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”).
1. Reference to Credit
Agreement and Security Agreement Reference is made to (i) that
Credit Agreement dated as of February 6, 2006 (as amended and restated as of
November 17, 2006 and as subsequently amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”),
among CRC Health Group, Inc., a Delaware corporation (“Holdings”), Borrower,
Citibank, N.A., as administrative agent (in such capacity, the “Administrative
Agent”), collateral agent (in such capacity, the “Collateral Agent”),
Swing Line Lender and L/C Issuer, each Lender from time to time party thereto,
JPMorgan Chase Bank, N.A., as Syndication Agent, and Xxxxxxx Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated, as Documentation Agent and (ii) that certain
Security Agreement dated as of February 6, 2006 (the “Security Agreement”),
among Borrower, Holdings, the Subsidiaries of the Borrower identified therein
and Citibank, N.A., as Collateral Agent for the Secured
Parties. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement
and the Security Agreement referred to therein.
2. Company’s
Certification. The undersigned, in the capacity as the duly
appointed officer of each Company and the Borrower, hereby certifies on behalf
of each Company and the Borrower that (i) each Company is a Xxxxxxx Subsidiary,
(ii) the Equity Interests of each Company have vested pursuant to the terms of
the applicable Xxxxxxx Equity Document attached as Annex A hereto in
accordance with the first proviso to Section 7.14 of the Credit Agreement (the
“Vested
Interests”), (iii) each Company has been released or shall be released
simultaneously with this Release from its guarantee of the Senior Subordinated
Notes and (iv) the Administrative Agent and Collateral Agent are authorized to
release the Guarantee of each Company pursuant to Section 9.11(c) of the Credit
Agreement and by the Security Agreement and to release its security interest in
each Company pursuant to Section 9.11(a)(iv) of the Credit Agreement and by the
Security Agreement.
3. Release. In
connection with the Vested Interests, each Company and the Borrower has
requested that the Collateral Agent release the Guarantee of each Company
created pursuant to the Credit Agreement in accordance with Section 9.11(c) of
the Credit Agreement and release each lien, security interest and other
encumbrance of any kind in respect of each Company created pursuant the Security
Agreement in accordance with Section 9.11(a)(iv) of the Credit
Agreement. The Administrative Agent and Collateral Agent hereby
release such Guarantee and security interest. For the avoidance of
doubt, this Release does not release any guarantee or lien in respect of
Borrower or any other Loan Party other than the Companies in favor of the
Secured Parties pursuant to the Credit Agreement, Security Agreement or any
other Loan Document.
4. Authorization to File
UCC-3. The Collateral Agent hereby authorizes each Company to
file UCC-3 termination financing statements in the form attached hereto as Annex B.
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
THIS SUBSCRIPTION AGREEMENT (the “Agreement”), dated as
of April 1, 2004, is entered into by and between XXXXXXXXXX LEADERSHIP
EXPEDITIONS, LLC, a Delaware limited liability company (the “Company”), and the
undersigned, XXX XXXXXXX (the “Employee”).
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”).
WHEREAS, Employee is employed by AEG as
the head of the wilderness division of AEG.
WHEREAS, in order to give Employee an
opportunity to acquire an interest in the Company as an incentive for Employee
to continue participating in the affairs of the Company, the Company desires to
issue certain membership interests to Employee pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the
premises and of the mutual agreements, representations, warranties, provisions,
covenants and other consideration, the sufficiency and adequacy of which is
hereby acknowledged, the Company and Employee agree as follows:
1. Issuance of Membership
Interest. On April 1, 2008 (the “Vesting Date”), the
Company shall issue to Employee ten (10) units of the Company (the “Units”), which
represent ten percent (10%) of the issued and outstanding membership interests
of the Company. On such date of issuance, the Company shall deliver to Employee
a membership certificate registered in Employee’s name representing the Units
and Employee shall sign a receipt acknowledging receipt of the
Units.
2. Amended and Restated
Operating Agreement. Notwithstanding the foregoing, the Company shall not
issue the Units to Employee unless and until Employee signs an Amended and
Restated Operating Agreement, effective as of the date of issuance of the Units,
that includes the transfer restrictions and other rights and obligations of the
Company and Employee as set forth herein. Notwithstanding anything to the
contrary herein, the Amended and Restated Operating Agreement shall provide that
all Distributions (as defined therein) shall be made to Aspen and that no
Distribution shall be made to Employee. The Company shall provide such Amended
and Restated Operating Agreement to Employee for review no later than 30 days
prior to the Vesting Date.
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
(b) The
consideration that Employee shall receive shall be in the same form or type of
consideration as Aspen receives for the sale of such membership interests or
assets. For example, if Aspen receives shares of capital stock of the third
party purchaser, Employee shall be entitled to that number of such shares of
capital stock of the third party purchaser equal to the product of the Transfer
Price divided by the per Unit price Aspen receives for the sale of such
membership interests or assets. Employee shall deliver the membership
certificate representing the Units to the Company on the date and at the
location designated by the Company and shall sign such agreements or other
documents in connection with the sale of the Units to the Company as the Company
reasonably requests.
4. Conversion Upon an
IPO. In the event AEG completes an initial public offering (an “IPO”) of its common
stock prior to the Vesting Date, the Employee’s right to receive the Units shall
automatically be converted into the right to receive a number of shares of
common stock of AEG (which shares of common stock shall not be registered under
the Securities Act of 1933, as amended (the “Act”)) on the Vesting
Date equal to the product of (i) the Transfer Price that Employee would have
received had a Call Event occurred on the Vesting Date, divided by (ii) the
closing price per share of the AEG common stock on the Vesting Date. For
purposes of this Agreement, an “initial public offering” shall mean the initial
firm commitment underwritten public offering of the common stock of Aspen,
immediately following which such common stock is listed for trading on the New
York Stock Exchange or for quotation on the NASDAQ National Market System or
other agreed, internationally recognized stock exchange.
