Document:

exv10w1

 

Exhibit 10.1

	 	 	 
	Rule 62(b) Bond and Supersedeas Bond

	 	     Travelers Casualty and Surety
	 

	 	           Company of America
	 

	 	One Tower Square, Hartford, CT 06183

     IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

	 	 	 	 	 
	In re Apollo Group Inc. Securities Litigation

	 	Bond No.
	 	105036869
	 
	 	 	 	 
	 

	 	Index or	 	 
	 

	 	Cause No.
	 	Master File No.
	 

	 	 	 	CV-04-2147- PHX-JAT (LEAD)
	 

	 	 	 	CV 04-2204-PHX-JAT
	 

	 	 	 	(Consolidated)
	 

	 	 	 	CV 04-2334-PHX-JAT
	 

	 	 	 	(Consolidated)

KNOW ALL PEOPLE BY THESE PRESENTS, this bond is being filed on behalf of the Defendants , Apollo
Group Inc., Todd S. Nelson and Kenda B. Gonzales (collectively “Defendants”) by Apollo Group, Inc.,
as Principal, and that Apollo Group, Inc. and Travelers Casualty and Insurance Company of America,
a corporation organized under the laws of the State of Connecticut and authorized to do business in
the State of Arizona, as Surety, are held and firmly bound unto Policeman’s Annuity and Benefit
Fund of Chicago and the class of plaintiffs it represents, as Obligee, in the maximum aggregate
penal sum of Ninety Five Million and no/100ths Dollars ($95,000,000.00), lawful money of the United
States of America, for which payment well and truly to be made we bind ourselves, our heirs,
executors, administrators, successors and assigns, jointly and severally, firmly by this
instrument.

On January 30, 2008, in a consolidated class action pending in the above court, with Policemen’s
Annuity and Benefit Fund of Chicago, et al, as lead plaintiff, judgment was rendered against
Defendants and duplicates of the judgment were filed in consolidated cases CV 04-2204-PHX-JAT and
CV 04-2334-PHX-JAT, and Defendants having filed post-trial motions (Doc. Nos. 523, 524 and 525)
with the above court, and having applied for and obtained an Order in the above court staying
enforcement of such judgment during the pendency of the post trial motions, and Defendants
intending, if the post-trial motions are denied, to file a notice of appeal from such judgment to
the United States Court of Appeals for the Ninth Circuit and in connection therewith to seek a
continued stay in enforcement of such judgment during the pendency of any appeal,

THEREFORE, the condition of this obligation is that if Defendants shall prosecute their post trial
motions to effect and shall satisfy the judgment in full, together with costs, interest and damages
for delay if the post trial motions are denied and no appeal taken, or if an appeal is taken shall
prosecute their appeal to effect, and if the appeal is dismissed or the judgment is affirmed shall
satisfy in full such judgment as modified together with such costs, interest and damages for delay
as the Court of Appeals may adjudge and award, subject however to the maximum aggregate penal sum
stated herein, this obligation shall be void; otherwise it shall remain in full force and effect.
In no event shall the maximum aggregate liability of the Surety under this Bond exceed Ninety Five
Million and no/100ths Dollars ($95,000,000.00).

 

 

Travelers Casualty and Surety Company of America, as surety, submits itself to the jurisdiction of
the District Court and irrevocably appoints the clerk of the District Court as Travelers’ agent
upon whom any papers effecting its liability on this obligation may be served.

SIGNED, SEALED AND DATED this 15th day of February, 2008.

