Document:

AMENDED & RESTATED

                     STOCK AND LIMITED PARTNERSHIP INTEREST

                               PURCHASE AGREEMENT

                         Dated as of December ___, 2006

                                  by and among

                          CHARYS HOLDING COMPANY, INC.,

                            COTTON HOLDINGS 1, INC.,

                           COTTON COMMERCIAL USA, LP,

                    COTTON RESTORATION OF CENTRAL TEXAS, LP,

                                       And

                          THE SELLERS SET FORTH HEREIN

<PAGE>
<TABLE>
<CAPTION>
                                       TABLE OF CONTENTS

                                                                                     PAGE
<S>            <C>                                                                   <C>

   ARTICLE I.     PURCHASE AND SALE OF COTTON EQUITY INTERESTS                          2
   ARTICLE II.    PURCHASE PRICE                                                        2
      2.01     Determination of  Purchase Price                                         2
      2.02     Payment of Cash Consideration                                            2
      2.03     Payment of Stock Consideration                                           3
      2.04     Aggregate Cash Consideration Adjustment Mechanism                        3
      2.05     Make-Whole Adjustment                                                    5
      2.06     Incentive Compensation.                                                  6
      2.07     Purchaser Stock Issued to the Seller                                     6
      2.08     Aged Accounts Receivable Adjustment                                      7
   ARTICLE III.   REPRESENTATIONS AND WARRANTIES OF SELLERS                             7
      3.01     Power, Authority and Organization of the Seller                          7
      3.02     No Conflict                                                              7
      3.03     Ownership of the Cotton Equity Interests                                 7
      3.04     Absence of Other Claims                                                  8
      3.05     Investment Representations                                               8
   ARTICLE IV.    REPRESENTATIONS AND WARRANTIES REGARDING THE COTTON GROUP COMPANIES  10
      4.01     Organization and Authorization                                          10
      4.02     Authorized and Outstanding Stock                                        11
      4.03     Absence of Other Claims                                                 11
      4.04     No Conflict                                                             11
      4.05     Required Consents and Approvals                                         11
      4.06     No Violation of Law                                                     11
      4.07     Financial Statements                                                    12
      4.08     No Undisclosed Liabilities                                              12
      4.09     Real Property                                                           13
      4.10     Personal Property                                                       13
      4.11     Indebtedness                                                            14
      4.12     Intellectual Property                                                   14

                                      -i-
<PAGE>
                                       TABLE OF CONTENTS
                                          (continued)

                                                                                     PAGE

      4.13     Litigation                                                              16
      4.14     Employees                                                               17
      4.15     Employee Benefits                                                       17
      4.16     Collective Bargaining                                                   19
      4.17     Labor Disputes                                                          19
      4.18     Bank Accounts                                                           19
      4.19     Environmental Matters                                                   19
      4.20     Required Licenses and Permits                                           21
      4.21     Insurance Policies                                                      21
      4.22     Major Suppliers and Customers                                           22
      4.23     Contracts and Commitments                                               22
      4.24     Agreements in Full Force and Effect                                     23
      4.25     Absence of Certain Changes and Events                                   23
      4.26     Accounts Receivable                                                     24
      4.27     Tax Matters                                                             25
      4.28     Brokerage                                                               27
      4.29     Disclosure                                                              27
   ARTICLE V.     REPRESENTATIONS AND WARRANTIES OF PURCHASER                          27
      5.01     Organization                                                            27
      5.02     Authorization                                                           28
      5.03     No Conflict                                                             28
      5.04     SEC Documents; Agreements; Financial Statements; Other Information      28
      5.05     Capitalization                                                          29
      5.06     Reporting Company                                                       29
      5.07     Financial Condition; Taxes; Litigation                                  29
      5.08     Listing                                                                 30
      5.09     Financing                                                               30
      5.10     Brokerage                                                               30
      5.11     Disclosure                                                              30
      5.12     Purchaser Stock                                                         30

                                      -ii-
<PAGE>
                                       TABLE OF CONTENTS
                                          (continued)

                                                                                     PAGE

   ARTICLE VI.    COVENANTS                                                            30
      6.01     Operations of the Cotton Group Companies                                30
      6.02     Access                                                                  33
      6.03     Transfer Taxes                                                          34
      6.04     Preparation of Supporting Documents                                     34
      6.05     Notices of Certain Events                                               34
      6.06     Supplements to Schedules                                                35
      6.07     No Solicitation of Transactions                                         35
      6.08     Filings; Other Actions; Notification                                    36
      6.09     Confidentiality                                                         36
      6.10     Publicity                                                               37
      6.11     Expenses                                                                37
      6.12     Non-Operating Expenses                                                  37
      6.13     Spin-Off Agreement                                                      37
      6.14     Tax Matters                                                             37
      6.15     Employee Bonus Pool                                                     40
   ARTICLE VII.   CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE                       40
      7.01     Regulatory Consents                                                     40
      7.02     Litigation                                                              40
   ARTICLE VIII.  CONDITIONS TO OBLIGATIONS OF THE SELLERS                             40
      8.01     Representations and Warranties True and Correct at Closing Date         40
      8.02     Performance of Obligations                                              41
      8.03     Documents Satisfactory in Form and Substance                            41
      8.04     Certificates                                                            41
      8.05     No Material Change                                                      41
      8.06     Termination of Stansell Contingent Interest                             41
      8.07     Opinion of Counsel to the Purchaser                                     41
   ARTICLE IX.    CONDITIONS TO OBLIGATIONS OF PURCHASER                               41
      9.01     Representations and Warranties True and Correct at Closing Date         41
      9.02     Performance Obligations                                                 42

                                     -iii-
<PAGE>
                                       TABLE OF CONTENTS
                                          (continued)

                                                                                     PAGE

      9.03     No Material Change                                                      42
      9.04     Other Necessary Consents                                                42
      9.05     Opinion of Counsel to the Seller                                        42
      9.06     Non-Compete Agreement                                                   42
      9.07     Documents Satisfactory in Form and Substance                            42
      9.08     Certificates                                                            42
      9.09     Employment Agreements                                                   43
      9.10     Release of Liens                                                        43
   ARTICLE X.     INDEMNIFICATION                                                      43
      10.01    Indemnification Obligations of the Sellers                              43
      10.02    Indemnification Obligations of Purchaser                                44
      10.03    Indemnification Procedure.                                              44
      10.04    Survival Period                                                         46
      10.05    Liability Limits                                                        46
      10.06    Determination of Purchaser Losses                                       47
      10.07    Investigations                                                          47
      10.08    Deleted                                                                 47
      10.09    Reduction of Purchase Price                                             47
      10.10    Damages                                                                 47
      10.11    Exclusive Remedy                                                        47
   ARTICLE XI.    TERMINATION PRIOR TO CLOSING DATE                                    47
      11.01    Termination of Agreement                                                47
      11.02    Termination of Obligations                                              48
   ARTICLE XII.   MISCELLANEOUS                                                        48
      12.01    Entire Agreement; Survival                                              48
      12.02    Amendment                                                               48
      12.03    Parties Bound by Agreement; Successors and Assigns                      49
      12.04    Counterparts; Facsimile                                                 49
      12.05    Headings                                                                49
      12.06    Modification and Waiver                                                 49

                                      -iv-
<PAGE>
                                       TABLE OF CONTENTS
                                          (continued)

                                                                                     PAGE

      12.07    Expenses                                                                49
      12.08    Notices                                                                 49
      12.09    Governing Law; Jurisdiction                                             50
      12.10    Public Announcements                                                    50
      12.11    Knowledge                                                               51
      12.12    No Third-Party Beneficiaries                                            51
      12.13    "Including"                                                             51
      12.14    Gender and Number                                                       51
      12.15    References                                                              51
      12.16    Severability                                                            51
      12.17    Further Assurances                                                      51
      12.18    Currency                                                                51
      12.19    Ordinary Course of Business                                             52
      12.20    Commercially Reasonable Efforts                                         52
      12.21    Material Adverse Change (or Effect)                                     52
      12.22    Arbitration                                                             52
      12.23    Enforcement                                                             53
</TABLE>

                                      -v-
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<TABLE>
<CAPTION>
                         LIST OF SCHEDULES AND EXHIBITS
                         ------------------------------

SCHEDULES
---------
<S>                  <C>

Schedule 2.06(a)(1)  Incentive Compensation Mechanics
Schedule 2.06(a)(2)  Incentive Employees
Schedule 2.06(b)     Integration Incentive Compensation Mechanics
Schedule 3.03        Ownership of Cotton Equity Interests
Schedule 4.01(a)     Qualifications to Conduct Business
Schedule 4.01(c)     Officers and Directors of the Corporation
Schedule 4.03        Other Claims
Schedule 4.04        Conflicts
Schedule 4.05        Required Consents
Schedule 4.07        Financial Statements
Schedule 4.09(a)     Real Property
Schedule 4.09(c)     Permitted Liens
Schedule 4.10(a)     Personal Property
Schedule 4.10(b)     Property Held at Other Locations
Schedule 4.10(d)     Personal Property Leases
Schedule 4.11        Indebtedness
Schedule 4.12(b)     Intellectual Property
Schedule 4.12(c)     Obligations Related to Intellectual Property
Schedule 4.13        Litigation
Schedule 4.14(a)     Employees
Schedule 4.15(a)(i)  Employee Benefit Plans
Schedule 4.18        Bank Accounts
Schedule 4.19(b)     Exceptions to Compliance with Environmental Laws
Schedule 4.20        Cotton Authorizations
Schedule 4.21        Insurance Policies
Schedule 4.22        Major Suppliers and Customers
Schedule 4.23        Contracts and Commitments
Schedule 4.25        Absence of Changes
Schedule 4.26(a)     Owner Notes Receivable
Schedule 4.26(b)     Accounts Receivable
Schedule 4.27(b)     Tax Returns
Schedule 4.27(c)     Tax Deficiencies
Schedule 4.27(d)     Tax Sharing Agreements
Schedule 4.27(e)     Tax Election Adjustments
Schedule 5.05        Capitalization of Purchaser
Schedule 5.07        Financial Condition of Purchaser
Schedule 6.13        Spin-Off Agreement
Schedule 12.11(a)    Seller's Knowledge
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                         LIST OF SCHEDULES AND EXHIBITS
                         ------------------------------
                                   (CONTINUED)

EXHIBITS
--------
<S>                  <C>

Exhibit A            Cotton Group Companies
Exhibit B            Purchase Price Allocation Among Sellers
Exhibit C            Form of Seller Note
Exhibit D            [OMITTED]
Exhibit E            [OMITTED]
Exhibit F-1          [OMITTED]
Exhibit F-2          [OMITTED]
Exhibit G            [OMITTED]
Exhibit H            [OMITTED]
</TABLE>

<PAGE>
                               AMENDED & RESTATED
                     STOCK AND LIMITED PARTNERSHIP INTEREST
                               PURCHASE AGREEMENT

     This  AMENDED  &  RESTATED  STOCK AND LIMITED PARTNERSHIP INTEREST PURCHASE
AGREEMENT (this "Agreement"), is made and entered into as of December ___, 2006,
                 ---------
by and among CHARYS HOLDING COMPANY, INC., a Delaware corporation ("Purchaser"),
                                                                    ---------
COTTON  HOLDINGS 1, INC., a Delaware corporation (the "Cotton Holdings"), COTTON
                                                       ---------------
COMMERCIAL  USA,  LP,  a Texas limited partnership ("Cotton Commercial"), COTTON
                                                     -----------------
RESTORATION  OF  CENTRAL  TEXAS,  LP,  a  Texas  limited  partnership  ("Cotton
                                                                         ------
Restoration"),  Bryan  Michalsky,  James Scaife, Randall Thompson, Daryn Ebrecht
-----------
and  Peter  Bell  (collectively,  the "Cotton Holdings Sellers"), Blake Stansell
                                       -----------------------
(a/k/a  Frank  Blakely  Stansell)  and  Chad  Weigman (collectively, the "Cotton
                                                                          ------
Commercial  Sellers")  and Johnny Slaughter and Russell White (collectively, the
-------------------
"Cotton Restoration Sellers"  and, together with the Cotton Holdings Sellers and
 --------------------------
Cotton  Commercial  Sellers, the "Sellers").    The parties are joined herein by
                                  -------
C&B  / Cotton Holdings, Inc., a Delaware corporation ("Acquisition Subsidiary"),
                                                       ----------------------
and  Crochet  &  Borel  Services, Inc., a Texas corporation ("Crochet & Borel"),
                                                              ---------------
both  of  which  are  wholly  owned  subsidiaries of Purchaser, for the purposes
herein  expressed.

                              W I T N E S S E T H:
                              --------------------

     WHEREAS,  the parties hereto previously entered into that certain Stock and
Limited  Partnership Interest Purchase Agreement, dated as of September 1, 2006,
as  amended  by that certain First Amendment to Purchase Agreement dated October
6,  2006,  as  further  amended  by  that  certain  Second Amendment to Purchase
Agreement  dated  October 19, 2006, and as further amended by that certain Third
Amendment  to  Purchase  Agreement  dated  October  31,  2006  (as  amended, the
"Original  Agreement");  and
 -------------------

     WHEREAS,  the parties desire to amend and restate the Original Agreement in
its  entirety  as  provided  herein;  and

     WHEREAS,  the Cotton Holdings Sellers own all of the issued and outstanding
shares  of  capital  stock  of  Cotton  Holdings;  and

     WHEREAS, the Cotton Commercial Sellers and Cotton Holdings collectively own
all  of  the  limited partnership interests in Cotton Commercial, and Cotton USA
GP,  LLC,  a wholly-owned subsidiary of Cotton Holdings, owns all of the general
partnership  interests  in  Cotton  Commercial;  and

     WHEREAS,  the  Cotton  Restoration  Sellers and CCI-LP, LLC, a wholly-owned
subsidiary  of  Cotton Holdings, collectively own all of the limited partnership
interests  in  Cotton Restoration, and CCI-GP, LLC, a wholly-owned subsidiary of
Cotton  Holdings,  owns  all  of  the  general  partnership  interests in Cotton
Restoration;  and

     WHEREAS,  Cotton  Holdings,  Cotton Commercial, Cotton Restoration, and the
other direct and indirect subsidiaries of Cotton Holdings set forth on EXHIBIT A
                                                                       ---------
attached  hereto  (collectively,  the  "Cotton  Group  Companies"  and  each,
                                        ------------------------
individually,  a  "Cotton  Group  Company")  are  in  the  business of providing
                   ----------------------
catastrophe  management,  reconstruction,  restoration,

                                     -1-
<PAGE>
and  environmental  remediation services throughout the United States of America
(the  "Cotton  Group  Business");  and
       -----------------------

     WHEREAS,  in  reliance  on  and  subject  to  the  terms,  conditions,
representations,  warranties,  covenants  and  agreements  contained  herein,
Purchaser desires to purchase all of the issued and outstanding shares of Cotton
Holdings  (the  "Cotton  Holdings Shares") from the Cotton Holdings Sellers; and
                 -----------------------

     WHEREAS,  in  reliance  on  and  subject  to  the  terms,  conditions,
representations,  warranties,  covenants  and  agreements  contained  herein,
Purchaser desires to purchase all of the limited partnership interests of Cotton
Commercial  held  by  the  Cotton  Commercial Sellers (the "Cotton Commercial LP
                                                            --------------------
Interests"),  being  a 17.5% limited partnership interest held by Blake Stansell
---------
and a 5% limited partnership interest held by Chad Weigman; and

     WHEREAS,  in  reliance  on  and  subject  to  the  terms,  conditions,
representations,  warranties,  covenants  and  agreements  contained  herein,
Purchaser desires to purchase all of the limited partnership interests of Cotton
Restoration  held  by the Cotton Restoration Sellers (the "Cotton Restoration LP
                                                           ---------------------
Interests"),  being  a  5% limited partnership interest held by Johnny Slaughter
---------
and a 5% limited partnership interest held by Russell White (the Cotton Holdings
Shares,  Cotton  Commercial LP Interests and Cotton Restoration LP Interests are
collectively referred to herein as the "Cotton Equity Interests"); and
                                        -----------------------

     WHEREAS,  the  Sellers  desire  to  sell  the  Cotton  Equity  Interests to
Purchaser and at the request of Purchaser assign, convey and transfer the Cotton
Equity  Interests  to  the  Acquisition  Subsidiary;

     NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements herein contained, and upon and subject to the terms and
the  conditions  hereinafter  set forth, the parties do hereby agree as follows:

                                   ARTICLE I.
                  PURCHASE AND SALE OF COTTON EQUITY INTERESTS
                  --------------------------------------------

     1.01     PURCHASE AND SALE. Upon the terms and subject to the conditions of
              -----------------
this Agreement, at the completion of the First Closing and Second Closing, which
are  defined  below,  (collectively,  the  "Closings"),  (a) the Cotton Holdings
                                            --------
Sellers  shall  sell,  assign, transfer and convey unto Purchaser, and Purchaser
shall  purchase  and acquire from the Cotton Holdings Sellers, all (but not less
than all) of the Cotton Holdings Shares, (b) the Cotton Commercial Sellers shall
sell,  assign,  transfer and convey unto Purchaser, and Purchaser shall purchase
and  acquire  from the Cotton Commercial Sellers, all (but not less than all) of
the Cotton Commercial LP Interests, and (c) the Cotton Restoration Sellers shall
sell,  assign,  transfer and convey unto Purchaser, and Purchaser shall purchase
and  acquire from the Cotton Restoration Sellers, all (but not less than all) of
the  Cotton Restoration LP Interests, in each case free and clear of any and all
claims, liens, charges and encumbrances.  The Closings shall occur at 10:00 a.m.
on  the First Closing Date and the Second Closing Date (defined below), or  such
other date(s) as the parties mutually agree in writing (the "Closing Dates"), at
                                                             -------------
the  offices  of  Nance & Simpson, LLP, 2603 Augusta, Suite 1000, Houston, Texas
77057.

                                     -2-
<PAGE>
     1.02     THE  FIRST CLOSING.  At the first closing ("First Closing"), which
              ------------------                          -------------
shall  occur on or before December 8, 2006 (the "First Closing Date"), Purchaser
                                                 ------------------
shall  purchase  40%  of  the  Cotton  Equity  Interests  (the  "First  Equity
                                                                 -------------
Interests"), pro-rata from the Sellers as their interests may be currently held,
---------
for  the  consideration  set  forth  in Sections 2.02(a),  2.02(b),  2.03(a) and
                                        ----------------   -------   -------
2.03(b).
-------

     1.03     THESECOND  CLOSING.  At  the  second  closing  ("Second Closing"),
              ------------------                               --------------
which  shall  occur  on  or  before  March  8, 2007 (the "Second Closing Date"),
                                                          -------------------
Purchaser  shall purchase the remaining Cotton Equity Interests not purchased at
the  First Closing (the "Second Equity Interests"), pro-rata from the Sellers as
                         -----------------------
their  interests  are  then  held,  for  the  consideration set forth in Section
                                                                         -------
2.02(c).
-------

                                   ARTICLE II.
                                 PURCHASE PRICE
                                 --------------

     2.01     THE  TOTAL  CONSIDERATION.  In consideration of the sale of all of
              -------------------------
the  Cotton  Equity  Interests  to Purchaser to occur at the Closings, Purchaser
shall  pay  and  deliver  to  the  Sellers  aggregate  consideration  ("Total
                                                                        -----
Consideration")  of (i) cash and promissory notes (the "Cash Consideration") and
-------------                                           ------------------
(ii) shares of the Purchaser's Common Stock and certain make-whole consideration
(collectively  the "Stock Consideration"), as more fully set forth below in this
                    -------------------
Article  II.  The  Total  Consideration shall be allocated and distributed among
the  Sellers  as  set forth on EXHIBIT B attached hereto and incorporated herein
                               ---------
for  all  purposes.

     2.02     PAYMENT  OF  CASH  CONSIDERATION.  Purchaser  shall  pay  the Cash
              --------------------------------
Consideration  to  Sellers  as  follows:

          (a)     NON-REFUNDABLE  CASH  CONSIDERATION.  Prior  to  the  First
                  -----------------------------------
Closing,  Purchaser has paid to Sellers the cumulative cash sum of $2,500,000.00
("Non-Refundable  Cash  Consideration"),  as a material inducement to Sellers to
  -----------------------------------
enter  into  this  Agreement.  At  the  First  Closing,  the Non-Refundable Cash
Consideration  shall be credited to the Total Consideration payable by Purchaser
to  Sellers  for  the First Equity Interests to be purchased by Purchaser at the
First  Closing.  Purchaser  acknowledges  and  agrees  that  if  this  Agreement
terminates  for  any  reason  whatsoever  prior  to  the First Closing including
(without  limitation) due to the lapse of time, the Sellers shall be entitled to
retain  all  of  the Non-Refundable Cash Consideration and Purchaser will not be
entitled  to  a  refund  of  the  Non-Refundable  Cash  Consideration,  and
notwithstanding  anything  herein  to  the contrary, Purchaser hereby waives and
forever  releases  all  claims  and  causes  of  action  with  respect  to  the
Non-Refundable  Cash  Consideration.

          (b)     CASH  CONSIDERATION  AT  THE  FIRST  CLOSING.  At  the  First
                  --------------------------------------------
Closing,  in  consideration  for  the  purchase  of  the First Equity Interests,
Purchaser shall pay to the Sellers the sum of $24,000,000.00 (the "First Closing
                                                                   -------------
Cash  Consideration") in the form of (i) $14,000,000.00 in immediately available
-------------------
federal funds delivered via wire transfer to the accounts of Sellers pursuant to
wire transfer instructions to be delivered to Purchaser at or prior to the First
Closing and (ii) a promissory note (the "Seller Note") in the original principal
                                         -----------
amount of $10,000,000.00, to be made by Purchaser and payable to Sellers, in the
form attached hereto as EXHIBIT C.  The Seller Note shall (i) be due and payable
                        ---------
on  the  90th day following the First Closing Date or if earlier, upon Purchaser
obtaining  "Permanent  Financing"  as  described  in  the Seller Note, (ii) bear
interest  from  the  First  Closing  Date  at  a  rate of 9% per annum, (iii) be

                                     -3-
<PAGE>
guaranteed by the Acquisition Subsidiary, the Cotton Group Companies and Crochet
and Borel, (iv) be secured by a first pledge and lien (the "Pledge") against the
                                                            ------
First  Equity  Interests, a first lien security interest ("Cotton Lien") against
                                                           -----------
the  assets  of  the  Cotton  Group  Companies  and  a subordinate lien security
interest  ("C&B  Lien")  against  the assets of Crochet and Borel.  At the First
            ---------
Closing  the  parties  shall execute all necessary guaranty agreements, security
agreements,  pledge  agreements,  UCC  financing  statements  and  intercreditor
agreements as needed to perfect the Pledge, Cotton Lien and C&B Lien in favor of
Sellers.

          (c)     CASH  CONSIDERATION  ATTHESECOND  CLOSING.  At  the  Second
                  -----------------------------------------
Closing,  in  consideration  for  the  purchase  of the Second Equity Interests,
Purchaser  shall  (i)  pay  to  the  Sellers the cash sum of $22,754,406.06 (the
"Second  Closing  Cash  Consideration")  in  immediately available federal funds
 ------------------------------------
delivered via wire transfer to the accounts of Sellers pursuant to wire transfer
instructions to be delivered to Purchaser at or prior to the Second Closing.  In
return  for  Sellers agreeing to accept the Seller Note (rather than all cash at
the  First  Closing)  and  in  consideration  of  Sellers  agreement  to sell to
Purchaser the Second Equity Interests (as contemplated herein), Purchaser agrees
that,  notwithstanding  anything herein to the contrary, on or before the Second
Closing Date, the Cotton Group Companies will (1) execute and deliver to certain
Sellers  (as  reflected on Schedule 4.26(a) and allocated on Exhibit B) a waiver
                                                             ---------
and  full release of certain liabilities and notes receivable from such Sellers,
their  spouses,  and  certain  related  companies including (without limitation)
Cotton  Development,  LP,  Cotton  Development 2, LP, Cotton Dev. GP, LLC, and T
double  HB,  LLC  and  (2) pay to Bryan Michalsky the sum of $840,000.00 in full
satisfaction of all amounts owed to Bryan Michalsky under his current employment
agreement,  which shall be terminated and replaced by a new employment agreement
in  accordance  with  this  Agreement.

     2.03     PAYMENT  OF STOCK CONSIDERATION.  Purchaser shall pay, deliver and
              -------------------------------
issue the Stock Consideration to Sellers as follows:

          (a)     NON-REFUNDABLE  STOCK  CONSIDERATION.  Prior  to  the  First
                  ------------------------------------
Closing,  Purchaser  has  issued  to Sellers 400,000 shares (the "Non-Refundable
                                                                  --------------
Stock  Consideration")  of  Purchaser's  Common  Stock ("Purchaser Stock"), as a
--------------------                                     ---------------
material  inducement  to  Sellers to enter into this Agreement.  At Closing, the
Non-Refundable  Stock Consideration shall be credited to the Total Consideration
payable  by  Purchaser  at  the  First  Closing  for the First Equity Interests.
Purchaser  acknowledges  and  agrees  that  if this Agreement terminates for any
reason  whatsoever prior to the First Closing including (without limitation) due
to  the  lapse  of  time,  the  Sellers  shall  be entitled to retain all of the
Non-Refundable  Stock  Consideration  and  Purchaser  will  not be entitled to a
refund  of  the Non-Refundable Stock Consideration, and notwithstanding anything
herein  to the contrary, Purchaser hereby waives and forever releases all claims
and causes of action with respect to the Non-Refundable Stock Consideration.

          (b)     STOCK  CONSIDERATION  AT  THE  FIRST  CLOSING.  At  the  First
                  ---------------------------------------------
Closing,  Purchaser  shall  issue to Sellers 1,555,532 shares of Purchaser Stock
(the  "Closing Stock  Consideration").
       ----------------------------

          (c)     NO FRACTIONAL SHARES.  No fractional shares of Purchaser Stock
                  --------------------
shall  be issued to the Sellers hereunder, and the number of shares of Purchaser
Stock  to  be  issued  shall  be  rounded down to the nearest whole share.  If a
fractional  share  interest  arises  pursuant  to  any

                                     -4-
<PAGE>
calculation  in  Section 2.06 or elsewhere herein, the Purchaser shall eliminate
                 ------------
such  fractional  share  interest  by  paying the Sellers the amount computed by
multiplying  the  fractional  interest  by  the price of a full share (with such
price being the same price used to determine the shares then being issued).

          (d)     REGISTRATION  RIGHTS.  The  Sellers  shall  be  granted
                  --------------------
registration rights, with respect to all shares of Purchaser Stock issued to the
Sellers  hereunder,  as  more  specifically set forth in the Registration Rights
Agreement  (the  "Registration  Rights Agreement") made by Purchaser in favor of
                  ------------------------------
Sellers,  dated  October  6,  2006.

          (e)     SHARES FULLY PAID.  Shares of Purchaser Stock, when issued and
                  -----------------
delivered  to  the  Sellers  in  accordance  with the terms hereof, will be duly
authorized,  validly  issued,  fully-paid  and  non-assessable.

          (f)     LEGEND  ON  STOCK  CERTIFICATES.  The  stock  certificates
                  -------------------------------
evidencing  the  shares of Purchaser Stock issued to Sellers hereunder will bear
the  following  legend:

     THE  SHARES  OF  STOCK  EVIDENCED  BY  THIS STOCK CERTIFICATE HAVE NOT BEEN
     REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
     LAWS  OF  ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED
     OF  EXCEPT  PURSUANT  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
     AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
     FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

     2.04     [OMITTED]
              ---------

     2.05     MAKE-WHOLE  ADJUSTMENT.
              ----------------------

          (a)  The following terms have the meanings set forth below:

                    (i)     "Make-Whole Date" means the first anniversary of the
                             ---------------
First  Closing Date, provided that if such date falls on a non-business day, the
Make-Whole  Date  shall  be  the  preceding  business  day.

                    (ii)     "Make  Whole Deficit" means the value, if positive,
                              -------------------
of  (A)  the  Target  Stock  Consideration  Value,  minus (B) the product of (1)
                                                    -----
1,955,532  multiplied  by (2) the Market Price of the Purchaser Stock during the
           --------------
15  consecutive  trading  days  prior  to  the  Make-Whole  Date.

                    (iii)     "Market  Price" means, with respect to any period,
                               -------------
the  weighted  average  sale  price of the Purchaser Stock during such period as
determined  by  (i) the principal stock exchange, or the NASDAQ/NMS, as the case
may  be,  on  which  shares  of  Purchaser  Stock are then listed or admitted to
trading,  or  (ii)  if  the  Purchaser  Stock  is not then listed or admitted to
trading  on  any  stock  exchange  or  the  NASDAQ/NMS,  the average of the last
reported  closing  bid and asked prices on each such day in the over-the-counter
market, as furnished by the NASDAQ system or National Quotation Bureau, Inc., or
(iii)  if  neither  NASDAQ,  or  National

                                     -5-
<PAGE>
Quotation  Bureau, Inc. is at the time engaged in the business of reporting such
prices,  then  as  furnished  by  any similar firm then engaged in such business

                    (iv)     "NASDAQ/NMS"  means  that  National  Association of
                              ----------
Securities Dealers' Automated Quotation National Market System.

                    (v)     "Target  Stock  Consideration  Value"  means
                             -----------------------------------
$29,332,980.00.

          (b)     In  the  event  that  the  Market Price of the Purchaser Stock
during  the fifteen consecutive trading days immediately prior to the Make-Whole
Date  is  less  than  $15.00  per  share  (the  "Target Per Share Stock Price"),
                                                 ----------------------------
Purchaser  shall,  at  Purchaser's  option, either (x) issue to the Sellers that
number  of  additional shares of Purchaser Stock (the "Make-Whole Shares") equal
                                                       -----------------
to  (1)  the  Make  Whole  Deficit, divided by the Market Price of the Purchaser
                                    ----------
Stock  on the Make-Whole Date, or (y) pay to the Sellers an amount in cash equal
to  (1)  the  Target Stock Consideration Value, less (2) the Make Whole Deficit.
                                                ----
Such  issuance  shall  be  completed or such cash payment shall be made no later
than the third business day after the Make-Whole Date.

          (c)     Notwithstanding  anything  to  the  contrary set forth herein,
Purchaser's  obligation  to  make any adjustment in accordance with this Section
                                                                         -------
2.05,  or  to issue any Make-Whole Shares, shall terminate in the event that, at
----
any time prior to the Make-Whole Date, the average Market Price Per Share of the
Stock  Consideration  during  any 90 consecutive trading days following the date
the  Sellers  are  entitled  to  freely  trade  the  Stock Consideration without
restrictions  pursuant  to  the  Registration  Rights  Agreement exceeds $15.00.
Further,  on  the  Make  Whole  Date,  Purchaser  may  reduce  the  Target Stock
Consideration  Value by the amount of any Purchaser Losses for which the Sellers
must  indemnify  the  Purchaser Indemnified Parties in accordance with ARTICLE X
                                                                       ---------
hereof,  including  satisfaction  of  the procedures and conditions set forth in
Sections  10.03  and  10.06  hereof.
---------------       -----

     2.06     INCENTIVE  COMPENSATION.
              -----------------------

          (a)     The  Sellers  shall,  for each Performance Year (as defined on
SCHEDULE  2.06(A)(1)),  be  entitled  to  earn  incentive  compensation, payable
--------------------
annually within 30 days following the filing of the Purchaser's 10-K for each of
the  fiscal years ending April 30, 2007, 2008 and 2009, based upon the financial
performance  of the Cotton Group Companies according to the formula set forth on
SCHEDULE  2.06(A)(1).  Upon determining the portion of the Bonus Pool Amount (as
--------------------
defined  on  SCHEDULE  2.06(A)(1)) payable for each Employment Year, the Sellers
             --------------------
shall notify Purchaser of the portion of such amount to be paid to each employee
identified  on  SCHEDULE  2.06(A)(2)  (the "Incentive Employees") (to the extent
                --------------------        -------------------
that  each  such  employee  continues  to  be entitled to incentive compensation
pursuant  to  the terms of his or her employment agreement with Purchaser or the
Cotton Group Companies) or any other employee who becomes eligible for incentive
compensation  pursuant  to the terms of his or her employment agreement with the
Corporation.

