Document:

ex10_7.htm

    
      

    

    Execution
      Copy

     

    AMENDED
      AND RESTATED

    SECURITY
      AGREEMENT

    

    AMENDED
      AND RESTATED SECURITY AGREEMENT, dated as of April 5. 2007 (this
“Agreement”) made by CHARYS HOLDING COMPANY, INC., a Delaware
      corporation (the “Company”), and the undersigned subsidiaries
      of the Company (each a “Grantor” and collectively and together
      with the Company the “Grantors”), in favor of IMPERIUM
      ADVISERS, LLC, a Delaware limited liability company, in its capacity as
      collateral agent (in such capacity, the “Collateral Agent”) for
      the benefit of the Holders (as defined below).

    

    

    WITNESSETH:

     

    WHEREAS,
      pursuant to a Security Agreement, dated as of August 30, 2006 (the
“Existing Security Agreement”), the Company and certain of the
      Company’s subsidiaries granted a security interest in their assets and
      properties to secure the Company’s obligations under the Securities Purchase
      Agreement, dated as August 30, 2006 (the “Securities Purchase
      Agreement”), and the other transaction agreements and documents
      contemplated thereby, including, without limitation, the Senior Secured
      Convertible Notes (the “Existing Notes”) issued under the
      Securities Purchase Agreement;

     

    WHEREAS,
      the Company has requested that the holders of the Existing Notes (the
“Noteholders”) extend the maturity date of the Existing Notes
      and make certain other modifications to the Existing Notes, and the Noteholders
      have agreed to make such modifications to the Existing Notes .(the Existing
      Notes, as so modified, amended and restated, being collectively referred to
      herein as the “Notes”);

    

    WHEREAS,
      in furtherance of the modifications to the Existing Notes, the Company and
      the
      Noteholders have entered into an Amendment Agreement, dated as of the date
      hereof (the “Amendment Agreement”), and it is a condition
      precedent to the performance by the Noteholders of their obligations under
      the
      Amendment Agreement that the Grantors execute and deliver this Agreement;
      and

     

    WHEREAS,
      the Existing Security Agreement may be amended in writing by each Grantor party
      to the Existing Security Agreement, the Required Holders (as defined in the
      Existing Notes), and the Collateral Agent, and all such parties are party
      hereto;

    

    NOW,
      THEREFORE, in consideration of the premises and the agreements herein, the
      parties hereto agree that the Existing Security Agreement is hereby amended
      and
      restated in its entirety to read as follows:

     

    SECTION
      1. Definitions.

     

    All
      terms
      used in this Agreement and the recitals hereto which are not defined herein
      shall have the meanings given to them in the Amendment Agreement or in Articles
      8 or 9 of the Uniform Commercial Code as in effect from time to time in the
      State of New York (the “Code”), and which are not otherwise
      defined herein shall have the same meanings herein as set forth therein;
provided that terms used herein which are defined in the Code as in
      effect in the State of New York on the date hereof shall continue to have the
      same meaning notwithstanding any replacement or amendment of such statute except
      as the Collateral Agent may otherwise determine.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      following terms shall have the respective meanings provided for in the Code:
      “Accounts”, “Cash Proceeds”, “Chattel Paper”, “Commercial Tort Claim”,
“Commodity Account”, “Commodity Contracts”, “Deposit Account”, “Documents”,
“Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”,
“Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Noncash
      Proceeds”, “Payment Intangibles”, “Proceeds”, “Promissory Notes”, “Security”,
“Record”, “Security Account”, “Software”, and “Supporting
      Obligations”.

     

    As
      used
      in this Agreement, the following terms shall have the respective meanings
      indicated below, such meanings to be applicable equally to both the singular
      and
      plural forms of such terms:

     

    “Copyright
      Licenses” means all licenses, contracts or other agreements, whether
      written or oral, naming any Grantor as licensee or licensor and providing for
      the grant of any right to use or sell any works covered by any
      copyright.

     

    “Copyrights”
      means all domestic and foreign copyrights, whether registered or not, including,
      without limitation, all copyright rights throughout the universe (whether now
      or
      hereafter arising) in any and all media (whether now or hereafter developed),
      in
      and to all original works of authorship fixed in any tangible medium of
      expression, acquired or used by any Grantor, all applications, registrations
      and
      recordings thereof (including, without limitation, applications, registrations
      and recordings in the United States Copyright Office or in any similar office
      or
      agency of the United States or any other country or any political subdivision
      thereof), and all reissues, divisions, continuations, continuations in part
      and
      extensions or renewals thereof.

     

    “Event
      of Default” shall have the meaning set forth in the
      Notes.

     

    “Holders”
      means a holder of any Securities or any transferee or assignee thereof to whom
      a
      holder assigns its rights under this Agreement in accordance with Section 10(d)
      and any transferee or assignee thereof to whom a transferee or assignee assigns
      its rights under this Agreement in accordance with Section 10(d).

     

    “Insolvency
      Proceeding” means any proceeding commenced by or against any Person
      under any provision of the Bankruptcy Code (Chapter 11 of Title 11 of the
      United States Code) or under any other bankruptcy or insolvency law, assignments
      for the benefit of creditors, formal or informal moratoria, compositions, or
      extensions generally with creditors, or proceedings seeking reorganization,
      arrangement, or other similar relief.

     

    “Intellectual
      Property” means the Copyrights, Trademarks and Patents.

     

    
      
        
        

      

      
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    “Licenses”
      means the Copyright Licenses, the Trademark Licenses and the Patent
      Licenses.

     

    “Lien”
      means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
      security interest, charge or other encumbrance or security or preferential
      arrangement of any nature, including, without limitation, any conditional sale
      or title retention arrangement, any capitalized lease and any assignment,
      deposit arrangement or financing lease intended as, or having the effect of,
      security.

     

    “Patent
      Licenses” means all licenses, contracts or other agreements, whether
      written or oral, naming any Grantor as licensee or licensor and providing for
      the grant of any right to manufacture, use or sell any invention covered by
      any
      Patent.

     

    “Patents”
      means all domestic and foreign letters patent, design patents, utility patents,
      industrial designs, inventions, trade secrets, ideas, concepts, methods,
      techniques, processes, proprietary information, technology, know-how, formulae,
      rights of publicity and other general intangibles of like nature, now existing
      or hereafter acquired, all applications, registrations and recordings thereof
      (including, without limitation, applications, registrations and recordings
      in
      the United States Patent and Trademark Office, or in any similar office or
      agency of the United States or any other country or any political subdivision
      thereof), and all reissues, divisions, continuations, continuations in part
      and
      extensions or renewals thereof.

     

    “Securities”
      means the Notes, the shares of Common Stock into which the Notes are
      convertible, the Warrants, and the shares of Common Stock for which the Warrants
      are exercisable.

    

    “Trademark
      Licenses” means all licenses, contracts or other agreements, whether
      written or oral, naming any Grantor as licensor or licensee and providing for
      the grant of any right concerning any Trademark, together with any goodwill
      connected with and symbolized by any such trademark licenses, contracts or
      agreements and the right to prepare for sale or lease and sell or lease any
      and
      all Inventory now or hereafter owned by any Grantor and now or hereafter covered
      by such licenses.

     

    “Trademarks”
      means all domestic and foreign trademarks, service marks, collective marks,
      certification marks, trade names, business names, d/b/a’s, Internet domain
      names, trade styles, designs, logos and other source or business identifiers
      and
      all general intangibles of like nature, now or hereafter owned, adopted,
      acquired or used by any Grantor, all applications, registrations and recordings
      thereof (including, without limitation, applications, registrations and
      recordings in the United States Patent and Trademark Office or in any similar
      office or agency of the United States, any state thereof or any other country
      or
      any political subdivision thereof), and all reissues, extensions or renewals
      thereof, together with all goodwill of the business symbolized by such marks
      and
      all customer lists, formulae and other Records of any Grantor relating to the
      distribution of products and services in connection with which any of such
      marks
      are used.

     

    “Transaction
      Documents” means this Agreement and the Securities Purchase Agreement,
      the Amendment Agreement, the Notes, the Warrants, the Amended and Restated
      Registration Rights Agreement, dated as of the date hereof, by and among the
      Company and the Holders, and the Subsidiary Guarantee, dated as of the date
      hereof, by the subsidiary Grantors for the benefit of the
      Noteholders.

     

    
      
        
        

      

      
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    “Warrants”
      means the Warrants issued by the Company to Imperium Master Fund,
      Ltd.

    

    SECTION
      2.  Grant of Security Interest.  As collateral
      security for all of the “Obligations” (as defined in Section 3 hereof),
      each Grantor, subject to the Permitted Liens, hereby pledges and assigns to
      the
      Collateral Agent for the benefit of the Holders, and grants to the Collateral
      Agent for the benefit of the Holders a continuing security interest in, all
      personal property of each Grantor, wherever located and whether now or hereafter
      existing and whether now owned or hereafter acquired, of every kind and
      description, tangible or intangible (collectively, the
“Collateral”), including, without limitation, the
      following:

     

    (a)   all
      Accounts;

     

    (b)   all
      Chattel Paper (whether tangible or electronic);

    

    (c)   all
      Commercial Tort Claims;

    

    (d)           all
      Deposit Accounts, all cash and other property from time to time deposited
      therein and the monies and property in the possession or under the control
      of
      the Collateral Agent or Holder or any affiliate, representative, agent or
      correspondent of the Collateral Agent or Holder; 

    

    (e)           all
      Documents;

    

    (f)           all
      Equipment;

    

    (g)           all
      Fixtures;

    

    (h)           all
      General Intangibles (including, without limitation, all Payment
      Intangibles);

    

    (i)           all
      Goods

    

    (j)           all
      Instruments (including, without limitation, Promissory Notes and each
      certificated Security);

    

    (k)           all
      Inventory;

    

    (l)           all
      Investment Property;

    

    (m)           all
      Copyrights, Patents and Trademarks, and all Licenses;

    

    (n)           all
      Letter-of-Credit Rights;

     

    
      
        
        

      

      
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    (o)           all
      Supporting Obligations;

    

    (p)           all
      other tangible and intangible personal property of each Grantor (whether or
      not
      subject to the Code), including, without limitation, all bank and other accounts
      and all cash and all investments therein, all proceeds, products, offspring,
      accessions, rents, profits, income, benefits, substitutions and replacements
      of
      and to any of the property of any Grantor described in the preceding clauses
      of
      this Section 2 (including, without limitation, any proceeds of insurance
      thereon and all causes of action, claims and warranties now or hereafter held
      by
      each Grantor in respect of any of the items listed above), and all books,
      correspondence, files and other Records, including, without limitation, all
      tapes, desks, cards, Software, data and computer programs in the possession
      or
      under the control of any Grantor or any other Person from time to time acting
      for any Grantor, in each case, to the extent of such Grantor’s rights therein,
      that at any time evidence or contain information relating to any of the property
      described in the preceding clauses of this Section 2 or are otherwise
      necessary or helpful in the collection or realization thereof; and

    

    (q)           all
      Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of
      any
      and all of the foregoing Collateral;

    

    in
      each
      case howsoever any Grantor’s interest therein may arise or appear (whether by
      ownership, security interest, claim or otherwise).

