the consumer reporting agency furnishing the report.
	 
	11.	 	In the event of a claim or notice of a potential claim, Company shall have the right, at all
times, to free access to the books, records, and accounts of the Indemnitors for the purpose
of examining the same.
	 
	12.	 	Company may furnish copies of any and all statements, agreements, financial statements and
any information which it now has or may hereafter obtain concerning Indemnitors, to other
persons or companies for the purpose of procuring co-suretyship or reinsurance.
	 
	13.	 	A duplicate or facsimile copy or electronic reproduction of the original document shall have
the same force and effect as the original.
	 
	14.	 	This Agreement may be executed in any number of counterparts, each of which shall be an
original but all of which together shall constitute one instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
	 
	15.	 	If any provision or portion of this Agreement shall be unenforceable, this Agreement shall
not be void, but shall be construed and enforced with the same effect as though such provision
or portion were omitted.
	 
	16.	 	This Agreement is in addition to and not in lieu of any other agreements and obligations
undertaken in favor of Company, whether now existing or entered into hereafter.
	 
	17.	 	The rights and remedies afforded to Company by the terms of this Agreement can only be
impaired by a written rider to this Agreement signed by an authorized employee of the Company.
	 
	18.	 	Company’s failure to act to enforce any or all of its rights under this Agreement shall not
be construed as a waiver of these rights.
	 
	19.	 	The date of this Agreement shall be the earliest date any Indemnitor executes this Agreement.
	 
	20.	 	Special Provisions:

	 	(a)	 	This Agreement shall only apply to that certain Supersedeas Bond Number
105036869 and including any and all modifications, replacements, substitutions,
supplements, or increases thereof (the “Bond”) posted under Federal Rule of Civil
Procedure 62 and/ or Federal Rule of Appellate Procedure 8 in connection with
post-trial motions and/or an appeal of the judgment entered in that certain case
entitled, In re Apollo Group Securities Litigation (“the Case”), pending as Case

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	 	 	 	Nos. CV 04-2147-PHX-JAT (LEAD), CV 04-2204-PHX-JAT (Consolidated) and CV
04-2334-PHX-JAT (Consolidated) in the United States District Court for the District
of Arizona (together with the courts having appellate jurisdiction thereof, the
“Court”).
	 
	 	(b)	 	Notwithstanding any other provision of this Agreement, that certain Control
Agreement of even date herewith (the “Control Agreement”), or that certain
Collateralized Bond Surety Program Registered Pledge and Master Security Agreement of
even date herewith (the “Security Agreement”):

     (1) Upon receipt of a notice of claim against the Bond and prior to making any
payments under the Bond or drawing upon the collateral, Company shall, as soon as
practicable, provide notice to Indemnitors and shall make a written demand upon
Indemnitors to timely satisfy the claim or provide defenses thereto. In the event
the Indemnitors do not timely satisfy a valid Bond obligation that the Company is
obligated to pay, Company shall have the right, in its sole discretion, to adjust,
settle, compromise or defend any such claim, demand, suit or judgment upon the Bond
and use the collateral to satisfy the claim. In the event Indemnitors wish to
either settle or pay the judgment using the collateral, Indemnitors shall provide
notice in writing directing the Company to do so.

     (2) Company shall not have any obligation to release the collateral or turn
over the proceeds thereof to the Indemnitors until it shall have received a Final
Order of the Court discharging Company from any and all obligations arising under
the Bond and releasing, discharging, or terminating the Bond without any further
liability to the Company. Any collateral provided to Company by the Indemnitors may
be applied to any Loss. “Final Order” as used in this Agreement means an order that
is subject to appeal or a writ of certiorari and with respect to which the time to
appeal or seek issuance of a writ of certiorari has expired.

     (3) Indemnitors shall not be obligated to deposit amounts to cover reserves
under paragraph 2(b) above with respect to Loss that is fully secured by collateral
and, in the event a reserve is set, any such reserve shall reflect the amount of
collateral on deposit at the time Company establishes such reserve or on deposit at
the time of any subsequent reserve adjustments. Any amounts deposited pursuant to
such paragraph 2(b) above shall constitute additional collateral.

