RELEASE OF GUARANTEE AND COLLATERAL
Exhibit 10.3i
This
Release of Guarantee and Collateral, dated as of July 25, 2008, (“Release”) is by and
among CITIBANK, N.A., as Administrative Agent and Collateral Agent (as defined
below), CRC HEALTH CORPORATION, a Delaware corporation (f/k/a CRC HEALTH GROUP,
INC.) (the “Borrower”),
ADIRONDACK LEADERSHIP EXPEDITIONS, LLC, a Delaware limited liability company
(“Adirondack”)
and LONE STAR EXPEDITIONS, INC., a Delaware corporation (“Lone Star” and,
together with Adirondack, the “Companies”).
5. General. Each
of the Credit Agreement and the Security Agreement is confirmed as being in full
force and effect. This Release may be executed in any number of
counterparts, which together shall constitute one instrument, and shall bind and
inure to the benefit of the parties and their respective permitted successors
and assigns. This Release shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflict of
laws principles thereof.
Each of
the undersigned has caused this Release to be executed and delivered by its duly
authorized officer as of the date first above written.
CRC
HEALTH CORPORATION
By:
Name: Xxxxx Xxxxx
Title: Chief
Financial Officer
ADIRONDACK
LEADERSHIP EXPEDITIONS, LLC
By:
Name: Xxxxx
Xxxxx
Title: Chief
Financial Officer
LONE STAR
EXPEDITIONS, INC.
By:
Name: Xxxxx Xxxxx
Title: Chief
Financial Officer
The
foregoing is hereby agreed to and accepted:
CITIBANK,
N.A.,
as
Administrative Agent and Collateral Agent
By:
Name:
Title:
Annex
A
Exhibit
10.3i
Exhibit 10.3i
Exhibit 10.3i
ADIRONDACK
LEADERSHIP EXPEDITIONS, LLC
SUBSCRIPTION
AGREEMENT
RECITALS
WHEREAS, the Company is an indirect,
wholly-owned subsidiary of Aspen Education Group, Inc., a California corporation
(“AEG”), and a
direct, wholly-owned subsidiary of Aspen Youth, Inc., a California corporation
(“Aspen”).
3. Sale of the Company.
In the event Aspen elects to sell the membership interests of the
Company, whether through a direct purchase or through a merger or other type of
transaction, or all or substantially all of the assets of the Company, to a
third party (a “Call Event”)
on or after the Vesting Date, the Company shall notify Employee of such sale at
least ten
days
prior to the closing of such sale and Employee shall sell or transfer the Units
to the Company on or before the closing date.
(a) In
consideration for such sale or transfer of the Units to the Company, Employee
shall receive an amount of consideration (the “Transfer Price”)
equal to: the product of (i) the sum of (X) twelve month trailing EBITDA for the
twelve month period ending on the last day of the month immediately preceding
the month in which such Call Event occurs, minus (Y) an amount equal to
maintenance capital expenditures for such twelve month period; multiplied by
(ii) 4.5; multiplied by (iii) 10%.
As an example only, if the twelve month
trailing EBIDTA for the relevant period is $1,000,000 and maintenance capital
expenditures for that period is $100,000, the Transfer Price would be equal
to:
($1,000,000 - $100,000) x 4.5 x 0.10 =
$405,000
Exhibit
10.3i
5. Termination of
Employment.
(a) If
prior to the Vesting Date (i) Employee ceases to be an employee of AEG, Aspen or
the Company, or ceases to provide services to the Company, whether due to
Employee’s death, disability or voluntary or involuntary termination, or (ii)
the membership interests or all or substantially all of the assets of the
Company are sold or transferred to a third party that is not an affiliate of
AEG, this Agreement shall automatically terminate and have no further force or
effect and Employee shall not be
consideration
pursuant to this Agreement or in connection with the termination of this
Agreement.
7. Representations and
Warranties of the Company. The Company hereby represents and warrants to
Employee that, as of the date hereof:
(a) The
Company is a limited liability company validly existing in good standing under
the laws of the state of Delaware and has all requisite power and authority to
carry on its business as now conducted and as proposed to be conducted and to
enter into and perform this Agreement and to carry out the transactions
contemplated hereby. The Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the failure to so qualify would
have a material adverse effect on its business or properties.