    

    SECTION
      3.  Security for Obligations.  The security interest
      created hereby in the Collateral constitutes continuing collateral security
      for
      all of the following obligations, whether now existing or hereafter incurred
      (collectively, the “Obligations”):

     

    (a)           the
      payment by the Company and each Grantor, as and when due and payable (by
      scheduled maturity, required prepayment, acceleration, demand or otherwise),
      of
      all amounts from time to time owing by it in respect of the Transaction
      Documents, including, without limitation, (A) all principal of and interest
      on
      the Notes (including, without limitation, all interest that accrues after the
      commencement of any Insolvency Proceeding of any Grantor, whether or not the
      payment of such interest is unenforceable or is not allowable due to the
      existence of such Insolvency Proceeding), and (B) all fees, commissions, expense
      reimbursements, indemnifications and all other amounts due or to become due
      under any of the Transaction Documents (including any Registration Delay
      Payments (as defined in the Amended and Restated Registration Rights Agreement,
      dated as of the date hereof, by and among the Company and the Holders));
      and

     

    (b)           for
      so long as the Notes are outstanding, the due performance and observance by
      each
      Grantor of all of its other obligations from time to time existing in respect
      of
      any of the Transaction Documents, including without limitation, with respect
      to
      any conversion or redemption rights of the Holders under the
      Notes.

    
      
        
        

      

      
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    SECTION
      4.  Representations and Warranties.  Each Grantor
      represents and warrants as of the date of this Agreement as
      follows:

     

    (a)           Schedule
      I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the
      state of incorporation, organization or formation and the organizational
      identification number of each Grantor in such state.Schedule II hereto
      sets forth (x) the exact legal name of each entity that is a Subsidiary of
      the
      Company as of the date hereof but is not a Grantor as of the date hereof, and
      (y) the state of incorporation, organization or formation and the organizational
      identification number of each such Subsidiary in such state. 

    

    (b)           There
      is no pending or, to its knowledge, written notice threatening any action,
      suit,
      proceeding or claim affecting any Grantor before any governmental authority
      or
      any arbitrator, or any order, judgment or award issued by any governmental
      authority or arbitrator, in each case, that may adversely affect the grant
      by
      any Grantor, or the perfection, of the security interest purported to be created
      hereby in the Collateral, or the exercise by the Collateral Agent of any of
      its
      rights or remedies hereunder.

    

    (c)           Except
      as disclosed in the Amendment Agreement, all Federal, state and local tax
      returns and other reports required by applicable law to be filed by any Grantor
      have been filed, or extensions have been obtained, and all taxes, assessments
      and other governmental charges imposed upon any Grantor or any property of
      any
      Grantor (including, without limitation, all federal income and social security
      taxes on employees’ wages) and which have become due and payable on or prior to
      the date hereof have been paid, except to the extent contested in good faith
      by
      proper proceedings which stay the imposition of any penalty, fine or Lien
      resulting from the non-payment thereof and with respect to which adequate
      reserves have been set aside for the payment thereof in accordance with
      generally accepted accounting principles consistently applied
      (“GAAP”).

    

    (d)           [Reserved]

    

    (e)           Each
      such License sets forth the entire agreement and understanding of the parties
      thereto relating to the subject matter thereof, and there are no other
      agreements, arrangements or understandings, written or oral, relating to the
      matters covered thereby or the rights of such Grantor or any of its affiliates
      in respect thereof.  Each material License now existing is, and any
      material License entered into in the future will be, the legal, valid and
      binding obligation of the parties thereto, enforceable against such parties
      in
      accordance with its terms.  No default under any material License by
      any such party has occurred, nor does any defense, offset, deduction or
      counterclaim exist thereunder in favor of any such party.

    

    (f)           Each
      Grantor owns and controls, or otherwise possesses adequate rights to use, all
      Trademarks, Patents and Copyrights, which are the only trademarks, patents,
      copyrights, inventions, trade secrets, proprietary information and technology,
      know-how, formulae, rights of publicity necessary to conduct its business in
      substantially the same manner as conducted as of the date hereof.  To
      the best knowledge of each Grantor, all such Intellectual Property of each
      Grantor is subsisting and in full force and effect, has not been adjudged
      invalid or unenforceable, is valid and enforceable and has not been abandoned
      in
      whole or in part.  Each Grantor has no knowledge of any conflict with
      the rights of others to any such Intellectual Property and, to the best
      knowledge of each Grantor, each Grantor is not now infringing or in conflict
      with any such rights of others in any material respect, and to the best
      knowledge of each Grantor, no other Person is now infringing or in conflict
      in
      any material respect with any such properties, assets and rights owned or used
      by each Grantor.  No Grantor has received any notice that it is
      violating or has violated the trademarks, patents, copyrights, inventions,
      trade
      secrets, proprietary information and technology, know-how, formulae, rights
      of
      publicity or other intellectual property rights of any third
      party.

    
      
        
        

      

      
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    (g)           Each
      Grantor is and will be at all times the sole and exclusive owner of, or
      otherwise has and will have adequate rights in, the Collateral free and clear
      of
      any Liens, except for Permitted Liens on any Collateral.  Except for
      the Permitted Liens described in the Amendment Agreement, no effective financing
      statement or other instrument similar in effect covering all or any part of
      the
      Collateral is on file in any recording or filing office except such as may
      have
      been filed in favor of the Collateral Agent and/or the Holders relating to
      this
      Agreement or the other Transaction Documents.

    

    (h)           The
      exercise by the Collateral Agent of any of its rights and remedies hereunder
      will not contravene any law or any contractual restriction binding on or
      otherwise affecting each Grantor or any of its properties and will not result
      in
      or require the creation of any Lien, upon or with respect to any of its
      properties.

    

    (i)           No
      authorization or approval or other action by, and no notice to or filing with,
      any governmental authority or other regulatory body, is required for
      (i) the grant by each Grantor, or the perfection, of the security interest
      purported to be created hereby in the Collateral, or (ii) the exercise by
      the Collateral Agent of any of its rights and remedies hereunder (except
      (A) for the filing of a UCC-1 financing statement with respect to each
      Grantor in the secretary of state office of the state of such Grantor’s
      formation, all of which financing statements have been duly filed and are in
      full force and effect or will be duly filed and in full force and effect, (B)
      with respect to Deposit Accounts, and all cash and other property from time
      to
      time deposited therein, for the execution of a control agreement with the
      depository institution with which such account is maintained, as provided in
      Section 5(i), (C) with respect to the perfection of the security
      interest created hereby in the United States Intellectual Property and Licenses,
      for the recording of the appropriate Assignment for Security, substantially
      in
      the form of Exhibit A hereto in the United States Patent and Trademark
      Office or the United States Copyright Office, as applicable, (D) with
      respect to the perfection of the security interest created hereby in foreign
      Intellectual Property and Licenses, for registrations and filings in
      jurisdictions located outside of the United States and covering rights in such
      jurisdictions relating to such foreign Intellectual Property and Licenses,
      (E)
      with respect to the perfection of the security interest created hereby in Titled
      Collateral, for the submission of an appropriate application requesting that
      the
      Lien of the Collateral Agent be noted on the Certificate of Title or certificate
      of ownership, completed and authenticated by the applicable Grantor, together
      with the Certificate of Title or certificate of ownership, with respect to
      such
      Titled Collateral, to the appropriate governmental authority, (F) with respect
      to the perfection of the security interest created hereby in any
      Letter-of-Credit Rights, for the consent of the issuer of the applicable letter
      of credit to the assignment of proceeds as provided in the Uniform Commercial
      Code as in effect in the applicable jurisdiction, (G) with respect to any action
      that may be necessary to obtain control of Collateral constituting Deposit
      Accounts, Commodity Contracts, Electronic Chattel Paper, Investment Property
      or
      Letter-of-Credit Rights, the taking of such actions, and (H) the Collateral
      Agent having possession of all Documents, Chattel Paper, Instruments and cash
      constituting Collateral (subclauses (A), (B), (C), (D), (E), (F), G), and (H),
      each a “Perfection Requirement” and collectively, the “Perfection
      Requirements”)).

    
      
        
        

      

      
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    (j)           This
      Agreement, subject to the Permitted Liens creates in favor of the Collateral
      Agent a legal, valid and enforceable security interest in the Collateral as
      security for the Obligations.  The Perfection Requirements result in
      the perfection of such security interests.  Such security interests
      are, or in the case of Collateral in which each Grantor obtains rights after
      the
      date hereof, will be, perfected, first priority security interests, subject
      only
      to Permitted Liens and the Perfection Requirements.  Such recordings
      and filings and all other action necessary to perfect and protect such security
      interest have been duly taken or will be taken pursuant to Section 5(n), and,
      in
      the case of Collateral in which each Grantor obtains rights after the date
      hereof, will be duly taken, except for the Collateral Agent’s having possession
      of all Documents, Chattel Paper, Instruments and cash constituting Collateral
      after the date hereof and the other actions, filings and recordations described
      above, including the Perfection Requirements.

