Document:

EXHIBIT 4.1

                          CHARYS HOLDING COMPANY, INC.
           NON-EMPLOYEE DIRECTORS AND CONSULTANTS RETAINER STOCK PLAN
                                FOR THE YEAR 2004

     1.   Introduction.  This  Plan  shall  be  known  as  the  "Charys  Holding
          ------------
Company, Inc. Non-Employee Directors and Consultants Retainer Stock Plan for the
Year  2004"  and is hereinafter referred to as the "Plan."  The purposes of this
Plan  are  to  enable  Charys Holding Company, Inc., a Delaware corporation (the
"Company"),  to  promote  the  interests  of the Company and its stockholders by
attracting  and  retaining  non-employee  Directors  and  Consultants capable of
furthering  the  future  success  of  the Company and by aligning their economic
interests more closely with those of the Company's stockholders, by paying their
retainer  or fees in the form of shares of the Company's common stock, par value
$0.001  per  share  (the  "Common  Stock").

     2.   Definitions.  The  following  terms  shall have the meanings set forth
          -----------
below:

     "Board" means the Board of Directors of the Company.

     "Change of Control" has the meaning set forth in Paragraph 12(d) hereof.

     "Code"  means  the Internal Revenue Code of 1986, as amended, and the rules
and  regulations  thereunder. References to any provision of the Code or rule or
regulation  thereunder  shall  be  deemed  to  include  any amended or successor
provision,  rule  or  regulation.

     "Committee"  means  the committee that administers this Plan, as more fully
defined  in  Paragraph  13  hereof.

     "Common Stock" has the meaning set forth in Paragraph 1 hereof.

     "Company" has the meaning set forth in Paragraph 1 hereof.

     "Consultants"  means  the  Company's  consultants and advisors only if: (i)
they  are  natural persons; (ii) they provide bona fide services to the Company;
and  (iii)  the  services  are  not  in  connection  with  the  offer or sale of
securities  in  a capital-raising transaction, and do not directly or indirectly
promote  or  maintain  a  market  for  the  Company's  securities.

     "Deferral Election" has the meaning set forth in Paragraph 6 hereof.

     "Deferred  Stock  Account"  means  a  bookkeeping account maintained by the
Company  for a Participant representing the Participant's interest in the shares
credited  to  such  Deferred  Stock  Account  pursuant  to  Paragraph  7 hereof.

     "Delivery Date" has the meaning set forth in Paragraph 6 hereof.

     "Director" means an individual who is a member of the Board of Directors of
the  Company.

     "Dividend  Equivalent"  for  a given dividend or other distribution means a
number  of  shares  of  the  Common  Stock having a Fair Market Value, as of the
record date for such dividend or distribution, equal to the amount of cash, plus
the  Fair  Market  Value  on  the  date of distribution of any property, that is
distributed  with  respect  to  one  share  of the Common Stock pursuant to such
dividend  or  distribution;  such  Fair  Market  Value  to  be determined by the
Committee  in  good  faith.

     "Effective Date" has the meaning set forth in Paragraph 3 hereof.

     "Exchange Act" has the meaning set forth in Paragraph 12(d) hereof.

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     "Fair  Market Value" means the mean between the highest and lowest reported
sales  prices  of the Common Stock on the New York Stock Exchange Composite Tape
or, if not listed on such exchange, on any other national securities exchange on
which  the  Common  Stock is listed or on The Nasdaq Stock Market, or, if not so
listed  on  any  other  national securities exchange or The Nasdaq Stock Market,
then  the  average  of  the  bid  price of the Common Stock during the last five
trading  days  on  the OTC Bulletin Board immediately preceding the last trading
day  prior  to  the  date  with  respect to which the Fair Market Value is to be
determined.  If  the  Common  Stock  is  not then publicly traded, then the Fair
Market  Value  of  the  Common  Stock shall be the book value of the Company per
share  as  determined  on the last day of March, June, September, or December in
any  year  closest  to  the  date when the determination is to be made.  For the
purpose  of  determining book value hereunder, book value shall be determined by
adding  as  of  the  applicable date called for herein the capital, surplus, and
undivided  profits  of  the  Company,  and  after  having  deducted any reserves
theretofore  established;  the sum of these items shall be divided by the number
of shares of the Common Stock outstanding as of said date, and the quotient thus
obtained shall represent the book value of each share of the Common Stock of the
Company.

     "Participant" has the meaning set forth in Paragraph 4 hereof.

     "Payment  Time"  means  the  time  when  a  Stock  Retainer is payable to a
Participant  pursuant to Paragraph 5 hereof (without regard to the effect of any
Deferral  Election).

     "Stock Retainer" has the meaning set forth in Paragraph 5 hereof.

     "Third Anniversary" has the meaning set forth in Paragraph 6 hereof.

     3.   Effective  Date  of  the  Plan.  This  Plan  was  adopted by the Board
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effective  July  19,  2004  (the  "Effective  Date").

     4.   Eligibility.  Each  individual  who is a Director or Consultant on the
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Effective  Date  and  each  individual  who  becomes  a  Director  or Consultant
thereafter  during  the  term  of  this  Plan,  shall  be  a  participant  (the
"Participant")  in this Plan, in each case during such period as such individual
remains a Director or Consultant and is not an employee of the Company or any of
its  subsidiaries.  Each  credit  of shares of the Common Stock pursuant to this
Plan shall be evidenced by a written agreement duly executed and delivered by or
on  behalf of the Company and a Participant, if such an agreement is required by
the  Company  to  assure  compliance  with  all applicable laws and regulations.

