THIS SECURED DEBENTURE AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE
(COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
----------
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER
THE ACT OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER
SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS
ARE AVAILABLE.
SECURED DEBENTURE
CHARYS HOLDING COMPANY INC.
DUE DECEMBER ___, 2005
No. CHC-001 US$1,000,000
This Secured Debenture (the "Debenture") is issued on December ___, 2005
---------
(the "Closing Date") by Charys Holding Company, Inc., a Delaware corporation
-------------
(the "Company"), to ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, or their designees
-------
(collectively, the "Holder") (the Holder together with its permitted successors
and assigns, the "Holder") pursuant to exemptions from registration under the
------
Securities Act of 1933, as amended, pursuant to a Securities Purchase Agreement
of even date herewith (the "Securities Purchase Agreement") among the Company,
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇, ▇▇., ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, or their designees.
ARTICLE I.
Section 1.01 PRINCIPAL AND INTEREST. For value received, the Company
-----------------------
hereby promises to pay to the order of the Holder on or before December ___,
2006 (the "Maturity Date"), as provided herein, in lawful money of the United
--------------
States of America and in immediately available funds the principal sum of
$1,000,000, together with interest on the unpaid principal of this Debenture
from the date hereof at the interest rate of as hereinafter provided. Unless
earlier redeemed by the Company in accordance with Section 1.04 hereof, at the
Holder's option, the entire principal amount and all accrued interest and the
redemption premium specified in Section 1.04 hereof shall be either (a) paid to
the Holder on the Maturity Date, or (b) converted in accordance with Section
1.02 herein. Provided, however, notwithstanding anything herein contained to
the contrary, the Holder may demand a prepayment of this Debenture upon the
funding of the acquisition financing with the respect to the purchase of Method
IQ, Inc. by the Company (the "Method IQ Acquisition"). Provided further, in the
event that there is no acquisition financing provided in connection with the
Method IQ Acquisition, then the Holder may demand that this Debenture shall
become due and payable on 30 days' written notice from the Holder to the
Company.
Section 1.02 OPTIONAL CONVERSION. The Holder is entitled, at its
--------------------
option, to convert and sell on the same day, subject to compliance with
applicable securities laws, at any time after 120 days from the Closing Date and
thereafter from time to time, until payment in full of the principal amount of
this Debenture, and accrued and unpaid interest, all or any part of the
principal amount of the Debenture, plus redemption premium and accrued and
unpaid interest, into shares (the "Conversion Shares") of the Company's common
-----------------
stock, par value $0.001 per share (the "Common Stock"), at the price per share
------------
equal to the lower of: (i) $0.80 per share of the Common Stock, or (ii) 120
percent of the average closing bid price for the five trading days immediately
preceding the Closing Date (the "Fixed Price"), or (iii) 80 percent of the
------------
lowest closing bid price for the five trading days immediately preceding the
date of conversion (the "Future Price") (the "Conversion Price"). No fraction
------------ ----------------
of shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest
whole share. To convert this Debenture, the Holder hereof shall deliver written
notice thereof, substantially in the form of Exhibit A to this Debenture, with
appropriate insertions (the "Conversion Notice"), to the Escrow Agent (as
------------------
defined in the Securities Purchase Agreement) and the Company at its address as
set forth herein. The date upon which the conversion shall be effective (the
"Conversion Date") shall be deemed to be the date set forth in the Conversion
----------------
Notice. The Holder has the right to convert this Debenture after the Maturity
Date. Except as otherwise provided herein or in Exhibit F to the Securities
---------
Purchase Agreement, the Company shall not have the right to object to the
conversion or the calculation of the applicable conversion price, absent
manifest error and the Escrow Agent
- 1 -
shall release the shares of Common Stock from escrow upon notifying the Company
of the conversion. Any conversion of any portion of the Debenture into shares
of the Common Stock shall be deemed to be a pre-payment of principal plus
accrued and unpaid interest, without any penalty or premium, and shall be
credited against any future payments of principal and interest in the order that
such payments become due and payable.
Section 1.03 RESERVATION OF COMMON STOCK. As set forth in Section 4(e)
---------------------------
of the Securities Purchase Agreement, the Company shall reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of this Debenture, that number of shares
of Common Stock equal to a multiple of two times the number of shares of the
Common Stock into which the Debenture is then convertible from time to time
based upon the Conversion Price unless a change in such multiple is agreed to in
writing by the Holder and the Company. If at any time the Company does not have
a sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders within 120
days of that time for the sole purpose of increasing the number of authorized
shares of Common Stock.
