JOINT VENTURE AGREEMENT
THIS AGREEMENT, is made this 3rd day of June, 2004, effective
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________________, 2004 (the "Effective Date") by and between Ruby Belle, LLC, a
Nevada limited liability company, ("Ruby Belle"), Xxx X. Xxxxxxx, a resident of
North Carolina ("Xxxxxxx"), and Charys Holding Company, Inc., a Delaware
corporation ("Charys") (hereinafter collectively referred to as the "Venturers")
who hereby agree to form a venture to develop, operate, and/or sell certain real
estate or interests therein owned by Realm National Insurance Company, a New
York corporation ("Realm") and located in North Carolina on the terms and
conditions herein set forth.
Article I
Name
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The name of the venture shall be 3DN Real Estate Development Joint Venture
(the "Venture").
Article II
Purpose and Duration
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The purpose of the Venture is to oversee and administer the development,
marketing, and/or selling of certain real estate or interests therein owned by
Realm and located in North Carolina (the "Property"), in accordance with the
Development and Marketing Plan prepared by TBD and agreed to by the Venturers
and Realm (the "Plan"). The Venture may not engage in any business or devote
itself to any objective other than that specified herein or in the Plan, unless
reasonably incidental thereto, or unless mutually agreed upon in writing by the
Venturers. Except as expressly provided herein to the contrary, the rights and
obligations of the Venturers shall be governed by North Carolina law. The
Venture shall be a partnership only for the purposes specified herein and this
Agreement shall not be deemed to create a general partnership between the
Venturers with respect to any activities whatsoever other than the activities
within the business purposes of the Venture as
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specified herein.
The Venture shall commence as of the Effective Date, and shall continue
until it is dissolved or liquidated as provided in this Agreement.
Article III
Location
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The principal office of the partnership shall be 0000 Xxxxxxxxx Xxxxxx
Xxxx, Xxxxx X000, Xxxxxxx, Xxxxxxx 00000. Such office location may be changed,
and additional offices may be established by the agreement of the parties.
Article IV
Formation
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The Venturers agree that the determination of their respective interests in
the Venture have been determined by consideration of the interests of each in
relation to the acquisition of certain properties by Realm, as follows:
(a) Charys hereby agrees to accept its interest in exchange for its
commitment to develop the properties at its cost and expense.
(b) Ruby Belle and Xxxxxxx agree to accept their respective interests to
facilitate payments on certain unsecured non-recourse Flagship Holdings, Inc.
Note(s) in accordance with the provisions of the Venture Agreement. The Flagship
Holdings, Inc. Note(s) arose out of the previous sale of the Property by Ruby
Belle and/or Xxxxxxx to Flagship Holdings, Inc. Nothing herein shall make such
Note(s) an obligation of the Venture.
Article V
Capital
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(a) Initial Capital Contribution. The initial capital contribution of
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each Venturer to the Venture shall be the cash, equipment, supplies and other
materials set forth opposite each respective
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Venturer's name as set forth in Exhibit "A", which is attached hereto and
incorporated herein for all purposes, and in exchange therefore, each Venturer
shall receive the percentage interest (the "Percentage Interest") in the Venture
specified as follows:
Name Percentage Interest
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Ruby Belle 35%
Xxxxxxx 35%
Charys 30%
(b) Subsequent Capital Contributions. The Venturers may, by mutual
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agreement, make additional capital contributions as are needed by the Venture,
in proportion to each Venturer's Percentage Interest. In the event the Venturers
agree to make additional capital contributions pursuant to the terms hereof, and
unless otherwise agreed to in writing by the Venturers, any disproportionate
advance of capital made by a Venturer shall be considered a loan to the Venture,
shall bear interest at the rate of nine (9%) percent per annum and shall be
repaid on such terms as mutually agreed upon by the Venturers.
(c) Capital Account. A separate capital account shall be shown and
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maintained for each Venturer. No Venturer shall withdraw any portion of the
capital contribution to the Venture except as provided in this Agreement.
(d) Venture Property. All property transferred by the Venturers to
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the Venture as contributions to capital and any other property subsequently
acquired, by purchase or otherwise, on account of the Venture shall be the
property of the Venture.
(e) Interest on Capital Contributions. Except as otherwise provided by
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this Agreement, no Venturer shall receive nor shall any Venturer be entitled to
receive any interest on its contribution of capital to the Venture, or on any
subsequent contributions of capital.
(f) Loans. In the event additional funds are required by the Venture,
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the Venture shall
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borrow such necessary funds from such parties and upon such terms and conditions
as are approved by each Venturer. In the event the Venture obtains a loan from
any Venturer pursuant to the terms of this Agreement, such loan shall bear
interest at the rate of nine (9%) percent per annum.
Article VI
Distributions
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(a) Proceeds of Sales. The Venturers agree that as each separate
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parcel/lot of the Property is sold the proceeds will be applied as follows:
first to the basis of Realm in all the developed or to be developed Properties;
secondly, to any costs of Realm relating to the sale transaction; and thirdly to
the incurred to date cost of development of all properties pursuant to the
Development Agreement with Charys with the balance of any proceeds being Net
Income.
(b) Net Income. Net Income shall be distributed to the Venturers in
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accordance with the Percentage Interest.
