OPTION TO PURCHASE STOCK AGREEMENT
This Option to Purchase Stock Agreement (the "Agreement") is made and
entered into as of the 18th day of May, 2004, by and between Charys Holding
Company, Inc., a Delaware corporation located at 0000 Xxxxxxxxx Xxxxxx Xxxx,
Xxxxx X 000, Xxxxxxx Xxxxxxx 00000 (the "Optionee"), X. X. Xxxxxx & Co., Inc., a
North Carolina corporation located at 00000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx (the "Company"), and Xxx X. Xxxxxx and his wife, Xxxxx X. Xxxxxx, both
residents of North Carolina (the "Optionors").
WITNESSETH:
WHEREAS, Optionors own or control all of the issued and outstanding shares,
beneficial ownership, or other indicia of ownership of the Company; and
WHEREAS, Optionee desires to purchase an option from Optionors, and
Optionors desire to sell, transfer and convey to the Optionee an option to
purchase all control and ownership of the Company, upon the terms and conditions
provided by this Agreement;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto, each intending to be legally bound, hereby
covenant and agree as follows:
ARTICLE I
OPTION TO PURCHASE SHARES
Section 1.1 Option to Purchase. Optionors hereby grant to Optionee an
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option (the "Option") to purchase and accept from Optionors at the Closing (as
defined below), on the terms and subject to the conditions set forth in this
Agreement, all of Optionors' control, stock, beneficial ownership, and other
indicia of ownership of the Company, which Optionors agree to sell, transfer,
assign, convey and deliver to the Optionee at the Closing free and clear of all
liens, pledges, and encumbrances of every kind.
Section 1.2 Consideration. In return for the grant of the Option to
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purchase control, stock, beneficial ownership, and other indicia of ownership of
the Company, the Optionee agrees, subject to the terms, conditions and
limitations set forth in this Agreement, to pay to Optionors in the sum of Ten
U.S. Dollars (U.S. $10.00), the "Consideration."
Section 1.3 Term. The period during which the Optionee may exercise the
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Option shall
begin on the Date hereof and shall continue until 11:55 p.m. on the third
anniversary hereof (the "Option Period").
Section 1.4 Exercise of Option; Purchase Price. The Optionee may
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exercise the Option during the Option Period by giving written notice to
Optionors in the manner described in Section 1.5 hereto. The Optionee will pay
to Optionors at closing an amount (the "Option Purchase Price") equal to the
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fair market value of the Shares held by Seller at such time, such value to be
mutually agreed upon by the parties but in no case to be less than the cash flow
of the Company for the twelve (12) months ended before the date of the notice
increased by a multiplier of two (2). The Optionee will pay the full amount of
the Option Purchase Price at closing, in cash, stock of Optionee and/or
Promissory Note as agreed by the parties.
Section 1.5 Exercise of Option and Closing. The Optionee, in accordance
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with the terms and conditions of this Agreement, shall give not less than thirty
(30) days prior written notice to the Optionors of Optionee's intention to
exercise such Option. The closing of the purchase under such Option shall be
held as promptly as possible after such notice has been received, but not later
than sixty (60) days following such notice, except as otherwise agreed by the
Optionee and Optionors. At closing, the Optionors shall deliver to Optionee
certificates representing Optionors' Shares of the Company, duly endorsed or
accompanied by duly executed stock powers or assignments. Optionors shall also
execute and deliver a closing certificate, in form and substance satisfactory to
the Optionee, warranting and representing to such individuals or entities that:
(i) the Optionors have the full right, power and authority to transfer the
shares, and that such shares are being transferred free and clear of all liens,
claims and encumbrances; (ii) the shares constitute 100% of the Company stock;
and (iii) no other person has any warrants, options, or rights with respect to
such Stock; and, Optionee shall deliver the Consideration to the Optionors.
Section 1.4 Time and Place of Closing. The Closing shall take place at
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the office of Optionee or such other place and/or date as the parties hereto may
agree upon, which date shall be the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF OPTIONORS AND COMPANY
In order to induce the Optionee to enter into this Agreement and to consummate
the transaction herein contemplated, the Optionors and the Company make the
following representations and warranties:
Section 2.1 Status and Effect of Delivery of the Shares. Optionors are
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authorized to sell the control, stock, beneficial ownership, and other indicia
of ownership of the
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Company to the Optionee at the Closing in accordance with this Agreement will
vest good and marketable title thereto in the Optionee, free and clear of any
liens, pledges, and encumbrances.