Section 1.04 RIGHT OF REDEMPTION. The Company at its option shall have
-------------------
the right to redeem, with three (3) business days advance written notice (the
"Redemption Notice"), a portion or all of the outstanding Debenture. The
------------------
redemption price shall be 110 percent for the 120 days following the Closing
Date and 120 percent thereafter (the "Redemption Price") of the face amount
----------------
redeemed plus accrued but unpaid interest. The Company shall pay the Redemption
Price on all payments made pursuant to the Debenture, including payments made
before, on, or after the Maturity Date. For all payments under this Debenture,
the payment of the Redemption Price by the Company shall be in addition to any
accrued but unpaid interest due.
Section 1.05 REGISTRATION RIGHTS. The Company is obligated to register
-------------------
the resale of the Conversion Shares under the Act, pursuant to the terms of a
Investor Registration Rights Agreement, between the Company and the Holder of
even date herewith (the "Investor Registration Rights Agreement").
-----------------------------------------
Section 1.06 INTEREST PAYMENTS. The Company will begin making monthly
-----------------
interest payments on the Debentures upon the earlier of (i) the effectiveness of
the registration statement as described herein, or (ii) 120 days from the
Closing Date. Interest shall be paid in cash (via wire transfer or certified
funds). In the event of default, as described in Section 3.01 hereunder, the
Holder may elect that the interest be paid in cash (via wire transfer or
certified funds) or in the form of shares of the Common Stock. If paid in the
form of the Common Stock, the amount of stock to be issued will be calculated as
follows: the value of the stock shall be the Closing Bid Price (as defined in
the Securities Purchase Agreement) on: (i) the date the interest payment is due,
or (ii) if the interest payment is not made when due, the date the interest
payment is made. A number of shares of the Common Stock with a value equal to
the amount of interest due shall be issued. No fractional shares will be
issued; therefore, in the event that the value of the Common Stock per share
does not equal the total interest due, the Company will pay the balance in cash.
Section 1.07 PAYING AGENT AND REGISTRAR. Initially, the Company will
---------------------------
act as paying agent and registrar. The Company may change any paying agent,
registrar, or the Company-registrar by giving the Holder not less than ten
business days' written notice of its election to do so, specifying the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.
Section 1.08 SECURED NATURE OF DEBENTURE. This Debenture is secured by
---------------------------
the Pledged Property as set forth on Exhibit A to the Security Agreement dated
---------
the date hereof between the Company and the Holder (the "Security Agreement").
------------------
Section 1.09 THE ESCROW SHARES. The Company shall deposit 1,250,000
-------------------
shares of the Common Stock with the Escrow Agent as "Escrow Shares." Unless the
Debenture has been redeemed in full by the Company and the Escrow Agent shall
otherwise have distributed the Conversion Shares to the Company, upon receipt of
the Conversion Notice from the Holder, the Escrow Agent shall distribute the
Conversion Shares to Holder pursuant to this Debenture and the Securities
Purchase Agreement including Exhibit F thereto.
----------
2
ARTICLE II.
Section 2.01 AMENDMENTS AND WAIVER OF DEFAULT. The Debenture may not
---------------------------------
be amended without the prior written consent of the Holder and the Company.
Notwithstanding the above, without the consent of the Holder, the Debenture may
be amended to cure any ambiguity, defect or inconsistency.
ARTICLE III.
Section 3.01 EVENTS OF DEFAULT. An Event of Default is defined as
-------------------
follows: (a) failure by the Company to pay the principal amount or interest due
hereunder on respective due dates including the Maturity Date; (b) failure by
the Company's transfer agent to issue shares of the Common Stock to the Holder
within five days of the Company's receipt of the attached Conversion Notice from
Holder; (c) failure by the Company for ten days after notice to it to comply
with any of its other agreements in the Debenture; (d) failure to comply with
the terms of the Irrevocable Transfer Agent Instructions (as defined in the
Securities Purchase Agreement); (e) if the Company files for relief under the
United States Bankruptcy Code (the "Bankruptcy Code") or under any other state
---------------
or federal bankruptcy or insolvency law, or files an assignment for the benefit
of creditors, or if an involuntary proceeding under the Bankruptcy Code or under
any other federal or state bankruptcy or insolvency law is commenced against the
Company, or (f) a breach by the Company of its obligations under any of the
Transaction Documents (as defined in the Securities Purchase Agreement) which is
not cured by the Company within any allocated cure period therein. Upon the
occurrence of an Event of Default, the Holder may, in his sole discretion, (i)
accelerate full repayment of the Debenture outstanding and accrued interest
thereon at the Redemption Price, or (ii) take possession of that number of
Escrow Shares necessary to convert the Debenture as of the date of such default.