          (b)     The  Sellers  shall  be  entitled  to  earn  additional equity
compensation  based  upon  the  financial  performance  of  acquired  companies,
determined  in  accordance  with  the  provisions  of  SCHEDULE  2.06(B).
                                                       -----------------

                                     -6-
<PAGE>
     2.07     SELLERS'  OPTION.  For  $10.00  and  other  good  and  valuable
              ----------------
consideration  paid and delivered to Purchaser by Sellers upon execution of this
Agreement,  the  receipt  and  sufficiency  of  which is hereby acknowledged and
agreed  to  by Purchaser, Purchaser hereby grants to Sellers the exclusive right
and  option,  at  their  sole discretion, to purchase the First Equity Interests
from  Purchaser  that  Purchaser  will  acquire at the consummation of the First
Closing  if  the Second Closing does not occur for any reason whatsoever (except
as  described  in  Section 2.07(d) below), by giving notice ("Option Notice") of
                                                              -------------
purchase  to  Purchaser within 60 days following the Second Closing Date, on the
following  terms  and  conditions:

          (a)     Sellers'  shall  pay  to  Purchaser  cash  consideration  of
     $14,000,000.00, in immediately available federal funds; and

          (b)     Sellers'  shall  assign, transfer, and convey to Purchaser the
     Closing Stock Consideration (i.e., 1,555,532 shares), being in unregistered
     form  as  issued  to  Sellers  at  the  First  Closing;  and

          (c)     The  closing  of the purchase of the First Equity Interests as
     set  forth  above  in  this Section 2.07 shall take place within 5 business
     days following the delivery of the Option Notice to Purchaser, at which the
     consideration  set  forth  in Section 2.07(a) and (b) shall be delivered to
     Purchaser  and  Purchaser shall transfer, assign, convey and deliver to the
     Sellers the First Equity Interests, free and clear of any liens, claims and
     encumbrances  of any kind, and thereafter, the parties hereto shall have no
     further  rights  or obligations under this Agreement except as set forth in
     this  Section  2.07;  and
           -------------

          (d)     Notwithstanding anything in this Section 2.07 to the contrary,
                                                   ------------
     Sellers  may  not  exercise their purchase option set forth in this Section
                                                                         -------
     2.07 if and only if the cause of the failure of the Second Closing to occur
     ---- --------------
     is  (i)  a  material breach by Sellers of a provision of this Agreement, or
     (ii) Sellers refusal to consummate the Second Closing without cause. In the
     event that Sellers do not exercise their purchase option, the parties agree
     that  the  principal  amount  of  the  Seller  Note  will  be  reduced  to
     $5,000,000.00.

                                  ARTICLE III.
                    REPRESENTATIONS AND WARRANTIES OF SELLERS
                    -----------------------------------------

     Each Seller hereby represents and warrants to the Purchaser, only as to his
respective  ownership of Cotton Equity Interests, execution and delivery of this
Agreement,  investment  in  Purchaser  Stock  pursuant  to  the  transaction
contemplated  by this Agreement, and the other matters addressed in this Article
                                                                         -------
III  (and not as to the ownership of other Sellers, their execution and delivery
---
of  this  Agreement,  investment in Purchaser Stock or other such matters), that
the  statements  contained  in  this  Article III are correct and complete as of
                                      -----------
September  1,  2006 (as then made in the Original Agreement) as though such date
were  substituted  for  the  date of this Agreement throughout this Article III,
                                                                    -----------
except  (i)  to  the  extent  any  such  representation or warranty speaks to an
earlier  date  and  (ii)  as set forth in the or Schedules ("Schedules") to this
                                                             ---------
Agreement delivered by the Sellers to the Purchaser.

     3.01     POWER,  AUTHORITY  AND ORGANIZATION OF THE SELLER.  Seller has the
              -------------------------------------------------
right,  power and capacity to execute, deliver and perform this Agreement and to
consummate  the  transactions

                                     -7-
<PAGE>
contemplated  hereby.  This  Agreement  has  been  duly and validly executed and
delivered  by  Seller  and  constitutes  Seller's  legal,  valid  and  binding
obligation,  enforceable  in  accordance  with  its  terms.

     3.02     NO  CONFLICT.  The  execution  and  delivery  of this Agreement by
              ------------
Seller,  the consummation of the transactions contemplated herein by Seller, and
the  performance  of  the  covenants and agreements of Seller, will not, with or
without  the  giving  of  notice  or  the  lapse  of time, or both, (a) violate,
conflict  with  or result in a breach or default under any term or condition, or
result  in  the  termination,  of  any  mortgage,  indenture, contract, license,
permit,  instrument,  trust document, or other agreement, document or instrument
to  which Seller is a party or by which Seller or any of Seller's properties may
be  bound, or (b) violate any provision of law, statute, rule, regulation, court
order,  judgment  or  decree,  or ruling of any governmental authority, to which
Seller is a party or by which Seller or Seller's properties may be bound.

     3.03     OWNERSHIP  OF  THE  COTTON  EQUITY  INTERESTS.  Seller  owns,
              ---------------------------------------------
beneficially  and of record, good and valid title to the Cotton Equity Interests
set  forth  beside  such  Seller's name on SCHEDULE 3.03 hereto, and such Cotton
                                           -------------
Equity  Interests  (a) are validly issued, fully paid and nonassessable, (b) are
free  and  clear of any liens, restrictions, claims, equities, charges, options,
rights  of  first  refusal or encumbrances, with no defects of title whatsoever,
and  (c)  constitute  all  of  the  issued  and  outstanding  stock  or  limited
partnership  interests  of  Cotton  Holdings,  Cotton  Restoration  and  Cotton
Commercial,  as  the  case  may  be, other than limited partnership interests in
Cotton  Restoration and Cotton Commercial owned directly or indirectly by Cotton
Holdings.  Other  than  the  Cotton  Equity  Interests, Seller owns no shares of
capital  stock,  limited partnership interests or other equity securities of any
Cotton  Group Company and, except as set forth on SCHEDULE 3.03, Seller does not
                                                  -------------
have  any  right  of  any kind to have any such equity security issued. Upon the
Closing  Date,  Purchaser shall have obtained good and valid title to the Cotton
Equity  Interests,  free and clear of any liens, restrictions, claims, equities,
options,  charges,  rights  of  first  refusal,  or  encumbrances  or  other
restrictions,  and  with  no  defects  of  title whatsoever. Seller has full and
exclusive power, right and authority to vote the Cotton Equity Interests. Seller
is  not  a party to or bound by any agreement affecting or relating to its right
to  transfer  or  vote  any  Cotton  Equity  Interest.

     3.04     ABSENCE OF OTHER CLAIMS.  No prior offer, issue, redemption, call,
              -----------------------
purchase,  sale,  merger,  transfer, involvement in any transfer, negotiation or
other  transaction  of  any  nature  or  kind  with respect to any capital stock
(including  shares,  offers, options, warrants, or debt convertible into shares,
options  or warrants) or other ownership interest in the Cotton Group Company in
which  Seller  owns a Cotton Equity Interest, that has given or may give rise to
(a)  any  valid  claim  or action by any person (including any former or present
holder  of  any of the Cotton Equity Interests) which is enforceable against the
Seller or such Cotton Group Company; or (b) any valid ownership interest in such
Cotton  Group  Company, and no fact or circumstance exists which could give rise
to any such right, claim, action or interest on behalf of any person.

     3.05     INVESTMENT  REPRESENTATIONS.
              ---------------------------

          (a)     Seller  has  sufficient  knowledge and experience in financial
and  business  matters  to  be  able  to  evaluate  the  risks and merits of the
investment  represented  by  the  issuance  of  the  Purchaser Stock pursuant to
Article  II  hereof  (the  "Issued  Securities").
-----------                 ------------------

                                     -8-
<PAGE>
          (b)     Seller  is  aware  that the business of the Purchaser involves
significant  and  material  economic  variables  and  risks that could adversely
affect  Seller's  investment  in  the  Issued  Securities.

          (c)     Seller  is able to bear the economic risks of an investment in
the  Issued Securities, including the risk of losing all of such investment, and
Seller has no need for liquidity with respect to such investment.

          (d)     Seller  acknowledges  that no prospectus, offering circular or
other  offering  statement  containing  information  with  respect to the Issued
Securities  was  delivered  in  connection with Seller's investment.  Seller has
made  his  own  inquiry  and  analysis  with  respect  to  the Purchaser and its
business,  and  further  represents that Seller has had access, for a reasonable
time  prior  to the issuance of the Issued Securities, to information concerning
the  Purchaser  and  has  had  the  opportunity to ask questions of, and receive
answers  from,  officers of the Purchaser concerning an investment in the Issued
Securities  and the business, management and financial affairs of the Purchaser,
and to obtain additional information (to the extent the Purchaser possessed such
information  or  could  acquire  it  without  unreasonable  effort  or  expense)
necessary  to  verify  the accuracy of any information furnished to Seller or to
which  the  Seller  had  access.

          (e)     The  Issued Securities were not offered to the Seller by means
of  publicly  disseminated  advertisements  or sales literature, or as part of a
general solicitation, nor is Seller aware of any offers made to other persons by
such  means.

          (f)     Seller  acknowledges  that he has either been supplied with or
has  had  access  to  information  to  which  a reasonable investor would attach
significance in making investment decisions. In determining to proceed with this
investment,  Seller  has  relied  solely upon the results of his own independent
investigation  with  respect  to  the  Issued  Securities.

          (g)     Seller  is  an "accredited investor" as defined in Rule 501(a)
of Regulation D, promulgated under the Securities Act, which requires individual
investors  to  either  (i)  have  had individual income (exclusive of any income
attributable to a spouse) of more than $200,000, or joint individual income with
a  spouse  of  more  than  $300,000,  in each of the two most recent years and a
reasonable  expectation  of reaching that level of income in the current year or
(ii)  have  an  individual  net  worth (or combined net worth with a spouse), in
excess  of  $1,000,000.

          (h)     Seller  is acquiring the Issued Securities for his own account
and not with a view to resale or other distribution thereof inconsistent with or
in  violation  of the federal securities laws or the securities or Blue Sky laws
of  any  state.  No other person or entity will have any interest, beneficial or
otherwise,  in  the  Issued Securities that Seller is acquiring hereunder, other
than  a  community  property interest of Seller's spouse, if applicable, in such
Issued Securities under the laws of the State of Texas.  Seller is not obligated
to  transfer the Issued Securities or any portion thereof to any other person or
entity,  nor  does  Seller  have  any  agreement  or  understanding  to  do  so.

          (i)     Seller  acknowledges  and  agrees that he may not, directly or
indirectly,  sell, assign, pledge, give, subject to lien or security interest or
otherwise  dispose  of  or  encumber

                                     -9-
<PAGE>
(collectively,  "Transfer")  all  or any part of the Issued Securities except as
                 --------
expressly  permitted  by  this  Agreement, the Registration Rights Agreement and
applicable  law.  Seller  understands  that the Purchaser may, as a condition of
any Transfer of any Issued Securities which are not registered for sale pursuant
to an effective registration statement of the Purchaser, require that he deliver
an  opinion of counsel reasonably acceptable to the Purchaser to the effect that
neither  the  sale  nor  the  proposed  Transfer will result in any violation of
applicable  state  securities  laws, the Securities Act or the securities law of
any  other  jurisdiction.

          (j)     Seller  acknowledges  that,  to  the  extent  Seller  deems
necessary,  he  has  relied  on  his own professional accounting, tax, legal and
financial  advisors  with  respect  to  an  investment  in the Purchaser and the
acquisition  of  the  Issued  Securities,  and  obtained, to the extent he deems
necessary,  such  professional advice with respect to the risks inherent in such
investment  and  the  suitability  of  an investment in the Issued Securities in
light  of  his  financial  condition  and  investment  needs.

          (k)     Any  non-public  information about the Purchaser that has been
disclosed  to  Seller  by  Purchaser or any of its representatives in connection
with  the  acquisition  of  the  Issued  Securities is deemed to be confidential
information  of  the  Purchaser,  and  Seller  hereby  agrees  that,  unless the
Purchaser  has  consented  in  writing  to the contrary, Seller shall treat such
information  as  Confidential  Information  under  this  Agreement.

          (l)     The  agreements,  representations  and  warranties made herein
extend  to and apply to all portions of the Issued Securities. The acceptance by
the  Sellers  of the Issued Securities shall constitute the Sellers confirmation
that all agreements and representations made herein shall be true and correct at
such  time.

                                   ARTICLE IV.
       REPRESENTATIONS AND WARRANTIES REGARDING THE COTTON GROUP COMPANIES
       -------------------------------------------------------------------

     Cotton  Holdings, Cotton Commercial and Cotton Restoration, and each of the
Sellers hereby jointly and severally represent and warrant to the Purchaser that
the  statements  contained in this Article IV are correct and complete as of the
                                   ----------
date of this Agreement, and will be correct and complete as of September 1, 2006
(the  "Representation  Date")  as  though made then and as though such date were
       --------------------
substituted  for  the  date of this Agreement throughout this Article IV, except
                                                              ----------
(i)  to the extent any such representation or warranty speaks to an earlier date
and  (ii)  as  set  forth  in  the  Schedules.

     4.01     ORGANIZATION  AND  AUTHORIZATION.
              --------------------------------

          (a)     Each  Cotton Group Company is duly organized, validly existing
and in good standing under the laws of its incorporation as specified on EXHIBIT
                                                                         -------
A and has all requisite power and authority, corporate or otherwise, to carry on
-
and  conduct  its  business as it is now being conducted and to own or lease its
properties  and  assets,  and  is  duly  qualified  and  in good standing in the
jurisdictions  set  forth  on  SCHEDULE  4.01(A),  which, except as set forth on
                               -----------------
SCHEDULE  4.01(A),  are  the  only  jurisdictions  in  which  the  ownership  of
-----------------
properties  or  assets  of

                                      -10-
<PAGE>
each  such  Cotton  Group  Company  or  the conduct of the Cotton Group Business
requires  such  qualification.

          (b)     EXHIBIT A  sets forth,  for each Cotton Group Company, (i) the
                  --------
authorized  number  of  equity  interests in such Cotton Group Company, (ii) the
name  of each holder of equity interests in such Cotton Group Company, and (iii)
for  each  such  holder,  the number of equity interests held by such holder and
outstanding as of the Representation Date.  Except as set forth on EXHIBIT A, no
                                                                   ---------
Cotton Group Company has any interest, direct or indirect, and has no commitment
to  purchase or otherwise acquire any interest, direct or indirect, in any other
corporation,  partnership,  joint  venture  or  other  business  enterprise.

          (c)     The  current  officers  and  directors  of  each  Cotton Group
Company  are  listed  on  SCHEDULE  4.01(C).
                          -----------------

          (d)     The  copies  of  the  company  records  of  the  Cotton  Group
Companies that have previously been delivered to Purchaser are true, correct and
complete copies of the corporate records of the Cotton Group Companies in effect
as  of  the  Representation  Date.  The  copies  of  the  minutes of directors',
shareholders' and partners' meetings and the stock or equity books of the Cotton
Group  Companies  that  have  been  delivered  previously to Purchaser are true,
correct  and complete copies of the records of all directors', shareholders' and
partners'  meetings  and  equity issuances through and including the date hereof
and,  to  the Knowledge of the Cotton Group Companies or any Seller, reflect all
transactions and other matters required to be reflected in such records, as well
as such other matters customarily contained in records of such type.

     4.02     AUTHORIZED  AND  OUTSTANDING  STOCK.  All  of  the  Cotton  Equity
              -----------------------------------
Interests  are  validly  issued,  fully  paid and nonassessable.  All issuances,
transfers  or  purchases of Cotton Equity Interests have been in compliance with
all  applicable  agreements and all applicable laws, including federal and state
securities  laws,  and all taxes thereon have been paid.  There are no shares of
capital stock or other equity interests held in the treasury of any Cotton Group
Company.

     4.03     ABSENCE  OF  OTHER  CLAIMS.  Except as set forth on SCHEDULE 4.03,
              --------------------------                          -------------
there  are  not  outstanding,  nor  is  any  Cotton  Group Company bound by, any
subscriptions,  options,  preemptive  rights,  warrants,  calls,  commitments or
agreements  or  rights  of  any  character requiring any Cotton Group Company to
issue,  or  entitling  any person or entity to acquire, any additional shares of
capital stock or any other equity security, including any right of conversion or
exchange under any outstanding security or other instrument, and no Cotton Group
Company  is  obligated  to issue or transfer any of its equity interests for any
purpose.  There  are  no  outstanding obligations of any Cotton Group Company to
repurchase,  redeem  or otherwise acquire any outstanding equity interest in any
such  Cotton  Group  Company.

     4.04     NO CONFLICT.  The execution and delivery of this Agreement by each
              -----------
Cotton  Group  Company  that  is  a  signatory  hereto,  the consummation of the
transactions  contemplated  herein  by  each  Cotton  Group  Company  that  is a
signatory  hereto,  and  the performance of the covenants and agreements of each
Cotton  Group  Company that is a signatory hereto, will not, with or without the
giving  of  notice  or  the  lapse  of time, or both, (a) except as set forth on
Schedule  4.04,  violate  or  conflict with any of the provisions of any charter
--------------
document,  bylaw,

                                      -11-
<PAGE>
limited  liability  company  agreement,  operating  agreement  or  partnership
agreement of any Cotton Group Company, (b) except as set forth on SCHEDULE 4.04,
                                                                  -------------
violate,  conflict  with  or  result  in  a  breach  or  default  under or cause
termination  of  any  term  or  condition  of any mortgage, indenture, contract,
license,  permit,  instrument,  trust  document, or other agreement, document or
instrument  to  which any Cotton Group Company is a party or by which any Cotton
Group  Company  or  the properties of any Cotton Group Company may be bound, (c)
violate  any provision of law, statute, regulation, court order or ruling of any
governmental authority, to which any Cotton Group Company is a party or by which
any  Cotton  Group  Company or the properties of any Cotton Group Company may be
bound,  or  (d) result in the creation or imposition of any lien, claim, charge,
restriction,  security  interest  or encumbrance of any kind whatsoever upon any
asset  of  any  Cotton  Group  Company.

     4.05     REQUIRED  CONSENTS AND APPROVALS.  Except as set forth on SCHEDULE
              --------------------------------                          --------
4.05,  no  consent  or approval is required by virtue of the execution hereof by
----
any  Seller  or  any  Cotton  Group  Company  or  the consummation of any of the
transactions  contemplated  herein  by any Seller or any Cotton Group Company to
avoid  the  violation  or  breach of, or the default under, or the creation of a
lien  on  any  assets  of any Cotton Group Company pursuant to the terms of, any
regulation,  order,  decree  or award of any court or governmental agency or any
lease,  agreement, contract, mortgage, note, license, or any other instrument to
which  any  Cotton Group Company is a party or to which any Cotton Group Company
or  the  property  or  assets  of  any Cotton Group Company or any of the Cotton
Equity  Interests  is  subject.

     4.06     NO  VIOLATION  OF  LAW.  No Cotton Group Company is, and no Cotton
              ----------------------
Group Company will be (by virtue of any past or present action, omission to act,
contract  to which it is a party or any occurrence or state of facts whatsoever)
in  violation  of  any  applicable  local,  state  or  federal  law,  ordinance,
regulation,  order,  injunction  or  decree,  or  any  other  requirement of any
governmental  body,  agency  or authority or court binding on it, or relating to
its  property  or  business  or  its  advertising,  sales  or  pricing practices
(including  any  antitrust  laws  and  regulations), and no Cotton Group Company
hereafter  will suffer or incur any material loss, liability, penalty or expense
(including  attorneys'  fees)  by  virtue  of  any  such  violation.

     4.07     FINANCIAL  STATEMENTS.  SCHEDULE  4.07  contains (i) the unaudited
              ---------------------   --------------
balance sheets of Cotton Commercial, Cotton Restoration, and Cotton Restoration,
LP  as  of the years ended October 31, 2005 and October 31, 2004 reviewed by the
Cotton  Group  Companies' certified  public  accountant (the "Reviewed Financial
                                                              ------------------
Statements"),  and the related statements of income, retained earnings, and cash
----------
flows  for  the  years  then  ended, and the related notes thereto; and (ii) the
audited  consolidated  balance sheet of Cotton Holdings 1, Inc. and Subsidiaries
(including,  without  limitation,  Cotton  Commercial,  Cotton  Restoration, and
Cotton  Restoration,  LP)  as  of  July  31,  2006,  and  the  related unaudited
statements  of  income, retained earnings, and cash flows for the 9-month period
then  ended, or if such interim statements are not commonly prepared, equivalent
statements  as  are  commonly  prepared (the "Interim Financial Statements", and
                                              ----------------------------
collectively  with  the  Reviewed  Financial  Statements, the "Current Financial
                                                               -----------------
Statements").  The  Reviewed  Financial  Statements present fairly the financial
----------
position  of the Cotton Group Companies as of the dates thereof, and the related
results  of  its  operations  for  the  years then ended.  The Interim Financial
Statements  present  fairly the financial position of the Cotton Group Companies
as  of  the  date  thereof,  and  the  related results of its operations for the
periods  then  ended.  The  Reviewed  Financial Statements have been prepared in
accordance  with

                                      -12-
<PAGE>
generally accepted accounting principles, consistently applied ("GAAP"), and the
                                                                 ----
Interim  Financial  Statements  have  been  prepared in accordance with GAAP for
interim  statements  on a basis consistent with prior periods.  All adjustments,
consisting of normal, recurring accruals necessary for a fair presentation, have
been made in the Interim Financial Statements.  The balance sheets as of October
31,  2005 (the "Reviewed Balance Sheet Date") included in the Reviewed Financial
                ---------------------------
Statements  are  referred  to  herein  as  the "Reviewed Balance Sheets" and the
                                                -----------------------
audited  consolidated  balance  sheet  as of July 31, 2006 (the "Interim Balance
                                                                 ---------------
Sheet Date") included in the Interim Financial Statements are referred to herein
----------
as  the  "Interim  Balance  Sheets."
          ------------------------

     4.08     NO  UNDISCLOSED  LIABILITIES.  There  are  no  liabilities  of any
              ----------------------------
Cotton  Group  Company  of  any  kind  whatsoever,  whether accrued, contingent,
absolute  or  otherwise,  except  for:

          (a)     liabilities and obligations fully reflected or provided for in
the Reviewed Balance Sheets, the Interim Balance Sheets or the Schedules;

          (b)     liabilities and obligations incurred in the Ordinary Course of
Business, consistent with past practice, since July 31, 2006, which individually
or in the aggregate are not in excess of $50,000.00; and

          (c)     liabilities  and  obligations  under  contracts  not  (i)
attributable to any failure by any Cotton Group Company to comply with the terms
thereof or any express or implied warranty, or (ii) entered into in violation of
this  Agreement  or  arising out of any such breach by any Cotton Group Company.

     4.09     REAL  PROPERTY.
              --------------

          (a)     SCHEDULE  4.09(A)  sets forth a complete and accurate list and
                  -----------------
description of all the real property that the Cotton Group Companies own, lease,
have  agreed (or have an option) to purchase, sell or lease, or may be obligated
to  purchase,  sell or lease (the "Real Property").  With respect to each parcel
                                   -------------
of  Real  Property that is owned by the Cotton Group Companies, Sellers or their
affiliates  and  required  to  be  listed and described on SCHEDULE 4.09(A), the
                                                           ----------------
Seller  has  or  will make available prior to Closing to Purchaser true, correct
and  complete copies of each instrument (if any) evidencing a grant by or to any
Cotton  Group  Company of an option to purchase or lease such parcel, each lease
and  leasehold  mortgage  (if  any)  with  respect to such parcel, and any title
policies or commitments and surveys with respect to such parcel.

          (b)     The  Cotton  Group  Companies  have good, valid and marketable
title  to,  or  in  the  case  of  leased properties and assets, valid leasehold
interests  in,  all  of  their  material  properties  and  assets,  tangible and
intangible,  real,  personal  and mixed, movable and immovable, used or held for
use  in  their  business.

          (c)     Except  for  the  matters  set  forth on SCHEDULE 4.09(C) (the
                                                           ----------------
"Permitted  Liens"),  no  Real  Property  owned  by  the Cotton Group Companies,
 ----------------
Sellers  or  their affiliate, or, to the Knowledge of the Cotton Group Companies
or  any  Seller, any Real Property leased by the Cotton Group, is subject to (i)
any  governmental  decree  or  order  (or  threatened  or  proposed

                                      -13-
<PAGE>
decree  or  order known to the Cotton Group Companies or the Sellers) to be sold
or  taken by public authority, or (ii) any liens, security interests, easements,
rights  of  way, building use restrictions, exceptions, variances, reservations,
limitations  or  other  encumbrances  of  any  nature  whatsoever.

     4.10     PERSONAL  PROPERTY.
              ------------------

          (a)     SCHEDULE  4.10(A)  sets forth a complete and accurate list and
                  -----------------
description  of  all  personal  property  that the Cotton Group Companies own or
lease,  have  agreed  (or  have an option) to purchase, sell or lease, or may be
obligated  to  purchase, sell or lease, the net book value of which, as properly
reflected  in  the  books  and  records  of  the  Cotton  Group  Companies on an
individual,  item-by-item  basis,  exceeds  $1,000.00.

          (b)     The  Cotton  Group  Companies (i) have good and valid title to
all  the personal and mixed, tangible and intangible properties and assets which
it purports to own or which it uses in the conduct of the Cotton Group Business,
including  Intellectual  Property, Software and Licensed Software (as defined in
Section  4.12),  and  all  the personal properties and assets reflected, but not
-------------
shown  as  leased  or  encumbered, on the Reviewed Balance Sheet and the Interim
Balance  Sheet  (except  for inventory and assets sold in the Ordinary Course of
Business  and  supplies  consumed  in the Ordinary Course of Business), and (ii)
except  for  Permitted  Liens, owns such personal property free and clear of all
title  defects  or  objections,  liens,  restrictions, claims, charges, security
interests,  easements, or other encumbrances of any nature whatsoever, including
any  mortgages,  leases,  chattel  mortgages,  conditional  sales  contracts,
collateral,  security  arrangements  and  other  title  or  interest  retention
arrangements.  Except  as  set  forth on SCHEDULE 4.10(B), all personal property
                                         ----------------
(including all improvements on any Real Property) and leasehold improvements are
located  at  the  principal  location  of  the  Cotton  Group  Business.

          (c)     All  of the inventories of the Cotton Group Companies included
on the Interim Balance Sheets or subsequently acquired are merchantable and of a
quality and quantity usable and saleable in the Ordinary Course of Business, and
the  quantities  of  each  type  of  inventory  (whether  raw  materials,
work-in-process,  or  finished goods) are not excessive, and are consistent with
prior  levels.  All of the inventories of the Cotton Group Companies included on
the  Interim  Balance  Sheet are valued for the purposes thereof at the lower of
cost  or  market.

          (d)     SCHEDULE  4.10(D) contains a complete and accurate list of all
                  -----------------
leases  (including  any  capital  leases) and lease-purchase arrangements (other
than  Real  Property  leases) pursuant to which the Cotton Group Companies lease
personal  property  from others and which (i) require the Cotton Group Companies
to  pay,  for  rent  and any obligatory improvements, more than $5,000.00 in any
single year or $10,000.00 during the entire term of such lease or lease-purchase
arrangement  (including any renewal term that the Cotton Group Companies may not
avoid  by  refusing  to  renew  in  its  sole discretion), or (ii) provide for a
purchase  option for a price of more than $5,000.00.  SCHEDULE 4.10(D) specifies
                                                      ----------------
which  of such leases, if any, are capital leases.  All leases that are required
to  be  capitalized  by GAAP have been so accounted for in the Current Financial
Statements.  The Cotton Group Companies have made available to Purchaser a true,
correct and complete copy of each of the items required to be listed on SCHEDULE
                                                                        --------
4.10(D).
-------

                                      -14-
<PAGE>
     4.11     INDEBTEDNESS.  SCHEDULE  4.11  sets  forth  a  true,  correct  and
              ------------   --------------
complete  list and description of all instruments or other documents relating to
any  direct  or  indirect  indebtedness  for  borrowed money of the Cotton Group
Companies,  as  well  as  indebtedness  by  way  of lease-purchase arrangements,
guarantees,  undertakings  on  which  others  rely  in  extending credit and all
conditional  sales  contracts, chattel mortgages and other security arrangements
with  respect  to  personal property used or owned by the Cotton Group Companies
(other  than  those  set forth on SCHEDULE 4.10(D)).  The Cotton Group Companies
                                  -----------------
have  made  available  to Purchaser a true, correct and complete copy of each of
the  items  required  to  be  listed  on  SCHEDULE  4.11.
                                          --------------

     4.12     INTELLECTUAL  PROPERTY.
              ----------------------

          (a)     For  purposes  of  this  Agreement,  the  term  "Intellectual
                                                                   ------------
Property" shall mean all patents, patent rights, patent applications, registered
--------
trademarks and service marks, trademark rights,  trademark applications, service
mark  rights,  service  mark  applications,  trade names, registered copyrights,
copyright  rights,  domain  names  and  all intellectual, industrial software or
proprietary  rights and trade secrets, technology and know-how, owned or used by
the  Cotton  Group  Companies,  together  with any amendments, modifications and
supplements  thereto  and  in  each  case  all  goodwill associated therewith in
connection  with  the  business in which any such intellectual property is used.

          (b)     Identification  of  Intellectual  Property.  SCHEDULE  4.12(B)
                  ------------------------------------------   -----------------
sets  forth  a  true,  correct  and  complete  list  and full description of all
Intellectual  Property.  With  respect  to any registrations of the Intellectual
Property,  SCHEDULE  4.12(B)  also  sets  forth,  as  to  each  such item of the
           -----------------
Intellectual Property, the (i) relevant application or registration number, (ii)
relevant  filing,  registration,  issue or application date, (iii) record owner,
(iv)  country,  (v)  title  or  description and (vi) remaining life thereof.  In
addition,  SCHEDULE  4.12(B)  identifies  whether  each item of the Intellectual
           -----------------
Property  is owned by the Cotton Group Companies or is possessed and used by the
Cotton  Group  Companies  under  any  license,  contract,  agreement  or  other
commitment  and,  if  under  any  such  commitment,  the identity of the parties
thereto,  the  term thereof and all amounts payable thereunder together with the
payment  terms  therefor.

          (c)     Ownership  and  Protection.  With  respect  to  each  item  of
                  --------------------------
Intellectual  Property  identified as being owned by the Cotton Group Companies,
the  Cotton  Group  Companies  own  all right, title and interest in and to such
Intellectual  Property,  and have not encumbered or impaired any rights in same.
The  Cotton  Group  Companies have obtained an enforceable written assignment of
all right, title and interest in and to each item of Intellectual Property owned
by  the  Cotton  Group Companies from each person or entity participating in the
discovery,  development  or  creation  of such item of Intellectual Property and
have  provided  to  Purchaser  true  and correct copies of each such assignment.
Except  as set forth on SCHEDULE 4.12(C), the Cotton Group Companies do not have
                        ----------------
any  obligation  to compensate, or to obtain the consent of, any third party for
the  use  of  any  item  of  Intellectual  Property.  All employees, independent
contractors,  or  other  persons  who  have had access to or participated in the
development  of  any  Intellectual  Property owned by the Cotton Group Companies
have  signed  appropriate  confidentiality and non-disclosure agreements and, in
the  case  of  independent contractors, appropriate work for hire agreements and
assignments,  sufficient to protect the Cotton Group Companies' ownership rights
in  Intellectual  Property  and the unauthorized use or disclosure of same.  All
registrations  and  applications  to  register the Intellectual Property in each

                                      -15-
<PAGE>
of the countries in which any of the same is registered are valid and subsisting
in  all  respects  and  have  been properly maintained.  To the Knowledge of the
Cotton Group Companies or any Seller, no party has any claim to any moral rights
with  respect  to  Intellectual  Property  owned  by the Cotton Group Companies.

          (d)     Litigation  and  Claims.  There is neither pending nor, to the
                  -----------------------
Knowledge  of  the  Cotton  Group  Companies or any Seller, threatened any suit,
action,  claim,  arbitration,  grievance, litigation, administrative or legal or
other  proceeding, or investigation, against the Cotton Group Companies or their
licensors  contesting  the  validity of, or the Cotton Group Companies' right to
use,  any  of  the  Intellectual  Property.

          (e)     Licenses.  The  Cotton  Group  Companies  have not granted any
                  --------
license or other right to use, in any manner, any item of Intellectual Property,
whether  or  not  requiring the payment of royalties, and no third party has any
right  to use any Intellectual Property owned by the Cotton Group Companies. The
Cotton  Group Companies have not licensed, leased, sold or otherwise transferred
or  disclosed  the  source  code  for any Intellectual Property to any person or
entity  other  than  to  the  Cotton  Group Companies' employees and independent
contractors  pursuant  to  agreements  with  such  employees  and  independent
contractors  protecting  the  intellectual  property  rights  therein  and  the
nondisclosure  thereof.

          (f)     Protection.  The  Cotton  Group  Companies  have  reasonably
                  ----------
protected  the  Intellectual  Property  as  the  proprietary  property and trade
secrets of the Cotton Group Companies.  There has not been any default under any
confidentiality  agreement  regarding the use and disclosure of the Intellectual
Property.

          (g)     Infringement.
                  ------------

                    (i)     To  the  Knowledge  of the Cotton Group Companies or
any  Seller,  no  third  party  is (A) infringing upon all or any portion of the
Intellectual  Property,  or  (B)  using  all  or any portion of the Intellectual
Property in derogation of any rights acquired by Purchaser under this Agreement.