    

    SECTION
      5.  Covenants as to the Collateral.  So long as any
      of the Obligations shall remain outstanding, unless the Collateral Agent shall
      otherwise consent in writing:

    

    (a)           Further
      Assurances.  Each Grantor will at its expense, at any time and
      from time to time, promptly execute and deliver all further instruments and
      documents and take all further action that the Collateral Agent may reasonably
      request in order to: (i) perfect and protect the security interest
      purported to be created hereby; (ii) enable the Collateral Agent to
      exercise and enforce its rights and remedies hereunder in respect of the
      Collateral; or (iii) otherwise effect the purposes of this Agreement,
      including, without limitation: (A) marking conspicuously all Chattel Paper
      and each License and, at the request of the Collateral Agent, each of its
      Records pertaining to the Collateral with a legend, in form and substance
      satisfactory to the Collateral Agent, indicating that such Chattel Paper,
      License or Collateral is subject to the security interest created hereby,
      (B)  delivering and pledging to the Collateral Agent pursuant to the Pledge
      each Promissory Note, Security, Chattel Paper or other Instrument, now or
      hereafter owned by any Grantor, duly endorsed and accompanied by executed
      instruments of transfer or assignment, all in form and substance satisfactory
      to
      the Collateral Agent, (C) executing and filing (to the extent, if any, that
      any Grantor’s signature is required thereon) or authenticating the filing of,
      such financing or continuation statements, or amendments thereto, as may be
      necessary or that the Collateral Agent may reasonably request in order to
      perfect and preserve the security interest purported to be created hereby,
      (D) furnishing to the Collateral Agent from time to time statements and
      schedules further identifying and describing the Collateral and such other
      reports in connection with the Collateral in each case as the Collateral Agent
      may reasonably request, all in reasonable detail, (E) if any Collateral
      shall be in the possession of a third party, notifying such Person of the
      Collateral Agent’s security interest created hereby and obtaining a written
      acknowledgment from such Person that such Person holds possession of the
      Collateral for the benefit of the Collateral Agent, which such written
      acknowledgement shall be in form and substance reasonably satisfactory to the
      Collateral Agent, (F) if at any time after the date hereof, any Grantor
      acquires or holds any Commercial Tort Claim, promptly notifying the Collateral
      Agent in a writing signed by such Grantor setting forth a brief description
      of
      such Commercial Tort Claim and granting to the Collateral Agent a security
      interest therein and in the proceeds thereof, which writing shall incorporate
      the provisions hereof and shall be in form and substance satisfactory to the
      Collateral Agent, (G) upon the acquisition after the date hereof by any
      Grantor of any motor vehicle or other Equipment subject to a certificate of
      title or ownership (other than a Motor Vehicle or Equipment that is subject
      to a
      purchase money security interest), causing the Collateral Agent to be listed
      as
      the lienholder on such certificate of title or ownership and delivering evidence
      of the same to the Collateral Agent in accordance with Section 5(j)
      hereof; and (H) taking all actions required by any earlier versions of the
      Uniform Commercial Code or by other law, as applicable, in any relevant Uniform
      Commercial Code jurisdiction, or by other law as applicable in any foreign
      jurisdiction.

    
      
        
        

      

      
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    (b)           [Reserved]

    

    (c)           Condition
      of Equipment.  Each Grantor will maintain or cause the Equipment
      (necessary or useful to its business) to be maintained and preserved in good
      condition, repair and working order, ordinary wear and tear excepted, and will
      forthwith, or in the case of any loss or damage to any Equipment of any Grantor
      within a commercially reasonable time after the occurrence thereof, make or
      cause to be made all repairs, replacements and other improvements in connection
      therewith which are necessary or desirable, consistent with past practice,
      or
      which the Collateral Agent may request to such end.  Any Grantor will
      promptly furnish to the Collateral Agent a statement describing in reasonable
      detail any such loss or damage in excess of $250,000 per
      occurrence to any Equipment.

    

    (d)           Taxes,
      Etc.  Each Grantor agrees to pay promptly when due all property
      and other taxes, assessments and governmental charges or levies imposed upon,
      and all claims (including claims for labor, materials and supplies) against,
      the
      Equipment and Inventory, except to the extent the validity thereof is being
      contested in good faith by proper proceedings which stay the imposition of
      any
      penalty, fine or Lien resulting from the non-payment thereof and with respect
      to
      which adequate reserves in accordance with GAAP have been set aside for the
      payment thereof.

    

    (e)           Insurance.

    

    (i)           Each
      Grantor will, at its own expense, maintain insurance (including, without
      limitation, commercial general liability and property insurance) with respect
      to
      the Equipment and Inventory in such amounts, against such risks, in such form
      and with responsible and reputable insurance companies or associations as is
      required by any governmental authority having jurisdiction with respect thereto
      or as is carried generally in accordance with sound business practice by
      companies in similar businesses similarly situated and in any event, in amount,
      adequacy and scope reasonably satisfactory to the Collateral
      Agent.  To the extent requested by the Collateral Agent at any time
      and from time to time, each such policy for liability insurance shall provide
      for all losses to be paid on behalf of the Collateral Agent and any Grantor
      as
      their respective interests may appear, and each policy for property damage
      insurance shall provide for all losses to be adjusted with, and paid directly
      to, the Collateral Agent.  To the extent requested by the Collateral
      Agent at any time and from time to time, each such policy shall in addition
      (A)
      name the Collateral Agent as an additional insured party thereunder (without
      any
      representation or warranty by or obligation upon the Collateral Agent) as their
      interests may appear, (B) contain an agreement by the insurer that any loss
      thereunder shall be payable to the Collateral Agent on its own account
      notwithstanding any action, inaction or breach of representation or warranty
      by
      any Grantor, (C) provide that there shall be no recourse against the Collateral
      Agent for payment of premiums or other amounts with respect thereto, and (D)
      provide that at least 30 days’ prior written notice of cancellation, lapse,
      expiration or other adverse change shall be given to the Collateral Agent by
      the
      insurer.  Any Grantor will, if so requested by the Collateral Agent,
      deliver to the Collateral Agent original or duplicate policies of such insurance
      and, as often as the Collateral Agent may reasonably request, a report of a
      reputable insurance broker with respect to such insurance.  Any
      Grantor will also, at the request of the Collateral Agent, execute and deliver
      instruments of assignment of such insurance policies and cause the respective
      insurers to acknowledge notice of such assignment.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (ii)           Reimbursement
      under any liability insurance maintained by any Grantor pursuant to this
Section 5(e) may be paid directly to the Person who shall have incurred
      liability covered by such insurance.  In the case of any loss
      involving damage to Equipment or Inventory, any proceeds of insurance maintained
      by any Grantor pursuant to this Section 5(e) shall be paid to the
      Collateral Agent (except as to which paragraph (iii) of this Section 5(e)
      is not applicable), any Grantor will make or cause to be made
      the necessary repairs to or replacements of such Equipment or Inventory, and
      any
      proceeds of insurance maintained by any Grantor pursuant to this Section
      5(e) shall be paid by the Collateral Agent to any Grantor as reimbursement
      for the costs of such repairs or replacements.

    

    (iii)           All
      insurance payments in respect of such Equipment or Inventory shall be paid
      to
      the Collateral Agent and applied as specified in Section 7(b)
      hereof.

    

    (f)           Provisions
      Concerning the Accounts and the Licenses.

    

    (i)           Any
      Grantor will (A) give the Collateral Agent at least 30 days’ prior written
      notice of any change in such Grantor’s name, identity or organizational
      structure, (B) maintain its jurisdiction of incorporation, organization or
      formation as set forth in Schedule I hereto, (C) immediately notify the
      Collateral Agent upon obtaining an organizational identification number, if
      on
      the date hereof such Grantor did not have such identification number, and (D)
      keep adequate records concerning the Accounts and Chattel Paper and permit
      representatives of the Collateral Agent during normal business hours on
      reasonable notice to such Grantor, to inspect and make abstracts from such
      Records and Chattel Paper.

    

    (ii)           Each
      Grantor will, except as otherwise provided in this subsection (f), continue
      to collect, at its own expense, all amounts due or to become due under the
      Accounts.  In connection with such collections, any Grantor may (and,
      at the Collateral Agent’s direction, will) take such action as any Grantor or
      the Collateral Agent may deem necessary or advisable to enforce collection
      or
      performance of the Accounts; provided, however, that the
      Collateral Agent shall have the right at any time, upon the occurrence and
      during the continuance of an Event of Default, to notify the account debtors
      or
      obligors under any Accounts of the assignment of such Accounts to the Collateral
      Agent and to direct such account debtors or obligors to make payment of all
      amounts due or to become due to any Grantor thereunder directly to the
      Collateral Agent or its designated agent and, upon such notification and at
      the
      expense of any Grantor and to the extent permitted by law, to enforce collection
      of any such Accounts and to adjust, settle or compromise the amount or payment
      thereof, in the same manner and to the same extent as any Grantor might have
      done.  After receipt by any Grantor of a notice from the Collateral
      Agent that the Collateral Agent has notified, intends to notify, or has enforced
      or intends to enforce any Grantor’s rights against the account debtors or
      obligors under any Accounts as referred to in the proviso to the immediately
      preceding sentence, (A) all amounts and proceeds (including Instruments)
      received by any Grantor in respect of the Accounts shall be received in trust
      for the benefit of the Collateral Agent hereunder, shall be segregated from
      other funds of any Grantor and shall be forthwith paid over to the Collateral
      Agent in the same form as so received (with any necessary endorsement) to be
      applied as specified in Section 7(b) hereof, and (B) no Grantor will
      adjust, settle or compromise the amount or payment of any Account or release
      wholly or partly any account debtor or obligor thereof or allow any credit
      or
      discount thereon.  In addition, upon the occurrence and during the
      continuance of an Event of Default, the Collateral Agent may (in its sole and
      absolute discretion) direct any or all of the banks and financial institutions
      with which any Grantor either maintains a Deposit Account or a lockbox or
      deposits the proceeds of any Accounts to send immediately to the Collateral
      Agent by wire transfer (to such account as the Collateral Agent shall specify,
      or in such other manner as the Collateral Agent shall direct) all or a portion
      of such securities, cash, investments and other items held by such
      institution.  Any such securities, cash, investments and other items
      so received by the Collateral Agent shall be applied as specified in accordance
      with Section 7(b) hereof.

    
      
        
        

      

      
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    (iii)           Upon
      the occurrence and during the continuance of any breach or default under any
      material License by any party thereto other than any Grantor, each Grantor
      party
      thereto will, promptly after obtaining knowledge thereof, give the Collateral
      Agent written notice of the nature and duration thereof, specifying what action,
      if any, it has taken and proposes to take with respect thereto and thereafter
      will take reasonable steps to protect and preserve its rights and remedies
      in
      respect of such breach or default, or will obtain or acquire an appropriate
      substitute License.

    

    (iv)           Each
      Grantor will, at its expense, promptly deliver to the Collateral Agent a copy
      of
      each notice or other communication received by it by which any other party
      to
      any material License purports to exercise any of its rights or affect any of
      its
      obligations thereunder, together with a copy of any reply by such Grantor
      thereto.

    

    (v)           Each
      Grantor will exercise promptly and diligently each and every right which it
      may
      have under each material License (other than any right of termination) and
      will
      duly perform and observe in all respects all of its obligations under each
      material License and will take all action reasonably necessary to maintain
      such
      Licenses in full force and effect.  No Grantor will, without the prior
      written consent of the Collateral Agent, cancel, terminate, amend or otherwise
      modify in any respect, or waive any provision of, any material
      License.