The failure of the Company to make Payments due under Section 1.06 shall also be
deemed as an Event of Default. Upon an Event of Default, the Escrow Agent is
authorized and directed to release the Escrow Shares to the Holder if requested
by the Holder, without approval of the Company.
ARTICLE IV.
Section 4.01 RE-ISSUANCE OF DEBENTURE. When the Holder elects to
--------------------------
convert a part of the Debenture, then the Company shall reissue a new Debenture
in the same form as this Debenture to reflect the new principal amount.
ARTICLE V.
Section 5.01 ANTI-DILUTION. Adjustment of Fixed Conversion Price or
------------- -----------------------------------------
Future Price. The Fixed Conversion Price or Future Price shall be adjusted from
------------
time to time as follows:
(a) Adjustment of Fixed Conversion Price and Number of Shares
---------------------------------------------------------
upon Issuance of the Common Stock. If and whenever on or after the Closing Date
---------------------------------
of this Debenture, the Company issues or sells, or is deemed to have issued or
sold, any shares of the Common Stock (other than (i) Excluded Securities (as
defined herein), and (ii) shares of the Common Stock which are issued or deemed
to have been issued by the Company in connection with an Approved Stock Plan (as
defined herein) or upon issuance, exercise or conversion of the Other Securities
(as defined herein)) for a consideration per share less than a price (the
"Applicable Price") equal to the Fixed Conversion Price in effect immediately
-----------------
prior to such issuance or sale, then immediately after such issue or sale the
Fixed Conversion Price then in effect shall be reduced to an amount equal to
such consideration per share, provided that in no event shall the Fixed
Conversion Price be reduced below $0.001.
(b) Effect on Fixed Conversion Price of Certain Events. For
---------------------------------------------------
purposes of determining the adjusted Fixed Conversion Price under Section
5.01(a) above, the following shall be applicable:
(i) Issuance of Options. If after the date hereof, the
--------------------
Company in any manner grants any rights, warrants or options to subscribe for or
purchase shares of the Common Stock or convertible securities ("Options") and
-------
the lowest price per share for which one share of the Common Stock is issuable
upon the exercise of any such Option or upon conversion or exchange of any
convertible securities issuable upon exercise of any such Option is less than
the Fixed Conversion Price then in effect, then such share of the
3
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 5.01(b)(i), the lowest price per share
for which one share of the Common Stock is issuable upon exercise of such
Options or upon conversion or exchange of such convertible securities shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of the Common Stock upon
the granting or sale of the Option, upon exercise of the Option or upon
conversion or exchange of any other convertible security other than this
Debenture issuable upon exercise of such Option. No further adjustment of the
Fixed Conversion Price shall be made upon the actual issuance of such Common
Stock or of such convertible securities upon the exercise of such Options or
upon the actual issuance of such Common Stock upon conversion or exchange of
such convertible securities.
(ii) Issuance of Convertible Securities. If the Company
----------------------------------
in any manner issues or sells any convertible securities after the Closing Date
and the lowest price per share for which one share of the Common Stock is
issuable upon the conversion or exchange thereof is less than the Fixed
Conversion Price then in effect, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such convertible securities for such price per share.
For the purposes of this Section 5.01(b)(ii), the lowest price per share for
which one share of Common Stock is issuable upon such conversion or exchange
shall be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of the Common
Stock upon the issuance or sale of the convertible security and upon conversion
or exchange of such convertible security. No further adjustment of the Fixed
Conversion Price shall be made upon the actual issuance of such Common Stock
upon conversion or exchange of such convertible securities, and if any such
issue or sale of such convertible securities is made upon exercise of any
Options for which adjustment of the Fixed Conversion Price had been or are to be
made pursuant to other provisions of this Section 5.01(b), no further adjustment
of the Fixed Conversion Price shall be made by reason of such issue or sale.
(iii) Change in Option Price or Rate of Conversion. If
----------------------------------------------
the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion or exchange of any convertible
securities, or the rate at which any convertible securities are convertible into
or exchangeable for the Common Stock changes at any time, the Fixed Conversion
Price in effect at the time of such change shall be adjusted to the Fixed
Conversion Price which would have been in effect at such time had such Options
or convertible securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold and the number of shares of Common Stock
issuable upon conversion of this Debenture shall be correspondingly readjusted.
