August 15, 2006
Complete Tower Sources, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxx, XX 000000
Attn: Xxxx Xxxxxxxx
Xxxxxxxx Site Acq., Inc.
000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Re: Stock Purchase Agreement (the "CTSI Stock Purchase Agreement"), dated
June 20, 2006, by and among Ayin Holding Company Inc. ("Purchaser"), Complete
Tower Sources, Inc. ("CTSI"), and Xxxx X. Xxxxxxxx, sole shareholder of CTSI, as
amended by that certain letter agreement, dated June 20, 2006, by and among
Purchaser, Sellers, CTSI and Xxxxxxxx Site Acq., Inc. (the "First Letter
Agreement");
Stock Purchase Agreement (the "MSAI Stock Purchase Agreement"), dated
June 20, 2006, by and among Purchaser, Xxxxxxxx Site Acq., Inc. ("MSAI"), and
Xxxxxxx X. Xxxxxxxx, sole shareholder of MSAI, as amended by the First Letter
Agreement;
The foregoing agreements are referred to collectively as the "Purchase
Agreements." Xxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx are referred to collectively as
the "Sellers."
Ladies and Gentlemen:
This closing letter agreement is being delivered in connection with the
Purchase Agreements and sets forth the agreement of the parties on certain
matters related to the Purchase Agreements. Unless specifically amended by this
(i) closing letter agreement or (ii) the First Letter Agreement, the Purchase
Agreements remain unchanged and in full force and effect.
Accordingly, Purchaser and Sellers, each intending to be legally bound,
agree as follows:
I. CTSI Stock Purchase Agreement
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For purposes of this Section I, reference is made to the CTSI Stock
Purchase Agreement and terms not otherwise defined under this Section I shall
have the meaning ascribed thereto in the CTSI Stock Purchase Agreement.
1. Closing Date. The Closing Date for the transactions contemplated
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by the CTSI Stock Purchase Agreement shall be effective as of August 15, 2006
(the "Closing Date").
2. Closing Date Payment Notwithstanding anything contained in Sections
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2.02, 2.03, or 2.04 of the CTSI Stock Purchase Agreement to the contrary, the
parties acknowledge and agree that the Purchase Price Cash Component to be paid
on the Closing Date shall be an amount equal to five million dollars
($5,000,000) in cash (the "CTSI Closing Cash Deposit"), which payment shall be
non-refundable. The balance of the Purchase Price Cash Component payable to
Seller at Closing under the CTSI Stock
Purchase Agreement shall be payable by the issuance to Seller of a promissory
note from Charys Holding Company, Inc. ("Charys") and Purchaser in the form of
Exhibit A attached hereto (the "CTSI Closing Note"), subject to the adjustment
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set forth in Paragraph 4 herein. The CTSI Closing Note shall be paid in full,
and the Parent Common Stock due under Section 2.04 of the CTSI Stock Purchase
Agreement, shall be delivered to Seller, when Purchaser obtains third party
financing sufficient to satisfy the full amount due under the CTSI Closing Note,
which in no event shall be later than September 30, 2006 (the "Closing Notes
Payment Date"); provided, however, should Purchaser fail to obtain third party
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financing sufficient to satisfy the full amount due under the CTSI Closing Note
by the Closing Notes Payment Date, Purchaser shall have the right to extend the
Closing Notes Payment Date for up to two (2) consecutive periods of thirty (30)
days each (each 30-day period an "Extension Period" and, in the aggregate, the
"Extension Periods"), subject to a payment, upon exercise, of $725,000 to Seller
as consideration for each Extension Period exercised by Purchaser. Any such
extension payment shall be nonrefundable and in addition to the Purchase Price
contemplated by the CTSI Stock Purchase Agreement. If Purchaser exercises its
right to effect one or more Extension Period(s), the Closing Notes Payment Date
shall be deemed to have extended to the end of such Extension Period(s).
3. Accrued Bonus Payment to CTSI Employees. Notwithstanding anything
-----------------------------------------
contained in Section 2.05 of the CTSI Stock Purchase Agreement to the contrary
and subject to the terms above, the parties acknowledge and agree that the
amounts payable to the individuals set forth on Schedule 2.05 to the CTSI Stock
-------------
Purchase Agreement shall be delivered on the Closing Notes Payment Date to CTSI
by Charys or Purchaser, and paid by CTSI within five (5) days following the
Closing Notes Payment Date.