    

    (g)           Transfers
      and Other Liens.

    
      
        
        

      

      
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    (i)           No
      Grantor will sell, assign (by operation of law or otherwise), lease, license,
      exchange or otherwise transfer or dispose of any of the Collateral, except
      such
      Grantor may (A) sell or dispose of Inventory (including, without limitation,
      As-extracted Collateral) in the ordinary course of business, and (B) sell or
      dispose of assets such Grantor has determined, in good faith, not to be useful
      in the conduct of its business, and (C) sell or dispose of accounts in the
      course of collection in the ordinary course of business consistent with past
      practice.

    

    (ii)           No
      Grantor will create, suffer to exist or grant any Lien upon or with respect
      to
      any Collateral other than a Permitted Lien.

    

    (h)   Intellectual
      Property.

    

    (i)           If
      applicable, any Grantor shall, upon the Collateral Agent’s written request, duly
      execute and deliver the applicable Assignment for Security in the form attached
      hereto as Exhibit A.  Each Grantor (either itself or through
      licensees) will, and will cause each licensee thereof to, take all action
      necessary to maintain all of the Intellectual Property in full force and effect,
      including, without limitation, using the proper statutory notices and markings
      and using the Trademarks on each applicable trademark class of goods in order
      to
      so maintain the Trademarks in full force and free from any claim of abandonment
      for non-use, and each Grantor will not (nor permit any licensee thereof to)
      do
      any act or knowingly omit to do any act whereby any Intellectual Property may
      become invalidated; provided, however, that so long as no Event of
      Default has occurred and is continuing, no Grantor shall have an obligation
      to
      use or to maintain any Intellectual Property (A) that relates solely to any
      product or work, that has been, or is in the process of being, discontinued,
      abandoned or terminated, (B) that is being replaced with Intellectual Property
      substantially similar to the Intellectual Property that may be abandoned or
      otherwise become invalid, so long as the failure to use or maintain such
      Intellectual Property does not materially adversely affect the validity of
      such
      replacement Intellectual Property and so long as such replacement Intellectual
      Property is subject to the Lien created by this Agreement or (C) that is
      substantially the same as another Intellectual Property that is in full force,
      so long the failure to use or maintain such Intellectual Property does not
      materially adversely affect the validity of such replacement Intellectual
      Property and so long as such other Intellectual Property is subject to the
      Lien
      and security interest created by this Agreement.  Each Grantor will
      cause to be taken all necessary steps in any proceeding before the United States
      Patent and Trademark Office and the United States Copyright Office or any
      similar office or agency in any other country or political subdivision thereof
      to maintain each registration of the Intellectual Property (other than the
      Intellectual Property described in the proviso to the immediately preceding
      sentence), including, without limitation, filing of renewals, affidavits of
      use,
      affidavits of incontestability and opposition, interference and cancellation
      proceedings and payment of maintenance fees, filing fees, taxes or other
      governmental fees.  If any Intellectual Property (other than
      Intellectual Property described in the proviso to the first sentence of
      subsection (i) of this clause (h)) is infringed, misappropriated, diluted or
      otherwise violated in any material respect by a third party, each Grantor shall
      (x) upon learning of such infringement, misappropriation, dilution or other
      violation, promptly notify the Collateral Agent and (y) to the extent any
      Grantor shall deem appropriate under the circumstances, promptly sue for
      infringement, misappropriation, dilution or other violation, seek injunctive
      relief where appropriate and recover any and all damages for such infringement,
      misappropriation, dilution or other violation, or take such other actions as
      such Grantor shall deem appropriate under the circumstances to protect such
      Intellectual Property.  Each Grantor shall furnish to the Collateral
      Agent from time to time upon its request statements and schedules further
      identifying and describing the Intellectual Property and Licenses and such
      other
      reports in connection with the Intellectual Property and Licenses as the
      Collateral Agent may reasonably request, all in reasonable detail and promptly
      upon request of the Collateral Agent, following receipt by the Collateral Agent
      of any such statements, schedules or reports, each Grantor shall, as the case
      may be, execute and authenticate such documents and do such acts as shall be
      necessary or, in the reasonable judgment of the Collateral Agent, desirable
      to
      subject such Intellectual Property and Licenses to the Lien and security
      interest created by this Agreement.  Notwithstanding anything herein
      to the contrary, upon the occurrence and during the continuance of an Event
      of
      Default, no Grantor may abandon or otherwise permit any Intellectual Property
      to
      become invalid without the prior written consent of the Collateral Agent, and
      if
      any Intellectual Property is infringed, misappropriated, diluted or otherwise
      violated in any material respect by a third party, each Grantor will take such
      action as the Collateral Agent shall deem appropriate under the circumstances
      to
      protect such Intellectual Property.

     

    
      
        
        

      

      
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    (ii)           In
      no event shall any Grantor, either itself or through any agent, employee,
      licensee or designee, file an application for the registration of any Trademark
      or Copyright or the issuance of any Patent with the United States Patent and
      Trademark Office or the United States Copyright Office, as applicable, or in
      any
      similar office or agency of the United States or any country or any political
      subdivision thereof unless it gives the Collateral Agent prior written notice
      thereof.  Upon request of the Collateral Agent, any Grantor shall
      execute, authenticate and deliver any and all assignments, agreements,
      instruments, documents and papers as the Collateral Agent may reasonably request
      to evidence the Collateral Agent’s security interest hereunder in such
      Intellectual Property and the General Intangibles of any Grantor relating
      thereto or represented thereby, and each Grantor hereby appoints the Collateral
      Agent its attorney-in-fact to execute and/or authenticate and file all such
      writings for the foregoing purposes, all acts of such attorney being hereby
      ratified and confirmed, and such power (being coupled with an interest) shall
      be
      irrevocable until the indefeasible payment in full in cash of all of the
      Obligations in full.

    

    (i)           Deposit,
      Commodities and Securities Accounts.  Upon the Collateral Agent’s
      written request, each Grantor shall cause each bank and other financial
      institution with an account of Grantor to execute and deliver to the Collateral
      Agent a control agreement, in form and substance reasonably satisfactory to
      the
      Collateral Agent, duly executed by each Grantor and such bank or financial
      institution, or enter into other arrangements in form and substance satisfactory
      to the Collateral Agent, pursuant to which such institution shall irrevocably
      agree, interalia, that (i) it will comply at any time with
      the instructions originated by the Collateral Agent to such bank or financial
      institution directing the disposition of cash, Commodity Contracts, securities,
      Investment Property and other items from time to time credited to such account,
      without further consent of each Grantor, which instructions the Collateral
      Agent
      will not give to such bank or other financial institution in the absence of
      a
      continuing Event of Default, (ii) all Commodity Contracts, securities,
      Investment Property and other items of each Grantor deposited with such
      institution shall be subject to a perfected, first priority security interest
      in
      favor of the Collateral Agent, (iii) any right of set off (other than
      recoupment of standard fees), banker’s Lien or other similar Lien, security
      interest or encumbrance shall be fully waived as against the Collateral Agent,
      and (iv) upon receipt of written notice from the Collateral Agent during
      the continuance of an Event of Default, such bank or financial institution
      shall
      immediately send to the Collateral Agent by wire transfer (to such account
      as
      the Collateral Agent shall specify, or in such other manner as the Collateral
      Agent shall direct) all such cash, the value of any Commodity Contracts,
      securities, Investment Property and other items held by it.  The
      provisions of this Section 5(i) shall not apply to (i) Deposit Accounts for
      which the Collateral Agent is the depositary and (ii) Deposit Accounts specially
      and exclusively used for payroll, payroll taxes and other employee wage and
      benefit payments to or for the benefit of each Grantor’s salaried or hourly
      employees.

    
      
        
        

      

      
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    (j)           Motor
      Vehicles.  To the extent that there are no Permitted Liens
      thereon:

    

    (i)           Upon
      the Collateral Agent’s written request, each Grantor shall deliver to the
      Collateral Agent originals of the certificates of title or ownership for all
      motor vehicles with a value in excess of $50,000, owned by it with the
      Collateral Agent listed as lienholder, for the benefit of the
      Holders.

     

    (ii)           Each
      Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective
      the date hereof and terminating upon the termination of this Agreement, for
      the
      purpose of (A) executing on behalf of such Grantor title or ownership
      applications for filing with appropriate state agencies to enable motor vehicles
      now owned or hereafter acquired by such Grantor to be retitled and the
      Collateral Agent listed as lienholder thereof, (B) filing such applications
      with
      such state agencies, and (C) executing such other documents and instruments
      on
      behalf of, and taking such other action in the name of, such Grantor as the
      Collateral Agent may deem necessary or advisable to accomplish the purposes
      hereof (including, without limitation, for the purpose of creating in favor
      of
      the Collateral Agent a perfected Lien on the motor vehicles and exercising
      the
      rights and remedies of the Collateral Agent hereunder).  This
      appointment as attorney-in-fact is coupled with an interest and is irrevocable
      until all of the Obligations are indefeasibly paid in full in cash and after
      all
      Transaction Documents have been terminated.

    

    (iii)           Any
      certificates of title or ownership delivered pursuant to the terms hereof shall
      be accompanied by odometer statements for each motor vehicle covered
      thereby.

    

    (iv)           So
      long as no Event of Default shall have occurred and be continuing, upon the
      request of any Grantor, the Collateral Agent shall execute and deliver to any
      Grantor such instruments as any Grantor shall reasonably request to remove
      the
      notation of the Collateral Agent as lienholder on any certificate of title
      for
      any motor vehicle; provided, however, that any such instruments
      shall be delivered, and the release effective, only upon receipt by the
      Collateral Agent of a certificate from any Grantor stating that such motor
      vehicle is to be sold or has suffered a casualty loss (with title thereto in
      such case passing to the casualty insurance company therefor in settlement
      of
      the claim for such loss) and the amount that any Grantor will receive as sale
      proceeds or insurance proceeds.  Any proceeds of such sale or casualty
      loss shall be paid to the Collateral Agent hereunder immediately upon receipt,
      to be applied to the Obligations then outstanding.

    

    (k)           Control.  Each
      Grantor hereby agrees to take any or all action that may be necessary, desirable
      or that the Collateral Agent may reasonably request in order for the Collateral
      Agent to obtain control in accordance with Sections 9-105 – 9-107 of the Code
      with respect to the following Collateral: (i) Electronic Chattel Paper,
      (ii) Investment Property, and (iii) Letter-of-Credit Rights.