8. Representations and
Warranties of Employee. Employee acknowledges, represents and warrants to
the Company as follows:
(a) Employee
understands that the Units have not been registered under the Act, or under any
other federal or state law, and that the Company does not currently contemplate
such a registration.
Exhibit 10.3i
(b) Employee
has such knowledge, skill and experience in business, financial and investment
matters so that Employee is capable of evaluating the merits and risks of an
investment in the Units. To the extent that Employee has deemed it appropriate
to do so, Employee has retained, and relied upon, appropriate professional
advice regarding the tax, legal and financial merits and consequences of the
investment in the Units.
(c) Employee
has made, either alone or together with advisors (if any), such independent
investigation of the Company, its management, and related matters as Employee
deems to be, or such advisors (if any) have advised to be, necessary or
advisable in connection with an investment in the Units; and Employee and
Employee’s advisors (if any) have received all information and data which
Employee and such advisors (if any) believe to be necessary in order to reach an
informed decision as to the advisability of an investment in the Units. Employee
is satisfied that there are no material facts regarding the Company or the Units
as to which Employee has not been fully informed.
(d) Employee
represents that Employee has reviewed Employee’s financial condition and
commitments, alone and together with Employee’s advisors, and that, based on
such review, Employee is satisfied that (i) Employee has adequate means of
providing for Employee’s financial needs and possible contingencies and has
assets or sources of income which, taken together, are more than sufficient so
that Employee could bear the risk of loss of Employee’s entire investment in the
Units, (ii) Employee has no present or contemplated future need or intention to
dispose of or sell all or any portion of the Units to satisfy any existing or
contemplated undertaking, need or indebtedness, and (iii) Employee is capable of
bearing the economic risk of an investment in the Units for the indefinite
future. Employee agrees to furnish any additional information requested by the
Company to assure compliance of this transaction with applicable federal and
state securities laws in connection with the purchase and sale of the
Units.
(e) Employee
understands that the Units are “restricted securities” under applicable federal
securities laws and that the Act and the rules of the Securities and Exchange
Commission provide in substance that Employee may dispose of the Units only
pursuant to an effective registration statement under the Act or an exemption
from such registration if available. Employee further understands that the
Company has no obligation or intention to register any of the Units under or to
take action so as to permit sales pursuant to the Act. Employee further
understands that applicable blue sky laws may permit sales of the Units only if
the Units are registered or the transaction is subject to an applicable
exemption. As a consequence, Employee understands that Employee must bear the
economic risks of the investment in the Units for an indefinite period of
time.
(f) Employee
hereby confirms that Employee is acquiring the Units for investment only and not
with a view to or in connection with any resale or distribution of the Units.
Employee hereby affirms that Employee has no present intention of making any
sale, assignment, pledge, gift, transfer or other disposition of the Units or
any interest therein.
(g) Employee
is an “accredited investor” within the meaning of Rule 501 under the Act and the
representations made on the Preliminary Purchaser Questionnaire delivered
previously to the Company are true and correct in all respects as of the date
hereof.
(h) Employee
acknowledges and agrees that for purposes of this Agreement, the term “Units” as
used in this Section 8 shall mean the Units as defined in Section 1 and the
shares of common stock of AEG which Employee may receive pursuant to Section
4.
9. Legend. Employee
acknowledges and agrees that the membership certificate evidencing the Units
will bear a restrictive legend substantially in the following form:
“THE
MEMBERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE (THE “UNITS”) HAVE BEEN
GRANTED BY XXXXXXXXXX LEADERSHIP EXPEDITIONS, LLC (THE “COMPANY”) UNDER THE
AMENDED AND RESTATED OPERATING AGREEMENT OF THE COMPANY (THE “AGREEMENT”), DATED AS
OF APRIL 1, 2008 BETWEEN THE REGISTERED OWNER NAMED HEREON (“EMPLOYEE”) AND THE
COMPANY. UNDER THE AGREEMENT, THE UNITS ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND TO THE OTHER TERMS AND CONDITIONS AS SET FORTH
THEREIN.