(c) Method of Distribution. Ruby Belle and Xxxxxxx hereby agree that up to
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50% of the available distribution for them may, at the option of Charys, be made
in Charys stock as payment on the Flagship Holdings, Inc. unsecured Promissory
Note(s) (as a result of their previous sale of the Property to Flagship
Holdings, Inc.). Upon the exercise by Charys of its option, the amount otherwise
available for distribution to Ruby Belle or Xxxxxxx shall be paid to Charys in
exchange for the stock issued to Ruby Belle or Xxxxxxx. The shares of Common
Stock of Charys shall be initially valued at $4.00 per share. Any shares of
Charys issued to Ruby Belle shall carry certain rights as set forth in the
Registration Rights Agreement, attached hereto as Exhibit "B" and incorporated
herein.
Article VII
Management and Operation of Venture Business
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(a) Equal Management Rights. Unless specifically provided otherwise
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herein, the overall management and control of the Venture shall be vested in the
Venturers, and each Venturer shall have equal rights in the management of the
Venturer's business. All decisions shall be made by the mutual agreement of the
Venturers, except as otherwise specified herein. In the event a Venturer fails
to contribute funds it had agreed to contribute pursuant to Article V(b), then
the defaulting Venturer's consent or approval to any action taken by the Venture
under this Agreement is not required until such default is cured.
(b) Board of Directors. By resolution adopted by the Venturers, the
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Venturers shall establish a Board of Directors which shall consist of three (3)
representatives, one (1) appointed by Ruby Belle and Xxxxxxx, one (1) by Charys,
and one (1) by Realm (the "Board"). The Board, to the extent provided in such
resolution, or subsequent resolutions adopted by the Venture from time to tune,
will be responsible for establishing marketing and operating policies and
protocols for the business of the Venture, and such other duties and powers as
set forth in the resolutions. A member serving on the Board shall hold office at
the pleasure of the entity appointing said member. Any member may be removed by
the entity appointing the same with or without cause, and the entity shall
thereafter reappoint his successor. The majority vote of the members shall be
required to constitute the act of the Board. The Board may appoint other members
who shall only be advisory members of the Board and shall not have voting
privileges on any matter before the Board. The Board may adopt rules for its own
government, so long as such rules are not inconsistent with the provisions of
this Agreement, or as is otherwise specified by the Venturers.
(c) Managing Venturer. The day to day business affairs of the Venture
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shall be managed by the Managing Venturer. Xxx Xxxxxx shall serve as the
Managing Venturer of the Venture, and accordingly, shall implement or cause to
be implemented the decisions approved by the Board and the Venturers, and
otherwise administer the day-to-day affairs of the Venture, pursuant to the
terms and conditions of an Administrative Management Agreement (the "Management
Agreement"), to
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be entered into by the Venture and Xxx Xxxxxx, wherein he will be paid for his
management services in accordance with a provision for a yearly consulting fee
(inclusive of his costs) of $120,000 and an incentive compensation plan to be
shared with the Marketing Manager of up to 10% of the Net Income of the Joint
Venture operations.
(d) Marketing Management. Marketing pursuant to the Plan shall be
---------------------
managed by the Marketing Manager. Xxx Xxxxxxx shall serve as the Marketing
Manager of the Venture, and accordingly, shall implement or cause to be
implemented the decisions approved by the Board and the Venturers, and otherwise
administer Marketing pursuant to the Plan on a day-to-day basis for the Venture,
pursuant to the terms and conditions of a Marketing Agreement (the "Marketing
Agreement"), to be entered into by the Venture and Xxx Xxxxxxx, wherein he will
be paid for his management services in accordance with a provision for a yearly
consulting fee (inclusive of his costs) of $120,000 and an incentive
compensation plan to be shared with the Managing Venturer of up to 10% of the
Net Income of the Joint Venture operations.
(e) Development Agreement. The development of the Property shall be
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conducted by Charys at its cost and expense pursuant to a Development Agreement,
to be entered into among the Venture, Charys and Realm.
(f) Scope of Authority; Indemnification. Except as otherwise
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expressly and specifically provided in this Agreement, none of the Venturers
shall have any authority to act for, or to assume any obligations or
responsibilities on behalf of the other Venturer or the Venture. Each of the
Venturers agrees that such Venturer will not, without the advance written
consent of the other Venturer, take any action on behalf of or in the name of
the Venture, or enter into any commitment or obligation binding upon the
Venture, except for: (i) actions expressly provided for in this Agreement; or
(ii) actions authorized by the Venturers in the manner set forth herein. Each
Venturer agrees to, and does hereby, indemnify and hold harmless the Venture and
the other Venturer and their respective affiliates, agents, employees,
shareholders, trustees, directors and
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officers, from and against any and all losses, costs, damages and expenses
(including reasonable attorney's fees) relating thereto, arising directly or
indirectly, in whole or in part, out of any breach of the foregoing provisions
by such Venturer or its affiliates, agents, employees, shareholders, trustees,
directors and officers. (Notwithstanding anything herein to the contrary, no
Venturer, including the Managing Venturer, shall, without the consent of the
other Venturers, do any of the actions set forth in Article XII below.)
(g) Devotion to Venture. The Venturers shall devote such time, attention
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and influence to the affairs of the Venture in order to meet their respective
duties contemplated by this Agreement.
(h) Outside Activities. No Venturer (including its owners or principals),
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during the continuance of the Venture, shall within twenty (20) miles, own,
market, lease or operate, directly or indirectly, a real estate ownership,
development, or sales business other than with respect to certain properties
identified in Exhibit "F" attached hereto and incorporated herein. Except as
otherwise provided herein, this Agreement shall not be deemed in any way or
manner to prohibit or restrict the right or freedom of any Venturer separately
or as a separate entity apart from the Venture to conduct any business or
activity whatsoever without any obligation or accountability to the Venture or
to the other Venturer, even if such business or activity competes with the
business of the Venture.