	 	 	 	 	 	 	 
	 

	 	 	 	APOLLO GROUP, INC.
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Joseph L. D’Amico	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	      Principal	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Travelers Casualty and Surety Company of	 	 
	 

	 	 	 	America	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ David G. Jensen	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     David G. Jensen, Attorney-in-Fact	 	 

 

 

WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER

	 	 	 	 	 
		 	POWER OF ATTORNEY
 
	 	Farmington Casualty Company
	 	St. Paul Guardian Insurance Company
	 	Fidelity and Guaranty Insurance Company
	 	St. Paul Mercury Insurance Company
	 	Fidelity and Guaranty Insurance Underwriters, Inc.
	 	Travelers Casualty and Surety Company
	 	Seaboard Surety Company
	 	Travelers Casualty and Surety Company of America
	 	St. Paul Fire and Marine Insurance Company
	 	United States Fidelity and Guaranty Company
	 
	 	 	 	 
	 
	 	 	 	 
	Attorney-In Fact No. 219472	 	Certificate No. 002138721

KNOW ALL MEN BY THESE PRESENTS: That Seaboard Surety Company is a corporation duly organized under
the laws of the State of New York, that St. Paul Fire and Marine Insurance Company, St. Paul
Guardian Insurance Company and St. Paul Mercury Insurance Company are corporations duly organized
under the laws of the State of Minnesota, that Farmington Casualty Company, Travelers Casualty and
Surety Company, and Travelers Casualty and Surety Company of America are corporations duly
organized under the laws of the State of Connecticut, that United States Fidelity and Guaranty
Company is a corporation duly organized under the laws of the State of Maryland, that Fidelity and
Guaranty Insurance Company is a corporation duly organized under the laws of the State of Iowa, and
that Fidelity and Guaranty Insurance Underwriters, Inc. is a corporation duly organized under the
laws of the State of Wisconsin (herein collectively called the “Companies”), and that the Companies
do hereby make, constitute and appoint

David G. Jensen. Terry Crull, Maryann Carafello, Brandy L. Balch, and Ethan Baker

of the
City of Phoenix , State of Arizona, their true and lawful Attorney(s)-in-Fact,
each in their separate capacity if more than one is named above, to sign, execute, seal and
acknowledge any and all bonds, recognizances, conditional undertakings and other writings
obligatory in the nature thereof on behalf of the Companies in their business of guaranteeing the
fidelity of persons, guaranteeing the performance of contracts and executing or guaranteeing bonds
and undertakings required or permitted in any actions or proceedings allowed by law.

IN WITNESS WHEREOF, the Companies have caused this instrument to be signed and their corporate
seals to be hereto affixed, this 9th day of January, 2008.

	 	 	 	 	 
	 

	 	Farmington Casualty Company
	 	St. Paul Guardian Insurance Company
	 

	 	Fidelity and Guaranty Insurance Company
	 	St. Paul Mercury Insurance Company
	 

	 	Fidelity and Guaranty Insurance Underwriters, Inc.
	 	Travelers Casualty and Surety Company
	 

	 	Seaboard Surety Company
	 	Travelers Casualty and Surety Company of America
	 

	 	St. Paul Fire and Marine Insurance Company
	 	United States Fidelity and Guaranty Company

	 	 	 	 	 	 	 
	State of Connecticut

	 	By:
	 	/s/ George W. Thompson	 	 
	City of Hartford ss. 

	 	 	 	 

George W. Thompson, Senior Vice President 		 
	
	 	 	 	 	 	 

On this 9th day of January, 2008, before me personally appeared George W. Thompson, who acknowledged himself
to be the Senior Vice President of Farmington Casualty Company, Fidelity and Guaranty Insurance
Company, Fidelity and Guaranty Insurance Underwriters, Inc., Seaboard
Surety Company, St. Paul
Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance
Company, Travelers Casualty and Surety Company, Travelers Casualty
and Surety Company of America,
and United States Fidelity and Guaranty Company, and that he, as such, being authorized so to do,
executed the foregoing instrument for the purposes therein contained by signing on behalf of the
corporations by himself as a duly authorized officer.

	 	 	 	 	 	 
	 
	 	 	 	 
	In Witness Whereof, I hereunto set my hand and official seal.
	 		 	/s/ Marie C. Tetreault
	My Commission expires the 30th day of June, 2011.
	 	 	Marie C. Tetreault, Notary Public
	 
	 	 	
	 
	 	 	 

58440-5-07 Printed in U.S.A.

WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER

 

 

WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER

This Power of Attorney is granted under and by the authority of the following resolutions adopted
by the Boards of Directors of Farmington Casualty Company, Fidelity and Guaranty Insurance
Company, Fidelity and Guaranty Insurance Underwriters, Inc., Seaboard Surety Company, St. Paul
Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance
Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety Company of America,
and United States Fidelity and Guaranty Company, which resolutions are now in full force and
effect, reading as follows:

RESOLVED, that the Chairman, the President, any Vice Chairman, any Executive Vice President, any
Senior Vice President, any Vice President, any Second Vice President, the Treasurer, any Assistant
Treasurer, the Corporate Secretary or any Assistant Secretary may
appoint Attorneys-in-Fact and
Agents to act for and on behalf of the Company and may give such appointee such authority as his
or her certificate of authority may prescribe to sign with the Company’s name and seal with the
Company’s seal bonds, recognizances, contracts of indemnity, and other writings obligatory in the
nature of a bond, recognizance, or conditional undertaking, and any of said officers or the Board
of Directors at any time may remove any such appointee and revoke the power given him or her; and
it is

FURTHER
RESOLVED, that the Chairman, the President, any Vice Chairman, any Executive Vice
President, any Senior Vice President or any Vice President may delegate all or any part of the
foregoing authority to one or more officers or employees of this Company, provided that each such
delegation is in writing and a copy thereof is filed in the office of the Secretary; and it is

FURTHER RESOLVED, that any bond, recognizance, contract of indemnity, or writing obligatory in the
nature of a bond, recognizance, or conditional undertaking shall be valid and binding upon the
Company when (a) signed by the President, any Vice Chairman, any Executive Vice President, any
Senior Vice President or any Vice President, any Second Vice President, the Treasurer, any
Assistant Treasurer, the Corporate Secretary or any Assistant Secretary and duly attested and
sealed with the Company’s seal by a Secretary or Assistant Secretary; or (b) duly executed (under
seal, if required) by one or more Attorneys-in-Fact and Agents pursuant to the power prescribed in
his or her certificate or their certificates of authority or by one or more Company officers
pursuant to a written delegation of authority; and it is

FURTHER RESOLVED, that the signature of each of the following officers; President, any Executive
Vice President, any Senior Vice President, any Vice President, any Assistant Vice President, any
Secretary, any Assistant Secretary, and the seal of the Company may be affixed by facsimile to any
power of attorney or to any certificate relating thereto appointing Resident Vice Presidents,
Resident Assistant Secretaries or Attorneys-in-Fact for purposes only of executing and attesting
bonds and undertakings and other writings obligatory in the nature thereof, and any such power of
attorney or certificate bearing such facsimile signature or facsimile seal shall be valid and
binding upon the Company and any such power so executed and certified by such facsimile signature
and facsimile seal shall be valid and binding on the Company in the future with respect to any
bond or understanding to which it is attached.

I, Kori M. Johanson, the undersigned. Assistant Secretary, of Farmington Casualty Company, Fidelity
and Guaranty Insurance Company, Fidelity and Guaranty Insurance Underwriters, Inc., Seaboard Surety
Company, St. Paul Fire and Marine Insurance Company, St. Paul Guardian Insurance Company, St. Paul
Mercury Insurance Company, Travelers Casualty and Surety Company, Travelers Casualty and Surety
Company of America, and United States Fidelity and Guaranty Company do hereby certify that the
above and foregoing is a true and correct copy of the Power of Attorney executed by said Companies,
which is in full force and effect and has not been revoked.

IN
TESTIMONY WHEREOF, I have hereunto set my hand and affixed the
seals of said Companies this
15th day
of February, 2008

	 	 	 	 	 
	 	 	 
	 	/s/ Kori M. Johanson
 	 
	 	Kori M. Johanson, Assistant Secretary  	 

To verify the authenticity of this Power of Attorney, call 1-800-421-3880 or contact us at
www.travelersbond.com. Please refer to the Attorney-In-Fact number, the above-named
individuals and the details of the bond to which the power is attached.

