ASSET PURCHASE AGREEMENT BY AND AMONG
AEON TECHNOLOGIES, LTD., A TEXAS LIMITED PARTNERSHIP
AND
CONTEMPORARY CONSTRUCTORS NEVADA, INC., A NEVADA CORPORATION,
AS PURCHASER
CHARYS HOLDING COMPANY, INC., A DELAWARE CORPORATION, AS
CORPORATION
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Agreement
to Purchase and Sell
ARTICLE I1
Purchase
Price
2.1
Purchase Price
2.2
Purchase Price Adjustment Mechanism
2.3
Common Stock Issued to the Sellers
ARTICLE I11
3.1
Organization
3.2
Subsidiaries
and Affiliates
3.3
Authorization
3.4
No Violation
3.5
Financial Statements
3.6
Contracts
3.7
Title and Related Matters
ARTICLE rv
4.1
Shares Held For Own Account
4.2
No Registration
4.3
Investment
Knowledge
ARTICLE V
5.1
Corporate Organization
5.2
Capital Stock
5.3
Authorization
5.4
No Violation
5.5
Financial Statements
5.6
Brokerage
5.7
Disclosure
ARTICLE VI
6.1
Regular Course OF Business
6.2
Consents
6.3
Breach of Agreement
6.4
Bulk Sale
6.5
Confidentiality
ARTICLE VII
7.1
Consents
7.2
Breach of Agreement
7.3
Confidentiality
ARTICLE VIII
8.1
Employment,
Non-Competition
and Incentive Compensation Agreements
8.2
Further Assurances
<PAGE>
ARTICLE IX
9.1
Representations
and Warranties; Performance
9.2
Consents AND Approvals
9.3
Opinion of the Seller's Counsel
9.4
No Material Adverse Change
9.5
No Proceeding or Litigation
9.6
Proceedings
and Documents
9.7
Employment
Agreements
9.8
Other Documents
ARTICLE X
10.1
Representations
and Warranties; Performance
10.2
Consents and Approvals
10.3
Opinion of Purchaser's Counsel
10.4
No Proceeding or Litigation
10.5
Proceedings
and Documents
10.6
Secretary's
Certificate
10.7
Certificate
of Good Standing
10.8
Employment
Agreements
10.9
Indemnification
Agreement
10.10
Registration
Rights Agreement
10.11
Other Documents
ARTICLE XI
11.1
Closing
11.2
Intervening
Litigation
11.3
Obligations
of Seller
11.4
Obligations
of Purchaser
ARTICLE XI1
12.1
Methods of Termination
12.2
Termination
of Obligations
ARTICLE XI11
13.1
The Seller's Agreement to Indemnify
13.2
The Purchaser's Agreement to Indemnify
13.3
Limitations
on Indemnification
13.4
Third PARTY Indemnification
13.5
Survival; Time to Assert Claims
ARTICLE XIV
14.1
Amendment AND Modification
14.2
Entire Agreement
14.3
Certain Definitions
14.4
Notices
14.5
Assignment
14.6
Governing Law
14.7
Dispute Resolution
14.8
Counterparts
14.9
Headings
14.10
Binding Effect
<PAGE>
14.11
Delays or Omissions
14.12
Severability
14.13
Expenses
EXHIBITS
EXHIBIT
A Equipment and Supplies
EXHIBIT
B Contracts
EXHIBIT
C Leases
EXHIBIT
D Accounts Receivable
EXHIBIT
E Secured Promissory Note
EXHIBIT
F Security Agreement
EXHIBIT
G Purchase Price Formula
EXHIBIT
H Registration Rights Agreement
EXHIBIT
I Employment Agreement, Wade Clark
EXHIBIT
J Employment Agreement, David Machovsky
EXHIBIT
K Seller's Certificate
EXHIBIT
L Purchaser's Certificate
EXHIBIT
M Purchaser's Secretary Certificate
EXHIBIT
N Bill of Sale
EXHIBIT
O Assignment, Assumption, and Consent Agreement
SCHEDULES
Schedule
2.2.2 Seller's Special Purpose Financial Statement
Schedule
3.3 Contract defaults, liens and legal authorities of Seller
Schedule
3.4.1 Seller's Financial Statements
Schedule
3.4.2 Additional Debts and Liabilities
Schedule
3.5 (a) - (d) Additional Contracts
Schedule
3.6.1 Title Defects
Schedule
3.6.4.1 Additional Trade Names
Schedule
3.6.4.2 Proprietary Rights and Claims
Schedule
5.2 Stock Options and Conversion Rights
Schedule
5.4 Contract defaults, liens and legal authorities of
Purchaser
Schedule
5.5.1 Accounting Requirements
Schedule
9.3 Opinion of Seller's Counsel
Schedule
10.3 Opinion of Purchaser's Counsel
<PAGE>
THIS
ASSET PURCHASE AGREEMENT (the "Agreement") is
made and entered into
this 9th day of April, 2006, by and between AEON
TECHNOLOGIES, LTD., a Texas
limited partnership
(the "Seller"), and CONTEMPORARY CONSTRUCTORS NEVADA, INC.,
a Nevada corporation (the "Buyer" or "PURCHASER").
The
Seller desires to sell to the Buyer and
the Buyer desires to purchase
from the Seller 100% of the assets of the Seller on the
terms and conditions
contained in
this Agreement.