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.
(b) If
after the Vesting Date 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, the Company shall
have the right, but not the obligation, to purchase the Units from the Employee
for a purchase price equal to the Transfer Price; provided that for purposes of
this Section 5(b), the Transfer Price shall be calculated using the twelve month
period ending on the last day of the month immediately preceding the month in
which Employee’s employment terminated.
6. Right of First
Refusal. Employee agrees that in the event Employee desires to transfer
any or all of her Units 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 Units to
be transferred at the lower of the price set forth in the transfer notice or the
Transfer Price, and upon the terms set forth in the transfer notice (the “Company’s First Refusal
Rights”). The Company shall exercise the Company First Refusal Rights by
giving Employee written notice of such intention prior to the expiration of the
Exercise Period.
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.
(b) The
outstanding membership interests of the Company consists of 100
Units.
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.
Exhibit 10.3i
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.
THE UNITS
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.”
10. General Solicitation.
Employee acknowledges that neither the Company nor any person acting on its
behalf has offered or sold the Units to Employee by any form of general
solicitation, general or public media advertising or mass mailing.
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.
12. Modifications or
Waivers. Neither this Agreement nor any provisions hereof shall be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought.
13. Assignments. This
Agreement is not transferable or assignable by Employee or the
Company.
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
THIS SUBSCRIPTION AGREEMENT (the “Agreement”), dated as
of April 1, 2004, is entered into by and between LONE STAR EXPEDITIONS, INC., a
Delaware corporation (the “Company”), and the
undersigned, XXX XXXXXXX (the “Employee”).
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”).
WHEREAS, Employee is employed by AEG as
the head of the wilderness division of AEG.
WHEREAS, in order to give Employee an
opportunity to acquire an interest in the Company as an incentive for Employee
to continue participating in the affairs of the Company, the Company desires to
issue shares of its common stock to Employee pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the
premises and of the mutual agreements, representations, warranties, provisions,
covenants and other consideration, the sufficiency and adequacy of which is
hereby acknowledged, the Company and Employee agree as follows:
1. Issuance of Common
Stock. On April 1, 2008 (the “Vesting Date”), the
Company shall issue to Employee ten (10) shares of common stock of the Company
(the “Shares”),
which represents ten percent (10%) of the issued and outstanding capital stock
of the Company. On such date of issuance, the Company shall deliver to Employee
a stock certificate registered in Employee's name representing the Shares and
Employee shall sign a receipt acknowledging receipt of the Shares.
2. Restricted Stock Award
Agreement. Notwithstanding the foregoing, the Company shall not issue the
Shares to Employee unless and until Employee signs a Restricted Stock Award
Agreement, effective as of the date of issuance of the Shares, that includes the
transfer restrictions and other rights and obligations of the Company and
Employee as set forth herein. The Company shall provide such Restricted Stock
Award Agreement to Employee for review no later than 30 days prior to the
Vesting Date.
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
(b) The
consideration that Employee shall receive shall be in the same form or type of
consideration as Aspen receives for the sale of such capital stock or assets.
For example, if Aspen receives shares of capital stock of the third party
purchaser, Employee shall be entitled to that number of such shares of capital
stock of the third party purchaser equal to the product of the Transfer Price
divided by the per share price Aspen receives for the sale of such capital stock
or assets. Employee shall deliver the stock certificate representing the Shares
to the Company on the date and at the location designated by the Company and
shall sign such agreements or other documents in connection with the sale of the
Shares to the Company as the Company reasonably requests.
4. Conversion Upon an
IPO. In the event AEG completes an initial public offering (an “IPO”) of its common
stock prior to the Vesting Date, the Employee's right to receive the Shares
shall automatically be converted into the right to receive a number of shares of
common stock of AEG (which shares of common stock shall not be registered under
the Securities Act of 1933, as amended (the “Act”)) on the Vesting
Date equal to the product of (i) the Transfer Price that Employee would have
received had a Call Event occurred on the Vesting Date, divided by (ii) the
closing price per share of the AEG common stock on the Vesting Date. For
purposes of this Agreement, an “initial public offering” shall mean the initial
firm commitment underwritten public offering of the common stock of Aspen,
immediately following which such common stock is listed for trading on the New
York Stock Exchange or for quotation on the NASDAQ National Market System or
other agreed, internationally recognized stock exchange.
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.
(b) If
after the Vesting Date 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, the Company shall
right, but not the obligation, to purchase the Shares from the Employee for a
purchase price equal to the Transfer Price; provided that for purposes of this
Section 5(b), the Transfer Price shall be calculated using the twelve month
period ending on the last day of the month immediately preceding the month in
which Employee’s employment terminated.
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
lower of
the price set forth in the transfer notice or the Transfer Price, and upon the
terms set forth in the transfer notice (the “Company's First Refusal
Rights”). The Company shall exercise the Company First Refusal Rights by
giving Employee written notice of such intention prior to the expiration of the
Exercise Period.
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.
Exhibit
10.3i
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
(h) Employee
acknowledges and agrees that for purposes of this Agreement, the term “Shares”
as used in this Section 8 shall mean the Shares 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 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.”
10. General Solicitation.
Employee acknowledges that neither the Company nor any person acting on its
behalf has offered or sold the Shares to Employee by any form of general
solicitation, general or public media advertising or mass mailing.
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.
12. Modifications or
Waivers. Neither this Agreement nor any provisions hereof shall be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought.
13. Assignments. This
Agreement is not transferable or assignable by Employee or the
Company.
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.
* * * *
*
Exhibit
10.3i
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