                    (ii)     There is no interference action or other litigation
pending  or,  to  the  Knowledge  of  the  Cotton Group Companies or any Seller,
threatened  before  any  governmental entity (including the United States Patent
and  Trademark  Office  or  corresponding  governmental  entities  in  foreign
jurisdictions) in regard to any of the Intellectual Property.

                    (iii)     None  of  the  Intellectual Property infringes any
copyright,  trademark,  patent, trade secret, or other right of any third party.
The  Cotton  Group  Companies have not received any notice of infringement upon,
misappropriation  of or conflict with any asserted right of any third party, and
there  is  no  basis  for  any  such  notice.

                    (iv)     The  inception,  development  and  reduction  to
practice  of  the Intellectual Property have not constituted or involved, and do
not constitute or involve, the misappropriation of trade secrets or other rights
of any other person or entity (including any governmental entity).

                                      -16-
<PAGE>
     4.13     LITIGATION.  SCHEDULE  4.13  sets  forth  all  litigation, claims,
              ----------   --------------
suits,  actions,  investigations,  indictments  or  information,  proceedings or
arbitrations,  grievances  or  other  procedures  (including  grand  jury
investigations,  actions  or  proceedings,  and  product  liability and workers'
compensation  suits, actions or proceedings) pending, or to the Knowledge of the
Cotton  Group Companies or any Seller, threatened, before any court, commission,
arbitration  tribunal,  or  judicial, governmental or administrative department,
body,  agency, administrator or official, grand jury, or any other forum for the
resolution  of  grievances, against any Cotton Group Company or involving any of
their  properties  or  businesses,  and  (b) indicates which of such matters are
being  defended  by  an  insurance  carrier,  and  which of the matters being so
defended  are  being  defended under a reservation of rights. Further, except as
set  forth on SCHEDULE 4.13, there are no judgments, orders, writs, injunctions,
              -------------
decrees, indictments or information, grand jury subpoenas or civil investigative
demands,  plea  agreements, stipulations or awards (whether rendered by a court,
commission,  arbitration  tribunal,  or judicial, governmental or administrative
department,  body,  agency,  administrator  or official, grand jury or any other
forum  for the resolution of grievances) against or relating to any Cotton Group
Company  or  involving any of their properties or businesses.   The Cotton Group
Companies  have made available to Purchaser true, correct and complete copies of
all  pleadings,  briefs  and  other  documents filed in each pending litigation,
claim,  suit,  action,  investigation,  indictment  or  information, proceeding,
arbitration,  grievance  or  other  procedure  required to be listed on SCHEDULE
                                                                        --------
4.13,  and  the  judgments, orders, writs, injunctions, decrees, indictments and
----
information,  grand  jury  subpoenas  and  civil  investigative  demands,  plea
agreements, stipulations and awards required to be listed on said Schedule.

     4.14     EMPLOYEES.
              ---------

          (a)     SCHEDULE 4.14(A) sets forth the names and current compensation
                  ----------------
(broken  down  by category, e.g., salary, bonus, commission) of all employees of
the  Cotton  Group  Companies,  together  with  the  date and amount of the last
increase  in  compensation for each such person.  To the Knowledge of the Cotton
Group  Companies  or  any  Seller,  no  employee intends to terminate his or her
employment  relationship  with  the  Cotton  Group  Companies as a result of the
transactions  contemplated  herein  or  otherwise.

          (b)     The Cotton Group Companies have conducted a thorough review of
their  employee records and have verified that each foreign national employee of
any  Cotton Group Company is authorized to be present and employed in the United
States.  The  Cotton  Group Companies are in full compliance with all applicable
laws,  regulations,  judgments and other requirements relating to the regulation
of  foreign nationals in the United States including those items relating to the
employment  and  compensation  of foreign nationals in the United States.  There
are  no  unresolved  past,  pending  or threatened administrative, regulatory or
judicial actions, proceedings, investigations, obligations, liabilities, losses,
decrees,  judgments,  penalties,  fines,  fees, demands, demand letters, orders,
directives, claims, or notices of noncompliance or violation relating in any way
to  any  Cotton  Group Company or their operations in connection with any Cotton
Group  Company's  employment  of  foreign  nationals.  As  used herein, the term
"foreign  national"  means a person who is not a citizen of the United States of
America.

     4.15     EMPLOYEE  BENEFITS.
              ------------------

                                      -17-
<PAGE>
          (a)     Employee  Benefit  Plans  and  Arrangements.
                  -------------------------------------------

                    (i)     List  and  Description  of  Plans  and Arrangements.
                            ---------------------------------------------------
SCHEDULE 4.15(A)(I) sets forth a true, correct and complete list and description
-------------------
of  all agreements, arrangements, commitments, policies or understandings of any
kind  (whether written or oral) (A) which relate to employee benefits, (B) which
pertain  to  present  or  former  employees,  retirees, directors or independent
contractors (or their beneficiaries, dependents or spouses) of  the Cotton Group
Companies  or  the predecessors in interest of any Cotton Group Company, and (C)
which  are  currently  or  expected  to  be  adopted,  maintained, sponsored, or
contributed  to  by  any  Cotton  Group  Company,  any  of their predecessors in
interest  or  any employer which, under Section 414 of the Internal Revenue Code
(the  "Code"),  would constitute a single employer with any Cotton Group Company
       ----
(a  "Company  Affiliate") or as to which any Cotton Group Company or any Company
     ------------------
Affiliate  has  any  ongoing  liability  or obligation whatsoever (collectively,
"Employee  Benefit Plans"), including all: (1) employee benefit plans as defined
 -----------------------
in  Section  3(3)  of  the  Employee  Retirement Income Security Act of 1974, as
amended  ("ERISA"),  (2)  all  other  deferred  compensation,  early retirement,
           -----
incentive,  profit-sharing,  thrift, stock ownership, stock appreciation rights,
bonus,  stock option, stock purchase, welfare or vacation, or other nonqualified
benefit  plans  or  arrangements,  and  (3)  trusts,  group  annuity  contracts,
insurance  policies  or  other  funding  media  for  the  plans and arrangements
described  hereinabove.

                    (ii)     Compliance  with  ERISA  and  the Code. Each Cotton
                             --------------------------------------
Group  Company  and  each  Company  Affiliate  has  complied  with  all of their
respective obligations with respect to all Employee Benefit Plans (including (A)
filing  or distributing all reports or notices required by ERISA or the Code and
(B)  complying  with all requirements of Part 6 of ERISA and Code Section 4980B)
and  has maintained the Employee Benefit Plans in compliance with all applicable
laws  and  regulations  (including  ERISA and the Code).  Each eligible Employee
Benefit  Plan  has  received  a favorable determination letter from the Internal
Revenue  Service,  and  the Internal Revenue Service has not threatened or taken
any  action  to revoke any favorable determination letter issued with respect to
any  such  Employee  Benefit Plan.  No amendment to any Employee Benefit Plan or
related  trust  has  been adopted since receipt of the most recent determination
letter  issued  with respect to the Employee Benefit Plan or related trust which
would  cause  disqualification  of  the  Employee Benefit Plan or related trust.

                    (iii)     Copies  of  Documents Provided to Purchaser.   The
                              -------------------------------------------
Cotton  Group  Companies  have  made  available  to  Purchaser true, correct and
complete  copies  of  all  documents relating to the Employee Benefit Plans that
Purchaser  has  requested,  including:  (A)  all  plan  texts, amendments, trust
instruments and other agreements adopted or entered into in connection with each
of  the  Employee Benefit Plans, (B) all insurance and annuity contracts related
to  any Employee Benefit Plan, (C) the notices and election forms used to notify
employees  and  their dependents of their continuation coverage rights under the
Cotton  Group  Companies'  group  health  plans (under Code Section 4980B(f) and
ERISA Section 606), if applicable, and (D) the most recently available Form 5500
annual  reports, certified financial statements, actuarial reports, summary plan
descriptions  and  favorable  determination letters, if applicable, for Employee
Benefit  Plans.  Since  the  date  such documents were supplied to Purchaser, no
plan  amendments  have been adopted, no changes to the documents have been made,
and  no such amendments or changes shall be adopted or made prior to the Closing
Date.

                                      -18-
<PAGE>
                    (iv)     Agreements  to Create, Continue or Terminate Plans.
                             --------------------------------------------------
Neither  any  Cotton  Group Company nor any Company Affiliate has any agreement,
arrangement,  commitment  or  understanding,  whether legally binding or not, to
create  any  additional  Employee Benefit Plan or to continue, modify, change in
any material respect, or terminate any existing Employee Benefit Plan.

                    (v)     Agency  Review, Taxes and Fiduciary Liability.  None
                            ---------------------------------------------
of  the Employee Benefit Plans is currently under investigation, audit or review
by the Department of Labor, the Internal Revenue Service or any other federal or
state agency or is liable for any federal, state, local or foreign taxes.  There
is no transaction in connection with which any Cotton Group Company, any Company
Affiliate or any fiduciary of any of the Employee Benefit Plans could be subject
to  either a civil penalty assessed pursuant to ERISA Section 502, a tax imposed
by Code Section 4975 or liability for a breach of fiduciary responsibility under
ERISA.

                    (vi)     Claims  Against  Plans and Fiduciaries.  Other than
                             --------------------------------------
routine  claims  for  benefits  payable  to  participants  or  beneficiaries  in
accordance  with  the  terms of the Employee Benefit Plans, there are no claims,
pending  or,  to  the  Knowledge  of  the  Cotton Group Companies or any Seller,
threatened,  by  any  participant  or  beneficiary  against  any of the Employee
Benefit  Plans  or  any  fiduciary  of any of the Employee Benefit Plans, and no
basis  for  any  such  claim  or  claims  exists.

                    (vii)     Retiree  Welfare  Benefits.  Neither  any  Cotton
                              --------------------------
Group  Company nor any Company Affiliate has maintained an Employee Benefit Plan
providing group health, dental, vision, life insurance or other welfare benefits
to  employees  following  retirement or other separation from service, except to
the extent required under Part 6 of Title I of ERISA and Code Section 4980B.

          (b)     Defined  Benefit  Plans.  No  Cotton  Group  Company  has ever
                  -----------------------
maintained an Employee Benefit Plan that is a pension plan within the meaning of
ERISA  Section  3(2)  which  is subject to Title IV of ERISA (a "Defined Benefit
                                                                 ---------------
Plan"),  nor has any Cotton Group Company ever participated in a Defined Benefit
----
Plan that is a multi-employer plan within the meaning of ERISA Section 3(37)(A).
There  has never been any Defined Benefit Plan or multi-employer plan maintained
by  any  Cotton  Group  Company  or any Company Affiliate under which any Cotton
Group  Company  and  any  Company Affiliate currently have, or potentially could
ever have, any obligation or liability whatsoever under ERISA.

     4.16     COLLECTIVE  BARGAINING.  There  are no labor contracts, collective
              ----------------------
bargaining  agreements,  letters  of understanding or other arrangements, formal
or, to the Knowledge of the Cotton Group Companies or any Seller, informal, with
any  union  or  labor  organization  covering  any employees of any Cotton Group
Company  and  none  of  said  employees  are  represented  by any union or labor
organization.

     4.17     LABOR DISPUTES.  The Cotton Group Companies are in compliance with
              --------------
all federal and state laws respecting employment and employment practices, terms
and  conditions  of  employment, wages and hours. The Cotton Group Companies are
not  and have not been engaged in any unfair labor practice, and no unfair labor
practice  complaint  against  any  Cotton  Group  Company  is pending before the
National  Labor  Relations  Board.  Neither  any  Cotton  Group

                                      -19-
<PAGE>
Company  nor any Seller knows or has reason to know of any labor strike or other
labor  trouble  actually  pending,  being  threatened  against, or affecting the
Cotton  Group  Companies.  To the Knowledge of the Cotton Group Companies or any
Seller,  relations  between management and labor are amicable and there have not
been, nor are there presently, any attempts to organize non-union employees, nor
are  there  plans  for  any  such  attempts.

     4.18     BANK  ACCOUNTS.  SCHEDULE  4.18  sets  forth  a  true, correct and
              --------------   --------------
complete  list  of  each bank or financial institution in which the Cotton Group
Companies  have  an  account or safe deposit box (giving the address and account
numbers)  and  the  names  of  the persons authorized to draw thereon or to have
access  thereto.

     4.19     ENVIRONMENTAL  MATTERS.
              ----------------------

          (a)     For  purposes  of this Section 4.19, the following terms shall
have  the  following  meanings:

                    (i)     "Environmental  Claims"  shall  mean  any  and  all
                             ---------------------
administrative,  regulatory  or  judicial  actions,  causes  of  action,  suits,
investigations,  obligations,  liabilities,  losses,  proceedings,  decrees,
judgments,  penalties, fines, fees, demands, demand letters, orders, directives,
claims  (including  any  claims involving liability in tort, strict, absolute or
otherwise),  liens,  notices  of  noncompliance  or  violation,  and  legal  and
consultant  fees and costs of investigations or proceedings, relating in any way
to  any  Environmental  Law  or  the presence or Release (or alleged presence or
Release)  into the environment of any Hazardous Material on, at or from the Real
Property including and regardless of the merit of such Claim, any and all Claims
by  any  governmental  or  regulatory  authority  or by any third party or other
person  for  enforcement, mitigation, cleanup, removal, response, remediation or
other  actions  or  damages,  contribution,  indemnification,  cost  recovery,
compensation  or  injunctive or declaratory relief pursuant to any Environmental
Law  or  any alleged injury or threat of injury to human health, safety, natural
resources  or  the  environment.

                    (ii)     "Environmental  Laws"  shall  mean  all present and
                              -------------------
future  federal, state and local laws, statutes, ordinances, regulations, codes,
policies,  rules,  directives,  orders,  decrees,  permits, licenses, approvals,
authorizations,  criteria,  guidelines,  covenants, deed restrictions, treaties,
conventions,  and  rules  of  common law now or hereafter in effect, and in each
case  as  amended,  and  any  judicial  or  administrative  judgment, opinion or
interpretation  thereof,  relating  to  the  regulation  or  protection of human
health,  safety,  natural  resources  or  the  environment,  including  laws and
regulations  (and all other items recited above) relating to the use, treatment,
storage,  management,  handling, manufacture, generation, processing, recycling,
distribution,  transport,  Release  or  threatened Release of or exposure to any
Hazardous  Material.

                    (iii)     "Hazardous  Materials"  shall  mean, collectively,
                               --------------------
any  substance,  material,  product,  derivative,  compound,  mixture,  mineral,
chemical, waste, medical waste or gas, in each case whether naturally occurring,
human-made  or  the  by-product of any process, including petroleum or petroleum
products  (A)  that  is  now or hereafter becomes defined or included within the
definition  of a "hazardous substance," "hazardous waste," "hazardous material,"
"toxic  chemical," "toxic substance," "hazardous chemical," "extremely hazardous
substance,"  "pollutant,"  "contaminant,"  or any other words of similar meaning
under  any

                                      -20-
<PAGE>
Environmental  Law,  (B)  exposure  to  which  or the presence, use, generation,
treatment,  Release,  transport  or  storage  of  which  is  now  or  hereafter
prohibited,  limited,  restricted or regulated under any Environmental Law or by
any  governmental  or  regulatory  authority,  or  (C)  that  could  require
investigation,  response  or  remediation, or could support the assertion of any
Environmental  Claim.

                    (iv)     "Release" shall mean the release, deposit, disposal
                              -------
or  leakage of any Hazardous Material at, into, upon or under any land, water or
air,  or otherwise into the environment, including by means of burial, disposal,
discharge,  emission,  injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.

          (b)     Except  as  disclosed  on  SCHEDULE  4.19(B):
                                             -----------------

                    (i)     Each Cotton Group Company is in full compliance with
all  applicable  Environmental  Laws;

                    (ii)     Each Cotton Group Company has all permits, licenses
and  other  approvals  required under the Environmental Laws with respect to the
Real Property and such Cotton Group Company's operations thereon;

                    (iii)     There  are  no  past,  pending  or  threatened
Environmental  Claims  relating  to the any Cotton Group Company's operations or
the  Real  Property;

                    (iv)     Hazardous  Materials  have  not  at  any  time been
present, generated, used, treated, managed, recycled, stored or Released at, on,
in  or  under,  or  transported  to  or  from  the  Real  Property;

                    (v)     Hazardous  Materials  have  not  at  any  time  been
Released  at,  on, in or under any other property in the vicinity or area of the
Real  Property;

                    (vi)     There  are  not  now  and  never  have  been  any
underground storage tanks located at, on or under the Real Property, there is no
asbestos  contained  in,  forming part of, or contaminating any part of the Real
Property,  and  no polychlorinated biphenyls (PCBs) are used, stored, located at
or  contaminate  any  part  of  the  Real  Property;

                    (vii)     There  are  no pending or threatened Environmental
Claims  at  any  treatment,  storage  or  disposal  facility  that  has received
Hazardous  Materials  from  or  generated  at  the  Real  Property;  and

                    (viii)     There  are  no  past  or  present facts, actions,
activities,  circumstances,  conditions,  occurrences,  events  or  incidents,
including  the  Release  or presence of Hazardous Materials, that could (A) form
the  basis  of  an  Environmental  Claim  against  or involving any Cotton Group
Company  or  the Real Property, (B) cause the Real Property to be subject to any
restrictions on or affect its ownership, occupancy, use or transferability under
any  applicable  Environmental  Law,  (C) require the filing or recording of any
notice  or  restriction  relating  to the presence of Hazardous Materials in the
real  estate records in the county or municipality in which the Real Property is
located,  other  than  any  customary  disclosure

                                      -21-
<PAGE>
requirements  in  connection  with  the  transfer  of  the Real Property, or (D)
prevent or interfere with the construction, operation or maintenance of the Real
Property.

     4.20     REQUIRED  LICENSES  AND  PERMITS.  The Cotton Group Companies have
              --------------------------------
all  licenses,  permits  or  other  authorizations  of  governmental authorities
necessary  for  the  conduct  of the Cotton Group Business, except to the extent
that  the  Cotton Group Companies are authorized pursuant to permits held by its
customers  to  conduct  operations and perform services in connection with their
respective  businesses.  A true, correct and complete list of all such licenses,
permits  and other authorizations (collectively, the "Cotton Authorizations") is
                                                      ---------------------
set  forth  on SCHEDULE 4.20.  The Cotton Group Companies have made available to
               -------------
Purchaser true, correct and complete copies of all written Cotton Authorizations
required  to  be  listed  on  SCHEDULE  4.20.
                              --------------

     4.21     INSURANCE  POLICIES.  SCHEDULE 4.21 sets forth a true, correct and
              -------------------   -------------
complete  list  and  description  of  all insurance policies in force naming the
Cotton  Group  Companies, or any employees thereof in their capacity as such, as
an  insured  or  beneficiary or as a loss payable payee, or for which any Cotton
Group  Company has paid or is obligated to pay all or part of the premiums.  The
Cotton  Group  Companies  have  not received notice of any pending or threatened
termination or premium increase (retroactive or otherwise) with respect thereto,
and  the  Cotton Group Companies are in compliance with all conditions contained
therein.  There  have  been  no  lapses  (whether  cured or not) in the coverage
provided  under  the  insurance  policies, referenced herein and as set forth on
SCHEDULE  4.21,  during  the term of such policies, as extended or renewed.  The
--------------
Cotton  Group  Companies  have  made  available  to  Purchaser true, correct and
complete  copies of each of the policies required to be listed on SCHEDULE 4.21.
                                                                  -------------

     4.22     MAJOR SUPPLIERS AND CUSTOMERS.  SCHEDULE 4.22 sets forth a list of
              -----------------------------   -------------
the  top  25  suppliers  of goods or services to and the top 25 customers of the
Cotton  Group  Companies  (by amounts paid or billed) during the 12-month period
ended  June  30,  2006  together,  in  each case, with the amount paid or billed
during  such  period.  The Cotton Group Companies are not engaged in any dispute
with  any  of  such  suppliers or customers. The Cotton Group Companies have not
been  advised  nor  have  any  reason  to  believe  that the consummation of the
transactions contemplated hereunder will have any adverse effect on the business
relationship  of  the Cotton Group Companies with any such supplier or customer.

     4.23     CONTRACTS AND COMMITMENTS.  SCHEDULE 4.23 sets forth a list of the
              -------------------------   -------------
Cotton  Group  Companies'  contracts  with  customers with an estimated value of
$50,000.00  or  more.  Except  as  set forth on SCHEDULES 4.10(D) (Leases), 4.11
                                                -----------------           ----
(Indebtedness),  4.12(B)  AND  (D) (Intellectual Property), 4.15(A)(I) (Employee
                 -----------------                          ----------
Benefit  Plans),  4.16  (Collective  Bargaining), 4.21 (Insurance Policies), and
                  ----                            ----
4.23  (Contracts  and  Commitments):
----

          (a)     The  Cotton  Group  Companies  do  not  have  any  outstanding
contract,  written  or  oral,  with  any  officer,  employee, agent, consultant,
advisor,  salesman,  manufacturer's  representative,  distributor,  dealer,
subcontractor, or broker that is not cancelable by the Cotton Group Companies on
notice  of  not  longer  than thirty (30) days and without liability, penalty or
premium  of  any  kind,  except  liabilities which arise as a matter of law upon
termination  of  employment,  or  any agreement or arrangement providing for the
payment  of  any  bonus  or  commission  based  on  sales  or  earnings;

                                      -22-
<PAGE>
          (b)     The  Cotton  Group  Companies  are  not under any liability or
obligation  under  any  agreement  pursuant  to  which  third  parties have been
provided with products that can be returned to the Cotton Group Companies in the
event  they are not sold and which could involve a liability of the Cotton Group
Companies  of  $25,000  or  more  in  the  aggregate;

          (c)     The  Cotton  Group  Companies  do not have (i) any outstanding
loan  or  loan  commitment  (excluding credit extended in the Ordinary Course of
Business  to  purchasers of job materials) to any person, or (ii) any factoring,
credit  line  or  subordination  agreement;

          (d)     Except as noted on SCHEDULE 4.11 (Indebtedness) and except for
                                     -------------
negotiable instruments in the process of collection,  the Cotton Group Companies
do  not  have  any  power of attorney outstanding or any contract, commitment or
liability  (whether  absolute,  accrued, contingent or otherwise), as guarantor,
surety,  co-signer, endorser, co-maker, indemnitor in respect of the contract or
commitment  of  any  other  person,  corporation,  partnership,  joint  venture,
association,  organization  or  other  entity;

          (e)     There  are  no  contracts  or  agreements  with  any director,
officer,  partner or shareholder of any Cotton Group Company, or with any person
related  to  any  such person or with any company or other organization in which
any  director,  officer,  partner or shareholder of any Cotton Group Company, or
anyone  related to any such person, has a direct or indirect financial interest;

          (f)     The  Cotton Group Companies are not subject to any contract or
agreement  containing covenants limiting the freedom of any Cotton Group Company
to  compete  in  any  line  of  business in any geographic area or requiring any
Cotton  Group  Company  to  share  any  profits;

          (g)     There is no contract, agreement or other arrangement entitling
any  person or other entity to any profits, revenues or cash flows of any Cotton
Group  Company  or  requiring  any payments or other distributions based on such
profits,  revenues  or  cash  flows;  and

          (h)     To  the Knowledge of the Cotton Group Companies or any Seller,
no  Cotton  Group  Company is a party to or bound by any presently or previously
existing  contract,  agreement  or  other arrangement that has had or may in the
future  have  a Material Adverse Effect upon the Cotton Group Business, earnings
or  financial  condition  of  any  Cotton  Group  Company.

The  Cotton  Group  Companies have made available to Purchaser true, correct and
complete  copies  of  all  contracts,  agreements,  plans,  leases, policies and
licenses  referred  to, or required to be referred to or listed on, any Schedule
delivered  hereunder.

     4.24     AGREEMENTS  IN  FULL FORCE AND EFFECT.  All contracts, agreements,
              -------------------------------------
plans, leases, policies and licenses referred to, or required to be referred to,
on any Schedule delivered hereunder are valid and binding, and are in full force
and  effect  and  are  enforceable in accordance with their terms, except to the
extent that the validity or enforceability thereof may be limited by bankruptcy,
insolvency,  reorganization  and  other similar laws affecting creditors' rights
generally  or  by  principles of equity.  Neither the Cotton Group Companies nor
any Seller has any Knowledge of any pending or threatened bankruptcy, insolvency
or similar proceeding with respect to any party to such agreements, and no event
has  occurred  which  (whether  with  or  without  notice,  lapse of time or the
happening  or  occurrence  of  any  other  event)  would  constitute

                                      -23-
<PAGE>
a  default  thereunder  by  any  Cotton Group Company or to the Knowledge of the
Cotton Group Companies or any Seller any other party thereto.

     4.25     ABSENCE  OF  CERTAIN  CHANGES  AND EVENTS.  Except as set forth in
              -----------------------------------------
SCHEDULE 4.25, since the Interim Balance Sheet Date,  the Cotton Group Companies
-------------
have operated only in the Ordinary Course of Business, and have not:

          (a)     suffered  any  material  damage  or  destruction  adversely
affecting  any asset of the Cotton Group Companies or the Cotton Group Business;

          (b)     made any declaration, setting aside or payment of any dividend
or  other  distribution  of  assets  (whether  in  cash, stock or property) with
respect  to  the  Cotton Equity Interests, or any direct or indirect redemption,
purchase  or  other  acquisition of stock or equity interests, or otherwise made
any  payment  of  cash  or  any  transfer of other assets, to the Sellers or any
Cotton  Group  Company;

          (c)     suffered any Material Adverse Change in their working capital,
assets,  liabilities,  financial condition, business prospects, or relationships
with any suppliers or customers listed on SCHEDULE 4.22;
                                          -------------

          (d)     except  for  customary  increases  based on term of service or
regular promotion of non-officer employees, increased (or announced any increase
in)  the compensation payable or to become payable to any employee, or increased
(or  announced  any increase in) any bonus, insurance, pension or other employee
benefit  plan,  payment  or  arrangement  for such employees, or entered into or
amended any employment, consulting, severance or similar agreement;

          (e)     incurred,  assumed  or  guaranteed any liability or obligation
(absolute,  accrued,  contingent or otherwise) other than in the Ordinary Course
of  Business;

          (f)     paid, discharged, satisfied or renewed any claim, liability or
obligation other than payment in the Ordinary Course of Business;

          (g)     permitted any of their assets to be subjected to any mortgage,
lien,  security  interest,  restriction, charge or other encumbrance of any kind
except  for  Permitted  Liens;

          (h)     cancelled or forgiven any indebtedness or otherwise waived any
material  claims  or  rights;

          (i)     sold,  transferred  or  otherwise  disposed  of  any  of their
assets,  except  in  the  Ordinary  Course  of  Business;

          (j)     made any single capital expenditure or investment in excess of
$100,000.00;

          (k)     made  any  change  in  any  method,  practice  or principle of
financial  or  tax  accounting;

                                      -24-
<PAGE>
          (l)     managed  working  capital  components,  including  cash,
receivables,  other current assets, trade payables and other current liabilities
in  a  fashion  inconsistent  with  past  practice,  including  failing  to sell
inventory and other property in an orderly and prudent manner or failing to make
all  budgeted  and  other normal capital expenditures, repairs, improvements and
dispositions;

          (m)     paid,  loaned, advanced, sold, transferred or leased any asset
to  any  employee, except for normal compensation involving salary and benefits;

          (n)     issued  or  sold  any  of their equity interests or issued any
warrant,  option  or  other  right to purchase equity interests, or any security
convertible  into  equity  interests;

          (o)     entered  into  any  material  commitment or transaction, other
than in the Ordinary Course of Business, affecting the Cotton Group Business; or

          (p)     agreed  in writing, or otherwise, to take any action described
in  this  Section.

     4.26     ACCOUNTS  RECEIVABLE.
              --------------------

          (a)     All  accounts  receivable  owed to any Cotton Group Company by
any  director,  officer,  shareholder or employee of any Cotton Group Company or
any  relative  of any such person (including those accounts receivable reflected
on the Interim Balance Sheets and incurred since the Interim Balance Sheet Date)
have  been paid in full prior to the date hereof or shall have been paid in full
prior  to the Closing Date, except for the promissory notes and notes receivable
described  on SCHEDULE 4.26(A) which are to be cancelled and released at Closing
              ----------------
in accordance with Section 2.02(e) of this Agreement.

          (b)     All  accounts receivable of the Cotton Group Companies (i) are
valid,  existing  and  fully  collectible  (subject to an allowance for doubtful
accounts)  without  resort  to  legal  proceedings  or collection agencies, (ii)
represent  monies due for goods sold or services rendered in the Ordinary Course
of  Business  except  as shown on SCHEDULE 4.26(B), and (iii) are not subject to
                                  ----------------
any  known  defenses,  rights  of  set-off,  assignment,  restrictions, security
interests or other encumbrances, except as shown on SCHEDULE 4.26(B).  Except as
                                                    ----------------
shown  on  SCHEDULE 4.26(B), as of the Representation Date of such Schedule, all
           ----------------
such  accounts  receivable  were current, and the Cotton Group Companies are not
aware  of  any  dispute  regarding  the  collectibility  of  any  such  accounts
receivable.  All reserves shown on the Current Financial Statements are adequate
to  cover  all  losses  giving  rise  to  any  such  reserve.

     4.27     TAX  MATTERS.
              ------------

          (a)     Definitions.  For  purposes  of  this Agreement, the following
                  -----------
definitions  shall  apply:

                    (i)     The  term  "Taxes"  shall  mean  all  Taxes, however
                                        -----
denominated,  including  any  interest, penalties or other additions to Tax that
may  become  payable  in  respect  thereof, imposed by any federal, territorial,
state, local or foreign government or any agency or political subdivision of any
such  government,  which  Taxes  shall  include,  without  limiting  the

                                      -25-
<PAGE>
generality  of  the  foregoing,  all  income or profits Taxes (including federal
income  Taxes  and  state income Taxes), payroll and employee withholding Taxes,
unemployment  insurance,  social security Taxes, sales and use Taxes, ad valorem
Taxes,  excise  Taxes,  franchise  Taxes, gross receipts Taxes, business license
Taxes,  occupation  Taxes,  real  and  personal  property  Taxes,  stamp  Taxes,
environmental  Taxes,  transfer  Taxes,  workers'  compensation, Pension Benefit
Guaranty  Corporation  premiums  and  other  governmental  charges,  and  other
obligations  of  the  same or of a similar nature to any of the foregoing, which
any Cotton Group Company is required to pay, withhold or collect.

                    (ii)     The  term  "Returns"  shall  mean  all  reports,
                                         -------
estimates,  declarations  of  estimated  Tax, information statements and returns
relating  to,  or  required to be filed in connection with, any Taxes, including
information  returns  or  reports  with  respect to backup withholding and other
payments  to  third  parties.

          (b)     Returns  Filed  and Taxes Paid.  Except as otherwise disclosed
                  ------------------------------
in SCHEDULE 4.27(B): (i) all Returns required to be filed by or on behalf of any
   ----------------
Cotton Group Company have been duly filed on a timely basis and such Returns are
true,  complete  and  correct  in all material respects, (ii) all material Taxes
shown  to  be  payable  on the Returns or on subsequent assessments with respect
thereto  have  been  paid in full on a timely basis, and no other material Taxes
are payable by any Cotton Group Company with respect to items or periods covered
by  such Returns (whether or not shown on or reportable on such Returns) or with
respect  to  any  period  prior to the date of this Agreement, (iii) each Cotton
Group  Company  has  withheld  and  paid  over  all  Taxes required to have been
withheld  and  paid over, and complied with all information reporting and backup
withholding requirements, including maintenance of required records with respect
thereto,  in  connection  with  amounts paid or owing to any employee, creditor,
independent contractor, or other third party, and (iv) there are no liens on any
of  the  assets  of  any  Cotton Group Company with respect to Taxes, other than
liens  for  Taxes  not  yet  due  and payable or for Taxes that any Cotton Group
Company  is  contesting  in  good  faith through appropriate proceedings and for
which  appropriate  reserves  have  been  established, which contested Taxes are
disclosed  in  SCHEDULE  4.27(B).
               -----------------

          (c)     Tax  Deficiencies; Audits; Statutes of Limitations.  Except as
                  --------------------------------------------------
otherwise  disclosed  in SCHEDULE 4.27(C):  (i) the Returns of  the Cotton Group
                         ----------------
Companies  have  never  been audited by a government or Taxing authority, nor is
any such audit in process, pending or threatened (either in writing or verbally,
formally  or  informally),  (ii)  no  deficiencies  exist  or have been asserted
(either  in  writing  or verbally, formally or informally) or are expected to be
asserted  with respect to Taxes of any Cotton Group Company, and no Cotton Group
Company  has  received  notice  (either  in  writing  or  verbally,  formally or
informally)  or expects to receive notice that it has not filed a Return or paid
Taxes  required  to  be  filed  or  paid by it, (iii) no Cotton Group Company is
either  a  party  to  any  action  or proceeding for assessment or collection of
Taxes,  nor  has  such  event  been asserted or threatened (either in writing or
verbally,  formally  or  informally)  against any Cotton Group Company or any of
their  assets,  (iv)  no waiver or extension of any statute of limitations is in
effect  with  respect  to  Taxes or Returns of any Cotton Group Company, and (v)
each  Cotton  Group  Company has disclosed on its federal income Tax Returns all
positions  taken  therein  that  could give rise to a substantial understatement
penalty  within  the  meaning  of  Code  Section  6662.