In
consideration
of the mutual
covenants and agreements contained in this
Agreement, and
for other good and valuable consideration, the receipt and
sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
---------
AGREEMENT TO PURCHASE AND SELL
Subject to
the terms, provisions and conditions set forth in this
Agreement, on
the date specified in
Section 1 1.1 hereof (the "Closing Date"),
the Seller
shall sell, transfer and convey to the Buyer,
and the Buyer shall
purchase from
the Seller all of its assets, including but
not limited to the
following (hereinafter
called the "Assets"):
(a)
All
of the Seller's rights, title and interest in and to the
equipment, fixtures
and supplies described on EXHIBIT "A" attached to this
Agreement (the
"Equipment
and Supplies").
(b)
All
of the Seller's right title and interest to the contracts
attached hereto
as EXHIBIT "B" to this Agreement (the "Contracts").
(c)
All
of the Seller's right,
title and interest in and to the Leases
to which Seller is a
party, copies of which are attached as Exhibit "Cn hereto.
(d)
All
of the Seller's right, title and interest in and to any
accounts receivable
of the Seller, specifically listed on
EXHIBIT "D" hereto.
(e)
All
intellectual
property, including
but not limited to the trade
name, trademark,
or any other
identifying name, owned by Seller and related to
the above-described
assets.
ARTICLE II
----------
PURCHASE PRICE
2.1
The Purchaser agrees to pay to the Seller at the Closing (as
defined in
Article 11.1 below) aggregate consideration of $2,088,000 (the
"PURCHASE PRICE")
by delivery of (i)
$907,000 to Seller ("CASH CONSIDERATION") (ii) $1,211,011 in
shares of Common Stock of Charys Holding Company, Inc., (hereinafter the
"Corporation") a
publicly traded Delaware
<PAGE>
corporation
(hereinafter called
the "Common Stock") to the SELLER for the
balance thereof
("STOCK
CONSIDERATION") as described below in Section 2.1.3 of
this Agreement. The aggregate consideration is subject to
adjustment pursuant to
Section 2.2
of this Agreement.
2.1.1 The Cash Consideration shall be issued to Seller as
follows:
Purchaser and
the corporation shall give Seller a Secured
Promissory Note
("Note") in a form attached as EXHIBIT "E"
requiring payment
of:
a. $226,000
payment within 30 days of closing.
b. The
remainder to be paid in three equal annual
installments on
the anniversary of the closing
date.
c. The
Note shall bear interest at 8%
d. The
Note shall be secured by the Assets
pursuant to a
Security Agreement in a form attached hereto as EXHIBIT
"F".
2.1.2 The Stock Consideration shall be issued to the Wade and
Jennifer
Clark Irrevocable Trust . Whenever in this document there is a
reference to
Seller receiving the
Common Stock, Seller shall mean the Wade and Jennifer
Clark Irrevocable
Trust. The Common Stock shall be
delivered as follows:
(a)
At Closing
(AS defined in Article 10.1 below), the
Purchaser shall
cause to be issued to the Seller sufficient
shares of Common
Stock in the Corporation (the "INITIAL STOCK TRANCHE"), reflecting
fifty percent
(50%) of the total Stock Consideration to be paid to
the Seller based upon a
share price
of Four Dollars ($4.00) per share.
(b)
180 days after the Effective Date, the Purchaser
shall
cause to be issued to the Seller additional shares of Common Stock
in the
Corporation (the
"SECOND STOCK
TRANCHE") reflecting fifty percent (50%) of the
total Stock
Consideration to be
paid to the Seller based upon a share price of
Four Dollars
($4.00) per share.
(c)
The number
of shares of Common Stock issued will be
adjusted at
the end of 25 days fRom the due date
for filing by Charys Holding
Company, Inc.
of the SEC prescribed 10Q for the full second quarter
after
Closing (hereinafter
the "Adjustment Date"):
If the Common Stock does not reach an
average Market Price
of at least Four Dollars and Fifty Cents
($4.50) per share for at least three
(3) consecutive Trading Days prior to or including the Adjustment
Date, then, at
the Purchaser's
option, either:
(i)
The Purchaser shall cause to be issued to the Seller
additional shares of
Common Stock in the Corporation, the number of which shall
be determined
pursuant to the following formula:
AS = (ISP/AVG)-IST
Where:
<PAGE>
AS = the number
of additional
shares of Common
Stock
to be issue.
AVG = the lesser
of (x) (MPl+MP2)/2 or (y) 4.
ISP = $1,211,011
IST = the number of
shares of Common Stock
issued in
the Initial
Stock Tranche and the Second Stock
Tranche.
MP1 = the average
Market Price
for the Common Stock
over the twenty-five (25) trading day period
beginning on
the SEC prescribed due date for
filing the
Purchaser's quarterly
report on Form
10-Q or annual report on Form 10K with the
SEC,
as the case may be, for the Purchaser's
second
full fiscal
quarter after Closing.
MP2 = he average
Market Price for the Common Stock
over the twenty-five (25) day period ending on
the Make Whole Determination Date.
or;
(ii)
The Purchaser shall
pay the SELLER an amount equal
to AS multiplied by AVG, in cash by wire transfer of
immediately available
funds; and
in either case, such issuance or
payment shall occur within thirty
(30) days of the eighteenth month after Closing (or that cash is
paid in lieu of
such Second
Stock Tranche pursuant to Section 2.2.3(c) above).
