SETTLEMENT AGREEMENT AND MUTUAL RELEASE
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This Settlement Agreement and Mutual Release (hereinafter the "Agreement")
is made as of the 5th day of June, 2006 by and between Lumbermens Mutual
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Casualty Company ("Lumbermens"), Able Telecommunications & Power, Inc. ("Able"),
Transportation Safety Contractors, Inc.("TSC"), Georgia Electric Company ("GEC")
(Able, TSC and GEC which are now known as Viasys Services, Inc. and being
hereinafter referred to, jointly, severally and collectively as the
"Defendants") and the parent company of Able, TSC and GEC, Charys Holding
Company, Inc. ("Charys").
WHEREAS, certain disputes have arisen between Lumbermens and the Defendants
under a General Indemnity Agreement dated March 6, 2000 ("GIA");
WHEREAS, the disputes resulted in a lawsuit captioned Lumbermens Mutual
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Casualty Company v. Able Telecommunications & Power, Inc., Transportation Safety
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Contractors, Inc. and Georgia Electric Company, United States District Court,
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Northern District of Georgia, Atlanta Division, Case No. l:04-CV-339-WSD (the
"Lawsuit");
WHEREAS, Lumbermens, on the one hand, and the Defendants and Charys, on the
other, wish to settle all claims and disputes between them arising out of or
related to the GIA, including all claims asserted or that could have been
asserted in the Lawsuit, upon the terms set forth herein; and
NOW, THEREFORE, in consideration of the premises and covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound, the parties
agree as follows:
1. The Defendants shall pay the sum of $200,000.00 cash to Lumbermens on or
before Friday, May 26, 2006.
2. The parent company of the Defendants, Charys, a publicly traded company
(stock symbol CHYS), shall issue and deliver 400,000 shares of validly
authorized, duly paid and nonassessable common stock to Lumbermens on or
before Friday, May 26, 2006.
3. On February 17, 2006, Charys filed a Registration Statement on Form SB-2
with the U.S. Securities and Exchange Commission ("SEC") covering the
resale of shares of common stock for the registration of additional stock
of Charys. On or before July 10, 2006, Charys shall file an amendment to
the pending SB-2 filing (if permitted by the SEC) or if necessary file a
new SB-2 adding an additional 500,000 shares for registration, constituting
the 400,000 shares to be issued to Lumbermens under Section 2 and the
100,000 of potentially issuable shares as described in Paragraph 4 of this
Agreement. Charys shall use its "best efforts" to cause the SB-2 to be
declared effective by the SEC on or before November 27, 2006.
4. For purposes of this Agreement, the value of the Charys stock to be
transferred is $5.36 per share which is stipulated to have been the market
price of the stock as of the close of business on May 11, 2006 (the
Effective Date). The valuation of the settlement amount
relating only to the stock (the total value of the stock as of the
Effective Date) is $2,144,000.00 (400,000 shares x $5.36). If the market
price of the stock is less than $4.83 per share as of the close of business
on the date of the first day the shares can be publicly sold without
restriction ("Sale Date"), then Charys shall issue and deliver to
Lumbermens additional shares of Charys common stock (up to 100,000 shares)
or pay an equivalent cash value of such stock cash amount to satisfy the
price differential between the total value of the stock as of the Effective
Date and the total value of the stock based on the market price of the
stock as of the close of business on the Sale Date . Such additional shares
shall be the 100,000 shares registered pursuant to Paragraph 3 of this
Agreement. However, in no event will Charys be required to issue more than
an additional 100,000 shares of common stock or pay in excess of the
equivalent cash value of such stock amount of in order to compensate
Lumbermens for any price differential as described above. Charys shall
retain the discretion regarding whether it will issue additional shares or
pay cash should the contingency in this Paragraph occur.
5. Charys and Lumbermens shall execute a Registration Rights Agreement on or
before Friday, June 2, 2006 covering the 400,000 shares to be issued to
Lumbermens under Paragraph 2 of this Agreement and the 100,000 of
potentially issuable shares as described in Paragraphs 3 and 4 of this
Agreement.