                                      -26-
<PAGE>
          (d)     Tax  Sharing  Agreements.  Except  as  otherwise  disclosed in
                  ------------------------
SCHEDULE  4.27(D)  no  Cotton Group Company is (or has ever been) a party to any
-----------------
Tax  sharing agreement or otherwise has any liability for the Taxes of any other
Person.

          (e)     Tax Elections and Special Tax Status.  No Cotton Group Company
                  ------------------------------------
has  filed  a consent pursuant to the collapsible corporation provisions of Code
Section  341(f).  No  Cotton  Group  Company is a party to any safe harbor lease
within the meaning of Code Section 168(f)(8), as in effect prior to amendment by
the  Tax Equity and Fiscal Responsibility Act of 1982.   No Cotton Group Company
is  or  has  been  a  United States real property holding corporation within the
meaning  of Code Section 897(c)(1)(A)(ii) during the applicable period specified
in  Code Section 897(c)(1)(A)(ii).  No Cotton Group Company has entered into any
compensatory  agreements  with  respect  to  the  performance  of services which
payment  thereunder  would  be  a nondeductible expense pursuant to Code Section
162(m)  or  280G  or  subject to an excise Tax to the recipient pursuant to Code
Section  4999.  No  Cotton  Group  Company has been a "distributing corporation"
(within  the  meaning  of  Code  Section  355(a)(1)(A)) within the 3-year period
ending  as of the Representation Date.  No Cotton Group Company has participated
in an international boycott as defined in Code Section 999.  Except as set forth
on SCHEDULE 4.27(E), no Cotton Group Company has agreed to make, nor is required
   ----------------
to make, any adjustment under Code Sections 263A or 481(a) by reason of a change
in accounting method or otherwise) or an election under Code Section 1377(a)(2).
No Cotton Group Company has a permanent establishment in any foreign country, as
defined in any applicable Tax treaty or convention between the United States and
such foreign country.  Each Cotton Group Company is in compliance with the terms
and conditions of all applicable Tax exemptions, Tax agreements or Tax orders of
any  government to which it may be subject or which it may have claimed, and the
transactions  contemplated by this Agreement will not have any adverse effect on
such  compliance.  No  Cotton  Group  Company  is  a  party  to any transaction,
understanding  or  arrangement  treated as a reportable, listed or substantially
similar  transaction  as  defined  in the Treasury Regulations promulgated under
Code  Section  6011

          (f)     Tax Claims.     No claim has been made by any Taxing authority
                  ----------
in  a jurisdiction where the Cotton Group Companies do not file Returns that any
Cotton  Group  Company  is or may be subject to taxation by, or required to file
any  Return  in,  that  jurisdiction.

          (g)     S Corporation Status.  Since November 1, 2001, Cotton Holdings
                  --------------------
has  been and is currently a valid "S" corporation for all federal and state Tax
purposes (and will be up to the First Closing Date), and no Taxing Authority has
challenged,  or  is  challenging,  the  S  election  of  Cotton  Holdings.

     4.28     BROKERAGE.  No  broker,  agent, or finder has rendered services to
              ---------
the  Cotton  Group  Companies or the Sellers in connection with the transactions
contemplated under this Agreement.  The Cotton Group Companies have not incurred
any  obligation  or liability, contingent or otherwise, for brokers' or finders'
fees  or  agents  commissions  or other similar payments in connection with this
Agreement  or  the  transactions  contemplated  hereby.

     4.29     DISCLOSURE.  No  representations,  warranties,  assurances  or
              ----------
statements by the Sellers or the Cotton Group Companies in this Agreement and no
statement  contained in any document (including the Financial Statements and the
Schedules),  certificates  or  other  writings

                                      -27-
<PAGE>
furnished  or  to  be furnished by the Sellers or the Cotton Group Companies (or
caused  to  be  furnished  by  the  Sellers  or  the  Cotton Group Companies) to
Purchaser  or  any  of  its  representatives  pursuant  to the provisions hereof
contains or will contain any untrue statement of material fact, or omits or will
omit  to  state any fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading as of
the  Representation  Date.

                                   ARTICLE V.
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER
                   -------------------------------------------

     Purchaser hereby represents and warrants to the Sellers that the statements
contained in this Article V are correct and complete as of September 1, 2006 (as
                  ---------
then  made  in  the Original Agreement) as though such date were substituted for
the  date  of this Agreement throughout this Article V, except to the extent any
                                             ---------
such representation or warranty speaks to an earlier or later date:

     5.01     ORGANIZATION.  Purchaser  is a corporation duly organized, validly
              ------------
existing  and  in  good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to carry on and conduct its business
as  it is now being conducted and to own or lease its properties and assets, and
to  effect  the transactions contemplated hereunder and is duly qualified and in
good  standing  in  each  jurisdiction  in  which the conduct of the business of
Purchaser  or  the  ownership  of its properties and assets requires it to be so
qualified, except where the failure to be so qualified or in such good standing,
or  to  have  such  power  or  authority when taken together with all other such
failures,  is not reasonably likely to have a Purchaser Material Adverse Effect.
As  used in this Agreement, the term "Purchaser Material Adverse Effect" means a
                                      ---------------------------------
material  adverse  effect  on  the  financial condition, properties, business or
results  of  operation  of  Purchaser  and  its  subsidiaries  taken as a whole;
provided,  however,  that  any such effect resulting from any change (i) in law,
--------   -------
rule  or regulation or GAAP or interpretations thereof that applies to Purchaser
or  (ii)  in  economic  or business conditions generally or in the industries in
which  the  Purchaser  conducts  its  business  shall  not  be  considered  when
determining if a Purchaser Material Adverse Effect has occurred.

     5.02     AUTHORIZATION.  Purchaser  has  the  right,  power and capacity to
              -------------
execute,  deliver  and perform this Agreement and to consummate the transactions
contemplated hereby.  The execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby, have been duly and
validly  authorized  by all necessary corporate action on the part of Purchaser.
This Agreement has been duly and validly executed and delivered by Purchaser and
constitutes  Purchaser's  legal,  valid  and  binding obligation, enforceable in
accordance  with  its  terms.

     5.03     NO  CONFLICT.  The  execution  and  delivery  of this Agreement by
              ------------
Purchaser,  the  consummation  of  the transactions contemplated herein, and the
performance  of  the  covenants  and  agreements  of Purchaser will not, with or
without  the  giving  of  notice  or  the lapse of time, or both, (a) violate or
conflict  with  any  of  the  provisions  of  any  charter  document or bylaw of
Purchaser,  (b)  violate,  conflict  with  or result in breach or default under,
result in the acceleration of any obligations or the creation of a lien, pledge,
security  interest  or other encumbrance on the assets of Purchaser pursuant to,
or  cause  termination  of  any  term  or  condition  of  any  mortgage,

                                      -28-
<PAGE>
lease,  indenture, notes, contract, license, permit, instrument, trust document,
or  other  agreement,  arrangement,  obligation, document or instrument to which
Purchaser  is  a  party  or  by  which Purchaser or any of its properties may be
bound,  or  (c)  violate  any provision of law, statute, rule, regulation, court
order,  judgment  or  decree,  or ruling of any governmental authority, to which
Purchaser  is  a  party  or  by  which Purchaser or its properties may be bound.

     5.04     SEC  DOCUMENTS;  AGREEMENTS;  FINANCIAL  STATEMENTS;  OTHER
              -----------------------------------------------------------
INFORMATION.  The  Purchaser  is  subject  to  the reporting requirements of the
-----------
Exchange  Act  and  has  filed  with  the  Commission  all  reports,  schedules,
registration  statements  and definitive proxy statements that the Purchaser was
required  to  file with the Commission on or after April 30, 2006 (collectively,
the  "SEC  Documents").  Each SEC Document, as of the date of the filing thereof
      --------------
with  the Commission, complied in all material respects with the requirements of
the Securities Act or Exchange Act, as applicable, and the rules and regulations
promulgated  thereunder  and,  as  of  the date of such filing (or if amended or
superseded  by a filing prior to the date of this Agreement, then on the date of
such  filing),  such  SEC Document (including all exhibits and schedules thereto
and  documents  incorporated  by  reference  therein)  did not contain an untrue
statement  of  material  fact  or  omit  to state a material fact required to be
stated  therein  or  necessary  to  make the statements therein, in light of the
circumstances  under  which  they  were  made,  not  misleading.  All  documents
required  to  be  filed  as  exhibits  to  the  SEC Documents have been filed as
required.  As  of  their  respective  dates,  the  financial  statements  of the
Purchaser  included  in  the  SEC  Documents complied as to form in all material
respects  with  applicable  accounting  requirements and the published rules and
regulations  of  the  Commission with respect thereto. Such financial statements
have been prepared in accordance with GAAP consistently applied at the times and
during  the  periods  involved (except (i) as may be otherwise indicated in such
financial  statements  or  the  notes  thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position  of  the  Purchaser  as  of  the  dates  thereof and the results of its
operations  and  cash  flows for the periods then ended (subject, in the case of
unaudited  statements,  to  normal  year-end  adjustments).

     5.05     CAPITALIZATION.  The  capitalization  of  the  Purchaser as of the
              --------------
date hereof, including its authorized capital stock, the number of shares issued
and  outstanding,  the  number  of  shares  issuable  and  reserved for issuance
pursuant  to  the  Purchaser's  stock  option  plans,  and  the number of shares
issuable  and  reserved  for issuance pursuant to securities exercisable for, or
convertible  into or exchangeable for any shares of Common Stock is set forth on
Schedule  5.05  hereto.  All  of  such  outstanding shares of capital stock have
--------------
been,  or  upon issuance will be, validly issued, fully paid and non-assessable.
The  Purchaser  owns  all of the capital stock of each Subsidiary, which capital
stock  is  validly  issued,  fully paid and non-assessable, and no shares of the
capital  stock  of  the  Purchaser  or  any  of  its Subsidiaries are subject to
preemptive  rights  or  any  other  similar  rights  of  the stockholders of the
Purchaser  or any such Subsidiary or any encumbrances or other liens of any kind
created  by  or  through  the  Purchaser  or  any  such  Subsidiary.

     5.06     REPORTING  COMPANY.  The  Purchaser  is  subject  to the reporting
              ------------------
requirements  of  the  Exchange  Act, has a class of securities registered under
Section 12 of the Exchange Act, and has filed all reports required thereby.  The
Purchaser  is  eligible  to  register the Common Stock for resale in a secondary
offering  by  each  Seller  on a registration statement on Form SB-2 pursuant to
Rule  415  under  the  Securities  Act.

                                      -29-
<PAGE>
     5.07     FINANCIAL  CONDITION;  TAXES;  LITIGATION.
              -----------------------------------------

          (a)     Except  as  disclosed on Schedule 5.07 hereto, the Purchaser's
                                           -------------
financial  condition  is,  in  all  material  respects,  as described in the SEC
Documents,  except  for  changes  in  the ordinary course of business and normal
year-end  adjustments  that are not, in the aggregate, materially adverse to the
consolidated  business  or  financial  condition  of  the  Purchaser  and  its
Subsidiaries  taken  as  a  whole.  Except  as  otherwise  described  in the SEC
Documents,  there  has  been  no  (i) material adverse change to the Purchaser's
business,  operations,  properties, financial condition, prospects or results of
operations  since  the  date  of  the  Purchaser's most recent audited financial
statements contained in the SEC Documents or (ii) change by the Purchaser in its
accounting  principles,  policies  and  methods except as required by changes in
GAAP.

          (b)     The  Purchaser  and  each  of its Subsidiaries has prepared in
good  faith and duly and timely filed all tax returns required to be filed by it
and  such  returns  are  complete  and accurate in all material respects and the
Purchaser  and each of its Subsidiaries has paid all taxes required to have been
paid  by  it, except for taxes which it reasonably disputes in good faith or the
failure  of which to pay has not had or would not reasonably be expected to have
a  Purchaser  Material  Adverse  Effect.  Neither  the  Purchaser nor any of its
Subsidiaries has any material liability with respect to taxes that accrued on or
before  September 30, 2003 in excess of the amounts accrued with respect thereto
that  are  reflected  in  the financial statements included in the SEC Documents
filed  prior  to  the  date  hereof.

          (c)     Neither  the  Purchaser  nor  any  of  its Subsidiaries is the
subject  of  any  pending  or, to the Purchaser's Knowledge, threatened inquiry,
investigation  or  administrative  or  legal  proceeding by the Internal Revenue
Service,  the  taxing  authorities  of  any  state  or  local  jurisdiction, the
Commission,  the  NASD,  any  state  securities commission or other governmental
authority.

          (d)     Except as described in the SEC Documents, there is no material
claim,  litigation  or administrative proceeding pending, or, to the Purchaser's
Knowledge,  threatened  or  contemplated,  against  the  Purchaser or any of its
Subsidiaries,  or  against any officer, director or employee of the Purchaser or
any  such  Subsidiary  in  connection  with  such person's employment therewith.
Neither  the  Purchaser  nor any of its Subsidiaries is a party to or subject to
the  provisions of, any order, writ, injunction, judgment or decree of any court
or  government  agency  or  instrumentality  that has had or would reasonably be
expected  to  have  a  Parent  Material  Adverse  Effect.

     5.08     LISTING.  The Purchaser Stock is traded on the OTC Bulletin Board.
              -------
The  Purchaser  currently  meets  the  continuing  eligibility  requirements for
listing  on  the OTC Bulletin Board and has not received any notice from the OTC
Bulletin  Board that it may not currently satisfy such requirements or that such
continued  listing  is in any way threatened.  The Purchaser has taken no action
designed  to, or which, to the Knowledge of the Purchaser, is likely to have the
effect  of,  terminating the registration of the Common Stock under the Exchange
Act or removing the Purchaser Stock from the OTC Bulletin Board.

     5.09     FINANCING.  Purchaser  has  or  will  have  available, immediately
              ---------
prior to and on the First Closing Date, sufficient cash in immediately available
funds  to  pay  the  aggregate  Cash

                                      -30-
<PAGE>
Consideration  (including  the  Closing  Date Cash Consideration and the highest
possible  amount  of  Final  Determination  Date  Cash  Consideration payable to
Sellers)  pursuant  to  Article  II and to consummate, on the terms contemplated
                        -----------
hereby, the other transactions contemplated hereby.

     5.10     BROKERAGE.  No  broker,  agent  or finder has rendered services to
              ---------
Purchaser in connection with the transactions contemplated under this Agreement.

     5.11     DISCLOSURE.  No  representations,  warranties,  assurances  or
              ----------
statements  by  Purchaser  in  this  Agreement and no statement contained in any
document,  certificates  or  other  writings  furnished  or  to  be furnished by
Purchaser  (or  caused  to  be  furnished by Purchaser) to the Sellers or any of
their representatives pursuant to the provisions hereof contains or will contain
any  untrue  statement of material fact, or omits or will omit to state any fact
necessary,  in  light  of the circumstances under which it was made, in order to
make the statements herein or therein not misleading.

     5.12     PURCHASER STOCK.  The shares  of  Purchaser Stock, when issued and
              ---------------
delivered  to  the  Sellers  in  accordance with the terms hereof, shall be duly
authorized, validly issued, fully-paid and non-assessable.

                                   ARTICLE VI.
                                    COVENANTS

     6.01     OPERATIONS  OF  THECOTTON  GROUP  COMPANIES.   The  Cotton  Group
              -------------------------------------------
Companies and the Sellers hereby covenant and agree that, except as consented to
in  writing by Purchaser, from and after the date hereof and prior to the Second
Closing  Date, the Cotton Group Companies shall, and the Sellers shall cause the
Cotton  Group  Companies  to,  operate  and conduct their businesses only in the
Ordinary  Course of Business.  In connection with the continued operation of the
Cotton  Group  Companies  during  the  period  commencing on the date hereof and
ending  on  the  Second Closing Date, the Cotton Group Companies and the Sellers
shall  confer  in  good  faith  on  a  regular and frequent basis with Purchaser
regarding  operational  matters and the general status of on-going operations of
the  Cotton Group Companies.   The Cotton Group Companies and the Sellers hereby
acknowledge  that  Purchaser  does not and shall not waive any right it may have
hereunder solely as a result of such consultations.  Neither the Sellers nor the
Cotton Group Companies shall, other than actions taken in the Ordinary Course of
Business,  take  any action that would, or that could reasonably be expected to,
result  in  any  representation  or  warranty of the Sellers or the Cotton Group
Companies set forth herein to become untrue.

     6.02     ACCESS.  During  the  period  from  and  after the date hereof and
              ------
prior  to  the  Closing  Date, the Cotton Group Companies shall, and the Sellers
shall  cause  the  Cotton  Group  Companies  to,  (a)  provide Purchaser and its
designees (e.g., officers, counsel, accountants, actuaries, and other authorized
representatives)  with  such  information as Purchaser or its designees may from
time  to  time reasonably request with respect to the Cotton Group Companies and
the  transactions  contemplated by this Agreement, (b) provide Purchaser and its
designees,  access  during  regular business hours and upon reasonable notice to
the  books,  records,  offices, personnel, counsel, accountants and actuaries of
the  Cotton Group Companies, as Purchaser or its designees may from time to time
reasonably  request,  and  (c)  permit  Purchaser  and  its

                                      -31-
<PAGE>
designees  to make such inspections thereof as Purchaser may reasonably request.
Any  investigation  shall  be  conducted in such a manner so as not to interfere
unreasonably  with  the operation of the business of the Cotton Group Companies.
No  such  investigation  shall  limit  or  modify in any way the Sellers' or the
Cotton  Group  Companies'  obligations  with  respect  to  any  breach  of their
representations, warranties, covenants or agreements contained herein.

     6.03     TRANSFER  TAXES.  All  sales  or  transfer  taxes, including stock
              ---------------
transfer  taxes,  document  recording  fees,  real  property transfer taxes, and
excise  taxes,  arising  out  of  or  in connection with the consummation of the
transactions contemplated hereby shall be paid by the party incurring same.  The
parties shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications and other documents regarding any of such taxes and
all  transfer,  recording,  registration  and  other fees that become payable in
connection  with  the  transactions  contemplated  hereby  that  are required or
permitted to be filed at or prior to the Closing Date.

     6.04     PREPARATION  OF SUPPORTING DOCUMENTS.  In addition to such actions
              ------------------------------------
as  the  Cotton  Group  Companies  may  otherwise be required to take under this
Agreement  or  applicable  law to consummate this Agreement and the transactions
contemplated  hereby, the Sellers and the Cotton Group Companies shall take such
action,  shall  furnish  such  information,  and  shall prepare, or cooperate in
preparing,  and  execute  and  deliver  such  certificates, agreements and other
instruments as Purchaser may reasonably request from time to time, before, at or
after  the  Closing  Date,  with  respect  to  compliance  with  obligations  of
Purchaser,  the  Sellers  or  the  Cotton  Group  Companies  in  connection with
Purchaser's  purchase  of  the  Cotton  Equity  Interests from the Sellers.  Any
information  so  furnished by the Sellers or the Cotton Group Companies shall be
true,  correct  and  complete in all material respects and shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be  stated  therein  or necessary to make the statements therein not misleading.

     6.05     NOTICES  OF  CERTAIN  EVENTS.  The  Sellers  and  the Cotton Group
              ----------------------------
Companies shall promptly notify Purchaser of:

          (a)     any  fact, condition, change or event that, individually or in
the  aggregate,  results  in  any representation or warranty of the Cotton Group
Companies  or  the  Sellers  hereunder being inaccurate in any respect as of the
date  of  such  fact,  condition,  change  or  event  had such representation or
warranty  been  made  as  of  such  date;

          (b)     any  fact,  condition,  change  or  event  that  causes  or
constitutes  a  breach of any of the representations or warranties of the Cotton
Group Companies or the Sellers hereunder made as of the date hereof;

          (c)     any  notice  or  other communication from any person or entity
alleging  that  the  consent  of  such person or entity is or may be required in
connection  with  the  transactions  contemplated  hereby;

          (d)     any  notice or other communication from or to any Governmental
Entity in connection with the transactions contemplated hereby;

                                      -32-
<PAGE>
          (e)     any action, suit, claim, investigation or proceeding commenced
or,  to  the  Knowledge  of the Cotton Group Companies or any Seller, threatened
against,  relating  to  or  involving  or  otherwise  affecting the Cotton Group
Companies  or  the  Cotton  Group  Business that, if pending on the date hereof,
would have been required to have been disclosed pursuant to Section 4.13 or that
                                                            ------------
relate to the consummation of the transactions contemplated hereby; and

          (f)     (i) the damage or destruction by fire or other casualty of any
asset  of  the  Cotton  Group Companies or part thereof or (ii) any asset of the
Cotton  Group  Companies  or part thereof becoming the subject of any proceeding
(or,  to  the  Knowledge of the Cotton Group Companies or any Seller, threatened
proceeding)  for  the  taking  thereof  or  of  any  right  relating  thereto by
condemnation, eminent domain or other similar governmental action.

The  Cotton  Group  Companies  and the Sellers hereby acknowledge that Purchaser
does  not and shall not waive any right it may have hereunder solely as a result
of  such  notifications and any notification given pursuant to this Section 6.05
                                                                    ------------
shall  (x)  not  have any effect for purposes of determining satisfaction of the
conditions  set  forth  in  Article IX of this Agreement, (y) be disregarded for
                            ----------
purposes  of  determining the obligations of the Sellers under Article X hereof,
                                                               ---------
and (z) not in any way limit Purchaser's exercise of its rights hereunder.

     6.06     FILINGS;  OTHER  ACTIONS;  NOTIFICATION.
              ---------------------------------------

          (a)     The  Sellers and Purchaser shall cooperate with each other and
use  their  respective  Commercially  Reasonable  Efforts to take or cause to be
taken  all  actions, and do or cause to be done all things, necessary, proper or
advisable on its part under this Agreement and applicable laws to consummate and
make  effective  the  transactions  contemplated  by  this  Agreement as soon as
practicable,  including  preparing  and  filing  as  promptly as practicable all
documentation  to effect all necessary notices, reports and other filings and to
obtain  as  promptly  as  practicable  all  consents,  registrations, approvals,
permits  and authorizations necessary or advisable to be obtained from any third
party  and/or  any  Governmental  Entity in order to consummate the transactions
contemplated  by  this  Agreement.  Without  limiting  the  generality  of  the
foregoing,  the  Sellers and Purchaser have prepared and filed the notifications
required  under  the  Hart-Scott-Rodino  Antitrust  Improvements Act of 1976, as
amended  (the "HSR Act").  Prior  to  the  Sellers'  and  Purchaser's receipt of
               -------
clearance or notice of early termination from the applicable Governmental Entity
reviewing the Sellers' and Purchaser's filings made under the HSR Act, Purchaser
shall  not be entitled to, and shall not, exercise any decision making authority
or participate in any way in the management of the Cotton Group Companies except
as  provided in Section 6.01 hereof.  Subject to applicable laws relating to the
                ------------
exchange  of  information,  Purchaser  and  the  Sellers shall have the right to
review in advance, and to the extent practicable each will consult the other on,
all  the information relating to Purchaser or the Cotton Group Companies, as the
case may be, that appear in any filing made with, or written materials submitted
to,  any  third  party  and/or  any  Governmental  Entity in connection with the
transactions  contemplated by this Agreement. In exercising the foregoing right,
each  of  the  Sellers  and  Purchaser  shall  act reasonably and as promptly as
practicable.

          (b)     The  Sellers  and Purchaser each shall keep the other apprised
of the status of matters relating to completion of the transactions contemplated
hereby,  including  promptly furnishing the other with copies of notice or other
communications  received  by  Purchaser,  the

                                      -33-
<PAGE>
Cotton  Group Companies or the Sellers, as the case may be, from any third party
and/or  any Governmental Entity with respect to the transactions contemplated by
this  Agreement.  Purchaser  shall give prompt notice to the other of any change
that is reasonably likely to result in a Purchaser Material Adverse Effect.

     6.07     CONFIDENTIALITY.   The  Cotton  Group  Companies  and  the Sellers
              ---------------
shall hold in confidence at all times following the date hereof all Confidential
Information  and  shall  not  disclose,  publish  or  make  use  of Confidential
Information  at  any  time  following  the date hereof without the prior written
consent  of Purchaser.  For purposes hereunder, "Confidential Information" means
                                                 ------------------------
any  data or information of the Cotton Group Companies (including trade secrets)
that  is not generally known to the public or competitors regarding (for example
and  including)  (a)  business  process  models,  (b)  proprietary software, (c)
research,  development,  products, services, marketing, selling, business plans,
budgets,  unpublished  financial statements, licenses, prices, costs, contracts,
suppliers,  customers,  and  customer  lists,  (d)  the  identity,  skills  and
compensation  of  employees,  contractors,  and  consultants,  (e)  specialized
training,  (f)  discoveries,  developments,  trade secrets, processes, formulas,
data,  lists,  and  all  other works of authorship, mask works, ideas, concepts,
know-how, designs, and techniques, whether or not any of the foregoing is or are
patentable,  copyrightable,  or registrable under any intellectual property laws
or  industrial  property  laws  in  the United States or elsewhere, and (g) such
other  information  that  may  give  the  Cotton  Group  Companies a competitive
business  advantage  or  the  disclosure  of  which  could be detrimental to the
interests  of  the  Cotton  Group  Companies  and  from  all  of  the  relevant
circumstances  could  reasonably  be  assumed  by  any  person  or  entity to be
confidential and proprietary to the Cotton Group Companies.  Notwithstanding the
foregoing, no data or information constitutes "Confidential Information" if such
                                               ------------------------
data  or  information  is  publicly known and in the public domain through means
that  do not involve a breach by the Cotton Group Companies or any Seller of any
covenant  or  obligation  set  forth  in  this  Agreement.

     6.08     PUBLICITY.  The  initial  press  release  shall  be  a joint press
              ---------
release  and  thereafter  the  Sellers, the Cotton Group Companies and Purchaser
each  shall  consult  with  each  other  prior  to issuing any press releases or
otherwise  making  public  announcements  with  respect  to  the  transactions
contemplated  by  this  Agreement and prior to making any filings with any third
party and/or any Governmental Entity (including any national securities exchange
or  interdealer  quotation  service)  with  respect  thereto,  except  as may be
required  by  law  or  by  obligations pursuant to any listing agreement with or
rules  of  any  national  securities  exchange or interdealer quotation service.

     6.09     EXPENSES.  All costs and expenses incurred in connection with this
              --------
Agreement  and  the transactions contemplated by this Agreement shall be paid by
Purchaser,  provided, however, Purchaser shall not be obligated to pay more than
$400,000.00  of  cost  and  expenses incurred by Sellers in connection with this
Agreement.

     6.10     [Omitted]

     6.11     SPIN-OFF  AGREEMENT.  Prior to the Closing Date, Purchaser and the
              -------------------
Sellers  shall  use  commercially reasonable efforts to negotiate and execute an
agreement  regarding  the potential spin-off of the Disaster Remediation Holding
Company  (as  such  term  is  defined  on

                                      -34-
<PAGE>
Schedule  6.11)  from  Purchaser with terms and conditions to be mutually agreed
--------------
upon  by  Purchaser  and  the  Sellers,  substantially  in  accordance  with the
provisions  of  SCHEDULE  6.11.
                --------------

     6.12     TAX  MATTERS.
              ------------

          (a)     Cooperation  on  Tax Matters.  The Sellers and Purchaser shall
                  ----------------------------
provide  each  other  with  such  cooperation  and information as either of them
reasonably  may  request  of  the  other  in  filing any tax return, amended tax
return,  determining  a  liability for taxes, participating in or conducting any
audit or other proceeding in respect of taxes.  Such cooperation and information
shall  include  providing  copies  of  relevant tax returns or portions thereof,
together with accompanying schedules, related work papers and documents relating
to  rulings  or  other  determinations  by  tax  authorities.  The  Sellers  and
Purchaser  shall  make  their respective employees available on a basis mutually
convenient  to  both  parties  to  provide  explanations  of  any  documents  or
information  provided  hereunder. Each of the Sellers and Purchaser shall retain
all  tax  returns, schedules and work papers, records and other documents in its
possession  relating  to  tax  matters  of  the  Cotton  Group Companies and the
business  and assets of the Cotton Group Companies for each taxable period first
ending  after the First Closing Date and for all prior taxable periods until the
later of (i) the expiration of the statute of limitations of the taxable periods
to  which  such  tax  returns  and  other  documents  relate,  without regard to
extensions  except  to the extent notified by the other party in writing of such
extensions  for  the respective tax periods, or (ii) six years following the due
date  (without  extension)  for such tax returns. Any information obtained under
this  Section  6.12 shall be kept confidential in accordance with the provisions
      -------------
of  this  Agreement  except as may be otherwise necessary in connection with the
filing  of  tax  returns or claims for refund or in conducting an audit or other
proceeding.

          (b)     Tax  Returns  and  Payment  of  Taxes.
                  -------------------------------------

                    (i)     The  Sellers  or the Sellers' designee shall prepare
and  timely  file  or shall cause to be prepared and timely filed all Returns of
the Cotton Group Companies for tax periods ending on or before the First Closing
Date  ("Seller  Returns"),  and  shall pay or shall cause to be paid any and all
        ---------------
Taxes  due  with  respect to such Returns.  The Sellers shall have the exclusive
authority  and obligation to prepare or cause to be prepared all Seller Returns.
Such  authority shall include the determination of the manner in which any items
of income, gain, deduction, loss or credit arising out of the income, properties
and  operations  of the Cotton Group Companies shall be reported or disclosed in
such  Seller  Returns; provided, however, that such Returns shall be prepared by
                       --------  -------
treating  items  on  such Returns in a manner consistent with past practice with
respect  to  such  items,  unless otherwise required by law.  If any such Seller
Returns  are due after the First Closing Date and the Sellers are not authorized
by  law  to  file  such  Seller Returns, the Sellers shall submit drafts of such
Seller  Returns  to  Purchaser  for its review at least 30 days prior to the due
date  of  any  such  Return.  Such  drafts of Seller Returns shall be subject to
Purchaser's  review  and  approval,  which  approval  shall  not be unreasonably
withheld,  and  Purchaser  shall  timely file, or cause to be timely filed, such
Seller  Returns  with  the  appropriate  taxing  authority.

                    (ii)     Purchaser  shall prepare (or cause to be prepared),
execute,  and timely file all Returns of the Cotton Group Companies that are not
Seller  Returns,  and  shall  pay  (or cause to be paid) all Taxes to which such
Returns  relate  for  all  periods  covered  by  such

                                      -35-
<PAGE>
Returns;  provided,  however,  that  Sellers  shall  reimburse Purchaser for all
          --------   -------
portions  of  such  Taxes  that are applicable to Pre-Closing Tax Periods to the
extent  such  Taxes  are not reflected in the reserve for Tax liability shown in
the Current Financial Statements, save and except for the Section 1374 Tax which
shall  be  an  obligation  of  and paid by Purchaser.  All such Returns shall be
prepared  in  accordance  with  the past practice of the Cotton Group Companies,
unless  otherwise  required  by  applicable law.  "Pre-Closing Tax Period" shall
                                                   ----------------------
mean any tax period ending on or before the Closing Date; and, with respect to a
Tax  period  that  begins on or before the Closing Date and ends thereafter, the
portion  of  such  tax  period  ending  on  the  Closing  Date.

                    (iii)     For  purposes  of  calculating Taxes applicable to
the  Pre-Closing  Tax  Periods, the amount of any Tax (except Taxes based on the
Cotton  Group  Companies' income or gross-receipts) owed shall be apportioned to
Pre-Closing  Tax  Periods  based  on  the  number of days for the portion of the
ending  on  and  including  the  Closing  Date.  Any  allocation  of  income  or
deductions  required to determine any Taxes based on the Cotton Group Companies'
income or gross-receipts applicable to a Pre-Closing Tax Period shall be made by
means  of a closing of the books and records of the Cotton Group Companies as of
the  close  of  business  on  the  Closing  Date.