Article VIII
Fees and Compensation
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(a) Fees Charged. Fees to be charged for operation of the Venture's
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business shall be established by the Board; provided, however, that each
Venturer hereby acknowledges and agrees that it is the intention of the Venture
to further the purposes of the Venture. Accordingly, the parties agree that the
Venture, including the determination of fees, shall be operated in accordance
with applicable North Carolina rules and regulations and shall further the
purposes for which the Venture is established.
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(b) Accounting for Fees and Compensation Received. Each Venturer shall
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account to the Venture for all fees and compensation received by it and
attributable to the business of the Venture.
(c) Compensation to Venturers. No individual owner or principal of a
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Venturer shall receive any salary for services rendered to the Venture;
provided, however, the Managing Venturer shall be paid for its management
services in accordance with the Administrative Management Agreement approved by
the Venturers and the Marketing Manager shall be paid for its management
services in accordance with the Marketing Management Agreement approved by the
Venturers.
(d) Reimbursement of Expenses. No Venturer shall be entitled to
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reimbursement from the Venture for expenses paid or liabilities incurred by it
in the ordinary course of its agreements to conduct the Venture business or the
preservation of Venture business or property.
(e) No Partition; No Dissolution. Each Venturer hereby irrevocably waives
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the right to partition the property owned by the Venture or the Venture, and
agrees not to seek partition at any time. Further, each Venturer irrevocably
waives the right to dissolve the Venture and agrees not to seek the dissolution
in the winding up of the Venture, except as provided herein.
Article IX
Bank Accounts
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All funds of the Venture shall be deposited in such financial institutions
approved by the Venturers and all withdrawals therefrom may be made upon checks
signed by individuals approved in writing by the Venture.
Article X
Allocation of Profit, Loss and Distributions
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All profits and losses of the Venture, including all items of income, gain,
expense, loss and deduction, as well as all credits for tax purposes, shall be
allocated, credited and charged for all purposes to each Venturer in proportion
to each Venturer's Percentage Interest. All net income generated by the business
of the Venture shall be retained and used solely for the ongoing business
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of the Venture, including capital improvements.
Article XI
Records and Accounts
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(a) Method of Accounting. All accounts of the Venture shall be kept on
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an accrual basis. All matters of accounting for which there is no provision in
this Agreement are to be governed by generally accepted methods of accounting.
(b) Fiscal Year. The fiscal year of the Venture shall end of the last day
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of December of each year.
(c) Place Where Xxxxx and Records are to be Kept. The Venture books of
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account, and all securities, papers, writings and records of the Venture shall
be kept at the principal place of business at 0000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx
X000 Xxxxxxx, Xxxxxxx, or in such other place as the business shall be carried
on. Each Venturer, or its designee, shall have the right during usual business
hours to inspect and make copies of the books, records and accounts of the
Venture. Such Venturer shall bear all expenses incurred in any examination,
including costs of reproduction, made at its request.
(d) Capital Accounts. A capital account shall be maintained on the
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Venture books for each Venturer. Such account shall be credited with that
Venturer's contributions to the capital of the Venture and allocable share of
profits and debited with the Venturer's allocable share of losses and
distributions, if any.
(e) Quarterly Statements. At the end of each quarter, the books shall be
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balanced and an operating statement shall be prepared and made available to each
Venturer showing the results of the operations of the Venture during the
preceding month.
(f) Annual Accounting. The Venture books shall be closed at the end of
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each fiscal year, and statements showing the results of operation prepared and
supplied, to each Venturer. Such statements shall be prepared and audited by a
certified public accountant or an accounting
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firm agreeable to each Venturer. When approved in writing by each Venturer, the
annual statements shall be deemed final and binding, except for manifest errors
discovered prior to the end of the next fiscal year.
(g) Meetings. Any Venturer may call a meeting to be held at the principal
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office of the Venture at any time after the giving of ten (10) working days'
notice to the other Venturer. A Venturer may waive notice of or attendance at
any meeting of the Venturers, and may attend by telephone or any other
electronic communication device or may execute a signed, written consent. For
purposes of voting on Venture matters, each Venturer shall be entitled to one
vote. Any action which may be taken at a meeting of the Venturers may be taken
without a meeting, if a consent in writing setting forth the action so taken
shall be signed by the Venturers entitled to vote with respect to the subject
matter thereof and such consent shall have the same force and effect as a vote
of the Venturers. Any such signed consent, or a signed counterpart thereof,
shall be placed in the records of the Venture.
Article XII
Limitations on Rights and Powers of Venturers
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No Venturer shall, without the written consent of the other Venturers, or
which is otherwise approved by the Venturers in accordance with this Agreement:
(a) Borrow money in the name of the Venture for Venture purposes or utilize
collateral owned by the Venture as security for such loans;
(b) Compromise or otherwise settle claims or assign, transfer, pledge,
compromise, or release any of the claims or debts due to the Venture except on
payment in full;
(c) Transfer Venture assets, or make, execute, or deliver:
(1) any assigned for the benefit of creditors;
(2) any negotiable instrument, bond, confession or judgment,
guaranty, indemnity bond, or surety bond; or
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(3) any contract to sell, xxxx of sale, deed, mortgage, or lease
relating to any substantial part of the Venture assets or its interest therein;
(d) Dispose of the goodwill of the Venture;
(e) Do any other act which would make it impossible to carry on the
ordinary business of the Venture;
(f) Confess a judgment;
(g) Submit a Venture claim or liability to arbitration; or
(h) Make any purchases in excess of One Thousand and 00/100 Dollars
($1,000.00).