WARNING: THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDERexv10w2

 

Exhibit 10.2

COLLATERALIZED BOND SURETY PROGRAM

REGISTERED PLEDGE AND MASTER SECURITY AGREEMENT

     THIS AGREEMENT (“Master Agreement”), made and entered into by and between Travelers Casualty
and Surety Company of America acting on its own behalf and as Agent on behalf of its parents,
subsidiaries and affiliates (the “Secured Party”) and Pledgor, as identified below, on its own
behalf and as Agent on behalf of any affiliate or other entity which is a party to the Indemnity
Agreements defined below (“Pledgor”). This Master Agreement shall be effective as of the date
executed by the Pledgor as evidenced by the signature below, subject to the acceptance by Secured
Party.

WITNESSETH:

     WHEREAS, Pledgor desires Secured Party to issue an instrument or instruments of suretyship,
undertakings or guarantees (“Bonds”);

     WHEREAS, Secured Party desires to be adequately secured with respect to Pledgor’s obligations
to Secured Party;

     WHEREAS, to induce Secured Party to issue such Bonds, Pledgor has agreed, at Secured Party’s
request, to make and enter into this Master Agreement;

     WHEREAS, Pledgor has executed or will execute General Agreements of Indemnity and for
Security; General Contracts of Indemnity; or Applications for Bonds (“Indemnity Agreements”);

     WHEREAS, Pledgor has agreed to indemnify and hold harmless Secured Party from any loss, cost
or expense as a result of furnishing Bonds;

     NOW, THEREFORE, in consideration for inducing Secured Party to issue such Bonds to and for the
benefit of Pledgor, the receipt and sufficiency of which are hereby acknowledged, Pledgor and
Secured Party hereby agree as follows:

     1. Indemnity Agreements. Any and all Indemnity Agreements executed by Pledgor and its
affiliates or any other entity which is party to an Indemnity Agreement executed by Pledgor are
hereby incorporated into this Master Agreement by reference.

     2. Pledge of Collateral. Pledgor does hereby pledge, hypothecate, assign, transfer,
set over, deliver and grant to Secured Party a security interest, at any time or from time to time,
in all of the Pledgor’s right, title and interest in the shares of the Smith Barney Money Funds,
Inc. Cash Portfolio (such portfolio being referred to herein as the “Fund”) (which such right,
title and interest is simultaneously herewith being delivered to Secured Party via a registered
pledge, which is to be so noted on the books of the Fund by PFPC Global Fund Services (the Fund’s
transfer agent) as evidenced by the shares of the Fund referenced on each Pledge Schedule executed,
from time to time pursuant to this Master Agreement (each Pledge Schedule shall be made a part
hereof, shall incorporate therein all of the terms, and conditions of this Master Agreement and
shall contain such additional terms and conditions as Pledgor and Secured Party shall agree upon)
together with any and all other securities, cash or other property at any time and from time to
time receivable or otherwise distributed in respect of or in exchange for or redemption of or
liquidation of any or all of Pledgor’s interest in such Fund, and together with the proceeds
thereof and such other property, rights and assets as may be pledged from time to time hereunder,
(hereinafter said property being collectively referred to as the “Collateral”), all as security for
the payment and performance when due of any and all duties, debts, liabilities and obligations of
Pledgor

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(either directly, as maker, or indirectly, as guarantor, surety, endorser or otherwise) to
Secured Party, whether now or hereafter existing, howsoever arising or incurred or evidenced
including specifically, but without limitation, the “Obligations” defined in the Indemnity
Agreements and Bonds (hereinafter collectively called the “Obligations”) and the obligations and
liabilities created herein, including the reimbursement of expenses as described in Section 13
hereof.