4. Post-Closing Liabilities Adjustment. Seller agrees that Purchaser
-------------------------------------
shall have the right to reduce the amount payable under the CTSI Closing Note to
the extent (i) obligations paid or otherwise satisfied by Purchaser are not
reflected in the Estimated Working Capital Adjustment pursuant to Section 2.03
of the CTSI Stock Purchase Agreement, (ii) are indemnifiable Purchaser Losses
under Section 10.01 of the CTSI Stock Purchase Agreement, or (iii) are not
reflected on Schedule 4.08, Schedule 4.11, or Schedule 6.11. Any such reduction
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of the CTSI Closing Note shall constitute an adjustment to the Purchase Price.
5. Waiver of Certain Closing Conditions. Notwithstanding anything
----------------------------------------
contained in Section 9.08 of the CTSI Stock Purchase Agreement to the contrary,
the parties acknowledge and agree that the obligation of the parties in
connection therewith shall be waived on the Closing Date, but acknowledge and
agree that such obligation shall have been performed prior to the Closing Notes
Payment Date; provided, however, the parties acknowledge and agree that Xxxxxx
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Xxxxxxxx'x employment and noncompetition agreement (the "Xxxxxx Xxxxxxxx
Employment Agreement") shall be executed contemporaneously herewith and be
deemed effective as of the Closing Date. The parties further agree that the
Xxxxxx Xxxxxxxx Employment and Noncompetition Agreement, at the election of
Xxxxxx Xxxxxxxx, shall be deemed null and void in the event the CTSI Closing
Note is not satisfied by the Closing Notes Payment Date.
6. Pre-Closing Notes Payment Date Operations of CTSI. CTSI shall not:
--------------------------------------------------
(i) make any expenditures beyond the normal operating expenses from the Closing
Date until the CTSI Closing Note is paid in full to Seller; and (ii) during that
period it shall not:
A. Make any declaration, set aside or payment of any dividends
or other distributions of assets (whether in cash, stock or
property);
B. Cause any material adverse change in its working capital
assets, liabilities, financial condition, business prospects or
relationships with any suppliers or customers;
C. Incur, assume or guarantee any liability or obligation other
than in the ordinary course of business;
D. Pay, discharge, satisfy or renew any claim, liability or
obligation other than in the ordinary course of business;
E. Cause any of its assets to be subject to any mortgage, lien,
security interest, restriction, charge or other encumbrance of
any kind;
F. Cancel or forgive any indebtedness or otherwise waive any
material claims or rights;
G. Sell, transfer or otherwise dispose of any of its assets
except in the ordinary course of business;
H. Make any single capital expenditure investment in excess of
$5,000.00;
I. Manage the working capital components, including cash,
receivables, other current assets, trade payables and other
current liabilities in a fashion consistent with past practice;
J. Pay, loan, advance, sell, transfer or lease any assets to
any employee, except for normal compensation involving salary and
benefits;
K. Issue or sell any of its capital stock or issue any warrant,
option or other right to purchase shares of its capital stock or
any securities convertible into its capital stock;
L. Enter into any material commitment or transaction other than
in the ordinary course of business, affecting the business; or
M. Agree in writing, or otherwise, to take any action described
in this section.
Sellers shall have the right to seek immediate injunctive relief in any court of
competent jurisdiction without posting a bond or other security if CTSI breaches
any of the foregoing restrictions. Notwithstanding the foregoing, CTSI may, for
the purpose of obtaining financing sufficient to consummate the transactions
contemplated herein and under the Purchase Agreements, enter into any
agreement(s) in connection with such financing requiring it to do any of the
acts contemplated under items C, E, and G above; provided, however, no pledge or
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conveyance of any of CTSI's assets or any obligation incurred by Purchaser set
forth in Items A through M above shall have any effect on the assets of CTSI
prior to the receipt of the financing and the payment of the outstanding balance
under the CTSI Closing Note.