For purposes of this Section 5.01(b)(iii), if the terms of any Option or
convertible security that was outstanding as of the Closing Date of this
Debenture are changed in the manner described in the immediately preceding
sentence, then such Option or convertible security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change. No adjustment pursuant to this
Section 5.01(b) shall be made if such adjustment would result in an increase of
the Fixed Conversion Price then in effect.
(c) Effect on Fixed Conversion Price of Certain Events. For
---------------------------------------------------
purposes of determining the adjusted Fixed Conversion Price under Sections
5.01(a) and 5.01(b), the following shall be applicable:
(i) Calculation of Consideration Received. If any
----------------------------------------
Common Stock, Options or convertible securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefore will be
deemed to be the net amount received by the Company therefor. If any Common
Stock, Options or convertible securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of consideration
received by the Company will be the market price of such securities on the date
of receipt of such securities. If any Common Stock, Options or convertible
securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefore will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or convertible securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of the Debenture representing at least
two-thirds of the shares of the Common Stock issuable upon conversion of the
Debenture then outstanding. If such
4
parties are unable to reach agreement within ten days after the occurrence of an
event requiring valuation (the "Valuation Event"), the fair value of such
----------------
consideration will be determined within five Business Days after the 10th day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the holders of the Debenture representing at least
two-thirds of the shares of the Common Stock issuable upon conversion of the
Debenture then outstanding. The determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such appraiser shall
be borne by the Company.
(ii) Integrated Transactions. In case any Option is
------------------------
issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a consideration of $0.001.
(iii) Treasury Shares. The number of shares of the
----------------
Common Stock outstanding at any given time does not include shares owned or held
by or for the account of the Company, and the disposition of any shares so owned
or held will be considered an issue or sale of the Common Stock.
(iv) Record Date. If the Company takes a record of the
------------
holders of the Common Stock for the purpose of entitling them (1) to receive a
dividend or other distribution payable in Common Stock, Options or in
convertible securities or (2) to subscribe for or purchase Common Stock, Options
or convertible securities, then such record date will be deemed to be the date
of the issue or sale of the shares of the Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(d) Adjustment of Fixed Conversion Price upon Subdivision or
---------------------------------------------------------
Combination of Common Stock. If the Company at any time after the date of
------------------------------
issuance of this Debenture subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
the Common Stock into a greater number of shares, any Fixed Conversion Price or
Future Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company at any time after the date of issuance
of this Debenture combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of the Common Stock into a smaller
number of shares, any Fixed Conversion Price or Future Price in effect
immediately prior to such combination will be proportionately increased. Any
adjustment under this Section 5.01(d) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(e) Distribution of Assets. If the Company shall declare or
-----------------------
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of the Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a
"Distribution"), at any time after the issuance of this Debenture, then, in each
------------
such case any Fixed Conversion Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of the Common
Stock entitled to receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying such
Fixed Conversion Price by a fraction of which (A) the numerator shall be the
closing bid price of the Common Stock on the trading day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Company's Board of Directors) applicable to one share of the Common
Stock, and (B) the denominator shall be the closing bid price of the Common
Stock on the trading day immediately preceding such record date.
(f) Certain Events. If any event occurs of the type
---------------
contemplated by the provisions of this Section 5.01 but not expressly provided
for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights, or other rights with equity
features), then the Company's Board of Directors will make an appropriate
adjustment in the Fixed Conversion Price so as to protect the rights of the
holders of the Debenture; provided, except as set forth in Section 5.01(d), that
no such adjustment pursuant to this Section 5.01(f) will increase the Fixed
Conversion Price as otherwise determined pursuant to this Section 5.01.
5
(g) Notices.
-------
(i) Immediately upon any adjustment of the Fixed
Conversion Price or Future Price, the Company will give written notice thereof
to the holder of this Debenture, setting forth in reasonable detail, and
certifying, the calculation of such adjustment.
(ii) The Company will give written notice to the holder
of this Debenture at least ten days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock; (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any dissolution or liquidation, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder.
(h) Definitions.
-----------
(i) "Approved Stock Plan" means any employee benefit
---------------------
plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or
director for services provided to the Company.
