Document:

EXHIBIT
10.4

WARRANT AGENT AGREEMENT

This Warrant Agent Agreement
(this “Agreement”) is made as of February 16,
2007, between CHARYS HOLDING COMPANY, INC., a Delaware corporation (the “Company”), and THE BANK OF NEW YORK TRUST COMPANY, N.A.
(the “Warrant Agent”).

WHEREAS, pursuant to a
Purchase Agreement, dated as of February 14, 2007 (the “Purchase
Agreement”), the Company is selling to the initial purchaser named
therein (the “Initial Purchaser”) up to 201,250  units (the “Units”) of the
Company’s securities, each Unit consisting of $1,000 principal amount of the
Company’s 8.75% Senior Convertible Notes due 2012 (the “Notes”),
a warrant to purchase up to 333.333 shares of the Company’s common stock, par
value $0.001 per share (“Common Stock”),
at an initial exercise price of $4.00 per share (a “$4.00
Warrant”) and a warrant to purchase up to 333.333 shares of Common
Stock, at an initial exercise price of $5.00 per share (a “$5.00
Warrant”); the $4.00 Warrants and the $5.00 Warrants are
collectively referred to as the “Warrants;”

WHEREAS, the Notes
will be issued pursuant to the provisions of an Indenture, dated as of the date
hereof, between the Company and The Bank of New York Trust Company, N.A., as
trustee (the “Indenture”);

WHEREAS, the Company
desires to engage the Warrant Agent to act on the Company’s behalf, and the
Warrant Agent desires to act on behalf of the Company, in connection with the
issuance of the Warrant Certificates (as defined below) and the other matters
as provided herein; and

WHEREAS, the Company
desires to provide for the form and provisions of the Warrants, the terms upon
which they shall be issued and exercised, and the respective rights and
obligations of the Company, the Warrant Agent and the holders of the Warrants
(the “Holders”);

NOW, THEREFORE, in
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:

1.             Certain Definitions.

“Affiliate”
of any Person means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such first Person. For this purpose, “control” shall mean the power to direct
the management and policies of a Person through the ownership of securities, by
contract or otherwise.

“Capital
Stock” of any Person means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of
such Person and all warrants, options or rights to acquire such capital stock.

“Common
Stock Equivalents” means rights, options, warrants or other
securities to, directly or indirectly, subscribe for or purchase Common Stock,
or securities, directly or indirectly, convertible or exercisable into or
exchangeable for Common Stock.

“Current Market Price” means
(a) if the Common Stock is listed or quoted on a Trading Market, the Volume
Weighted Average Price for the 20 consecutive Trading Days ending on, and
including, the Trading Day immediately preceding the applicable Date of
Determination; and (b) if not so listed or quoted, such price as the Board of
Directors of the Company shall determine, in good faith.

“Date of
Determination” means (a) with respect to Section 4.3.1, the
Date of Exercise, (b) with respect to Sections 5.1, 5.2 and 5.3, the date fixed
for determination of the holders of Common Stock entitled to receive the
subject dividend, issuance or distribution, and (c) with respect to Section
5.4, the Trading Day immediately preceding the date on which the Common Stock
or Common Stock Equivalents are issued or sold.

“Depositary”
means The Depositary Trust Company, its nominees and their
respective successors.

“Excluded
Securities” means shares, rights, options, warrants and
convertible or exchangeable securities, issued or issuable (a) in any of the
transactions with respect to which an adjustment of the Warrant Price is
provided pursuant to Sections 5.1 through 5.3 hereof, (b) pursuant to the
Purchase Agreement or in connection therewith, including, the Units, the Notes
(the guarantees endorsed thereon), the Warrants and the Initial Purchaser’s
Warrants, (c) upon conversion of the Notes or exercise of the Warrants or the
Initial Purchaser’s Warrants, and (d) to directors and employees (including
officers) pursuant to stock option and incentive plans of the Company existing
as of the Issue Date.

“Indebtedness”
of a Person means the principal of, premium, if any, and
interest on, and all other obligations in respect of (a) all indebtedness of
such Person for borrowed money (including all indebtedness evidenced by notes,
bonds, debentures or other securities), (b) all obligations (other than trade
payables) incurred by such Person in the acquisition (whether by way of
purchase, merger, consolidation or otherwise and whether by such Person or
another Person) of any business, real property or other assets, (c) all reimbursement
obligations of such Person with respect to letters of credit, bankers’
acceptances or similar facilities issued for the account of such Person, (d)
all capital lease obligations of such Person, (e) all net obligations of such
Person under interest rate swap, currency exchange or similar agreements of
such Person, (f) all obligations and other liabilities, contingent or
otherwise, under any lease or related document, including a purchase agreement,
conditional sale or other title retention agreement, in connection with the
lease of real property or improvements thereon (or any personal property
included as part of any such lease) which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed-upon residual value of the leased property,
including such Person’s obligations under such lease or related document to
purchase or cause a third party to purchase such leased property or pay an
agreed-upon residual value of the leased property to the lessor, (g) guarantees
by such Person of indebtedness described in clauses (a) though (f) of another
Person, and (h) all renewals, extensions, refundings, deferrals,
restructurings, amendments and modifications of any indebtedness, obligation,
guarantee or liability of the kind described in clauses (a) though (g).

“Initial
Purchaser’s Warrants” means the warrants issued or issuable
to the Initial Purchaser and/or one or more of its Affiliates in connection
with the transactions contemplated

 2
 

by the Purchase Agreement.

“Issue Date” means
February 16, 2007.

“Lien” means
any lien, mortgage, deed of trust, pledge, security interest, charge or
encumbrance of any kind.

“Person”
means any individual, corporation, partnership, limited liability company,
joint venture, association, joint stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.

“Registration
Rights Agreement” means the Registration Rights Agreement,
dated as of February 16, 2007, by and between the Company and the Initial
Purchaser.

“Registration
Statement” has the meaning ascribed thereto in the
Registration Rights Agreement.

“Restricted
Security” means a Warrant that constitutes a “restricted
security” within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Warrant Agent shall be entitled to request and
conclusively rely on a written opinion of counsel to the Company with respect
to whether any Warrant constitutes a Restricted Security.

“Securities
Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.

“Trading
Day” means a day during which trading in securities generally
occurs on the principal Trading Market on which the Common Stock is then listed
or quoted.

“Trading Market” means whichever
of the New York Stock Exchange, the American Stock Exchange, the Boston Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, NASDAQ
Capital Market or the Over-The-Counter Bulletin Board on which the Common Stock
is listed or quoted for trading on the date in question.

“Volume Weighted Average Price” means
(a) with respect to a specified Trading Day, the quotient obtained by dividing
(i) the sum of the Volume Weighted Transaction Price for each trade of Common
Stock made during such Trading Day by (ii) the total number of shares of Common
Stock traded on such Trading Day, and (b) with respect to a specified number of
Trading Days, the average Volume Weighted Average Price for such Trading Days,
determined by dividing the sum of the Volume Weighted Average Price for each
such Trading Day (determined in accordance with the foregoing clause (a)) by
the number of Trading Days during such period.

“Volume
Weighted Transaction Price” means, with respect to a
particular trade of Common Stock, the quotient obtained by dividing (a) the
product of the number of shares bought and sold in such transaction, multiplied
by the price at which such shares are bought and sold, divided by (b) the
number of shares bought and sold in such transaction.

 3
 

2.             Appointment of Warrant Agent.  The Company hereby appoints
the Warrant Agent to act as agent for the Company for the Warrants, and the
Warrant Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this Agreement.

3.             Issuance; Registration; Transfer;
Exchange; Replacement; Cancellation; etc.

3.1          Original
Issue of Warrants; Form of Warrant Certificates.

3.1.1       Certificates
representing the $4.00 Warrants and the $5.00 Warrants (the “Warrant Certificates”) shall be
substantially in the forms of Exhibit A-1 or
Exhibit A-2, respectively, the
provisions of which are incorporated herein, and shall be signed by, or bear
the facsimile signature of, the Chief Executive Officer or the President, and
the Treasurer, Secretary or Assistant Secretary of the Company, and shall bear
such other insertions, letters, numbers, legends or marks of identification as
the Company and the Warrant Agent deem appropriate, required or permitted by
this Agreement.  In the event the person
whose facsimile signature has been placed upon any Warrant shall have ceased to
serve in the capacity in which such person signed the Warrant before such
Warrant is issued, it may be issued with the same effect as if he or she had
not ceased to be such at the date of issuance. 
The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.  Typographical and other
minor errors or defects in any such facsimile signature shall not effect the
validity or enforceability of any Warrant which has been countersigned and
delivered by the Warrant Agent.  Warrant
Certificates shall be countersigned by the Warrant Agent and shall not be valid
for any purpose unless so countersigned. 
Warrant Certificates shall be dated the date of countersignature by the
Warrant Agent.

3.1.2       Contemporaneously
with the Closing Date (as such term is defined in the Purchase Agreement), upon
written instruction by the Company to the Warrant Agent, the Warrant Agent will
countersign for original issue $4.00 Warrants to purchase up to an aggregate of
58,333,275 shares of Common Stock and $5.00 Warrants to purchase up to an
aggregate of 58,333,275 shares of Common Stock. 
Contemporaneously with the Additional Closing Date (as such term is
defined in the Purchase Agreement), upon written instruction by the Company to
the Warrant Agent, the Warrant Agent will countersign for original issue $4.00
Warrants to purchase up to an aggregate of 8,749,992 shares of Common Stock and
$5.00 Warrants to purchase up to an aggregate of  8,749,992 shares of Common Stock.

3.1.3       The
$4.00 Warrants and the $5.00 Warrants offered and sold in reliance on Rule 144A
shall be issued initially in the form of one or more permanent global Warrant
Certificates in definitive, fully registered form, substantially in the forms
set forth in Exhibit A-1 and Exhibit A-2, respectively (the “$4.00 Global Warrant” and “$5.00 Global Warrant,” respectively, and
collectively, the “Global Warrants”),
deposited with the Warrant Agent, as custodian for, and registered in the name
of the nominee for, the Depositary, duly executed by the Company and
countersigned by the Warrant Agent as provided herein.  The aggregate number of Warrants represented
by each Global Warrant may from time to time be increased or decreased by
adjustments made on the records of the Warrant Agent, as custodian for the Depositary,
or its nominee, as provided in this Agreement; provided, that in no event shall

 4
 

the $4.00 Global Warrant represent the right to acquire more than
67,083,267 shares of Common Stock and in no event shall the $5.00 Global
Warrant represent the right to acquire more than 67,083,267 shares of Common
Stock, in each case, assuming subject to adjustment as provided in Section 5
below and assuming the maximum number of Units are purchased by the Initial
Purchaser pursuant to the Purchase Agreement.   
Beneficial owners of interests in a Global Warrant may receive a
permanent Warrant Certificate in registered form substantially in the form set
forth in Exhibit A-1 or Exhibit A-2, as applicable (the “Physical Warrant”), in accordance with the
procedures of the Warrant Agent and the Depositary.

3.1.4       All
Warrant Certificates shall bear the legend set forth in Exhibit B-1.  Each Global Warrant and Physical Warrant that
constitutes a Restricted Security shall bear the legend (the “Private Placement Legend”) set forth in Exhibit B-2 on the face thereof until after
the second anniversary of the later of (a) the Issue Date, and (b) the last
date on which the Company or any Affiliate thereof was the owner of such
Warrant (or any predecessor security), or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder or such longer period of time as may be required under the
Securities Act or applicable state securities laws, as set forth in an opinion
of counsel to the Company, unless otherwise agreed between the Company and the
Holder thereof (such date, the “Resale
Restriction Termination Date”). 
Each Global Warrant shall also bear the legend set forth in Exhibit B-3.

3.2          Registration.

3.2.1       Warrant
Register.  The
Warrant Agent shall maintain books (“Warrant
Register”) for the registration of the original issuance and
transfers or exchanges of Warrants.  Upon
the initial issuance of the Warrants, the Warrant Agent shall issue and
register the Warrants in the name of the Initial Purchaser in accordance
Section 3.1.2 above and instructions delivered to the Warrant Agent by the
Company.  The Company shall, upon
reasonable advance notice to the Warrant Agent, have access to the Warrant
Register during the Warrant Agent’s regular business hours.  All Warrant Certificates issued upon any
registration of transfer or exchange of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to
the same benefits under this Agreement, as the Warrant Certificates surrendered
for such registration of transfer or exchange.

3.2.2       Registered
Holder.  Prior
to due presentment for registration of transfer or exchange of any Warrant, the
Company and the Warrant Agent may deem and treat the person in whose name such
Warrant shall be registered upon the Warrant Register (“registered holder”) as the absolute owner
of such Warrant and of each Warrant represented thereby (notwithstanding any
notation of ownership or other writing on the Warrant Certificate made by
anyone other than the Company or the Warrant Agent) for the purpose of any
exercise thereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

3.3          Transfer
and Exchange.

3.3.1       The
Warrants shall initially be issued as part of the issuance of the Units.  With respect to each Unit, the Note and
Warrants included therein will become separately

 5
 

transferable immediately following the sale by the Initial Purchaser of
such Unit to a Person whom the Initial Purchaser reasonably believes to be a
QIB in a transaction under Rule 144A.

3.3.2       A
Holder may transfer or exchange Warrants for an equal number of Warrants in
other denominations, only by surrendering to the Warrant Agent the Warrant
Certificate therefor, properly endorsed with signatures properly guaranteed and
accompanied by appropriate instructions for transfer or exchange, as
applicable.  Thereupon, the Warrant Agent
shall issue in exchange therefore one or more new Warrant Certificates as
requested by the registered holder of the Warrants so surrendered, representing
an equal aggregate number of Warrants; provided, however, that, in the event a
Warrant Certificate surrendered for transfer bears a restrictive legend, the
Warrant Agent may require a written opinion of counsel for the Company stating
that such transfer may be made and indicating whether the new Warrant
Certificate(s) must also bear a restrictive legend.  No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Warrant Agent in the Warrant
Register.  Prior to the registration of
the transfer by the Warrant Agent as provided herein, the Company, the Warrant
Agent, and any agent of the Company or the Warrant Agent may treat the Person
in whose name the Warrants are registered as the owner thereof for all purposes
and as the Person entitled to exercise the rights represented thereby, any
notice to the contrary notwithstanding. Upon any such transfer or exchange, a
new Warrant Certificate(s), representing an equal aggregate number of Warrants
shall be issued and the old Warrant Certificates shall be cancelled by the
Warrant Agent.  Warrant Certificates so
cancelled shall be delivered by the Warrant Agent to the Company from time to
time upon the Company’s request.  All
Warrants issued upon any registration of transfer or exchange shall be the
valid obligations of the Company, entitled to the same benefits under this
Agreement as the Warrants surrendered upon such registration of transfer or
exchange.  The Warrant Agent shall not be
required to effect any registration of transfer or exchange which will result
in the issuance of a Warrant Certificate for a fraction of a warrant.

3.3.3       No
service charge shall be made for any transfer or exchange of Warrants, but the
Company or the Warrant Agent may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge that may be imposed in
connection with any transfer exchange of Warrants to a name other than that of
the registered holder.

3.3.4       The
Warrant Agent is authorized to countersign and to deliver, in accordance with
the terms of this Agreement, the Warrant Certificates required to be issued
pursuant to the provisions of this Section 3.3, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrant
Certificates duly executed on behalf of the Company for such purpose.

3.4          Replacement
of Warrants.  If
the Holder of a Warrant claims that his, her or its Warrant Certificate has
been mutilated, lost, destroyed or wrongfully taken, the Company shall issue
and the Warrant Agent shall countersign a replacement Warrant, upon surrender
to the Warrant Agent of the mutilated Warrant Certificate, or upon delivery to
the Warrant Agent of evidence of the loss, destruction or theft of the Warrant
Certificate satisfactory to the Warrant Agent and the Company. In the case of
lost, destroyed or wrongfully taken Warrant Certificates, if required by the
Warrant Agent or the Company, an indemnity bond must

 6
 

be provided by the Holder that is reasonably satisfactory to the
Warrant Agent and the Company to protect the Company and the Warrant Agent from
any loss which either of them may suffer if a Warrant Certificate is replaced.
The Warrant Agent may charge the Holder for its expenses in replacing a Warrant
Certificate.  The Warrant Agent is
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Warrant Certificates required to be issued pursuant to the
provisions of this Section 3.4, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly
executed on behalf of the Company for such purpose.  If a Warrant Certificate is replaced pursuant
to this Section 3.3, it ceases to be outstanding unless the Warrant Agent
receives proof satisfactory to it, or a court holds, that the replaced Warrant
Certificate is held by a bona fide purchaser.

3.5          Cancellation
of Warrants.  The
Company at any time may deliver Warrant Certificates to the Warrant Agent for
cancellation. The Warrant Agent shall promptly cancel all Warrant Certificates
surrendered for transfer, exchange, exercise or cancellation in accordance with
its customary procedures. The Company may not issue new Warrants to replace
Warrants delivered to the Warrant Agent for cancellation or that any Holder has
exercised.