7. Seller hereby releases the signature pages held in escrow by
Purchaser's counsel and delivered on May 25, 2006 to each of the following
documents executed in connection with the CTSI Stock Purchase Agreement: (i)
non-competition agreements of Seller; (ii) employment and non-competition
agreement of Xxxxxx Xxxxxxxx; and (iii) the Promissory Note in connection with
the CTSI Stock Purchase Agreement.
II. MSAI Stock Purchase Agreement
--------------------------------
For purposes of this Section II, reference is made to the MSAI Stock
Purchase Agreement and terms not otherwise defined under this Section II shall
have the meaning ascribed thereto in the MSAI Stock Purchase Agreement.
1. Closing Date. The date for closing the transactions contemplated
------------
by the MSAI Stock Purchase Agreement shall be the Closing Date.
2. Closing Date Payment Notwithstanding anything contained in Sections
---------------------
2.02, 2.03, or 2.04 of the MSAI Stock Purchase Agreement to the contrary, the
parties acknowledge and agree that the Purchase Price Cash Component to be paid
on the Closing Date shall be an amount equal to two million dollars ($2,000,000)
in cash (the "MSAI Closing Cash Deposit"), which payment shall be
non-refundable. The balance of the Purchase Price Cash Component payable to
Seller at Closing under the MSAI Stock Purchase Agreement, and the full amounts
payable under the Goodwill Purchase Agreement and Noncompetition Agreement,
shall be payable by the issuance to Seller of a single promissory note from
Charys and Purchaser in the form of Exhibit A attached hereto (the "MSAI Closing
---------
Note"), subject to the adjustment set forth in Paragraph 4 herein. The MSAI
Closing Note shall be paid in full, and the Parent Common Stock due under
Section 2.04 of the MSAI Stock Purchase Agreement, shall be delivered to Seller
on or before the Closing Notes Payment Date; provided, however, should Purchaser
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fail to obtain third party financing sufficient to satisfy the full amount due
under the MSAI Closing Note by the Closing Notes Payment Date, Purchaser shall
have the right to extend the Closing Notes Payment Date for up to two (2)
consecutive periods of thirty (30) days each (each 30-day period an "Extension
Period" and, in the aggregate, the "Extension Periods"), subject to a payment,
upon exercise, of $275,000 to Seller as consideration for each Extension Period
exercised by Purchaser. Any such extension payment shall be nonrefundable and in
addition to the Purchase Price contemplated by the MSAI Stock Purchase
Agreement. If Purchaser exercises its right to effect one or more Extension
Period(s), the Closing Notes Payment Date shall be deemed to have extended to
the end of such Extension Period(s).
3. MSAI Contractors Payment. Notwithstanding anything contained in
--------------------------
Section 2.02(b) of the MSAI Stock Purchase Agreement to the contrary and subject
to the terms above, the parties acknowledge and agree that the $787,500 cash
payment due to the MSAI Contractors shall be delivered on the Closing Notes
Payment Date to MSAI by Charys or Purchaser, and paid in full by MSAI to those
persons within five (5) days following the Closing Notes Payment Date in the
amounts set forth on Schedule 2.02 to the MSAI Stock Purchase Agreement.
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4. Post-Closing Liabilities Adjustment. Seller agrees that Purchaser
-------------------------------------
shall have the right to reduce the amount payable under the MSAI Closing Note to
the extent (i) any obligations paid or otherwise satisfied by Purchaser are not
reflected in the Estimated Working Capital Adjustment pursuant to Section 2.03
of the MSAI Stock Purchase Agreement, or (ii) are indemnifiable Purchaser Losses
under Section 10.01 of the MSAI Stock Purchase Agreement. Any such reduction of
the MSAI Closing Note shall constitute an adjustment to the Purchase Price.
5. Employment Agreements. The parties acknowledge and agree that Xxxx
----------------------
Xxxxxxxx'x and Xxxxxxx Xxxxxxxx'x employment and noncompetition agreements (the
"MSAI Employment and Noncompetition Agreements") shall be executed
contemporaneously herewith and be deemed effective as of the Closing Date. The
parties further agree that MSAI Employment and Noncompetition Agreements, at the
election of Xxxx Xxxxxxxx and Xxxx Xxxxxxxx, shall be deemed null and void in
the event the MSAI Closing Note is not satisfied by the Closing Notes Payment
Date.