11. Governing Law. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of California, without regard for the conflicts of laws
provisions thereof.
14. Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile, and
all of such counterparts together will be deemed one instrument.
* * * *
*
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.
ADIRONDACK
LEADERSHIP EXPEDITIONS, LLC
By: AYS
Management, Inc.,
as Manager
By:
Name:
Xxxxxx Xxxxxx
Its: Chief
Executive Officer and President
Employee
intends to be legally bound hereby.
EMPLOYEE:
By:
Name: XXX
XXXXXXX
[Signature
Page to Subscription Agreement]
LONE
STAR EXPEDITIONS, INC.
SUBSCRIPTION
AGREEMENT
RECITALS
WHEREAS, the Company is an indirect,
wholly-owned subsidiary of Aspen Education Group, Inc., a California corporation
(“AEG”), and a
direct, wholly-owned subsidiary of Aspen Youth, Inc., a California corporation
(“Aspen”).
3. Sale of the Company.
In the event Aspen elects to sell the capital stock of the Company,
whether through a direct purchase or through a merger or other type of
transaction, or all or substantially all of the assets of the Company, to a
third party (a “Call
Event”) on or after the Vesting Date, the Company shall notify Employee
of such sale at least ten days prior to the closing of such sale and Employee
shall sell or transfer the Shares to the Company on or before the closing
date.
(a) In
consideration for such sale or transfer of the Shares to the
Company,
Employee
shall receive an amount of consideration (the “Transfer Price”)
equal to: the product product of (i) the sum of (X) twelve month trailing EBITDA
for the twelve month period ending on the last day of the month immediately
preceding the month in which such Call Event occurs, minus (Y) an amount equal
to maintenance capital expenditures for such twelve month period; multiplied by
(ii) 4.5; multiplied by (iii) 10%.
As an
example only, if the twelve month trailing EBIDTA for the relevant period is
$1,000,000 and maintenance capital expenditures for that period is $100,000, the
Transfer Price would be equal to:
($1,000,000 - $100,000) x 4.5 x 0.10 =
$405,000
Exhibit
10.3i
5. Termination of
Employment.
(a) If
prior to the Vesting Date (i) Employee ceases to be an employee of AEG, Aspen or
the Company, or ceases to provide services to the Company, whether due to
Employee's death, disability or voluntary or involuntary termination, or (ii)
the capital stock or all or substantially all of the assets of the Company are
sold or transferred to a third party that is not an affiliate of AEG, this
Agreement shall automatically terminate and have no further force or effect and
Employee shall not be entitled to receive any of the Shares or any other
consideration pursuant to this Agreement or in connection with the termination
of this Agreement.
6. Right of First
Refusal. Employee agrees that in the event Employee desires
to
transfer
any or all of her Shares to another party, Employee shall give prior written
notice to the
Company
describing in reasonable detail the terms of such bona fide offer. For a period
of thirty (30) days after such notice of transfer is received by the Company
(the “Exercise
Period”), the
Company
shall have a right to repurchase all or any portion of the Shares to be
transferred at the
7. Representations and
Warranties of the Company. The Company hereby represents and warrants to
Employee that, as of the date hereof:
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be
conducted and to enter into and perform this Agreement and to carry out the
transactions contemplated hereby. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business or
properties.
(b) The
authorized capital of the Company consists of 3,000 shares of common stock, no
par value. There are 100 shares of common stock issued and
outstanding.
(c) The
outstanding common shares are duly authorized and validly authorized and issued,
fully paid and nonassessable.
8. Representations and
Warranties of Employee. Employee acknowledges, represents and warrants to
the Company as follows:
(a) Employee
understands that the Shares have not been registered under the Act, or under any
other federal or state law, and that the Company does not currently contemplate
such a registration.