6. The parties shall file a joint motion for voluntary dismissal without
prejudice of the Lawsuit on or before May 26, 2006.
7. If Defendants and Charys do not perform each and every covenant and
undertaking set forth in Paragraphs 1, 2, 3, and 4 of this Agreement within
the times specified, including actually obtaining the registration of the
additional 500,000 shares of Charys stock as described in paragraph 3 of
this Agreement by no later than November 27, 2006, Lumbermens may elect to
rescind this Agreement. Lumbermens agrees it shall not rescind this
Agreement under any circumstance after December 31, 2006.
8. If Lumbermens elects to rescind this Agreement, then the rescission will
become effective if Lumbermens has 1) provided Charys with written notice
of its election to rescind this Agreement under Paragraph 6 of this
Agreement, 2) tendered to Charys any and all stock issued and delivered by
Charys under Paragraphs 2 through 4 of this Agreement, and 3) tendered to
Charys the $200,000 paid under Paragraph 1 of this Agreement.
9. (a) Upon the complete and timely performance by Defendants and Charys
of each and every covenant and undertaking set forth in Paragraphs 1, 2, 3
and 4 of this Agreement Lumbermens, Universal Bonding Insurance Company
("Universal") and all affiliates absolutely and forever, irrevocably and
unconditionally remise, release, acquit, and forever discharge New Viasys
Holdings, LLC, Charys, Defendants, and all those associated with them in
the past, at present, or in the future, including, but not limited to, any
or all of their assigns, predecessors-in-interest, successors-in-interest,
divisions, all affiliated, parent or subsidiary corporations or entities,
agents officers, directors, employees, managers, supervisors, shareholders,
representatives, attorneys, insurers, lienholders, mortgagees, creditors,
partners, and joint venturers (collectively, the "Viasys
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Releasees"), from any and all claims, demands, actions, complaints,
charges, causes or action, suits, rights, liabilities, contracts, promises,
losses, debts, expenses, compensation, loss of income, loss of services,
damages (whether direct, consequential, punitive, or otherwise), costs,
interest, legal fees, and obligations of any kind or nature whatsoever,
both known and unknown, both foreseen and unforeseen, to person and
property, which have resulted in the past, which exist at the present, or
which may in the future arise out of any of the transactions or events
described in the Lawsuit, or which were or could have been asserted against
the Viasys Releasees in the Lawsuit.
(b) Concurrently with, and expressly conditioned upon, Lumbermens'
release as set forth in Paragraph 8(a) of this Agreement, Charys, New
Viasys Holdings, LLC, and the Defendants absolutely and forever, hereby
irrevocably and unconditionally remise, release, acquit, and forever
discharge Lumbermens, Universal and all affiliates, and all those
associated with them in the past, at present, or in the future, including,
but not limited to, any or all of their assigns, predecessors-in-interest,
successors-in-interest, divisions, all affiliated, parent or subsidiary
corporations or entities, agents, officers, directors, employees, managers,
supervisors, shareholders, representatives, attorneys, insurers,
lienholders, mortgagees, creditors, partners, and joint venturers
(collectively, the "Lumbermens Releasees"), from any and all claims,
demands, actions, complaints, charges, causes of actions, suits, rights,
liabilities, contracts, promises, losses, debts, expenses, compensation,
loss of income, loss of services, damages (whether direct, consequential,
punitive, or otherwise), costs, interest, legal fees, and obligations of
any kind or nature whatsoever, both known and unknown, both foreseen and
unforeseen, to person and property, which have resulted in the past, which
exist at the present, or which may in the future arise out of any of the
transactions or events described in the Lawsuit, or which were or could
have been asserted against the Lumbermens Releasees in the Lawsuit.
10. The parties covenant, agree, and promise that they shall not hereafter
commence any type of civil action or assert any defenses, counterclaims, or
setoffs against each other arising out of or related to all claims asserted
or that could have been asserted in the Lawsuit unless and until this
Agreement is rescinded pursuant to Paragraphs 6 and 7 of this Agreement.