2.2
Purchase Price Adjustment Mechanism.
2.2.1 The aggregate consideration to be paid
by the Purchaser to the
Seller is subject to a one-time adjustment based upon
the Seller's
financial performance
during the year
preceding the Closing Date, as
described below.
Attached as EXHIBIT "G" is a document reflecting the
formula used in
determining the Purchase Price. This same methodology
shall be applied to the March 31, 2005 financial statement to
determine the
Purchase Price Adjustment.
2.2.2 As soon as practicable, but in no event more
than sixty (60)
days after
the Determination Date, the Purchaser shall cause the
Seller to prepare and deliver to the Purchaser, special purpose
financial statements
prepared in accordance with GAAP, applied
on a
consistent basis in accordance with the Seller's historical
accounting
policies and
as described on SCHEDULE 2.2.2, showing results of
operation of
the Seller as of the
close of business for the one year
period (the
<PAGE>
"DETERMINATION PERIOD") ending on the Closing (the "DETERMINATION
DATE
FINANCIAL
STATEMENTS"), which Determination Date Financial Statements
shall be prepared at the expense of the Purchaser,
by the Purchaser
accounting firm (the "AUDITOR"). In addition, the Purchaser shall
bear
the expense
of having an opening date balance sheet as of the
Effective Date,
prepared by the Auditor in accordance with GAAP,
applied on
a consistent basis in accordance with the Seller's
historical accounting
policies. The parties acknowledge that the
Determination Date
Financial Statements are for the sole of
determining
adjustments to the Purchase Price and may not reflect the
actual financials
of the Seller used in preparing the
Purchaser's
consolidated financial
statements.
2.2.3 The PURCHASER shall have thirty (30) days from the date
the
Determination Date Financial Statements are delivered by the Seller
to
review the
Determination
Date Financial Statements and propose
any
adjustments for the purpose of determining adjustments to the
Purchase
Price. If after discussion of any such proposed
adjustments, either
party disputes
such adjustments, then the Purchaser and the
Seller
shall engage
a nationally
recognized accounting firm (the "Alternate
Auditor") to
review the disputed items. The Alternate Auditor's
determination of the
disputed items with respect to the determination
of the Purchase Price shall be final and binding upon
the Parties,
without adjustment.
All invoices submitted by the
Alternate Auditor
shall be paid by the Purchaser and the Seller equally.
2.2.4 The "ADJUSTED PURCHASE PRICE" for the Assets
shall be 4 times
the
Seller's consolidated EBIDTA for the Determination Period, as
calculated h
m the Determination Date Financial Statements.
(a) In the event that
the Adjusted Purchase Price is equal to or
greater than $906,909 and less than $2,088,000 pursuant to
clause
(x) above, then no
later than 5 days following the date on which
the Determination Date Financial Statements is finalized
pursuant
to Section 1.3.3, the
SELLER shall transfer to the Purchaser, ON
A PRO-RATA BASIS, the
number of shares of Common Stock issued as
Stock Consideration
to the SELLER equal in Base Value to the
amount determined by taking the difference between the
$2,088,000
and the Adjusted
Purchase Price, and dividing such number by the
Average Issue
Price Per Share (the "Shortage Amount") of $4,
regardless of the
actual value of such Common Stock. If the Base
Value of all of the shares of Common Stock owned
by SELLER is
less than the Shortage
Amount, then Seller shall transfer all of
the shares
of Common Stock owned by IT, to Purchaser,
and the
Seller note
will be adjusted for
any remaining Shortage Amount.
(b) In the event that the Adjusted Purchase Price is greater
than
$2,088,000 pursuant
to clause (x) above, then no later than
5
days following the date on which the Determination Date
Financial
Statements is
finalized pursuant to Section 1.3.3, If the
Purchase Price is greater than the Estimated Purchase Price,
then
the Purchaser
shall pay to the Seller,
<PAGE>
THE difference between the Adjusted Purchase Price and
$2,088,000
(the "PURCHASE
PRICE BALANCE"), as follows:
(i) The Purchase Price
Balance, shall, at the option of the
Purchaser, be
paid in (i) cash by wire transfer of
immediately available
funds or (ii) shares
of Common Stock
(using the
$4.00 Price for such Common Stock to
calculate
the number
of shares to be issued).
(c) The Seller hereby
agrees that it shall deliver any shares of
Common Stock
required to pay the Shortage Amount, if
any, free
and clear of all Liens.
2.3
Common Stock Issued to the Wade and
Jennifer Clark Irrevocable Trust.
2.3.1 No fractional shares of Common Stock shall be issued to
the
Seller hereunder,
and the number of shares of Common Stock to be
issued shall
be rounded down to the nearest whole share. If A
fractional share
interest arises pursuant to any calculation in
Section 2.3
or elsewhere herein, the Purchaser
shall eliminate such
fractional
share interest by
paying the Seller the amount computed by
multiplying the fractional interest by the price of a full share
(with
such price
being the same price used to determine the shares
then
being issued).