    
      
        
        

      

      
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    (l)           Inspection
      and Reporting.  Each Grantor shall permit the Collateral Agent, or
      any agent or representatives thereof or such professionals or other Persons
      as
      the Collateral Agent may designate, during normal business hours, after
      reasonable notice in the absence of an Event of Default and not more than once
      a
      year in the absence of an Event of Default, (i) to examine and make copies
      of and abstracts from any Grantor’s records and books of account, (ii) to visit
      and inspect its properties, (iii) to verify materials, leases, Instruments,
      Accounts, Inventory and other assets of any Grantor from time to time, and
      (iv) to conduct audits, physical counts, appraisals and/or valuations,
      examinations at the locations of any Grantor.  Each Grantor shall also
      permit the Collateral Agent, or any agent or representatives thereof or such
      professionals or other Persons as the Collateral Agent may designate to discuss
      such Grantor’s affairs, finances and accounts with any of its directors,
      officers, managerial employees, independent accountants or any of its other
      representatives.

    

    (m)           Future
      Subsidiaries.  If any Grantor shall hereafter create or acquire
      any Subsidiary, simultaneously with the creation or acquisition of such
      Subsidiary, such Grantor shall (i) cause such Subsidiary to become a party
      to
      this Agreement as an additional “Grantor” hereunder, (ii) such Grantor shall
      deliver to Collateral Agent revised Schedules to this Agreement, as appropriate,
      (iii) shall duly execute and deliver a guaranty of the Obligations in favor
      of
      the Collateral Agent in accordance with the Guarantee, and (iv) shall duly
      execute and/or deliver such opinions of counsel and other documents (including
      an Assumption Agreement by such Subsidiary in the form attached hereto as
Exhibit B), in form and substance reasonably acceptable to the Collateral
      Agent, as the Collateral Agent shall reasonably request with respect thereto,
      provided that any Grantor that acquires a subsidiary on or within two days
      after
      the Closing Date shall have 10 Business Days in which to satisfy the
      requirements of this Section 5(m).

    

    (n)           Fixture
      Filings.  Within 10 Business Days after the Closing Date, Grantors
      shall cause financing statements to be filed in the appropriate county clerk’s
      offices in order to perfect the security interest of the Collateral Agent in
      and
      to all Fixtures and As-extracted Collateral constituting Collateral on the
      Closing Date or within two Business Days after the Closing Date.

    

    SECTION
      6.Additional Provisions Concerning the Collateral.

    

    (a)           Each
      Grantor hereby (i) authorizes the Collateral Agent to file one or more Uniform
      Commercial Code financing or continuation statements, and amendments thereto,
      relating to the Collateral and (ii) ratifies such authorization to the extent
      that the Collateral Agent has filed any such financing or continuation
      statements, or amendments thereto, prior to the date hereof.  A
      photocopy or other reproduction of this Agreement or any financing statement
      covering the Collateral or any part thereof shall be sufficient as a financing
      statement where permitted by law.

     

    
      
        
        

      

      
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    (b)           Each
      Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact
      and proxy, with full authority in the place and stead of such Grantor and in
      the
      name of such Grantor or otherwise, from time to time in the Collateral Agent’s
      discretion, so long as an Event of Default shall have occurred and is
      continuing, to take any action and to execute any instrument which the
      Collateral Agent may reasonably deem necessary or advisable to accomplish the
      purposes of this Agreement (subject to the rights of each Grantor under
Section 5 hereof), including, without limitation, (i) to obtain and
      adjust insurance required to be paid to the Collateral Agent pursuant to
Section 5(e) hereof, (ii) to ask, demand, collect, sue for, recover,
      compound, receive and give acquittance and receipts for moneys due and to become
      due under or in respect of any Collateral, (iii) to receive, endorse, and
      collect any drafts or other instruments, documents and chattel paper in
      connection with clause (i) or (ii) above, (iv) to file any claims or take any
      action or institute any proceedings which the Collateral Agent may deem
      necessary or desirable for the collection of any Collateral or otherwise to
      enforce the rights of the Collateral Agent and the Holders with respect to
      any
      Collateral, and (v) to execute assignments, licenses and other documents to
      enforce the rights of the Collateral Agent and the Holders with respect to
      any
      Collateral.  This power is coupled with an interest and is irrevocable
      until all of the Obligations are indefeasibly paid in full in cash.

    

    (c)           For
      the purpose of enabling the Collateral Agent to exercise rights and remedies
      hereunder, at such time as the Collateral Agent shall be lawfully entitled
      to
      exercise such rights and remedies, and for no other purpose, each Grantor hereby
      grants to the Collateral Agent, to the extent assignable, an irrevocable,
      non-exclusive license (exercisable without payment of royalty or other
      compensation to any Grantor) to use, assign, license or sublicense any
      Intellectual Property now owned or hereafter acquired by such Grantor, wherever
      the same may be located, including in such license reasonable access to all
      media in which any of the licensed items may be recorded or stored and to all
      computer programs used for the compilation or printout
      thereof.  Notwithstanding anything contained herein to the contrary,
      but subject to the provisions of the Amendment Agreement that limit the right
      of
      any Grantor to dispose of its property, and Section 5(g) and Section
      5(h) hereof, so long as no Event of Default shall have occurred and be
      continuing, any Grantor may exploit, use, enjoy, protect, license, sublicense,
      assign, sell, dispose of or take other actions with respect to the Intellectual
      Property in the ordinary course of its business.  In furtherance of
      the foregoing, unless an Event of Default shall have occurred and be continuing,
      the Collateral Agent shall from time to time, upon the request of any Grantor,
      execute and deliver any instruments, certificates or other documents, in the
      form so requested, which such Grantor shall have certified are appropriate
      (in
      such Grantor’s judgment) to allow it to take any action permitted above
      (including relinquishment of the license provided pursuant to this clause (c)
      as
      to any Intellectual Property).  Further, upon the indefeasible payment
      in full in cash of all of the Obligations, the Collateral Agent (subject to
      Section 10(e) hereof) shall release and reassign to any Grantor all of
      the Collateral Agent’s right, title and interest in and to the Intellectual
      Property, and the Licenses, all without recourse, representation or warranty
      whatsoever.  The exercise of rights and remedies hereunder by the
      Collateral Agent shall not terminate the rights of the holders of any licenses
      or sublicenses theretofore granted by each Grantor in accordance with the second
      sentence of this clause (c).  Each Grantor hereby releases the
      Collateral Agent from any claims, causes of action and demands at any time
      arising out of or with respect to any actions taken or omitted to be taken
      by
      the Collateral Agent under the powers of attorney granted herein other than
      actions taken or omitted to be taken through the Collateral Agent’s gross
      negligence or willful misconduct, as determined by a final determination of
      a
      court of competent jurisdiction.

    
      
        
        

      

      
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    (d)           If
      any Grantor fails to perform any agreement or obligation contained herein,
      the
      Collateral Agent may itself perform, or cause performance of, such agreement
      or
      obligation, in the name of such Grantor or the Collateral Agent, and the
      expenses of the Collateral Agent incurred in connection therewith shall be
      payable by such Grantor pursuant to Section 8 hereof and shall be secured
      by the Collateral.

    

    (e)           The
      powers conferred on the Collateral Agent hereunder are solely to protect its
      interest in the Collateral and shall not impose any duty upon it to exercise
      any
      such powers.  Except for the safe custody of any Collateral in its
      possession and the accounting for moneys actually received by it hereunder,
      the
      Collateral Agent shall have no duty as to any Collateral or as to the taking
      of
      any necessary steps to preserve rights against prior parties or any other rights
      pertaining to any Collateral.

    

    (f)           Anything
      herein to the contrary notwithstanding (i) each Grantor shall remain liable
      under the Licenses and otherwise with respect to any of the Collateral to the
      extent set forth therein to perform all of its obligations thereunder to the
      same extent as if this Agreement had not been executed, (ii) the exercise
      by the Collateral Agent of any of its rights hereunder shall not release any
      Grantor from any of its obligations under the Licenses or otherwise in respect
      of the Collateral, and (iii) the Collateral Agent shall not have any
      obligation or liability by reason of this Agreement under the Licenses or with
      respect to any of the other Collateral, nor shall the Collateral Agent be
      obligated to perform any of the obligations or duties of any Grantor thereunder
      or to take any action to collect or enforce any claim for payment assigned
      hereunder.

    

    SECTION
      7.  Remedies Upon Event of Default.  If any Event of
      Default shall have occurred and be continuing, subject to the Permitted
      Liens:

    