11. It is understood and agreed between the parties that the above-mentioned
considerations, as well as the releases provided herein, are given and
received for the purpose of compromising doubtful and disputed claims, and
the giving and receiving of said considerations and releases are not and
shall not be construed to constitute an admission of liability by any
party.
12. This Agreement is entered for the purpose of achieving a full settlement of
all claims between and among the parties described herein, subject to the
conditions described herein. This Agreement represents the entire agreement
between the parties and supersedes any prior negotiations or agreements
between them regarding the claims, GIA and Lawsuit addressed herein, and
may not be altered, amended, or modified in any respect, except by a
writing duly executed by the party to be charged with such change;
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13. This Agreement is made and performed in the State of Georgia, shall be
governed by the laws of the State of Georgia and the venue for any disputes
concerning this Agreement shall be in the United States District Court for
the Northern District of Georgia, Atlanta Division, the Xxxxxxxxx Xxxxxxx
X. Xxxxxx presiding. If the foregoing stipulation is for any reason
unenforceable or is not recognized or accepted by the specified court, then
venue shall lay in the Superior Court of Xxxxxx County. The terms of this
Agreement shall be kept confidential by the parties and not disclosed to
any third parties or the public except as necessary for the specific
enforcement of the terms of this Agreement, SEC filings or Registration
Statements filed by Charys, or as otherwise directed or required by court
order.
14. All parties to this Agreement warrant and represent that, as of the date of
the execution of this Agreement, no claim addressed by this Agreement has
been assigned or transferred, expressly or implied by operation of law to
any other person or party and no person or party is subrogated to the
rights of the parties herein and that all claims released herein are owned
exclusively by the parties releasing said claims with the sole authority to
release them; provided, however, that Lumbermens has disclosed to
Defendants and Charys the existence of reinsurance agreement(s) related to
the subject matter of the Lawsuit, and Defendants and Charys agree and
stipulate that the existence of such reinsurance agreement(s) is consistent
with this Agreement and shall not constitute either a breach of this
Agreement or a basis for the partial or complete invalidation of this
Agreement.
15. Lumbermens agrees to indemnify and hold harmless Defendants, Charys and all
affiliates, officers, directors, members, employees, agents, successors and
assigns against any and all losses, claims, demands, damages or liabilities
(including reasonable attorneys' fees), joint or several, which may be
brought or threatened by any reinsurer or reinsurance company to either
Lumbermens or Universal under the GIA with respect to any claim within the
subject matter of the lawsuit.
16. The terms and conditions of this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their respective heirs,
executors, administrators, legal representatives, successors, and assigns.
17. Any otherwise applicable statute of limitation, doctrine of laches, or
other time-based defense or impediment to Lumbermens and its affiliates,
including without limitation Universal, filing suit on any claim against
the Defendants or any of them arising out of or related to the GIA shall be
tolled until the date six months after the date on which Lumbermens gives
notice of an election to rescind the Agreement pursuant to paragraph 7 of
this Agreement, and Charys and Defendants covenant not to assert any
defense based on the timeliness of the suit as to any suit filed during
such period. The terms and covenants of this Paragraph shall survive any
rescission or invalidation of this Agreement.
18. This Agreement may be executed in multiple counterparts which upon
execution by all parties shall in the aggregate comprise a single executed
document.
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19. The parties hereto acknowledge and agree that this Agreement is the product
of arm's-length negotiations between the parties, that they have read the
terms of this Agreement, that they have been assisted by counsel of their
choosing with respect to this Agreement, that they fully understand the
terms of this Agreement, and that they have entered into this Agreement
voluntarily and with full knowledge of the effects hereof.
20. All parties shall bear their own attorneys' fees and expenses arising out
of or in connection with this Agreement and/or any related matters and
documents.
21. This Agreement is and shall be deemed jointly drafted and written by all
the parties and shall not be construed or interpreted for or against any
party, including the party originating or preparing it.
(SIGNATURES ON FOLLOWING PAGE)
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ABLE TELECOMMUNICATIONS & POWER, INC.,
TRANSPORTATION SAFETY CONTRACTORS, INC. and
GEORGIA ELECTRIC COMPANY n/k/a VIASYS SERVICES,
INC.