2.3.2 The Common Stock shall be restricted bearing a legend as
follows:
"The Shares of Stock represented by this certificate have not
been registered under the securities act of 1933, as amended
and
may not be sold or otherwise transferred unless a compliance
with
the registration provisions of such act has been made or unless
availability of an exemption from such registration provisions
haws been established, or unless sold pursuant to Rule 144
under
the securities act of 1933."
2.3.3 The Seller shall be granted "piggy-back"
registration rights,
with respect
to all shares of Common Stock issued to the Seller
hereunder, as more specifically set forth in that certain
Registration
Rights Agreement
(the "REGISTRATION RIGHTS AGREEMENT") in the form
attached hereto as EXHIBIT "H". Shares to be delivered to Seller
shall
be included
in the next registration.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The
Seller hereby represents and warrants to
the Purchaser as of the date
hereof and
as of the Closing Date that, to the best of its knowledge:
3.2
3.1 Organization. The Seller is a
limited partnership duly organized,
------------
validly existing
and in good standing under the laws of
Texas with full power
and authority
to carry
<PAGE>
on its business as it is now being
conducted and proposed to be conducted, and
to own, operate and lease its properties and assets.
3.2 Authorization.
The Seller has full power and authority to enter into
--------------
this Agreement and the
agreements contemplated hereby and to deliver the Assets
free and clear of all Liens. The execution, delivery
and performance of this
Agreement and
all other agreements and transactions
contemplated hereby have
been duly authorized by the General Partner and no other
proceedings on its part
are necessary
to authorize this Agreement and the transactions
contemplated
hereby. This
Agreement and all other agreements contemplated hereby to be
entered into
by the Seller
constitute a legal, valid and binding obligation of
the Seller
enforceable
against the Seller in
accordance with their respective
terms.
3.3 No Violation. Other than as set forth in SCHEDULE 3.3, the
execution,
--------------
delivery and
assignment
by the Seller and all
Assets contemplated hereby, and
the fulfillment
of and compliance with
the respective terms hereof and thereof
by the Seller do not and will not (a) conflict with or result in a
breach of the
terms, conditions
or provisions of or
constitute a default or event of default
under (with
due notice, lapse of time or both) of any contract
to which the
Seller is a party; (b) or result in the creation of
any Lien upon any of the
Assets; (c) give any
third party the right to accelerate any obligations of the
Seller; (d)
result in a violation of or require any
authorization, consent,
approval, exemption
or other action by or notice to any court or
Authority.
3.4 Financial
Statements.
----------------------
3.4.1 Unaudited
year-end balance sheets and statements of operations, and
cash flow of the Seller as of December
31,2005 and unaudited balance
sheets for
the period commencing January 1, 2006 and ending
MARCH
31, 2006 (the
"FINANCIAL STATEMENT DATE") and unaudited statements of
operations for
the three (3) month period then ended
(collectively,
the "FINANCIAL
STATEMENTS") have been delivered to the Purchaser, and
are attached
to SCHEDULE 3.4.1. Such balance sheets and the
notes
thereto fairly present
the financial position of the Seller as at the
respective dates
thereof, and such Financial Statements (a)
fairly
present the results of operations for the periods therein referred
to,
all in accordance with
GAAP (except as stated therein or in the notes
thereto) applied
on a consistent basis; (b) fairly present the
financial condition
of the Seller at the
respective date of, and for
the period covered by such statements; and (c) (EXCEPT AS DISCLOSED
IN
SCHEDULE 3.4.1,)
are in accordance with the required or permitted
statutory accounting requirements or practices applied on a
consistent
basis under
the laws of the State of Texas. Since the Financial
Statement Date, no
change has occurred in the condition of the Seller
as shown in the
Financial Statements which HAS or could reasonably be
expected to
have a Material Adverse Effect.
3.4.2 Except as
set forth in SCHEDULE 3.4.2 hereto,
the Seller does
not
have any Indebtedness, obligation or liability (whether accrued,
absolute,
<PAGE>
contingent,
unliquidated or
otherwise, known to
the Seller, whether
due or to become due) arising out of transactions
entered into or
Occurrences that occurred at or prior to the Closing Date, other
than:
(a) liabilities
set forth in the Financial Statements; and (b)
liabilities and
obligations
which have arisen after the Financial
Statement Date in the
ordinary course of business (none of which is a
liability resulting from breach of Contract, breach of warranty,
tort,
infringement, Claim
or lawsuit). Purchaser shall assume only
those
liabilities listed on
the Financial Statements or otherwise stated on
Schedule 3.4.2
3.5 Contracts.
----------
3.5.1 Except as expressly contemplated by this Agreement or as set
forth on
SCHEDULES 3.5.1(a)-(d)
hereto, as of the
Closing Date, the Seller is
not a party to any written or oral:
(a) Guarantee
of any obligation;
(b) Contract under
which the Seller is lessor of or permits any third
party to hold or operate any property, real or personal,
owned or
controlled by
the Seller;
(c) assignment,
license,
indemnification or Contract with respect to
any intangible
property (including, without limitation, any
Proprietary Rights),
other than software licenses in the ordiiary
course of business;
(d) Contracts
providing for "take or pay" or similar
unconditional
purchase or
payment obligations.