     (4) The collateral pledged under the Control Agreement and the Security
Agreement shall only secure Loss under this Agreement, at law or in equity and
obligations and liabilities created under the Control Agreement and the Security
Agreement, including but not limited to the reimbursement of expenses described in
Section 13 of the Security Agreement.

     (5) If the Company becomes legally obligated to pay on the Bond or it appears
to the Company that its obligation to pay on the Bond may come due within ten (10)
business days, and it further appears to the Company at the time of either such
event that any portion of the collateral then held by the Company will

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not timely mature and/or become liquid by the time the Company is obligated to
make payment on the Bond, Company shall so notify Indemnitors in writing, who shall
within five (5) business days after receipt of such notice provide substitute
collateral that is payable on demand or will mature by the time such payment on the
Bond is due. If the amount of collateral on deposit is insufficient to pay the
Company’s obligation on the Bond when it becomes due, then Indemnitor shall either
forthwith pay the difference or provide additional collateral equal to the
shortfall. Such payment will be made by wire transfer or otherwise in immediately
available funds to the bank account specified in the notice provided to the
Indemnitors by Company. The Indemnitors waive, to the fullest extent permitted by
applicable law, each and every right which they may have to contest any such payment
that is due and that the Company is legally obligated to make. Failure to make
payment to Company as herein provided shall cause the Indemnitors to be additionally
liable for any and all costs and expenses, including attorney’s fees, incurred by
Company in enforcing this Agreement, together with interest on unpaid amounts due
Company. Interest shall accrue, commencing the date Company pays the amount of the
Demand, at 130% of the prime rate of interest in effect on December 31 of the
previous calendar year as published in the Wall Street Journal. Indemnitors
stipulate and agree that the Company will suffer immediate irreparable harm and will
have no adequate remedy at law should Indemnitors fail to perform this obligation,
and therefore Company shall be entitled to specific performance of this obligation.

WE HAVE READ THIS CONTRACT OF INDEMNITY CAREFULLY. THERE ARE NO SEPARATE AGREEMENTS OR
UNDERSTANDINGS WHICH IN ANY WAY LESSEN OUR OBLIGATIONS AS ABOVE SET FORTH. IN TESTIMONY HEREOF, WE
THE INDEMNITORS HAVE SET OUR HANDS AND FIXED OUR SEALS AS SET FORTH BELOW.

If Indemnitor is an Individual, sign below:

 

Instructions: Signatures of individual Indemnitors must be witnessed. Indemnitors must include
their Social Security Number. All signatures must be dated with names printed or typed on the line
provided.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	(Witness Signature)

	 	 	 	(Date)
	 	 	 	(Witness
	 	Signature)
	 	 	 	(Date)
	Print of Type Name:	 	 	 	 	 	 	 	Print of Type Name:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	SS#:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

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If Indemnitor a Corporation, Limited Liability Company or Partnership, sign below:

 

Instructions: If the entity is: 1) a corporation the secretary and an authorized officer should
sign on behalf of the corporation, 2) a limited liability company the manager(s) or member(s)
should sign on behalf of the LLC, or 3) a partnership the partner(s) should sign on behalf of the
partnership. Two signatures are required for all entities and all signatures must be notarized and
dated. Please provide the entity’s federal tax identification number on the line provided.

Each of the undersigned hereby affirms to Company as follows: I am a duly authorized official of
the business entity Indemnitor on whose behalf I am executing this Agreement. In such capacity I
am familiar with all of the documents which set forth and establish the rights which govern the
affairs, power and authority of such business entity including, to the extent applicable, the
certificate or articles of incorporation, bylaws, corporate resolutions and/or partnership,
operating or limited liability agreements of such business entity. Having reviewed all such
applicable documents and instruments and such other facts as deemed appropriate, I hereby affirm
that such entity has the power and authority to enter into this Agreement and that the individuals
executing this Agreement on behalf of such entity are duly authorized to do so.

	 	 	 	 	 	 	 
	Apollo Group, Inc.