3.6          CUSIP
Numbers.  The
Company in issuing the Warrants may use one or more “CUSIP” numbers, and, if
so, the Warrant Agent shall use the CUSIP numbers in notices relating to the
Warrants as a convenience to Holders; provided, however, that no representation
is hereby deemed to be made by the Warrant Agent as to the correctness or
accuracy of the CUSIP numbers printed on any notice or on any Warrant
Certificate; provided, further, that reliance may be placed only on the other
identification numbers printed on the Warrant Certificates, and the
effectiveness of any such notice shall not be affected by any defect in, or
omission of, such CUSIP numbers. The Company shall promptly notify the Warrant
Agent in writing of any change in the CUSIP numbers.

3.7          Book-Entry
Provisions for Global Warrants.

3.7.1       The
Global Warrants initially shall (a) be registered in the name of the Depositary
or the nominee of such Depositary, (b) be delivered to the Warrant Agent as
custodian for such Depositary, and (iii) bear legends required by Section
3.1.4.  Members of, or participants in,
the Depositary (“Participants”) shall
have no rights under this Agreement with respect to any Global Warrant held on
their behalf by the Depositary, or the Warrant Agent as its custodian, or under
the Global Warrant, and the Depositary may be treated by the Company, the
Warrant Agent and any agent of the Company or the Warrant Agent as the absolute
owner of the Global Warrant for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Warrant Agent or any
agent of the Company or the Warrant Agent from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and Participants, the operation of customary
practices governing the exercise of the rights of a Holder of any Warrant.

3.7.2       Transfers
of Global Warrants shall be limited to transfers in whole, but not in part, to
the Depositary, its successors or their respective nominees. In addition,
Physical Warrants shall be transferred to all beneficial owners, as identified
by the Depositary, in exchange for their beneficial interests in Global
Warrants only if the Depositary notifies the Company that the Depositary is
unwilling or unable to continue as depositary for any Global

 7
 

Warrant (or the Depositary ceases to be a “clearing agency” registered
under Section 17A of the Exchange Act) and a successor Depositary is not
appointed by the Company within 90 days of such notice or cessation, or upon
the request of the beneficial owners in accordance with the rules and
procedures of the Depositary and the provisions of this Agreement.

3.7.3       In
connection with the transfer of a Global Warrant in its entirety to beneficial
owners pursuant to Section 3.7.2, such Global Warrant shall be deemed to be
surrendered to the Warrant Agent for cancellation, and the Company shall
execute, and the Warrant Agent shall upon written instructions from the Company
countersign and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interest in such Global Warrant, an equal number
of Physical Warrants of authorized denominations.

3.7.4       Any
Physical Warrant constituting a Restricted Security delivered in exchange for
an interest in a Global Warrant pursuant to 3.7.2 shall, except as otherwise
provided by Section 3.8, bear the Private Placement Legend.

3.7.5       The
Holder of any Global Warrant may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests through
Participants, to take any action which a Holder is entitled to take under this
Agreement or the Warrants.

3.8          Special
Transfer Provisions.

3.8.1       Notwithstanding
any other provisions of this Agreement, but except as provided in 3.7.2, a
Global Warrant may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.

3.8.2       Upon
the transfer, exchange or replacement of Warrant Certificates not bearing the
Private Placement Legend, the Warrant Agent shall deliver Warrant Certificates
that do not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of Warrant Certificates bearing the Private Placement Legend, the
Warrant Agent shall deliver only Warrant Certificates that bear the Private
Placement Legend unless (a) the requested transfer is after the Resale
Restriction Termination Date, (b) there is delivered to the Warrant Agent and
the Company an opinion of counsel reasonably satisfactory to the Company and
addressed to the Company to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act, or (c) such Warrant has been sold pursuant to
an effective registration statement under the Securities Act and the Holder
that sold such Warrants has delivered to the Warrant Agent a notice in the form
of Exhibit C hereto. Upon the effectiveness,
under the Securities Act, of a Registration Statement relating to the sale of
Warrants, the Company shall deliver to the Warrant Agent a notice of
effectiveness, a Global Warrant or Global Warrants representing the number of
Warrants covered by such effective Registration Statement which do not bear the
Private Placement Legend, a written opinion of counsel for the Company in
customary form, and, if required by the Depositary, the Company shall deliver
to the Depositary a letter of representations in a form reasonably acceptable
to the Depositary. Upon the effectiveness of any

 8
 

post-effective amendment to the Registration Statement and upon the
effectiveness, under the Securities Act, of any subsequent Registration
Statement, the Company shall deliver to the Warrant Agent a notice of
effectiveness and a written opion of counsel for the Company in customary form
and, if such post-effective amendment or subsequent Registration Statement
covers the sale of Warrants not covered by the initial Registration Statement,
one or more Global Warrants relating to such additional Warrants.  Upon any sale, pursuant to a Registration
Statement, of a beneficial interest in a Global Warrant that theretofore
constituted a Restricted Security and delivery of appropriate evidence thereof
to the Warrant Agent, and upon any sale or transfer of a beneficial interest in
connection with which the Private Placement Legend will be removed in
accordance with this Agreement, the Warrant Agent shall increase the portion of
the Global Warrant that does not constitute a Restricted Security by the
portion of such sale or transfer and likewise reduce the portion of the Global
Warrant that does constitute a Restricted Warrant.

3.8.3       By
its acceptance of any Warrant bearing the Private Placement Legend, each Holder
of such a Warrant acknowledges the restrictions on transfer of such Warrant set
forth in this Agreement and in the Private Placement Legend and agrees that it
will transfer such Warrant only as provided in this Agreement and the Private
Placement Legend.

3.8.4       The
Warrant Agent shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.7 or this Section 3.8. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Warrant Agent.

4.                                      Terms
and Exercise of Warrants.

4.1          Warrant
Price.  Each
Warrant shall, when countersigned by the Warrant Agent, entitle the registered
holder thereof, subject to the provisions of such Warrant and of this
Agreement, to purchase from the Company the number of shares of Common Stock
stated therein, with respect to the $4.00 Warrants, at the price of $4.00 per
whole share, and with respect to the $5.00 Warrants, at the price of $5.00 per
whole share, in each case, subject to the adjustments provided in
Section 5 hereof.  As used in this
Agreement, the term “Warrant Price”
refers to the price per share at which Common Stock may be purchased at the
time a Warrant is exercised.

4.2          Duration
of Warrants.  A
Warrant may be exercised only during the period (“Exercise Period”) commencing on the date of issuance thereof
and terminating at 5:00 p.m., New York City time, on the fifth year anniversary
of the Issue Date (“Expiration Date”).  Each Warrant not exercised on or before the
Expiration Date shall become void, and all rights thereunder and all rights in
respect thereof under this Agreement shall cease at the close of business on
the Expiration Date.

 

 9

 

4.3          Exercise of Warrants.

4.3.1       Manner of Exercise; Payment of Warrant
Price.  Subject
to the provisions of the Warrant and this Agreement, a Warrant, when
countersigned by the Warrant Agent, may be exercised by the registered holder
thereof by:

(a)           surrendering
the Warrant Certificate, at the principal office of the Warrant Agent, with the
completed subscription form set forth in the Warrant Certificate duly executed;
and

(b)           with
respect to each full share of Common Stock as to which the Warrant is exercised,
by paying in full (i) any and all applicable taxes due in connection with the
exercise of the Warrant, the exchange of the Warrant for the Common Stock and
the issuance of the Common Stock, and (ii) the Warrant Price, in lawful money
of the United States, in cash, certified check or bank draft payable to the
order of the Company; provided, that, if the registered holder so elects, he,
she or it may satisfy the obligation to pay the Warrant Price through a “cashless
exercise,” in which event the Company shall issue to the registered holder the
number of shares of Common Stock determined as follows:

	
  

  	
   

  	
  X = Y((A-B)/A)

  
	
   

  	
  where:

  	
   

  
	
   

  	
   

  	
  X = the number of shares of Common Stock to be
  issued to the registered holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y = the number of shares of Common Stock with
  respect to which this Warrant is being exercised

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A = the Current Market Price of the Common Stock

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B = the Warrant Price

  

 

All cash
payments received upon exercise of Warrants shall be delivered to the Company
by the Warrant Agent as instructed in writing by the Company.

4.3.2       Limitation
on Exercise.

(a)           Notwithstanding
anything to the contrary contained herein, at any time that any of the Company’s
equity securities are registered under Section 12 of the Securities Exchange
Act of 1934, as amended (the “Exchange
Act”), the number of shares of Common Stock that may be acquired
by a Holder upon exercise of any Warrant (or otherwise in respect thereof)
shall be limited to the extent necessary to ensure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other individuals
or entities whose beneficial ownership of Common Stock would be aggregated with
the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed
4.999% (the “5% Maximum Percentage”)
of the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of

 10
 

Common Stock issuable upon such exercise).  For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. The Company shall, instead of
issuing shares of Common Stock in excess of the 5% Maximum Percentage, suspend
its obligation to issue shares in excess of the foregoing limitation until such
time, if any, as such shares of Common Stock may be issued in compliance with
such limitation.  Additionally, by  written notice to the
Company and the Warrant Agent, a Holder may waive the provisions of this
Section 4.3.2(a) or increase or decrease the 5% Maximum Percentage to any other
percentage specified in such notice; provided, that (i) any such waiver or
increase or decrease will not be effective until the 61st day after such notice is delivered to the
Company and the Warrant Agent, and (ii) any such waiver or increase or decrease
will apply only to such Holder and not to any other Holders of Warrants.

 

(b)           Notwithstanding
anything to the contrary contained herein and regardless of whether the
restrictions contained in Section 4.3.2(a) are waived as provided therein, the
number of shares of Common Stock that may be acquired by a Holder upon exercise
of any Warrant (or otherwise in respect thereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the
total number of shares of Common Stock then beneficially owned by such Holder
and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed 9.999% (the “10%
Maximum Percentage”) of the total number of issued and outstanding
shares of Common Stock (including for such purpose the shares of Common Stock
issuable upon such exercise).  For such
purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
The Company shall, instead of issuing shares of Common Stock in excess of the
10% Maximum Percentage, suspend its obligation to issue shares in excess of the
foregoing limitation until such time, if any, as such shares of Common Stock
may be issued in compliance with such limitation.  The provisions of this Section 4.3.2(b) may
not be waived.

4.3.3       Issuance
of Certificates.

(a)           As
soon as practicable (and, in any event, within three Trading Days) after the
exercise of any Warrant and, if applicable, the clearance of the funds in
payment of the Warrant Price, the Company shall issue (or cause its transfer
agent to issue) to the registered holder of such Warrant a certificate or
certificates representing the number of full shares of Common Stock to which
he, she or it is entitled, registered in such name or names as may be directed
by him, her or it, and, if such Warrant shall not have been exercised in full,
a new countersigned Warrant Certificate for the number of shares as to which
such Warrant shall not have been exercised. 
Notwithstanding the foregoing, the Company shall not be obligated to
deliver any securities pursuant to the exercise of a Warrant unless (i) a
registration statement under the Securities Act with respect to the Common
Stock issuable upon exercise of such Warrants is effective and a current
prospectus relating to the shares of Common Stock issuable upon exercise of the
Warrants is available for delivery to the registered holders, or (ii) the
exercise of the Warrants is exempt from the registration requirements of the
Securities Act and such securities are qualified for sale or exempt from
qualification under applicable securities laws of the states or other
jurisdictions in which the registered holder resides.  Warrants may not

 11
 

be exercised by, or securities issued to, any registered holder in any
state in which such exercise or issuance would be unlawful.

(b)           Subject
to the last two sentences of Section 4.3.3(a), if the Company fails to issue
and deliver, or cause to be issued and delivered though the Warrant Agent, to a
Holder (or such Holder’s nominee or nominee), certificates for the number of
shares of Common Stock to which such Holder shall be entitled upon exercise of
any Warrant on or prior to the date which is three Trading Days after the Date
of Exercise (as defined below), and if on or after such date such Holder is
required by its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such Holder of
the shares of Common Stock which such Holder anticipated receiving upon
exercise, then the Company shall, within three Trading Days after such Holder’s
request therefore, (i) pay in cash to such Holder the amount by which (A) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (B) the amount obtained by
multiplying (x) the number of shares of Common Stock required to be issued and
delivered upon such exercise, by (y) the price at which the sell order giving
rise to such purchase obligation was executed, and (ii) at the option of such
Holder, either reinstate the Warrant (or portion thereof) and equivalent number
of shares of Common Stock for which such exercise was not timely honored, or
deliver to the Holder the number of shares of Common Stock that should have
been issued and delivered upon exercise of the Warrant in accordance with the
terms hereof.

4.3.4       Valid
Issuance.  All
shares of Common Stock issued upon the proper exercise or surrender of a
Warrant in conformity with this Agreement shall be validly issued, fully paid
and nonassessable and shall be free from preemptive rights and free of any Lien
or adverse claim.

4.3.5       Date
of Issuance.  Each person or entity in whose name any such
certificate for shares of Common Stock is issued shall, for all purposes, be
deemed to have become the holder of record of such shares on the date on which
the Warrant Certificate (together with the executed and completed subscription
form) was surrendered and payment of the Warrant Price was made (including by
way of cashless exercise, if applicable) (the “Date
of Exercise”), except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are
open.

4.3.6       Taxes
on Exercise.  If
a Holder exercises a Warrant, the Company shall pay any documentary, stamp or
similar issue or transfer tax or duty due on the issue, if any, of shares of
Common Stock upon the exercise. However, such Holder shall pay any such tax or
duty which is due because such shares are issued in a name other than such
Holder’s name. The Company may refuse to deliver (or may refuse to cause its
transfer agent to deliver) a certificate representing the shares of Common
Stock to be issued in a name other than such Holder’s name until the Company
(or its transfer agent) receives a sum sufficient to pay any tax or duty which
will be due because such shares are to be issued in a name other than such
Holder’s name. Nothing herein shall preclude any tax withholding required by
law or regulation.

 12
 

4.3.7       No
Fractional Shares. 
Notwithstanding any provision contained in this Agreement to the
contrary, the Company shall not issue fractional shares upon exercise of
Warrants.  If, by reason of any
adjustment made pursuant to this Section 5, the holder of any Warrant
would be entitled, upon the exercise of a Warrant, to receive a fractional interest
in a share, the Company shall, upon such exercise, round up to the nearest
whole number the number of the shares of Common Stock to be issued to the
Warrant holder.

5.                                      Adjustments.

5.1          Cash
Dividends.  In
case the Company pays any cash dividend (including regularly scheduled cash
dividends) or other cash distribution to holders of its Common Stock, then on
and after the record date for the determination of holders of Common Stock
entitled to such dividend or distribution, the Warrant Price shall be decreased
by multiplying the Warrant Price in effect immediately prior to such record
date by a fraction of which (a) the numerator shall be (i) the Current Market
Price of the Common Stock, less (ii)
the per share amount of such dividend or other distribution, and (b) the
denominator shall be the Current Market Price of the Common Stock.  Such decrease shall become effective
immediately prior to the opening of business on the day following such record
date.

5.2          Stock
Splits and Combinations.  In
case the Company shall (a) pay a dividend in shares of Common Stock to all
holders of Common Stock, (b) make a distribution in shares of Common Stock to
all holders of Common Stock, (c) subdivide the outstanding shares of Common
Stock into a greater number of shares of Common Stock, or (d) combine the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Warrant Price in effect immediately prior to such action shall be
adjusted so that the Holder of any Warrant thereafter surrendered for exercise
shall be entitled to receive the number of shares of Common Stock which such
Holder would have owned immediately following such action had such Warrant been
converted immediately prior thereto. Any adjustment made pursuant to this
Section 5.2 shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision or combination.  If any dividend or distribution of the type
described in this Section 5.2 is declared but not so paid or made, the Warrant
Price shall again be adjusted to the Warrant Price which would then be in
effect if such dividend or distribution had not been declared.

