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September 23, 1997
BT Xxxx. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-3220
Dear Ladies and Gentlemen:
National Endowment for Financial Education ("NEFE") has entered into an
agreement for the sale of assets and related business operations of the College
for Financial Planning and certain related entities to Apollo Group, Inc.
("Apollo") for $35 million in cash and securities, the securities portion of
which will consist of 444,953 shares of Apollo Class A Common Stock delivered to
NEFE (the "Shares"). In this connection, Xxxxxx has filed with the Securities
and Exchange Commission (the "Commission") a copy of the Asset Purchase
Agreement dated August 21, 1997, as amended (the "Agreement").
Pursuant to the Agreement, it is expected that the acquisition
transaction will close and NEFE will receive the Shares on or about September
23, 1997. The Agreement also provides that on the date of the closing of the
acquisition transaction (the "First Closing") a shelf registration statement on
Form S-3 (the "Registration Statement") with respect to the Shares will be
declared effective. NEFE warrants and represents that upon the First Closing, it
will have good and marketable title to the Shares, free and clear of all liens,
claims and encumbrances.
This will confirm that subject to the provisions of this letter, BT
Xxxx. Xxxxx Incorporated ("BT Xxxx. Xxxxx") has agreed to buy, as principal, the
Shares from NEFE at the time of the Second Closing (as defined below), and XXXX
has agreed to sell the Shares to BT Xxxx. Xxxxx at the time of the Second
Closing (as defined below). The purchase price shall be the Share Determination
Price, on the date of the First Closing, as described in Section 1.3(b)(ii) of
the Agreement. BT Xxxx. Xxxxx'x agreement to purchase the Shares is subject to
the following:
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1) The Registration Statement shall be declared effective, and BT Xxxx.
Xxxxx shall be advised of such fact, on or before the Second Closing (as defined
below);
2) The closing date for the purchase of the Shares by BT Xxxx. Xxxxx,
(the "Second Closing") will be the third business day after the day that both
(i) the Registration Statement shall have been declared effective by the
Commission and (ii) the First Closing, in which NEFE shall have received the
Shares, shall have occurred (e.g., if such effectiveness and the First Closing
occur on September 23, 1997, then the Second Closing shall occur on September
26, 1997);
3) On or before the effectiveness of this letter, Xxxxxx and XXXX,
respectively, will have executed the letters regarding indemnity and other
matters that are attached hereto as Exhibits A and B, respectively, and shall
have delivered such letter to BT Xxxx. Xxxxx;
4) BT Xxxx. Xxxxx may terminate its obligation to purchase the Shares
by providing written notice to NEFE, prior to the Second Closing, if any of the
following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the accompanying prospectus, any material adverse
change in or affecting the condition, financial or otherwise, of Apollo or the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of Apollo; (ii) any outbreak or
escalation of hostilities or declaration of war or national emergency or other
national or international calamity or crisis or material and adverse change in
economic or political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or material and adverse change on the
financial markets of the United States would, in BT Xxxx. Xxxxx'x reasonable
judgment, make it impracticable to market the Shares or to enforce contracts for
the sale of the Shares; (iii) suspension of trading in securities generally on
the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange; (iv) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in BT Xxxx. Xxxxx'x reasonable opinion
materially and
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adversely affects the business or operations of Apollo taken as a whole; (v)
declaration of a banking moratorium by United States or New York State
authorities; (vi) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the use of the accompanying
prospectus, or of the institution of any proceedings for that purpose; or (vii)
the suspension of trading for more than one hour of Apollo's common stock by the
NASDAQ Stock Market, the Commission or any other governmental authority.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return one copy.