     3. Holding of Collateral and Rights. Pledgor acknowledges and agrees that Secured
Party shall hold the Collateral, together with all right, title, interest, powers, privileges and
preferences pertaining or incidental thereto forever, subject, however, to return of the Collateral
(or such portion thereof as may be existing from time to time hereafter after giving effect to the
terms hereof) by Secured Party to Pledgor upon (a) payment in full of all outstanding Obligations
and (b) termination of all Obligations of Pledgor (past, present or future) evidenced by releases
of all liabilities under or pursuant to the Bonds satisfactory to Secured Party.

     4. Additions to Collateral. Pledgor further acknowledges and agrees that, at any time
or from time to time hereafter, should the market value or marketability of said Collateral, as
determined by Secured Party, be reduced or impaired by an aggregate amount deemed material by
Secured Party, or should the value of the Collateral be reduced by any redemption or series of
redemptions to pay outstanding Obligations or to reimburse the Secured Party as required or
permitted under or pursuant to the Bonds, then, at the option of Secured Party, the Secured Party
may require that Pledgor pledge additional mutual fund shares or like property or other liquid
assets to Secured Party in order to replenish or replace such loss in market value or marketability
or decrease in value due to redemption and, in such event, within 30 days after Pledgor’s receipt
of notice of such request, Pledgor shall deliver such additional Collateral to Secured Party in
form acceptable to Secured Party together with such documents, instruments and agreements as
Secured Party may request in connection therewith to evidence, effect and perfect such pledge.

     Pledgor may, at any time, and for any reason, pledge and deliver additional Collateral to
Secured Party together with all documents, instruments and agreements necessary to evidence, effect
and perfect such pledge.

     5. Representations and Warranties. In order to induce Secured Party to accept this
Master Agreement, Pledgor hereby represents and warrants to Secured Party with respect to this
Master Agreement and each Pledge Schedule executed hereunder:

     (1) that Pledgor has the complete and unconditional authority to pledge the
Collateral, holds (or will hold on date of pledge thereof) the Collateral free and clear
of any and all liens, charges, encumbrances and security interests thereon (other than
in favor of Secured Party), has (or will have on the date of pledge thereof) good right,
title and legal authority to pledge the Collateral in the manner contemplated herein and
that the execution and performance of this Master Agreement and each Pledge Schedule
constitutes authorized, legal, valid and binding acts of Pledgor enforceable in
accordance with their respective terms as evidenced (should Secured Party so request) by
a certificate of incumbency for the individual executing this Master Agreement or any
Pledge Schedule; and

     (2) that no authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body having jurisdiction over the assets,
affairs or business of Pledgor is required either

     (i) for the pledge by Pledgor, of the Collateral pursuant to this Master
Agreement or any Pledge Schedule or for the execution, delivery or performance
of this Master Agreement or any Pledge Schedule by Pledgor, or

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     (ii) for the exercise by Secured Party of the voting or other rights
provided for in this Master Agreement or the remedies in respect of the
Collateral pursuant to this Master Agreement.

     6. Further Assurances. Pledgor agrees that at any time and from time to time, at the
expense of Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action that Secured Party may reasonably request, in order to
perfect and protect the security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights, powers and remedies hereunder with respect to any
Collateral.

     7. Name in Which Collateral Held. Pledgor further acknowledges and agrees that
Secured Party upon taking possession of the Collateral, may hold any of the Collateral in its own
name, endorsed, registered or assigned in blank or in the name of any nominee or nominees.

     8. Voting Rights; Dividends; Etc.

     (a) So long as no Event of Default (as defined in Section 11 hereof) shall have occurred and
be continuing:

          (i) Pledgor shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral or any part thereof for any purpose not prohibited by the terms of
this Master Agreement; provided, however, that following request therefor by Secured Party, Pledgor
shall not exercise or, as the case may be, shall not refrain from exercising any such right if such
action or failure to act would have a material adverse effect on the value of the Collateral or any
part thereof; and, provided further, that Pledgor shall give Secured Party at least ten days’
written notice of the manner in which it intends to exercise or fail to exercise any such right.