     5.   Grants  of  Shares.  Commencing  on  the Effective Date, the amount of
          ------------------
compensation  for service to directors or consultants shall be payable in shares
of  the  Common  Stock (the "Stock Retainer") pursuant to this Plan.  The deemed
issuance  price  of  shares  of  the Common Stock subject to each Stock Retainer
shall  not  be less than 85 percent of the Fair Market Value of the Common Stock
on  the  date  of  the  grant.  In  the  case  of any person who owns securities
possessing  more than ten percent of the combined voting power of all classes of
securities  of the issuer or its parent or subsidiaries possessing voting power,
the  deemed  issuance  price of shares of the Common Stock subject to each Stock
Retainer  shall  be  at least 100 percent of the Fair Market Value of the Common
Stock  on  the  date  of  the  grant.

     6.   Deferral Option.  From and after the Effective Date, a Participant may
          ---------------
make an election (a "Deferral Election") on an annual basis to defer delivery of
the Stock Retainer specifying which one of the following ways the Stock Retainer
is to be delivered (a) on the date which is three years after the Effective Date
for  which  it was originally payable (the "Third Anniversary"), (b) on the date
upon  which the Participant ceases to be a Director or Consultant for any reason
(the  "Departure  Date")  or (c) in five equal annual installments commencing on
the  Departure  Date  (the  "Third  Anniversary" and "Departure Date" each being
referred  to  herein as a "Delivery Date").  Such Deferral Election shall remain
in  effect  for each Subsequent Year unless changed, provided that, any Deferral
Election  with  respect  to  a  particular Year may not be changed less than six
months  prior to the beginning of such Year, and provided, further, that no more
than one Deferral Election or change thereof may be made in any Year.

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     Any Deferral Election and any change or revocation thereof shall be made by
delivering  written  notice  thereof  to  the Committee no later than six months
prior to the beginning of the Year in which it is to be effected; provided that,
with  respect to the Year beginning on the Effective Date, any Deferral Election
or  revocation  thereof must be delivered no later than the close of business on
the  30th  day  after  the  Effective  Date.

     7.   Deferred  Stock Accounts.  The Company shall maintain a Deferred Stock
          ------------------------
Account  for  each  Participant  who makes a Deferral Election to which shall be
credited,  as of the applicable Payment Time, the number of shares of the Common
Stock  payable  pursuant  to  the  Stock Retainer to which the Deferral Election
relates.  So  long  as  any amounts in such Deferred Stock Account have not been
delivered  to  the  Participant  under  Paragraph  8 hereof, each Deferred Stock
Account  shall be credited as of the payment date for any dividend paid or other
distribution  made  with respect to the Common Stock, with a number of shares of
the  Common Stock equal to (a) the number of shares of the Common Stock shown in
such Deferred Stock Account on the record date for such dividend or distribution
multiplied  by  (b)  the  Dividend Equivalent for such dividend or distribution.

     8.   Delivery  of  Shares.
          --------------------

     (a)  The  shares  of  the  Common  Stock  in a Participant's Deferred Stock
Account  with  respect  to  any Stock Retainer for which a Deferral Election has
been  made (together with dividends attributable to such shares credited to such
Deferred  Stock  Account) shall be delivered in accordance with this Paragraph 8
as  soon as practicable after the applicable Delivery Date.  Except with respect
to  a  Deferral  Election  pursuant  to  Paragraph  6 hereof, or other agreement
between  the parties, such shares shall be delivered at one time; provided that,
if  the  number  of shares so delivered includes a fractional share, such number
shall  be rounded to the nearest whole number of shares.  If the Participant has
in  effect  a Deferral Election pursuant to Paragraph 6 hereof, then such shares
shall  be  delivered  in five equal annual installments (together with dividends
attributable  to  such shares credited to such Deferred Stock Account), with the
first  such installment being delivered on the first anniversary of the Delivery
Date;  provided  that,  if  in  order  to equalize such installments, fractional
shares  would  have  to  be  delivered,  such  installments shall be adjusted by
rounding  to  the  nearest  whole share.  If any such shares are to be delivered
after  the  Participant  has  died  or become legally incompetent, they shall be
delivered  to the Participant's estate or legal guardian, as the case may be, in
accordance  with  the  foregoing;  provided that, if the Participant dies with a
Deferral  Election pursuant to Paragraph 6 hereof in effect, the Committee shall
deliver  all  remaining  undelivered  shares  to  the  Participant's  estate
immediately.  References  to a Participant in this Plan shall be deemed to refer
to  the  Participant's  estate  or  legal  guardian,  where  appropriate.

     (b)  The  Company may, but shall not be required to, create a grantor trust
or  utilize  an existing grantor trust (in either case, "Trust") to assist it in
accumulating  the  shares  of the Common Stock needed to fulfill its obligations
under this Paragraph 8.  However, Participants shall have no beneficial or other
interest  in  the Trust and the assets thereof, and their rights under this Plan
shall  be  as  general  creditors of the Company, unaffected by the existence or
nonexistence  of  the  Trust,  except  that  deliveries  of  Stock  Retainers to
Participants  from  the  Trust  shall,  to  the  extent  thereof,  be treated as
satisfying  the  Company's  obligations  under  this  Paragraph  8.

     9.   Share  Certificates;  Voting  and  Other Rights.  The certificates for
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shares  delivered to a Participant pursuant to Paragraph 8 above shall be issued
in the name of the Participant, and from and after the date of such issuance the
Participant shall be entitled to all rights of a stockholder with respect to the
Common Stock for all such shares issued in his name, including the right to vote
the  shares,  and  the  Participant  shall  receive  all  dividends  and  other
distributions  paid  or  made  with  respect  thereto.