(ii) "Excluded Securities" means, provided such security
-------------------
is issued at a price which is greater than or equal to the arithmetic average of
the Closing Bid Prices of the Common Stock for the ten consecutive trading days
immediately preceding the date of issuance, any of the following: (a) any
issuance by the Company of securities in connection with a strategic partnership
or a joint venture (the primary purpose of which is not to raise equity
capital;, (b) any issuance by the Company of securities as consideration for a
merger or consolidation or the acquisition of a business, product, license, or
other assets of another person or entity, and (c) options to purchase shares of
the Common Stock, provided (i) the issuance of such options (the "Approved
--------
Plan") is to non-executive employees and is limited to 10,000 shares of the
----
Common Stock, and (ii) the exercise price of such options is not less than the
closing bid price of the Common Stock on the date of issuance of such option.
(iii) "Other Securities" means (i) those options,
-----------------
warrants and convertible securities of the Company issued prior to, and
outstanding on, the Closing Date; (ii) the shares of the Common Stock issuable
on exercise of such options, warrants and convertible securities, provided such
options, warrants and convertible securities are not amended after the Closing
Date; (iii) the shares of the Common Stock issuable upon conversion of this
Debenture, or otherwise in connection with this Debenture and the Warrants
issued pursuant to the Securities Purchase Agreement, and (iv) those shares,
options and warrants proposed for issuance as disclosed in Schedule 3(c)
thereto.
(i) Nothing in this Section 5.01 shall be deemed to authorize
the issuance of any securities by the Company in violation of this Section 5.01.
(j) In the event an Event of Default has occurred, the lesser
of the then Conversion Price and the Default Conversion Price shall be used for
all calculations in Section 5.01(a) through (g).
6
ARTICLE VI.
Section 6.01 NOTICE. Notices regarding this Debenture shall be sent to
------
the parties at the following addresses, unless a party notifies the other
parties, in writing, of a change of address:
If to the Company, to: Charys Holding Company Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney at Law
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇-▇▇▇.▇▇▇
If to the Holder, to: Preferred Employers Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
attention ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.,
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇,
Attention:
Telephone:
Facsimile:
Section 6.02 GOVERNING LAW. The parties hereto acknowledge that the
--------------
transactions contemplated by this Agreement and the exhibits hereto bear a
reasonable relation to the State of Florida. The parties hereto agree that the
internal laws of the State of Florida shall govern this Agreement and the
exhibits hereto, including, but not limited to, all issues related to usury.
Any action to enforce the terms of this Agreement or any of its exhibits shall
be brought exclusively in the state and/or federal courts situated in the County
and State of Florida. Service of process in any action by the Holder(s) to
enforce the terms of this Agreement may be made by serving a copy of the summons
and complaint, in addition to any other relevant documents, by commercial
overnight courier to the Company at its principal address set forth in this
Agreement.
Section 6.03 SEVERABILITY. The invalidity of any of the provisions of
------------
this Debenture shall not invalidate or otherwise affect any of the other
provisions of this Debenture, which shall remain in full force and effect.
Section 6.04 ENTIRE AGREEMENT AND AMENDMENTS. This Debenture
----------------------------------
represents the entire agreement between the parties hereto with respect to the
subject matter hereof and there are no representations, warranties or
commitments, except as set forth herein. This Debenture may be amended only by
an instrument in writing executed by the parties hereto.
7
IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company
has executed this Debenture as of the date first written above.
CHARYS HOLDING COMPANY INC.
By
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇, ▇▇., Chief Executive Officer
8
EXHIBIT A
---------
NOTICE OF CONVERSION
--------------------
(TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)
TO:
The undersigned hereby irrevocably elects to convert $
of the principal amount of the above Debenture into shares of the Common Stock
of Charys Holding Company Inc., according to the conditions stated therein, as
of the Conversion Date written below.
CONVERSION DATE:
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APPLICABLE CONVERSION PRICE:
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SIGNATURE:
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NAME:
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ADDRESS:
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AMOUNT TO BE CONVERTED: $
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AMOUNT OF DEBENTURE UNCONVERTED: $
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CONVERSION PRICE PER SHARE: $
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NUMBER OF SHARES OF COMMON
STOCK TO BE ISSUED:
----------------------------------------
PLEASE ISSUE THE SHARES OF COMMON
STOCK IN THE FOLLOWING NAME AND TO
THE FOLLOWING ADDRESS:
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ISSUE TO:
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AUTHORIZED SIGNATURE:
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NAME:
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TITLE:
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PHONE NUMBER:
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BROKER DTC PARTICIPANT CODE:
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ACCOUNT NUMBER:
----------------------------------------