	 	 	 	 	 	(Seal)
	 	 	 	 	 
	(Indemnitor Name)

	 	 	 	(First Signature)	 	 
	 
	 	 	 	 	 	 
	86-0419443

	 	 	 	/s/ Brian E. Mueller
	 	2-14-08
	 	 	 	 	 
	(Federal Tax ID)

	 	 	 	Brian E. Mueller, President
	 	(Date)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	(Seal)
	 	 	 	 	 
	 

	 	 	 	(Second Signature)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ P. Robert Moya
	 	2-14-08
	 	 	 	 	 
	 

	 	 	 	P. Robert Moya, Senior Vice President
and Secretary
	 	(Date)

	 	 	 
	ACKNOWLEDGEMENT
	 	 
	STATE OF ARIZONA

	 	County of Maricopa

On this 14 day of February, 2008, before me personally appeared Brian E. Mueller, known or proven
to me to be the President of the entity executing the foregoing instrument (“Entity”) and P. Robert
Moya, known or proven to me to be the SVP and Secretary of the Entity, and they acknowledged said
instrument to be the free and voluntary act and deed of said Entity, for the uses and purposes
therein mentioned and on oath stated that the seal affixed is the seal of said Entity and that it
was affixed and that they executed said instrument by authority of the Entity. IN WITNESS WHEREOF,
I have hereunto set my hand and affixed my OFFICIAL SEAL the day and year first above written.

	 	 	 	 	 
	 	 	 
	 	                 /s/ Catherine S. Davis
 	 
	 	Notary Public residing at Phoenix AZ 	 
	 	(Commission Expires           10/05/09                     ) 	 
	 

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Exhibit 10.4

CONTROL AGREEMENT

Re:           Account No. Smith Barney *** — ***** — ** — ***          

Travelers Casualty and Surety Company of America, Secured Party

FBO Apollo Group, Inc.

     This agreement refers to the above-referenced and entitled Smith Barney Inc. (“SB”) Account
(together with any substitution or replacement thereof, the “Account”) which the undersigned
account holder(s) (jointly and severally if more than one) (the “Account Holder”) has instructed SB
(the “Securities Intermediary”) to entitle as referenced above and hold certain of the Account
Holder’s assets as set forth in Exhibit “A”. The Account Holder and the Securities Intermediary
hereby acknowledge and agree that the Account is a cash securities account and is not a DVP
account, a retirement account, an SB margin account or an SB linked account.

     The Account Holder and the Secured Party (“Secured Party”) hereby notify the Securities
Intermediary that the Account Holder has granted the Secured Party a security interest in the
Account, all financial assets and other items therein, all proceeds thereof and distributions in
connection therewith and income received thereon (the “Collateral”) pursuant to a Collateralized
Bond Surety Program Registered Pledge and Master Security Agreement dated even date herewith made
by the Account Holder in favor of the Secured Party (as amended, supplemented or otherwise modified
from time to time, the “Security Agreement”). The Securities Intermediary hereby acknowledges being
so notified and confirms that it has recorded such security interest on its books and records.
Further, the Securities Intermediary confirms that as of the date hereof, its personnel generally
responsible for maintaining records of liens or security interests with respect to cash securities
accounts, have no knowledge of any restraint, security interest, lien or other adverse claim in or
to the Account or any item therein; provided that the Securities Intermediary may retain a
subordinated lien in connection with any obligations that Account Holder may have incurred with the
Securities Intermediary. In addition, the Securities Intermediary agrees to promptly notify the
Secured Party and the Account Holder in the event it receives any written notice of any lien,
encumbrance or adverse claim against the Account or any of the other Collateral.

     The Account Holder and Secured Party agree that the Account Holder may only instruct the
Securities Intermediary to sell or purchase the types of securities for the benefit of the
Portfolio, as set forth in Exhibit “B” hereinafter referred to as “Permitted Trading.”

     The Account Holder and Secured Party consent and agree that, other than the instructions set
forth in the preceding paragraph, the only instructions that shall be given to the Securities
Intermediary in regard to or in connection with the Account shall be given by the Secured Party.
The Account Holder shall not instruct the Securities Intermediary to deliver and, subject to
Section 8(a)(iii) of the Security Agreement, the Securities Intermediary shall not deliver cash,
securities, or proceeds from the sale of, or distributions on, such securities out of the Account.

     Notwithstanding anything herein to the contrary, upon written notice, at any time, by the
Secured Party to the Securities Intermediary (the form of such notice is hereinafter referred to as

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“Notice of Exclusive Control”, as set forth in “Exhibit C”) the Securities Intermediary shall
not accept or honor any instructions from or on behalf of the Account Holder in respect of the
Account, including but not limited to instructions relating to Permitted Trading, and shall only
comply with the instructions of the Secured Party. The Securities Intermediary agrees that all
property in the Account at any time shall be treated as a financial asset for purposes of the
Uniform Commercial Code in effect in New York as of the date thereof.