5.3          Other
Dividends.  In
case the Company shall dividend or distribute to all holders of Common Stock
shares of Capital Stock of the Company (other than Common Stock), evidences of
Indebtedness or other assets (other than cash dividends or distributions
covered by Section 5.1), or shall dividend or distribute to all holders of
Common Stock warrants, options or rights to subscribe for or purchase
securities, then, in each such case, the Warrant Price shall be decreased by
multiplying the Warrant Price in effect immediately prior to the close of business
on the record date for the determination of holders of Common Stock entitled to
such dividend or distribution by a fraction of which (a) the numerator shall be
an amount equal to (i) the Current Market Price of Common Stock, less (ii) the fair market value (as
determined in good faith by the Company’s Board of Directors), on such record
date, of the portion of the shares of Capital Stock, evidences of Indebtedness,
assets, warrants, options or rights to be dividend or distributed applicable to
one share of Common Stock, and (b) the denominator shall be the Current Market
Price of the Common Stock, such decrease to become effective immediately prior
to the opening

 13
 

of business on the day following such record date; provided, however,
that if such denominator is equal to or less than one, then, in lieu of the
foregoing adjustment to the Warrant Price, adequate provision shall be made so
that each Holder shall have the right to receive upon exercise of Warrants, in
addition to the shares of Common Stock issuable (and cash, if any, payable)
upon such exercise, an amount of shares of Capital Stock, evidences of
Indebtedness, assets, options, warrants or rights that such Holder would have
received had such Holder exercised all of its Warrants on such record date. In
the event that such dividend or distribution is not so paid or made, the
Warrant Price shall again be adjusted to be the Warrant Price which would then
be in effect if such dividend or distribution had not been declared.

5.4          Below
Warrant Price Issuances.  In
case the Company shall issue or sell shares of Common Stock or Common Stock
Equivalents (other than Excluded Securities), at a price per share (or having
an exercise price, conversion price or exchange price per share) lower than the
Warrant Price in effect immediately prior to such issuance or sale, then the
Warrant Price shall be reduced on the date of such issuance to the lowest price per
share at which any such shares of Common Stock or Common Stock Equivalents have
been issued or sold.  In connection
with the adjustments contemplated by this Section 5.4, the following provisions
shall apply:

5.4.1       No
adjustment of any Warrant Price pursuant to this Section 5.4 shall have the
effect of increasing such Warrant Price above the Warrant Price in effect
immediately prior to such adjustment.

5.4.2       In
the case of the issuance of Common Stock or Common Stock Equivalents for cash,
the consideration shall be deemed to be the amount of cash paid, excluding
amounts paid or payable for accrued interest.

5.4.3       In
the case of the issuance of Common Stock or Common Stock Equivalents for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as determined in good faith
by the Company’s Board of Directors.

5.4.4       The
disposition of  treasury shares shall be
considered an issuance of Common Stock or Common Stock Equivalents.

5.4.5       If
any Common Stock or Common Stock Equivalents are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the
surviving corporation, the amount of consideration therefore shall be deemed to
be the fair value of the portion of the net assets of the non-surviving entity
that is attributable to such Common Stock or Common Stock Equivalents.  The fair value of any consideration or net
assets other than cash and securities (and, if applicable, the portions thereof
attributable to any such stock or securities) shall be determined in good faith
by the Company’s Board of Directors.

5.4.6       Common
Stock Equivalents shall be deemed issued for the consideration, if any,
received by the Company upon the issuance of such Common Stock Equivalents
(excluding any cash received or receivable on account of accrued interest or
accrued

 14
 

dividends), plus the
additional consideration, if any, to be received by the Company upon the full
exercise, conversion or exchange of such Common Stock Equivalents.

5.4.7       All
Common Stock or Common Stock Equivalents deemed issued pursuant to this Section
5.4 shall be considered issued only at the time of their deemed issuance and
any actual issuance of such securities shall not be an actual issuance or a
deemed issuance of Common Stock or Common Stock Equivalents under the
provisions of this Section 5.4.

5.4.8       Simultaneously
with any adjustment to the Warrant Price pursuant to this Section 5.4, the
number of shares of Common Stock that may be purchased upon exercise of any
Warrant shall be adjusted so that, after such adjustment, the aggregate Warrant
Price payable upon full exercise of such Warrant shall be the same aggregate
Warrant Price in effect immediately prior to such adjustment.

5.5          Adjustments
at the Company’s Option.

5.5.1       In
addition to the foregoing adjustments in Subsections 5.1, 5.2, 5.3 and 5.4 above,
the Company, from time to time and to the extent permitted by law, may decrease
the Warrant Price by any amount for a period of at least 20 days or such longer
period as may be required by law, if the Company’s Board of Directors has made
a determination, which determination shall be conclusive, that such decrease
would be in the best interests of the Company. Such Warrant Price decrease
shall be irrevocable during such period. The Company shall give notice to the
Warrant Agent and cause notice of such decrease to be mailed to each Holder of
Warrants at such Holder’s address as the same appears on the registry books of
the Warrant Registrar, at least 15 days prior to the date on which such
decrease commences.

5.5.2       The
Company may make such decreases in the Warrant Price, in addition to those
required by the above provisions of this Section 5, as it determines to be
advisable in order that any stock dividend, subdivision of shares, distribution
of options, warrants or rights to purchase stock or securities or distribution
of securities convertible into or exchangeable for stock made by the Company or
to its stockholders will not be taxable to the recipients thereof.

5.6          Effect
of Other Adjustment Events.

5.6.1       The
computation of any adjustment to be made pursuant to Section 5.1, 5.2 or 5.3
shall be subject to the following:

(a)           if
the “ex” date for any event (other than the event requiring such computation)
that requires an adjustment to the Warrant Price pursuant to Section 5.1, 5.2
or 5.3 occurs on or after the tenth Trading Day prior to the applicable
Determination Date, and prior to the “ex” date for the issuance or distribution
requiring such computation, the Volume Weighted Average Price for each Trading
Day prior to the “ex” date for such other event shall be adjusted by
multiplying such Volume Weighted Average Price by the reciprocal of the
fraction by which the Warrant Price is so required to be adjusted as a result
of such other event;

 15
 

(b)           
if the “ex” date for any event (other than the event requiring such
computation) that requires an adjustment to the Warrant Price pursuant to
Section 5.1, 5.2 or 5.3, above occurs on or after the “ex” date for the
issuance or distribution requiring such computation and on or prior to the
applicable Determination Date, the Volume Weighted Average Price for each
Trading Day on and after the “ex” date for such other event shall be adjusted
by multiplying such Volume Weighted Average Price by the same fraction by which
the Warrant Price is so required to be adjusted as a result of such other
event; and

(c)           if
the “ex” date for the event requiring such computation is on or prior to the
applicable Determination Date, after taking into account any adjustment
required pursuant to clause (a) or (b) above, the Volume Weighted Average Price
for each Trading Day on and after such “ex” date shall be adjusted by adding
thereto the amount of any cash and the fair market value (as determined in good
faith by the Company’s Board of Directors) of the evidences of Indebtedness,
shares of Capital Stock or other securities or assets or cash being distributed
(in the event requiring such computation) applicable to one share of Common
Stock as of the close of business on the day before such “ex” date.

5.6.2       For
purposes of this subsection, the term “ex” date, (i) when used with respect to
any issuance or distribution, means the first date on which the Common Stock
trades the regular way on the relevant Trading Market from which the Volume
Weighted Average Price was obtained without the right to receive such issuance
or distribution, (ii) when used with respect to any subdivision or combination
of shares of Common Stock, means the first date on which the Common Stock
trades the regular way on such exchange or in such Trading Market after the time
at which such subdivision or combination becomes effective, and (iii) when used
with respect to any tender offer or exchange offer means the first date on
which the Common Stock trades the regular way on such Trading Market after the
expiration time of such tender offer or exchange offer (as it may be amended or
extended).

5.7          No
Adjustments.  No
adjustment in the Warrant Price shall be required for a change in the par value
or no par value of the Common Stock. 
Further, no adjustment in the Warrant Price shall be required unless the
adjustment would require an increase or decrease of at least $0.01; provided,
however, that any adjustments which by reason of this Section 5.7 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 5 shall be made to
the nearest cent or to the nearest one-tenth of a share, as the case may be.

5.8          Certificate
of Adjustment.  Whenever
the Warrant Price is adjusted, the Company shall promptly mail to Holders at
the addresses appearing on the Warrant Register a notice of the adjustment and
file with the Warrant Agent a certificate of adjustment, executed by an
authorized officer of the Company, briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence of the correctness of such adjustment absent manifest error.  At the Company’s request, upon reasonable
prior notice agreed to by the Warrant Agent, the Warrant Agent shall, in the
Company’s name and at the Company’s expense, mail to Holders at the addresses
appearing on the Warrant Register such notice of adjustment required by this
Section 5.8; provided, that the form and content of such notice shall be
prepared by the Company.

 16
 

5.9          Notice
of Certain Transactions.  In
the event that (a) the Company takes any action, or becomes aware of any event,
which would require an adjustment in the Warrant Price; (b) the Company takes
any action described in Section 5.10; or (c) there is a dissolution or
liquidation of the Company, the Company shall mail to Holders and to the
Warrant Agent a written notice describing, in reasonable detail, such action or
event, the effect thereof on the Warrants and the related rights of the
Holders, and stating the proposed record, effective or expiration date, as the
case may be, of any such action or event. 
The Company shall mail such notice at least ten days before such date;
however, failure to mail such notice or any defect therein shall not affect the
validity of any such transactions or event. At the Company’s request, upon
reasonable prior notice, the Warrant Agent shall, in the Company’s name and at
the Company’s expense, mail to Holders such written notice required by this
5.9; provided, that the form and content of such notice shall be prepared by
the Company.

5.10        Effect
of Reclassifications, Consolidations, Mergers, Binding Share Exchanges or
Sales.  If any
of the following shall occur, namely: (a) any reclassification or change in the
Common Stock issuable upon exercise of Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), (b) any consolidation, merger or
binding share exchange to which the Company is a party other than a merger in
which the Company is the continuing Person and which does not result in any
reclassification of, or change (other than a change in name, or par value, or
from par value to no par value, or from no par value to par value or as a
result of a subdivision or combination) in, the Common Stock, or (c) any sale,
transfer, lease, conveyance or other disposition of all or substantially all of
the property or assets of the Company (each, a “Fundamental Transaction”), then the Company or such successor
or purchasing Person, as the case may be, shall, as a condition precedent to
such Fundamental Transaction, execute and deliver to the Warrant Agent a
supplement to this Agreement in form reasonably satisfactory to the Warrant
Agent providing that, at and after the effective time of such Fundamental
Transaction (i) the Holder of each Warrant then outstanding shall have the
right to exercise such Warrant into the kind and amount of shares of stock and
other securities and property (including cash) receivable upon such Fundamental
Transaction by a holder of the number of shares of Common Stock deliverable
upon exercise of such Warrant immediately prior to such Fundamental Transaction
(including the right of a stockholder to select the particular type of
consideration to be received), and (ii) in lieu of the rights provided by
clause (i), a Holder may elect to receive from the Company or such successor or
purchasing Person, an amount in cash equal to the value of such Holder’s Warrant,
calculated in accordance with the Black-Scholes formula (using volatility of
50%).  Such supplement shall (A) briefly
describe the Fundamental Transaction giving rise thereto, (B) state the kind
and amount of shares of stock or securities or property (including cash)
receivable by Holders of the Warrants upon exercise thereof following any such
Fundamental Transaction and any adjustment to be made with respect thereto, (C)
provide for adjustments of the Warrant Price which shall be as nearly equivalent
as may be practicable to the adjustments of the Warrant Price provided for in
this Section 5 (including, but not limited to, adjustments for any cash
dividends or distributions made by the successor or purchasing Person), and (D)
describe the procedure by which a Holder may exercise the rights, and receive
the payment, describe in clause (ii) above. 
If, in the case of any such Fundamental Transaction, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of stock or other securities and property of a
Person other than the successor or purchasing Person, as the case may be, in
such Fundamental

 17
 

Transaction, then such supplement shall also be executed by such other
Person and shall contain such additional provisions to protect the interests of
the Holders of the Warrants as the Company’s Board of Directors in good faith
shall reasonably determine necessary by reason of the foregoing. The provisions
of this Section 5.10 shall similarly apply to successive Fundamental
Transactions.

5.11        Warrant
Agent’s Disclaimer.  The
Warrant Agent has no duty to determine when an adjustment under this Section 5
should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of the correctness of any such adjustment,
and shall be protected in relying upon, the Company’s written advice with
respect thereto (including, without limitation, a certificate of adjustment
delivered to the Warrant Agent in accordance with Section 5.8 and/or a
supplement delivered to the Warrant Agent in accordance with Section
5.10).  The Warrant Agent makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Warrants, and the Warrant Agent shall not be responsible for
the failure by the Company to comply with any provisions of this Section 5.

5.12        Form
of Warrant.  The
form of Warrant need not be changed because of any adjustment pursuant to this
Section 5, and Warrants issued after such adjustment may state the same
Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. 
However, the Company may, at any time, in its sole discretion, make any
change in the form of Warrant that the Company may deem appropriate and that
does not affect the substance thereof, and any Warrant thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
or otherwise, may be in the form as so changed.

6.                                      Other
Provisions Relating to Rights of Holders of Warrants.

6.1          No
Rights as Stockholder.  Except as provided in Section 6.5 below, a
Warrant does not entitle the registered holder thereof to any of the rights of
a stockholder of the Company, including, without limitation, the right to
receive dividends or other distributions, exercise any preemptive rights or any
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter.

6.2          Reservation
of Common Stock. 
The Company shall at all times reserve and keep available a number of
its authorized but unissued shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Warrants issued pursuant to this
Agreement.

6.3          Registration
Rights.  The
Warrants and the shares of Common Stock issuable upon exercise thereof
constitute “Registrable Securities” as that term is used in the Registration
Rights Agreement.  The holder of any
Warrant or shares of Common Stock issued upon exercise of a Warrant shall be
entitled to the rights, and subject to the obligations, set forth in said
Registration Rights Agreement.

 18
 

6.4          Right
of Action.  All
rights of action with respect to this Agreement are vested in the Holders of
the Warrants, and any Holder of any Warrant, without the consent of the Warrant
Agent or the Holder of any other Warrant, may, on such Holder’s own behalf and
for such Holder’s own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company suitable to enforce, or otherwise in
respect of, such Holder’s right to exercise such Warrants in the manner
provided in the Warrant Certificate representing such Warrants and in this
Agreement.

7.                                      Concerning
the Warrant Agent and Other Matters.

7.1          Payment
of Taxes.  The
Company will, from time to time, promptly pay all taxes and charges that may be
imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of Warrants, but the
Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.

7.2          Resignation,
Consolidation, or Merger of Warrant Agent.

7.2.1       Appointment
of Successor Warrant Agent.  The Warrant Agent, or any successor to it
hereafter appointed, may resign its duties and be discharged from all further
duties and liabilities hereunder after giving 60 days’ notice in writing to the
Company.  If the office of the Warrant
Agent becomes vacant by resignation or incapacity to act or otherwise, the
Company shall appoint, in writing, a successor Warrant Agent in place of the
Warrant Agent.  If the Company shall fail
to make such appointment within a period of 30 days after it has been notified
in writing of such resignation or incapacity by the Warrant Agent or by the
holder of a Warrant, then the holder of any Warrant may apply to the Supreme
Court of the State of New York for the County of New York for the appointment
of a successor Warrant Agent.  Any successor
Warrant Agent, whether appointed by the Company or by such court, shall have a
place of business in the Borough of Manhattan, City and State of New York,
shall be authorized under applicable laws to exercise corporate trust powers
and shall be subject to supervision or examination by federal or state
authorities.  After appointment, any
successor Warrant Agent shall be vested with all the authority, powers, rights,
immunities, duties and obligations of its predecessor Warrant Agent with like
effect as if originally named as Warrant Agent hereunder, without any further
act or deed; but, if for any reason it becomes necessary or appropriate, the
predecessor Warrant Agent shall execute and deliver, at the expense of the
Company, an instrument transferring to such successor Warrant Agent all the
authority, powers, rights, immunities, duties and obligations of such
predecessor Warrant Agent hereunder; and, upon request of any successor Warrant
Agent, the Company shall make, execute, acknowledge and deliver any and all
instruments in writing for more fully and effectually vesting in, and
confirming to, such successor Warrant Agent all such authority, powers, rights,
immunities, duties and obligations.

7.2.2       Notice
of Successor Warrant Agent.  In the event a successor Warrant Agent shall
be appointed, the Company shall give notice thereof to the predecessor Warrant
Agent and the transfer agent for the Common Stock not later than the effective
date of any such appointment.

 

 19

7.2.3       Merger
or Consolidation of Warrant Agent.  Any entity into which the Warrant Agent may be
merged or with which it may be consolidated or any corporation resulting from
any merger or consolidation to which the Warrant Agent shall be a party shall
be the successor Warrant Agent under this Agreement without any further act on
the part of the Company or the Warrant Agent.

7.3          Fees
and Expenses of Warrant Agent.

7.3.1       Remuneration.  The Company agrees to pay the Warrant Agent
reasonable remuneration for its services as Warrant Agent hereunder as set
forth on Exhibit D hereto and will
reimburse the Warrant Agent upon demand for all expenditures that the Warrant
Agent may reasonably incur in the execution of its duties hereunder.

7.3.2       Further
Assurances.  The
Company agrees to perform, execute, acknowledge and deliver, or cause to be
performed, executed, acknowledged and delivered, all such further and other
acts, instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this Agreement.