3.6 Title and Related Matters.
-----------------------------
3.6.1 Except as set forth in SCHEDULE 3.6.1 hereto, the Seller has
good and
marketable title to
all of the properties and assets reflected in the
Financial Statements
(except for properties and assets sold since the
Financial Statement Date in the ordinary course of business), free
and
clear of all Liens, except (a) statutory Liens not yet delinquent;
(b)
such imperfections
or irregularities of title, Liens, easements,
charges or
encumbrances as do not
detract from or interfere with the
present use
of the properties or assets subject
thereto or affected
thereby, otherwise
impair present business operations at such
properties; or
do not detract from the value of such
properties and
assets, taken
as a whole; or (c) Liens reflected in the
Financial
Statements or
the notes thereto.
3.6.2 There has not been since the Financial Statement Date and
will not be
prior to the Closing Date, any sale, lease or any other disposition
or
distribution by the
Seller of any of its assets or properties and any
other assets now or
hereafter owned by it, except transactions in the
ordinary
<PAGE>
and regular
course of business, or as otherwise
consented to by the
Purchaser.
3.6.3 Litigation.
There is no Claim pending or threatened against
the
-----------
Assets which,
if adversely
determined, would have a Material Adverse
Effect, nor
is there any Order outstanding
against the Seller which
has, or could reasonably be expected to have, a Material Adverse
Effect, except
as disclosed on SCHEDULE 3.6.3.
3.6.4 Intellectual
Property.
-----------------------
3.6.4.1 The Seller has
no trade name, service mark, patent, copyright
or
trademark related to its business, except
those which are set forth in
SCHEDULE 3.6.4.1,
which are all those necessary for the
operation of its
business as
currently conducted.
3.6.4.2 The Seller has
the right to use each Proprietary Right listed
on
SCHEDULE 3.6.4.2. There are no Claims pending, or
threatened, against
the
Seller that its use of any of the Proprietary Rights listed on
SCHEDULE
3.6.4.2 infringes
the rights of any Person.
3.6.4.3 The
Seller is not a party in any capacity to
any franchise,
license or
royalty agreement respecting any Proprietary Right.
3.6.5 Disclosure.
Neither this
Agreement nor any of the exhibits,
-----------
attachments, written
statements,
documents,
certificates
or other
items prepared for or supplied to the Purchaser by or on behalf of
the
Seller with
respect to the
transactions contemplated hereby contains
any untrue
statement of a material fact or omits a material fact
necessary to
make each statement contained herein or therein not
misleading. There is no fact which the Seller has not disclosed to
the
Purchaser in
writing and of which
the Seller or any of its executive
employees is aware and which could reasonably be anticipated to
have a
Material Adverse
Effect.
ARTICLE IV
ADDITIONAL REPRESENTATIONS OF THE SELLER
The
Seller hereby
represents and warrants to the Purchaser, as of the date
hereof and
as of the Closing Date that, to the best of its knowledge:
4.1
Shares Held For Own Account. Any shares of Common Stock acquired by
the
----------------------------
Seller hereunder
(the "ACQUIRED SHARES") are being acquired for the
Seller's own account; not as a nominee or agent, and not with a
view to the
direct or indirect sale or distribution of any part thereof, and
the Seller
has
no present intention of selling, granting any
participation in, or
otherwise distributing
the same, except in
compliance with the Securities
Act
of 1933, as amended (the "SECURITIES ACT").
<PAGE>
4.2
No Registration. The Seller understands and acknowledges that the
----------------
Acquired Shares
have not been registered under the
Securities Act or any
state securities
laws, are being sold in reliance upon an exemption
or
exemptions from
the registration and prospectus
delivery requirements of
the
Securities
Act and applicable
state securities laws, and must be held
by
the Seller indefinitely unless a subsequent disposition thereof
is
registered under the Securities Act and applicable state securities
laws or
is
exempt therefrom.
4.3
Investment
Knowledge.
The Seller has the knowledge, skill and
---------------------
experience in
financial,
business and investment matters relating to
an
investment of this
type and are capable of evaluating the merits and risks
of
such investment and protecting the Seller's interests in
connection
therewith. To
the extent deemed necessary by the Seller,
the Seller has
retained, at
the Seller's own expense, appropriate professional
advice
regarding the
investment,
tax and legal merits and consequences of
acquiring AND
owning the Acquired Shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The
Purchaser represents and warrants to the Seller as
follows as of the
date hereof
and as of the Closing Date, to the best of its knowledge:
5.1
Corporate
Organization. The Purchaser is a corporation duly organized,
-----------------------
validly existing and in good standing under the laws of its
jurisdiction of
incorporation with
full corporate power and authority to carry on its
business as
it is now being conducted and to own,
operate and lease its
properties and
assets.
5.2
Capital Stock. As of
MARCH 1, 2006 the entire authorized capital stock
--------------
of
Charys Holding Company, Inc. consists of THREE HUNDRED MILLION
(300,000,000) shares
of Common Stock with $0.001 par value
per share, of
which 15,734,019
shares are issued and outstanding,. Since
FEBRUARY 28,
2005, no Common Stock has been issued other than
Common Stock trading on
the
OTC Bulletin Board. All issued and
outstanding shares of Common Stock
having been
validly issued and are fully paid and
nonassessable, with no
personal liability or preemptive rights attaching to the ownership
thereof.