Very truly yours,
National Endowment for Financial Education
------------------------------------------
Xxxxxxx X. Xxxxxx
President
Acknowledged and Agreed:
BT Alex. Brown Incorporated
------------------------------------------
By:
--------------------------------------
Its: Managing Director
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EXHIBIT A--APOLLO INDEMNITY LETTER
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APOLLO
September 23, 1997
BT Xxxx. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-3220
Ladies and Gentlemen:
Apollo Group, Inc. (the "Company") has filed a registration statement
on Form S-3 (the "Registration Statement") relating to the resale of 444,953
shares of the Class A Common Stock of the Company (the "Shares"). The Shares
will be issued by the Company directly to the National Endowment for Financial
Education (the "Selling Shareholder"), and may be offered for sale through BT
Xxxx. Xxxxx Incorporated ("BT Xxxx. Xxxxx").
The Registration Statement includes a prospectus (the "Prospectus")
meeting the requirements of the Securities Act of 1933 (the "Act"). Each
preliminary prospectus included in the Registration Statement prior to the time
it becomes effective is herein referred to as a "Preliminary Prospectus." Any
reference herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein and any
amendments and supplements thereon.
The Company represents, warrants and covenants:
a) The Registration Statement with respect to the Shares has been
prepared in conformity with the requirements of the Act and the Rules and
Regulations (the "Rules and Regulations") of the Securities and Exchange
Commission;
b) The Registration Statement and the Prospectus comply or will comply
in all material respects, as the case may be, to the requirements of, the Act
and the Rules and Regulations. The documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission conformed at the
time of filing, in all material respects to the requirements of the Securities
Exchange Act of 1934 or the Act, as applicable, and the Rules and
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Regulations of the Commission thereunder. The Registration Statement and any
amendment thereto, does not contain and will not contain, as the case may be,
any untrue statement of a material fact and does not omit nor will not omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus and any amendments and
supplements thereto does not contain and will not contain, as the case may be,
any untrue statement of a material fact and does not omit nor will not omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, provided that the Company will not be liable in any case
to the extent that any such claim, loss, damage or liability arises out of or is
based upon any such untrue statement or omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Selling Shareholder or BT Xxxx. Xxxxx specifically for inclusion
therein (or specifically for inclusion in any document incorporated therein by
reference); and
c) The Company will advise BT Xxxx. Xxxxx promptly: (i) of any request
of the Commission for amendment to the Registration Statement or for supplement
to the Prospectus or for any additional information and (ii) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus, or of the institution of any proceedings
for that purpose.
The Company agrees to indemnify and hold harmless BT Xxxx. Xxxxx and
each person, if any, who controls BT Xxxx. Xxxxx within the meaning of the Act
against any losses, claims, damages or liabilities to which BT Xxxx. Xxxxx or
such controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and will reimburse BT Xxxx. Xxxxx and
each such controlling person for any legal or other expenses reasonably incurred
by BT Xxxx. Xxxxx or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding and
expenses reasonably incurred in responding to a subpoena or governmental inquiry
whether or not BT Xxxx. Xxxxx or such controlling person is a party to any
action or proceeding; provided, however, that the Company will not be liable in
such case to the extent that any such loss, claim, damage or liability arises or
is based upon 1) any sale of Shares to any person by BT Xxxx. Xxxxx if BT Xxxx.
Xxxxx failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the Act, and
that the untrue statement or alleged untrue statement of a material fact was
corrected in the Prospectus, or 2) any such untrue statement or omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Selling Shareholder or BT Xxxx. Xxxxx
specifically for inclusion therein (or specifically for inclusion in any
document incorporated therein by reference). This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
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In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Agreement, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party"). In case any such proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein, and, to the
extent it shall wish, jointly with any other indemnifying party, to assume the
defense thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and BT Xxxx. Xxxxx on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and BT Xxxx. Xxxxx on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and BT Xxxx. Xxxxx on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering received by the Company bear to the total commissions and other
compensation received by BT Xxxx. Xxxxx. The relative fault shall be determined
by reference to, among other things, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
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The parties agree that it would not be just and equitable if
contributions pursuant to this Agreement were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Agreement, BT Xxxx. Xxxxx shall not be
required to contribute any amount in excess of the commissions and other
compensation applicable to the Shares sold through BT Xxxx. Xxxxx. In addition,
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
In any proceeding relating to the Registration Statement, the
Prospectus or any supplement or amendment thereto, each party against whom
indemnification or contribution may be sought hereunder hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party.