7.4          Liability
of Warrant Agent.

7.4.1       Reliance
on Company Statement.  Whenever,
in the performance of its duties under this Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
statement signed by the Chief Executive Officer, Chief Financial Officer or
Chairman of the Board of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such
statement for any action taken or suffered in good faith by it pursuant to the
provisions of this Agreement.

7.4.2       Indemnity.  The Warrant Agent shall be liable hereunder
only for its own gross negligence or willful misconduct.  The Company agrees to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including
judgments, costs and reasonable counsel fees, for anything done or omitted by
the Warrant Agent in the execution of this Agreement, except as a result of the
Warrant Agent’s gross negligence or willful misconduct.

7.4.3       Exclusions.
 The Warrant
Agent shall have no responsibility with respect to the validity of this
Agreement or with respect to the validity or execution of any Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under the
provisions of Section 5 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment; nor shall it, by any act hereunder, be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Warrant or as to whether any shares of Common Stock will. when
issued, be validly issued and fully paid and nonassessable.

 20
 

7.5          Acceptance
of Agency.  The
Warrant Agent hereby accepts the agency established by this Agreement and
agrees to perform the same upon the terms and conditions herein set forth and,
among other things, shall account promptly to the Company with respect to
Warrants exercised and concurrently account for, and pay to the Company, all
moneys received by the Warrant Agent for the purchase of shares of the Company’s
Common Stock through the exercise of Warrants.

8.                                      Miscellaneous
Provisions.

8.1          Successors.
 All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.

8.2          Notices.  All notices and
other communications provided for or permitted hereunder (including, without
limitation, any notice of exercise made by a Warrant holder) shall be made in
writing, shall be delivered by hand delivery, by telecopier, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (a) when made, if made by hand delivery,
(b) upon confirmation, if made by confirmed facsimile transmission (provided
notice is also given by some other means permitted by this Section 8.2), (c)
one Business Day after being deposited with such courier, if made by overnight
courier, or (d) on the date indicated on the notice of receipt, if made by
first-class mail, to the parties as follows:

if to a Warrant holder, to the address of
such Person contained in the Warrant Register

if to the Company, to:

Charys
Holding Company, Inc.

1117
Perimeter Center West, Suite N-415

Atlanta,
Georgia  30338

Attention:  Mr. Billy V. Ray, Jr., Chief Executive
Officer

Facsimile:  (678) 443-2320

 

if
to the Warrant Agent, to:

The Bank of New York Trust Company, N.A. 

DM-GEO 

101 Barclay Street

New York, NY 10286

Attention:  Corporate Trust
Admin - ATL 

 21
 

with a copy to: 

The Bank of New York Trust Company, N.A. 

100 Ashford center North, Suite 520 

Atlanta, GA 30338

Attention:  Karen Kelly

 

or to such other address as
such person may have furnished to the other persons identified in this
Section 8.2 in writing in accordance herewith.

8.3          Applicable
Law.  The laws
of the State of New York, without regard to principles of conflicts of law,
shall govern this Agreement and the Warrants. 
The Company submits to the non-exclusive jurisdiction of the courts of
the State of New York and the courts of the United States of America, in each
case located in the Borough of Manhattan, New York, New York, over any suit,
action or proceeding arising under or in connection with this Agreement or the
transactions contemplated hereby or the Warrants.  The Company waives any objection that they
may have to the venue of any suit, action or proceeding arising under or in
connection with this  Agreement or the
transactions contemplated hereby or the Warrants in the courts of the State of
New York or the courts of the United States of America, in each case located in
the Borough of Manhattan, New York, New York, or that such suit, action or
proceeding brought in the courts of the State of New York or the courts of the
United States of America, in each case located in the Borough of Manhattan, New
York, New York, was brought in an inconvenient court and agrees not to plead or
claim the same.

8.4          Persons
Having Rights under this Agreement.  Nothing in this Agreement expressed and nothing
that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any Person, other than the parties
hereto and the registered holders of the Warrants, any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement hereof. 
All covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive benefit of the
parties hereto and their successors and assigns and of the registered holders
of the Warrants.

8.5          Examination
of the Agreement.  A copy of this Agreement shall be available at
all reasonable times at the principal office of the Warrant Agent, for
inspection by the registered holder of any Warrant.  The Warrant Agent may require any such holder
to submit his, her or its Warrant for inspection.

8.6          Counterparts;
Facsimile Signatures. 
This Agreement may be executed in any number of counterparts, and each
of such counterparts shall, for all purposes, be deemed to be an original, and
all such counterparts shall together constitute one and the same
instrument.  Facsimile signatures shall
constitute original signatures for all purposes of this Agreement.

8.7          Construction.
 Any reference
to any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder and any applicable
common law, unless the context requires otherwise.  The word “including” shall mean 

 22
 

including, without limitation, and is used in an
illustrative sense rather than a limiting sense.  Terms used with initial capital letters will
have the meanings specified applicable to singular and plural forms for all
purposes of this Agreement.  Reference to
any gender will be deemed to include all genders and the neutral form.  The headings in this Agreement are used for
convenience of reference only and shall not be considered in construing or
interpreting this Agreement.

8.8          Amendments.

8.8.1       This
Agreement and any Warrant Certificate may be amended by the parties hereto by
executing a supplemental warrant agreement (a “Supplemental
Agreement”), without the consent of any of the Warrant holders, for
the purpose of (a) curing any ambiguity, or curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this agreement
that is not inconsistent with the provisions of this Agreement or the Warrant
Certificates, (b) evidencing the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company contained in this agreement and the Warrants, (c) evidencing and
providing for the acceptance of appointment by a successor Warrant Agent with
respect to the Warrants, (d) adding to the covenants of the Company for
the benefit of the Warrant holders or surrendering any right or power conferred
upon the Company under this Agreement, or (e) amending this agreement and
the Warrants in any manner that the Company may deem to be necessary or
desirable and that will not adversely affect the interests of the Warrant
holders in any material respect.

8.8.2       The
Company and the Warrant Agent may amend this agreement and the Warrants by executing
a Supplemental Agreement with the consent of a Majority of the Warrant Holders
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders under this agreement; provided, however, that,
without the consent of each of the Holders affected thereby, no such amendment
may be made that (a) changes the Warrants so as to reduce the number of
shares of Common Stock (or other securities) purchasable upon exercise of the
Warrants or so as to increase the Warrant Price (other than as provided by
Section 5), (b) shortens the period of time during which the Warrants
may be exercised, (c) otherwise adversely affects the exercise rights of
the Holders in any material respect, or (d) amends this Section
8.8.2.  For purposes hereof, the term “Majority of the Warrant Holders” means
Holders of Warrants exercisable for at least a majority of the shares of Common
Stock issuable upon exercise of all then outstanding Warrants (in each case,
excluding any previously exercised Warrants or shares of Common Stock
previously issued upon such exercise).

8.9          Severability.
This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a
part of this Agreement a provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and enforceable.

(Remainder
of page intentionally left blank.  Signature page immediately follows.)

 23
 

IN
WITNESS WHEREOF, this Warrant Agent Agreement has been duly executed by the
parties hereto as of the day and year first above written.

	
  

  	
  CHARYS HOLDING COMPANY, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Billy V. Ray, Jr. 

  
	
   

  	
   

  	
  Billy V. Ray, Jr., Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF NEW YORK TRUST COMPANY, N.A.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen Z. Kelly 

  
	
   

  	
   

  	
  Karen Z. Kelly, Vice President

  
				

 

 24

EXHIBIT A-1

FORM OF $4.00 WARRANT CERTIFICATE

 

	
  NUMBER

  	
  THIS
  WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M. 

  NEW YORK CITY TIME, FEBRUARY 16, 2012

  	
  WARRANTS

  

CHARYS
HOLDING COMPANY, INC.

 

WARRANT                                                          CUSIP                            

THIS CERTIFIES THAT, for value received                                                                                                                        

is the registered holder of a Warrant or
Warrants expiring at 5:00 p.m., New York City time, on February 16, 2012, to
purchase one fully paid and non-assessable share (each a “Warrant Share”) of
Common Stock, par value $0.001 per share (“Common Stock”), of Charys Holding
Company, Inc., a Delaware corporation (the “Company”), for each Warrant
evidenced by this Warrant Certificate. 
The Warrant entitles the holder thereof to purchase from the Company, at
any time, and from time to time, such number of Warrant Shares at a price of
$4.00 per share, subject to adjustment as provided in the Warrant Agreement
(defined below), upon surrender at the office or agency of the Warrant Agent
(as defined below), of this Warrant Certificate, with the subscription form on
the reverse hereof duly completed and executed, with signature guaranteed as
therein specified, and payment in full of the Warrant Price, in cash, certified
check or bank draft payable to the order of the Company, or by “cashless
exercise,” in any such case, subject to the conditions set forth herein and in
the Warrant Agreement; provided, that, the Company shall not be obligated to
deliver any Warrant Shares pursuant to the exercise of a Warrant and shall have
no obligation to settle a Warrant exercise unless a registration statement
under the Securities Act of 1933, as amended (the “Act”), with respect to such
Warrant Shares is effective and a current prospectus is available for delivery
to the Warrant holders or the issuance of the Warrant Shares is permitted
pursuant to an exemption from the registration requirements of the Act.  The Warrant Agreement provides that, upon the
occurrence of certain events the Warrant Price and the number of Warrant Shares
purchasable hereunder may, subject to certain conditions, be adjusted.  As used in this Warrant Certificate, the term
“Warrant Price” refers to the price per share at which Warrant Shares may be
purchased at the time the Warrant is exercised.

This Warrant Certificate is issued under and in accordance with a
Warrant Agent Agreement, dated as of February 16, 2007 (the “Warrant Agreement”),
by and between the Company and The Bank of New York Trust Company, N.A., as
warrant agent (the “Warrant Agent”), the terms and provisions of which are
incorporated by reference herein and made a part hereof.  Copies of the Warrant Agreement are on file
at the office of the Warrant Agent and may be obtained by writing to the
Warrant Agent at DM-GEO, 101 Barclay Street, New York, NY 10286; Attention:
 Corporate Trust Admin - ATL.  Each
holder of this Warrant Certificate, by holding the same, consents and agrees to
the terms and provisions of the Warrant Agreement.

No fraction of a Warrant Share will be issued upon any exercise of a
Warrant.  If the holder of a Warrant
would be entitled to receive a fraction of a Warrant Share upon any exercise of
a Warrant, the Company shall, upon such exercise, round up to the nearest whole
number the number of Warrant Shares to be issued to such holder.

Upon any exercise of the Warrant for less than the total number of full
Warrant Shares provided for herein, there shall be issued to the registered
holder hereof or the registered holder’s assignee a new Warrant Certificate
covering the number of Warrant Shares for which the Warrant has not been
exercised.

Warrant Certificates, when surrendered at the office or agency of the
Warrant Agent by the registered holder hereof in person or by attorney duly
authorized in writing, may be exchanged in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants.

Upon due presentment for registration of transfer of the Warrant
Certificate at the office or agency of the Warrant Agent, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee in
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge except for any applicable tax or other
governmental charge.

The Company and the Warrant Agent may deem and treat the registered
holder as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the registered holder, and for
all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.

This Warrant does not entitle the registered holder to any of the rights
of a stockholder of the Company.  This
Warrant Certificate shall not be valid for any purpose until it shall have been
countersigned by the Warrant Agent.

 

	
  

  	
   

  	
  CHARYS
  HOLDING COMPANY, INC.

  CORPORATE

  THE STATE OF DELAWARE

  SEAL 1959

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Billy V. Ray, Jr., CHIEF EXECUTIVE OFFICER

  	
   

  	
  Raymond J. Smith, SECRETARY

  
	
  BANK OF NEW YORK TRUST COMPANY,
  N.A., as Warrant Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Karen Z. Kelly, Vice
  President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

SUBSCRIPTION FORM

To Be Executed by the Registered Holder in Order to Exercise Warrants

The undersigned Registered Holder irrevocably elects to
exercise                        Warrants
represented by Warrant Certificate No.                          ,
and to purchase the Warrant Shares issuable upon such exercise.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in said
Warrant Certificate and the related Warrant Agent Agreement, dated as of
February 16, 2007, by and between CHARYS HOLDING COMPANY, INC. and BANK OF NEW
YORK TRUST COMPANY, N.A.  The undersigned
Registered Holder intends that payment of the Warrant Price be made by:

Check one: 
          o            Payment
of
$                         
by wire transfer, certified check or bank draft.

o            “Cashless
Exercise”

The undersigned Registered Holder requests
that Certificates for shares shall be issued in the name of:

 

	
  

  
	
  (PLEASE TYPE OR
  PRINT NAME AND ADDRESS)

  
	
   

  
	
   

  
	
   

  
	
  (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  
	
  and be delivered to

  	
   

  
	
  (PLEASE PRINT OR TYPE NAME AND ADDRESS)

  
	
  and, if such number of
  Warrants shall not be all the Warrants evidenced by this Warrant Certificate,
  that a new Warrant Certificate for the balance of such Warrants be registered
  in the name of, and delivered to, the Registered Holder at the address stated
  below:

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (SIGNATURE)

  	
   

  	
  (TAX
  IDENTIFICATION NUMBER)

  
	
   

  	
   

  
	
                                                                                           

  	
  (ADDRESS)

  
	
  SIGNATURE(S) GUARANTEED BY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  ASSIGNMENT

  To Be Executed by the Registered Holder in Order to
  Assign Warrants

  
	
   

  
	
  For
  Value Received, 

  	
   

  	
  hereby
  sells, assigns, and transfers unto:

  
	
   

  
	
  

  
	
  (PLEASE TYPE OR
  PRINT NAME AND ADDRESS)

  
	
   

  
	
   

  
	
   

  
	
  (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  
	
  and be delivered to

  	
   

  
	
  (PLEASE PRINT OR TYPE NAME AND ADDRESS)

  
	
  

  
	
   

  	
  of
  the Warrants represented by this Warrant Certificate, and hereby irrevocably
  constitutes and appoints 

  
	
   

  	
  Attorney
  to transfer this Warrant Certificate on the books of the Company, with full
  power of 

  
	
  substitution
  in the premises.

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (SIGNATURE)

  
	
   

  
	
  SIGNATURE(S) GUARANTEED BY:

  
	
   

  	
   

  
	
   

  	
   

  
									

 

THE SIGNATURE TO THE ASSIGNMENT
OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME WRITTEN UPON THE FACE OF
THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST
COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK
EXCHANGE, PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

EXHIBIT A-2

FORM OF $5.00 WARRANT CERTIFICATE

 

 

	
  NUMBER

  	
  THIS
  WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M.

  NEW YORK CITY TIME, FEBRUARY 16, 2012

  	
  WARRANTS

  

CHARYS
HOLDING COMPANY, INC.

 

WARRANT                                                          CUSIP                            

THIS CERTIFIES THAT, for value
received                                                                                                                        

is the registered holder of a Warrant or
Warrants expiring at 5:00 p.m., New York City time, on February 16, 2012, to
purchase one fully paid and non-assessable share (each a “Warrant Share”) of
Common Stock, par value $0.001 per share (“Common Stock”), of Charys Holding
Company, Inc., a Delaware corporation (the “Company”), for each Warrant
evidenced by this Warrant Certificate. 
The Warrant entitles the holder thereof to purchase from the Company, at
any time, and from time to time, such number of Warrant Shares at a price of $5.00
per share, subject to adjustment as provided in the Warrant Agreement (defined
below), upon surrender at the office or agency of the Warrant Agent (as defined
below), of this Warrant Certificate, with the subscription form on the reverse
hereof duly completed and executed, with signature guaranteed as therein
specified, and payment in full of the Warrant Price, in cash, certified check
or bank draft payable to the order of the Company, or by “cashless exercise,”
in any such case, subject to the conditions set forth herein and in the Warrant
Agreement; provided, that, the Company shall not be obligated to deliver any
Warrant Shares pursuant to the exercise of a Warrant and shall have no
obligation to settle a Warrant exercise unless a registration statement under
the Securities Act of 1933, as amended (the “Act”), with respect to such
Warrant Shares is effective and a current prospectus is available for delivery
to the Warrant holders or the issuance of the Warrant Shares is permitted
pursuant to an exemption from the registration requirements of the Act.  The Warrant Agreement provides that, upon the
occurrence of certain events the Warrant Price and the number of Warrant Shares
purchasable hereunder may, subject to certain conditions, be adjusted.  As used in this Warrant Certificate, the term
“Warrant Price” refers to the price per share at which Warrant Shares may be
purchased at the time the Warrant is exercised.

This Warrant Certificate is issued under and in accordance with a
Warrant Agent Agreement, dated as of February 16, 2007 (the “Warrant Agreement”),
by and between the Company and The Bank of New York Trust Company, N.A., as
warrant agent (the “Warrant Agent”), the terms and provisions of which are
incorporated by reference herein and made a part hereof.  Copies of the Warrant Agreement are on file at
the office of the Warrant Agent and may be obtained by writing to the Warrant
Agent at DM-GEO, 101 Barclay Street, New York, NY 10286; Attention:
 Corporate Trust Admin - ATL.  Each
holder of this Warrant Certificate, by holding the same, consents and agrees to
the terms and provisions of the Warrant Agreement.