Article XIII
Expulsion From Venture
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(a) Grounds for Expulsion. The following grounds shall constitute a
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basis for the Venturers to expel a Venturer:
(1) Failure to Remain in Good Standing. If a Venturer fails to
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remain in good standing with the office of the Secretary of State where formed
or incorporated for a period which exceeds sixty (60) days;
(2) Misconduct. If any Venturer engages in misconduct in violation
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of federal or state law;
(3) Insolvency or Bankruptcy If any Venturer becomes insolvent,
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makes an assignment for the benefit of creditors, is declared a bankrupt, or if
its assets are administered in any type of creditors proceeding.
(4) Breach. If a Venturer breaches this Agreement, including,
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without limitation, the breach of the terms and conditions of any agreement with
the Venture (the "Defaulting Venturer"), the other Venturers (the
"Non-defaulting Venturers") shall have the right to give the Defaulting Venturer
a notice of default ("Notice of Default"). The Notice of Default shall set forth
the nature of the obligation that the Defaulting Venturer has not performed. If
a Defaulting
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Venturer does not remedy its default within thirty (30) days from receipt of the
Notice of Default, the Defaulting Venturer shall be subject to being expelled
upon compliance with the notice provisions as set forth in subsection (b) below.
(b) Notice of Expulsion. If grounds for expulsion exist, notice of
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expulsion shall be given to the Venturer subject to being expelled, such
expulsion to be effective fifteen (15) days after the date of the notice. The
notice shall briefly state the grounds for expulsion.
(c) Voluntary Withdrawal Without Consent. In the event a Venturer
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dissolves or withdraws from the Venture without the written consent of the other
Venturers, or without complying with Article XIV or otherwise causes a
dissolution of the Venture in violation of this Agreement, the Venturer shall be
deemed to have been expelled from the Venture as of the date of withdrawal, and
the provisions of Section (d) below shall apply.
(d) Purchase of Interest. In the event a Venturer is expelled pursuant
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to the provisions hereof, the other Venturers shall have thirty (30) days after
the effective date of the expulsion, by notice to the expelled Venturer, to
elect to purchase the expelled Venturer's Percentage Interest, with the purchase
to be effective on the effective date of the expulsion of the Venturer. The
terms and conditions of the purchase shall be at the price and on the terms
provided in Article XIV of this Agreement. If the remaining Venturers fail to
elect to purchase the expelled Venturer's Percentage Interest within the
appropriate time period, the Venture shall be liquidated as provided in Article
XVI The expelled Venturer shall be obligated to sell, and the other Venturers
shall be obligated to purchase the expelled Venturer's Percentage Interest in
the Venture, at the price and on the terms provided in Article XIV of this
Agreement.
Article XIV
Withdrawal of Venturer
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(a) Voluntary Withdrawal. A Venturer may withdraw from the Venture by
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giving
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ninety (90) days advance written notice to the other Venturers of its intent to
withdraw from the Venture, which withdrawal shall become effective at the end of
the calendar month following such ninety (90) day period. If a Venturer
withdraws from the Venture pursuant to the terms thereof, the other Venturers
shall have thirty (30) days after the effective date of the withdrawal, by
notice to the withdrawing Venturer, to elect to purchase the withdrawing
Venturer's Percentage Interest, the purchase to be effective on the effective
date of the withdrawal of the Venturer. The terms and conditions of the purchase
of the withdrawing Venturer's Percentage Interest shall be at the price and on
the terms provided in this Article XIV below. If the non-withdrawing Venturers
fail to elect to purchase the withdrawing Venturer's Percentage Interest within
the appropriate time period, the Venture shall be liquidated as provided in
Article XVI.
(b) Valuation of Venturer's Percentage Interest. For purposes of Articles
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XIII and XIV, the value of the Percentage Interest of a Venturer withdrawing
from the Venture, either due to expulsion or by voluntary withdrawal pursuant to
the provisions set forth above, shall be computed by (the "Purchase Price"):
(1) adding the totals of
(i) its capital account, and
(ii) any other amounts owed to it by the Venture, and
(2) subtracting from the sum of the above totals any amount owed by
it to the Venture.
(c) Payment. Within sixty (60) days after (i) the effective date of a
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Venturer's expulsion pursuant to Article XIII; or (ii) receipt by the selling
Venturer of the other Venturers' election to purchase such Venturer's Percentage
Interest pursuant to the provisions of Article XIV(a), the purchasing Venturers
shall schedule and hold a closing (the "Closing"), which shall be held at the
offices of the Venture, and at such closing the purchasing Venturers shall
purchase the selling Venturer's Percentage Interest by paying to him twenty-five
(25%) percent of the Purchase
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Price in cash, and the balance of the Purchase Price in twelve (12) equal
principal installments over a period of one (1) year plus interest on the unpaid
balance at the rate of nine percent (9%) per annum from the date of closing. At
Closing, the selling Venturer shall deliver to the purchasing Venturers a duly
executed instrument of transfer and assignment, transferring and assigning good
and marketable title to the Percentage Interest in the Venture to the purchasing
Venturers, and the purchasing Venturers shall deliver a promissory note to the
Selling Venturer which incorporates the terms of this section and such other
terms and conditions which are agreed to by the parties hereto.
(d) Assumption of Venture Obligation. In the event of a purchase of a
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Venturer's Percentage Interest pursuant to the terms hereof, the purchasing
Venturers agree to save the selling Venturer harmless from all obligations of
the Venture, past and future, except for any claims against the Venture based
upon mistakes or defalcations of the selling Venturer.