Except as set forth on SCHEDULE 5.2, no
instruments or securities of any
kind
exist which are convertible into additional shares of the
capital
stock of the Corporation, nor do any outstanding options, warrants,
rights,
calls, commitments,
plans or other arrangements or agreements of any
character exist
providing for the purchase or issuance of
any additional
shares of the Corporation.
5.3
Authorization.
The Purchaser and the Corporation has full
corporate
-------------
power and authority to enter into this Agreement and to carry out
the
transactions
contemplated hereby.
The directors of the
Purchaser and the
Corporation have duly authorized the execution, delivery and
performance of
this
Agreement and the transactions contemplated hereby, and no other
corporate proceedings on its part are necessary to authorize this
Agreement
and
the transactions contemplated hereby. This
Agreement constitutes the
<PAGE>
legal, valid and binding obligation of the Purchaser enforceable
against it
in
accordance
with its terms.
5.4
No Violation. Other than as set forth in
SCHEDULE 5.4, the execution
--------------
and
delivery by the Purchaser of this
Agreement, and all other agreements
contemplated hereby,
and the fulfillment of and compliance with the
respective terms
hereof and thereof by the Purchaser do
not and will not
(a)
conflict with or result in a breach of the terms, conditions or
provisions of
or constitute a
default or event of default under (with due
notice, lapse of time
or both) of any contract to which the Purchaser is a
party; b) result in the creation of any Lien
upon any of the Common Stock
or
assets; c) give any
third party the right to accelerate any obligations
of
the Purchaser; or d) result in a violation of or require any
authorization, consent, approval, exemption or other action by or
notice to
any
court or Authority pursuant to, the charter or bylaws of the
Purchaser,
or
any Regulation, Order or Contract to which the Purchaser or its
properties are
subject. The Purchaser will comply with all applicable
Regulations and
Orders in connection with the execution, delivery and
performance of
this Agreement and the transactions contemplated
hereby
5.5
Financial Statements.
----------------------
5.5.1 Audited
year-end balance sheets and statements of
operations,
stockholders equity
of Charys Holding
Company, Inc. as of April
30, 2005 and unaudited balance sheets for
the period commencing
May 1,2005 and ending
JANUARY 31, 2006 (the "PURCHASER FINANCIAL
STATEMENT DATE")
and unaudited statements of operations,
stockholders equity
and cash flow for the three (3) month period
then ended
(collectively, the
"PURCHASER FINANCIAL STATEMENTS")
have been delivered to the Seller. Such balance sheets
and the
notes thereto
fairly present the financial position of the
Purchaser as at the respective dates thereof, and such
statements
of operations,
stockholders
equity and cash flow
and the notes
thereto (a)
fairly present the results of operations for the
periods therein
referred to, all in accordance with GAAP (except
as stated therein or in the notes thereto) applied on a
consistent basis;
(b) fairly present the
financial condition of
the Purchaser
at the respective date of, and for the period
covered by
such statements; and (c) except as disclosed in
SCHEDULE 5.5.1, are in
accordance with the required or permitted
statutory accounting
requirements
or practices applied on a
consistent basis
under the laws of the
State of Delaware. Since
the Purchaser Financial Statement Date, no change has occurred
in
the condition
of the Purchaser as shown in the Purchaser
Financial Statements which has or could reasonably be expected
to
have a Material Adverse Effect.
5.6
Brokerage.
No broker, agent or finder has rendered services to
the
----------
Purchaser in
connection
with the transactions contemplated under this
Agreement.
5.7
Disclosure.
Neither this Agreement nor any of the exhibits,
-----------
attachments, written
statements,
documents,
certificates or other
items
prepared for
or supplied to the
<PAGE>
Seller by or on behalf of the Purchaser with
respect to the transactions
contemplated hereby
contains any untrue statement of a material
fact or
omits a material fact
necessary to make each statement contained herein or
therein not
misleading.
There is no fact which the Purchaser has not
disclosed to
the Seller in writing and of which the Purchaser or its
officers, directors
or executive employees is aware and which could
reasonably be
anticipated
to have a Material Adverse Effect.
ARTICLE VI
COVENANTS OF THE SELLER
Until the Closing Date, except as otherwise consented to or
approved by the
Purchaser in
writing, the Seller covenants and agrees that it shall act
or
refrain from
acting where required hereinafter, to
comply with the following:
6.1
Regular Course of Business. The Seller shall operate its
business
------------------------------
diligently and
in good faith, consistent with past
management practices;
shall maintain
its properties in good
order and condition, shall maintain
(except for
expiration
due to lapse of time) all leases and
Contracts
described herein
in effect without change except as expressly
provided
herein; shall
materially comply with the provisions of all Regulations and
Orders applicable
to the Seller and the conduct of its business.
6.2
Consents. The Seller shall use its best
efforts to obtain on or prior
---------
to
the Closing Date, all consents necessary to the
consummation of the
transactions
contemplated
hereby.
6.3
Breach of Agreement.
The Seller shall not take any action prior to the
--------------------
Closing Date,
would constitute a breach of this Agreement.
6.4
Bulk Sale. Seller
covenants that in completing this transaction it has
----------
complied with
any applicable bulk sale or transfer laws of the
state of
Texas.
6.5
Confidentiality.