     The Account Holder hereby authorizes the Securities Intermediary to, and the Securities
Intermediary shall, provide the Secured Party with a monthly statement of assets and a confirmation
statement of each transaction effected in the Account after such transaction is effected. The
Account Holder further authorizes the Securities Intermediary to disclose to the Secured Party such
information relative to the Account, the financial assets and credit balances therein as the
Secured Party may at any time request, without any reference to any further authority for, or
inquiry as to the justification for, such disclosure, with it being agreed that Securities
Intermediary will provide Account information to Secured Party as frequently as Secured Party may
require to permit it to monitor the Collateral for compliance with the Security Agreement.

     The Securities Intermediary will comply with all entitlement orders originated by the Secured
Party without further action or consent by Account Holder or any other person and will (i) as
frequently as requested in writing by the Secured Party, transfer all available credit balances and
financial assets in the Account to such account as may be designated by the Secured Party by wire
transfer, depository transfer check, automatic clearing house electronic transfer, or otherwise, as
the Secured Party may direct in its sole discretion and (ii) maintain the Account and all financial
assets and other items therein as the Secured Party may direct in writing from time to time
(including using its best efforts to place or negotiate orders to sell securities in the Account,
including but not limited to sell orders pursuant to stock powers issued in favor of the Securities
Intermediary, and transferring the proceeds of sale to the Secured Party in accordance herewith),
in each case until such time (if any) as the Notice of Exclusive Control is withdrawn or rescinded
by the Secured Party.

     Any security interest in or lien on the Account or other Collateral, as defined in this
Control Agreement, granted to or otherwise obtained by the Securities Intermediary (including,
without limitation, by operation of law) shall be junior and subordinate to the security interest
and lien of the Secured Party in and on the Account and other Collateral, as defined in this
Control Agreement, regardless of the order of perfecting any such security interest or lien, the
filing or absence of filing any financing statement or the taking or failure to take any other
action. The Securities Intermediary acknowledges the Secured Party’s perfected security interest in
the Account and other Collateral, as defined in this Control Agreement, and agrees that, except as
provided herein, it will not (i) foreclose upon, sell or otherwise dispose of the Account or any
such other Collateral, or exercise any bankers’ or other lien or right of setoff or similar right
in connection with the Account or any such other Collateral, in each case without the prior written
consent of the Secured Party or (ii) receive, accept or apply any proceeds of the Account or any
such other Collateral to or on account of any indebtedness or obligation of the Account Holder to
the Securities Intermediary, in each case until the Secured Party has released its security
interest in the Account and any such other Collateral, provided however that nothing herein shall
limit the right of the Securities Intermediary from debiting the Account in an amount equal to the

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amount of any deposit that the Securities Intermediary has credited to the Account that is
thereafter returned to the Securities Intermediary because of insufficient funds or is otherwise
unpaid. The Securities Intermediary shall neither advance margin or other credit against the
Account, nor hypothecate any financial assets or other items carried in the Account, without the
prior written consent of the Secured Party. The Securities Intermediary shall not agree with any
other person or entity that it will comply (and the Securities Intermediary shall not comply) with
any withdrawal, transfer, payment or redemption instruction, or any other entitlement order or
other order, from such person or entity concerning the Account or any financial assets or other
items therein, without the prior written consent of the Secured Party, and any such agreement
entered into without such consent shall be null and void.

     The Account Holder acknowledges and agrees that this Control Agreement constitutes written
notification to the Securities Intermediary with respect to the Secured Party’s security interest
in the Collateral pursuant to Articles 8 and 9 of the Uniform Commercial Code in effect in New York
as of the date hereof and any applicable federal regulations for the Federal Reserve Book Entry
System. The Account Holder and the Secured Party each acknowledge and agree that the Securities
Intermediary shall not be held responsible for (i) any decline in the market value of the
Collateral or the failure to notify the Account Holder or the Secured Party thereof or (ii) the
failure to take any action with respect to the Collateral, except as expressly provided in this
Control Agreement, or as instructed by the Secured Party to the Securities Intermediary in
accordance with this Control Agreement (which instructions may be oral followed by written
confirmation within three (3) business days), (iii) and, except as expressly provided in this
Control Agreement, this Control Agreement shall not abridge any rights the Securities Intermediary
otherwise may have. To the extent that any provisions of this Control Agreement conflicts with any
provisions of the Account Agreements, the provisions of this Control Agreement shall control.