          6.13     EMPLOYEE  BONUS POOL.  At the Second Closing, Purchaser shall
                   --------------------
make  available  a  pool of 700,000 shares of Purchaser Stock in a non-statutory
stock  option  plan  for  the  benefit  of certain employees of the Cotton Group
Entities  designated  by  the  Sellers,  with an exercise price not to exceed an
amount  per  share  equal  to (a) the Market Price of the Purchaser Stock on the
Closing  Date,  less  the  lesser  of (i) $2.50 or (ii) 30% of the Market Price.
                ----

                                  ARTICLE VII.
                 CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE
                 ----------------------------------------------

     The  respective  obligation  of  each  party  to  effect  the  transactions
contemplated  by this Agreement is subject to the satisfaction (or waiver) at or
prior to the First Closing Date of each of the following conditions:

     7.01     REGULATORY  CONSENTS.  At  or  prior  to  the  First  Closing, all
              --------------------
notices, reports and other filings required to be made prior to the Closing Date
by  the Sellers, the Cotton Group Companies or Purchaser with, and all consents,
registrations,  approvals,  permits  and  authorizations required to be obtained
prior  to  the  Closing  Date  by  the  Sellers,  the  Cotton Group Companies or
Purchaser  from, any Governmental Entity (collectively, "Governmental Consents")
                                                         ---------------------
in  connection  with  the  execution  and  delivery  of  this  Agreement and the
consummation  of  the  transactions  contemplated  hereby  by  the  Sellers  and
Purchaser  shall  have  been made or obtained (as the case may be), except those
that  the failure to make or to obtain are not individually or in the aggregate,
reasonably  likely  to  have a Purchaser Material Adverse Effect or to provide a
reasonable  basis to conclude that the parties hereto or any of their affiliates
or  respective  directors,  officers,  agents, advisors or other representatives
would be subject to the risk of criminal or material financial liability.

     7.02     LITIGATION.  No  court  or  Governmental  Entity  of  competent
              ----------
jurisdiction  shall  have  enacted, issued, promulgated, enforced or entered any
statute, law, ordinance, rule, regulation, judgment, decree, injunction or other
order  (whether  temporary,  preliminary  or  permanent)  that

                                      -36-
<PAGE>
is  in  effect and restrains, enjoins or otherwise prohibits consummation of the
transactions contemplated by this Agreement (collectively, an "Order").
                                                               -----

                                  ARTICLE VIII.
                    CONDITIONS TO OBLIGATIONS OF THE SELLERS
                    ----------------------------------------

     The  obligation  of  the Sellers to effect the transactions contemplated by
this  Agreement  is  subject to the satisfaction (or waiver by the Seller) at or
prior  to  the First Closing Date and/or the Second Closing Date, as applicable,
of  each  of  the  following  conditions:

     8.01     REPRESENTATIONS  AND  WARRANTIES TRUE AND CORRECT AT CLOSING DATE.
              -----------------------------------------------------------------
Each  of  Purchaser's representations and warranties contained in this Agreement
that  are qualified by materiality shall be true and correct in all respects and
each  of  Purchaser's representations and warranties contained in this Agreement
that are not so qualified shall be true and correct in all material respects, in
each  case as of the date of the Representation Date and on and as of the Second
Closing  Date,  with  the same force and effect as though made on and as of such
dates (except to the extent any such representation or warranty expressly speaks
as  of  an  earlier  date),  and  at  the  Second  Closing, Purchaser shall have
delivered  to  the  Seller  certificates dated as of the Second Closing Date and
signed on behalf of Purchaser by its President to such effect.

     8.02     PERFORMANCE  OF  OBLIGATIONS.  Purchaser  shall have performed and
              ----------------------------
complied  in  all material respects with the respective covenants and agreements
set  forth  herein  to be performed or complied with on or before the respective
Closing  Dates;  and at each of the  Closings, Purchaser shall have delivered to
the  Company  a certificate dated as of each of the respective Closing Dates and
signed  on  behalf  of  Purchaser  by  its  President  to  all  such effects and
confirming such other matters as may be reasonably requested by the Sellers.

     8.03     DOCUMENTS  SATISFACTORY  IN  FORM  AND SUBSTANCE.  All agreements,
              ------------------------------------------------
certificates and other documents delivered by Purchaser to the Sellers hereunder
or  in  connection  herewith  shall be in form and substance satisfactory to the
Sellers and their counsel, in the exercise of their reasonable judgment.

     8.04     CERTIFICATES.  Purchaser  shall  have  delivered  to  the  Sellers
              ------------
certificates  of the Secretary or Assistant Secretary of Purchaser (a) attaching
and  certifying  copies of the resolutions of its board of directors authorizing
the  execution,  delivery  and  performance  of  this  Agreement  and  the other
documents,  instruments  and certifications required or contemplated hereby, (b)
certifying  the  name,  title  and  true  signature of each officer of Purchaser
executing  or  authorized  to  execute  this  Agreement and the other documents,
instruments  and  certifications  required  or  contemplated  hereby,  and  (c)
attaching  and  certifying  a  true,  correct and complete copy of the bylaws of
Purchaser.

     8.05     NO  MATERIAL  CHANGE.  The  Purchaser  shall not have suffered any
              --------------------
Material Adverse Change in its business, prospects, financial condition, working
capital,  assets,  liabilities  (absolute,  accrued,  contingent  or otherwise),
reserves  or  operations.

                                      -37-
<PAGE>
                                   ARTICLE IX.
                     CONDITIONS TO OBLIGATIONS OF PURCHASER
                     --------------------------------------

     The  obligations  of  Purchaser  to effect the transactions contemplated by
this  Agreement  are  subject to the satisfaction (or waiver by Purchaser) at or
prior  to  the First Closing Date and/or the Second Closing Date, as applicable,
of  each  of  the  following  conditions:

     9.01     REPRESENTATIONS  AND WARRANTIES TRUE AND CORRECT AT REPRESENTATION
              ------------------------------------------------------------------
DATE  CLOSING  DATE.  Each  of  the representations and warranties of the Cotton
-------------------
Group  Companies  and the Sellers contained in this Agreement that are qualified
by  materiality  shall  be true and correct in all respects and the Cotton Group
Companies'  and  Sellers'  representations  and  warranties  contained  in  this
Agreement  that  are  not so qualified shall be true and correct in all material
respects,  in  each  case as of September 1, 2006 (except to the extent any such
representation  or  warranty expressly speaks as of an earlier date), and at the
Second Closing, the Sellers shall have delivered to Purchaser certificates dated
as of the Second Closing Date and signed on behalf of the Cotton Group Companies
by  the  President  of  each  of  Cotton  Holdings, Cotton Commercial and Cotton
Restoration  to  such  effect.

     9.02     PERFORMANCE  OBLIGATIONS.  The  Cotton  Group  Companies  and  the
              ------------------------
Sellers  shall  have  performed  and  complied in all material respects with the
covenants and agreements set forth herein to be performed or complied with by it
on  or  before  the Closing Dates; and at each of the Closings the Sellers shall
have delivered to Purchaser certificates dated as of the respective Closing Date
and  signed  on behalf of the Cotton Group Companies by the President or General
Partner  of each of Cotton Holdings, Cotton Commercial and Cotton Restoration to
such effect, and confirming such other matters as may be reasonably requested by
Purchaser.

     9.03     NO  MATERIAL  CHANGE.  On  or  prior  to  the  First Closing Date,
              --------------------
neither  the  Sellers  nor  the  Cotton  Group Companies shall have suffered any
Material  Adverse  Change  since  the  date of the Reviewed Financial Statements
(whether  or not such change is referred to or described in any Schedule) in its
business,  prospects,  financial condition, working capital, assets, liabilities
(absolute,  accrued,  contingent  or  otherwise),  reserves  or  operations.

     9.04     OTHER  NECESSARY CONSENTS.  On or prior to the First Closing Date,
              -------------------------
the Sellers shall have obtained all consents and approvals required to be listed
on  SCHEDULE  4.05.  With  respect  to  each such consent or approval, Purchaser
    --------------
shall  have  received written evidence, satisfactory to it, that such consent or
approval  has  been  duly  and  lawfully  filed, given, obtained or taken and is
effective,  valid  and  subsisting.

     9.05     NON-COMPETE  AGREEMENT.  At  the  Second  Closing, each Seller and
              ----------------------
each  Incentive  Employee  shall  have  executed  and  delivered  to  Purchaser
non-competition agreements substantially in the form of EXHIBIT G.
                                                        ---------

     9.06     DOCUMENTS  SATISFACTORY  IN  FORM  AND SUBSTANCE.  All agreements,
              ------------------------------------------------
certificates, opinions and other documents delivered by the Sellers to Purchaser
hereunder  shall  be  in  form  and  substance satisfactory to Purchaser and its
counsel,  in  the  exercise  of  their  reasonable  judgment.

                                      -38-
<PAGE>
     9.07     CERTIFICATES.  On  or  before  the  First Closing Date the Sellers
              ------------
shall  have  delivered  to  Purchaser:

          (a)     Certificates  of  the Secretary or Assistant Secretary of each
of  Cotton  Holdings, Cotton Commercial and Cotton Restoration (i) attaching and
certifying copies of the resolutions of its board of directors and shareholders,
or  its  partners,  authorizing  the execution, delivery and performance of this
Agreement  and  the  other documents, instruments and certifications required or
contemplated  hereby, (ii) certifying the name, title and true signature of each
officer  or  partner  of  such  entity  executing  or authorized to execute this
Agreement  and  the  other documents, instruments and certifications required or
contemplated  hereby,  and  (iii)  attaching  and certifying a true, correct and
complete copies of the bylaws or partnership agreement of such entity; and

          (b)     Copies  of  the  articles  of  incorporation  or  articles  of
formation of such entity certified by the Secretary of State of the jurisdiction
of  its incorporation and by its Secretary or Assistant Secretary, together with
certificates  of  good standing or existence dated not earlier than September 1,
2006  as  may  be available from the Secretaries of State of its jurisdiction of
incorporation  or  organization  and  every  other state of the United States in
which  it  is  qualified.

     9.08     EMPLOYMENT  AGREEMENTS.  At  the  Second  Closing, each Seller and
              ----------------------
each  Incentive  Employee  shall  have  executed  and  delivered  to  Purchaser
employment  agreements substantially  in  the  form of EXHIBIT H, provided, that
                                                       ---------  --------
Purchaser agrees that the salaries and benefits payable to such persons shall be
the  same as in effect on the date of this Agreement or as otherwise provided on
EXHIBIT  H.
----------

     9.09     RELEASE  OF  LIENS.  At  the  Second Closing, Purchaser shall have
              ------------------
received  evidence  reasonably satisfactory to it that all liens or encumbrances
affecting any asset of the Cotton Group Companies have been released, except for
(i)  liens  or  encumbrances,  if  any, arising out of indebtedness for borrowed
money  reflected  in  the  Current  Financial Statements and (ii) purchase money
security liens on equipment incurred in the ordinary course of business.

                                   ARTICLE X.
                                 INDEMNIFICATION
                                 ---------------

     10.01     INDEMNIFICATION  OBLIGATIONS  OF  THESELLERS.  The Sellers shall,
               --------------------------------------------
jointly  and  severally,  indemnify,  defend and hold harmless Purchaser and its
affiliates,  officers,  directors, employees, agents and representatives and the
heirs, executors, successors and assigns of any of the foregoing (the "Purchaser
                                                                       ---------
Indemnified  Parties")  from,  against,  and  in respect of, any and all claims,
--------------------
liabilities, obligations, damages, losses, costs, expenses, penalties, fines and
judgments  (at  equity  or  at  law, including statutory and common) and damages
whenever  arising  or  incurred  (including amounts paid in settlement, costs of
investigation  and  reasonable  attorneys'  fees and expenses) arising out of or
relating  to:

          (a)     any  breach  or  inaccuracy  of any representation or warranty
made  by  the  Cotton  Group  Companies  or the Sellers in this Agreement or any
documents  or agreements executed and delivered by the Cotton Group Companies or
any  Seller  in  connection  with  the

                                      -39-
<PAGE>
transactions contemplated by this Agreement (without regard to any qualification
or  exception  contained  in  such  representation  or  warranty  relating  to
materiality  or  Material  Adverse  Effect);  or

          (b)     any  breach  of any covenant, agreement or undertaking made by
the  Cotton Group Companies or the Sellers in this Agreement or in any documents
or agreements executed and delivered by the Cotton Group Companies or any Seller
in  connection  with  the  transactions  contemplated  by  this  Agreement.

Notwithstanding  anything in this Agreement to the contrary, Sellers obligations
--------------------------------------------------------------------------------
to  indemnify  any  Purchaser  Indemnified  Party  under  this  Section 10.01 or
--------------------------------------------------------------------------------
otherwise,  arising  from any breach described in Section 10.01(a) and (b) above
--------------------------------------------------------------------------------
occurring  prior  to  the  Second  Closing,  shall  be  reduced  to  40%  of the
--------------------------------------------------------------------------------
obligations  that  Sellers  would  have  otherwise had if the Second Closing had
--------------------------------------------------------------------------------
already occurred when the indemnification obligation arose.  For example, if the
----------------------------------------------------------
indemnification  obligation  is  $1,000,000.00  and it arose prior to the Second
Closing,  then  the  obligation  shall  be  reduced  to  $400,000.00.

The  claims,  liabilities,  obligations,  losses,  damages,  costs,  expenses,
penalties, fines and judgments of the Purchaser Indemnified Parties described in
this Section 10.01 as to which the Purchaser Indemnified Parties are entitled to
     -------------
indemnification  are  collectively  referred  to  as  "Purchaser  Losses".
                                                       -----------------

     10.02     INDEMNIFICATION  OBLIGATIONS  OF  PURCHASER.  Purchaser  shall
               -------------------------------------------
indemnify  and  hold harmless the Sellers and their heirs, executors, successors
and  assigns  (the "Seller Indemnified Parties") from, against and in respect of
                    --------------------------
any  and all claims, liabilities, obligations, losses, damages, costs, expenses,
penalties,  fines  and  judgments  (at equity or at law, including statutory and
common)  and  damages  whenever  arising  or incurred (including amounts paid in
settlement,  costs of investigation and reasonable attorneys' fees and expenses)
arising  out  of  or  relating  to:

          (a)     any  breach  or  inaccuracy  of any representation or warranty
made by Purchaser in this Agreement or in any document or agreement executed and
delivered  by Purchaser in connection with the transactions contemplated by this
Agreement;  or

          (b)     any  breach  of any covenant, agreement or undertaking made by
Purchaser  in  this  Agreement  or  in  any  document  or agreement executed and
delivered  by Purchaser in connection with the transactions contemplated by this
Agreement;

The  claims,  liabilities,  obligations,  losses,  damages,  costs,  expenses,
penalties,  fines  and  judgments of the Seller Indemnified Parties described in
this  Section  10.02  as to which the Seller Indemnified Parties are entitled to
      --------------
indemnification are collectively referred to as "Seller Losses".
                                                 --------------

     10.03     INDEMNIFICATION  PROCEDURE.
               --------------------------

          (a)     Promptly following receipt by a Purchaser Indemnified Party or
a  Seller Indemnified Party, as applicable (an "Indemnified Party") of notice by
                                                -----------------
a  third  party (including any Governmental Entity) of any complaint, dispute or
claim or the commencement of any audit, investigation, action or proceeding with
respect  to which such Indemnified Party may be entitled to receive payment from
the  other  party  for  any  Purchaser  Losses  or  any  Seller  Losses  (as the

                                      -40-
<PAGE>
case may be), such Indemnified Party shall give Purchaser or the Sellers, as the
case  may  be  (the  "Indemnifying  Party"),  reasonably  prompt  written notice
                      -------------------
thereof, but in any event not later than thirty (30) calendar days after receipt
of such notice of such third party claim, provided, however, that the failure to
                                          --------  -------
so  notify  the  Indemnifying  Party  shall  relieve the Indemnifying Party from
liability  hereunder  with respect to such claim only if, and only to the extent
that,  such  failure  to  so  notify  the  Indemnifying  Party  prejudices  the
Indemnifying  Party  of  rights  and  defenses  otherwise  available  to  the
Indemnifying Party with respect to such claim. The Indemnifying Party shall have
the  right, upon written notice delivered to the Indemnified Party within twenty
(20)  days  thereafter  assuming full responsibility for any Purchaser Losses or
Seller  Losses  (as  the  case may be) resulting from such audit, investigation,
action or proceeding, to assume the defense of such audit, investigation, action
or  proceeding,  including  the employment of counsel reasonably satisfactory to
the  Indemnified  Party  and  the  payment of the fees and disbursements of such
counsel. In the event, however, that the Indemnifying Party declines or fails to
assume  the  defense  of  the  audit, investigation, action or proceeding on the
terms  provided  above  or  to  employ  counsel  reasonably  satisfactory to the
Indemnified  Party, in either case within such 20-day period, then any Purchaser
Losses  or  any Seller Losses (as the case may be), shall include the reasonable
fees  and disbursements of counsel for the Indemnified Party as incurred. In any
audit,  investigation,  action  or proceeding for which indemnification is being
sought  hereunder  the Indemnified Party or the Indemnifying Party, whichever is
not  assuming the defense of such action, shall have the right to participate in
such  matter  and  to  retain  its  own counsel at such party's own expense. The
Indemnifying  Party  or  the Indemnified Party (as the case may be) shall at all
times use reasonable efforts to keep the Indemnifying Party or Indemnified Party
(as  the  case  may  be) reasonably apprised of the status of the defense of any
matter  the  defense  of  which it is maintaining and to cooperate in good faith
with  each  other  with  respect  to  the  defense  of  any  such  matter.

          (b)     No  Indemnified  Party  may  settle or compromise any claim or
consent  to  the  entry of any judgment with respect to which indemnification is
being  sought  hereunder  without  the prior written consent of the Indemnifying
Party,  unless  (i)  the  Indemnifying  Party  fails  to assume and maintain the
defense  of  such  claim  pursuant  to Section 10.03(a) or (ii) such settlement,
                                       ----------------
compromise  or  consent  includes  an  unconditional release of the Indemnifying
Party  and  its officers, directors, employees and affiliates from all liability
arising  out  of  such  claim.  An Indemnifying Party may not, without the prior
written  consent  of  the  Indemnified  Party, settle or compromise any claim or
consent  to  the  entry of any judgment with respect to which indemnification is
being  sought  hereunder  unless  (x)  such  settlement,  compromise  or consent
includes  an  unconditional  release  of the Indemnified Party and its officers,
directors,  employees  and  affiliates  from  all  liability arising out of such
claim, (y) does not contain any admission or statement suggesting any wrongdoing
or  liability  on  behalf  of the Indemnified Party and (z) does not contain any
equitable  order,  judgment  or  term  that  in any manner affects, restrains or
interferes  with the business of the Indemnified Party or any of the Indemnified
Party's  affiliates.

          (c)     In  the  event  an Indemnified Party claims a right to payment
pursuant  hereto, such Indemnified Party shall send written notice of such claim
to  the  appropriate  Indemnifying  Party (a "Notice of Claim").  Such Notice of
                                              ---------------
Claim  shall  specify  the basis for such claim.  The failure by any Indemnified
Party  so  to  notify  the Indemnifying party shall not relieve the Indemnifying
Party from any liability that it may have to such Indemnified Party with respect
to  any  claim  made pursuant to this Section 10.03(c), it being understood that
                                      ----------------
notices  for  claims  in

                                      -41-
<PAGE>
respect  of  a breach of a representation or warranty must be delivered prior to
the  expiration of the survival period for such representation or warranty under
Section  10.04.  In  the  event  the  Indemnifying  Party  does  not  notify the
--------------
Indemnified  Party  within thirty (30) days following its receipt of such notice
that  the  Indemnifying  Party  disputes  its liability to the Indemnified Party
under this Article or the amount thereof, the claim specified by the Indemnified
Party  in  such  Notice of Claim shall be conclusively deemed a liability of the
Indemnifying Party under this Section 10.03(c), and the Indemnifying Party shall
                              ----------------
pay  the  amount of such liability to the Indemnified Party on demand or, in the
case  of  any  notice  in  which  the amount of the claim (or any portion of the
claim)  is  estimated, on such later date when the amount of such claim (or such
portion  of  such  claim)  becomes  finally  determined.  In  the  event  the
Indemnifying  Party has timely disputed its liability with respect to such claim
as  provided  above,  as  promptly  as  possible, such Indemnified Party and the
appropriate  Indemnifying  Party  shall  establish the merits and amount of such
claim  (by  mutual  agreement, litigation, arbitration or otherwise) and, within
five  (5)  Business  Days  following  the  final determination of the merits and
amount  of such claim, the Indemnifying Party shall pay to the Indemnified Party
immediately  available  funds  in  an  amount  equal to such claim as determined
hereunder.

     10.04     SURVIVAL  PERIOD.  The  representations  and  warranties  of  the
               ----------------
parties  contained  herein shall not be extinguished by the First Closing or the
Second  Closing,  but  shall  survive  the  Closings  for,  and  all  claims for
indemnification  in  connection  therewith  shall  be  asserted  not later than,
eighteen  (18)  months following the First Closing Date; provided, however, that
                                                         --------  -------
the  representations  and warranties contained in Section 3.01 (Power, Authority
                                                  ------------
and  Organization  of the Sellers), Section 3.03 (Ownership of the Cotton Equity
                                    ------------
Interests),  Section  4.01  (Organization  and  Authorization),  Section  4.02
             -------------                                       -------------
(Authorized  and  Outstanding  Stock), Section 4.15 (Employee Benefits), Section
                                       ------------                      -------
4.19  (Environmental  Matters),  Section  4.27  (Tax  Matters), and Section 4.28
----                             -------------                      ------------
(Brokerage)  (collectively, the "Surviving Representations") shall survive for a
                                 -------------------------
period of four (4) years following the First Closing Date, and the period during
which  a claim for indemnification may be asserted in connection therewith shall
continue  during such four (4) year period.  The covenants and agreements of the
parties  hereunder  shall  survive without limitation as to time, and the period
during which a claim for indemnification may be asserted in connection therewith
shall  continue  indefinitely.  Notwithstanding  the foregoing, if, prior to the
close  of  business  on the last day a claim for indemnification may be asserted
hereunder,  an  Indemnifying  Party shall have been properly notified of a claim
for  indemnity  hereunder and such claim shall not have been finally resolved or
disposed  of at such date, such claim shall continue to survive and shall remain
a basis for indemnity hereunder until such claim is finally resolved or disposed
of  in  accordance  with  the  terms hereof.  In the event that Sellers exercise
their Rescission Right, all of the obligations of the parties under this Article
X shall be cancelled and of no further force or effect, except that Seller shall
be  indemnified  for  any  Seller Losses under Sections 10.02(a) or (b) that are
                                               ------------------------
based  on  intentional  or  knowing breaches or misrepresentations by Purchaser.

     10.05     LIABILITY  LIMITS.  Notwithstanding  anything to the contrary set
               -----------------
forth  herein,  the Purchaser Indemnified Parties shall not make a claim against
the Sellers for indemnification under Section 10.01(d) for Purchaser Losses, and
                                      ----------------
the  Sellers  will  have  no  liability  for  indemnification  of  any Purchaser
Indemnified  Party  pursuant  to Section 10.01(a) unless and until the aggregate
                                 ----------------
Losses  claimed thereunder exceed an amount equal to $250,000.00 (the "Threshold
                                                                       ---------
Amount"),  and once  the  aggregate amount of such Losses under Section 10.01(a)
------                                                          ----------------
exceeds the Threshold Amount, the Purchaser Indemnified Parties will be entitled
to recover all such Losses

                                      -42-
<PAGE>
to  which  they  are  entitled  in  excess  of  the  Threshold Amount. The total
aggregate  amount  of  the  liability  of  the  Seller for Purchaser Losses with
respect  any  claims made pursuant to Section 10.01(a) other than Claims arising
                                      ----------------
under  Section  4.19  (Environmental  Matters) ("Environmental Claims") shall be
       -------------                             --------------------
limited  to  $3,000,000.00  (the  "Purchaser Cap"); provided, however, that with
                                   -------------    --------  -------
respect  to  Environmental  Claims  the  Purchaser  Cap shall be increased by an
additional  $2,000,000  to  $5,000,000 (the "Environmental Cap"), and the Seller
                                             -----------------
shall  be liable for one half (1/2) of the amount of any Environmental Claims in
excess  of the Environmental Cap; provided, further, that total aggregate amount
                                  --------  -------
of  the liability of the Company and the Seller for Purchaser Losses arising out
of  fraud  or  willful  misconduct  shall  not  be  subject  to  any  limits.
Notwithstanding  the  foregoing,  any  indemnification  amounts  payable  by the
Sellers  pursuant  to  this  Article  X  will be reduced by any amounts actually
                             ----------
recovered  by  any Purchaser Indemnified Party under insurance policies or other
collateral  sources  with  respect  to  such  Losses and the Purchaser shall use
Commercially  Reasonable  Efforts  to  collect  any  such  amounts.

     10.06     DETERMINATION  OF PURCHASER LOSSES.  The Purchaser Losses payable
               ----------------------------------
by  a  Seller  hereunder shall be determined (i) by the written agreement of the
parties,  (ii)  by  a  final  judgment  or  decree  of  any  court  of competent
jurisdiction,  or  (iii)  by any other means agreed to in writing by the Sellers
and  the  Purchaser.  A judgment or decree of a court shall be deemed final when
the  time  for  appeal, if any, shall have expired and no appeal shall have been
taken  or  when  all  appeals  taken  have  been  fully  determined.

     10.07     INVESTIGATIONS.  The respective representations and warranties of
               --------------
the  parties  contained  in  this Agreement or any certificate or other document
delivered  by  any  party  at  or  prior  to the Closing Date, and the rights to
indemnification  set  forth  in  this  Article  X  shall not be deemed waived or
                                       ----------
otherwise affected by any investigation made, or knowledge acquired, by a party,
provided,  that  if  either  party  becomes aware of a fact which results in, or
--------
could  result  in,  a breach of a covenant or representation of the other party,
the  party  become  aware  of such fact shall promptly notify the other party of
such  fact,  provided,  further, that any party's failure to so notify the other
             --------   -------
party  shall  not  in  any  way  limit the rights of such party pursuant to this
Agreement  if  such failure does not result in a material prejudice to the other
party.

     10.08     DELETED.
               -------

     10.09     REDUCTION OF PURCHASE PRICE.  Any indemnification amounts payable
               ---------------------------
by  the  Sellers pursuant to this Article X shall be deemed to be a reduction in
                                  ---------
the  Purchase  Price.

     10.10     DAMAGES.      Notwithstanding  any  other  provision  in  this
               -------
Agreement  to  the contrary, no party shall be liable to the other party for any
punitive  or  exemplary  damages.

     10.11     EXCLUSIVE  REMEDY.      Except  as  otherwise  set  forth in this
               -----------------
Agreement,  after  the Closing, indemnification pursuant to this Article X shall
                                                                 ---------
be the sole and exclusive remedy for the parties with respect to matters arising
under this Agreement of any kind or nature, including, for any misrepresentation
or  breach  of  any  warranty,  covenant,  or  other provision contained in this
Agreement,  and the parties hereby waive and release any other rights, remedies,
causes  of  action, or claims that either of them have or that may arise against
any  other  party  with  respect  thereto.

                                      -43-
<PAGE>
                                   ARTICLE XI.
                        TERMINATION PRIOR TO CLOSING DATE
                        ---------------------------------

     11.01     TERMINATION  OF  AGREEMENT.  This  Agreement may be terminated at
               --------------------------
any  time  prior  to  the  First  Closing  Date:

          (a)     By  the  mutual  written consent of Purchaser, the Sellers and
the  Cotton  Group  Companies;

          (b)     By  the  Sellers  in  writing, without liability, if Purchaser
shall  (i)  fail  to  perform  in  any material respect its agreements contained
herein  required to be performed by it on or prior to the First Closing Date, or
(ii)  materially  breach  any of its representations or warranties, or covenants
set  forth  in  Article  VI that apply to any period prior to the First Closing,
which failure or breach is not cured within ten (10) days after the Sellers have
notified  Purchaser of their intent to terminate this Agreement pursuant to this
subparagraph  (b);

          (c)     By  Purchaser  in  writing,  without  liability, if the Cotton
Group Companies or the Sellers shall (i) fail to perform in any material respect
their  agreements  contained herein required to be performed by them on or prior
to  the  First  Closing  Date,  or  (ii)  materially  breach  any  of  their
representations  or  warranties, or covenants set forth in Article VI that apply
to  any  period prior to the First Closing, which failure or breach is not cured
within  ten  (10) days after Purchaser has notified the Sellers of its intent to
terminate  this  Agreement  pursuant  to  this  subparagraph  (c);

          (d)     By  either  the  Sellers  or  Purchaser  in  writing,  without
liability,  if there shall be any order, writ, injunction or decree of any court
or  governmental  or  regulatory agency binding on Purchaser, the Sellers or the
Cotton  Group  Companies,  which prohibits or restrains Purchaser, the Seller or
the  Cotton  Group  Companies  from  consummating  the transactions contemplated
hereby,  provided  that  Purchaser,  the  Sellers and the Cotton Group Companies
shall  have  used  their  reasonable, good faith efforts to have any such order,
writ, injunction or decree lifted and the same shall not have been lifted within
30  days after entry, by any such court or governmental or regulatory agency; or

          (e)     By  either  the  Sellers  or  Purchaser,  in  writing, without
liability, if for any reason the First Closing Date has not occurred by December
8,  2006  other  than  as  a result of the breach of this Agreement by the party
attempting  to  terminate  the  Agreement.

     11.02     TERMINATION  OF  OBLIGATIONS.  Termination  of  this  Agreement
               ----------------------------
pursuant  to  this  Article  XI  shall  terminate all obligations of the parties
                    -----------
hereunder,  except  for  the obligations  under Sections 2.02(a), 2.03(a), 2.07,
                                                ----------------  -------  ----
2.08,  6.09,  11.02, 12.07 and 12.10 hereof; provided, however, that termination
----   ----   -----  -----     -----         --------  -------
pursuant  to  subparagraphs  (b),  (c)  or (e) of Section 11.01 hereof shall not
                                                  -------------
relieve  a  defaulting  or breaching party from any liability to the other party
hereto.

                                  ARTICLE XII.
                                  MISCELLANEOUS
                                  -------------

     12.01     ENTIRE  AGREEMENT;  SURVIVAL.  This  Agreement  (including  the
               ----------------------------
Schedules  and  Exhibits  which  are  incorporated  herein) constitutes the sole
understanding  of  the  parties  with

                                      -44-
<PAGE>
respect  to the subject matter hereof; provided, however, that this provision is
                                       --------  -------
not  intended  to  abrogate  any  other  written  agreement  between the parties
executed  with  or  after  this  Agreement.

     12.02     AMENDMENT.  No amendment, modification or alteration of the terms
               ---------
or  provisions  of  this  Agreement shall be binding unless the same shall be in
writing  and  duly  executed  by  all  of  the  parties  hereto.

     12.03     PARTIES  BOUND  BY AGREEMENT; SUCCESSORS AND ASSIGNS.  The terms,
               ----------------------------------------------------
conditions,  and obligations of this Agreement shall inure to the benefit of and
be  binding  upon  the  parties hereto and the respective successors and assigns
thereof.  This  Agreement  shall  not  be  assignable  by  operation  of  law or
otherwise.

     12.04     COUNTERPARTS;  FACSIMILE.  This  Agreement  may  be  executed  in
               ------------------------
multiple  counterparts,  each of which shall for all purposes be deemed to be an
original  and  all  of  which, when taken together, shall constitute one and the
same  instrument.  This  Agreement  may  be executed and delivered by facsimile.

     12.05     HEADINGS.  The  headings  of  the Sections and paragraphs of this
               --------
Agreement  are  inserted  for  convenience  only  and  shall  not  be  deemed to
constitute part of this Agreement or to affect the construction thereof.

     12.06     MODIFICATION  AND WAIVER.  Any of the terms or conditions of this
               ------------------------
Agreement may be waived in writing at any time by the party which is entitled to
the  benefits  thereof.  No  waiver  of  any of the provisions of this Agreement
shall  be  deemed  to or shall constitute a waiver of any other provision hereof
(whether  or  not  similar).

     12.07     EXPENSES.  Except  as  otherwise  provided  herein, the Purchaser
               --------
shall  pay  all costs and expenses incurred by Purchaser, Sellers and the Cotton
Group  Companies  in  connection  with  this  Agreement  and  the  transactions
contemplated  hereby,  including  fees  and  expenses  of financial consultants,
accountants and attorneys; provided, however, that Purchaser's obligation to pay
the  costs  and  expenses  of  Sellers  and the Cotton Group Companies shall not
exceed  $400,000.00. All such expenses incurred by the Cotton Group Companies in
connection with this Agreement and the transactions contemplated hereby shall be
paid  by  the  Purchaser  on  or  before  the  Second  Closing  Date.