The Seller shall, and shall cause its respective
----------------
principals and
other personnel and
authorized representatives to, hold in
confidence, and
not disclose to any other party without the
Purchaser's
prior consent,
all information received by it from the Purchaser
or its
officers, directors,
employees, agents, counsel and auditors in connection
with
the transactions contemplated hereby except as may be required by
applicable law
or as otherwise contemplated herein.
ARTICLE VII
COVENANTS OF THE PURCHASER
The
Purchaser hereby covenants and agrees with the Seller that:
7.1
Consents. The Purchaser shall use its best efforts to obtain on
or
---------
prior to the Closing Date, all consents
necessary to the consummation of
the
transactions
contemplated
hereby.
<PAGE>
7.2
Breach of Agreement.
The Purchaser shall not take any action which, if
--------------------
taken prior
to the Closing Date, would constitute a breach of this
Agreement.
7.3
Confidentiality.
The Purchaser shall,
and shall cause its principals,
----------------
officers and
other personnel and authorized representatives to,
hold in
confidence, and not
disclose to any other party without the Seller's prior
consent, all
information
received by it from
the Seller or its officers,
directors, employees,
agents, counsel and
auditors in connection with the
transactions
contemplated hereby
except as may be
required by applicable
law
or as otherwise contemplated herein.
7.4
Purchaser covenants
that in completing this transaction it has or will
comply with
any applicable bulk sale or transfer laws of the state
of
Georgia.
7.5
Purchaser covenants to pay immediately when due all attorneys' fees
and
costs incurred
on behalf of Seller, Purchaser and any successors and
assigns thereof, in
the ongoing litigation styled Elite Communications, et
al.
v. Wade Allan Clark, Aeon Technologies, LLC, Aeon Management Ltd.,
Wade
& Jennifer
Clark Irrevocable Trust, et al., In the
95h Judicial District
Court of Dallas County, Texas, referred to as Cause No. 05-12812.
ARTICLE VIII
OTHER AGREEMENTS
As
a condition to the Parties' obligation to
consummate the transactions
contemplated
hereby:
8.1
Employment.
Non-Com-petition
and Incentive Compensation
Agreements.
----------------------------------------------------------------------
Wade
Clark, and David Machovsky (collectively, the "MANAGERS") shall at
the
Closing, execute and
deliver the Employment, Non-Competition and Incentive
Compensation Agreements in the forms of EXHIBIT "I" and EXHIBIT "J"
hereto,
respectively (each
an "EMPLOYMENT AGREEMENT").
8.2
Further Assurances. Subject to the terms and conditions of this
--------------------
Agreement, each
of the Parties hereto
shall use its best efforts to take,
or
cause to be taken, all action, and to do, or cause to be
done, all
things necessary,
proper or advisable under applicable Regulations to
consummate and
make effective the transactions contemplated by this
Agreement. If
at any time after the Closing Date the Purchaser
shall
consider or be advised that any further deeds, assignments or
assurances in
law
or in any other things are necessary, desirable or
proper to vest,
perfect or confirm, of
record or otherwise, in the Purchaser, the title to
any
property or rights of any of the Seller
acquired or to be acquired by
reason of,
or as a result of, the
acquisition, the Seller agrees that the
Seller shall
execute and deliver all such proper deeds,
assignments and
assurances in law and do all things necessary, desirable or proper
to vest,
perfect or
confirm title to such property or rights
in the Purchaser and
otherwise to
carry out the purpose of this Agreement.
<PAGE>
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
Each
and every obligation of the Purchaser under
this Agreement shall be
subject to
the satisfaction, on or before the Closing Date, of each
of the
following conditions
unless waived in writing by the Purchaser:
9.1
Representations
and Warranties; Performance. The
representations and
----------------------------------------------
warranties of
the Seller contained in this Agreement
and all information
contained in
any exhibit, schedule
or attachment hereto or in any writing
delivered by, or on
behalf of, the Seller shall be true and correct in all
material respects
when made and shall be
true and correct in all material
respects on
the Closing Date as though then made, except as
expressly
provided herein.
The Seller shall have performed and complied in all
material respects with all agreements, covenants and conditions
required by
this
Agreement to be performed and complied with by them prior to
the
Closing Date.
The Seller shall have delivered to the Purchaser a
certificate (which
shall be addressed to the Purchaser), dated the Closing
Date, in the form of EXHIBIT "K" hereto, ("Seller's Certificate"),
certifying to
the foregoing.
9.2
Consents and Approvals. The Seller shall have obtained any and
all
-----------------------
material consents,
approvals, orders, qualifications, licenses, permits or
other authorizations,
required by all applicable Regulations,
Orders and
Contracts of
the Seller or binding on their respective properties
and
assets, with
respect to the execution, delivery and
performance of the
Agreement and
the consummation of the transactions contemplated
hereby,
including, without
limitation,
any consents required from any Bank or
Financial institution
utilized by Seller.
9.3
Opinion of the Seller's Counsel. The
Purchaser shall have received an
---------------------------------
opinion of
the Seller's outside
counsel addressed to the Purchaser, dated
the
Closing Date, in the form set forth on SCHEDULE 9.3.
9.4
No Material Adverse Change. There
shall have been no Material Adverse
---------------------------
Change to the Assets since the date of this Agreement, which
representation
shall be attested to in the Seller's Certificate.