By: [illegible]
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Title: President
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CHARYS HOLDING COMPANY, INC.
By:
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Title: President
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LUMBERMENS MUTUAL CASUALTY COMPANY
By:
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Title: President
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ABLE TELECOMMUNICATIONS & POWER, INC.,
TRANSPORTATION SAFETY CONTRACTORS, INC. and
GEORGIA ELECTRIC COMPANY n/k/a VIASYS SERVICES,
INC.
By:
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Title: President
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CHARYS HOLDING COMPANY, INC.
By: [illegible]
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Title: President
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LUMBERMENS MUTUAL CASUALTY COMPANY
By:
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Title: President
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ABLE TELECOMMUNICATIONS & POWER, INC.,
TRANSPORTATION SAFETY CONTRACTORS, INC. and
GEORGIA ELECTRIC COMPANY n/k/a VIASYS SERVICES,
INC.
By:
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Title: President
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CHARYS HOLDING COMPANY, INC.
By:
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Title: President
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LUMBERMENS MUTUAL CASUALTY COMPANY
By: [illegible]
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Title: Attorney-in-fact
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute, and appoint Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, and Xxxx X. Xxxx as
their true and lawful attorneys-in-fact for said corporations, with full right
and authority to execute on behalf of, and in their names, places, and steads to
do the following:
1. to institute, defend, compromise, or otherwise dispose of (and to
appear for us in any proceedings before any tribunal for the enforcement or for
the defense of) any claim, either alone or in conjunction with other persons,
relating to us, any bonds of ours, or to any property of ours or any other
persons; to obtain, discharge and substitute counsel and to authorize appearance
of such counsel to be entered for me in any such action or proceeding; and, to
compromise or arbitrate any claim in which I may be interested and for that
purpose to enter into agreement or compromise or arbitration and perform or
enforce any award entered in pursuant to such arbitration;
2. to execute, deliver, and acknowledge contracts, releases,
instruments, deeds, deeds of trust, covenants, indentures, any and all
agreements including takeover and completion agreements, mortgages,
hypothecations, bills of lading, bills, bonds, receipts, releases and
satisfactions of mortgage, judgments, and other obligation and debts;
3. to employ lawyers, accountants, engineers, and other persons to
render services to us and to pay the usual and reasonable fees and compensation
of such persons for their services.
IN WITNESS WHEREOF, I have hereunto set my signature, on this the 17th day
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of May , 2004.
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AMERICAN MANUFACTURERS MUTUAL INSURANCE COMPANY
AMERICAN MOTORISTS INSURANCE COMPANY XXXXXX
CASUALTY INSURANCE COMPANY XXXXXX INDEMNITY
INSURANCE COMPANY UNIVERSAL BONDING INSURANCE
COMPANY LUMBERMEN MUTUAL CASUALTY COMPANY
By: /s/ Xxxx Xxxxxx
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Its: General Counsel
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STATE OF IL )
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COUNTY OF [illegible] )
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Before me, the undersigned authority, a Notary Public in and for the State
and County aforesaid, personally appeared, Xxxx Xxxxxx with whom I am personally
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acquainted (or provided to me on the basis of satisfactory evidence), and who,
upon oath, acknowledged himself to be the General Counsel of American
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Manufacturers Mutual Insurance Company, American Motorists Insurance Company,
Xxxxxx Casualty Insurance Company, Xxxxxx Indemnity Insurance Company, Lumbermen
Mutual Casualty Company, and Universal Bonding Insurance Company, the within
named bargainers, all corporations, and that he as such officer executed the
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within instrument for the purposes therein contained by signing the name of the
corporation by he as such officer.
--
Witness my hand and seal at office in the State and County aforesaid on
this the 17th day of May, 2004.
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OFFICIAL SEAL /s/ Xxxxxxxxx X. Xxxxxxxxxx
XXXXXXXXX V SBACHIERO -----------------------------------
NOTARY PUBLIC STATE OF ILLINOIS Notary Public
MY COMMISSION EXPIRES: 09/22/07
My commission expires: 09/22/07
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