     12.08     NOTICES.  Any  notice,  request, instruction or other document to
               -------
be  given  hereunder  by  any party hereto to any other party hereto shall be in
writing  and  delivered  personally  or  sent  by  registered  or certified mail
(including  by overnight courier such as FedEx or express mail service), postage
or  fees  prepaid,

     if to the Sellers or, prior to the   Cotton
     Closing Date, the Cotton Group       14345 Northwest Fwy.
     Companies to:                        Houston, TX.  77040
                                          Fax No.: (713) 856-7425
                                          Attention:  Pete Bell
                                                      Chairman/Founder

                                      -45-
<PAGE>
     with a copy to:                      Nance & Simpson, LLP
                                          2603 Augusta, Suite 1000
                                          Houston, Texas 77057
                                          Fax No.:  (713) 520-5109
                                          Attention:  Glynn Nance

     if to Purchaser to:                  Charys Holding Company, Inc.
                                          1117 Perimeter Center West, Suite N415
                                          Atlanta, Georgia 30338
                                          Attention:  Billy V. Ray, Jr., Chief
                                                      Executive Officer

     with a copy to:                      Glast, Phillips & Murray, P.C.
                                          815 Walker Street, Suite 1250
                                          Houston, Texas 77002
                                          Fax No.:  713-237-3202
                                          Attention:  Norman T. Reynolds

or  at  such other address for a party as shall be specified by like notice  Any
notice  which  is  delivered  personally  in the manner provided herein shall be
deemed  to  have been duly given to the party to whom it is directed upon actual
receipt  by  such  party  or  the  office  of  such  party.  Any notice which is
addressed  and  mailed  in  the  manner  herein  provided  shall be conclusively
presumed  to  have  been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the fourth business day after
the  day it is so placed in the mail or, if earlier, the time of actual receipt.

     12.09     GOVERNING  LAW;  JURISDICTION.  This Agreement is executed by the
               -----------------------------
parties  hereto in and shall be construed in accordance with and governed by the
laws  of the State of Texas without giving effect to the principles of conflicts
of  law  thereof.  Each  of the parties hereto irrevocably agrees that any legal
action  or  proceeding  with  respect  to  this  Agreement  or  the transactions
contemplated  hereby,  or  for  recognition  and  enforcement of any judgment in
respect  hereof,  brought by the other party hereto or its successors or assigns
shall be brought and determined in state or federal courts sitting in the States
of  Georgia  or  Texas, and each party hereby irrevocably submits with regard to
any  such  action  or  proceeding  for  itself  and  in respect of its property,
generally  and  unconditionally,  to the exclusive jurisdiction of the aforesaid
courts.  Each  party hereto hereby irrevocably waives, and agrees not to assert,
by  way  of  a motion, as a defense, counterclaim or otherwise, in any action or
proceeding  with  respect  to  this  Agreement,  (a)  any  claim  that it is not
personally  subject to the jurisdiction of the above-named courts for any reason
other than the failure to lawfully serve process, (b) that it or its property is
exempt  or  immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment,  attachment  in aid of execution of judgment, execution of judgment or
otherwise),  and (c) to the fullest extent permitted by applicable law, that (i)
the  suit,  action or proceeding in any such court is brought in an inconvenient
forum,  (ii) the venue of such suit, action or proceeding is improper, and (iii)
this  Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

                                      -46-
<PAGE>
     12.10     PUBLIC  ANNOUNCEMENTS.  No  public  announcement shall be made by
               ---------------------
any  person  with  regard  to  the  transactions  contemplated by this Agreement
without  the  prior  consent  of the Sellers and Purchaser; provided that either
party may make such disclosure if advised by counsel that it is legally required
to  do  so.  The  Sellers, the Cotton Group Companies and Purchaser will discuss
any public announcements or disclosures concerning the transactions contemplated
by  this  Agreement with the other parties prior to making such announcements or
disclosures.

     12.11     KNOWLEDGE.    The  Cotton Group Companies shall be deemed to have
               ---------
"Knowledge"  of  a particular fact or matter if an individual listed on SCHEDULE
                                                                        --------
12.11(A)  is actually aware of such fact or matter without further investigation
--------
or  inquiry.

          (b)     An  individual Seller shall be deemed to have "Knowledge" of a
particular  matter  if  such  Seller  is  actually  aware of such fact or matter
without  further  investigation  or  inquiry.

          (c)     Purchaser  shall be deemed to have "Knowledge" of a particular
fact  or  matter  if any of Billy Ray, Ray Smith, Michael Oyster and Purchaser's
other  executive  officers,  if  any,  is  actually aware of such fact or matter
without  further  inquiry.

     12.12     NO  THIRD-PARTY BENEFICIARIES.  With the exception of the parties
               -----------------------------
to  this  Agreement,  there  shall  exist  no  right  of  any  person to claim a
beneficial  interest in this Agreement or any rights occurring by virtue of this
Agreement.

     12.13     "INCLUDING".  Words  of inclusion shall not be construed as terms
               -----------
of limitation herein, so that references to "included" matters shall be regarded
as  non-exclusive,  non-characterizing  illustrations.

     12.14     GENDER  AND  NUMBER.  Where  the  context  requires, the use of a
               -------------------
pronoun  of one gender or the neuter is to be deemed to include a pronoun of the
appropriate  gender,  singular words are to be deemed to include the plural, and
vice  versa.

     12.15     REFERENCES.  Whenever  reference is made in this Agreement to any
               ----------
Article,  Section,  Schedule or Exhibit, such reference shall be deemed to apply
to  the specified Article or Section of this Agreement or the specified Schedule
or  Exhibit  to  this  Agreement.  The Schedules and Exhibits referenced in this
Agreement  are  attached hereto, are hereby incorporated into this Agreement and
are hereby made a part hereof as if set forth in full in this Agreement.

     12.16     SEVERABILITY.  In  case  any  one  or  more  of  the  provisions
               ------------
contained in this Agreement should be found by a court of competent jurisdiction
to be invalid, illegal or unenforceable in any respect against any party hereto,
such  invalidity, illegality, or unenforceability shall only apply to such party
in  the  specific  jurisdiction  where  such  judgment  shall  be  made, and the
validity,  legality,  and  enforceability  of the remaining provisions contained
herein  shall  not  in any way be affected or impaired thereby, except that this
Agreement  shall  not  be  reformed  in  any way that will deny to any party the
essential  benefits  of  this Agreement, unless such party waives in writing its
rights  to  such  benefits.

                                      -47-
<PAGE>
     12.17     FURTHER  ASSURANCES.  Each  of  the  parties  hereto will use its
               -------------------
reasonably  good  faith  efforts  to  take  all  actions  and  to  do all things
necessary,  proper  or advisable following the Second Closing Date to consummate
and effectuate the transactions contemplated by this Agreement.

     12.18     CURRENCY.  All  payments  hereunder  or  contemplated  by  this
               --------
Agreement shall be paid in U.S. currency.

     12.19     ORDINARY  COURSE  OF  BUSINESS.  "Ordinary  Course  of  Business"
               ------------------------------    ------------------------------
means,  with  respect  to  actions  and operations conducted by the Cotton Group
Companies,  actions  and operations that are (a) consistent with the past custom
and  practices  of  the Cotton Group Companies, (b) taken in the ordinary course
of  the  normal,  day-to-day  operations  of the Cotton Group Companies, (c) not
required  to  be authorized by the Board of Directors or other governing body of
the  Cotton  Group Companies, and (d) similar in nature and magnitude to actions
and  operations  customarily  taken,  without  any authorization by the Board of
Directors  or  other  governing  body,  in  the  ordinary  course of the normal,
day-to-day operation of other companies that are in the same line of business as
the  Cotton  Group  Companies.

     12.20     COMMERCIALLY  REASONABLE  EFFORTS.  "Commercially  Reasonable
               ---------------------------------    ------------------------
Efforts"  means  efforts  which  are  designed  to  enable  a party, directly or
-------
indirectly, to satisfy a condition to or otherwise assist in the consummation of
a  desired  result and which do not require the performing party to expend funds
or  assume  liabilities  other  than  expenditures  and  liabilities  which  are
customary and reasonable in nature and amount in the context hereof.

     12.21     MATERIAL  ADVERSE  CHANGE  (OR EFFECT).  "Material Adverse Change
               --------------------------------------    -----------------------
(or  Effect)"  means  any change or effect that individually or in the aggregate
------------
with other changes or effects would be material and adverse to (a) the financial
condition,  assets,  liabilities,  businesses,  or  results or operations of any
Cotton Group Company or the Purchaser, as the case may be, or (b) the ability of
the Sellers or the Purchaser, as the case may be, to consummate the transactions
contemplated  hereby;  provided,  however,  that  any change or effect resulting
                       --------   -------
from,  or  directly  relating  to,  any of the following shall not be taken into
account  in  making any such determination and shall not be deemed to constitute
or  give  rise  to a Material Adverse Effect: (i) a change or effect which has a
similar  impact  on  comparable  businesses, (ii) a change or changes in general
business  or  economic  conditions,  including,  without  limitation, changes in
applicable  laws  or  regulations and changes in financial or market conditions,
(iii)  changes resulting from conditions generally affecting the geographic area
or  local, regional, or national industry in which the Cotton Group Companies or
the  Purchaser,  as  the  case  may  be, operates, (iv) acts of terrorism or war
(whether  or  not declared), (v) the performance by any party of its obligations
under  this  Agreement,  (vi)  the  compliance  by  any  party with any covenant
hereunder,  (vii)  the performance by any party of any action to which the other
party  has consented, (viii) the fact that the Purchaser is the purchaser of the
Cotton  Equity  Interests,  (ix)  the  announcement  of  the  transaction or the
existence  of this Agreement, or (x) the taking of any action by or on behalf of
the  other  party  or  its  Affiliates,  representatives,  or  agents.

     12.22     ARBITRATION.      The  parties  shall  use  their respective best
               -----------
efforts  to  resolve  any  disputes,  claims, or controversies arising out of or
relating  to  this  Agreement,  including  the  performance,  breach,  validity,
interpretation,  application,  or  termination thereof (a "Dispute").  Any party
                                                           -------
may give written notice of the existence of a Dispute (the "Notice of Dispute"),
                                                            -----------------
after

                                      -48-
<PAGE>
which  the  parties  shall  attempt  to  resolve  the Dispute through good faith
negotiations by their respective authorized representatives.  If the parties are
unable to resolve the Dispute amicably within thirty (30) days after delivery of
the  written  Notice  of Dispute, or such other time as the parties may agree in
writing,  then  the  Dispute  shall be subject to arbitration in accordance with
this  Section.  Any Dispute not resolved amicably through good faith negotiation
as  provided  above shall be finally resolved by arbitration administered by the
American  Arbitration  Association in accordance with its Commercial Arbitration
Rules  as  then  in  effect  (the "AAA Rules"), and judgment on the award may be
                                   ---------
entered in any court having jurisdiction thereof.  In the event that any party's
claim  or  counterclaim  exceeds $1,000,000, exclusive of interest or attorneys'
fees,  the  Dispute  shall be heard and determined by three arbitrators, each of
whom  shall  be independent and impartial; otherwise, the Dispute shall be heard
and  determined  by one arbitrator.  In the event that one arbitrator shall hear
the  Dispute,  the parties shall attempt to agree upon a qualified individual to
serve  as  arbitrator.  If the parties are unable to so agree within thirty (30)
days  of  the  commencement  of  the  arbitration,  then the arbitrator shall be
selected  and  appointed  in  accordance  with the AAA Rules.  In the event that
three  arbitrators  shall hear the Dispute, each party shall, within twenty (20)
days  after  commencement  of  the  arbitration,  select  one  person  to act as
arbitrator.  The  two  arbitrators so selected shall, within twenty (20) days of
their  appointment, select a third arbitrator who shall serve as the chairperson
of  the  arbitral  panel.  The  arbitrators  selected  shall  be  qualified  by
education,  training, and experience to hear and determine matters in the nature
of  the  Dispute.  If a party fails to appoint an arbitrator as provided herein,
or if the arbitrators selected by the parties are unable or fail to agree upon a
third  arbitrator  within  twenty  (20) days of their appointment, or such other
time as the parties may agree in writing, then that arbitrator shall be selected
and  appointed  in  accordance  with  the  AAA Rules.  Should an arbitrator die,
resign, refuse to act, or become incapable of performing his or her functions as
an arbitrator, the AAA may declare a vacancy on the Panel.  The vacancy shall be
filled  by  the  method  by which that arbitrator was originally appointed.  The
seat  of  the  arbitration  shall  be  Houston,  Texas.  The arbitrator(s) shall
determine the matters at issue in the Dispute in accordance with the substantive
law  of  Texas.  The  parties  hereby waive any claim to exemplary, punitive, or
similar  damages  in excess of compensatory damages, attorneys' fees, costs, and
expenses  of  arbitration,  and the arbitral panel is not empowered to and shall
not  award  exemplary,  punitive,  or  similar damages in excess of compensatory
damages,  attorneys' fees, costs, and expenses of arbitration.  The award of the
arbitration(s) shall be in writing and shall set out the reasons therefor.

     12.23     ENFORCEMENT.  Prior  to the First Closing, the parties agree that
               -----------
irreparable  damage  would occur in the event that any of the provisions of this
Agreement  were  not  performed in accordance with their specified terms.  It is
accordingly  agreed  that  prior  to the First Closing Date the parties shall be
entitled  to specific performance of the terms hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.

                                   **********

                                      -49-
<PAGE>
     IN  WITNESS  WHEREOF,  each  of  the  parties  hereto has duly executed and
delivered this Agreement as of the date first above written.

                                        CHARYS HOLDING COMPANY, INC.

                                        By:
                                             -----------------------------------
                                             Name:  Billy  Ray
                                             Title:  Chief  Executive  Officer

                                        C&B / COTTON HOLDINGS, INC

                                        By:
                                             -----------------------------------
                                             Name:  Troy Crochet
                                             Title:  President

                                        CROCHET & BOREL SERVICES, INC

                                        By:
                                             -----------------------------------
                                             Name:  Troy Crochet
                                             Title:  President

                                        COTTON HOLDINGS 1, INC

                                        By:
                                             -----------------------------------
                                             Name:  Peter Bell
                                             Title:  President

                                        COTTON  COMMERCIAL  USA,  LP

                                        By:  Cotton USA GP, LLC, its sole
                                             general partner

                                        By:
                                             -----------------------------------
                                             Name:  Peter  Bell
                                             Title:  President

                  [SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]

<PAGE>
                                        COTTON RESTORATION OF CENTRAL TEXAS, LP

                                        By:  CCI-GP, LLC, its sole general
                                             partner

                                        By:
                                             -----------------------------------
                                             Name:  Peter  Bell
                                             Title:  President

SELLER:                                 SELLER:
------                                  -------

------------------------------------    ----------------------------------------
CHAD WEIGMAN                            BLAKE STANSELL

SELLER:                                 SELLER:
------                                  -------

------------------------------------    ----------------------------------------
BRYAN MICHALSKY                         JAMES SCAIFE

SELLER:                                 SELLER:
------                                  -------

------------------------------------    ----------------------------------------
RANDALL THOMPSON                        PETER BELL

SELLER:                                 SELLER:
------                                  -------

------------------------------------    ----------------------------------------
DARYN EBRECHT                           RUSSELL WHITE

SELLER:
-------

------------------------------------
JOHNNY SLAUGHTER

                  [SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]

<PAGE>
                                    EXHIBIT A
                                    ---------

                             COTTON GROUP COMPANIES

COTTON HOLDINGS 1, INC., A DELAWARE CORPORATION

     The  Corporation  is  authorized  to  issue  1,000  shares  of common stock
     with a par value of $0.01 per share.

     Stockholders:

     Peter  Bell          435 shares of common stock (43.5%)
     Daryn  Ebrecht       435 shares of common stock (43.5%)
     Randall  Thompson     50 shares of common stock (5%)
     James  Scaife         50 shares of common stock (5%)
     Bryan  Michalsky      30 shares of common stock (3%)

COTTON COMMERCIAL USA, LP, A TEXAS LIMITED PARTNERSHIP

     Partners:

     Cotton USA GP, LLC         1% general partner interest
     Cotton Holdings 1, Inc.    76.5% limited partner interest
     Chad Weigman               5% limited partner interest
     Frank Blakely Stansell     17.5% limited partner interest

COTTON RESTORATION, LP, A TEXAS LIMITED PARTNERSHIP
     Partners:
     CRI-GP, LLC           1% general partner interest
     CRI-LP, LLC           99% limited partner interest

COTTON RESTORATION OF CENTRAL TEXAS, LP, A TEXAS LIMITED PARTNERSHIP

     Partners:

     CCI-GP, LLC           1% general partner interest
     CCI-LP, LLC           89% limited partner interest
     Johnny Slaughter      5% limited partner interest
     Russell White         5% limited partner interest

COTTON USA, LP, A TEXAS LIMITED PARTNERSHIP

     Partners:

     CCI-GP, LLC          1% general partner interest
     CCI-LP, LLC          99% limited partner interest

<PAGE>
COTTON HQ, LLC, A TEXAS LIMITED LIABILITY COMPANY

     The sole Member is Cotton Holdings 1, Inc.

COTTON USA GP, LLC, A TEXAS LIMITED LIABILITY COMPANY

     The sole Member is Cotton Holdings 1, Inc.

CRI-GP, LLC, A TEXAS LIMITED LIABILITY COMPANY

     The sole Member is Cotton Holdings 1, Inc.

CRI-LP, LLC, A TEXAS LIMITED LIABILITY COMPANY

     The sole Member is Cotton Holdings 1, Inc.

CCI-GP, LLC, A TEXAS LIMITED LIABILITY COMPANY

     The sole Member is Cotton Holdings 1, Inc.

CCI-LP, LLC, A DELAWARE LIMITED LIABILITY COMPANY

     The sole Member is Cotton Holdings 1, Inc.

<PAGE>
                                   EXHIBIT B
                                   ---------

           PURCHASE PRICE ALLOCATION AMONG SHAREHOLDERS AND PARTNERS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                       NON-
                       NON-                                                                         REFUNDABLE    FIRST CLOSING
                    REFUNDABLE    FIRST CLOSING        LESS        FIRST CLOSING                      STOCK           STOCK
                       CASH         DATE CASH        SCHEDULE       CASH FUNDED    FIRST CLOSING  CONSIDERATION   CONSIDERATION
SELLER            CONSIDERATION   CONSIDERATION    4.26(a) ITEMS    FROM CHARYS     SELLER NOTE      (SHARES)        (SHARES)
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
<S>               <C>             <C>             <C>              <C>             <C>            <C>             <C>
Pete Bell         $ 1,172,776.88    5,143,773.62     (535,613.80)    4,608,259.72   3,337,368.77         138,146         532,646
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Daryn Ebrecht       1,172,776.88    5,143,773.62     (499,593.03)    4,644,180.49   3,337,368.77         138,146         532,646
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
James Scaife           25,630.31      671,884.50      (41,992.20)      629,882.30     435,930.23          17,243          60,220
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Randall Thompson       25,630.31      671,884.63      (68,142.82)      613,741.81     435,930.31          17,243          60,220
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Blake Stansell         48,585.73    1,827,416.96     (134,750.00)    1,692,665.96   1,185,658.92          53,964         192,010
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Chad Weigman           23,282.85      840,076.48               -       840,076.48     645,066.08          16,898          77,221
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Bryan Michalsky        14,140.35      879,110.49      (37,627.62)      841,482.87     570,382.01           9,651          36,658
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Russell White           9,583.34      117,371.20      (27,882.06)       89,489.14      76,162.45           4,855          32,006
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Johnny Slaughter        9,583.34      117,371.20      (77,159.97)       40,211.23      76,152.45           4,855          32,006
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
           Total  $ 2,500,000.00  $15,412,661.50  $(1,412,661.50)  $14,000,000.00  10,000,000.00         400,000       1,555.532
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Non-Owners Participating in Incentive Compensation
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Matt Wenstrom
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Brett Conrad
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Mark Golson
----------------  --------------  --------------  ---------------  --------------  -------------  --------------  --------------
Pool
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
                     SECOND                      TOTAL CASH AND        STOCK                                       INTEGRATION
                  CLOSING DATE                        NOTE         CONSIDERATION                     INCENTIVE      INCENTIVE
                      CASH       TOTAL Cash and     EXCLUDING     [AT MAKE WHOLE       TOTAL       COMPENSATION   COMPENSATION
SELLER            CONSDERATION        Note        4.26(a) ITEMS       PRICE]       CONSIDERATION    PERCENTAGE     PERCENTAGE
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
<S>               <C>            <C>             <C>              <C>              <C>             <C>            <C>
Pete Bell          7,255,549.74   16,909,468.91  $ 16,373,355.11  $    10,061,884  $   26,971,353            16%            24%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Daryn Ebrecht      7,255,549.74   16,909,468.91  $ 16,409,876.88  $    10,061,884  $   26,971,353            16%            24%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
James Scaife       1,075,285.59    2,208,730.63  $  2,166,738.43  $     1,161,932  $    3,370,662            12%            16%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Randall Thompson   1,075,285.80    2,208,731.06  $  2,150,588.23  $     1,161,932  $    3,370,663            12%            16%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Blake Stansell     2,947,725.46    6,007,386.06  $  5,872,636.06  $     3,685,610  $    3,696,996            12%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Chad Weigman       1,353,213.90    2,761,639.31  $  2,761,639.31  $     1,396,785  $    4,158,424            12%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Bryan Michalsky    1,428,325.55    2,689.958.40  $  2,852,330.78  $       693,143  $    3,583,102             8%            16%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Russell White        182,735.15      385,842.14  $    357,960.08  $       552,906  $      938,748             2%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Johnny Slaughter     182,735.15      385,842.14  $    308,582.17  $       552,906  $      938,748             2%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
           Total  22,764,406.06   50,667,067.56    49,264,406.06  $    29,332,981  $   80,000,049            92%            96%
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Non-Owners Participating in Incentive Compensation
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Matt Wenstrom                                                                                                 3%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Brett Conrad                                                                                                  3%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Mark Golson                                                                                                   2%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
Pool                                                                                                                         4%
----------------  -------------  --------------  ---------------  ---------------  --------------  -------------  --------------
                                                                                                            100%           100%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

/s/ Chad Weigman
----------------

/s/ Blake Stansell
------------------

/s/ Daryn Ebrecht
-----------------

/s/ Russell White
-----------------

/s/ Randall Thompson
--------------------

/s/ James Scaife
----------------

/s/ Bryan Michalsky
-------------------

/s/ Pete Bell
-------------

/s/ Johnny Slaughter
--------------------

<PAGE>
                                    EXHIBIT C
                                    ---------

                                 PROMISSORY NOTE
                                  [SELLER NOTE]

$ 10,000,000.00                                                   Houston, Texas
                                                                December 8, 2006

          FOR  VALUE  RECEIVED, the undersigned, CHARYS HOLDING COMPANY, INC., A
Delaware  corporation  ("Maker"),  hereby  promises to pay to the order of Peter
                         -----
Bell,  Daryn  Ebrecht,  James  Scaife,  Randall  Thompson, Bryan Michalsky, Chad
Weigman,  Frank  Blakely  Stansell,  Johnny  Slaughter,  and  Russell  White
(collectively  "Sellers"),  who  now  appoint  PETER  BELL  and  DARYN  EBRECHT,
                -------
individual  residents of the State of Texas, as Sellers' co-agents (collectively
"Agent"), acting together, for the purpose of receiving payments on their behalf
 -----
under  and  this  Promissory  Note (this "Note") and otherwise taking all action
                                          ----
necessary  or  practical  in  the  enforcement  of this Note on their behalf, in
lawful  money  of  the  United  States  of  America,  the  principal  sum  of
$10,000,000.00  subject  to the terms hereof, together with interest thereon, at
the rate hereinafter set forth below, with such principal sum and interest being
payable  as  set  forth  below. Sellers will share in the principal and interest
under  this  Note and in the security for payment thereof in accordance with the
allocation  schedule  set  forth  on  EXHIBIT A to this Note. This Note is being
                                      ---------
delivered pursuant to Section 2.02(b) of that certain Amended and Restated Stock
and  Limited  Partnership  Interest  Purchase  Agreement dated as of December 8,
2006,  by  and  among  Maker,  as  Purchaser,  Cotton  Holdings  1, Inc., Cotton
Commercial  USA, LP, Cotton Restoration of Central Texas, LP and the Sellers set
forth  therein  (the  "Purchase Agreement"), and is subject to the provisions of
                       ------------------
Section.  2.07  thereof. Terms not otherwise defined in this Note shall have the
meaning  set  forth  in  the  Purchase  Agreement.

     Section I.     Rate of Interest
                    ----------------

          From  and  after  the  date  hereof,  interest  shall  accrue  on  the
outstanding  principal balance of this Note at a rate equal to nine percent (9%)
per annum, calculated on the basis of 365 days per year and actual days elapsed.

     Section II.     Payment of Principal and Interest
                     ---------------------------------

          (a)     The  principal  amount evidenced by this Note and all accrued,
unpaid  interest  thereon, shall be due and payable in full by Maker on March 8,
2007, or if earlier, the date, if any, that the "Permanent Financing" defined in
(b)  below  is  completed  (the  earlier  date  being  herein referred to as the
"Maturity  Date").  Maker  shall  have  the  right  to  prepay  the indebtedness
 --------------
evidenced by this Note, in full or in part, at any time, without penalty, fee or
charge.

          (b)     Maker  agrees to diligently pursue and use its commercial best
efforts to obtain capital funding in the approximate range of $125,000,000.00 to
$150,000,000.00 in the form of either capital investments (including investments
in  equity  or  convertible  debt  instruments)  in  or  loans  to Maker, or any
subsidiary of Maker, including but not limited to the Cotton Companies or any of
them.  Any  and  all  such  capital funding regardless of whether in the form of
capital investment or loans, is referred to herein as the "Permanent Financing."
                                                           -------------------

<PAGE>
          (c)     Notwithstanding  any  provision  in this Note to the contrary,
the  entire  principal  amount outstanding hereunder shall be due and payable in
full  by  Maker  in  the  event  that a change of control occurs with respect to
Maker,  C  &  B  /  Cotton  Holdings,  Inc.,  Cotton Holdings 1, Inc., or Cotton
Commercial  USA,  LP,  which  shall  be deemed to have occurred in the event any
person  or  group  of  persons  (within  the  meaning  of  Section 13(d)) of the
Securities  Exchange  Act  of  1934,  as  amended, acquires beneficial ownership
(within  the meaning of the aforesaid Section 13(d), by conveyance, sale, lease,
assignment,  transfer  or  other  disposal,  of  all or substantially all of the
property,  business  or  assets  of any one or more of such, or greater than 50%
voting  control  of  any  one or more of such companies, and one or more of such
person(s)  acquiring beneficial ownership is a third party not related to Maker.

     Section III.     Events of Default
                      -----------------

          For  purposes  of  this  Note,  the occurrence of any of the following
events  or  conditions  shall  constitute  an  event  of  default  hereunder:

          (a)     Maker  or any successor to Maker shall fail to pay in full any
amount  under  this  Note when due and such default shall continue uncured for a
period  of  15  days  after  Sellers'  Agent  notifies Maker of such default; or

          (b)     Maker  or  any  successor to Maker shall: (i) file a voluntary
petition  or  assignment  in bankruptcy or a voluntary petition or assignment or
answer  seeking  liquidation,  reorganization,  arrangement, readjustment of its
debts,  or  any other relief under the Bankruptcy Reform Act of 1978, as amended
(the  "Bankruptcy Code"), or under any other act or law pertaining to insolvency
       ---------------
or debtor relief, whether State, Federal, or foreign, now or hereafter existing;
(ii)  enter  into  any  agreement  indicating  consent  to,  approval  of,  or
acquiescence  in,  any  such  petition  or proceeding; (iii) apply for or permit
the  appointment,  by  consent  or  acquiescence,  of  a  receiver, custodian or
trustee  of  all  or a substantial part of its property; (iv) make an assignment
for  the  benefit  of  creditors;  (v)  be unable or shall fail to pay its debts
generally  as  such  debts become due, or (vi) admit in writing its inability or
failure  to  pay  its  debts  generally  as  such  debts  become  due;

          (c)     There  occurs  (i)  a  filing or issuance against Maker or any
successor  to  Maker  of  an  involuntary  petition  in  bankruptcy  or  seeking
liquidation, reorganization, arrangement, readjustment of its debts or any other
relief  under  the  Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether Stale, Federal or foreign, now or hereafter
existing;  (ii) the involuntary appointment of a receiver, liquidator, custodian
or  trustee  of Maker or any successor to Maker or for all or a substantial part
of  its property; or (iii) the issuance of a warrant of attachment, execution or
similar  process against all or any substantial part of the property of Maker or
any  successor  to  Maker  and such shall not have been discharged (or provision
shall not have been made for such discharge), or stay of execution thereof shall
not  have  been procured, within sixty (60) days from the date of entry thereof;

          (d)     There  occurs  an Event of Default or other material breach by
Maker  or  any  successor to Maker (or by a subsidiary or affiliate of Maker, as
applicable) under (i) the Pledge Agreement(s), Security Agreement(s) or Guaranty
Agreement(s)  defined  in  Section  IV  below  in  this Note, or (ii) any of the
Employment  Agreements  to be entered into on or about the Maturity Date between
each  of  the Sellers, respectively, and the employer "Company" defined therein;
and

                                        2
<PAGE>
          (e)     There  occurs  a  breach or default by Maker or C & B / Cotton
Holdings,  Inc.  under  the  Purchase  Agreement  or  the  Registration  Rights
Agreement,  or a breach or default by Maker or any successor to Maker, or by any
subsidiary  or  affiliate  of  Maker,  under any credit facility entered into to
finance  the  transactions  contemplated by the Purchase Agreement, or any other
indebtedness of any such parties to which the payment of this Note or any of the
security  interests  or  guaranty  securing  payment  of  this  Note  have  been
subordinated.  All  expenses incurred in collection of this Note or with respect
to  any  guaranty  agreement,  pledge agreement or security agreement associated
with this Note shall be treated as additional advances under this Note and shall
increase  the  principal  amount  payable  to  Sellers  under  this  Note.

          Upon  any  such  event of default, the total outstanding principal and
accrued,  unpaid  interest  shall  become  immediately  due and payable, and the
entire unpaid principal of this Note shall bear interest until paid at a rate of
interest  equal  to the lesser of (i) eighteen percent (18%) per annum, computed
on the basis of 365 days per year for the actual number of days elapsed, or (ii)
the  Highest Lawful Rate (defined below). Forbearance by Sellers to exercise its
rights  with  respect  to  any failure or breach of Maker shall not constitute a
waiver of the right as to any subsequent failure or breach. For purposes of this
Note,  "Highest  Lawful  Rate"  means  the maximum non-usurious rate of interest
permitted  by  applicable  federal  or  Texas  law  from  time  to  time.

     All agreements between Maker and Sellers, whether now existing or hereafter
arising  and whether written or oral, are hereby expressly limited so that in no
event,  whether by reason of acceleration of maturity hereof or otherwise, shall
the amount paid or agreed to be paid to the Sellers for the use, forbearance, or
detention  of the money to be loaned hereunder, or otherwise, exceed the Highest
Lawful  Rate. If fulfillment of any provision hereof or of any loan agreement or
other  document evidencing or securing the indebtedness evidenced hereby, at the
time  performance of such provision shall be due, shall involve transcending the
limit  of  validity  prescribed  by  law,  then,  automatically  and without the
requirement  for  affirmative  action,  the  obligation to be fulfilled shall be
reduced  to  the limit of such validity. Should Sellers ever receive anything of
value  deemed  interest  under this Note under applicable law which would exceed
interest  at  the Highest Lawful Rate, an amount equal to any excessive interest
shall  be  applied  to the reduction of the principal amount owing hereunder and
not to the payment of interest, or if such excessive interest exceeds the unpaid
balance  of  principal  hereof,  such excess shall be refunded to the Maker. All
sums paid or agreed to be paid to Sellers for the use, forbearance, or detention
of  the  indebtedness  of  Maker  to  Sellers  shall, to the extent permitted by
applicable  law,  be  amortized,  prorated, allocated, and spread throughout the
Full  term  of  such  indebtedness  until  payment  in  full so that the rate of
interest  on account of such indebtedness is uniform throughout the term thereof
The  provisions of this paragraph shall control all agreements between Maker and
Sellers.

     Section IV.     Security for Obligations
                     ------------------------

          Payment,  of  this  Note  is  secured  by  the  following:

                                        3
<PAGE>
          (a)     A Guaranty Agreement of even date herewith from C & B / Cotton
Holdings,  Inc  and  Crochet  &  Borel  Services,  Inc.;

          (b)     A  Guaranty  Agreement  of  even  date  herewith  from  Cotton
Holdings  1,  Inc.,  Cotton  Commercial  USA,  LP, Cotton Restoration of Central
Texas,  LP  and  all  of  the  other  Cotton  Group  Companies;

          (c)     A  Pledge  Agreement of even date herewith from C & B / Cotton
Holdings,  Inc.  covering  all  of  the  Cotton  Equity  Interests  owned by it;

          (d)     A  Security  Agreement  of  even  date  herewith  between  the
Sellers,  as  Lender,  and  C  &  B  / Cotton Holdings, Inc. and Crochet & Borel
Services,  Inc.,  as  Debtors;  and

          (e)     A Security Agreement of even date herewith between Sellers, as
Lender,  and  Cotton  Holdings  1,  Inc.,  Cotton  Commercial  USA,  LP,  Cotton
Restoration of Central Texas, LP and all of the other Cotton Group Companies, as
Debtor.