    (a)           The
      Collateral Agent may exercise in respect of the Collateral, in addition to
      any
      other rights and remedies provided for herein or otherwise available to it,
      all
      of the rights and remedies of a secured party upon default under the Code
      (whether or not the Code applies to the affected Collateral), and also may
      (i) take absolute control of the Collateral, including, without limitation,
      transfer into the Collateral Agent’s name or into the name of its nominee or
      nominees (to the extent the Collateral Agent has not theretofore done so) and
      thereafter receive, for the benefit of the Collateral Agent, all payments made
      thereon, give all consents, waivers and ratifications in respect thereof and
      otherwise act with respect thereto as though it were the outright owner thereof,
      (ii) require each Grantor to, and each Grantor hereby agrees that it will
      at its expense and upon request of the Collateral Agent forthwith, assemble
      all
      or part of its respective Collateral as directed by the Collateral Agent and
      make it available to the Collateral Agent at a place or places to be designated
      by the Collateral Agent that is reasonably convenient to both parties, and
      the
      Collateral Agent may enter into and occupy any premises owned or leased by
      any
      Grantor where the Collateral or any part thereof is located or assembled for
      a
      reasonable period in order to effectuate the Collateral Agent’s rights and
      remedies hereunder or under law, without obligation to any Grantor in respect
      of
      such occupation, and (iii) without notice except as specified below and
      without any obligation to prepare or process the Collateral for sale,
      (A) sell the Collateral or any part thereof in one or more parcels at
      public or private sale, at any of the Collateral Agent’s offices or elsewhere,
      for cash, on credit or for future delivery, and at such price or prices and
      upon
      such other terms as the Collateral Agent may deem commercially reasonable and/or
      (B) lease, license or dispose of the Collateral or any part thereof upon
      such terms as the Collateral Agent may deem commercially
      reasonable.  Each Grantor agrees that, to the extent notice of sale or
      any other disposition of its respective Collateral shall be required by law,
      at
      least ten (10) days’ notice to any Grantor of the time and place of any public
      sale or the time after which any private sale or other disposition of its
      respective Collateral is to be made shall constitute reasonable
      notification.  The Collateral Agent shall not be obligated to make any
      sale or other disposition of any Collateral regardless of notice of sale having
      been given.  The Collateral Agent may adjourn any public or private
      sale from time to time by announcement at the time and place fixed therefor,
      and
      such sale may, without further notice, be made at the time and place to which
      it
      was so adjourned.  Each Grantor hereby waives any claims against the
      Collateral Agent and the Holders arising by reason of the fact that the price
      at
      which its respective Collateral may have been sold at a private sale was less
      than the price which might have been obtained at a public sale or was less
      than
      the aggregate amount of the Obligations, even if the Collateral Agent accepts
      the first offer received and does not offer such Collateral to more than one
      offeree, and waives all rights that any Grantor may have to require that all
      or
      any part of such Collateral be marshaled upon any sale (public or private)
      thereof.  Each Grantor hereby acknowledges that (i) any such sale
      of its respective Collateral by the Collateral Agent shall be made without
      warranty, (ii) the Collateral Agent may specifically disclaim any
      warranties of title, possession, quiet enjoyment or the like, and
      (iii) such actions set forth in clauses (i) and (ii) above shall not
      adversely affect the commercial reasonableness of any such sale of
      Collateral.  In addition to the foregoing, (1) upon written
      notice to any Grantor from the Collateral Agent after and during the continuance
      of an Event of Default, such Grantor shall cease any use of the Intellectual
      Property or any trademark, patent or copyright similar thereto for any purpose
      described in such notice; (2) the Collateral Agent may, at any time and from
      time to time after and during the continuance of an Event of Default, upon
      10
      days’ prior notice to such Grantor, license, whether general, special or
      otherwise, and whether on an exclusive or non-exclusive basis, any of the
      Intellectual Property, throughout the universe for such term or terms, on such
      conditions, and in such manner, as the Collateral Agent shall in its sole
      discretion determine; and (3) the Collateral Agent may, at any time, pursuant
      to
      the authority granted in Section 6 hereof (such authority being effective
      upon the occurrence and during the continuance of an Event of Default), execute
      and deliver on behalf of such Grantor, one or more instruments of assignment
      of
      the Intellectual Property (or any application or registration thereof), in
      form
      suitable for filing, recording or registration in any country.

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (b)           Any
      cash held by the Collateral Agent as Collateral and all Cash Proceeds received
      by the Collateral Agent in respect of any sale of or collection from, or other
      realization upon, all or any part of the Collateral shall be applied (after
      payment of any amounts payable to the Collateral Agent pursuant to Section
      8 hereof) by the Collateral Agent against, all or any part of the
      Obligations in such order as the Collateral Agent shall elect, consistent with
      the provisions of the Amendment Agreement.  Any surplus of such cash
      or Cash Proceeds held by the Collateral Agent and remaining after the
      indefeasible payment in full in cash of all of the Obligations shall be paid
      over to whomsoever shall be lawfully entitled to receive the same or as a court
      of competent jurisdiction shall direct.

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (c)           In
      the event that the proceeds of any such sale, collection or realization are
      insufficient to pay all amounts to which the Collateral Agent and the Holders
      are legally entitled, each Grantor shall be liable for the deficiency, together
      with interest thereon at the highest rate specified in the Notes for interest
      on
      overdue principal thereof or such other rate as shall be fixed by applicable
      law, together with the costs of collection and the reasonable fees, costs,
      expenses and other client charges of any attorneys employed by the Collateral
      Agent to collect such deficiency.

    

    (d)           Each
      Grantor hereby acknowledges that if the Collateral Agent complies with any
      applicable state, provincial or federal law requirements in connection with
      a
      disposition of the Collateral, such compliance will not adversely affect the
      commercial reasonableness of any sale or other disposition of the
      Collateral.

    

    (e)           The
      Collateral Agent shall not be required to marshal any present or future
      collateral security (including, but not limited to, this Agreement and the
      Collateral) for, or other assurances of payment of, the Obligations or any
      of
      them or to resort to such collateral security or other assurances of payment
      in
      any particular order, and all of the Collateral Agent’s rights hereunder and in
      respect of such collateral security and other assurances of payment shall be
      cumulative and in addition to all other rights, however existing or
      arising.  To the extent that any Grantor lawfully may agree, each
      Grantor hereby agrees that it will not invoke any law relating to the marshaling
      of collateral which might cause delay in or impede the enforcement of the
      Collateral Agent’s rights under this Agreement or under any other instrument
      creating or evidencing any of the Obligations or under which any of the
      Obligations is outstanding or by which any of the Obligations is secured or
      payment thereof is otherwise assured, and, to the extent that it lawfully may,
      each Grantor hereby irrevocably waives the benefits of all such
      laws.

    

    SECTION
      8.  Indemnity and Expenses.

    

    (a)           Each
      Grantor agrees, jointly and severally, to defend, protect, indemnify and hold
      the Collateral Agent and each of the Holders, jointly and severally, harmless
      from and against any and all claims, damages, losses, liabilities, obligations,
      penalties, fees, costs and expenses (including, without limitation, reasonable
      legal fees, costs, expenses, and disbursements of such Person’s counsel) to the
      extent that they arise out of or otherwise result from this Agreement
      (including, without limitation, enforcement of this Agreement), except to the
      extent resulting from such Person’s gross negligence or willful misconduct, as
      determined by a final judgment of a court of competent
      jurisdiction.

     

    (b)           Each
      Grantor agrees, jointly and severally, to pay to the Collateral Agent upon
      demand the amount of any and all costs and expenses, including the reasonable
      fees, costs, expenses and disbursements of counsel for the Collateral Agent
      and
      of any experts and agents (including, without limitation, any collateral trustee
      which may act as agent of the Collateral Agent), which the Collateral Agent
      may
      incur in connection with (i) the preparation, negotiation, execution,
      delivery, recordation, administration, amendment, waiver or other modification
      or termination of this Agreement, (ii) the custody, preservation, use or
      operation of, or the sale of, collection from, or other realization upon, any
      Collateral, (iii) the exercise or enforcement of any of the rights of the
      Collateral Agent hereunder, or (iv) the failure by any Grantor to perform
      or observe any of the provisions hereof.

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    SECTION
      9.  Notices, Etc.  All notices and other
      communications provided for hereunder shall be in writing and shall be mailed
      (by certified mail, postage prepaid and return receipt requested), telecopied,
      e-mailed or delivered to the addressee at its address specified on the signature
      pages below; or as to any such Person, at such other address as shall be
      designated by such Person in a written notice to all other parties hereto
      complying as to delivery with the terms of this Section 9.  All
      such notices and other communications shall be effective (a) if sent by
      certified mail, return receipt requested, when received or three days after
      deposited in the mails, whichever occurs first, (b) if telecopied or e-mailed,
      when transmitted (during normal business hours) and confirmation is received,
      and otherwise, the day after the notice or communication was transmitted and
      confirmation is received, or (c) if delivered in person, upon
      delivery.

    

    SECTION
      10.   Miscellaneous.

     

    (a)           No
      amendment of any provision of this Agreement shall be effective unless it is
      in
      writing and signed by each Grantor, the Required Holders (as defined in the
      Note) and the Collateral Agent, and no waiver of any provision of this
      Agreement, and no consent to any departure by each Grantor therefrom, shall
      be
      effective unless it is in writing and signed by each Grantor and the Collateral
      Agent, and then such waiver or consent shall be effective only in the specific
      instance and for the specific purpose for which given.

     

    (b)           No
      failure on the part of the Collateral Agent to exercise, and no delay in
      exercising, any right hereunder or under any of the other Transaction Documents
      shall operate as a waiver thereof; nor shall any single or partial exercise
      of
      any such right preclude any other or further exercise thereof or the exercise
      of
      any other right.  The rights and remedies of the Collateral Agent or
      any Holder provided herein and in the other Transaction Documents are cumulative
      and are in addition to, and not exclusive of, any rights or remedies provided
      by
      law.  The rights of the Collateral Agent or any Holder under any of
      the other Transaction Documents against any party thereto are not conditional
      or
      contingent on any attempt by such Person to exercise any of its rights under
      any
      of the other Transaction Documents against such party or against any other
      Person, including but not limited to, any Grantor.

    

    (c)           Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining portions
      hereof or thereof or affecting the validity or enforceability of such provision
      in any other jurisdiction.

    

    (d)           This
      Agreement, subject to the Permitted Liens, shall create a continuing security
      interest in the Collateral and shall (i) remain in full force and effect until
      the indefeasible payment in full in cash of the Obligations, and (ii) be binding
      on each Grantor and all other Persons who become bound as debtor to this
      Agreement in accordance with Section 9-203(d) of the Code and shall inure,
      together with all rights and remedies of the Collateral Agent and the Holders
      hereunder, to the benefit of the Collateral Agent and the Holders and their
      respective permitted successors, transferees and assigns.  Without
      limiting the generality of clause (ii) of the immediately preceding sentence,
      without notice to any Grantor, the Collateral Agent and the Holders may assign
      or otherwise transfer their rights and obligations under this Agreement and
      any
      of the other Transaction Documents, to any other Person and such other Person
      shall thereupon become vested with all of the benefits in respect thereof
      granted to the Collateral Agent and the Holders herein or
      otherwise.  Upon any such assignment or transfer, all references in
      this Agreement to the Collateral Agent or any such Holder shall mean the
      assignee of the Collateral Agent or such Holder.  None of the rights
      or obligations of any Grantor hereunder may be assigned or otherwise transferred
      without the prior written consent of the Collateral Agent, and any such
      assignment or transfer without the consent of the Collateral Agent shall be
      null
      and void.

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    (e)           Upon
      the indefeasible payment in full in cash of the Obligations, (i) this Agreement
      and the security interests created hereby shall terminate and all rights to
      the
      Collateral shall revert to the respective Grantor that granted such security
      interests hereunder, and (ii) the Collateral Agent will, upon any Grantor’s
      request and at such Grantor’s expense, (A) return to such Grantor such of the
      Collateral as shall not have been sold or otherwise disposed of or applied
      pursuant to the terms hereof, and (B) execute and deliver to such Grantor such
      documents as such Grantor shall reasonably request to evidence such termination,
      all without any representation, warranty or recourse whatsoever.

    

    (f)           THIS
      AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF
      LAW
      AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION
      AND
      THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
      HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
      GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
      YORK.