Very truly yours,
APOLLO GROUP, INC.
By:
--------------------------
Title:
-----------------------
Accepted and Agreed
BT Alex. Brown Incorporated
By:
-------------------------------
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9
EXHIBIT B--NEFE INDEMNITY LETTER
10
NATIONAL ENDOWMENT FOR FINANCIAL EDUCATION
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
September 23, 1997
BT Xxxx. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-3220
Ladies and Gentlemen:
Apollo Group, Inc. (the "Company") has filed a registration statement
on Form S-3 (the "Registration Statement") relating to the resale of 444,953
shares of the Class A Common Stock of the Company (the "Shares"). The Shares
will be issued by the Company directly to the National Endowment for Financial
Education (the "Selling Shareholder"), and may be offered for sale through BT
Xxxx. Xxxxx Incorporated ("BT Xxxx. Xxxxx").
The Registration Statement includes a prospectus (the "Prospectus")
meeting the requirements of the Securities Act of 1933 (the "Act"). Each
preliminary prospectus included in the Registration Statement prior to the time
it becomes effective is herein referred to as a "Preliminary Prospectus." Any
reference herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein and any
amendments and supplements thereon.
NEFE agrees to indemnify and hold harmless BT Xxxx. Xxxxx and each
person, if any, who controls BT Xxxx. Xxxxx within the meaning of the Act
against any losses, claims, damages or liabilities to which BT Xxxx. Xxxxx or
such controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, but only to the extent that any such
loss, claim, damage or liability
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arises out of or is based upon any such untrue statement or omission made
therein in reliance upon and in conformity with written information furnished to
Apollo by or on behalf of the Selling Shareholder specifically for inclusion
therein (or specifically for inclusion in any document incorporated therein by
reference), and will reimburse BT Xxxx. Xxxxx and each such controlling person
for any legal or other expenses reasonably incurred by BT Xxxx. Xxxxx or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding and expenses reasonably incurred
in responding to a subpoena or governmental inquiry whether or not BT Xxxx.
Xxxxx or such controlling person is a party to any action or proceeding;
provided, however, that the Company will not be liable in such case to the
extent that any such loss, claim, damage or liability arises or is based upon
any sale of Shares to any person by BT Xxxx. Xxxxx if BT Xxxx. Xxxxx failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act, and that the
untrue statement or alleged untrue statement of a material fact was corrected in
the Prospectus.
In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Agreement, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party"). In case any such proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein, and, to the
extent it shall wish, jointly with any other indemnifying party, to assume the
defense thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by NEFE
on the one hand and BT Xxxx.
2
12
Xxxxx on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law then each indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of NEFE on the one hand
and BT Xxxx. Xxxxx on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by XXXX on the one hand and BT
Xxxx. Xxxxx on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering received by NEFE bear to the total
commissions and other compensation received by BT Xxxx. Xxxxx. The relative
fault shall be determined by reference to, among other things, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Agreement were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Agreement, BT Xxxx. Xxxxx shall not be
required to contribute any amount in excess of the commissions and other
compensation applicable to the Shares sold through BT Xxxx. Xxxxx. In addition,
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
In any proceeding relating to the Registration Statement, the
Prospectus or any supplement or amendment thereto, each party against whom
indemnification or contribution may be sought hereunder hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party.
Very truly yours,
NATIONAL ENDOWMENT FOR FINANCIAL
EDUCATION
By:
------------------------------------
Title: Xxxxxxx X. Xxxxxx, its President
Accepted and Agreed
BT Alex. Brown Incorporated
By:
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