No fraction of a Warrant Share will be issued upon any exercise of a
Warrant.  If the holder of a Warrant
would be entitled to receive a fraction of a Warrant Share upon any exercise of
a Warrant, the Company shall, upon such exercise, round up to the nearest whole
number the number of Warrant Shares to be issued to such holder.

Upon any exercise of the Warrant for less than the total number of full
Warrant Shares provided for herein, there shall be issued to the registered
holder hereof or the registered holder’s assignee a new Warrant Certificate
covering the number of Warrant Shares for which the Warrant has not been
exercised.

Warrant Certificates, when surrendered at the office or agency of the
Warrant Agent by the registered holder hereof in person or by attorney duly
authorized in writing, may be exchanged in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants.

Upon due presentment for registration of transfer of the Warrant
Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any applicable tax or other governmental
charge.

The Company and the Warrant Agent may deem and treat the registered
holder as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the registered holder, and for
all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.

This Warrant does not entitle the registered holder to any of the rights
of a stockholder of the Company.  This
Warrant Certificate shall not be valid for any purpose until it shall have been
countersigned by the Warrant Agent.

 

	
  

  	
   

  	
  CHARYS
  HOLDING COMPANY, INC.

  CORPORATE

  THE STATE OF DELAWARE

  SEAL 1959

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Billy V. Ray, Jr., CHIEF EXECUTIVE OFFICER

  	
   

  	
  Raymond J. Smith, SECRETARY

  
	
  BANK OF NEW YORK TRUST C
  OMPANY, N.A., as Warrant Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Karen Z. Kelly, Vice
  President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
									

SUBSCRIPTION FORM

To Be Executed by the Registered Holder in Order to Exercise Warrants

The undersigned Registered Holder irrevocably elects to
exercise                        Warrants
represented by Warrant Certificate No.                          ,
and to purchase the Warrant Shares issuable upon such exercise.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in said
Warrant Certificate and the related Warrant Agent Agreement, dated as of
February 16, 2007, by and between CHARYS HOLDING COMPANY, INC. and BANK OF NEW
YORK TRUST COMPANY, N.A.  The undersigned
Registered Holder intends that payment of the Warrant Price be made by:

Check one: 
          o            Payment
of
$                         
by wire transfer, certified check or bank draft.

o            “Cashless
Exercise”

The
undersigned Registered Holder requests that Certificates for shares shall be
issued in the name of:

 

	
  

  
	
  (PLEASE TYPE OR
  PRINT NAME AND ADDRESS)

  
	
   

  
	
   

  
	
   

  
	
  (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  
	
  and be delivered to

  	
   

  
	
  (PLEASE PRINT OR TYPE NAME AND ADDRESS)

  
	
  and, if such number of
  Warrants shall not be all the Warrants evidenced by this Warrant Certificate,
  that a new Warrant Certificate for the balance of such Warrants be registered
  in the name of, and delivered to, the Registered Holder at the address stated
  below:

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (SIGNATURE)

  	
   

  	
  (TAX
  IDENTIFICATION NUMBER)

  
	
   

  	
   

  
	
                                                                                           

  	
  (ADDRESS)

  
	
  SIGNATURE(S) GUARANTEED BY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  ASSIGNMENT

  To Be Executed by the Registered Holder in Order to
  Assign Warrants

  
	
   

  
	
  For
  Value Received, 

  	
   

  	
  hereby
  sells, assigns, and transfers unto:

  
	
   

  
	
  

  
	
  (PLEASE TYPE OR
  PRINT NAME AND ADDRESS)

  
	
   

  
	
   

  
	
   

  
	
  (SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  
	
  and be delivered to

  	
   

  
	
  (PLEASE PRINT OR TYPE NAME AND ADDRESS)

  
	
  

  
	
   

  	
  of
  the Warrants represented by this Warrant Certificate, and hereby irrevocably
  constitutes and appoints 

  
	
   

  	
  Attorney
  to transfer this Warrant Certificate on the books of the Company, with full
  power of 

  
	
  substitution
  in the premises.

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  (SIGNATURE)

  
	
   

  
	
  SIGNATURE(S) GUARANTEED BY:

  
	
   

  	
   

  
	
   

  	
   

  
									

 

THE SIGNATURE TO THE ASSIGNMENT
OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME WRITTEN UPON THE FACE OF
THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST
COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK
EXCHANGE, PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

EXHIBIT B-1

FORM OF LEGEND REGARDING REGISTRATION RIGHTS AGREEMENT

THIS SECURITY AND THE COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS SECURITY SHALL BE ENTITLED TO THE BENEFITS
OF THAT CERTAIN REGISTRATION RIGHTS AGREEMENT, DATED FEBRUARY 16, 2007, AMONG
CHARYS HOLDING COMPANY, INC. AND MCMAHAN SECURITIES CO. L.P. FOR THE BENEFIT OF
PARTIES IN INTEREST THERETO.

EXHIBIT B-2

FORM OF PRIVATE PLACEMENT LEGEND

THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1)
REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT)
OR THAT IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) AND THAT
IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES THAT IT WILL NOT DIRECTLY OR INDIRECTLY ENGAGE IN ANY HEDGING
TRANSACTIONS INVOLVING THIS SECURITY OR THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS SECURITY UNLESS IN COMPLIANCE WITH THE SECURITIES ACT, AND (3) AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE
DATE THAT IS THE LATER OF (X) TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES
ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME
EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OR THAT IT IS AN
INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT), OR (D) PURSUANT TO AN EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN
ACCORDANCE WITH (3)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM
OF WHICH MAY BE OBTAINED FROM THE WARRANT AGENT) MUST BE DELIVERED TO THE
WARRANT AGENT. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
(3)(D) ABOVE, THE COMPANY AND THE WARRANT AGENT RESERVE THE RIGHT TO REQUIRE
THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY
REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS
BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE
SECURITIES LAWS.

EXHIBIT B-3

FORM OF LEGEND FOR GLOBAL WARRANT

Any Global Warrant issued, countersigned and
delivered hereunder shall bear a legend (which would be in addition to any
other legends required in the case of a Restricted Security) in substantially
the following form:

THIS SECURITY IS A GLOBAL WARRANT WITHIN THE MEANING
OF THE WARRANT AGENT AGREEMENT, DATED AS OF FEBRUARY 16, 2007 (THE “WARRANT
AGREEMENT”) BETWEEN THE COMPANY AND THE BANK OF NEW YORK TRUST COMPANY, N.A.
(THE “WARRANT AGENT”) AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT
AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER
OR EXCHANGE, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL WARRANT SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL WARRANT SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 3.7 OF THE WARRANT AGREEMENT.

EXHIBIT C

FORM OF NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

Charys Holding Company, Inc.

1117 Perimeter Center West,
Suite N-415

Atlanta, Georgia  30338

Attention:  Mr.
Billy V. Ray, Jr., Chief Executive Officer

 

The Bank of New York Trust
Company, N.A. DM-GEO 

101 Barclay Street

New York, NY 10286

Attention:  Corporate Trust Admin - ATL

 

The Bank of New York Trust Company, N.A. 

100 Ashford center North, Suite 520 

Atlanta, GA 30338

Attention:  Karen
Kelly

Re:                               Warrants to purchase shares of common stock,
par value $0.001 per share (“Common Stock”), of Charys Holding Company,
Inc. (the “Company”) at an initial exercise price of $4.00 per share (“$4.00
Warrants”) and warrants to purchase shares of Common Stock at an initial
exercise price of $5.00 per share (“$5.00 Warrants” and, together with
the $4.00 Warrants, the “Warrants”).

Ladies and Gentlemen:

Please be advised
that                                                                                                 
has
transferred                     
$4.00 Warrants,                         shares
of Common Stock issued upon exercise of $4.00 Warrants,                                    
$5.00 Warrants, and                                            
shares of Common Stock issued upon exercise of $5.00 Warrants pursuant to an
effective Registration Statement on Form
             (File
No.
333-                      ).

We hereby certify that the prospectus delivery
requirements, if any, of the Securities Act of 1933, as amended, have been
satisfied with respect to the transfer described above and that the above-named
beneficial owner of the Warrants or shares of Common Stock is named as a “Selling
Security Holder” in the Prospectus, dated
                     ,
or in amendments or supplements thereto, and that the Warrants and the number
of shares of Common Stock transferred are [a portion of] the Warrants and shares
of Common Stock listed in such Prospectus, as amended or supplemented, opposite
such owner’s name.

	
  Very truly yours,

  
	
   

  
	
   

  	
   

  
	
  (Name)

  
	
   

  
	
   

  	
   

  
	
  (Signature)

  

EXHIBIT D

WARRANT AGENT FEES

The Warrant Agent fees are
included in the fees payable to The Bank of New York Corporate Trust Company,
N.A., as Trustee, under the Indenture.EXHIBIT 10.5

CHARYS HOLDING COMPANY, INC.

REGISTRATION RIGHTS AGREEMENT

February 16, 2007

MCMAHAN
SECURITIES CO. L.P.

500
West Putnam Avenue

Greenwich, CT 06830

 

Charys Holding
Company, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the initial purchaser (the “Initial
Purchaser”) named in the purchase agreement, dated February 14,
2007  (the “Purchase
Agreement”), by and among the Initial Purchaser, the Company and
certain of the Company’s subsidiaries from time to time serving as guarantors
under the Indenture (as defined below) (the “Guarantors”),
up to 201,250 units (“Units”) of the
Company’s securities, each Unit consisting of $1,000 principal amount of its
8.75% Senior Convertible Notes due 2012 (the “Notes”)
and warrants to purchase shares of the Common Stock (as defined below) (the “Warrants” and, collectively with the Notes and the
Guarantees (as defined below), the “Securities”),
upon the terms and subject to the conditions set forth in such Purchase
Agreement.  As an inducement to the
Initial Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchaser thereunder, the Company
agrees (on behalf of itself and the Guarantors) with the Initial Purchaser for
the benefit of Holders (as defined below) as follows:

1.             Definitions.

Capitalized terms used
herein without definition shall have the meanings ascribed to them in the
Purchase Agreement.  As used in this
Registration Rights Agreement (this “Agreement”),
the following defined terms shall have the following meanings:

“415 Reduction”
has the meaning set forth in Section 2(c) hereof.

“Additional Interest”
has the meaning set forth in Section 7 hereof.

“Additional Shares”
has the meaning ascribed thereto in Section 3.8 of the Indenture.

“Affiliate” of
any specified person means any other person which, directly or indirectly, is
in control of, is controlled by, or is under common control with such specified
person.  For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

“Applicable Amount”
has the meaning set forth in Section 7 hereof.

“Business Day” means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in the City of New York, State of New York are authorized
or obligated by law or executive order to close.

“Comfort Letter” has
the meaning set forth in Section 5(u) hereof.

“Commission” means
the United States Securities and Exchange Commission, or any other federal
agency at the time administering the Exchange Act or the Securities Act,
whichever is the relevant statute for the particular purpose.

“Common Stock” means
the Company’s common stock, par value $0.001 per share.

“Effective” shall
mean, with respect to any Registration Statement, that (a) such Registration
Statement is declared effective by the Commission, and (b) the Registrable
Securities covered by such Registration Statement are listed for trading or
quoted by the Company’s then principal Trading Market, and the term “Effectiveness” shall have the correlative meaning.

“Effectiveness Period” has
the meaning set forth in Section 3(a)(i) hereof.

“Effective Date” means,
with respect to a particular Registration Statement, the date as of which such
Registration Statement becomes Effective.

“Exchange Act” means
the United States Securities Exchange Act of 1934, as amended.

“Guarantees”
means the full and unconditional guarantees by the Guarantors of the Company’s
obligations under the Notes as set forth in the Indenture.

“Holder” means,
as of the time of determination, any person holding Registrable Securities.

“Indenture”
means the Indenture, dated as of February 16, 2007, by and among the Company,
the Guarantors and the Trustee, pursuant to which the Securities are to be
issued, and as amended and supplemented from time to time in accordance with
its terms.

“Initial Purchaser’s Warrants”
means the warrants to purchase shares of Common Stock issued or issuable to the
Initial Purchaser and/or one or more of its Affiliates in connection with the
purchase and sale of Securities pursuant to the Purchase Agreement.

“Issue Date”
means the first date of original issuance of the Securities.

“Loss” has the
meaning set forth in Section 8(a) hereof.

“Notice and Questionnaire” means
a Notice of Registration Statement and Selling Securityholder Election and
Questionnaire substantially in the form of Appendix A
hereto.

 2
 

The term “person” means an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.

“Prospectus” means
the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by any
Registration Statement, including all material incorporated by reference in
such prospectus and all documents filed after the date of such prospectus by
the Company under the Securities Act or the Exchange Act and incorporated by
reference therein.

“Registrable Securities” means
all or any portion of the Securities issued from time to time under the
Indenture and the Warrant Agent Agreement and the shares of Common Stock issued
or issuable upon exercise or conversion of such Securities (including, without
limitation, Additional Shares, if any); provided, that, “Registrable Securities”
shall not include (a) Securities which are no longer outstanding, or (b) shares
of Common Stock which have been (i) sold to or through a broker or dealer or
underwriter in a public distribution, or (ii) sold in a transaction exempt from
the registration and Prospectus delivery requirements of the Securities Act
under Section 4(1) thereof, in either case (i) or (ii), in such a manner
that, upon the consummation of such sale, all transfer restrictions and
restrictive legends with respect to such shares are removed upon the
consummation of such sale

“Registration” means
a registration effected pursuant to Section 2 hereof.

“Registration Statement” means
a “shelf” registration statement filed under the Securities Act providing for
the registration of, and the sale on a continuous or delayed basis by the
Holders of, all of the Registrable Securities pursuant to Rule 415, filed by
the Company and the Guarantors pursuant to the provisions of Section 2 or
Section 5(a) of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement and Prospectus,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement and Prospectus.

“Requisite Holders”
shall mean, as of the date of determination, one or more Holders who in the
aggregate hold not less than a majority of the shares of Common Stock included
in the then outstanding Registrable Securities (including shares of Common
Stock issuable upon conversion of the Notes and exercise of the Warrants
included in the then outstanding Registrable Securities); provided, that, if
the matter in question relates to a particular Registration, then the term “Requisite
Holders” shall mean one or more Selling Securityholders who in the aggregate
hold not less than a majority of the shares of Common Stock included in the
then outstanding Registrable Securities held by all Selling Securityholders
(including shares of Common Stock issuable upon conversion of the Notes and
exercise of the Warrants included in the then outstanding Registrable
Securities).

“Rule 415”
shall mean Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

 3
 

“Securities Act” means
the United States Securities Act of 1933, as amended.

“Selling Securityholder” has
the meaning set forth in Section 2(a) hereof.

“Suspension Period”
has the meaning set forth in Section 3(b) hereof.

“Trading Market” shall
mean whichever of the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market or the Over-the-Counter Bulletin Board upon which the Common Stock is
listed or quoted on for trading on the date in question.

“Transfer Opinion”
has the meaning set forth in Section 5(t) hereof.

“Trustee” means
Bank of New York Corporate Trust Company, N.A.

“Trust Indenture Act” means
the Trust Indenture Act of 1939, or any successor thereto, and the rules,
regulations and forms promulgated thereunder, as the same shall be amended from
time to time.

The term “underwriter” means any underwriter, or any person deemed to
be an underwriter pursuant to the Securities Act and Exchange Act and the
respective rules and regulations thereunder, as in effect at any relevant time,
of Registrable Securities in connection with an offering thereof under a
Registration Statement.

“Warrant Agent”
means Bank of New York Corporate Trust Company, N.A..

“Warrant Agent Agreement”
means the Warrant Agent Agreement, dated as of February 16, 2007, between the
Company and the Warrant Agent, relating to the Warrants, and as amended and
supplemented from time to time in accordance with its terms.