     10.  General  Restrictions.
          ---------------------

          (a)  Notwithstanding  any  other  provision of this Plan or agreements
made pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of the Common Stock under this Plan prior
to  fulfillment  of  all  of  the  following  conditions:

               (i)   Listing  or  approval  for  listing upon official notice of
issuance  of  such  shares  on  the New York Stock Exchange, Inc., or such other
securities exchange as may at the time be a market for the Common Stock;

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               (ii)  Any  registration  or  other  qualification  of such shares
under  any  state  or federal law or regulation, or the maintaining in effect of
any such registration or other qualification which the Committee shall, upon the
advice  of  counsel,  deem  necessary  or  advisable;  and

              (iii)  Obtaining  any  other consent, approval, or permit from any
state  or federal governmental agency which the Committee shall, after receiving
the  advice  of  counsel,  determine  to  be  necessary  or  advisable.

          (b)  Nothing  contained  in  this  Plan shall prevent the Company from
adopting other or additional compensation arrangements for the Participants.

     11.  Shares  Available.  Subject  to Paragraph 12 below, the maximum number
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of  shares  of  the  Common  Stock  which  may in the aggregate be paid as Stock
Retainers pursuant to this Plan is 966,664.  Shares of the Common Stock issuable
under this Plan may be taken from treasury shares of the Company or purchased on
the  open  market.

     12.  Adjustments;  Change  of  Control.
          ---------------------------------

          (a)  In  the  event  that there is, at any time after the Board adopts
this  Plan,  any  change  in  corporate  capitalization,  such as a stock split,
combination  of  shares,  exchange  of  shares,  warrants  or rights offering to
purchase  the  Common  Stock  at  a  price  below  its  Fair  Market  Value,
reclassification,  or  recapitalization, or a corporate transaction, such as any
merger,  consolidation,  separation,  including  a  spin-off, stock dividend, or
other  extraordinary  distribution  of  stock  or  property  of the Company, any
reorganization  (whether  or not such reorganization comes within the definition
of  such term in Section 368 of the Code) or any partial or complete liquidation
of  the Company (each of the foregoing a "Transaction"), in each case other than
any  such  Transaction which constitutes a Change of Control (as defined below),
(i)  the  Deferred  Stock Accounts shall be credited with the amount and kind of
shares  or  other  property  which  would  have been received by a holder of the
number  of  shares  of  the Common Stock held in such Deferred Stock Account had
such  shares of the Common Stock been outstanding as of the effectiveness of any
such  Transaction,  (ii) the number and kind of shares or other property subject
to  this  Plan  shall  likewise  be  appropriately  adjusted  to  reflect  the
effectiveness  of  any  such  Transaction,  and  (iii)  the  Committee  shall
appropriately  adjust  any  other  relevant provisions of this Plan and any such
modification  by  the  Committee shall be binding and conclusive on all persons.

          (b)  If  the shares of the Common Stock credited to the Deferred Stock
Accounts  are  converted  pursuant  to  Paragraph  12(a)  into  another  form of
property,  references  in  this  Plan to the Common Stock shall be deemed, where
appropriate,  to  refer  to  such  other  form  of  property,  with  such  other
modifications as may be required for this Plan to operate in accordance with its
purposes.  Without  limiting  the  generality  of  the  foregoing, references to
delivery of certificates for shares of the Common Stock shall be deemed to refer
to delivery of cash and the incidents of ownership of any other property held in
the  Deferred  Stock  Accounts.

          (c)  In lieu of the adjustment contemplated by Paragraph 12(a), in the
event  of  a  Change  of  Control,  the following shall occur on the date of the
Change  of Control (i) the shares of the Common Stock held in each Participant's
Deferred  Stock  Account  shall be deemed to be issued and outstanding as of the
Change  of Control; (ii) the Company shall forthwith deliver to each Participant
who  has  a  Deferred Stock Account all of the shares of the Common Stock or any
other property held in such Participant's Deferred Stock Account; and (iii) this
Plan  shall  be  terminated.

          (d)  For  purposes  of  this Plan, Change of Control shall mean any of
the  following  events:

               (i)   The  acquisition by any individual, entity or group (within
the  meaning  of  Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934,  as  amended  (the  "Exchange  Act")) (a "Person") of beneficial ownership
(within  the  meaning  of  Rule  13d-3 promulgated under the Exchange Act) of 80
percent or more of either (1) the then outstanding shares of the Common Stock of
the Company (the "Outstanding Company Common Stock"), or (2) the combined voting
power  of  then  outstanding  voting  securities of the Company entitled to vote
generally  in  the  election  of  directors  (the  "Outstanding  Company  Voting
Securities");  provided,

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however,  that  the  following  acquisitions  shall  not  constitute a Change of
Control  (A) any acquisition directly from the Company (excluding an acquisition
by virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Company), (B) any acquisition by
the Company, (C) any acquisition by any employee benefit plan (or related trust)
sponsored  or  maintained  by  the  Company or any corporation controlled by the
Company  or (D) any acquisition by any corporation pursuant to a reorganization,
merger  or  consolidation,  if,  following  such  reorganization,  merger  or
consolidation, the conditions described in clauses (A), (B) and (C) of paragraph
(iii)  of  this  Paragraph  12(d)  are  satisfied;  or