Section 2.2 Binding Obligation. This Agreement has been duly executed
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and delivered by Optionors and the Company and is a valid and binding obligation
of Optionors and the Company, enforceable in accordance with its terms. The
execution and delivery of this Agreement by Optionors and the transfer of
ownership of the Company to Optionee by Optionors will not require the consent
or approval of any governmental authority or agency, or constitute a violation
of any law, rule, regulation or order of any such authority or agency or any
judicial order to which Optionors or the Company is subject.
Section 2.3 Organization, Power and Authority of the Company. The
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Company is a corporation duly organized and legally existing in good standing
under the laws of the State of North Carolina, and has full corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted, to enter into this Agreement and to carry out the
transaction herein contemplated.
Section 2.4 Subsidiaries of the Company. The Company has no equity
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interest or the right or obligation to acquire an equity interest in any other
business or entity.
Section 2.5 Tax Matters. The Company has timely filed, or will file
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within ten (10) days of the date of this Agreement, all tax returns required to
be filed by it, including without limitation, all local, national, and foreign
tax returns, and has paid in fall all taxes, penalties, and assessments shown on
or required by the filing of such returns or has made adequate provision for the
payment thereof. All such returns are true and correct in all material respects.
There are no tax liens upon any property or assets of the Company, except for
taxes not yet due and payable.
Section 2.6 Compliance with Laws by Optionors and the Company.
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Optionors and the Company are in material compliance with all laws, regulations
and orders applicable to the Company, its assets, properties, and business.
Section 2.7 Mining Permit. The Company is the exclusive owner and
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holder of the Xxxxxxxxx Mining Permit issued by the State of North Carolina, a
copy of which is attached hereto and made a part hereof. The Mining Permit is
validly issued and is not subject to cancellation or termination other than as
provided by the governing law and rules applicable thereto.
Section 2.8 Mining License. The Company is the exclusive owner and
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holder of a Mining License issued pursuant to the federal Mine Health and Safety
Act, a copy of which is attached hereto and made a part hereof. The Mining
License is validly issued and is not subject to cancellation or termination
other than as provided by the governing law and rules applicable thereto.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
In order to induce the Optionors to enter into this Agreement and to
consummate the transaction herein contemplated, the Optionee makes the following
representations and warranties:
Section 3.1 Organization, Power and Authority of Optionee. The Optionee
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is a corporation subject to the laws of the State of Georgia, with full power
and authority to enter into this Agreement and the transaction herein
contemplated.
Section 3.2 Due Authorization; Binding Obligation. The execution,
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delivery and performance of this Agreement and the consummation of the
transaction herein contemplated are duly authorized. This Agreement has been
duly executed and delivered by the Optionee and is a valid and binding
obligation of the Optionee, enforceable in accordance with its terms. Neither
the execution and delivery of this Agreement nor the consummation of the
transaction herein contemplated will result in any breach of or default under
any mortgage, contract, agreement, indenture, will, trust or other instrument
which is binding upon or enforceable against the Optionee, or require any
additional consents or approvals.
ARTICLE IV
CONDITIONS TO THE OBLIGATION OF OPTIONEE
The obligation of the Optionee to purchase the control, stock, beneficial
ownership, and other indicia of ownership of the Company from the Optionors
shall be subject to the fulfillment at or prior to the Closing Date of each of
the following conditions:
Section 4.1 Accuracy of Representations and Warranties and Compliance
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with Obligations. The representations and warranties of Optionors contained in
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this Agreement shall have been true and correct in all material respects at and
as of the Closing Date with the same force and effect as though made at and as
of that time. Optionors shall have performed and complied in all material
respects with all of the obligations required by this Agreement to be performed
or complied with by it, at or prior to the Closing Date.