2.             Mandatory
Registration.

(a)           Subject to Sections
2(b) below, the Company shall (and shall cause the Guarantors to), as soon as
practicable, but no later than the 60th calendar day following the Issue Date, file
with the Commission a Registration Statement relating to the offer and sale of
the Registrable Securities by the Holders in accordance with the methods of
distribution elected by the Requisite Holders; and, thereafter, shall use its
best efforts (and shall cause each Guarantor to use its best efforts) to cause
such initial Registration Statement to be declared Effective under the
Securities Act no later than the 150th calendar day following the Issue Date.  Further, if, at any time during the
Effectiveness Period and in any event upon the later of (i) 180 days following
the date as of which the then most recent registration statement registering the
issuance and/or sale of the Company’s securities has been declared effective by
the Commission, and (ii) 60 days after the date as of which substantially all
of the Registration Securities included in any prior Registration Statement
have been sold, less than 100% of the Registrable Securities are included in an
Effective Registration Statement, then subject to the following provisions of
this Section 2, the Company shall (and shall cause each of the Guarantors to),
as expeditiously as possible, in consultation with the Requisite Holders and their
counsel, prepare and file with the Commission (i) such pre- or post-effective
amendments to any existing Registration Statement as shall be 

 4
 

necessary to Register the offer and sale of previously
excluded Registrable Securities, or (ii) one or more separate Registration
Statements with respect to previously excluded Registrable Securities, and use
its commercially reasonable best efforts to cause such existing Registration
Statement, as so amended, or such separate Registration Statement(s), as applicable,
to be declared Effective as soon as possible. 
Notwithstanding the foregoing, only Holders who have timely delivered to
the Company their signed and completed Notice and Questionnaire shall be
entitled to be named as a selling securityholder in any Registration Statement
or to use the Prospectus forming a part thereof for offers and resales of
Registrable Securities.  With respect to
any particular Registration Statement, a Holder of Registrable Securities covered
thereby is sometimes referred to as a “Selling Securityholder.”

(b)           If, by reason of a
415 Reduction, the total number of Registrable Securities exceeds the maximum
amount of securities that may be included in any Registration Statement, then
the Company shall (and shall cause the Guarantors to) include in such
Registration (i) first, the Notes, the related
Guarantees and the shares of Common Stock issued or issuable upon conversion
thereof, up to the maximum amount of securities that may be included in such
Registration, and (ii) second, the balance
of the Registrable Securities, in each case, pro rata,
among the Selling Securityholders in proportion, as nearly as practicable, to
their respective number of shares of Common Stock included among their
Registrable Securities; and

(c)           In the event that
the Commission (i) determines that a Registration Statement  (A) constitutes a primary offering of
securities of the Company, or (B) requires any Holder to be named as an
underwriter and such Holder does not consent to being named as an underwriter in
such Registration Statement, or (ii) promulgates any rule or issues any
bulletin, no action letter, telephone interpretation or other guidance which
establishes, changes or clarifies the criteria or standards for a registration
and sale of securities on a continuous or delayed basis pursuant to Rule 415 so
as to (x) limit the number of Registrable Securities that may be included in a
Registration Statement, or (y) delay the filing or Effectiveness of any
Registration Statement by reason of a previously filed registration statement
registering the Company’s securities, then the Company may (and may permit the
Guarantors to) reduce the number of Registrable Securities to be included in
such Registration (a “415 Reduction”)
in the manner set forth in Section 2(b) above.

(d)           Unless otherwise
agreed to in writing by the Requisite Holders, no Registration Statement shall
include, by amendment or otherwise, securities other than Registrable
Securities.

3.             Effectiveness Period;
Suspension Period.

(a)           Subject to Section 3(b)
below, the Company shall use its best efforts (and shall cause each Guarantor
to use its best efforts) to keep any Registration Statement continuously
Effective, supplemented and amended as required by the provisions of
Section 5(k) hereof, in order to permit the Prospectus forming a part
thereof to be usable by Selling Securityholders until the earlier of (A) two
years from the last date of original issuance of any Securities, and (B) the
date as of which all Registrable Securities registered under the Registration
Statements have been sold “Effectiveness Period”).  The
Company and each Guarantor shall be deemed not to have used its best efforts to
keep a Registration Statement 

 5
 

Effective with respect to a period of time if the
Company or any Guarantor voluntarily takes any action that results in Selling
Securityholders not being able to offer and sell Registrable Securities under
such Registration Statement during such period, unless such action is (1)
required by applicable law and the Company thereafter promptly complies with
the requirements of Section 5(k) hereof, or (2) permitted pursuant to
Section 3(b) below.

(b)           The Company may
suspend the use of any Prospectus for a period not to exceed 20 consecutive
days or an aggregate of 60 calendar days in any 12-month calendar period (each
such period, a “Suspension Period”), with the
first day of any Suspension Period being at least 10 Business Days after the
end of any prior Suspension Period, if:

(i)            an event has
occurred and is continuing as a result of which the Registration Statement
would, in the Company’s reasonable judgment, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;

(ii)           the Company
determines in good faith that the disclosure of such event at such time would
have a material adverse effect on the Company and its subsidiaries (including,
without limitation, the Guarantors) taken as a whole; and

(iii)         the Company sends written
notice of such suspension to the affected Selling Securityholders.

4.             Underwritten
Offerings.  In the
event that a Registration is an underwritten offering, then each Selling
Securityholder shall, unless otherwise agreed by the Company and the Requisite
Holders, offer and sell such Registrable Securities using the same underwriter
or underwriters.  Notwithstanding the
foregoing, only Requisite Holders may elect to involve an underwriter in the
offering and in such event shall select the underwriter or underwriters to
manage the offering (which underwriter or underwriters shall be reasonably
acceptable to the Company).  In all
underwritten offerings of Registrable Securities, the Company shall (and shall
cause each Guarantor to) enter into an underwriting agreement with all of the
Selling Securityholders and the managing underwriter or underwriters. Such
underwriting agreement shall be in customary form containing conventional
representations, warranties, allocation of expenses, and customary closing conditions,
including, but not limited to, opinions of counsel and accountants’ cold
comfort letters, provided, however, that no such Selling Securityholder shall
be required to make any representations or warranties or agreements other than
representations, warranties and agreements regarding the valid existence of
such Selling Securityholder, his, her or its title to Registrable Securities
and the truth and accuracy of any information provided in writing by such
Selling Securityholder for inclusion in the Registration Statement; and
provided, further, that such Selling Securityholders may require that any or
all representations, warranties, conditions precedent and other agreements by
the Company and/or any Guarantor for the benefit of the underwriter shall also
be for the benefit of such Selling Securityholders.

5.             Registration
Procedures.  In
connection with the Registration Statements, the following provisions shall
apply:

 6

(a)           Notice and Questionnaire.  The Company shall distribute the
Notice and Questionnaire (i) to all of the Holders not less than 45 calendar
days prior to the time the Company (or any Guarantor) in good faith intends to
have any Registration Statement declared Effective, and (ii) to any particular
Holder promptly following request therefor. The Company shall (and shall cause
each Guarantor to) name as a “selling securityholder” in the initial
Registration Statement and any subsequent Registration Statement each Holder
that completes, executes and delivers a Notice and Questionnaire to the Company
within a reasonable time prior to the date as of which any such Registration
Statement is declared Effective (it being understood that delivery of a
completed and signed Notice and Questionnaire at least two Business Days prior
to the Effective Date shall be considered reasonable prior time) so that the
Holder delivering such Notice and Questionnaire is named as a selling
securityholder in such Registration Statement and is permitted to deliver the
Prospectus to purchasers of such Holder’s Registrable Securities in accordance
with applicable law.  Thereafter, if the
Company shall receive a completed and signed Notice and Questionnaire from any
Holder who is not already named as a selling securityholder in the initial
Registration Statement or any subsequent Registration Statement, the Company
shall (and shall cause each Guarantor to), as soon as reasonably practicable,
prepare and file with the Commission (A) a supplement to the Prospectus or, if
required by applicable law, a post-effective amendment to such Registration
Statement, and any other document required by applicable law, so that the
Holder delivering such Notice and Questionnaire is named as a selling securityholder
in such Registration Statement and is permitted to deliver the Prospectus to
purchasers of such Holder’s Registrable Securities in accordance with
applicable law, and (B) use its commercially reasonable best efforts to cause
any post-effective amendment or such additional Registration Statement to
become Effective under the Securities Act as promptly as is practicable.    Except as provided by the
foregoing, neither the Company nor any Guarantor shall be required to take any
action to name any Holder as a selling securityholder in any Registration
Statement or to enable any Holder to use the Prospectus forming a part thereof
for resales of Registrable Securities unless such Holder has returned a
completed and signed Notice and Questionnaire to the Company.

(b)           Opportunity
to Review.  Within a
reasonable period of time (and in any event at least five Business Days) prior
to filing, the Company shall furnish to each Selling Securityholder for his,
her or its review and comment and the comment of such Selling Securityholder’s
legal counsel, a draft of each Registration Statement (and each pre- or
post-effective amendment or supplement thereto other than supplements solely
for the purpose of including one or more additional Selling Securityholders)
and the Company will use its best efforts to incorporate any comments as such
Selling Securityholders and their respective counsel may reasonably propose.

(c)           Commission
Comments and Acceleration. 
Subject to Section 3(b), the Company shall (and shall cause each Guarantor
to) respond to each item of correspondence from the Commission or the staff of
the Commission relating to each Registration Statement as promptly as
practicable.  If, to the actual knowledge
of a senior officer of the Company or any Guarantor or to the knowledge of the
Company’s or any Guarantor’s outside counsel, the Commission and the staff of
the Commission have no comments (or no further comments) concerning a
Registration Statement, subject to Section 3(b), the Company shall (and shall
cause each Guarantor to) as soon as practicable thereafter, but in any case
within five Business Days

 7
 

thereafter,
request acceleration of Effectiveness of the Registration Statement from the
Commission.

(d)           Amendments
and Supplements.  The
Company shall (and shall cause each Guarantor to) promptly take such action as
may be necessary so that (i) each Registration Statement and any amendment or
supplement thereto and the Prospectus forming a part thereof and any amendment
or supplement thereto (and each report or other document incorporated therein
by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and regulations
thereunder, as in effect at any relevant time, (ii) each Registration Statement
and any amendment or supplement thereto does not, when it becomes Effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
(iii) each Prospectus forming a part of any Registration Statement, and any
amendment or supplement to such Prospectus, in the form delivered to purchasers
of the Registrable Securities during the Effectiveness Period, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

(e)           Advice
and Information.  The
Company shall promptly advise each Selling Securityholder, and shall confirm
such advice in writing if so requested by any such Selling Securityholder:

(i)            when
any Registration Statement has been filed with the Commission and when any Registration
Statement has become Effective, in each case making a public announcement
thereof by publishing the information on the Company’s website or through such
other broad, public medium as the Company may reasonably and in good faith see
fit;

(ii)           when
any supplement to a Prospectus, a Registration Statement or post-effective
amendment to a Registration has been filed with the Commission and, with
respect to a Registration Statement or any post-effective amendment, when the
same has been made Effective;

(iii)         of
any request by the Commission for amendments or supplements to any Registration
Statement or the Prospectus included therein or for additional information;

(iv)          of
the issuance by the Commission of any stop order suspending the Effectiveness
of any Registration Statement or the initiation of any proceedings for such
purpose;

(v)            of
the receipt by the Company or any Guarantor of any notification with respect to
the suspension of the qualification of the securities included in any
Registration Statement for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and

(vi)          of
the happening of any event or the existence of any state of facts that requires
the making of any changes in any Registration Statement or the Prospectus included
therein so that, as of such date, such Registration Statement and Prospectus do
not contain an

 8
 

untrue statement
of a material fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (which advice shall be
accompanied by an instruction to such Selling Securityholders to suspend the
use of the Prospectus until the requisite changes have been made, and shall
specify the nature of the event giving rise to such suspension).

(f)            No
Stop Orders. The Company shall use its best efforts (and
shall cause each Guarantor to use its best efforts) to prevent the issuance,
and if issued to obtain the withdrawal at the earliest possible time, of any
order suspending the Effectiveness of any Registration Statement.

(g)           Copies
of Registration Statements, Etc.  The
Company shall furnish to any Selling Securityholder and its legal counsel,
promptly after the same is prepared and filed with the Commission and without
charge, at least one copy of the Registration Statement and any amendment
thereto, and such number of copies of each Prospectus and all amendments and
supplements thereto, and such other documents as such Selling Securityholder
may reasonably request in order to facilitate the disposition of such Selling
Securityholder’s Registrable Securities.

(h)           Use
of Prospectus.  The
Company, on its behalf and on the behalf of each Guarantor, consents (except
during a Suspension Period or during the continuance of any event described in
Section 5(e)(iii)-(vi) above) to the use of the Prospectus and any
amendment or supplement thereto by each of the Selling Securityholders in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus and any amendment or supplement thereto during the Effectiveness
Period.

(i)            Blue
Sky.  Prior to any
offering of Registrable Securities pursuant to a Registration Statement, the
Company shall (and shall cause each Guarantor to) (i) register or qualify or
cooperate with the Selling Securityholders and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or “blue sky” laws of such jurisdictions within the United
States as any Selling Securityholder may reasonably request in writing, (ii)
keep such registrations or qualifications or exemptions therefrom in effect and
comply with such laws so as to permit the continuance of offers and sales in
such jurisdictions for so long as may be necessary to enable any Selling
Securityholder or underwriter, if any, to complete its distribution of
Registrable Securities pursuant to such Registration Statement, and (iii) take
any and all other actions necessary or advisable to enable the disposition in
such jurisdictions of such Registrable Securities; provided, however, that in no event shall the Company or any
Guarantor be obligated to (A) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise be required to
so qualify but for this Section 5(i), or (B) subject itself to general or
unlimited service of process or to taxation in any such jurisdiction if it is
not now so subject.

(j)            Delivery
of Stock Certificates.  Unless
any Registrable Securities shall be in book-entry only form, the Company shall
(and shall cause each Guarantor to) cooperate with the Selling Securityholders
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to any Registration Statement, which

 9
 

certificates, if
so required by any securities market or exchange upon which any Registrable
Securities are quoted or listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Selling Securityholders
may request in connection with the sale of Registrable Securities pursuant to
such Registration Statement.

(k)           Corrections.  Upon the occurrence of any event or the
existence of any fact contemplated by paragraph 5(e)(vi) above, subject to
Section 3(b) above, the Company shall (and shall cause each Guarantor to)
promptly, but in any event within 10 Business Days following such occurrence or
existence, prepare and file (and have declared Effective) a post-effective
amendment to any Registration Statement or an amendment or supplement to the
related Prospectus included therein or file any other document with the
Commission so that, as thereafter delivered to purchasers of the Registrable
Securities, the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  If the Company notifies the Selling
Securityholders of the occurrence of any event or the existence of any fact
contemplated by paragraph 5(e)(vi) above, the Selling Securityholders shall
suspend the use of the Prospectus until the requisite supplement or amendment
to the Prospectus has been made or a post-effective amendment to the applicable
Registration Statement shall become Effective.

(l)            Transfer
Agent and CUSIP.  Not
later than the Effective Date of a Registration Statement, the Company shall
provide (i) a transfer agent and registrar, which may be a single entity, and
(ii) the Company shall provide a CUSIP number for, the Registrable Securities
to be sold pursuant thereto.

(m)          Compliance
with Laws.  The Company
shall (and shall cause each Guarantor to) comply with all applicable laws
related to a Registration Statement filed pursuant to this Agreement and
offering and sale of securities covered by the Registration Statement and all
applicable rules and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act and the Exchange
Act).

(n)           Earnings
Statement.  The Company
shall use its commercially reasonable best efforts to make available to the
Holders earnings statements (which need not be audited) satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12 month period (or 90 days after the end of any 12 month
period if such period is a fiscal year), or such shorter period as required by
the Securities Act and the Exchange Act and the respective rules and
regulations thereunder, as in effect at any relevant time.

(o)           Due
Diligence and Road Shows.  In
connection with any underwritten offering of Registrable Securities, the
Company shall (and shall cause each Guarantors to) reasonably participate in,
and cause the officers and directors and independent accountants of the Company
and each Guarantor to reasonably participate in “due diligence” sessions with
representatives of, and counsel for, the underwriters, and “road show” and
other presentations to,

 10
 

and conferences
with, potential investors, all as reasonably requested by the managing
underwriter or underwriters.

(p)           Qualification
of Indenture.  Not
later than the Effective Date of the initial Registration Statement, the
Company shall use its commercially reasonable best efforts to cause the
Indenture to be qualified under the Trust Indenture Act; in connection with
such qualification, the Company shall (and shall cause each Guarantor to)
cooperate with the Trustee under the Indenture to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and the Company shall
(and shall cause each Guarantor to) execute, and shall use commercially
reasonable best efforts to cause the Trustee to execute, all documents that may
be required to effect such changes and all other forms and documents required
to be filed with the Commission to enable such Indenture to be so qualified in
a timely manner.  In the event that any
such amendment or modification referred to in this Section 5(p) involves
the appointment of a new trustee under the Indenture, the Company shall (and
shall, if required by the Indenture, cause each Guarantor to) appoint a new
trustee thereunder pursuant to the applicable provisions of the Indenture.

(q)           Inspection
of Company Records.  The
Company shall (and shall cause each Guarantor to) make reasonably available for
inspection by one or more representatives of the Selling Securityholders, any
underwriter participating in any disposition pursuant to any Registration
Statement, and any attorney, accountant or other agent retained by such Selling
Securityholders or any such underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries (including, without limitation, the Guarantors), and shall cause
the officers, directors and employees of the Company and each Guarantor to make
available for inspection all information reasonably requested by such Selling
Securityholders or any such underwriter, attorney, accountant or agent in
connection with such Registration Statement, in each case, as is customary for
similar due diligence examinations.