               (ii)  Individuals  who,  as  of  the  date hereof, constitute the
Board  of  the  Company (as of the date hereof, "Incumbent Board") cease for any
reason  to  constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's stockholders, was approved by a vote
of  at  least  a  majority  of the directors then comprising the Incumbent Board
shall  be  considered  as  though such individual were a member of the Incumbent
Board,  but  excluding,  for  this  purpose,  any  such individual whose initial
assumption  of  office  occurs  as  a  result  of either an actual or threatened
election  contest  (as  such  terms  are  used  in Rule 14a-11 of Regulation 14A
promulgated  under  the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board; or

              (iii)  Approval  by  the  stockholders  of  the  Company  of  a
reorganization,  merger,  binding  share  exchange  or  consolidation,  unless,
following  such  reorganization, merger, binding share exchange or consolidation
(A)  more  than  60  percent of, respectively, then outstanding shares of common
stock  of  the  corporation  resulting from such reorganization, merger, binding
share  exchange  or  consolidation  and  the  combined  voting  power  of  then
outstanding  voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners,  respectively,  of  the Outstanding Company Common Stock and Outstanding
Company  Voting  Securities  immediately  prior  to such reorganization, merger,
binding share exchange or consolidation in substantially the same proportions as
their ownership, immediately prior to such reorganization, merger, binding share
exchange  or  consolidation,  of  the  Outstanding  Company  Common  Stock  and
Outstanding  Company  Voting  Securities,  as  the  case  may  be, (B) no Person
(excluding  the  Company,  any  employee  benefit plan (or related trust) of the
Company  or such corporation resulting from such reorganization, merger, binding
share  exchange or consolidation and any Person beneficially owning, immediately
prior  to  such reorganization, merger, binding share exchange or consolidation,
directly  or  indirectly,  20  percent or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities, as the case may be) beneficially
owns,  directly  or  indirectly,  20  percent  or  more  of,  respectively, then
outstanding  shares  of  common  stock  of  the  corporation resulting from such
reorganization,  merger, binding share exchange or consolidation or the combined
voting  power of then outstanding voting securities of such corporation entitled
to  vote  generally in the election of directors, and (C) at least a majority of
the  members  of  the  board of directors of the corporation resulting from such
reorganization,  merger, binding share exchange or consolidation were members of
the  Incumbent  Board  at  the  time  of  the execution of the initial agreement
providing  for  such  reorganization,  merger,  binding  share  exchange  or
consolidation;  or

               (iv)  Approval  by  the  stockholders  of  the  Company  of (1) a
complete  liquidation  or  dissolution  of the Company, or (2) the sale or other
disposition of all or substantially all of the assets of the Company, other than
to  a  corporation,  with  respect  to  which  following  such  sale  or  other
disposition,  (A) more than 60 percent of, respectively, then outstanding shares
of  common  stock  of  such  corporation  and  the combined voting power of then
outstanding  voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners,  respectively,  of  the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially  the same proportion as their ownership, immediately prior to such
sale  or  other  disposition,  of  the  Outstanding  Company  Common  Stock  and
Outstanding  Company  Voting  Securities,  as  the  case  may  be, (B) no Person
(excluding  the  Company and any employee benefit plan (or related trust) of the
Company  or  such  corporation  and  any Person beneficially owning, immediately
prior  to  such sale or other disposition, directly or indirectly, 20 percent or
more  of  the  Outstanding  Company  Common  Stock or Outstanding Company Voting
Securities,  as  the  case may be) beneficially owns, directly or indirectly, 20
percent  or  more  of,  respectively, then outstanding shares of common stock of
such  corporation  and  the  combined  voting  power  of then outstanding voting
securities  of  such  corporation  entitled to vote generally in the election of
directors,  and (C) at least a majority of the members of the board of directors
of  such  corporation  were  members  of  the

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Incumbent  Board at the time of the execution of the initial agreement or action
of  the  Board  providing  for  such  sale or other disposition of assets of the
Company.

     13.  Administration;  Amendment  and  Termination.
          --------------------------------------------

          (a)  This  Plan shall be administered by a committee consisting of two
members  who  shall  be the current directors of the Company or senior executive
officers or other directors who are not Participants as may be designated by the
Chief  Executive  Officer  (the "Committee"), which shall have full authority to
construe  and  interpret  this  Plan,  to establish, amend and rescind rules and
regulations  relating  to  this  Plan, and to take all such actions and make all
such  determinations  in  connection  with this Plan as it may deem necessary or
desirable.

          (b)  The  Board  may  from  time  to time make such amendments to this
Plan,  including  to  preserve or come within any exemption from liability under
Section  16(b)  of  the  Exchange  Act,  as  it  may deem proper and in the best
interest  of the Company without further approval of the Company's stockholders,
provided  that,  to  the  extent  required  under  Delaware  law  or  to qualify
transactions  under  this  Plan for exemption under Rule 16b-3 promulgated under
the  Exchange  Act,  no  amendment to this Plan shall be adopted without further
approval  of  the  Company's stockholders and, provided, further, that if and to
the  extent  required  for this Plan to comply with Rule 16b-3 promulgated under
the  Exchange Act, no amendment to this Plan shall be made more than once in any
six  month period that would change the amount, price or timing of the grants of
the  Common  Stock hereunder other than to comport with changes in the Code, the
Employee  Retirement Income Security Act of 1974, as amended, or the regulations
thereunder.  The  Board  may  terminate  this  Plan  at  any time by a vote of a
majority  of  the  members  thereof.