Section 4.2 No Material Adverse Change or Occurrence. From and after
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the date hereof and until the Closing Date, there shall have been no change in
the business or properties of the Company or in the financial condition of the
Company, other than changes which in the aggregate shall not have had a material
adverse effect on the business, properties, financial condition or results of
operations of the Company, and the property, business or operations of the
Company shall not have been adversely affected in any material way by fire,
accident or other casualty (whether or
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not covered by insurance).
Section 4.3 Minute Book and Ownership Records. The Optionors shall have
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made available to the Optionee for his inspection the minute books, stock
records, and records of beneficial ownership or other indicia of ownership of
the Company.
Section 4.4 Tax Returns. Optionors shall fulfill the tax returns filing
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obligations required by all local, national and foreign authorities within ten
(10) days of the date of this Agreement.
Section 4.5 Xxxxxxxxx Mine Closing. Optionors and Flagship Holdings,
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Inc., a Georgia corporation shall have successfully completed the closing of the
sale to Flagship Holdings, Inc. from Optionors of the Xxxxxxxxx Mine property
located in Stanly County, North Carolina, consisting of approximately 242 acres,
as more particularly described in the "legal description" attached hereto and
made a part hereof.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF OPTIONORS
The obligation of Optionors to sell the control, stock, beneficial
ownership, and other indicia of ownership of the Company to Optionee shall be
subject to the fulfillment at or prior to the Closing Date of each of the
following conditions:
Section 5.1 Accuracy of Representations and Warranties and Compliance
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with Obligations. The representations and warranties of the Optionee contained
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in this Agreement shall have been true and correct in all material respects at
and as of the date hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time. The Optionee shall have performed and complied in
all material respects with all of his obligations required by this Agreement to
be performed or complied with at or prior to the Closing Date.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Brokers, Commissions and Other Expenses. The Optionee and
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Optionors shall each hold the other party harmless from any commission, fee or
claim of any person, firm or corporation employed or retained, or reasonably
claiming to be employed or retained by the Optionee or Optionors respectively,
to bring about, or to represent one of them in, the transaction herein
contemplated.
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Section 6.2 Amendment and Modification. The parties may amend, modify
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and supplement this Agreement in such manner as may be agreed upon by them in
writing.
Section 6.3 Termination. Anything to the contrary herein
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notwithstanding, this Agreement may be terminated and the transaction herein
contemplated may be abandoned:
(a) By the mutual written consent of all the parties hereto at any
time prior to the Closing Date;
(b) By the Optionee at any time prior to the Closing Date if there
shall be a pending action or proceeding by or before any court or other
governmental or regulatory body which shall seek to restrain, prohibit or
invalidate the sale of the control, stock, beneficial ownership, or other
indicia of ownership of the Company or the transaction contemplated herein,
or materially affect the right of the Optionee to own the control, stock,
beneficial ownership, or the other indicia of ownership of the Company;
(c) By the Optionee in the event of the material breach by the
Optionors of any provision of this Agreement, which breach is not remedied
by the Optionors or waived by the Optionee within five (5) days after
receipt of notice thereof from the Optionee; and
(d) By the Optionors in the event of the material breach by the
Optionee of any provision of this Agreement, which breach is not remedied
within thirty (30) days after receipt of notice thereof from the Optionors,
Section 6.4 Indemnification. Optionors agrees to indemnify and hold
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harmless the Optionee and all of its employees, consultants, agents and
affiliates from and against all claims, liabilities and damages, of any kind,
arising prior to the Closing.
Section 6.5 Binding Effect. This Agreement shall be binding upon and
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shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives.
Section 6.6 Entire Agreement. This Agreement and the exhibits attached
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hereto contain the entire agreement of the parties hereto with respect to the
transaction contemplated herein and supersede all prior understandings,
agreements and representations of the parties with respect to the subject matter
hereof.
Section 6.7 Headings. The descriptive headings in this Agreement are
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inserted for convenience only and do not constitute part of this Agreement.
Section 6.8 Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed therein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
OPTIONEE:
CHARYS HOLDING COMPANY, INC.
By: /s/ Xxxxx X. Xxx, Xx.
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OPTIONEE:
/s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
COMPANY:
X. X. XXXXXX & CO., INC.
By: /s/ Xxx X. Xxxxxx
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