    

    (g)           ANY
      LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
      RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE
      COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
      OF
      NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS
      AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
      PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
      COURTS.  EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
      FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
      ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUMNONCONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
      THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE
      JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
      AS
      IS DEEMED APPROPRIATE BY THE COURT.

    

    (h)           EACH
      GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) THE COLLATERAL
      AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION
      BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
      OF
      THE OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      ORAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES
      HERETO.

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (i)           Each
      Grantor irrevocably consents to the service of process of any of the aforesaid
      courts in any such action, suit or proceeding by the mailing of copies thereof
      by registered or certified mail (or any substantially similar form of mail),
      postage prepaid, to any Grantor at its address provided herein, such service
      to
      become effective 10 days after such mailing.

    

    (j)           Nothing
      contained herein shall affect the right of the Collateral Agent to serve process
      in any other manner permitted by law or commence legal proceedings or otherwise
      proceed against any Grantor or any property of any Grantor in any other
      jurisdiction.

    

    (k)           Each
      Grantor irrevocably and unconditionally waives any right it may have to claim
      or
      recover in any legal action, suit or proceeding referred to in this Section
      any
      special, exemplary, punitive or consequential damages.

    

    (l)           Section
      headings herein are included for convenience of reference only and shall not
      constitute a part of this Agreement for any other purpose.

    

    (m)           This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which shall be deemed to be an
      original, but all of which taken together constitute one in the same
      Agreement.

    

    (n)           In
      the event of any conflict between the terms of this Agreement, the Amendment
      Agreement, or any of the other Transaction Documents or exhibits referred to
      herein or therein, the terms of the Amendment Agreement shall
      control.

    

    

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Collateral Agent, the Required Holders and the Grantors
      have each caused this Agreement to be executed and delivered by its officer
      thereunto duly authorized, as of the date first above written.

     

    

    
      	 	
              CHARYS
                HOLDING COMPANY, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:
                Chief Executive Officer

            
	 	 	
              Address:
                1117 Perimeter Center

            
	 	 	
              West,
                Suite N415, Atlanta, Georgia 30338

            
	 	 	
              Telephone:
                678-443-2300

            
	 	 	
              Facsimile:
                678-443-2320

            
	 	 	
              Email:
                bray@charys.com

            
	 	 	 
	 	 	 
	 	
              PERSONNEL
                RESOURCES OF GEORGIA,
                INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                880 South Pleasantburg Drive, Suite 3C, Greenville, South Carolina
                29607

            
	 	 	
              Telephone:
                864-271-7611

            
	 	 	
              Facsimile:
                864-232-0178

            
	 	 	 
	 	 	 
	 	
              CCI
                TELECOM, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                19240 Red Land Road, San Antonio, Texas 78259

            
	 	 	
              Telephone:
                210-496-1926

            
	 	 	
              Facsimile:
                210-491-0932

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              METHOD
                IQ, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                1750 Founders Parkway, Suite 180, Alpharetta, Georgia
                30004

            
	 	 	
              Telephone:
                678-507-1300

            
	 	 	
              Facsimile:
                678-507-1302

            
	 	 	 
	 	 	 
	 	
              VIASYS
                SERVICES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                26 Lake Wire Drive, Lakeland, Florida 33815

            
	 	 	
              Telephone:
                863-607-9988

            
	 	 	
              Facsimile:
                863-607-9955

            
	 	 	 
	 	 	 
	 	
              VIASYS
                NETWORK SERVICES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                26 Lake Wire Drive, Lakeland, Florida 33815

            
	 	 	
              Telephone:
                863-607-9988

            
	 	 	
              Facsimile:
                863-607-9955

            
	 	 	 
	 	 	 
	 	
              VSI
                REAL ESTATE HOLDING, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                26 Lake Wire Drive, Lakeland, Florida 33815

            
	 	 	
              Telephone:
                863-607-9988

            
	 	 	
              Facsimile:
                863-607-9955

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              CROCHET
                AND BOREL SERVICES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                346 Twin City Highway, Port Neches, Texas 77651

            
	 	 	
              Telephone:
                409-722-9697

            
	 	 	
              Facsimile:
                409-722-7273

            
	 	 	 
	 	 	 
	 	
              DIGITAL
                COMMUNICATION SERVICES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:
                96 North 5th Avenue, Delray Beach, Florida 33483

            
	 	 	 
	 	 	 
	 	
              AYIN
                HOLDING COMPANY INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:
                Billy V. Ray, Jr.

            
	 	 	
              Title:

            
	 	 	
              Address:

            
	 	 	
              Telephone:

            
	 	 	
              Facsimile:

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THIS
      AMENDED AND RESTATED SECURITY AGREEMENT ACCEPTED BY:

     

    
      	
              IMPERIUM
                ADVISERS, LLC

            	 
	
              as
                Collateral Agent

            	 
	 	 	 
	 	 	 
	
              By:

            	 	 
	
              Name:

            	
              Maurice
                Hryshko

            	 
	
              Title:

            	
              General
                Counsel

            	 
	
              Address:

            	
              153
                East 53rd Street

            	 
	 	
              29th
                Floor

            	 
	 	
              New
                York, NY 10022

            	 
	
              Telephone:

            	
              (212)
                433-1360

            	 
	
              Facsimile:

            	
              (212)
                433-1361

            	 
	 	 	 
	 	 	 
	
              IMPERIUM
                MASTER FUND, LTD.

            	 
	
              as
                Noteholder

            	 
	 	 	 
	 	 	 
	
              By:

            	 	 
	
              Name:

            	
              Maurice
                Hryshko

            	 
	
              Title:

            	
              General
                Counsel

            	 
	
              Address:

            	
              c/o
                Imperium Advisers, LLC

            	 
	 	
              153
                East 53rd Street

            	 
	 	
              29th
                Floor

            	 
	 	
              New
                York, NY 10022

            	 
	
              Telephone:

            	
              (212)
                433-1360

            	 
	
              Facsimile:

            	
              (212)
                433-1361

            	 
	 	 	 
	 	 	 
	
              JED
                FAMILY TRUST

            	 
	
              as
                Noteholder

            	 
	 	 	 
	 	 	 
	
              By:

            	 	 
	
              Name:

            	 	 
	
              Title:

            	 	 
	
              Address:

            	
              c/o
                Imperium Advisers, LLC

            	 
	 	
              153
                East 53rd Street

            	 
	 	
              29th
                Floor

            	 
	 	
              New
                York, NY 10022

            	 
	
              Telephone:

            	
              (212)
                433-1360

            	 
	
              Facsimile:

            	
              (212)
                433-1361

            	 
	 	 	 
	 	 	 
	
              JOHN
                MICHAELSON

            	 
	
              as
                Noteholder

            	 
	 	 	 
	 	 	 
	 	 
	
              Address:

            	
              c/o
                Imperium Advisers, LLC

            	 
	 	
              153
                East 53rd Street

            	 
	 	
              29th
                Floor

            	 
	 	
              New
                York, NY 10022

            	 
	
              Telephone:

            	
              (212)
                433-1360

            	 
	
              Facsimile:

            	
              (212)
                433-1361

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      I

     

    LEGAL
      NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OR

    JURISDICTION
      OF ORGANIZATION

     

     

    
      	
              Charys
                Holding Company, Inc.

              1117
                Perimeter Center West

              Suite
                N415

              Atlanta,
                GA 30338

            	
              DE

            	
              3791748

            
	 	 	 
	
              Personnel
                Resources of Georgia, Inc.

              669
                N Academy St

              Greenville,
                NC 29607

            	
              GA

            	
              0104816

            
	 	 	 
	
              CCI
                Telecom, Inc.

              16901
                N. Dallas Parkway

              Suite
                105

              Addison,
                TX  75001

            	
              NV

            	
              C-25002-2000

            
	 	 	 
	
              Method
                IQ, Inc.

              1750
                Founders Pkwy

              Suite
                180

              Alpharetta,
                GA 30004

            	
              GA

            	
              0153426

            
	 	 	 
	
              Viasys
                Services, Inc.

              2944
                Drane Field

              Lakeland,
                FL 33811

            	
              FL

            	
              G09210

            
	 	 	 
	
              Viasys
                Network Services, Inc.

              2944
                Drane Field

              Lakeland,
                FL 33811

            	
              FL

            	
              P05000012213

            
	 	 	 
	
              VSI
                Real Estate Holding, Inc.

            	
              FL

            	
              P06000019107

            
	 	 	 
	
              Crochet
                & Borel Services, Inc.

              346
                Twin City Hwy

              Port
                Neches, TX 77651

            	
              TX

            	
              138054100

            
	 	 	 
	
              Digital
                Communication Services, Inc.

              96
                North 5th

              Delray
                Beach, FL 33483

            	
              KY

            	
              0416787

            
	 	 	 
	
              Ayin
                Holding Company Inc.

              17314
                SH 249

              Suite
                230

              Houston,
                TX 77064

            	
              DE

            	
              4147158

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      II

     

    LEGAL
      NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OR

    JURISDICTION
      OF ORGANIZATION

     

    
      	
              LFC,
                Inc.

              17314
                SH 249

              Suite
                230

              Houston,
                TX 77064

            	
              DE

            	
              4145595

            
	 	 	 
	
              Aeon
                Technologies, Inc.

              16901
                N. Dallas Parkway

              Suite
                105

              Addison,
                TX  75001

            	
              NV

            	
              C28977-2000

            
	 	 	 
	
              Berkshire
                Wireless, Inc.

              480
                Pleasant St

              Lee,
                MA 01238

            	
              MA

            	
              000606988

            
	 	 	 
	
              CCI
                Integrated Solutions, Inc.

              16901
                N. Dallas Parkway

              Suite
                105

              Addison,
                TX  75001

            	
              TX

            	
              01602617

            
	 	 	 
	
              Mitchell
                Site Acq., Inc.

              119
                Veterinarian Rd

              Lafayette,
                LA 70507

            	
              LA

            	
              34675000D

            
	 	 	 
	
              Ayin
                Tower Management Services, Inc.

              17314
                SH 249

              Suite
                230

              Houston,
                TX 77064

            	
              DE

            	
              4233831

            
	 	 	 
	
              Complete
                Tower Sources, Inc.

              765
                Vatican Road

              Carencro,
                LA 70520

            	
              LA

            	
              35400877D

            
	 	 	 
	
              Cotton
                Restoration of Central Texas, LP

              14345
                NW Freeway

              Houston,
                TX 77040

            	
              TX

            	
              800008991

            
	 	 	 
	
              Cotton
                Commercial USA, LP

              14345
                NW Freeway

              Houston,
                TX 77040

            	
              TX

            	
              800433352

            
	 	 	 
	
              Cotton
                Holdings 1, Inc.