9.5
No Proceeding or
Litigation. No preliminary or permanent injunction or
----------------------------
other Order,
decree or ruling issued by any Authority,
or any Regulation
promulgated or
enacted by any Authority shall be in effect,
which would
prevent the
consummation
of the transactions contemplated hereby.
9.6
Proceedings
and Documents. All proceedings in connection with the
----------------------------
transactions contemplated hereby and all documents and instruments
incident
to
such transactions shall be reasonably satisfactory in substance and
form
to
the Purchaser and the Purchaser's counsel, and the
Seller shall have
made
available to the Purchaser for examination the originals or
true,
complete and
correct copies of all records and
<PAGE>
documents relating
to the assets of the Seller which the Purchaser
may
reasonably request
in connection with said transaction.
9.7
Employment Agreements. The Seller shall have executed and delivered
the
----------------------
Employment
Agreements.
9.8
Other Documents. The Seller shall furnish the Purchaser with such
other
----------------
and
further documents and certificates as the Purchaser
shall reasonably
request to
evidence compliance with the conditions set forth in this
Agreement.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF THE SELLER
Each
and every obligation of the Seller under this Agreement shall
be
subject to
the satisfaction, on or before the Closing Date, of each
of the
following conditions
unless waived in writing by the Seller, as
applicable:
10.1
Representations
and Warranties;
Performance. The representations and
---------------------------------------------
warranties of the Purchaser contained in this Agreement and all
information
contained in
any exhibit, schedule
or attachment hereto shall be true and
correct in all material respects when made and shall be true and
correct in
all
material respects on the Closing Date as though then
made, except as
expressly provided
herein. The Purchaser shall have performed and complied
in
all material respects with all agreements, covenants and
conditions
required by this Agreement to be performed and complied with by it
prior to
the
Closing Date. An
officer of the Purchaser, shall have delivered to the
Seller a certificate, dated the Closing Date, in the
form of EXHIBIT "L"
hereto, certifying
to the foregoing.
10.2
Consents and
Approvals. The Purchaser shall have obtained any and all
-----------------------
material consents,
approvals,
subordinations,
orders, qualifications,
licenses, permits
or other authorizations with respect
to the execution,
delivery and
performance
of the Agreement and the consummation of the
transactions
contemplated
hereby.
10.3
Opinion of the
Purchaser's Counsel. The Seller shall have received an
-----------------------------------
opinion of
the Purchaser's
outside counsel addressed to the Seller, dated
the
Closing Date, in the form set forth on SCHEDULE 10.3.
10.4
No Proceeding or Litigation. No preliminary or permanent injunction
or
----------------------------
other Order,
decree or ruling issued by any Authority,
or any Regulation
promulgated or
enacted by any Authority shall be in effect,
which would
prevent the
consummation
of the transactions contemplated hereby.
10.5
Proceedings
and Documents. All proceedings in connection with
the
----------------------------
transactions contemplated hereby and all documents and instruments
incident
to
such transactions shall be reasonably satisfactory in substance and
form
to
the Seller and its
counsel, and the Purchaser shall have made available
to
the Seller for examination the
originals or true, complete and correct
copies of all records and documents relating to the business
<PAGE>
and
affairs of the Purchaser which the Seller may
reasonably request in
connection with
said transaction.
10.6
Secretary's Certificate. The Seller shall have received a
certificate,
------------------------
substantially in
the form of EXHIBIT "M" hereto, of the
secretary of the
Purchaser, as
to the charter and
bylaws of the Purchaser, the resolutions
adopted by
the directors and stockholders of the
Purchaser in connection
with
this Agreement and the incumbency of the Purchaser's officers.
10.7
Certificate of Good Standing. At the Closing, the Purchaser shall
have
-----------------------------
delivered to the Seller a certificate issued
by Georgia Secretary of State
evidencing the good
standing, with respect to both the conduct of business
and
the payment of all franchise taxes, of
the Purchaser as of a date not
more
than thirty (30) days prior to the Closing Date
10.8
Employment Agreements.
The Managers shall have executed and delivered
----------------------
the
Employment
Agreements.
10.9
Indemnification
Agreement.
The Purchaser shall have executed and
--------------------------
delivered the
Indemnification
Agreement.
10.10 Registration
Rights Agreement. The Purchaser shall have executed and
------------------------------
delivered the Registration Rights Agreement attached hereto as
EXHIBIT "H".
10.11 Other
Documents.
The Purchaser shall furnish the Seller
with such
-----------------
other and further documents and certificates including certificates of the
Purchaser's officers
and others as Seller
shall reasonably request to evidence
compliance with
the conditions set forth in this Agreement.
ARTICLE XI
CLOSING
11.1
Closing. Unless this Agreement shall have been terminated or
abandoned
--------
pursuant to
the provisions of ARTICLE XI, a closing of the
transactions
contemplated by
this Agreement (the "CLOSING") shall be
held on the 30th
day
of April, 2006, or on
such other mutually agreed to date (the "CLOSING
DATE").
11.2
Intervening Litigation. If, prior to the Closing Date, any
preliminary
-----------------------
or
permanent injunction or other Order issued by a court of competent
jurisdiction or
by any other Authority shall restrain or
prohibit this
Agreement or the consummation of the transactions contemplated
herein for a
period of fifteen (15) days or
