THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE
NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THERE0F UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Corporation:
Charys Holding Company, Inc.
Number of Shares:
862,069
Class of Stock:
Common Stock
Initial Exercise Price: $0.35 per
share
Issue Date:
August 1, 2005
Expiration Date:
July 31, 2012
THIS
WARRANT CERTIFIES THAT, for the agreed upon value of $1.00
and for
other good and valuable consideration, Venture Banking Group, a division
of
Greater Bay Bank NA. ("Holder") is entitled
to purchase the number of fully paid
and nonassessable shares of COMMON
Stock (the 'Shares") of the corporation (the
"Company") at the price per Share (the
"Warrant Price") all as set forth herein
and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions
and upon the terms and conditions set forth of this Warrant.
ARTICLE 1. EXERCISE.
--------
1.1 Method
of Exercise. Holder
may exercise this Warrant by delivering
-------------------
a duly executed Notice of Exercise in substantially the form attached as
Appendix I to the principal office of the
Company. Unless Holder is exercising
the conversion right set forth in
Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant
Price for the Shares being purchased.
1.2 Conversion
Right. In lieu of exercising this Warrant
as specified
-----------------
in Section 1.1, Holder may from time to time
convert this Warrant, in whole or
in part, into a number of Shares determined
by dividing (a) the aggregate fair
market value of the Shares or other
securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant
Price of such Shares by (b) the fair
market value of one Share, The fair market value of the Shares shall be
determined pursuant Section 1.4.
1.3 No Rights of Shareholder. This Warrant does
not entitle Holder to
--------------------------
any voting rights as a shareholder of
the Company prior to the exercise hereof.
1.4 Fair Market
Value. If the Shares are traded in a public market, the
-----------------
fair market value of the Shares shall be
the closing price of the Shares (or the
closing price of the Company's stock into which the Shares are
convertible)
reported for the business day immediately
before Holder delivers its Notice of
Exercise to the Company.
1.5 Delivery
of Certificate and New Warrant. Promptly after Holder
--------------------------------------------
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has
not been fully
exercised or converted and has not expired, a new Warrant
representing the
Shares not so acquired.
1.6 Replacement
of Warrants. On receipt of evidence reasonably
-------------------------
satisfactory to the Company of the loss, theft, destruction or
mutilation of
this Warrant and, in the case of loss, theft or
destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to
the Company
or, in the case of mutilation, or surrender
and cancellation of this Warrant,
the Company at its expense shall execute
and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 Repurchase on
Sale, Merger, or Consolidation of the Company.
-----------------------------------------------------------
1.7.1 "Acquisition".
For the purpose of this Warrant,
------------
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets (including intellectual property) of the
Company, or any reorganization, consolidation, or
merger of the Company where
the holders of the Company's
securities before the transaction beneficially own
less than 50% of the outstanding voting
securities of the surviving entity after
the transaction.
1.7.2 Assumption
of Warrant. Upon the closing of any
Acquisition
-----------------------
the successor entity shall assume the obligations of this Warrant,
and this
Warrant shall be exercisable for the same securities, cash, and
property as
would be payable for the Shares issuable upon exercise of the
unexercised
portion of this Warrant as if such Shares were
outstanding on the record date
for the Acquisition and subsequent
closing. The Warrant Price shall be adjusted
accordingly.
- 1 -
<PAGE>
1.7.3 Purchase Right.
At the election of Holder, the Company shall
--------------
purchase the unexercised portion of this Warrant for cash
upon the closing of
any Acquisition for an amount equal to (a) the fair market value of any
consideration that would have been received by Holder in
consideration of the
Shares had Holder exercised the
unexercised portion of this Warrant immediately
before the record date for determining
the shareholders entitled to participate
in the proceeds of the Acquisition,
less (b) the aggregate Warrant Price of the
Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS
TO THE SHARES.
----------------------------
2.1 Stock
Dividends,
Splits, Etc. If the Company declares or pays
a
-------------------------------
dividend on its common stock payable in common stock, or other
securities,
subdivides the outstanding common stock into a
greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder
shall
receive, without cost to Holder, the total number and kind of
securities to
which Holder would have been entitled had
Holder owned the Shares of record as
of the date the dividend or subdivision
occurred.
2.2
Reclassification,
Exchange or
Substitution.
Upon any
---------------------------------------------
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the
securities issuable upon exercise or
conversion of this Warrant, Holder shall be
entitled to receive, upon exercise
or conversion of this Warrant, the number and kind
of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification,
exchange, substitution, or
other event. The Company or its successor shall
promptly issue to Holder a new
Warrant for such new securities or other
property. The new Warrant shall provide
for adjustments which shall be as nearly
equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of
securities or properly
issuable upon exercise of the new Warrant. The provisions
of this Section 2.2
shall similarly apply to successive
reclassifications, exchanges, substitutions,
or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares
are
------------------------------------
combined or consolidated, by
reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be
proportionately increased.
2.4 No Impairment. The Company shall not, by amendment of its
--------------
Certificate of Incorporation or through a reorganization,
transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or
any other
voluntary action, avoid or seek to avoid
the observance or performance of any of
the terms to be observed or performed under this
Warrant