(r)           Listing.  The Company will use its
commercially reasonable best efforts to cause the Common Stock issuable upon
conversion or exercise of the Securities to be quoted or listed on the Trading
Market on or prior to the Effective Date of each Registration Statement
hereunder.

(s)           Cooperation
with the NASD.  The
Company will (and will cause each Guarantor to) cooperate and assist in any
filings required to be made with the National Association of Securities
Dealers, Inc.

(t)            Opinions.  The Company will cause its
legal counsel (and legal counsel to each Guarantor) to timely deliver to the
transfer agent, the managing underwriter(s), if any, and the Selling
Securityholders a legal opinion (a “Transfer Opinion”),
dated as of the Effective Date of such registration, in form and substance as
is customarily given in connection with the registration and offering of equity
securities and reasonably acceptable to the transfer agent and managing
underwriter(s) stating (i) that the applicable Registration Statement has
become Effective under the Securities Act; (ii) that no stop order suspending
the Effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or, to the knowledge of such counsel, are pending or
contemplated under the Securities Act; (iii) that the Registration

 11
 

Statement, the
related Prospectus and each amendment or supplement thereof comply as to form
in all material respects with the requirements of the Securities Act (except
that such counsel need not express any opinion as to financial statements or
other financial data contained therein); (iv) with respect to such other
matters of law as reasonably may be requested by the transfer agent or
underwriters.  The Company will also
cause its counsel (and legal counsel to each Guarantor) to deliver to the
recipients of the Transfer Opinion a written statement that, to the knowledge
of such counsel, the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
in which they were made, not misleading.

(u)           Accountant
Letters.  If so
requested by the managing underwriter(s), if any, the Company will cause to be
timely furnished to the underwriters and each Selling Securityholder, a letter
(a “Comfort Letter”) from the Company’s
independent certified public accountants, dated as of the Effective Date of
such registration, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
stating that they are independent accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the consolidated
financial statements of the Company included in the Registration Statement or
the Prospectus, or any amendment or supplement thereto, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than five
Business Days prior to the date of such letter) with respect to such
registration as such underwriters and Selling Securityholders reasonably
request.

(v)            Selling
Securityholder Information.  If,
and to the extent that the Company requires information from any Selling
Securityholder for inclusion in a Registration Statement or otherwise in
connection with the Company’s performance of its duties hereunder, the Company
will make requests for such information in writing reasonably in advance of the
date on which such information is actually required.  The Company shall (and shall cause each
Guarantor to) hold in confidence and not make any disclosure of non-public
information concerning any Selling Securityholder provided to, or at the
request of, the Company or any Guarantor by such Selling Securityholder unless
(i) disclosure of such information is reasonably necessary to comply with
federal or state securities laws, rules, statutes or regulations, (ii) the
disclosure of such information is reasonably necessary to avoid or correct a
misstatement or omission in any Registration Statement or other public filing
by the Company, (iii) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of competent
jurisdiction or is otherwise required by applicable law or legal process, (iv)
such information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (v) such Selling
Securityholder consents to the form and content of any such disclosure.  The Company agrees that it shall (and shall
cause each Guarantor to), upon learning that disclosure of such information
concerning any Selling Securityholder is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Selling Securityholder prior to making such disclosure, and
allow such Selling Securityholder, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.

 12
 

(w)           Further
Actions.  The Company
shall use its best efforts (and shall cause each Guarantor to use its best efforts)
to take all other steps necessary to effect the registration, offering and sale
of the Registrable Securities covered by each Registration Statement
contemplated hereby, including entering into such customary agreements and
taking all such other necessary actions in connection therewith.

6.             Registration
Expenses.  The Company
shall bear all fees, costs and expenses incurred in connection with the
performance by the Company of its obligations under this Agreement whether or
not any of the Registration Statements are declared Effective.  Such fees, costs and expenses shall include,
without limitation: (a) all registration, qualification and filing fees
(including, without limitation, fees and expenses (i) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.,
and (ii) of compliance with United States federal and state securities or “blue
sky” laws (including under the laws of such jurisdictions as the Selling
Securityholders may reasonably designate), (b) printing expenses (including,
without limitation, expenses of printing Prospectuses and certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company), (c) duplication expenses relating to copies of any Registration
Statement or Prospectus delivered to any Holders hereunder, (d) internal
expenses (including, without limitation, all salaries and expenses of the
Company’s and any its subsidiary’s officers and employees performing legal or
accounting duties), (e) fees and expenses incurred by the Company or any
Guarantors in connection with the listing of Registrable Securities for
trading, (f) fees and disbursements of counsel and independent accountants for
the Company and the Guarantors (or any one of them) in connection with the
Registration Statement (including, expense of any Transfer Opinion or other
legal opinion), (g) accounting fees and expenses, including, without
limitation, costs associated with the delivery by independent certified
accountants of a Comfort Letter or Comfort Letters, and expenses of any special
audit incident to or required by any Registration), (h) escrow fees, (i) fees
and expenses of any special experts retained by the Company or any Guarantor in
connection with any Registration, (j) reasonable fees and disbursements of the
Trustee, the Warrant Agent and their respective counsel and of the registrar
and transfer agent for the Common Stock and the Warrants, (k) messenger, word
processing, duplication, telephone and delivery expenses, (l) Securities Act
liability insurance, if the Company (or any Guarantor) purchases such
insurance, and (m) transfer taxes. In addition, with respect to the initial
Registration Statement and any post-effective amendment or subsequent
Registration Statement, the Company shall bear or reimburse the Holders for
reasonable fees and disbursements of one firm of legal counsel for the Holders,
which shall initially be counsel to the Initial Purchaser, but which may, upon
the written consent of the Initial Purchaser (which shall not be unreasonably
withheld), be another nationally recognized law firm experienced in securities
law matters designated by the Company.

7.             Additional Interest.  In addition to interest payable to
Holders pursuant to and under the Notes, the Company shall be required to pay
to each Holder additional interest (“Additional Interest”),
from and including the 181st day following the Issue Date to but excluding
the 2nd year anniversary of the Issue Date, at a rate
per annum equal to 2.0% of such Holder’s Applicable Amount.  For purposes hereof, a Holder’s “Applicable Amount” shall mean, as of the time of
computation, the principal amount of Notes converted or convertible into
Registrable Securities by such Holder the resale of which is not covered
by an Effective Registration Statement; provided, that, the foregoing shall not
include (a) Registrable Securities

 13
 

the resale of which is
covered by a Registration Statement the Effectiveness of which is subject to
suspension pursuant to Section 3(b) except to the extent that such Suspension
Period has exceeded 60 days, or (b) Registrable Securities which have been
excluded from Registration by reason of a 415 Reduction.  Additional Interest, if any, shall be payable
to Holders quarterly in arrears (and contemporaneously with interest payments
under the Notes) by wire transfer of immediately available funds or by federal
funds check; provided, that, the Company may postpone payment of Additional
Interest payable to any Holder who has not yet delivered to the Company an
executed and completed Notice and Questionnaire until delivery of the same
shall have been made, but such postponement of payment may be made only if the
Company delivers notice of the same to the affected Holder.

8.             Indemnification
and Contribution.

(a)           Indemnification by the Company.  The Company shall indemnify
and hold harmless each Holder, the Initial Purchaser, each underwriter of
Registrable Securities, each person, if any, who controls any such Holder,
Initial Purchaser or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the respective
officers, directors, partners, employees, representatives and agents of any
such Holder, the Initial Purchaser, underwriter or any controlling person, from
and against any loss, claim, damage, liability, cost or expense whatsoever as
incurred (including, but not limited to, attorneys’ fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation) (collectively, “Losses”), joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as any such Loss (or action in respect thereof) arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereto or
supplement thereof or any related preliminary prospectus or the Prospectus or
any amendment thereto or supplement thereof, (ii) the omission or alleged
omission to state therein any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (iii) any violation or alleged
violation by the Company or any Guarantor of the Securities Act, the Exchange
Act or any other applicable Federal, State or common law rule or regulation applicable
to the Company or any Guarantor in connection with the matters contemplated by
this Agreement; provided, however, that the Company shall not be liable to any
such indemnified party in any such case to the extent that any such Loss arises
out of, or is based upon, any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
indemnified party specifically for use in the subject Registration Statement;
and provided further, however, that the Company shall not be liable to any such
indemnified party in any such case to the extent that such Loss arises from an
offer or sale by a Holder of Registrable Securities during a Suspension Period,
if such indemnified party is a Holder that received from the Company written
notice of the commencement of such Suspension Period prior to the making of
such offer or sale.  The foregoing
indemnity agreement is in addition to any liability that the Company or any
Guarantor may otherwise have to any indemnified party.  The Company shall not be liable under this
Section 8(a) for any settlement of any action effected without its written
consent, which shall not be unreasonably withheld; provided, however, that with
respect to actions pursuant to clauses (i), (ii) and (iii) of
Section 8(c), no such consent shall be required.

 14

(b)           Indemnification by the Holders. 
Each Holder, severally and not jointly, shall
indemnify and hold harmless the Company, any affiliate or subsidiary thereof
(including, without limitation, the Guarantors), the Initial Purchaser, each
underwriter of Registrable Securities, each other Holder, each person, if any,
who controls the Company, any Guarantor, the Initial Purchaser, such
underwriter or another Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the respective
officers, directors, partners, employees, representatives and agents of the
Company, any affiliate or subsidiary thereof (including, without limitation,
the Guarantors), the Initial Purchaser, such underwriter, any other Holder or
any controlling person, from and against any Loss, joint or several, to which
they or any of them may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as any such Loss (or action in respect thereof)
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereto or any related preliminary prospectus or the Prospectus or
any amendment thereto or supplement thereof, or arises out of, or is based
upon, the omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission made therein was made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use therein.  In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such indemnification
obligation.  The foregoing indemnity
agreement is in addition to any liability that any Holder may otherwise have to
the Company, any Guarantor, the Initial Purchaser, any underwriter of
Registrable Securities, any other Holder and any such other person.

(c)           Notices of Claims, Etc.  Promptly
after receipt by an indemnified party under this Section 8 of notice of
any claim or the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the claim or
the commencement of that action; provided, however, that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have
under this Section 8.  If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party.  After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the indemnified
party shall have the right to employ counsel to represent jointly the
indemnified party and its respective officers, directors, partners, employees,
representatives, agents and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
indemnified party against the indemnifying party under this Section 8 if
(i) employment of such counsel has been authorized in writing by the
indemnifying party, or (ii) such indemnifying party shall not have employed
counsel to have charge of the defense of such proceeding within

 15
 

30 days of the receipt of
notice thereof, or (iii) such indemnified party shall have reasonably concluded
that the representation of such indemnified party and those officers,
directors, partners, employees, representatives, agents and controlling persons
by the same counsel representing the indemnifying party would be inappropriate
under applicable standards of professional conduct due to actual or potential
differing interests between them or where there may be one or more defenses
available to them that are different from, additional to or in conflict with
those available to the indemnifying party, and in any such event ((i), (ii) or
(iii)) the fees and expenses of such separate counsel shall be paid by the
indemnifying party as incurred.  It is
understood that the indemnifying party shall not be liable for the fees and
expenses of more than one separate firm (in addition to local counsel in each
jurisdiction, if necessary) for all indemnified parties in connection with any
proceeding or related proceedings.  No
indemnifying party shall, without the prior written consent of the indemnified
parties, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened claim, investigation,
action, suit or proceeding in respect of which indemnity or contribution may be
or could have been sought hereunder (whether or not the indemnified party or
parties are actual or potential parties thereto) unless (A) such settlement,
compromise or judgment (1) includes an unconditional release of such
indemnified party from all liability arising out of such claim, investigation,
action, suit or proceeding, and (2) does not include a statement as to or an
admission of fault, culpability or failure to act by or on behalf of any
indemnified party, and (B) the indemnifying party confirms in writing its
indemnification obligations hereunder with respect to such settlement,
compromise or judgment.

(d)           Contribution.  If
the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the Losses (or actions in
respect thereof) referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on the
other from the registration of the Registrable Securities pursuant to the
Registration, or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
that resulted in such Losses (or actions in respect thereof) as well as any
other relevant equitable considerations. 
The relative fault of the parties shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or any Guarantor, on the one
hand, or such Holder or such other indemnified party, as the case may be, on
the other, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The amount paid by an indemnified party as a
result of the Losses referred to in the first sentence of this
Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this Section 8(d).  The Company (on its behalf and on behalf of
each Guarantor) and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to herein.  Notwithstanding any other provision of this
Section 8(d), no Holder of the

 16
 

Registrable Securities
shall be required to contribute any amount in excess of the amount by which the
net proceeds received by such Holder from the sale of its Registrable
Securities pursuant to the Registration Statement exceeds the amount of damages
which such Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  For purposes
of this Section 8(d), each officer, director, partner, employee,
representative or agent of an indemnified party, and each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the
Exchange Act, shall have the same rights to contribution as such indemnified
party and each officer, director, partner, employee, representative and agent
of the Company or Guarantor, and each person, if any, who controls the Company
or Guarantor within the meaning of the Securities Act or the Exchange Act,
shall have the same rights to contribution as the Company.  The Holders’ respective obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective amount of Registrable Securities they have sold pursuant to a
Registration Statement and not joint. 
The remedies provided for in this Section 8(d) are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

(e)           Survival.  The
indemnity and contribution provisions contained in this Section 8 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of the Initial
Purchaser, any underwriter of Registrable Securities, any Holder, any officer,
director, partner, employee, representative or agent of the Initial Purchaser,
underwriter or any Holder, or any person controlling the Initial Purchaser,
underwriter or any Holder, or by or on behalf of the Company, any Guarantor,
their respective officers, directors, partners, employees, representatives or
agents or any person controlling the Company or any Guarantor, and (iii) any
sale or other transfer of Registrable Securities pursuant to a Registration
Statement or otherwise.

9.             Holder’s Obligations.  Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities
pursuant to a Registration Statement or to receive a Prospectus relating
thereto, unless such Holder has furnished the Company with a Notice and
Questionnaire as required pursuant to Section 5(a) hereof (including the
information required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. 
Each Holder agrees to promptly furnish to the Company all information
required under applicable law, or in response to a request for information by
the Commission, to be disclosed in any Registration Statement, as the Company
may from time to time reasonably request. 
Any sale of any Registrable Securities by any Holder pursuant to a
Registration Statement shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of
distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not, as of the time
of such sale, contain any untrue statement of a material fact relating to or provided
by such Holder or its plan of distribution and that such Prospectus does not,
as of the time of such sale, omit to state any material fact relating to or
provided by such Holder or its plan of distribution necessary in order to make
the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.

 17
 

10.          Rule 144.  The Company covenants to
the Holders of the Registrable Securities that the Company shall use its best
efforts (and, if applicable, shall cause each Guarantor to use its best
efforts) to timely file the reports required to be filed by it under the
Exchange Act (including the reports under Section 13 and 15(d) of the Exchange
Act referred to in subparagraph (c)(1) of Rule 144 of the Securities Act) and
the rules and regulations adopted by the Commission thereunder, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemption provided by Rule 144 under the Securities Act, as such may be
amended from time to time, or any similar or successor rule or regulation
hereafter adopted by the Commission. 
Upon the request of any Holder of Registrable Securities in connection
with that Holder’s sale pursuant to Rule 144, the Company shall deliver to such
Holder a written statement as to whether it (and, if applicable, each
Guarantor) has complied with such requirements.

11.          Company Lock-Up.  The Company agrees not to
effect (and will not permit any Guarantor to effect) any public sale or
distribution of any of the Company’s equity securities during the 30 days prior
to and during the 90 days following the date as of which any Registration which
includes Registrable Securities is declared Effective, except with the consent
of the Requisite Holders; provided, that, the foregoing restriction shall not
be deemed to preclude the registration of securities on Form S-8 or any
successor form thereto and the sale by the Company of the securities so registered.

12.          Mergers, Recapitalizations; Etc.

(a)           The Company shall
not, directly or indirectly, enter into any merger, consolidation or
reorganization in which the Company shall not be the surviving corporation
unless the proposed surviving corporation shall, prior to such merger,
consolidation, or reorganization, agree in writing to assume the obligations of
the Company under this Agreement, and for that purpose references hereunder to “Registrable
Securities” shall be deemed to be references to the securities that the Holders
would be entitled to receive in exchange for Registrable Securities under the
terms of any such merger, consolidation, or reorganization; provided, however,
that the provisions of this Agreement shall not apply in the event of any merger,
consolidation, or reorganization in which the Company is not the surviving
corporation if all Selling Securityholders are entitled to receive in exchange
for their Registrable Securities consideration consisting solely of (i) cash,
(ii) securities of the acquiring corporation that may be immediately sold to
the public without registration under the Securities Act, or (iii) a
combination of both.  Further, the
Company shall not permit any Guarantor to enter into any merger, consolidation
or reorganization in which it is not the surviving entity.