          (ii) Secured Party shall execute and deliver (or cause to be executed and delivered) to
Pledgor all such proxies and other instruments as Pledgor may reasonably request for the purpose of
enabling Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant
to clause (i) above.

          (iii) Pledgor shall be credited with any cash dividends, interest or any other distribution of
property paid, payable or otherwise distributed in cash in respect of the Collateral other than by
way of redemption or liquidation of such Collateral.

     (b) Upon the occurrence and during the continuance of an Event of Default:

          (i) All rights of Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 8(a) hereof shall cease, and all such rights
shall thereupon become vested in Secured Party who shall thereupon have the sole right to exercise
such voting and other consensual rights; provided, however, Pledgor shall continue to have the
rights to exercise such voting and other consensual rights notwithstanding the occurrence and
continuance of an Event of Default until Secured Party delivers a notice to Pledgor of its
intention to exercise such voting and other consensual rights.

          (ii) All rights of Pledgor to receive credit for cash dividends, interest, or other
distributions in cash pursuant to Section 8(a) hereof shall cease and all rights to dividends,
interest and other distributions shall thereupon be vested in Secured Party, who shall thereupon
have the sole right to receive and hold as Collateral such dividends, interest and other
distributions, or to direct that all such dividends, interest and other distributions shall be
reinvested in additional shares of the Fund, all of which shall become additional Collateral. All
dividends, interest and other distributions which are received by Pledgor contrary to these
provisions shall be received in trust for the benefit of Secured Party, shall be segregated from
other property or funds of Pledgor and shall be forthwith delivered to Secured Party as Collateral
in the same form as so received (with any necessary endorsement or registrations on the books of
the Fund’s transfer agent).

-3-

 

     9. Secured Party Appointed Attorney-in-Fact. Pledgor hereby irrevocably appoints
Secured Party as Pledgor’s attorney-in-fact upon and as of the happening of an Event of Default,
with full authority in the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in Secured Party’s discretion, to take any action and to execute any instrument which
Secured Party may deem reasonably necessary or advisable to accomplish the purposes of this Master
Agreement, including, without limitation, to receive, endorse and collect all instruments made
payable to Pledgor representing any dividend or interest payment or other distribution in respect
of the Collateral or any part thereof and to give full discharge for the same, when and to the
extent permitted by this Master Agreement.

     10. Secured Party May Perform. If Pledgor fails to perform any agreement, obligation
or responsibility contained herein, Secured Party may itself perform, or cause performance of, such
agreement, obligation or responsibility, and the expenses of Secured Party incurred in connection
therewith shall be payable by Pledgor under Section 13 hereof.

     11. Events of Default. The following shall constitute “Events of Default” hereunder:

          (a) Any default under any Bonds or any default under any Indemnity Agreements;

          (b) Pledgor assigns, attempts to encumber, subjects to further pledge or security interest,
sells, transfers or otherwise disposes of any of the Collateral without the prior written consent
of Secured Party;

          (c) Pledgor fails to respond to any demand by Secured Party or to reimburse Secured Party
pursuant to the terms of any Indemnity Agreements or Bonds for amounts paid out by Secured Party on
behalf of Pledgor;

          (d) Pledgor fails to perform any covenant or agreement set forth herein, or in any document,
instrument or agreement evidencing, securing, guaranteeing or pertaining to any of the Obligations,
including the Bonds;

          (e) Any default occurs, and is not cured within any applicable cure or grace period, with
respect to any document, instrument or agreement evidencing, securing, guaranteeing or pertaining
to any of the Obligations, including the Bonds, whether or not due to any default by Pledgor;

          (f) Any representation or warranty made by Pledgor in this Agreement is false or misleading in
any material respect;