     14.  Restrictions  on  Transfer.  Each Stock Option granted under this Plan
          --------------------------
shall  be transferable only by will or the laws of descent and distribution.  No
interest  of  any  Employee  under  this  Plan  shall  be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or  equitable  process.  Each  Stock  Option  granted  under  this Plan shall be
exercisable  during  an  Employee's  lifetime  only  by  the  Employee or by the
Employee's  legal  representative.

     15.  Term  of  Plan.  No shares of the Common Stock shall be issued, unless
          --------------
and  until  the  Directors  of the Company have approved this Plan and all other
legal  requirements have been met.  This Plan was adopted by the Board effective
July  19,  2004,  and  shall  expire  on  July  19,  2014.

     16.  Approval.  This Plan must be approved by a majority of the outstanding
          --------
securities  entitled  to  vote  within  12  months  before or after this Plan is
adopted  or  the  date  the agreement is entered into.  Any securities purchased
before security holder approval is obtained must be rescinded if security holder
approval  is  not obtained within 12 months before or after this Plan is adopted
or  the  agreement  is  entered  into.  Such  securities shall not be counted in
determining  whether  such  approval  is  obtained.

     17.  Governing  Law.  This  Plan  and all actions taken thereunder shall be
          --------------
governed  by,  and  construed  in  accordance  with,  the  laws  of the State of
Delaware.

     18.  Information to Shareholders.  The Company shall furnish to each of its
          ---------------------------
stockholders financial statements of the Company at least annually.

     19.  Miscellaneous.
          -------------

          (a)  Nothing  in this Plan shall be deemed to create any obligation on
the  part  of the Board to nominate any Director for reelection by the Company's
stockholders  or to limit the rights of the stockholders to remove any Director.

          (b)  The  Company  shall  have  the  right  to  require,  prior to the
issuance  or  delivery  of any shares of the Common Stock pursuant to this Plan,
that  a  Participant  make  arrangements  satisfactory  to the Committee for the
withholding  of  any  taxes  required  by law to be withheld with respect to the
issuance  or  delivery  of  such  shares,  including, without limitation, by the
withholding  of  shares  that  would  otherwise  be  so  issued or

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delivered, by withholding from any other payment due to the Participant, or by a
cash  payment  to  the  Company  by  the  Participant.

     IN  WITNESS  WHEREOF,  this Plan has been executed effective as of July 19,
2004.

                                    CHARYS HOLDING COMPANY, INC.

                                    By  /s/  Billy V. Ray, Jr.
                                      ------------------------------------------
                                      Billy V. Ray, Jr., Chief Executive Officer

                                        7
<PAGE>Exhibit 10.3

AGREEMENT

 

This Agreement is effective as of this 10th day of May, 2004 (the "Effective Date"), by and between House of Brussels Chocolates, Inc. ("HOBC") of 750 Terminal Ave., Suite 208, Vancouver, British Columbia V6A 2M5, Canada and Walgreen Co., ("Walgreens") of 200 Wilmot Road, Deerfield, Illinois 60015.

 

1.    Assignment and Transfer of TRUFFELINOS and TRUFFELINOS LITE Trademarks and Registrations. In consideration for the private label product production commitments as described herein, HOBC agrees to assign to Walgreens, and Walgreens agrees to receive from HOBC, any and all HOBC right, title and interest in and to the TRUFFELINOS and TRUFFELINOS LITE trademarks and corresponding applications described on Exhibit A hereto (incorporated herein by reference) which HOBC may have, any and all trade dress rights in and to the current TRUFFELINOS and TRUFFELINOS LITE products (individually and collectively, the "Trademarks"), and any and all goodwill associated therewith as of the Effective Date, and further, HOBC agrees to produce the TRUFFELINOS and TRUFELLINOS LITE products as more fully described in this Agreement. In connection with this Trademark transfer, concurrent with the execution of this Agreement, HOBC will execute the Trademark Assignment attached hereto as Exhibit B, and any such additional assignment documentation as Walgreens may require, such documents to be effective as of the Effective Date or as of the earliest date thereafter as may be legally required in connection with the trademark assignment process. Any and all costs associated with preparing, recording, registering and/or otherwise affecting the trademark assignment documents shall be borne by Walgreens.

 

2.    Production Terms/Pricing. Subject to the terms of this Agreement, HOBC will be the sole and exclusive producer of Walgreens' TRUFFELINOS and TRUFFELINOS LITE products (collectively referred to herein as the "Products") as follows:

 

	
(i)
	TRUFFELINOS shall be produced in 8, 12 and 16 oz. sized boxes and a 1 oz. sampler size,; and 

 

	
(ii)
	TRUFFELINOS LITE, containing low-carbohydrate/no-sugar-added chocolates, shall be produced in 7, 10.5 and 14 oz. boxes and a 1 oz, sampler size (the "Products")

 

with each box containing (A) six flavors of chocolate-coated candies consisting of Caramel, Coffee Crisp, Chocolate Truffle, Peanut Butter, Orange and Lemon, and (B) half milk chocolate and half dark chocolate-coated candies.

 

Production shall commence as of the Effective Date of this Agreement and continue for two (2) years, ending on the second anniversary of the Effective Date, with guaranteed annual purchases by Walgreens of no less than $3 million worth of Products from HOBC. The packaging, branding and labeling of the Products shall be produced by HOBC in the manner described in Exhibit C, attached hereto and made a part hereof by reference.

