Consent and Agreement Regarding Subordination and Perfection of Security Interests among Charys Holding Company, Cotton Sellers, New Stream Commercial Finance, and Gottbetter Capital Finance (December 8, 2006)

Summary

This agreement involves Charys Holding Company, various Cotton Sellers, New Stream Commercial Finance, and Gottbetter Capital Finance. It documents the consent of New Stream and Gottbetter to the closing of a purchase transaction, while outlining that the parties will negotiate an intercreditor agreement to establish the priority of security interests in certain assets. The agreement specifies that the Cotton Sellers' security interest will be perfected only after all parties agree on the terms, and that Charys and its subsidiaries remain obligated under the purchase agreement regardless of any delay in perfecting the security interest.

EX-10.3 4 ex10_3.txt EXHIBIT 10.3 December 8, 2006 New Stream Commercial Finance, LLC 38C Grove Street Ridgefield, Connecticut 06877 Attention: Jim McKay, [Title]: Gottbetter Capital Finance, LLC - ------------------------------ - ------------------------------ Attn: Michael W. Chorske, President Dear Jim and Michael, As we have discussed, Charys Holding Company Inc. ("Charys") is Purchaser of various Cotton company entities pursuant to that certain Amended and Restated Stock and Limited Partnership Interest Purchase Agreement dated December 8, 2006 ("Purchase Agreement") by and between Charys, the various sellers identified therein ("Cotton Sellers"), and our wholly owned subsidiaries Crochet & Borel Inc ("C&B") and C&B/Cotton Holdings, Inc. A copy of the Purchase Agreement which is attached hereto. Section 2.02(b) of the Purchase Agreement provides for a security interest in certain assets of C&B (the "C&B Lien") to be granted to the Cotton Sellers to secure Charys's obligation to pay a portion of the purchase price. As you are aware the collateral described in the Purchase Agreement to secure the C&B Lien is currently subject to [a] a first perfected security interest in favor of New Stream pursuant to the Revolving Loan Credit Agreement by and between New Stream Commercial Finance LLC ("New Stream"), Charys, and Crochet & Borel dated the __day of ___, 2006, and [b] a subordinate security interest in favor of Gottbetter Capital Finance, LLC, a Delaware limited liability company ("Gottbetter"), as more particularly described in the Inter Creditor Agreement between New Stream and Gottbetter a copy of which is also attached. As we have also discussed, the parties to the Purchase Agreement are desirous of consummating the First Closing under the Purchase Agreement (the "Closing"), and request the signature of New Stream and Gottbetter below to indicate its consent to the Closing in consideration of the agreement of the parties to the Purchase Agreement, set forth hereon, that New Stream, Gottbetter, Charys and the Cotton Sellers shall endeavor to negotiate in good faith an inter creditor agreement (after the Closing) that will perfect the C&B Lien as described in the Purchase Agreement as a lien subordinate to New Stream but superior to Gottbetter; provided, however, that the C&B Lien shall remain unperfected unless and until the Cotton Sellers, Charys, C&B, New Stream and Gottbetter shall enter into an inter creditor agreement in the form and substance satisfactory to New Stream, Charys, Gottbetter and the Cotton Sellers. Notwithstanding the foregoing, the delay in perfection of the C&B Lien shall not relieve Charys and C&B of their respective obligations under the Purchase Agreement. IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered this Letter as of the date first above written. CHARYS HOLDING COMPANY, INC. By: --------------------------------------- Name: Billy Ray Title: Chief Executive Officer C&B / COTTON HOLDINGS, INC By: --------------------------------------- Name: Troy Crochet Title: President CROCHET & BOREL SERVICES, INC By: --------------------------------------- Name: Troy Crochet Title: President COTTON HOLDINGS 1, INC By: --------------------------------------- Name: Peter Bell Title: President COTTON COMMERCIAL USA, LP By: Cotton USA GP, LLC, its sole general partner By: --------------------------------------- Name: Peter Bell Title: President COTTON RESTORATION OF CENTRAL TEXAS, LP By: CCI-GP, LLC, its sole general partner By: --------------------------------------- Name: Peter Bell Title: President SELLER: SELLER: - ------- ------- - ----------------------------- -------------------------------- CHAD WEIGMAN BLAKE STANSELL SELLER: SELLER: - ------- ------- - ----------------------------- -------------------------------- BRYAN MICHALSKY JAMES SCAIFE SELLER: SELLER: - ------- ------- - ----------------------------- -------------------------------- RANDALL THOMPSON PETER BELL SELLER: SELLER: - ------- ------- - ----------------------------- -------------------------------- DARYN EBRECHT RUSSELL WHITE SELLER: - ------- - ----------------------------- JOHNNY SLAUGHTER NEW STREAM COMMERCIAL FINANCE, LLC By: --------------------------------------- Title: ------------------------------------ GOTTBETTER CAPITAL FINANCE, LLC, as Agent By: --------------------------------------- Michael W. Chorske Title: President