(b) Employee
has such knowledge, skill and experience in business, financial and investment
matters so that Employee is capable of evaluating the merits and risks of an
investment in the Shares. To the extent that Employee has deemed it appropriate
to do so, Employee has retained, and relied upon, appropriate professional
advice regarding the tax, legal and financial merits and consequences of the
investment in the Shares.
(c) Employee
has made, either alone or together with advisors (if any), such independent
investigation of the Company, its management, and related matters as Employee
deems to be, or such advisors (if any) have advised to be, necessary or
advisable in connection with an investment in the Shares; and Employee and
Employee's advisors (if any) have received all information and data which
Employee and such advisors (if any) believe to be necessary in order to reach an
informed decision as to the advisability of an investment in the Shares.
Employee is satisfied that there are no material facts regarding the Company or
the Shares as to which Employee has not been fully informed.
(d) Employee
represents that Employee has reviewed Employee's financial condition and
commitments, alone and together with Employee's advisors, and that, based on
such review, Employee is satisfied that (i) Employee has adequate means of
providing for Employee's financial needs and possible contingencies and has
assets or sources of income which, taken together, are more than sufficient so
that Employee could bear the risk of loss of Employee's entire investment in the
Shares, (ii) Employee has no present or contemplated future need or intention to
dispose of or sell all or any portion of the Shares to satisfy any existing or
contemplated undertaking, need or indebtedness, and (iii) Employee is capable of
bearing the economic risk of an investment in the Shares for the indefinite
future. Employee agrees to furnish any additional information requested by the
Company to assure compliance of this transaction with applicable federal and
state securities laws in connection with the purchase and sale of the
Shares.
(e) Employee
understands that the Shares are “restricted securities” under applicable federal
securities laws and that the Act and the rules of the Securities and Exchange
Commission provide in substance that Employee may dispose of the Shares only
pursuant to an effective registration statement under the Act or an exemption
from such registration if available. Employee further understands that the
Company has no obligation or intention to register any of the Shares under or to
take action so as to permit sales pursuant to the Act. Employee further
understands that applicable blue sky laws may permit sales of the Shares only if
the Shares are registered or the transaction is subject to an applicable
exemption. As a consequence, Employee understands that Employee must bear the
economic risks of the investment in the Shares for an indefinite period of
time.
(f) Employee
hereby confirms that Employee is acquiring the Shares for investment only and
not with a view to or in connection with any resale or distribution of the
Shares. Employee hereby affirms that Employee has no present intention of making
any sale, assignment, pledge, gift, transfer or other disposition of the Shares
or any interest therein.
(g) Employee
is an “accredited investor” within the meaning of Rule 501 under the Act and the
representations made on the Preliminary Purchaser Questionnaire delivered
previously to the Company are true and correct in all respects as of the date
hereof.
Exhibit
10.3i
9. Legend. Employee
acknowledges and agrees that the stock certificate evidencing the Shares will
bear a restrictive legend substantially in the following form:
“THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE (THE “SHARES”) HAVE BEEN
GRANTED BY LONE STAR EXPEDITIONS, INC.
(THE
“COMPANY”) AS
RESTRICTED STOCK UNDER THE RESTRICTED STOCK AWARD AGREEMENT (THE “AGREEMENT”), DATED AS
OF APRIL 1, 2008 BETWEEN THE REGISTERED OWNER NAMED HEREON (“EMPLOYEE”) AND THE
COMPANY. UNDER THE AGREEMENT, THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND TO THE OTHER TERMS AND CONDITIONS AS SET FORTH
THEREIN.
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR REGISTERED
OR QUALIFIED ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS.”
11. Governing Law. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of California, without regard for the conflicts of laws
provisions thereof.
14. Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile, and
all of such counterparts together will be deemed one instrument.
* * * *
*
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
LONE
STAR EXPEDITIONS, INC.
By:
Name:
Xxxxxx Xxxxxx
Its: Chief
Executive Officer and President
Employee intends to be legally bound
hereby.
EMPLOYEE:
By:
Name: XXX
XXXXXXX
[Signature
page to Subscription Agreement]
Exhibit 10.3i
Annex
B
UCC-3
Financing Statements