 

HOBC shall supply Walgreens with such inventory/production of the Products and other private label products as Walgreens may reasonably require from time to time during the term hereof, with HOBC at all times maintaining a 30-day supply of such respective Products

	 
	 	 	 
	

	 

based on Walgreens' average monthly purchases from HOBC over the previous six-month period; provided, however, that during the- first six months of the term, H0BC shall maintain such inventory levels as set forth in Walgreens projected sales report delivered to HOBC.

 

The pricing for the Products shall be that which is outlined on Exhibit D, attached hereto and made a part hereof by reference, and shall remain fixed for the term of this Agreement; provided, however, that in the event at any time during the term of this Agreement, Walgreens is offered a lower price to produce the Products by another vendor, such production to commence no earlier than the first anniversary of the Effective Date, Walgreens shall present such offer to HOBC and HOBC shall have a period of thirty (30) days to match such offer. In the event HOBC refuses to match such offer, Walgreens shall have the right to terminate this Agreement, such termination to be effective no earlier than the first anniversary of the Effective Date, and in such case, all right, title and interest in and to the TRUFFELINOS and TRUFFELINOS LITE trademarks shall remain with Walgreens. HOBC shall deliver the Products to Walgreens' designated distribution centers by the dates set forth in Walgreens' respective purchase orders, which shall contemplate a minimum order lead-time of at least 10 days. HOBC represents and warrants that the price and terms offered to Walgreens for the Products shall be at least as favorable as those offered by HOBC to any other third party private label customer of HOBC purchasing chocolates and low-carbohydrate/ no-sugar-added chocolates. Further, every six (6) months during the term of this Agreement, the parties agree to review the pricing for the Products, and in the event that HOBC's cost to produce the Products has decreased, the price to Walgreens for the Products shall be lowered by the same percentage, effective as of such review date,

 

Walgreens, as owner of the TRUFFELINOS and TRUFFELINOS LITE trademarks, shall be free to use these marks on any other products Walgreens may produce or have produced for it at any time during the term of this Agreement or thereafter. Provided, however, that during the term hereof, HOBC shall have a right of first refusal to match or better the terms and conditions offered to Walgreens by any other potential supplier of any new TRUFFELINOS or TRUFFELINOS LITE chocolates and/or low-carbohydrate/no-sugar-added chocolate candies. This right of first refusal shall apply to any decision by Walgreens to replace the TRUFFELINOS or TRUFFELINOS LITE Products that are the subject of this Agreement, with a different sized TRUFFELINOS or TRUFFELINOS LITE Product. HOBC shall have a period of fifteen (15) days in each instance to determine whether or not to exercise this right of first refusal on the terms and conditions presented by Walgreens, and in the event HOBC elects to accept such terms, any such new or additional purchase arrangement shall be pursuant to the terms of this Agreement as amended to reflect the new terms applicable to the production and sale of the new or additional TRUFFELINOS or TRUFFELINOS LITE Products. Further, such new or additional chocolates and/or low-carbohydrate/no-sugar-added chocolates shall be included in the definition of Products for purposes of this Agreement, including but not limited to the minimum purchase requirements set forth in Paragraph 2. In the event that HOBC elects not to exercise its right of first refusal, Walgreens shall be free to pursue production of such chocolates and/or low-carbohydrate/no-sugar-added chocolates on the same or more favorable terms as those offered to HOBC. HOBC refusal to exercise its right of first refusal in connection with an offer to replace the TRUFFELINOS or TRUFFELINOS LITE Products or add any new TRUFFELINOS or TRUFFELINOS LITE

	 
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chocolates and/or low-carbohydrate/no-sugar-added chocolates shall not in any way effect Walgreens' ownership of the TRUFFELINOS and TRUFFELINOS LITE trademarks.

 

3.  Applicable HOBC Trademark Representations and Warranties. HOBC represents and warrants to Walgreens that, to the best of its knowledge, as of the Effective Date: (i) HOBC is the sole owner of all right, title and interest in and to the Trademarks, and that it has made no other use of the TRUFFELINOS name other than in connection with Trademarks that are assigned to Walgreens pursuant to this Agreement; (ii) such Trademarks are free and clear of any legitimate liens or encumbrances; (iii) HOBC is not aware of any claim alleging that the Trademarks infringe or otherwise violate the rights of any other party; (iv) HOBC has the legal right, authority and ability to transfer the Trademarks to Walgreens as described in this Agreement; and (v) the Trademark transfer and assignment transactions contemplated herein will effectively transfer all right, title and interest in the Trademarks, and any goodwill associated therewith, to Walgreens.

 

4.  Term and Termination.

 

(a) This Agreement shall commence as of the Effective Date and shall end on the second anniversary of the Effective Date.

 

(b) This Agreement may be earlier terminated as follows:

 

(i) By either party, upon not less that 30 days prior written notice if the other party materially breaches any non-payment obligation under this Agreement and fails to cure such breach within said thirty day period; provided, however, that in the event HOBC fails to have sufficient production to fill Walgreens' purchase orders on three (3) or more occasions during any given 12-month period during the term hereof, HOBC shall forfeit its right to cure, as provided above;

 

(ii) By Walgreens, upon 30 days prior written notice to HOBC, in the event that HOBC files, or has filed against it (and not dismissed within 30 days) a petition in bankruptcy, makes a general assignment for the benefit of creditors, or files a petition or an answer with a court of law seeking or consenting to any reorganization, arrangement, adjustment, composition, liquidation, dissolution or similar relief under any law or regulation, or files an answer admitting or not contesting the material allegations of a petition or other pleading filed against it for or proposing any such relief.