              14345
                NW Freeway

              Houston,
                TX 77040

            	
              DE

            	
              3451808

            
	 	 	 
	
              C&B/Cotton
                Holdings, Inc.

              14345
                NW Freeway

              Houston,
                TX 77040

            	
              DE

            	
              4236638

            

 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    ASSIGNMENT
      FOR SECURITY

     

    [TRADEMARKS]
      [PATENTS] [COPYRIGHTS]

     

    WHEREAS,
      ______________________________ (the “Assignor”) [has
      adopted, used and is using, and holds all right, title and interest in and
      to,
      the trademarks and service marks listed on the annexed Schedule 1A,
      which trademarks and service marks are registered or applied for in the United
      States Patent and Trademark Office (the “Trademarks”)] [holds all right,
      title and interest in the letter patents, design patents and utility patents
      listed on the annexed Schedule 1A, which patents are issued or
      applied for in the United States Patent and Trademark Office (the
“Patents”)] [holds all right, title and interest in the copyrights listed
      on the annexed Schedule 1A, which copyrights are registered in the United
      States Copyright Office (the “Copyrights”)];

     

    WHEREAS,
      the Assignor has entered into an Amended and Restated Security Agreement, dated
      as of April 5, 2007 (as amended, restated or otherwise modified from time to
      time the “Security Agreement”), in favor IMPERIUM ADVISERS, LLC, as
      collateral agent for certain purchasers (the “Assignee”);

     

    

    WHEREAS,
      pursuant to the Security Agreement, the Assignor has assigned to the Assignee
      and granted to the Assignee for the benefit of the Holders (as defined in the
      Security Agreement) a continuing security interest in all right, title and
      interest of the Assignor in, to and under the [Trademarks, together with, among
      other things, the good-will of the business symbolized by the Trademarks]
      [Patents] [Copyrights] and the applications and registrations thereof, and
      all
      proceeds thereof, including, without limitation, any and all causes of action
      which may exist by reason of infringement thereof and any and all damages
      arising from past, present and future violations thereof (the
“Collateral”), to secure the payment, performance and observance of the
“Obligations” (as defined in the Security Agreement);

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Assignor does hereby pledge, convey, sell,
      assign, transfer and set over unto the Assignee and grants to the Assignee
      for
      the benefit of the Holders a continuing security interest in the Collateral
      to
      secure the prompt payment, performance and for the benefit of the Holders
      observance of the Obligations.

     

    The
      Assignor does hereby further acknowledge and affirm that the rights and remedies
      of the Assignee with respect to the Collateral are more fully set forth in
      the
      Security Agreement, the terms and provisions of which are hereby incorporated
      herein by reference as if fully set forth herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed
      by
      its officer thereunto duly authorized as of _____________, 20__

     

    
      	 	
              [GRANTORS] 

            
	 	 
	 	 
	 	
              By:

            	 	 
	 	 	
              Name:

            
	 	 	
              Title:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    STATE
      OF
      ____________

    ss.:

    COUNTY
      OF
      __________

     

     

    On
      this
      ____ day of _______________, 20__, before me personally came ________________,
      to me known to be the person who executed the foregoing instrument, and who,
      being duly sworn by me, did depose and say that s/he is the ________________
      of
      _______________________________________, a ____________________, and that s/he
      executed the foregoing instrument in the firm name of
      _______________________________________, and that s/he had authority to sign
      the
      same, and s/he acknowledged to me that he executed the same as the act and
      deed
      of said firm for the uses and purposes therein mentioned.

     

     

    
      	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      1A TO ASSIGNMENT FOR SECURITY

     

    

    [Trademarks
      and Trademark Applications]

    [Patent
      and Patent Applications]

    [Copyright
      and Copyright Applications]

    
      	
              Owned
                by

            	 	 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    ASSUMPTION
      AGREEMENT

    

    ASSUMPTION
      AGREEMENT, dated as of _________, _____ made by __________________, a __________
      corporation (the “Additional Grantor”), in favor of the Holders pursuant to the
      Amendment Agreement referred to below. All capitalized terms not defined herein
      shall have the meaning ascribed to them in such Amendment
      Agreement.

    

    W
      I T N E
      S S E T H :

    

    WHEREAS,
      Charys Holding Company, Inc.,
      a Delaware corporation (the “Company”), and the Holders have entered into an
      Amendment Agreement, dated as of April 5, 2007 (as amended, supplemented or
      otherwise modified from time to time, the “Amendment Agreement”);

    

    WHEREAS,
      in connection with the
      Amendment Agreement, the Company and its subsidiaries (other than the Additional
      Grantor) have entered into an amended and restated Security Agreement, dated
      as
      of the date of the Amendment Agreement (as amended, supplemented or otherwise
      modified from time to time, the “Security Agreement”) in favor of the
      Holders;

    

    WHEREAS,
      the Amendment Agreement
      requires the Additional Grantor to become a party to the Security Agreement;
      and

    

    WHEREAS,
      the Additional Grantor has
      agreed to execute and deliver this Assumption Agreement in order to become
      a
      party to the Security Agreement;

    

    NOW,
      THEREFORE, IT IS AGREED:

    

    1.           Security
      Agreement.  By executing and delivering this Assumption Agreement,
      the Additional Grantor hereby becomes a party to the Security Agreement as
      a
      Grantor thereunder with the same force and effect as if originally named therein
      as a Grantor and, without limiting the generality of the foregoing, hereby
      expressly assumes all obligations and liabilities of a Grantor
      thereunder.  The Additional Grantor hereby represents and warrants
      that each of the representations and warranties contained in Section 4 of the
      Security Agreement is true and correct on and as the date hereof as to such
      Additional Grantor (after giving effect to this Assumption Agreement) as if
      made
      on and as of such date.

    

    2.           Governing
      Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
      INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE
      TO
      CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW
      YORK.

    

    3.           Controlling
      Agreement.  In the event of any conflict between the provisions of
      this Assumption Agreement, the Amendment Agreement, and any of the other
      Transaction Documents, the terms of the Amendment Agreement shall
      control.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned has
      caused this Assumption Agreement to be duly executed and delivered as of the
      date first above written.

    

    

    
      	 	
              [ADDITIONAL
                GRANTOR]

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Title:

            
	 	 	
              Name:ex10_8.htm

    
      

    

    AMENDMENT
      #4 TO

     

    AMENDED
      AND RESTATED SENIOR SECURED CONVERTIBLE NOTE

     

     

    This
      Amendment #4 to Amended and Restated Senior Secured Convertible Note (this
      “Amendment”) is dated as of July 28, 2007 by and between Charys Holding
      Company, Inc., a Delaware corporation (the “Company”), and Imperium
      Master Fund, Ltd., (the “Investor”) and is made with reference to that
      certain Amended and Restated Senior Secured Convertible Note issued by the
      Company to the Investor as of April 5, 2007 (the
“Note”).  Capitalized terms used herein without definition
      shall have the same meanings herein as set forth in the Note.

     

    WHEREAS,
      pursuant to Section 3(b)(ii) of the
      Note  the Conversion Price of the Note shall on May 30, 2007 be
      reduced to an amount equal to one-half of the then-existing Conversion
      Price;

     

    WHEREAS,
      the Company has previously requested extensions of such date to July 28th, 2007 which
      were
      granted by Investor pursuant to Amendment #1 to Amended and Restated Senior
      Secured Convertible Note, Amendment #2 to Amended and Restated Senior Secured
      Convertible Note, and Amendment #3 to Amended and Restated Senior Secured
      Convertible Note; and

     

    WHEREAS,
      the Company has requested an additional four-week extension of such date to
      August 28th,
      2007.

     

    NOW
      THEREFORE, for consideration, the adequacy of which is hereby
      acknowledged by all parties, the parties hereto hereby agree to the
      following:

    

    
      1.           Section
        3(b)(ii) of the Note is hereby amended and restated in relevant part to read
        as
        follows:

       

                   
        “(ii)    “Conversion Price” means, as of
        the Amendment Date, $2.25 initially, which Conversion Price shall be subject
        to
        adjustment from time to time in accordance with the terms set forth herein
        (including Section 7 hereof) and, on August 28, 2007, the Conversion Price
        shall
        be reduced to an amount equal to one-half of the then-existing Conversion
        Price,
        which reduced Conversion Price shall be subject to further adjustment from
        time
        to time in accordance with the terms set forth herein (including Section
        7
        hereof). The Conversion Price shall also be appropriately adjusted for any
        stock
        split, stock dividend, stock combination or other similar transaction that
        proportionately decreases or increases the Common Stock.”

      

      2.           Entire
        Agreement; Amendment. This Amendment contains the entire understanding
        of the parties with respect to the matters covered hereby and, except as
        specifically set forth herein, neither the Company nor the Investor makes
        any
        representation, warranty, covenant or undertaking with respect to such matters.
        No provision of this Amendment may be waived or amended other than by a written
        instrument signed by the party against whom enforcement of any such amendment
        or
        waiver is sought.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    3.           Governing
      Law. This Amendment shall be governed by and construed and enforced in
      accordance with the laws of the State of New York applicable to agreements
      executed and to be performed entirely within such State.

     

    4.           Counterparts.
      This Amendment may be executed in one or more counterparts, each of which shall
      be deemed an original, and all of which together shall constitute one and the
      same instrument.

     

    5.           Authorization.  The
      parties hereby represent and warrant to each other that the signatories hereto
      have full power and authority to sign this Amendment for an on behalf of the
      entities for which they purport to be signing and that their signatures hereto
      shall be binding and enforceable upon the purported parties hereto.

     

    All
      other
      terms and provisions of the Note shall remain the same and in full force and
      effect.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the parties hereto have executed this Amendment #4 to Amended
      and Restated Senior Secured Convertible Note as of the date set forth in the
      first paragraph hereof.

     

    
      	 	
              COMPANY:

            
	 	 
	 	
              CHARYS
                HOLDING COMPANY, INC.

            
	 	
              By: 
                ________________________________

            
	 	
              Name: 
                ______________________________

            
	 	
              Title: 
                _______________________________

            
	 	 
	 	
              INVESTOR:

            
	 	 
	 	
              IMPERIUM
                MASTER FUND, LTD.

            
	 	
              By: 
                ________________________________

            
	 	
              Name:
                ______________________________

            
	 	
              Title:
                _______________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]