          (g) A receiver, liquidator, custodian or trustee of Pledgor, or of all or any of the property
of Pledgor, is appointed by court order and such order remains in effect for more than thirty (30)
days; or an order for relief is entered with respect to Pledgor or Pledgor is adjudicated a
bankrupt or insolvent, or any of the property of Pledgor is sequestered by court order and such
order remains in effect for more than thirty (30) days; or a petition is filed against Pledgor
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, and is not dismissed
within thirty (30) days after such filing;

          (h) Pledgor files a petition in voluntary bankruptcy or seeking relief under any provision of
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing
of any petition against it under any such law; or

          (i) Pledgor makes an assignment for the benefit of its creditors, or admits in writing its
inability, or fails, to pay its debts generally as they become due, or consents to the appointment
of a receiver, liquidator or trustee of the Pledgor, or of all or any part of the property of
Pledgor.

     12. Remedies. If any Event of Default shall have occurred and be continuing:

          (a) Secured Party may exercise (in compliance with all applicable securities laws) in respect
of the Collateral, in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of New York at that time, and Secured Party may also,
without notice except as specified below,

-4-

 

sell the Collateral or any part thereof by redemption of all or any number of the shares of
the Fund. To the extent such redemption is deemed a sale with respect to which notice shall be
required by law, Secured Party shall give Pledgor at least five days’ notice of the time after
which any private sale is to be made, which Pledgor agrees shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Pledgor agrees that any redemption of the shares by Secured
Party shall be deemed to be a commercially reasonable sale under the New York Uniform Commercial
Code. As an alternative to exercising the power of sale and redemption herein conferred upon it,
Secured Party may proceed by a suit or suits at law or in equity to foreclose the security interest
granted under this Agreement and to sell or redeem the Collateral, or any portion thereof, pursuant
to a judgment or decree of a court or courts of competent jurisdiction.

          (b) Any cash held by Secured Party as Collateral and all cash proceeds and any income or
interest from said cash proceeds received by Secured Party in respect of any sale of, collection
from, redemption of or other realization upon or any part of the Collateral following the
occurrence of an Event of Default may, in the discretion of Secured Party, be held by Secured Party
as collateral for, and then and/or at any time thereafter applied against, all or any part of the
Obligations, in such order of application as Secured Party shall select.

          (c) Any surplus of such cash or cash proceeds held by Secured Party and remaining after
payment in full of all outstanding Obligations and the termination of all Obligations of the
Secured Party (past, present or future) under or pursuant to the Bonds evidenced by releases of all
liabilities under or pursuant to Bonds satisfactory to Secured Party, shall be paid over to Pledgor
or to whomsoever may be lawfully entitled to receive such surplus.

     13. Expenses. Pledgor will upon demand pay to Secured Party the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts
and agents, which Secured Party may incur in connection with (1) the administration of this
Agreement, (2) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (3) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (4) the failure by Pledgor to perform or observe any of the provisions
hereof.

     14. Security Interest Absolute. All rights of Secured Party hereunder, the security
interest granted to Secured Party hereunder, and all obligations of Pledgor hereunder, shall be
absolute and unconditional irrespective of any of the following circumstances, acts, events, or
occurrences, and Pledgor expressly consents to the occurrence of any of such events and waives any
defense arising therefrom:

          (a) any lack of validity or enforceability of the Bonds or any other agreement or instrument
relating thereto;

          (b) any change in the time, manner or place of payment of, or in any other term of, all or any
of the Obligations, or any other amendment or waiver of or any consent to any departure from the
Bonds any other agreement or instrument relating thereto;

          (c) any other circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Obligations or in respect of this Master Agreement.

     15. Amendments, Etc. No amendment or waiver of any provision of this Master Agreement
nor consent to any departure by Pledgor herefrom shall in any event be effective unless the same
shall be in writing and signed by Secured Party and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

     16. No Waiver, Cumulative Remedies. No failure on the part of Secured Party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by
Secured Party preclude any

-5-

 

other or further exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.

     17. Severability. If any provision of any of this Master Agreement or the application
thereof to any party hereto or circumstances shall be invalid or unenforceable to any extent, the
remainder of this Master Agreement and the application of such provisions to any other party
thereto or circumstances shall not be affected thereby and shall be enforced to the greatest extent
permitted by law.