 

Upon expiration or termination of this Agreement for any reason, other than a breach by Walgreens, which is not cured as provided herein, all right, title and interest in and to the Trademarks shall be permanently vested in Walgreens and no action shall be taken by HOBC adverse to such ownership interest.

 

(d) In the event this Agreement is terminated due to the breach hereof by Walgreens, which is not cured as provided in subparagraph 4(b)(i) above, all right, tide and interest in and to the Trademarks shall immediately revert to HOBC, and any costs associated with the transfer of the Trademarks back to HOBC shall be paid by Walgreens.

	 
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5.  Product Representations, Indemnification and Insurance.

 

(a)  HOBC represent; and warrants to Walgreens that (i) all Products sold to Walgreens pursuant to this Agreement and the Product containers and packaging therefor shall be free from defects in design and/or manufacture, and shall comply with any and all applicable federal, state and local laws; and (ii) the Trademarks, Product containers and Product packaging or any portions thereof do not infringe or otherwise violate the rights of any other party, and that it is not aware of any claim that the Trademarks, Product containers or Product packaging or any portion thereof infringe or otherwise violate the rights of any other party.

 

(b)  HOBC shall indemnify and hold Walgreens harmless from any and all claims, causes of action and other proceedings, including but not limited to any and all loss, cost, damage and expense, including but not limited to reasonable attorneys' fees, incurred in connection therewith ("Claims"), which result from (i) the acts or omissions of H0BC, its employees, agents and subcontractors, and (ii) any breach of this Agreement by HOBC, its employees, agents or subcontractors, including but not limited to any Claim that death personal injury or property damage was caused by the condition of the Products, Product containers and/or Product packaging, or that any of the materials provided by HOBC infringe or otherwise violate the rights of another party.

 

(c)  During the term of this Agreement, HOBC shall maintain a comprehensive, occurrence-based general liability policy from an insurance company reasonably acceptable to Walgreens, with limits of liability equal to or greater than Ten Million U.S. Dollars (SUS10,000,000). Walgreens shall be named as an additional insured on such policy and HOBC shall deliver to Walgreens, concurrent with the execution of this Agreement, a certificate of insurance in compliance herewith. Said policy shall not contain any provision that restricts or otherwise limits Walgreens' recovery thereunder, nor shall it be canceled or otherwise modified without prior notice to and the written consent of Walgreens. HOBC duty to defend and/or indemnify Walgreens shall not be limited by the terms of any such insurance policy.

 

(d)    HOBC shall reimburse Walgreens for any and all attorneys' fees and litigation expenses it incurs in defending itself against any Claim, or if Walgreens so requests, HOBC, shall, at its sole expense, retain legal counsel reasonably acceptable to Walgreens to defend Walgreens, its directors, officers, employees and agents against any such Claims; provided, however, that in the event HOBC and/or its retained counsel fail to promptly provide such defense, or, having commenced such defense, fail to diligently proceed with such defense in a manner that is reasonably satisfactory to Walgreens, Walgreens shall have the right to assume the defense of any such matter through legal counsel of its own choosing. In such case, HOBC shall remain liable for Walgreens' reasonable attorneys' fees and litigation expenses, as provided herein. Further, in the event HOBC does provide Walgreens' defense, neither HOBC nor its retained counsel shall enter into any settlement agreement or agree to the entry of any judgment or decree that requires Walgreens to take or refrain from taking any specific action, admit liability or pay any amount of money out of its own resources without Walgreens' prior written consent.

	 
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(e)    Walgreens shall indemnify and hold HOBC harmless from any and all Claims, which result solely from (i) the acts or omissions of Walgreens, its employees and agents, including but not limited to any Claim that any trademarks (other than the TRUFFELINO and TRUFFELINO LITE trademarks), trade dress, or other artwork or designs created by Walgreens for the Products and/or Product packaging infringe or otherwise violate the rights of another party, or (ii) any breach of this Agreement by Walgreens, its employees, agents or subcontractors. Walgreens shall reimburse HOBC for any and all reasonable attorneys' fees and litigation expenses it incurs in defending itself against any Claim, or if HOBC so requests, Walgreens, shall, at its sole expense, retain legal counsel reasonably acceptable to HOBC to defend HOBC, its directors, officers, employees and agents against any such Claims; provided, however, that in the event Walgreens and/or its retained counsel fail to promptly provide such defense, or. having commenced such defense, fail to diligently proceed with such defense in a manner that is reasonably satisfactory to HOBC, HOBC shall have the right to assume the defense of any such matter through legal counsel of its own choosing. In such case, Walgreens shall remain liable for HOBC's reasonable attorneys' fees and litigation expenses, as provided herein. Further, in the event Walgreens does provide HOBC's defense, neither Walgreens nor its retained counsel shall enter into any settlement agreement or agree to the entry of any judgment or decree that requires HOBC to take or refrain from taking any specific action, admit liability or pay any amount of money out of its own resources without HOBC's prior written consent.

 

6. Entire Agreement and Modification. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and/or contemporaneous communications or agreements with regard to the subject matter hereof, including without limitation any terms and conditions which may be contained on Walgreens' standard purchase order or other documentation. This Agreement may not be modified except in a writing executed by the parties hereto.

 

7. Assignment. Neither parry shall assign or transfer the whole or any part of this Agreement to any other person, firm, company or entity without obtaining the prior written consent of the other party hereto. Notwithstanding the assignment restriction referenced herein, Walgreens may assign this Agreement to one of its wholly owned subsidiaries, or to a sister company or affiliate without obtaining HOBC prior consent.