(e) Disposition of Records and Venture File. All Venture records and
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files, including client files and records, shall be deemed assets of and shall
remain with the Venture. The remaining Venturers may on request deliver certain
files to a selling Venturer or permit it to make copies or to examine the files
relating to Venture business so long as such does not offend any confidentiality
agreement. The selling Venturer shall be entitled to the files and records
relating to its personal matters.
(f) Venture Name. The parties acknowledge and agree that Charys is the
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owner of the Venture name and Charys is authorized to register the Venture name
with the United States Department of Commerce/Patent and Trademark Office and
the Secretaries of State of the States of Georgia and North Carolina. Upon the
dissolution of the Venture, howsoever caused, Charys shall retain the exclusive
ownership of the Venture name and shall immediately discontinue use of such
name.
(g) Examination of Venture Books and Files by Withdrawn Venturer. A
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withdrawn Venturer, or its authorized representative, shall have the right to
examine the books and records of
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the Venture for a period of two (2) months after the effective date of its
withdrawal for the purpose of verifying the amount it is to receive for its
Percentage Interest in the Venture under this Article.
Article XV
Restrictions on Transfer
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Except as specifically provided in this Article, no Venturer may sell,
assign, transfer, encumber or otherwise dispose of its Percentage Interest or
any other interest in the Venture, or Venture property or income, and any such
prohibited transfer, if made, shall be void and without force and effect and
shall not be binding on the Venturer or the other Venturer. The terms and
provisions of this Joint Venture shall be subordinate to the terms and
provisions of the mortgage given as security for such loans.
Article XVI
Liquidation of the Venture
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(a) Liquidation by Agreement. The Venture may be dissolved and
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liquidated by agreement at any tune by the unanimous agreement of the Venturers.
(b) Liquidation After Failure to Purchase. If the Venturers fail to elect
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to purchase the interest of a Venturer who has been expelled or who has given
notice to withdraw from the Venture pursuant to the terms of Article XIV, the
affairs of the Venture shall be wound up and liquidated forthwith as provided in
paragraph (c) of this Article.
(c) Liquidation Procedure. If, for any reason, the affairs of the Venture
----------------------
are to be wound up and liquidated, the procedure shall be as follows:
(1) Pending Matters. All matters in progress shall be completed,
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or their completion assumed by agreement between the Venturers with the consent
of third-parties, if such consent is appropriate or necessary.
(2) Application of Assets. The Venturers shall proceed to collect
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the Venture assets which shall first be used to pay or provide for all debts of
the Venture (other than loans or
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advances that may have been made by any of the Venturers to the Venture).
Thereafter, the assets (or proceeds therefrom) shall be applied in the following
order:
(i) to the establishment of any reserves which the Venturers may
deem necessary for any contingent or unforeseen liabilities or obligations of
the Venture or of the Venturers arising out of or in connection with the
Venture; provided, however, that any such reserves shall be paid over to an
escrow agent to be held by such agent for a reasonable period for the purpose of
disbursing such reserves in payment of any of the aforesaid contingencies and at
the expiration of such period to distribute the balance thereafter remaining in
the manner hereinafter provided;
(ii) to the Venturers in amounts equal to and in reduction (down
to a zero balance) of the balances in their existing capital account; and
(iv) to the Venturers in amounts equal to their Percentage
Interest. (3) In the event of a termination of the Venture, following the
application and distribution by the Venture of all then available cash or
property as provided above, any Venturer than having a deficit or negative
balance in his capital account shall contribute in cash to the capital of the
Venture the amount required to increase such Venture's capital account as of
such date to zero. All amounts so contributed to the capital account of the
Venture shall be distributed by the Venture in the manner, and in the order of
priority, set forth under this Article XVI.
(d) Disposition of Real Estate Records and Files After Liquidation. After
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liquidation of the Venture, the possession of all real estate records and files
shall be maintained by Charys for retention and storage; provided, however, if
allowable by law, Realm shall have access to such records and files during
business hours for the purpose of inspection and copying, at the expense of
Realm in connection with any pending litigation against Realm involving such
information, or for any other purpose agreed to by the parties.
Article XVII
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Notice To Venturers
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All notices provided in this Agreement shall be in writing and shall be
sufficient if sent by registered or certified mail to the last known address of
the Venturer to whom such notice is to be given.
Article XVIII
Acts to Make Agreement Effective
--------------------------------
The Venturers agree that they will execute any further instruments, and
that they will perform any acts that are or may become necessary to effectuate
and to carry on the Venture created by this Agreement.
Article IX
Construction: Definitions
-------------------------
Unless the context in which a word or phrase is used is to the contrary,
the terms used in this Agreement are defined as follows:
(a) "As the Venturers may agree" and "otherwise agreed" mean by unanimous
decision of the Venturers.
(b) "Month" means calendar month.
(c) "Income" and "losses" means net income and net losses as determined in
accordance with generally accepted accounting practices.
Article XX
Miscellaneous
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(a) Agreement. This Agreement may be amended on by written agreement,
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signed by both of the Venturers.
(b) Governing Law. This Agreement shall be interpreted, construed and
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enforced in accordance with the laws of the State of Georgia.
(c) Entire Agreement. This Agreement contains the entire agreement
-----------------
between the
17
parties hereto relative to the formation and operation of the Venture, and this
Agreement supersedes any and all prior negotiations, understandings or
agreements in regard thereto.
(d) Waiver. No consent or waiver, express or implied, by any Venturer to
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or of any breach or default in the performance of any other Venturer of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other Venturer of
the same or any other obligations of such Venturer hereunder. Failure on the
part of any Venturer to complain of any act or failure to act of any other
Venturer or to declare such other Venturer in default, irrespective of how long
such failure continues, shall not constitute a waiver of such Venturer's rights
hereunder.