(b)           If, and as often
as, there is any change in the Common Stock by way of a stock split,
combination, stock dividend, reclassification, or the like, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that
the rights and privileges granted hereby to the Holders with respect to the
Registrable Securities shall not be diminished or adversely affected.

13.          Limitation on Registration
Rights.  From and after
the date of this Agreement and until all Registrable Securities required to be
registered under Section 2 hereof have been so registered, the Company shall
not, without the prior written consent of the Requisite Holders,

 18
 

enter into any agreement
with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder (a) the right to require the Company to
initiate any registration of any securities of the Company, or (b) the right to
require the Company, upon any registration of any of its securities, to
include, among the securities which the Company is then registering, securities
owned by such holder, except for rights with respect to registration of
securities of the Company which are currently existing (including, without
limitation, registration rights with respect to the Initial Purchaser’s
Warrants) or which are not inconsistent with, and which expressly provide that
such rights are subordinate in all respects to, the rights of the Holders
hereunder.  Further, the Company shall
not permit any Guarantor to grant any rights with respect to the registration
of its securities other than the rights provided for herein.

14.          Miscellaneous.

(a)           Specific Performance.  The parties hereto
acknowledge that there would be no adequate remedy at law if the Company fails
to perform any of its obligations hereunder and that the Initial Purchaser and
the Holders from time to time may be irreparably harmed by any such failure, and
accordingly agree that the Initial Purchaser and such Holders, in addition to
any other remedy to which they may be entitled at law or in equity and without
limiting the remedies available to the Holders under Section 7 hereof,
shall be entitled to compel specific performance of the obligations of the
Company under this Agreement in accordance with the terms and conditions of
this Agreement, in any court of the United States or any State thereof having
jurisdiction.

(b)           Amendments
and Waivers.  This
Agreement, including this Section 14(b), may be amended, and waivers or
consents to departures from the provisions hereof may be given, only by a
written instrument duly executed by the Company and the Requisite Holders.  Each Holder of Registrable Securities outstanding
at the time of any such amendment, waiver or consent or thereafter shall be
bound by any amendment, waiver or consent effected pursuant to this
Section 14(b), whether or not any notice, writing or marking indicating
such amendment, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.

(c)           Notices.  All notices and other
communications provided for or permitted hereunder shall be made in writing,
shall be delivered by hand delivery, by telecopier, by courier guaranteeing
overnight delivery or by first-class mail, return receipt requested, and shall
be deemed given (i) when made, if made by hand delivery, (ii) upon
confirmation, if made by confirmed facsimile transmission (provided notice is
also given by some other means permitted by this Section 14(c)), (iii) one
Business Day after being deposited with such courier, if made by overnight
courier or (iv) on the date indicated on the notice of receipt, if made by
first-class mail, to the parties as follows:

if
to a Holder of Registrable Securities, at the most current address given by
such Holder to the Company in a Notice and Questionnaire or any amendment
thereto;

 19
 

if
to the Company, to:

Charys Holding Company, Inc.
                 1117 Perimeter Center
West, Suite N-415
                 Atlanta, Georgia  30338
                 Attention:  Mr. Billy V. Ray, Jr., Chief Executive
Officer
                 Facsimile:  (678) 443-2320

with a copy to:

Morris, Manning & Martin, LLP
                 1600 Atlanta Financial
Center
                 3343 Peachtree Road, N.E.
                 Atlanta, Georgia  30326
                 Attention:  Larry W. Shackelford, Esq.
                 Facsimile:  (404) 365-9532

if to the Initial Purchaser, to:

McMahan Securities Co. L.P.
                 500 West Putnam Avenue
                 Greenwich, Connecticut
06830
                 Attention: Alan Streiter,
Senior Managing Director
                 Facsimile: (203) 618-3401

with a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.
                 666 Third Avenue, 25th Floor
                 New York, New York 10017
                 Attention: Stephen J.
Gulotta, Jr., Esq.
                 Facsimile: (212) 935-3000

or to such other address
as such person may have furnished to the other persons identified in this
Section 13(c) in writing in accordance herewith.

(d)           Parties in Interest.  The
parties to this Agreement intend that all Holders of Registrable Securities
shall be entitled to receive the benefits of this Agreement and that any
Selling Securityholder shall be bound by the terms and provisions of this
Agreement by reason of such Selling Securityholder’s election to include
Registrable Securities in a Registration Statement (which election shall be
deemed made by delivering to the Company an executed and completed Notice and
Questionnaire).  All of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective successors and assigns of the
parties hereto and any Holder from time to time of the Registrable Securities
to the aforesaid extent.  In the event
that any transferee of any Holder of Registrable Securities shall acquire
Registrable Securities, in any manner, whether by gift, bequest, purchase,
operation of law or otherwise, such transferee shall, without any further
writing or action of any kind, be entitled to receive the benefits of and, if a
Selling Securityholder, be conclusively deemed to

 20
 

have agreed to be bound
by and to perform all of the terms and provisions of this Agreement to the
aforesaid extent.

(e)           Counterparts; Facsimile Signatures.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.  Facsimile signatures shall constitute
original signatures for all purposes of this Agreement.

(f)            Construction.  This Agreement shall be deemed to have been
drafted by both the Company and the Holders and shall not be construed against
either party as the principal draftsperson hereof.  Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder and any applicable common law, unless the
context requires otherwise.  The word “including”
shall mean including, without limitation, and is used in an illustrative sense
rather than a limiting sense.  Terms used
with initial capital letters will have the meanings specified applicable to
singular and plural forms for all purposes of this Agreement.  Reference to any gender will be deemed to
include all genders and the neutral form. 
The headings in this Agreement are used for convenience of reference
only and shall not be considered in construing or interpreting this Agreement.

(g)           Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any provisions relating to
conflicts of law.

(h)           Severability.  In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

(i)            Survival.  The
respective indemnities, agreements, covenants, representations, warranties and
other provisions set forth in this Agreement or made pursuant hereto shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of the Initial
Purchaser, any Holder, or any officer, director, partner, employee,
representative or agent of the Initial Purchaser or such Holder, any agent or
underwriter, any officer, director, partner, employee, representative or agent
or of such agent or underwriter, or any controlling person of any of the
foregoing, and shall survive the transfer and registration of the Registrable
Securities of such Holder.

(j)            Submission to Jurisdiction; Appointment of Agent for Service. The
Company agrees that any suit, action or proceeding against the Company arising
out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in any state or federal court in The City of New York, New York,
and waives any objection which it may now or hereafter have to the laying of
venue of any such proceeding, and irrevocably submits to the exclusive
jurisdiction of such courts in any suit, action or proceeding.  The Company expressly accepts the exclusive
jurisdiction of any such court in respect of any such suit, action or

 21
 

proceeding.  The Company agrees that a final judgment in
any such proceeding brought in any such court shall be conclusive and binding thereupon
and may be enforced in any other court in the jurisdiction to which the Company
is or may be subject by suit upon such judgment.

(k)           Further Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

(l)            No Third Party Beneficiaries.  This Agreement shall not
confer any rights or remedies upon any person other than the parties hereto,
the Holders, their permitted successors and assigns and parties eligible for
indemnification or contribution under Section 8, and only in accordance with
the express terms of this Agreement.

(m)          Incorporation of Exhibits, Annexes and
Schedules.  The
Exhibits, Annexes and Schedules identified in this Agreement, if any, are
incorporated herein by reference and made a part hereof.

{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE IN COUNTERPARTS FOLLOWS}

 

 22

 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

Please confirm that the
foregoing correctly sets forth the agreement between the Company and you.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  Charys Holding Company, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Billy V. Ray, Jr.

  	
   

  
	
   

  	
   

  	
  Name: Billy V. Ray, Jr.

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
					

 

	
  

  	
  Accepted for the benefit of the Holders,

  as of the date first above written:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  McMahan Securities Co. L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan Streiter

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Alan Streiter

  	
   

  
	
   

  	
   

  	
  Title: Senior Managing Director

  	
   

  

 

 

APPENDIX
A

CHARYS HOLDING COMPANY, INC.

FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The undersigned
beneficial holder of 8.75% Senior Convertible Notes due February 16, 2012 (the “Notes”) of CHARYS HOLDING COMPANY, INC. (the “Company”), warrants (the “Warrants”)
to purchase shares of the Company’s common stock, par value $0.001 per share
(the “common stock”), guarantees of the
Company’s obligations under the Notes (“Guarantees”)
made by certain of the Company’s subsidiaries (each a “Guarantor”
and, collectively with the Company, the “Registrant”),
or common stock understands that the Registrant has filed or intends to file
with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities Act of
1933, as amended (the “Securities Act”),
of the Notes, the Warrants, Guarantees and the shares of Common Stock issued or
issuable upon exercise or conversion of the Notes and Warrants (collectively,
the “Registrable Securities”), in
accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”), among the Company and the
initial purchaser named therein. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. Each
capitalized term not otherwise defined herein shall have the meaning ascribed
thereto in the Registration Rights Agreement.

Each beneficial owner of
Registrable Securities is entitled to the benefits of the Registration Rights
Agreement. In order to sell or otherwise dispose of any Registrable Securities
pursuant to the Registration Statement, a beneficial owner of Registrable
Securities generally will be required to be named as a selling securityholder
in the related prospectus, deliver a prospectus to purchasers of Registrable
Securities and be bound by those provisions of the Registration Rights
Agreement applicable to such beneficial owner (including certain
indemnification provisions, as described below). Beneficial owners that do not
complete this Notice and Questionnaire and deliver it to the Company as
provided below will not be named as selling securityholders in the prospectus
and, therefore, will not be permitted to sell any Registrable Securities
pursuant to the Registration Statement. Beneficial owners are encouraged to
complete and deliver this Notice and Questionnaire prior to the Effectiveness
of the Registration Statement so that such beneficial owners may be named as selling
securityholders in the related prospectus at the time of Effectiveness. The
Company has agreed to pay additional amounts pursuant to the Registration
Rights Agreement under certain circumstances as set forth therein.

Certain legal
consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.

 A-1
 

NOTICE

The undersigned
beneficial owner (the “Selling Securityholder”)
of Registrable Securities hereby gives notice to the Company of its intention
to sell or otherwise dispose of Registrable Securities beneficially owned by it
and listed below in Item 3 pursuant to the Registration Statement. The
undersigned, by signing and returning this Notice and Questionnaire,
understands that it will be bound by the terms and conditions of this Notice
and Questionnaire and the Registration Rights Agreement.

Pursuant to the
Registration Rights Agreement, the undersigned has agreed to indemnify and hold
harmless the Company, each Guarantor, the Company’s and each Guarantor’s
directors and officers, each person, if any, who controls the Company or any
Guarantor within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act of 1934, as amended (the “Exchange Act”), and other persons identified in the
Registration Rights Agreement, from and against certain losses arising in
connection with statements concerning the undersigned made in the Registration
Statement or the related prospectus in reliance upon the information provided
in this Notice and Questionnaire.

The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate and complete.

 A-2
 

QUESTIONNAIRE

	
  1.

  	
  (a)

  	
   

  	
  Full Legal Name of Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Full Legal Name of Registered Holder (if not the
  same as (a) above) through which Registrable Securities listed in Item 3
  below are held:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Full Legal Name of DTC Participant (if applicable
  and if not the same as (b) above) through which Registrable Securities listed
  in Item 3 below are held:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
  2.

  	
  Address for Notices to Selling Securityholder:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Contact Person:

  	
   

  
						

 

 

	
  3.

  	
  Beneficial Ownership of Registrable Securities:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Type and Principal Amount (if applicable) of
  Registrable Securities beneficially owned:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Notes:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Warrants:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Common Stock:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  CUSIP No(s). of such Registrable Securities
  beneficially owned:

  
	
   

  	
   

  	
   

  
							

 

	
  4.

  	
  Beneficial Ownership of Other Securities of the
  Company or any Guarantor owned by the Selling  Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 A-3
 

Except as set
forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company or any Guarantor other than
the Registrable Securities listed above in Item 3.

 

	
  

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Type and Amount of Other Securities beneficially
  owned by the Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  CUSIP No(s). of such Other Securities beneficially
  owned:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
  5.

  	
   

  	
  Relationship(s) with the Company and/or any
  Guarantor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below, neither the undersigned
  nor any of its affiliates, officers, directors or principal equity holders
  (5% or more) has held any position or office or has had any other material
  relationship with the Company or any Guarantor (or its predecessors or
  affiliates) during the past three years.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State any exceptions here:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Plan of Distribution:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below, the undersigned
  (including its donees or pledgees) intends to distribute the Registrable
  Securities listed above in Item 3 pursuant to the Registration Statement
  only as follows (if at all). Such Registrable Securities may be sold from
  time to time directly by the undersigned or, alternatively, through
  underwriters, broker-dealers or agents. If the Registrable Securities are
  sold through underwriters or broker-dealers, the Selling Securityholder will
  be responsible for underwriting discounts or commissions or agent’s
  commissions. Such Registrable Securities may be sold in one or more
  transactions at fixed prices, at prevailing market prices at the time of
  sale, at varying prices determined at the time of sale, or at negotiated
  prices. Such sales may be effected in transactions (which may involve block
  transactions) (i) on any national securities exchange or quotation
  service on which the Registrable Securities may be listed or quoted at the
  time of sale, (ii) in the over-the-counter market, or (iii) in
  transactions otherwise than on such exchanges or services or in the
  over-the-counter market. The undersigned may also loan or pledge Registrable
  Securities to broker-dealers that in turn may sell such securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State any exceptions here:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Note: The
undersigned acknowledges that it understands its obligation to comply with the
provisions of the Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Securities
pursuant to the Registration Rights Agreement. The undersigned agrees that neither
it nor any person acting on its behalf will engage in any transaction in
violation of such provisions.

 A-4
 

The Selling
Securityholder hereby acknowledges its obligations under the Registration
Rights Agreement to indemnify and hold harmless certain persons as set forth
therein. Pursuant to the Registration Rights Agreement, the Company has agreed
under certain circumstances to indemnify the Selling Securityholder against
certain liabilities. In accordance with the undersigned’s obligation under the
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Registration Statement remains effective. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing at the
address set forth below. In the event that the undersigned transfers all or any
portion of the Registrable Securities listed in Item 3 above after the
date on which such information is provided to the Company, the undersigned
agrees to notify the transferee(s) at the time of transfer of its rights and obligations
under this Notice and Questionnaire and the Registration Rights Agreement. By
signing below, the undersigned consents to the disclosure of the information
provided in response to Items 1 through 6 above and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the
Company and the Guarantors in connection with the preparation or amendment of
the Registration Statement and the related prospectus.

 

IN WITNESS WHEREOF, the undersigned, by authority duly
given, has caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Beneficial Owner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
					

 

 

PLEASE RETURN THE
COMPLETED AND EXECUTED NOTICE AND

QUESTIONNAIRE TO THE COMPANY AT:

 

Charys Holding Company, Inc.

1117 Perimeter Center West, Suite N-415

Atlanta, Georgia  30338

Attention:  Mr. Billy V. Ray, Jr., Chief
Executive Office

Facsimile:  (678) 443-2320

 A-5
 

 

EXHIBIT 1 TO NOTICE AND
QUESTIONNAIRE

 

NOTICE OF TRANSFER
PURSUANT

TO REGISTRATION STATEMENT

Charys
Holding Company, Inc.

1117 Perimeter Center West, Suite N-415

Atlanta, Georgia  30338

Re:
         Charys Holding Company, Inc.

Ladies and Gentlemen:

Please be advised that
                
has transferred
$               principal
amount of 8.75% Senior Convertible Notes due 2012 (the “Notes”), warrants to
purchase
               
shares of the Company’s common stock (“Warrants”), guarantees of the Company’s
obligations under the Notes (“Guarantees”) and/or
                
shares of the Company’s common stock issued upon conversion or exercise of
Notes and/or Warrants, pursuant to the Registration Statement on Form S-3 (File
No. 333-                )
filed by the Company and/or certain of its subsidiaries.

 

We hereby certify that
the prospectus delivery requirements, if any, of the Securities Act of 1933, as
amended, have been satisfied with respect to the transfer described above and
that the above named beneficial owner of the Notes, Warrants, Guarantees and/or
common stock is named as a selling securityholder in the Prospectus, dated
                ,
or in amendments or supplements thereto, and that the aggregate principal
amount of the Notes, number of Warrants, Guarantees and/or number of shares of
common stock transferred are [all or a portion of] the Notes, Warrants,
Guarantees and/or common stock listed in such Prospectus, as amended or
supplemented, opposite such owner’s name.

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
  [name]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized Signature)

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					

 

 A-6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00118-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00118-of-00352.parquet"}]]