 

8. No Implied Waivers. The failure of one party hereto at any time to require performance by the other of any provision hereof shall, in no way, affect such party's right to require full performance thereof at any time thereafter; nor shall the waiver by one party hereto of a breach of any provision hereof, be taken or held to be a waiver by such party of any succeeding breach of such provision or as a waiver of the provision itself. To be effective, any waiver of rights, remedies or obligations hereunder must be in writing, singed by the waiving party.

	 
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House of Brussels Chocolates
	
Walgreen Co.

	
750 Terminal Ave.
	
200 Wilmot Road

	
Suite 208
	
Deerfield, IL 60015

	
Vancouver, British Columbia
	
Attn: Vice President - Purchasing

	
Canada V6A 2M5
	 
	 	 
	
Facsimile:
	
Facsimile:

	 	 
	
e-mail:
	
e-mail;

	 	 
	
With a copy to:
	
With a copy to:

	 	 
	 	 
	 	Divisional Vice President - Law 
	 	Walgreen Co.
	 	(same address)

 

or to other such recipients, addresses or numbers as either party shall direct by written notice to the other party in the manner provided above. The date of giving any notice shall be the date of delivery, if by hand, telex or facsimile, the date following mailing, if sent by recognized overnight courier service, or if sent by regular U.S. mail, on the third business day after deposited in the mail.

 

10.    Governing Law. This agreement shall be construed in accordance with and governed by, the laws of the state of Illinois (excluding the principles of conflicts of laws). Any action to interpret or enforce the provisions of this Agreement shall only be brought in state or federal court located in Cook or Lake Counties in Illinois, and the parties hereby consent to the jurisdiction of said courts and agree not to raise any objection to such jurisdiction or venue.

 

11.    The Headings. The headings appearing in this Agreement are inserted for convenience of reference only and shall not form a part hereof.

 

12.    Force Majeure. Neither party shall be liable or responsible for any delays, damages or failure to perform any of the terms or provisions of this Agreement arising from causes reasonably beyond its control, including but not limited to, unforeseen unpreventable acts of God or public enemies, acts of civil or military authority, labor disputes, fires, riots, wars or conditions or war, acts of terrorists, embargoes, accidents, epidemics, floods or other unusually severe weather, closing or obstructing of highways, bridges or ferries, shortage of raw materials or power, or breakdown or other failure of equipment which have a material, substantial and adverse effect on such party's ability to perform pursuant to the terms of this Agreement; provided, however, that if such event of force majeure prevents a party from

	 
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performing nay of its obligations hereunder for a period exceeding thirty (30) days, the other parry shall have the right to terminate this Agreement, effective upon the provision of notice to the non-performing party.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives in duplicate, each duplicate to be considered an original and each party to retain one duplicate, as of the day and year first above written.

 

	
House of Brussels Chocolate, Inc
	
Walgreen Co.
	 
	 	 	 
	 	 	 
	
 

By: /s/ Grant Peterson
	
 

By: /s/ Robert Kral
	 
	

	

	 
	
 

Name: Grant Peterson
	
 

Name: Robert Kral
	 
	

	

	 
	
 

Title: CEO, President
	
 

Title: VP Purchasing
	 
	

	

	 

    

 

	  
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EXHIBIT A

	
Mark
	
Registration No,
	 	
Registration Date 

	 	 	 	 
	
TRUFFELINOS
	
1,499,825
	 	
August 9, 1988

	 	 	 	 
	
Mark
	
Serial Number
	 	
Application Date

	 	 	 	 
	
TRUFFELINOS LITE
	
78/355,115
	 	
January 21,2004

 

	 
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EXHIBIT B

 

ASSIGNMENT OF TRADEMARKS

 

WHEREAS, House of Brussels Chocolates, Inc., a Nevada corporation, having a place of business at 750 Terminal Avenue, Suite 208, Vancouver, British Columbia, Canada V6A 2M5 ("Assignor"), is the sole and exclusive owner of the trademarks TRUFFELINOS and TRUFFELINOS LITE, as described on Schedule I attached hereto and made a part hereof; and

 

WHEREAS, WALGREEN CO., an Illinois Corporation, having a place of business at 200 Wilmot Road, Deerfield, Illinois 60015 ("Assignee"), desires to acquire the entire right, title and interest in, to and under the said marks and the registrations and applications thereof:

 

NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00), to it in hand paid by said Assignee, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, said Assignor sells, assigns, transfers and sets over to said Assignee, all its right, title and interest in, to and under the said marks, together with the goodwill of the business symbolized by the marks, and the registrations and applications thereof, subject to the terms and conditions of the parties agreement dated 2004.

IN TESTIMONY WHEREOF, Assignor has executed this assignment by its

 

duly authorized officer this 10th day of May, 2004.

 

	 	
Assignor:

	 	 
	 	
House of Brussels Chocolates, Inc.

	 	 
	 	 
	 	
By: /s/ Grant Petterson

	 	
Name: Grant Peterson

	 	
Title: President, CEO

	 
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CERTIFICATE OF ACKNOWLEDGEMENT

 

On this 10th day of May, 2004, before me appeared Grant Peterson, the person who signed the foregoing instrument, who acknowledged that he executed the above assignment as a free act on behalf of the Assignor identified therein, with authority to do so.

 

	
/s/ Ted Hified
	 	 
	
Notary Public
	 	 

 

	
 

Subscribed and sworn to 
	 
	
before me this 10th day of

	
May, 2004.

	
 

My commission expires: Non Expiring

	 
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