(e) Severability. In the event any provision of this Agreement or the
------------
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
(f) Binding Agreement. Subject to the restrictions on transfers and
------------------
encumbrances set forth herein, this Agreement shall inure to the benefit of and
be binding upon the undersigned Venturers and their respective successors and
assigns. Whenever in this Agreement a reference to any Venturer is made, such
reference shall be deemed to include a reference to the successors and assigns
of such Venture.
(g) Time of Essence. Time is of the essence of this Agreement.
-----------------
(h) Attorney's Fees. In the event of a dispute between the Venturers,
----------------
which results in litigation, the prevailing party shall be entitled to recover
from the other party, all costs and expenses, including, without limitation,
reasonable attorney's fees incurred, at trial and on appeal, in connection with
such enforcement.
IN WITNESS WHEREOF, the parties, after obtaining appropriate corporate
authority by
18
resolution, have executed this Agreement effective as of the day and year first
above written.
Charys Holding Company, Inc.
a Delaware corporation
Attest: Xxxxx Xxxxx By: /s/ Xxxxx X. Xxx, Xx.
------------------------ --------------------------------------
Title: CEO
-----------------------------------
Ruby Belle, LLC
a Nevada limited liability company
Attest: Xxxxx Xxxxx By: /s/ Xxx Xxxxxxx
------------------------ --------------------------------------
Title: Member
-----------------------------------
Attest: Xxxxx Xxxxx /s/ Xxx X. Xxxxxxx
------------------------ --------------------------------------
Xxx X. Xxxxxxx
(For title purpose of agreeing to the provisions of Article IV)
Flagship Holdings, Inc.
a Georgia corporation
Attest: Xxxxx Xxxxx By: /s/ Xxxxxx Xxxxxx
------------------------ --------------------------------------
Title: Vice President
-----------------------------------
19
EXHIBIT "A"
CAPITAL CONTRIBUTIONS
Ruby Belle $350.00
Xxx X. Xxxxxxx $350.00
Charys Holding Company, Inc. $300.00
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS AGREEMENT is entered into as of ______________, 2004, by and between
Charys Holding Company, Inc. a Delaware corporation (the "Company"), and Ruby
Belle, LLC, a Nevada limited liability company (the "Holder").
WHEREAS, on even date herewith, for value received, pursuant to that
certain Commercial Real Estate Purchase and Sale Agreement, the Holder received
____________________ shares of the common stock of the Company, par value $0.001
per share (the "Common Stock"); and
WHEREAS, the shares of the Common Stock and any other securities issued or
issuable at any time or from time to time in respect of the Common Stock as a
result of a merger, consolidation, reorganization, stock split, stock dividend,
recapitalization or other similar event involving the Company are hereinafter
referred to as the "Registrable Securities":
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Piggyback Registration Rights Available. Provided that the Registrable
Securities have not been registered, if at any time after the date hereof but
before the third anniversary of the date hereof, the Company proposes to
register any of its securities under the Securities Act of 1933, as amended (the
"Securities Act"), other than by a registration in connection with an
acquisition in a manner which would not permit registration of the Registrable
Securities for sale to the public, on Form S-8, or any successor form thereto,
on Form S-4, or any successor form thereto on an underwritten basis (either
"best-efforts" or "firm-commitment"), then, the Company will each such time give
prompt written notice to the Holder of its intention to do so and of the
Holder's rights under this Agreement. Upon the written request of the Holder
made within 10 days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by the Holder and
the intended method of disposition thereof), the Company will, subject to the
terms of this Agreement, use its commercially reasonable best efforts to effect
the registration under the Securities Act of the Registrable Securities, to the
extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of the Registrable Securities in a registration statement filed by
the Company on Form S-l, SB-2, or S-3, or some other similar form pursuant to
the Securities Act to register the securities which the Company proposes to
register (the "Registration Statement"), provided that if, at any time after
written notice of its intention to register any securities and prior to the
effective date of the Registration Statement filed in connection with such
registration, the Company shall determine for any reason either not to register
or to delay registration of such securities, the Company may, at its election,
give written notice of such determination to the Holder and, thereupon:
(a) In the case of a determination not to register, shall be relieved
of this obligation to register any Registrable Securities in connection with
such registration (but not from its obligation to pay the Registration Expenses
in connection therewith); and
(b) In the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same period
as the delay in registering such other securities.
2. Payment of Registration Expenses. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Agreement. The right provided the Holder
pursuant to this Agreement shall be exercisable at its sole discretion.
3. Priority in Incidental Registrations. If the managing underwriter of
the underwritten offering contemplated by this Agreement shall inform the
Company and the Holder by letter of its belief that the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering, then the Company will include in such registration, to
the extent of the number which the Company is so advised can be sold in such
offering:
(a) First, securities proposed by the Company to be sold for its
own account; and
(b) Second, Registrable Securities and securities of other selling
security holders requested to be included in such registration pro rata on the
basis of the number of shares of such securities so proposed to be sold and so
requested to be included; provided, however, the Holder shall have pro rata
rights of registration with all shares sought to be included by officers and
directors of the Company as well as holders of 10 percent or more of the Common
Stock.