     Section V.     General Provisions
                    ------------------

     Time  is of the essence of this Note and, in case this Note is collected by
law or through an attorney at law, or under advice herefrom, Maker agrees to pay
all  costs  of  collection,  including  reasonable attorneys' fees and expenses.

     This  Note  is  a  "Negotiable Instrument" pursuant to Section 9.401 of the
Texas  Business  &  Commerce  Code,  as  amended.

     Sellers  may transfer, sell or assign this Note or his rights hereunder, in
whole  or  part,  without  the  requirement  of  the  consent  of  Maker.

     Sellers  will  execute  this  Note  for  the  purpose  of acknowledging the
provisions hereof and his receipt of the Note, but the execution of this Note by
Sellers shall in no event be deemed to constitute Sellers as an endorser of this
Note.

     Each Maker, borrower, guarantor, surety and endorser of this Note, and each
party  hereafter  assuming or otherwise becoming liable hereon: (i) agree to any
substitution,  exchange or release of any collateral or security and the release
of  any  party  primarily  or  secondarily liable hereon; (ii) agree that Lender
shall  not  be  required  first to institute suit or exhaust its remedies hereon
against  the M or others liable or to become liable hereon or enforce its rights
against  any  security  herewith in order to enforce payment of this Note by it;
and  (iii)  consent  to  any extensions, modification or postponement of time of
payment  of  this  Note  and to any other indulgence with respect hereto without
notice  thereof  to  any  of  them.

     In  addition  to  all  principal  and  accrued interest on this Note, Maker
agrees  to  pay (a) all reasonable costs and expenses incurred by Sellers in any
reorganization,  bankruptcy  or  any  other proceedings for the establishment or
collection  of this Note, and (b) all reasonable attorneys' fees if this Note is
placed  in  the  hands  of  an  attorney  for  collection  after  default.

                                        4
<PAGE>
     This  Note  may  not  be  amended, extended, or renewed except by a written
instrument  signed  by  Maker  and  Sellers.

     THIS  NOTE,  AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
(WITHOUT  REGARD  TO  PRINCIPLES  OF  CONFLICT  OF  LAWS).

     [SIGNATURE PAGE FOLLOWS]

                                        5
<PAGE>
     IN  WITNESS  WHEREOF,  the  undersigned  Maker  has  hereunto executed this
instrument  as  of  the  day  and  year  first  above  written.

                                   MAKER:

                                   CHARYS HOLDING COMPANY, INC.

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

ACCEPTED BY THE SELLERS:

/s/Peter Bell
-------------------------
Peter Bell

/s/Daryn Ebrecht
-------------------------
Daryn Ebrecht

/s/Bryan Michalsky
-------------------------
Bryan Michalsky

/s/Frank Blakely Stansell
-------------------------
Frank Blakely Stansell

/s/Chad Weigman
-------------------------
Chad Weigman

/s/Randall Thompson
-------------------------
Randall Thompson

/s/James Scaife
-------------------------
James Scaife

/s/Russell White
-------------------------
Russell White

/s/Johnny Slaughter
-------------------------
Johnny Slaughter

                                        6
<PAGE>
<TABLE>
<CAPTION>
                                    EXHIBIT A
                                    ---------
                           SELLER ALLOCATION SCHEDULE
--------------------------------------------------------------------------------
SELLER NAME             ALLOCATED SECURITY                       NOTE PRINCIPAL
----------------------  ---------------------------------------  ---------------
<S>                     <C>                                      <C>
Peter Bell              174 shares of stock of Cotton            $  3,337,368.77
                        Holdings 1, Inc., and 33.37% of all
                        other security

----------------------  ---------------------------------------  ---------------
Daryn Ebrecht           174 shares of stock of Cotton            $  3,337,368.77
                        Holdings 1, Inc., and 33.37% of all
                        other security

----------------------  ---------------------------------------  ---------------
Bryan Michalsky         12 shares of stock of Cotton             $    570,382.01
                        Holdings 1, Inc., and 5.71% of all
                        other security

----------------------  ---------------------------------------  ---------------
Randall Thompson        20 shares of stock of Cotton             $    435,930.31
                        Holdings 1, Inc., and 4.36% of all
                        other security

----------------------  ---------------------------------------  ---------------
James Scaife            20 shares of stock of Cotton             $    435,930.23
                        Holdings 1, Inc., and 4.36% of all
                        other security

----------------------  ---------------------------------------  ---------------
Chad Weigman            A 2.0% limited partnership interest      $    545,056.08
                        in Cotton Commercial USA, LP, and
                        5.45% of all other security

----------------------  ---------------------------------------  ---------------
Frank Blakely Stansell  A 7.0% limited partnership interest in   $  1,185,658.92
                        Cotton Commercial USA, LP, and
                        11.86% of all other security

----------------------  ---------------------------------------  ---------------
Johnny Slaughter        A 2.0% limited partnership interest in   $     76,152.45
                        Cotton Restoration of Central Texas,
                        LP, and 0.76% of all other security

----------------------  ---------------------------------------  ---------------
Russell White           A 2.0% limited partnership interest in   $     76,152.45
                        Cotton Restoration of Central Texas,
                        LP, and 0.76%, of all other security

----------------------  ---------------------------------------  ---------------

----------------------  ---------------------------------------  ---------------
TOTALS                  100.00%                                  $    10,000,000

--------------------------------------------------------------------------------
</TABLE>

By  executing  this  Note, all of the Sellers agree to share in the principal of
this  Note  (and all interest thereon, respectively and pro-rata) in the amounts
set  forth above, and to allocate the security that secures payment of this Note
as  set  forth  above.

                                        7
<PAGE>
                                    EXHIBIT D
                                    ---------

                                    [OMITTED]

<PAGE>
                                    EXHIBIT E
                                    ---------

                                    [OMITTED]

<PAGE>
                                   EXHIBIT F-1
                                   -----------

                                    [OMITTED]

<PAGE>
                                   EXHIBIT F-2
                                   -----------

                                   [OMITTED]

<PAGE>
                                    EXHIBIT G
                                    ---------

                                   [OMITTED]

<PAGE>
                                    EXHIBIT H
                                    ---------

                                   [OMITTED]

<PAGE>
                               SCHEDULE 2.06(A)(1)

                           INCENTIVE COMPENSATION(1)

On  the date that is 30 days following the issuance of Purchaser's Form 10K (the
"Incentive Bonus Date") for the fiscal years 2007, 2008 and 2009 (each such year
 --------------------
being  a  "Performance Year"), the board of directors of Purchaser (the "Board")
           ----------------                                              -----
shall  pay  to the Sellers a bonus based on a comparison of the audited year-end
financials  of  the  Cotton  Group  Companies to the projected financials of the
Cotton  Group  Companies.  Based  on the results of such comparison, the Sellers
may  be  eligible  for  an  incentive  bonus  calculated  as  follows:

1.     For  each  Performance Year, the total amount of the bonus pool available
shall  be  equal  to  25%  of  the  audited  pre-tax  income of the Cotton Group
Companies  for  such  Performance  Year  (the  "Bonus  Pool  Amount").
                                                -------------------

2.     The  aggregate  amount  of incentive bonuses payable for each Performance
Year  shall  be  an amount equal to (a) the Bonus Pool Amount, multiplied by (b)
the  percentage  set  forth in the table below opposite the applicable Financial
Performance  Target,  calculated  as  set  forth  herein.

<TABLE>
<CAPTION>
<S>                                                                 <C>
Actual Performance < 5% Financial Performance Target                0%
Actual Performance  5% but < 20% Financial Performance Target       5%
Actual Performance  20% but < 35% Financial Performance Target      20%
Actual Performance  35% but < 50% Financial Performance Target      35%
Actual Performance  50% but < 65% Financial Performance Target      50%
Actual Performance  65% but < 80% Financial Performance Target      70%
Actual Performance  80% but < 90% Financial Performance Target      90%
Actual Performance  90% but < 100% Financial Performance Target     100%
Actual Performance  100% but < 110% Financial Performance Target    110%
Actual Performance  110% Financial Performance Target               120%
</TABLE>

3.     The  "Financial  Performance  Target" shall be an amount equal to (i) the
             ------------------------------
sum of the (x) Revenue Factor, (y) EBITDA Factor, and (z) Net Income Factor, for
each  Performance  Year,  as  set  forth  below:

<TABLE>
<CAPTION>
PERFORMANCE YEAR  PROJECTED REVENUE   PROJECTED EBITDA   PROJECTED NET
                                                             INCOME
-----------------------------------------------------------------------
<S>               <C>                 <C>                <C>
    FY 2007         $86,000,000.00     $20,300,000.00    $19,700,000.00
    FY 2008        $121,000,000.00     $29,025,000.00    $29,025,000.00
    FY 2009        $155,000,000.00     $40,375,000.00    $39,125,000.00
</TABLE>

-----------------------------
     (1)     To be allocated pro rata with Troy Crochet and certain employees of
Crochet & Borel Services, Inc., as agreed by the Sellers and Troy Crochet.

<PAGE>
4.     "Actual  Performance"  shall  be an amount equal to the sum of actual (i)
Revenue  Factor,  (ii)  EBITDA  Factor  and  (iii)  Net  Income  Factor, for any
Performance  Year.

5.     The  Revenue Factor, the EBITDA Factor and the Net Income Factor shall be
calculated  in  accordance  with  GAAP.

Any  bonus  due  shall  be  payable  in cash, to the extent such cash payment is
permitted  under  the  loan  agreements  to which the Cotton Group Companies and
Purchaser  are  a party.  If such agreements do not permit payment of such bonus
in  cash,  then the bonus shall be paid in shares of Charys common stock, at the
Market Price as of the last trading day of the applicable Performance Year.

     For  purposes  of  this  Exhibit  A,  the  terms set forth above shall mean
                              ----------
     as  follows:

          (i)  Revenue  Factor shall be a percentage equal to the product of (x)
               ---------------
               forty percent (40%) multiplied by (y) a fraction the numerator of
               which  is  the  Cotton  Group  Companies'  actual  revenues for a
               Performance Year and the denominator of which is the Cotton Group
               Companies'  projected revenues for such corresponding Performance
               Year.

          (ii) EBITDA  Factor shall be a percentage equal to, the product of (x)
               --------------
               fifty percent (50%) multiplied by (y) a fraction the numerator of
               which  is  the  Cotton  Group  Companies'  actual  EBITDA  for  a
               Performance Year and the denominator of which is the Cotton Group
               Companies'  projected  EBITDA  for such corresponding Performance
               Year.

         (iii) Net Income Factor  shall be a percentage equal to, the product of
               -----------------
               (x)  ten percent (10%) multiplied by (y) a fraction the numerator
               of  which  is  the Cotton Group Companies' actual audited pre-tax
               net income for a Performance Year and the denominator of which is
               the Cotton Group Companies' projected pre-tax net income for such
               corresponding  Performance  Year.

<PAGE>
EXAMPLE  CALCULATION
--------------------

By  way  of  example,  and  for  illustrative purposes only, the following model
depicts  the  manner  in  which  the  bonus  shall  be  calculated  for a single
Performance  Year.  The  numbers and assumptions used herein are not intended to
be  the  final  projections  or  Bonus Pool Amount for purposes of this Schedule
                                                                        --------
2.06(1).
-------

<TABLE>
<CAPTION>
PERFORMANCE YEAR  PROJECTED REVENUE   PROJECTED EBITDA     PROJECTED NET
                                                               INCOME
---------------------------------------------------------------------------
<S>               <C>                 <C>                <C>
    FY 2007           $5,000,000         $1,000,000           $500,000
---------------------------------------------------------------------------
PERFORMANCE YEAR    ACTUAL REVENUE      ACTUAL EBITDA    ACTUAL NET INCOME
---------------------------------------------------------------------------
    FY 2007           $6,000,000          $800,000            $250,000
</TABLE>

Whereby:

1)   Revenue Factor = 48%; EBITDA Factor = 40%; Net Income Factor=5%

2)   Calculation Value = 48% + 40% + 5% = 93%

3)   Incentive Bonus payable based on a calculation value of 93% = $58,125

<PAGE>
                               SCHEDULE 2.06(A)(2)

                               INCENTIVE EMPLOYEES

<PAGE>
                                SCHEDULE 2.06(B)

                       INTEGRATION INCENTIVE COMPENSATION(2)

During  the  period  beginning  on  the  Closing  Date  and  ending on the third
anniversary  of  the  Closing  Date  (the  "Integration  Incentive Period"), the
                                            -----------------------------
Sellers  shall  be  entitled  to  additional  equity  compensation determined in
accordance  with  the  following  provisions:

1.     As soon as reasonably practicable following the Closing Date, the Sellers
shall  provide  to  the  Purchaser  a schedule identifying potential acquisition
targets  conducting  business  similar  to  the  Cotton  Group  Business  (the
"Acquisition  Targets" and each, an "Acquisition Target").  For each Acquisition
 --------------------                ------------------
Target,  the  Sellers  shall  identify  the  target  annual revenue (the "Target
                                                                          ------
Revenue")  of  such  Acquisition  Target.
-------

2.     On  the  third  anniversary  of  the  Closing  Date, the Sellers shall be
entitled  to  a bonus calculated as follows, payable in cash or shares of shares
of  Charys  common  stock,  in  Purchaser's  discretion:  (A)  Bonus Multiplier,
multiplied  by  (B)  the  Integration  Bonus  Pool.
--------------

The  term  "Bonus  Multiplier" means a percentage, (A) the numerator of which is
            -----------------
the  actual  aggregate  revenue  for  all  Acquisition Targets measured over the
trailing  twelve  months  from Charys' fiscal year end in the year in which such
Acquisition Target is acquired (or, if the target is acquired in September 2006,
the  actual revenue of the Acquisition Target from 5-1-06 thru 4-31-07), and (B)
the  denominator  of  which  is the aggregate Target Revenue for all Acquisition
Targets. An example calculation of the Bonus Multiplier is as follows:

<TABLE>
<CAPTION>
                          First Year
          Projected         Actual
           Millions    in year acquired
----------------------------------------
<S>       <C>         <C>
Target A  $       30  $              20
Target B  $       20  $              20
Target C  $      100  $             110
Target D  $       40  Did not acquire
Target E  $       10  $              40
----------------------------------------
          $      200  $             190

Limit                             95.00%
----------------------------------------
</TABLE>

<PAGE>
The term "Integration Bonus Pool" means the aggregate audited pre-tax revenue of
          ----------------------
all  Acquisition  Targets  during  the Integration Incentive Period.  An example
calculation of the Integration Bonus Pool follows:

<TABLE>
<CAPTION>
                                           Actual
                                          Pre-tax
                                           Year 1   Year 2   Year 3
--------------------------------------------------------------------
<S>                                       <C>       <C>      <C>
Target A                                  $      3      -$1      -$2
Target B                                  $      2  $     2  $     1
Target C                                            $    15  $    17
Target D
Target E                                                     $    15
--------------------------------------------------------------------
                                          $      5  $    16  $    31

Pool                                      $      1  $     4  $     8

Total pool payable at end of year three                      $    13
amount earned limited to 95%                                 $ 12.35
--------------------------------------------------------------------
</TABLE>

<PAGE>
                                  SCHEDULE 6.13

                               SPIN-OFF AGREEMENT

The  following  general  terms and conditions shall be more fully reflected in a
definitive  agreement  to  be  negotiated  in  good  faith  and,  if  reasonably
acceptable  to  both  Purchaser  and  the  Sellers, executed, on or prior to the
Closing  Date.

  -  Purchaser  shall maintain separate books and records and separately audited
     financial  statements  for  a  to-be-formed  holding  company  holding (the
     "Disaster  Remediation  Holding Company") all of Purchaser's current future
     subsidiaries  operating in the Disaster Remediation industry (the "Disaster
     Remediation  Businesses")  during  the  period beginning on the Closing and
     ending  on  the third anniversary of the Closing (the "Preparation Period")
     and  during  the  period ending on the third anniversary of the Closing and
     ending  on  the  sixth  anniversary  of  the Closing (the "Option Period").

  -  During  the Option Period, Sellers, collectively with the management of all
     of  Purchaser's Disaster Remediation Businesses (collectively with Sellers,
     the  "Disaster  Remediation  Management  Team"),  may  cause  Purchaser  to
     effectuate  a  spin-off  of  the  Disaster  Remediation  Holding Company (a
     "Spin-Off  Transaction")  into  a  separate publicly-traded entity provided
     that  the  conditions  set  forth  in  the  following  section  are  met.

  -  The Disaster  Remediation  Management  Team  may  only  cause  Purchaser to
     effectuate  a  Spin-Off  Transaction in the event that (a) during the three
     year  period  prior  to  the  Disaster  Remediation  Management  Team's
     notification  of  its intent to effectuate a spin-off (the "Spin-Off Notice
     Date")  the  aggregate  net  revenue  of  the  Disaster Remediation Holding
     Company  was  greater  than  or equal to $750,000,000, (b) during the three
     year  period  prior to the Spin-Off Notice Date, the aggregate net earnings
     of  the  Disaster  Remediation Holding Company are greater than or equal to
     $150,000,000,  (c)  the  Disaster  Remediation Management Team collectively
     hold  in  excess  of 10,000,000 shares of Charys' common stock, and (d) the
     per  share Market Price of Charys' common stock for twenty (20) consecutive
     trading  days  prior  to  the  Spin-Off Notice Date is in excess of $20 per
     share,  adjusted  for any splits or dividends occurring between the Closing
     Date  and  the  Spin-Off  Notice  Date.

  -  The  Spin-Off  Transaction  shall  be  effectuated  by  granting  to  each
     shareholder  of  Purchaser  as  of  the  effective  date  of  the  Spin-Off
     Transaction  one publicly traded share of the Corporation for each share of
     Purchaser  Stock held by such Shareholder. Simultaneously with the issuance
     of  such  shares,  each  member of the Disaster Remediation Management Team
     shall  tender  to  Purchaser  not  less than 80% of the shares of Purchaser
     Stock  held  by  such member of the Disaster Remediation Management Team in
     exchange  for an equal number of shares of the Disaster Remediation Holding
     Company.NOTE AND WARRANT PURCHASE

                                    AGREEMENT

                          DATED AS OF DECEMBER 4, 2006

                                  BY AND AMONG

                          CHARYS HOLDING COMPANY, INC.

                                       AND

                       THE PURCHASERS LISTED ON EXHIBIT A

<PAGE>
<TABLE>
<CAPTION>
                                 TABLE OF CONTENTS

<S>                                                                            <C>
                                                                               Page
                                                                               ----

ARTICLE I     PURCHASE AND SALE OF NOTES AND WARRANTS . . . . . . . . . . . . .   1
     Section 1.1     Purchase and Sale of Notes and Warrants. . . . . . . . . .   1
     Section 1.2     Purchase Price and Closing . . . . . . . . . . . . . . . .   2
     Section 1.3     Conversion Shares / Warrant Shares . . . . . . . . . . . .   2

ARTICLE II     REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .   3
     Section 2.1     Representations and Warranties of the Company. . . . . . .   3
     Section 2.2     Representations and Warranties of the Purchasers . . . . .  13

ARTICLE III     COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
     Section 3.1     Securities Compliance. . . . . . . . . . . . . . . . . . .  15
     Section 3.2     Registration and Listing . . . . . . . . . . . . . . . . .  15
     Section 3.3     Inspection Rights. . . . . . . . . . . . . . . . . . . . .  15
     Section 3.4     Compliance with Laws . . . . . . . . . . . . . . . . . . .  16
     Section 3.5     Keeping of Records and Books of Account. . . . . . . . . .  17
     Section 3.6     Reporting Requirements . . . . . . . . . . . . . . . . . .  17
     Section 3.7     Other Agreements . . . . . . . . . . . . . . . . . . . . .  16
     Section 3.8     Use of Proceeds. . . . . . . . . . . . . . . . . . . . . .  16
     Section 3.9     Reporting Status . . . . . . . . . . . . . . . . . . . . .  16
     Section 3.10    Disclosure of Transaction. . . . . . . . . . . . . . . . .  17
     Section 3.11    Disclosure of Non-Public Material Information. . . . . . .  18
     Section 3.12    Pledge of Securities . . . . . . . . . . . . . . . . . . .  17
     Section 3.13    Amendments . . . . . . . . . . . . . . . . . . . . . . . .  17
     Section 3.14    Distributions. . . . . . . . . . . . . . . . . . . . . . .  17
     Section 3.15    Reservation of Shares. . . . . . . . . . . . . . . . . . .  17
     Section 3.16    Transfer Agent Instructions. . . . . . . . . . . . . . . .  18
     Section 3.17    Disposition of Assets. . . . . . . . . . . . . . . . . . .  18
     Section 3.18    Form SB-2 Eligibility. . . . . . . . . . . . . . . . . . .  18
     Section 3.19    Subsequent Financings. . . . . . . . . . . . . . . . . . .  18

ARTICLE IV     CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
     Section 4.1     Conditions Precedent to the Obligation of the Company
                     to Close and to Sell the Securities. . . . . . . . . . . .  21
     Section 4.2     Conditions Precedent to the Obligation of the Purchasers
                     to Close and to Purchase the Securities. . . . . . . . . .  22

ARTICLE V     CERTIFICATE LEGEND. . . . . . . . . . . . . . . . . . . . . . . .  24
     Section 5.1     Legend . . . . . . . . . . . . . . . . . . . . . . . . . .  24

ARTICLE VI     INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .  25
     Section 6.1     Company Indemnity. . . . . . . . . . . . . . . . . . . . .  25
     Section 6.2     Indemnification Procedure. . . . . . . . . . . . . . . . .  25

<PAGE>
                                 TABLE OF CONTENTS
                                    (continued)

                                                                               Page
                                                                               ----

ARTICLE VII     MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 26
     Section 7.1     Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 26
     Section 7.2     Specific Performance; Consent to Jurisdiction; Venue. . . . 27
     Section 7.3     Entire Agreement; Amendment . . . . . . . . . . . . . . . . 27
     Section 7.4     Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 27
     Section 7.5     Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 28
     Section 7.6     Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 29
     Section 7.7     Successors and Assigns. . . . . . . . . . . . . . . . . . . 29
     Section 7.8     No Third Party Beneficiaries. . . . . . . . . . . . . . . . 29
     Section 7.9     Governing Law . . . . . . . . . . . . . . . . . . . . . . . 29
     Section 7.10    Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 29
     Section 7.11    Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 29
     Section 7.12    Publicity. .  . . . . . . . . . . . . . . . . . . . . . . . 29
     Section 7.13    Severability. . . . . . . . . . . . . . . . . . . . . . . . 29
     Section 7.14    Further Assurances. . . . . . . . . . . . . . . . . . . . . 29
</TABLE>

<PAGE>
                       NOTE AND WARRANT PURCHASE AGREEMENT

     This NOTE AND WARRANT PURCHASE AGREEMENT dated as of December 4, 2006 (this
"Agreement")  by  and among Charys Holding Company, Inc., a Delaware corporation
 ---------
(the  "Company"),  and  each  of  the purchasers of the subordinated convertible
       -------
promissory  notes of the Company whose names are set forth on Exhibit A attached
                                                              ---------
hereto  (each  a  "Purchaser"  and  collectively,  the  "Purchasers").
                   ---------                             ----------

     The  parties  hereto  agree  as  follows:

                                    ARTICLE I

                     PURCHASE AND SALE OF NOTES AND WARRANTS

          Section  1.1     Purchase  and  Sale  of  Notes  and  Warrants.
                           ---------------------------------------------

          (a)     Upon  the  following  terms  and conditions, the Company shall
issue  and  sell  to  the  Purchasers, and the Purchasers shall purchase (in the
amounts  set  forth  as  Exhibit  A  hereto)  from  the  Company,  subordinated
                         ----------
convertible  promissory notes in the aggregate principal amount of up to Fifteen
Million  Dollars  ($15,000,000), convertible into shares of the Company's common
stock,  par  value  $0.001  per share (the "Common Stock"), in substantially the
                                            ------------
form attached hereto as Exhibit B (the "Notes").  The Company and the Purchasers
                        ---------       -----
are  executing  and delivering this Agreement in accordance with and in reliance
upon  the exemption from securities registration afforded by Section 4(2) of the
U.S.  Securities  Act  of  1933,  as  amended,  and  the  rules  and regulations
promulgated  thereunder  (the  "Securities  Act"),  including  Regulation  D
                                ---------------
("Regulation  D"),  and/or  upon  such  other  exemption  from  the registration
  -------------
requirements  of  the  Securities Act as may be available with respect to any or
all  of  the  investments  to  be  made  hereunder.

          (b)     Upon  the following terms and conditions and for no additional
consideration,  each of the Purchasers shall be issued (i) Series A Warrants, in
substantially the form attached hereto as Exhibit C-1 (the "Series A Warrants"),
                                          -----------       -----------------
to  purchase  the number of shares of Common Stock equal to seventy-five percent
(75%)  of  the  number  of  Conversion  Shares (as defined in Section 1.3 below)
issuable  upon  conversion  of the Notes purchased by each Purchaser pursuant to
the  terms  of  this  Agreement,  as set forth opposite such Purchaser's name on
Exhibit  A  hereto,  (ii)  Series B Warrants, in substantially the form attached
----------
hereto  as  Exhibit C-2  (the "Series B Warrants"),  to  purchase  the number of
            -----------        -----------------
shares  of  Common  Stock  equal  to seventy-five percent (75%) of the number of
Conversion  Shares  issuable  upon  conversion  of  the  Notes purchased by each
Purchaser  pursuant  to  the terms of this Agreement, as set forth opposite such
Purchaser's  name on Exhibit A hereto, (iii) Series J Warrants, in substantially
                                             -----------------
the  form  attached hereto as Exhibit C-3 (the "Series J Warrants"), to purchase
                              -----------       -----------------
the  number of shares of Common Stock equal to one hundred percent (100%) of the
number  of  Conversion Shares issuable upon conversion of the Notes purchased by
each Purchaser, as set forth opposite such Purchaser's name on Exhibit A hereto,
                                                               ---------
(iv) Series C Warrants, in substantially the form attached hereto as Exhibit C-4
                                                                     -----------
(the  "Series  C  Warrants"),  to  purchase the number of shares of Common Stock
       -------------------
equal  to seventy-five percent (75%) of the number of Conversion Shares issuable
upon

                                        1
<PAGE>
conversion  of  the  Notes  purchased by each Purchaser pursuant to the terms of
this Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto,
                                                               ---------
and  (v) Series D Warrants, in substantially the form attached hereto as Exhibit
                                                                         -------
C-5  (the "Series D Warrants"  and,  together  with  the  Series A Warrants, the
---        -----------------
Series B Warrants, the  Series  J  Warrants  and  the  Series  C  Warrants,  the
"Warrants"),  to  purchase  the  number  of  shares  of  Common  Stock  equal to
 --------
seventy-five  percent  (75%)  of  the  number of Conversion Shares issuable upon
conversion  of  the  Notes  purchased by each Purchaser pursuant to the terms of
this Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto.
                                                               ---------
Notwithstanding  the  foregoing to the contrary, each of the Purchasers shall be
issued  Series  J Warrants, Series C Warrants and Series D Warrants only if such
Purchaser's  aggregate  investment  in  the  Company is equal to or greater than
$10,000,000  (including only such Purchaser's investment amount for the purchase
of  Notes  pursuant to this Agreement plus such Purchaser's investment amount in
the subordinated convertible note financing that closed on August 31, 2006). The
Warrants  shall expire five (5) years following the Closing Date, except for the
Series  J  Warrants,  which  shall  expire nine (9) months following the Closing
Date.  Each  of the Warrants shall have an exercise price per share equal to the
Warrant  Price  (as  defined  in  the  applicable  Warrant).

          Section  1.2     Purchase Price and Closing.  Subject to the terms and
                           --------------------------
conditions  hereof,  the Company agrees to issue and sell to the Purchasers and,
in  consideration  of  and  in  express  reliance  upon  the  representations,
warranties,  covenants,  terms and conditions of this Agreement, the Purchasers,
severally  but  not  jointly,  agree  to  purchase the Notes and Warrants for an
aggregate  purchase  price  of  up to Fifteen Million Dollars ($15,000,000) (the
"Purchase  Price").  The  closing  of  the  purchase  and  sale of the Notes and
   -------------
Warrants  to be acquired by the Purchasers from the Company under this Agreement
   ---
shall  take  place  at  the offices of Kramer Levin Naftalis & Frankel LLP, 1177
Avenue  of the Americas, New York, New York 10036 (the "Closing") at 10:00 a.m.,
                                                        -------
New  York  time  (i)  on  or  before December 4, 2006; provided, that all of the
                                                       --------
conditions  set  forth  in Article IV hereof and applicable to the Closing shall
have been fulfilled or waived in accordance herewith, or (ii) at such other time
and  place  or on such date as the Purchasers and the Company may mutually agree
upon  (the  "Closing  Date").  Subject  to  the  terms  and  conditions  of this
             -------------
Agreement,  at the Closing the Company shall deliver or cause to be delivered to
each  Purchaser  (x)  its  Notes for the principal amount set forth opposite the
name  of  such  Purchaser on Exhibit A hereto, (y) its Warrants to purchase such
                             ---------
number  of  shares  of  Common  Stock  as is set forth opposite the name of such
Purchaser  on  Exhibit A attached hereto and (z) any other documents required to
               ---------
be  delivered  pursuant  to  Article  IV hereof.  At the Closing, each Purchaser
shall  deliver  its  Purchase  Price  by  wire  transfer  to  an  escrow account
designated  by  the  escrow  agent.

          Section 1.3     Conversion Shares / Warrant Shares.  As of the Closing
                          ----------------------------------
Date,  the  Company has authorized and has reserved and covenants to continue to
reserve,  free  of  preemptive  rights  and  other similar contractual rights of
stockholders,  a  sufficient  number  of  its  authorized but unissued shares of
Common  Stock to effect the conversion of the Notes and exercise of the Warrants
as  of the Closing Date.  Any shares of Common Stock issuable upon conversion of
the  Notes  are  herein  referred  to as the "Conversion Shares".  Any shares of
                                              -----------------
Common  Stock  issuable  upon  exercise  of  the  Warrants (and such shares when
issued)  are  herein  referred  to  as  the  "Warrant  Shares".  The  Notes, the
                                              ---------------
Warrants,  the  Conversion  Shares  and  the  Warrant  Shares  are  sometimes
collectively  referred  to  herein  as  the  "Securities".
                                              ----------

                                        2
<PAGE>
                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

          Section  2.1     Representations  and  Warranties of the Company.  The
                           -----------------------------------------------
Company  hereby represents and warrants to the Purchasers, as of the date hereof
and the Closing Date (except as set forth on the Schedule of Exceptions attached
hereto  with each numbered Schedule corresponding to the section number herein),
as  follows:

          (a)     Organization,  Good  Standing  and  Power.  The  Company  is a
                  -----------------------------------------
corporation  duly  incorporated, validly existing and in good standing under the
laws  of  the  State  of Delaware  and has the requisite corporate power to own,
lease and operate its properties and assets and to conduct its business as it is
now  being conducted.  The Company does not have any Subsidiaries (as defined in
Section  2.1(g)) or own securities of any kind in any other entity except as set
forth  on  Schedule  2.1(g)  hereto.  The  Company  and each such Subsidiary (as
           ----------------
defined  in  Section  2.1(g))  is  duly qualified as a foreign corporation to do
business  and  is  in good standing in every jurisdiction in which the nature of
the  business  conducted  or  property  owned  by  it  makes  such qualification
necessary  except  for  any jurisdiction(s) (alone or in the aggregate) in which
the failure to be so qualified will not have a Material Adverse Effect.  For the
purposes of this Agreement, "Material Adverse Effect" means any material adverse
                             -----------------------
effect  on  the  business, operations, properties, or financial condition of the
Company  and  its  Subsidiaries and/or any condition, circumstance, or situation
that  would  prohibit  or otherwise materially interfere with the ability of the
Company  to  perform any of its obligations under this Agreement in any material
respect.

          (b)      Authorization;  Enforcement.  The  Company  has the requisite
                  ----------------------------
corporate  power  and  authority to enter into and perform its obligations under
this  Agreement,  the  Notes, the Warrants, the Registration Rights Agreement by
and  among  the  Company  and  the  Purchasers,  dated  as  of  the date hereof,
substantially in the form of Exhibit D attached hereto (the "Registration Rights
                             ---------                       -------------------
Agreement"),  the  Escrow Agreement by and among the Company, the Purchasers and
---------
the  escrow  agent,  dated  as  of the date hereof, substantially in the form of
Exhibit E attached hereto (the "Escrow Agreement"), and the Irrevocable Transfer
---------                       ----------------
Agent  Instructions  (as  defined  in  Section  3.16  hereof) (collectively, the
"Transaction Documents") and to issue and sell the Securities in accordance with
 ---------------------
the  terms  hereof.  The  execution, delivery and performance of the Transaction
Documents  by  the  Company  and  the  consummation  by  it  of the transactions
contemplated  thereby  have  been  duly  and validly authorized by all necessary
corporate  action,  and,  except  as  set  forth  on Schedule 2.1(b), no further
                                                     ---------------
consent  or authorization of the Company, its Board of Directors or stockholders
is  required.  When  executed  and  delivered  by  the  Company,  each  of  the
Transaction  Documents  shall  constitute  a valid and binding obligation of the
Company  enforceable against the Company in accordance with its terms, except as
such  enforceability  may  be  limited by applicable bankruptcy, reorganization,
moratorium,  liquidation, conservatorship, receivership or similar laws relating
to, or affecting generally the enforcement of, creditor's rights and remedies or
by  other  equitable  principles  of  general  application.