     Except with respect to the obligations and duties expressly provided in this Control
Agreement, this Control Agreement shall not impose or create any obligations or duties upon the
Securities Intermediary that are greater than or in addition to the usual and customary obligations
and duties, if any, of the Securities Intermediary with respect to the Account or the Account
Holder. Except as expressly provided in this Control Agreement, the Securities Intermediary shall
have no obligation or duty whatsoever to interpret the terms of any other agreements between the
Account Holder and the Secured Party or to determine whether any default exists thereunder.

     The Account Holder hereby irrevocably authorizes and instructs the Securities Intermediary to
perform and comply with the terms of this Control Agreement and to the extent there is any conflict
between this Control Agreement and the Account Agreements, the provisions of this Control Agreement
will control. The Account Holder hereby indemnifies and holds harmless the Securities Intermediary
from and against any and all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including reasonable attorney’s fees) and liabilities of every nature and
character arising out of or related to this Control Agreement or the transactions, contemplated
hereby or any actions taken or omitted to be taken by the Securities Intermediary hereunder,
including, without limitation, claims arising out of the Securities Intermediary’s failure to
permit the Account Holder to withdraw funds from the Account other than in strict compliance with
the terms of this Control Agreement, except to

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the extent directly caused by the Securities Intermediary’s negligence or willful misconduct.
The Secured Party shall indemnify and hold harmless the Securities Intermediary from and against
any and all claims, actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including reasonable attorneys’ fees) and liabilities of every nature and character that
may result by reason of the Securities Intermediary complying with instructions or requests of the
Secured Party as permitted or required under this Control Agreement, except to the extent directly
caused by the Securities Intermediary’s negligence or willful misconduct. The foregoing
indemnifications shall survive any termination of this Control Agreement.

     The Securities Intermediary may act upon any instrument or other writing believed by it in
good faith to be genuine and to have been signed or presented by Secured Party. The Securities
Intermediary shall not be liable in connection with the performance or nonperformance of its duties
hereunder, except for its own negligence or willful misconduct. The Securities Intermediary’s
duties shall be determined only with reference to this Control Agreement and applicable laws, and
the Securities Intermediary shall not be charged with knowledge of or any duties or
responsibilities in connection with, any other document or agreement.

     All notices required to be given pursuant to this Control Agreement shall be in writing and
shall be delivered by hand, mailed by United States registered or certified first class mail,
postage prepaid and return receipt requested, sent by overnight courier, sent via facsimile with
evidence of receipt, addressed to the applicable party at its address set forth on the signature
page hereto or, in each case, to such other address for notices as any of the parties to this
Control Agreement shall last have furnished in writing to the other parties hereto in accordance
with this paragraph. Any such notice or communication shall be deemed to have been duly given or
made and to have become effective at the time of the receipt thereof by the party to which it is
directed, or when delivery is duly attempted and refused.

     This Control Agreement may not be amended or modified without the prior written consent of the
Securities Intermediary, the Account Holder and the Secured Party. This Control Agreement shall
continue in full force until the Securities Intermediary receives written notice from the Secured
Party terminating this Control Agreement. Upon receipt of such notice, all obligations of the
Securities Intermediary under this Control Agreement shall cease including without limitation any
and all obligations hereunder with respect to the maintenance of the Account. Thereafter, the
Securities Intermediary may take such steps as the Account Holder may request to vest full
ownership and control of the Account in the Account Holder.

     No delay or omission on the part of the Secured Party or the Securities Intermediary in
exercising any right hereunder shall operate as a waiver of such right or of any other right under
this Control Agreement. No waiver of any right under this Control Agreement shall be effective
unless in writing and signed by the Secured Party and the Securities Intermediary, and no waiver on
one occasion shall be construed as a bar to or waiver of any such right on any other occasion.