4. Registration Procedures. If and whenever the Company is required to
affect the registration of any Registrable Securities under the Securities Act
as provided in herein, the Company shall, as expeditiously as possible:
(a) Prepare and file with the Securities and Exchange Commission (the
"SEC") the Registration Statement, or amendments thereto, to effect such
registration (including such audited financial statements as may be required by
the Securities Act or the rules and regulations promulgated thereunder) and
thereafter use its commercially reasonable best efforts to cause the
Registration Statement to be declared effective by the SEC, as soon as
practicable; provided, however, that before filing the Registration Statement or
any amendments thereto, the Company will furnish to the counsel selected by the
Holder, copies of all such documents proposed to be filed;
(b) Furnish to the Holder such number of conformed copies of the
Registration Statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in the Registration Statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the Holder and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by the Holder;
(c) Use its commercially reasonable best efforts to register or qualify
all Registrable Securities and other securities covered by the Registration
Statement under such other securities laws or blue sky laws as the Holder shall
reasonably request, to keep such registrations or qualifications in effect for
so long as the Registration Statement remains in effect, and take any other
action which may be reasonably necessary to enable the Holder to consummate the
disposition in such jurisdictions of the securities owned by the Holder, except
that the Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subparagraph be obligated to be so qualified or
to consent to general service of process in any such jurisdiction;
2
(d) Use its commercially reasonable best efforts to cause all
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Holder to consummate the disposition of such Registrable
Securities;
(e) Furnish to the Holder a signed counterpart, addressed to the
Holder, and the underwriters, if any, of an opinion of counsel for the Company,
dated the effective date of the Registration Statement (or, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to the Holder including that the prospectus and any prospectus
supplement forming a part of the Registration Statement does not contain an
untrue statement of a material fact or omits a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(f) Notify the Holder and its counsel promptly and confirm such advice
in writing promptly after the Company has knowledge thereof:
(i) When the Registration Statement, the prospectus or any prospectus
supplement related thereto or post-effective amendment to the Registration
Statement has been filed, and, with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective;
(ii) Of any request by the SEC for amendments or supplements to the
Registration Statement or the prospectus or for additional information;
(iii) Of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
by any Person for that purpose; and
(iv) Of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under
the securities or blue sky laws of any jurisdiction or the initiation or threat
of any proceeding for such purpose;
(g) Notify each holder of the Registrable Securities covered by the
Registration Statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material facts required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of the Holder promptly prepare
and furnish to the Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(h) Use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of the Registration Statement at the earliest possible moment;
(i) Otherwise use its commercially reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably
3
practicable, an earnings statement covering the period of at least 12 months,
but not more than 18 months, beginning with the first full calendar month after
the effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(j) Enter into such agreements and take such other actions as the Holder
shall reasonably request in writing (at the expense of the requesting or
benefiting Holder) in order to expedite or facilitate the disposition of the
Registrable Securities; and
(k) Use its commercially reasonable best efforts to list all of the
Registrable Securities covered by the Registration Statement on any securities
exchange on which any of the Registrable Securities are then listed.
5. Information to be Furnished by the Holder. The Company may require the
Holder of the Registrable Securities as to which any registration is being
affected to furnish the Company such information regarding the Holder and the
distribution of such securities as the Company may from time to time reasonably
request in writing.
6. Discontinuance of Disposition of the Registrable Securities. The Holder
agrees that, upon receipt of any notice from the Company of the occurrence of
any event of the kind described in Paragraph 4(g) hereof, the Holder will
forthwith discontinue the Holder's disposition of the Registrable Securities
pursuant to the Registration Statement relating to such Registrable Securities
until the Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Paragraph 4(g) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in the Holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
7. Incidental Underwritten Offerings. If the Company at any time proposes
to register any of its securities under the Securities Act as contemplated by
this Agreement and such securities are to be distributed by or through one or
more underwriters, the Company will, if requested by the Holder, use its
commercially reasonable best efforts to arrange for such underwriters to include
all the Registrable Securities to be offered and sold by the Holder among the
securities to be distributed by such underwriters.
8. Holdback Agreements. Subject to such other reasonable requirements as
may be imposed by the underwriter as a condition of inclusion of the Registrable
Securities in the Registration Statement, the Holder agrees by acquisition of
the Registrable Securities, if so required by the managing underwriter, not to
sell, make any short sale of, loan, grant any option for the purchase of, effect
any public sale or distribution of or otherwise dispose of, except as part of
such underwritten registration, any equity securities of the Company, during
such reasonable period of time requested by the underwriter; provided however:
(a) The secondary offering is intended to raise a minimum of $8,000,000 on
behalf of the Company and
(b) Such period shall not exceed the 90-day period commencing with the
completion of an underwritten offering.
4
The Company agrees and acknowledges that during any holdback period, the Holder
may sell, in the holdback period, Registrable Securities in the amount of up to
one percent per week of the shares of the Common Stock held by the Holder as
long as this Agreement remains effective.
9. Participation in Underwritten Offerings. The Holder may not participate
in any underwritten offering under this Agreement unless the Holder:
(a) Agrees to sell its securities on the basis provided in any underwriting
arrangements approved, subject to the terms and conditions hereof, by the
Holder; and
(b) Completes and executes all questionnaires, indemnities, underwriting
agreements and other documents (other than powers of attorney) required under
the terms of such underwriting arrangements.
Notwithstanding the foregoing, no underwriting agreement (or other agreement in
connection with such offering) shall require the Holder to make a representation
or warranty to or agreements with the Company or the underwriters other than
representations and warranties contained in a writing furnished by the Holder
expressly for use in the related Registration Statement or representations,
warranties or agreements regarding the Holder, the Holder and the Holder's
intended method of distribution and any other representation required by law.
10. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each Registration Statement under the Securities Act
pursuant to this Agreement, the Company will give the Holder and its counsel and
accountants, the opportunity to participate in the preparation of the
Registration Statement, each prospectus included therein or filed with the SEC,
and each amendment thereof or supplement thereto, and will give each of them
such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of the Holder's and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
11. Indemnification by the Company. In the event of any registration of any
securities of the Company under the Securities Act, the Company will, and hereby
does agree to indemnify and hold harmless the Holder, its directors and
officers, each other Person ("Person" means an individual, partnership, firm,
limited liability company, trust, joint venture, association, corporation, or
any other legal entity) who participates as an underwriter in the offering or
sale of such securities and each other Person, if any, who controls the Holder
or any such underwriter within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which the Holder or
any such director or officer or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse the Holder and each such director, officer,
underwriter and controlling person for any legal or any other expenses
reasonably incurred by
5
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability, (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by the
Holder or underwriter stating that it is for use in the preparation thereof and,
provided further that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of the Registrable
Securities or to any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, within the time
required by the Securities Act to the Person asserting the existence of an
untrue statement or alleged untrue statement or omission or alleged omission at
or prior to the written confirmation of the sale of the Registrable Securities
to such Person if such statement or omission was corrected in such final
prospectus or an amendment or supplement thereto. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Holder or any such director, officer, underwriter or controlling person and
shall survive the transfer of such securities by the Holder.
12. Indemnification by the Holder. The Company may require, as a condition
to including any of the Registrable Securities in any Registration Statement
filed pursuant to this Agreement, that the Company shall have received an
undertaking satisfactory to it from the Holder, to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Paragraph 11 hereof)
the Company, each director of the Company, each officer of the Company and each
other Person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from the Registration Statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by the Holder specifically stating that it is for use in the preparation of the
Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by the Holder.
13. Notices of Claims, Etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in Paragraph 11 and Paragraph 12 hereof, such indemnified party
will, if claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action, provided
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under Paragraph 11
and Paragraph 12 hereof, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that the
indemnifying party may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified
6
party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement of any such action which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability, or a covenant not to xxx, in respect to such
claim or litigation. No indemnified party shall consent to entry of any judgment
or enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party.
14. Other Indemnification. Indemnification similar to that specified in
Paragraph 11 and Paragraph 12 hereof (with appropriate modifications) shall be
given by the Company and the Holder (but only if and to the extent required
pursuant to the terms hereof) with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority, other than the Securities Act.
15. Indemnification Payments. The indemnification required by Paragraph 11
and Paragraph 12 hereof shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
16. Contribution. If the indemnification provided for in Paragraph 11 and
Paragraph 12 hereof is unavailable to an indemnified party in respect of any
expense, loss, claim, damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such expense, loss, claim, damage or liability:
(a) In such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Holder or underwriter, as the
case may be, on the other from the distribution of the Registrable Securities;
or
(b) If the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but also the relative fault of
the Company on the one hand and of the Holder or underwriter, as the case may
be, on the other in connection with the statements or omissions which resulted
in such expense, loss, damage or liability, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the Holder or
underwriter, as the case may be, on the other in connection with the
distribution of the Registrable Securities shall be deemed to be in the same
proportion as the total net proceeds received by the Company from the initial
sale of the Registrable Securities by the Company to the purchasers bear to the
gain, if any, realized by all selling holders participating in such offering or
the underwriting discounts and commissions received by the underwriter, as the
case may be. The relative fault of the Company on the one hand and of the Holder
or underwriter, as the case may be, on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission to state a material fact relates to information
supplied by the Company, by the Holder or by the underwriter and the parties'
relative intent, knowledge, access to information supplied by the Company, by
the Holder or by the underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct
7
or prevent such statement or omission, provided that the foregoing contribution
agreement shall not inure to the benefit of any indemnified party if
indemnification would be unavailable to such indemnified party by reason of the
provisions contained hereof, and in no event shall the obligation of any
indemnifying party to contribute under this Paragraph 16 exceed the amount that
such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for hereunder had been available
under the circumstances.
The Company and the Holder agree that it would not be just and equitable if
contribution pursuant to this Paragraph 16 were determined by pro rata
allocation (even if the Holder and any underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
herein, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
17. Limitation on Contributions. Notwithstanding the provisions of
Paragraph 16, the Holder and an underwriter shall not be required to contribute
any amount in excess of the amount by which (a) in the case of the Holder, the
net proceeds received by the Holder from the sale of Registrable Securities, or
(b) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that the Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
18. Rule 144. The Company shall timely file the reports required to be
filed by it under the Securities Act and the Securities Exchange Act of 1934, as
amended (including but not limited to the reports under Sections 13 and 15(d) of
the Securities Exchange Act of 1934 referred to in subparagraph (c) of Rule 144
adopted by the SEC under the Securities Act) and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not required to file such
reports, will, upon the request of the Holder, make publicly available other
information) and will take such further action as the Holder may reasonably
request, all to the extent required from time to time to enable the Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of the Holder, the
Company will deliver to the Holder a written statement as to whether it has
complied with the requirements of this Paragraph.
19. Amendments and Waivers. This Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of the sum of the 51 percent or more of the shares of (a) the
Registrable Securities issued at such time, plus (b) the Registrable Securities
issuable upon exercise or conversion of the securities of the Company then
constituting derivative securities (if such securities were not fully exchanged
or converted in full as of the date such consent if sought). Each holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
any consent authorized by this Paragraph, whether or not such Registrable
Securities shall have been marked to indicate such consent.
8
27. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty, covenant or agreement herein, nor
shall nay single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
28. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
29. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto relating to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
Charys Holding Company, Inc.
By:
-------------------------------------
Xxxxx X. Xxx, Xx.
Title: CEO
HOLDER:
Ruby Belle, LLC
By
-------------------------------------
Title:
---------------------------------
10