6. Pre-Closing Notes Payment Date Operations of MSAI. MSAI shall not:
--------------------------------------------------
(i) make any expenditures beyond the normal operating expenses from the Closing
Date until the MSAI Closing Note is paid in full to Seller; and (ii) during that
period it shall not:
A. Make any declaration, set aside or payment of any dividends
or other distributions of assets (whether in cash, stock or
property);
B. Cause any material adverse change in its working capital
assets, liabilities, financial condition, business prospects or
relationships with any suppliers or customers;
C. Incur, assume or guarantee any liability or obligation other
than in the ordinary course of business;
D. Pay, discharge, satisfy or renew any claim, liability or
obligation other than in the ordinary course of business;
E. Cause any of its assets to be subject to any mortgage, lien,
security interest, restriction, charge or other encumbrance of
any kind;
F. Cancel or forgive any indebtedness or otherwise waive any
material claims or rights;
G. Sell, transfer or otherwise dispose of any of its assets
except in the ordinary course of business;
H. Make any single capital expenditure investment in excess of
$5,000.00;
I. Manage the working capital components, including cash,
receivables, other current assets, trade payables and other
current liabilities in a fashion consistent with past practice;
J. Pay, loan, advance, sell, transfer or lease any assets to
any employee, except for normal compensation involving salary
and benefits;
K. Issue or sell any of its capital stock or issue any warrant,
option or other right to purchase shares of its capital stock
or any securities convertible into its capital stock;
L. Enter into any material commitment or transaction other than
in the ordinary course of business, affecting the business; or
M. Agree in writing, or otherwise, to take any action described
in this section.
Sellers shall have the right to seek immediate injunctive relief in any court of
competent jurisdiction without posting a bond or other security if MSAI breaches
any of the foregoing restrictions. Notwithstanding the foregoing, MSAI may, for
the purpose of obtaining financing sufficient to consummate the transactions
contemplated herein and under the Purchase Agreements, enter into any
agreement(s) in connection with such financing requiring it to do any of the
acts contemplated under items C, E, and G above; provided, however, no pledge or
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conveyance of any of MSAI's assets or any obligation incurred by Purchaser set
forth in Items A through M above shall have any effect on the assets of MSAI
prior to the receipt of the financing and the payment of the outstanding balance
under the MSAI Closing Note.
7. Seller hereby releases the signature pages held in escrow by
Purchaser's counsel and delivered on May 25, 2006 to each of the following
documents executed in connection with the MSAI Stock Purchase Agreement: (i)
employment and non-competition agreements of Sellers; (ii) Goodwill Purchase
Agreement; (iii) the promissory note in connection with the Goodwill Purchase
Agreement; (iv) the Promissory Note; and (iii) the Promissory Note in connection
with the MSAI Stock Purchase Agreement.
III. General
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If you are in agreement with the foregoing, please so indicate by signing
below. Except as expressly modified by this letter agreement, the Purchase
Agreements shall remain in full force and effect on the terms and conditions set
forth therein.
Sellers further acknowledge and agree that Sellers have carefully read this
closing letter agreement, that Sellers have consulted with Sellers' legal
counsel to the extent Sellers have wished to do so, and that Sellers understand
the terms and conditions of the Purchase Agreements and amendments to such
Purchase Agreements contained herein.
This closing letter agreement may be executed in counterparts.
[SIGNATURES ON FOLLOWING PAGE]
Sincerely,
AYIN HOLDING COMPANY INC.,
as Purchaser
By:
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Xxxxx Xxxxxx, President
CHARYS HOLDING COMPANY, INC.,
as Parent
By:
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Xxxxx X. Xxx, Xx., Chief Executive Officer
Agreed and Accepted this August 15, 2006:
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COMPLETE TOWER SOURCES, INC. CTSI SELLER:
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By: Xxxx X. Xxxxxxxx
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Name:
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Title:
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XXXXXXXX SITE ACQ., INC. MSAI SELLER:
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By: Xxxxxxx X. Xxxxxxxx
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Name:
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Title:
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EXHIBIT A
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CTSI AND MSAI CLOSING NOTES
See attached.