     This Control Agreement and any waiver or amendment hereto may be executed in counterparts and
by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all of which shall together constitute one and the same instrument. This
Control Agreement may be executed and delivered by telecopier or other

4

 

facsimile transmission all with the same force and effect as if the same were a fully executed
and delivered original manual counterpart.

     This Control Agreement shall be governed by and construed in accordance with the laws of the
State of New York (without giving effect to the conflicts of law principles thereof and shall be
binding upon and shall inure to the benefit of the parties hereto and their respective successors
and assigns.

     This Control Agreement constitutes the entire agreement, and supersedes any prior agreements,
of the parties concerning its subject matter. In the event a provision of this Control Agreement is
unenforceable, this agreement shall be construed to the extent possible as if the unenforceable
provision were omitted.

     Please indicate your agreement with the foregoing by signing below and returning this Control
Agreement.

	 	 	 	 	 	 	 	 	 
	ACCOUNT HOLDER	 	 	 	 	 	 	 	 
	 
	Signature	 	/s/ Brian E. Mueller	 	/s/ P. Robert Moya	 	Date: 2-14-08
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Signers:	 	Brian E. Mueller, President	 	P. Robert Moya, Senior Vice
President and Secretary
	Address:	 	Apollo Group, Inc.,
4025 S. Riverpoint Parkway, 
   Phoenix, AZ 85040
	 
	 	 	 	 	 	 	 	 
	SECURED PARTY	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Signature

	 	/s/ George W. Thompson	 	Date:	 	February 25, 2008	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Authorized Signer:	George W. Thompson, Sr. Vice President	 	 	 	 	 	 
	Address:	 	Travelers Casualty and Surety Company of America, One Tower Square, Bond -
2SHS2, Hartford, CT 06183

Accepted and Agreed:

SMITH BARNEY INC.

	 	 	 	 	 	 	 
	By:

	 	/s/ Gabriel D’Amica, Jr.	 	Date:	 	2/25/08 
	 

	 	 
	 	 	 	 
	Authorized Signer: Gabriel D’Amica, Jr., Branch Manager
	Address: Cityplace I, 185 Asylum Street, Floor 21

Hartford, CT 06103

5

 

EXHIBIT A

PLEDGED COLLATERAL ACCOUNT NUMBER: ***- ***** - ** -***

APOLLO GROUP, INC.

TOTAL
COLLATERAL REQUIREMENT: $ 95,000,000

6

 

EXHIBIT B

APOLLO GROUP, INC.

PERMITTED TRADING

Types of securities which Account Holder is permitted to instruct the Securities Intermediary to
sell or purchase:

	 	a.	 	Money Market Funds
	 
	 	b.	 	U.S. Treasuries
	 
	 	c.	 	Government Agencies
	 
	 	d.	 	Municipal Bonds: Rated AA- or better
	 
	 	e.	 	Auction Rate Securities, within all of the following parameters:

	 	•	 	Long-term credit ratings of AA- or better; and
	 
	 	•	 	Total Portfolio Holdings not to exceed $150 Million (par value); and
	 
	 	•	 	No investment in any single municipality or entity exceeds 10% of portfolio;
and
	 
	 	•	 	No more than $10 Million may be purchased in a single security transaction.

7

 

SAMPLE FORM ONLY — DO NOT COMPLETE UNLESS ACCOUNT HOLDER WILL BE DENIED TRADING PRIVILEGES

EXHIBIT C

Form of Notice of Exclusive Control

                                        ,                     

	 	 	 	 	 
	Smith Barney Inc.	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	Attn.:
	 	 	 	 
	 

	 	 	 	 

Re: Control Agreement dated [             ]

Ladies and Gentlemen:

     Reference is made to the Control Agreement dated                                          (the “Agreement”; capitalized
terms used herein shall have the meanings assigned thereto in the Agreement) among you, us and
                                         (the “Account Holder”). This letter constitutes a Notice of Exclusive Control under
the Agreement.

     Effective today and continuing until we shall authorize you in writing to do otherwise, you
shall no longer accept or honor any instructions from or on behalf of the Account Holder in respect
of the Account or any financial assets or credit balances in the Account including but limited to
instruction relating to Permitted Trading and, instead, shall only accept and honor our
instructions, as further provided in the Agreement.

Very truly yours,

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	(SECURED PARTY)	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 

8

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