     18. Interpretation. No provision of this Master Agreement shall be construed against
or interpreted to the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have structured or dictated
such provision.

     19. Jurisdiction. Pledgor agrees that any legal action or proceeding with respect to
this Master Agreement may be brought in the state or federal courts of the State of New York, all
as Secured Party may elect. By execution of this Master Agreement, Pledgor hereby submits to each
such jurisdiction, hereby expressly waiving whatever rights may correspond to it by reason of its
present or future domicile. Nothing herein shall affect the right of Secured Party to commence
legal proceedings or otherwise proceed against Pledgor in any other jurisdiction or to serve
process in any manner permitted or required by law. In furtherance of the foregoing, Pledgor
hereby appoints the Secretary of State of the State of New York as its agent for service of
process.

     20. Acceptance. This Master Agreement shall not become effective unless and until
delivered to Secured Party at its principal office in Hartford, Connecticut, and accepted in
writing by Secured Party thereafter at such office as evidenced by its execution hereof (notice of
which delivery and acceptance are hereby waived by Pledgor).

     21. Governing Law. This Master Agreement shall be governed by and construed in
accordance with the laws of the State of New York and shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto.

     22. Notices. All notices, requests and demands to or upon the respective parties
hereto shall be deemed to have been given or made when personally delivered or deposited in the
mail, registered or certified mail, postage prepaid, addressed as follows or to such other address
as may be designated hereafter in writing by the respective parties hereto:

	 	 	 
	Pledgor: (Name and Address)

	 	Secured Party:
	Apollo Group, Inc.

	 	Travelers Casualty and Surety Company of America
	4025 S. Riverpoint Parkway

	 	One Tower Square, Bond — 2SHS2
	Phoenix, AZ 85040

	 	Hartford, CT 06183
	 
	 	 
	Taxpayer ID# 86-0419443

	 	Collateral Processing, National Resources
	 

	 	H.O. Bond, 2SHS2
	Attn: P. Robert Moya, Senior VP and Secretary

	 	Taxpayer ID# 06-0907370

-6-

 

     Except in cases where it is expressly provided herein or by applicable law that such notice,
demand or request is not effective until received by the party to whom it is addressed.

     IN WITNESS WHEREOF, I hereby execute this agreement on behalf of Pledgor as of the date set
forth below.

	 	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ Brian E. Mueller
	 	 	 	Signed:
	 	/s/ P. Robert Moya
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Apollo Group, Inc.
	 	 	 	 	 	Apollo Group, Inc.	 	 
	 
	By:

	 	Brian E. Mueller, President
	 	 	 	By:
	 	P. Robert Moya, Senior Vice President	 	 
	 

	 	 	 	 	 	 	 	and Secretary	 	 

     I hereby certify that I am the duly elected and qualified (Assistant) Secretary of the
corporation (“Pledgor”) that entered into the foregoing agreement (the “Master Agreement”) with
Travelers; that the officer who executed the Master Agreement on behalf of the Pledgor has been
duly elected and qualified as such officer; that the signature above is the genuine signature of
such officer, that the Master Agreement was duly executed and delivered by the Pledgor; that its
execution and delivery were properly authorized by the Board of Directors of the Pledgor; and that
the Master Agreement represents a valid and binding obligation of the Pledgor.

     IN WITNESS WHEREOF, I have set my hand and the seal of this Corporation this 14th day of
February, 2008.

	 	 	 	 	 
	 

	 	/s/ P. Robert Moya
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Secretary	 	 

	 	 	 	 	 	 	 	 	 
	SEAL

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	ACCEPTED:	 	 	 	TRAVELERS CASUALTY AND SURETY COMPANY

OF AMERICA	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ George W. Thompson	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	Sr. Vice President	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	February 25, 2008	 	 
	 

	 	 	 	 	 	 	 	 

-7-

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