          (c)     Capitalization.  The  authorized  capital stock of the Company
                  --------------
as  of  the  date  hereof  is  set  forth on Schedule 2.1(c) hereto.  All of the
                                             ---------------
outstanding shares of the Common Stock and any other outstanding security of the
Company  have  been  duly  and  validly  authorized  and

                                        3
<PAGE>
validly  issued, fully paid and nonassessable and were issued in accordance with
the  registration or qualification provisions of the Securities Act, or pursuant
to valid exemptions therefrom.  Except as set forth in this Agreement and as set
forth on Schedule 2.1(c) hereto, no shares of Common Stock or any other security
         ---------------
of the Company are entitled to preemptive rights, registration rights, rights of
first  refusal or similar rights and there are no outstanding options, warrants,
scrip,  rights  to subscribe to, call or commitments of any character whatsoever
relating  to,  or  securities  or rights convertible into, any shares of capital
stock of the Company.  Furthermore, except as set forth in this Agreement and as
set  forth  on  Schedule  2.1(c)  hereto,  there  are no contracts, commitments,
                ----------------
understandings,  or  arrangements by which the Company is or may become bound to
issue  additional  shares  of  the  capital  stock  of  the  Company or options,
securities  or  rights  convertible into shares of capital stock of the Company.
Except  for customary transfer restrictions contained in agreements entered into
by the Company in order to sell restricted securities or as provided on Schedule
                                                                        --------
2.1(c)  hereto,  the  Company  is  not  a  party to or bound by any agreement or
------
understanding  granting  registration or anti-dilution rights to any person with
------
respect  to  any  of  its  equity  or  debt  securities.  Except as set forth on
Schedule  2.1(c), the Company is not a party to, and it has no knowledge of, any
----------------
agreement  or  understanding restricting the voting or transfer of any shares of
the  capital  stock of the Company.  Except as disclosed on Schedule 2.1(c), (i)
                                                            ---------------
there  are no outstanding debt securities, or other form of material debt of the
Company  or  any  of its Subsidiaries, (ii) there are no contracts, commitments,
understandings, agreements or arrangements under which the Company or any of its
Subsidiaries  is  required to register the sale of any of their securities under
the  Securities Act, (iii) there are no outstanding securities of the Company or
any  of its Subsidiaries which contain any redemption or similar provisions, and
there  are no contracts, commitments, understandings, agreements or arrangements
by which the Company or any of its Subsidiaries is or may become bound to redeem
a  security  of  the  Company  or  any  of  its  Subsidiaries, (iv) there are no
securities  or  instruments  containing anti-dilution or similar provisions that
will  be  triggered  by the issuance of the Securities, (v) the Company does not
have  any  stock  appreciation rights or "phantom stock" plans or agreements, or
any  similar plan or agreement and (vi) as of the date of this Agreement, to the
Company's  and each of its Subsidiaries' knowledge, no Person (as defined below)
or  group  of  related Persons beneficially owns (as determined pursuant to Rule
13d-3  promulgated  under  the  Exchange  Act)  or  has  the right to acquire by
agreement  with  or by obligation binding upon the Company, beneficial ownership
of  in  excess of 5% of the Common Stock.  Any Person with any right to purchase
securities  of  the  Company  that  would  be  triggered  as  a  result  of  the
transactions  contemplated  hereby  or by any of the other Transaction Documents
has  waived  such rights or the time for the exercise of such rights has passed,
except  where  failure  of  the  Company to receive such waiver would not have a
Material  Adverse  Effect.  Except as set forth on Schedule 2.1(c), there are no
                                                   ---------------
options,  warrants  or  other  outstanding securities of the Company (including,
without  limitation,  any equity securities issued pursuant to any Company stock
option  plan)  the  vesting  of  which  will  be accelerated by the transactions
contemplated hereby or by any of the other Transaction Documents.  Except as set
forth  in  Schedule  2.1(c),  none  of  the  transactions  contemplated  by this
           ----------------
Agreement  or by any of the other Transaction Documents shall cause, directly or
indirectly,  the  acceleration  of  vesting  of  any options issued pursuant the
Company's  stock  option  plans.

          (d)     Issuance  of  Securities.  The  Notes  and  the Warrants to be
                  ------------------------
issued  at  the  Closing  have  been  duly authorized by all necessary corporate
action  and,  when  paid  for or issued in accordance with the terms hereof, the
Notes  shall  be  validly  issued  and  outstanding,  free  and

                                        4
<PAGE>
clear  of  all  liens, encumbrances and rights of refusal of any kind.  When the
Conversion  Shares and Warrant Shares are issued and paid for in accordance with
the  terms  of  this  Agreement and as set forth in the Notes and Warrants, such
shares  will  be  duly  authorized by all necessary corporate action and validly
issued  and  outstanding,  fully  paid  and nonassessable, free and clear of all
liens,  encumbrances  and rights of refusal of any kind and the holders shall be
entitled  to  all  rights  accorded  to  a  holder  of  Common  Stock.

          (e)     No  Conflicts.  The execution, delivery and performance of the
                  -------------
Transaction  Documents  by  the  Company,  the performance by the Company of its
obligations  under  the  Notes  and  the  consummation  by  the  Company  of the
transactions  contemplated  hereby  and  thereby, (including the issuance of the
Securities  as  contemplated hereby) do not and will not (i) violate or conflict
with  any  provision  of  the  Company's  Certificate  of  Incorporation  (the
"Certificate")  or  Bylaws  (the  "Bylaws"),  each  as  amended  to date, or any
 -----------                       ------
Subsidiary's  comparable  charter documents, (ii) conflict with, or constitute a
default  (or  an event which with notice or lapse of time or both would become a
default)  under,  or  give  to  others  any  rights  of  termination, amendment,
acceleration  or  cancellation  of,  any  agreement,  mortgage,  deed  of trust,
indenture,  note,  bond,  license,  lease agreement, instrument or obligation to
which  the Company or any of its Subsidiaries is a party or by which the Company
or  any of its Subsidiaries' respective properties or assets are bound, or (iii)
result  in  a  violation  of any federal, state, local or foreign statute, rule,
regulation,  order,  judgment  or decree (including federal and state securities
laws and regulations) applicable to the Company or any of its Subsidiaries or by
which  any property or asset of the Company or any of its Subsidiaries are bound
or  affected,  except,  with  respect  to  clauses (ii) and (iii) above for such
conflicts,  defaults,  terminations, amendments, acceleration, cancellations and
violations  as  would  not,  individually  or  in the aggregate, have a Material
Adverse  Effect  (excluding with respect to federal and state securities laws)).
Neither  the  Company  nor  any  of  its Subsidiaries is required under federal,
state,  foreign  or  local  law,  rule  or  regulation  to  obtain  any consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency  in  order for it to execute, deliver or perform any of its
obligations  under the Transaction Documents or issue and sell the Securities in
accordance with the terms hereof (other than any filings, consents and approvals
which  may  be  required  to  be  made by the Company under applicable state and
federal  securities  laws,  rules  or regulations or any registration provisions
provided  in  the  Registration  Rights  Agreement).

          (f)     Commission  Documents, Financial Statements.  The Common Stock
                  -------------------------------------------
of  the  Company  is  registered  pursuant  to  Section  12(b)  or  12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, except as
                                                  ------------
set  forth  on Schedule 2.1(f) hereto, the Company has timely filed all reports,
               ---------------
schedules, forms, statements and other documents required to be filed by it with
the  Commission  pursuant to the reporting requirements of the Exchange Act (all
of  the  foregoing  including  filings  incorporated  by reference therein being
referred  to  herein as the "Commission Documents").  Except as set forth in the
                             --------------------
Commission  Documents  filed  prior  to  the  date hereof, at the times of their
respective filings, the Form 10-QSB for the fiscal quarters ended July 31, 2006,
January  31, 2006 and October 31, 2005 (collectively, the "Form 10-QSB") and the
                                                           -----------
Form  10-KSB  for  the  fiscal  year ended April 30, 2006, as amended (the "Form
                                                                            ----
10-KSB") complied in all material respects with the requirements of the Exchange
------
Act  and the rules and regulations of the Commission promulgated thereunder, and
the  Form  10-QSB  and  Form  10-KSB  did  not contain any untrue statement of a
material  fact or omit to state a material fact required to be stated therein or
necessary  in  order  to  make  the  statements  therein,  in  light  of  the

                                        5
<PAGE>
circumstances  under  which  they  were  made,  not  misleading.  As  of  their
respective  dates,  the  financial  statements  of  the  Company included in the
Commission  Documents  complied  as  to  form  in  all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the Commission.  Such financial statements have been prepared in accordance with
generally  accepted accounting principles ("GAAP") applied on a consistent basis
                                            ----
during  the  periods  involved (except (i) as may be otherwise indicated in such
financial  statements  or  the  notes  thereto  or (ii) in the case of unaudited
interim  statements,  to  the  extent  they  may not include footnotes or may be
condensed  or  summary  statements), and fairly present in all material respects
the  financial  position  of  the  Company  and its Subsidiaries as of the dates
thereof  and the results of operations and cash flows for the periods then ended
(subject,  in  the  case  of  unaudited  statements,  to  normal  year-end audit
adjustments).

          (g)     Subsidiaries.  Schedule  2.1(g)  hereto  sets  forth  each
                  ------------   ----------------
Subsidiary  of  the  Company,  showing  the jurisdiction of its incorporation or
organization  and  showing  the  percentage  of  each  person's ownership of the
outstanding  stock  or  other interests of such Subsidiary.  For the purposes of
this Agreement, "Subsidiary" shall mean any corporation or other entity of which
                 ----------
at  least a majority of the securities or other equity ownership interest having
ordinary voting power (absolutely or contingently) for the election of directors
or  other persons performing similar functions are at the time owned directly or
indirectly  by  the  Company  and/or  any of its other Subsidiaries.  All of the
outstanding  shares of capital stock or other equity ownership interests of each
Subsidiary  have been duly authorized and validly issued, and are fully paid and
nonassessable.  Except  as  set  forth  on  Schedule 2.1(g) hereto, there are no
                                            ---------------
outstanding  preemptive,  conversion  or  other  rights,  options,  warrants  or
agreements  granted or issued by or binding upon any Subsidiary for the purchase
or  acquisition  of  any  shares of capital stock of any Subsidiary or any other
securities  convertible  into,  exchangeable  for  or  evidencing  the rights to
subscribe  for  any  shares  of such capital stock.  Neither the Company nor any
Subsidiary  is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any Subsidiary
or any convertible securities, rights, warrants or options of the type described
in  the  preceding  sentence  except  as  set  forth  on Schedule 2.1(g) hereto.
                                                         ---------------
Neither  the  Company  nor any Subsidiary is party to, nor has any knowledge of,
any  agreement  restricting  the voting or transfer of any shares of the capital
stock  of  any  Subsidiary.

          (h)     No Material Adverse Change.  Since April 30, 2006, the Company
                  --------------------------
has not experienced or suffered any Material Adverse Effect, except as disclosed
on  Schedule  2.1(h)  hereto  and  as  disclosed  in  its  Commission Documents.
    ----------------

          (i)     No  Undisclosed  Liabilities.  Except as disclosed on Schedule
                  ----------------------------                          --------
2.1(i)  hereto, neither the Company nor any of its Subsidiaries has incurred any
------
liabilities,  obligations, claims or losses (whether liquidated or unliquidated,
secured  or  unsecured,  absolute,  accrued, contingent or otherwise) other than
those  incurred  in  the  ordinary  course  of the Company's or its Subsidiaries
respective  businesses  or  which,  individually  or  in  the aggregate, are not
reasonably  likely  to  have  a  Material  Adverse  Effect.

          (j)     No Undisclosed Events or Circumstances.  Since April 30, 2006,
                  --------------------------------------
except  as  disclosed  on  Schedule  2.1(j) hereto, no event or circumstance has
                           ----------------
occurred  or  exists  with  respect  to the Company or its Subsidiaries or their
respective  businesses,  properties,  prospects,

                                        6
<PAGE>
operations  or  financial  condition,  which,  under  applicable  law,  rule  or
regulation,  requires public disclosure or announcement by the Company but which
has  not  been  so  publicly  announced  or  disclosed.

          (k)     Indebtedness.  Schedule  2.1(k)  hereto  sets  forth as of the
                  ------------   ----------------
date hereof all outstanding secured and unsecured Indebtedness of the Company or
any  Subsidiary,  or  Indebtedness  for  which the Company or any Subsidiary has
commitments.  For  the purposes of this Agreement, "Indebtedness" shall mean (a)
any  liabilities for borrowed money or amounts owed in excess of $100,000 (other
than  trade  accounts  payable incurred in the ordinary course of business), (b)
all  guaranties,  endorsements  and  other  contingent obligations in respect of
Indebtedness  of  others,  whether or not the same are or should be reflected in
the  Company's  balance  sheet  (or  the  notes  thereto),  except guaranties by
endorsement  of  negotiable  instruments  for  deposit  or collection or similar
transactions  in  the  ordinary course of business; and (c) the present value of
any  lease  payments  in  excess  of  $25,000  due  under  leases required to be
capitalized  in  accordance  with GAAP.  Except as set forth on Schedule 2.1(k),
                                                                ---------------
Neither  the  Company  nor  any  Subsidiary  is  in  default with respect to any
Indebtedness.

          (l)     Title to Assets.  Each of the Company and the Subsidiaries has
                  ---------------
good  and  valid title to all of its real and personal property reflected in the
Commission  Documents, free and clear of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those indicated on Schedule
                                                                        --------
2.1(l)  hereto  or  such  that,  individually or in the aggregate, do not have a
------
Material Adverse Effect.  Any leases of the Company and each of its Subsidiaries
are  valid  and  subsisting  and,  to the Company's knowledge, in full force and
effect.

          (m)     Actions  Pending.  There  is  no  action,  suit,  claim,
                  ----------------
investigation,  arbitration,  alternate  dispute  resolution proceeding or other
proceeding  pending  or, to the knowledge of the Company, threatened against the
Company  or any Subsidiary which questions the validity of this Agreement or any
of  the  other  Transaction  Documents  or  any of the transactions contemplated
hereby or thereby or any action taken or to be taken pursuant hereto or thereto.
Except  as  set  forth in the Commission Documents or on Schedule 2.1(m) hereto,
                                                         ---------------
there  is  no action, suit, claim, investigation, arbitration, alternate dispute
resolution  proceeding  or  other proceeding pending or, to the knowledge of the
Company,  threatened  against or involving the Company, any Subsidiary or any of
their  respective  properties or assets, which individually or in the aggregate,
would  reasonably  be  expected,  if  adversely  determined,  to have a Material
Adverse  Effect.  Except as set forth in the Commission Documents or on Schedule
                                                                        --------
2.1(m)  hereto,  there are no outstanding orders, judgments, injunctions, awards
------
or  decrees  of any court, arbitrator or governmental or regulatory body against
the  Company  or  any  Subsidiary or any officers or directors of the Company or
Subsidiary  in their capacities as such, which individually or in the aggregate,
could  reasonably  be  expected  to  have  a  Material  Adverse  Effect.

          (n)     Compliance  with  Law.  The  business  of  the Company and the
                  ---------------------
Subsidiaries  has  been  and is presently being conducted in accordance with all
applicable  federal,  state  and local governmental laws, rules, regulations and
ordinances,  except  as  set  forth  in the Commission  Documents or on Schedule
                                                                        --------
2.1(n)  hereto or such that, individually or in the aggregate, the noncompliance
------
therewith  could  not  reasonably be expected to have a Material Adverse Effect.
The Company and each of its Subsidiaries have all franchises, permits, licenses,
consents  and  other  governmental  or  regulatory  authorizations and approvals
necessary  for  the  conduct  of  its

                                        7
<PAGE>
business  as  now  being  conducted  by  it  unless  the failure to possess such
franchises,  permits,  licenses,  consents  and other governmental or regulatory
authorizations  and  approvals,  individually  or  in  the  aggregate, could not
reasonably  be  expected  to  have  a  Material  Adverse  Effect.

          (o)     Taxes.  The  Company  and  each  of  the  Subsidiaries  has
                  -----
accurately  prepared and filed all federal, state and other tax returns required
by  law  to  be  filed by it, has paid or made provisions for the payment of all
taxes  shown  to  be due and all additional assessments, and adequate provisions
have  been  and are reflected in the financial statements of the Company and the
Subsidiaries for all current taxes and other charges to which the Company or any
Subsidiary  is  subject  and which are not currently due and payable.  Except as
disclosed  on Schedule 2.1(o) hereto or in the Commission Documents, none of the
              ---------------
federal income tax returns of the Company or any Subsidiary have been audited by
the  Internal  Revenue  Service.  The Company has no knowledge of any additional
assessments,  adjustments or contingent tax liability (whether federal or state)
of  any  nature whatsoever, whether pending or threatened against the Company or
any  Subsidiary  for  any  period,  nor  of  any  basis for any such assessment,
adjustment  or  contingency.

          (p)     Certain  Fees.  Except as set forth on Schedule 2.1(p) hereto,
                  -------------                          ---------------
the  Company has not employed any broker or finder or incurred any liability for
any  brokerage  or  investment  banking  fees, commissions, finders' structuring
fees,  financial  advisory  fees  or  other  similar fees in connection with the
Transaction  Documents.

          (q)     Disclosure.  Except  for the transactions contemplated by this
                  ----------
Agreement,  the  Company confirms that neither it nor any other person acting on
its  behalf  has  provided any of the Purchasers or their agents or counsel with
any  information  that  constitutes  or  might  constitute  material,  nonpublic
information.  To  the  Company's  knowledge,  neither  the  representations  and
warranties  contained  in  Section 2.1 of this Agreement or the Schedules hereto
                           -----------
nor any other documents, certificates or instruments furnished to the Purchasers
by  or  on  behalf  of  the  Company  or  any  Subsidiary in connection with the
transactions  contemplated  by  this Agreement contain any untrue statement of a
material  fact  or  omit to state a material fact necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they  were  made  herein  or  therein,  not  misleading.

          (r)     Operation of Business.  Except as set forth on Schedule 2.1(r)
                  ---------------------                          ---------------
hereto, the Company and each of the Subsidiaries owns or possesses the rights to
all  patents,  trademarks,  domain  names  (whether  or  not registered) and any
patentable  improvements or copyrightable derivative works thereof, websites and
intellectual  property  rights  relating  thereto,  service  marks, trade names,
copyrights,  licenses  and authorizations which are necessary for the conduct of
its  business  as  now conducted without any conflict with the rights of others.

          (s)     Environmental  Compliance.  Except  as  set  forth on Schedule
                  -------------------------                             --------
2.1(s)  hereto  or  in  the  Commission  Documents,  the Company and each of its
------
Subsidiaries  have obtained all material approvals, authorization, certificates,
consents,  licenses,  orders  and permits or other similar authorizations of all
governmental  authorities, or from any other person, that are required under any
Environmental  Laws.  "Environmental  Laws"  shall  mean  all  applicable  laws
relating to the protection of the environment including, without limitation, all
requirements  pertaining  to  reporting,  licensing,  permitting,  controlling,
investigating  or  remediating  emissions,  discharges,

                                        8
<PAGE>
releases  or  threatened  releases of hazardous substances, chemical substances,
pollutants,  contaminants  or  toxic  substances,  materials  or wastes, whether
solid,  liquid or gaseous in nature, into the air, surface water, groundwater or
land,  or relating to the manufacture, processing, distribution, use, treatment,
storage,  disposal,  transport  or  handling  of  hazardous substances, chemical
substances,  pollutants,  contaminants  or toxic substances, material or wastes,
whether  solid,  liquid  or  gaseous in nature.  To the Company's knowledge, the
Company  has  all  necessary  governmental  approvals  required  under  all
Environmental  Laws  as  necessary for the Company's business or the business of
any of its subsidiaries.  Except for such instances as would not individually or
in  the  aggregate  have  a  Material Adverse Effect and to the knowledge of the
Company,  there  are  no  past  or  present  events,  conditions, circumstances,
incidents,  actions or omissions relating to or in any way affecting the Company
or  its Subsidiaries that violate or may violate any Environmental Law after the
Closing  Date or that may give rise to any environmental liability, or otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation  (i)  under  any Environmental Law, or (ii) based on or related to
the  manufacture,  processing,  distribution, use, treatment, storage (including
without  limitation underground storage tanks), disposal, transport or handling,
or  the  emission,  discharge,  release  or  threatened release of any hazardous
substance.

          (t)     Books  and Records; Internal Accounting Controls.  The records
                  ------------------------------------------------
and  documents  of  the  Company  and its Subsidiaries accurately reflect in all
material  respects  the  information relating to the business of the Company and
the  Subsidiaries,  the  location  of  their  assets,  and  the  nature  of  all
transactions  giving  rise  to  the  obligations  or  accounts receivable of the
Company  or any Subsidiary.  The Company and each of its Subsidiaries maintain a
system  of  internal  accounting  controls  sufficient,  in  the judgment of the
Company's  board  of  directors,  to  provide  reasonable  assurance  that  (i)
transactions  are  executed  in accordance with management's general or specific
authorizations,  (ii)  transactions  are  recorded  as  necessary  to  permit
preparation  of  financial  statements  in  conformity  with  generally accepted
accounting  principles  and  to  maintain  asset accountability, (iii) access to
assets  is  permitted  only  in accordance with management's general or specific
authorization  and  (iv) the recorded accountability for assets is compared with
the  existing  assets  at reasonable intervals and appropriate actions are taken
with  respect  to  any  differences.

          (u)     Material  Agreements.  Except  for  the  Transaction Documents
                  --------------------
(with  respect  to  clause (i) of this Section 2.1(u) only), as disclosed in the
Commission  Documents or as set forth on Schedule 2.1(u) hereto, or as would not
                                         ---------------
be reasonably likely to have a Material Adverse Effect, (i) the Company and each
of  its  Subsidiaries have performed all obligations required to be performed by
them  to  date  under  any  written  or  oral  contract,  instrument, agreement,
commitment,  obligation, plan or arrangement, filed or required to be filed with
the  Commission (the "Material Agreements"), (ii) neither the Company nor any of
                      -------------------
its Subsidiaries has received any notice of default under any Material Agreement
and,  (iii)  to  the  Company's  knowledge,  neither  the Company nor any of its
Subsidiaries  is  in  default  under  any  Material  Agreement  now  in  effect.

          (v)     Transactions with Affiliates.  Except as set forth on Schedule
                  ----------------------------                          --------
2.1(v)  hereto  and  in  the  Commission  Documents, there are no loans, leases,
------
agreements,  contracts, royalty agreements, management contracts or arrangements
or  other continuing transactions between (a) the Company, any Subsidiary or any
of  their  respective  customers  or  suppliers  on  the  one  hand,

                                        9
<PAGE>
and  (b) on the other hand, any officer, employee, consultant or director of the
Company,  or  any  of  its Subsidiaries, or any person owning at least 5% of the
outstanding  capital stock of the Company or any Subsidiary or any member of the
immediate  family of such officer, employee, consultant, director or stockholder
or  any  corporation  or  other  entity  controlled  by  such officer, employee,
consultant, director or stockholder, or a member of the immediate family of such
officer,  employee,  consultant, director or stockholder which, in each case, is
required  to  be  disclosed in the Commission Documents or in the Company's most
recently  filed  definitive  proxy  statement  on  Schedule  14A, that is not so
disclosed  in  the  Commission  Documents  or  in  such  proxy  statement.

          (w)     Securities  Act  of  1933.  Based  in  material  part upon the
                  -------------------------
representations  herein  of  the  Purchasers,  the Company has complied and will
comply  with all applicable federal and state securities laws in connection with
the  offer,  issuance and sale of the Securities hereunder.  Neither the Company
nor anyone acting on its behalf, directly or indirectly, has or will sell, offer
to sell or solicit offers to buy any of the Securities or similar securities to,
or  solicit  offers  with  respect  thereto from, or enter into any negotiations
relating thereto with, any person, or has taken or will take any action so as to
bring  the  issuance  and  sale  of any of the Securities under the registration
provisions  of the Securities Act and applicable state securities laws.  Neither
the  Company  nor  any  of its affiliates, nor any person acting on its or their
behalf,  has  engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the  offer  or  sale  of  any  of  the  Securities.

          (x)     Employees.  Neither  the  Company  nor  any Subsidiary has any
                  ---------
collective  bargaining arrangements or agreements covering any of its employees,
except  as set forth on Schedule 2.1(x) hereto.  Except as set forth on Schedule
                        ---------------                                 --------
2.1(x)  hereto,  neither  the  Company  nor  any  Subsidiary  has any employment
------
contract,  agreement  regarding  proprietary  information,  non-competition
agreement,  non-solicitation  agreement, confidentiality agreement, or any other
similar  contract or restrictive covenant, relating to the right of any officer,
employee  or  consultant  to  be  employed  or  engaged  by  the Company or such
Subsidiary  required  to be disclosed in the Commission Documents that is not so
disclosed.  No  officer,  consultant  or  key  employee  of  the  Company or any
Subsidiary  whose termination, either individually or in the aggregate, would be
reasonably  likely  to have a Material Adverse Effect, has terminated or, to the
knowledge  of  the  Company, has any present intention of terminating his or her
employment  or  engagement  with  the  Company  or  any  Subsidiary.

          (y)     Absence  of  Certain Developments.  Except as set forth in the
                  ---------------------------------
Commission  Documents  or  provided  on  Schedule 2.1(y) hereto, since April 30,
                                         ---------------
2006,  neither  the  Company  nor  any  Subsidiary  has:

               (i)     issued any stock, bonds or other corporate securities or
any right, options or warrants with respect thereto;

               (ii)     borrowed any amount in excess of $100,000 or incurred or
become  subject  to  any  other  liabilities  in excess of $100,000 (absolute or
contingent)  except  current  liabilities  incurred  in  the  ordinary course of
business  which  are  comparable in nature and amount to the current liabilities
incurred  in  the  ordinary  course  of  business  during the comparable portion

                                       10
<PAGE>
of  its  prior fiscal year, as adjusted to reflect the current nature and volume
of  the  business  of  the  Company  and  its  Subsidiaries;

               (iii)     discharged or satisfied any lien or encumbrance in
excess of $100,000 or paid any obligation or liability (absolute or contingent)
in excess of $100,000, other than current liabilities paid in the ordinary
course of business;

               (iv)     declared or made any payment or distribution of cash or
other property to stockholders with respect to its stock, or purchased or
redeemed, or made any agreements so to purchase or redeem, any shares of its
capital stock, in each case in excess of $50,000 individually or $100,000 in the
aggregate;

               (v)     sold, assigned or transferred any other tangible assets,
or canceled any debts or claims, in each case in excess of $100,000, except in
the ordinary course of business;

               (vi)     sold, assigned or transferred any patent rights,
trademarks, trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights in excess of $100,000, or disclosed any proprietary
confidential information to any person except to customers in the ordinary
course of business or to the Purchasers or their representatives;

               (vii)     suffered any material losses or waived any rights of
material value, whether or not in the ordinary course of business, or suffered
the loss of any material amount of prospective business;

               (viii)     made any changes in employee compensation except in
the ordinary course of business and consistent with past practices;

               (ix)     made capital expenditures or commitments therefor that
aggregate in excess of $100,000;

               (x)     entered into any material transaction, whether or not in
the ordinary course of business which has not been disclosed in the Commission
Documents;

               (xi)     made charitable contributions or pledges in excess of
$10,000;

               (xii)     suffered any material damage, destruction or casualty
loss, whether or not covered by insurance;

               (xiii)     experienced any material problems with labor or
management in connection with the terms and conditions of their employment; or

               (xiv)     entered into an agreement, written or otherwise, to
take any of the foregoing actions.

                                       11
<PAGE>
          (z)     Investment  Company  Act Status.  The Company is not, and as a
                  -------------------------------
result  of and immediately upon the Closing will not be, an "investment company"
or  a company "controlled" by an "investment company," within the meaning of the
Investment  Company  Act  of  1940,  as  amended.

          (aa)     ERISA.  No  liability  to  the  Pension  Benefit  Guaranty
                   -----
Corporation has been incurred with respect to any Plan (as defined below) by the
Company  or  any  of its Subsidiaries which is or would be materially adverse to
the  Company and its Subsidiaries.  The execution and delivery of this Agreement
and  the  issuance  and  sale of the Securities will not involve any transaction
which  is  subject to the prohibitions of Section 406 of the Employee Retirement
Income  Security Act of 1974, as amended ("ERISA") or in connection with which a
tax  could  be  imposed pursuant to Section 4975 of the Internal Revenue Code of
1986,  as  amended,  provided  that,  if any of the Purchasers, or any person or
entity that owns a beneficial interest in any of the Purchasers, is an "employee
pension benefit plan" (within the meaning of Section 3(2) of ERISA) with respect
to  which  the  Company  is a "party in interest" (within the meaning of Section
3(14)  of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA, if
applicable,  are  met.  As  used  in this Section 2.1(aa), the term "Plan" shall
mean  an "employee pension benefit plan"(as defined in Section 3 of ERISA) which
is  or has been established or maintained, or to which contributions are or have
been made, by the Company or any Subsidiary or by any trade or business, whether
or  not  incorporated,  which,  together  with the Company or any Subsidiary, is
under  common  control,  as  described  in  Section  414(b)  or (c) of the Code.

          (bb)     Independent  Nature  of Purchasers.  The Company acknowledges
                   ----------------------------------
that  the  obligations  of  each  Purchaser  under the Transaction Documents are
several  and  not  joint  with  the  obligations  of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of  any  other  Purchaser  under  the  Transaction  Documents.  The  Company
acknowledges that the decision of each Purchaser to purchase Securities pursuant
to  this  Agreement  has  been made by such Purchaser independently of any other
Purchaser  and  independently  of  any  information,  materials,  statements  or
opinions  as  to  the  business,  affairs,  operations,  assets,  properties,
liabilities,  results  of  operations,  condition  (financial  or  otherwise) or
prospects  of  the  Company  or  of its Subsidiaries which may have been made or
given by any other Purchaser or by any agent or employee of any other Purchaser,
and  no  Purchaser or any of its agents or employees shall have any liability to
any  Purchaser  (or  any  other  person)  relating  to  or arising from any such
information,  materials,  statements or opinions.  The Company acknowledges that
nothing contained herein, or in any Transaction Document, and no action taken by
any  Purchaser  pursuant  hereto  or  thereto, shall be deemed to constitute the
Purchasers  as  a partnership, an association, a joint venture or any other kind
of  entity, or create a presumption that the Purchasers are in any way acting in
concert  or  as  a  group  with  respect to such obligations or the transactions
contemplated  by  the  Transaction Documents.  The Company acknowledges that for
reasons  of administrative convenience only, the Transaction Documents have been
prepared  by counsel for the placement agent and such counsel does not represent
the  Purchasers.  The  Company  acknowledges  that it has elected to provide all
Purchasers  with the same terms and Transaction Documents for the convenience of
the  Company  and  not  because  it  was  required  or requested to do so by the
Purchasers  and  the  Purchasers have retained their own counsel with respect to
the  transactions  contemplated  hereby.  The  Company  acknowledges  that  such
procedure  with  respect  to  the  Transaction  Documents  in  no  way creates a
presumption  that

                                       12
<PAGE>
the  Purchasers  are  in any way acting in concert or as a group with respect to
the  Transaction  Documents  or the transactions contemplated hereby or thereby.

          (cc)     No  Integrated Offering.  Neither the Company, nor any of its
                   -----------------------
affiliates,  nor  any  person  acting  on  its  or their behalf, has directly or
indirectly  made  any offers or sales of any security or solicited any offers to
buy  any  security  under  circumstances  that  would  cause the offering of the
Securities  pursuant  to this Agreement to be integrated with prior offerings by
the  Company  for  purposes of the Securities Act in a manner that would prevent
the  Company  from  selling the Securities pursuant to Regulation D and Rule 506
thereof  under the Securities Act, nor will the Company or any of its affiliates
or  subsidiaries  take  any action or steps that would cause the offering of the
Securities  to  be  integrated  with  other  offerings.  Except  as set forth on
Schedule  2.1(cc)  hereto,  the Company does not have any registration statement
-----------------
pending  before  the  Commission  or  currently  under  the Commission's review.
Except as set forth on Schedule 2.1(cc) hereto, since April 1, 2006, the Company
                       ----------------
has  not  offered  or  sold  any  of  its  equity  securities or debt securities
convertible  into  shares  of  Common  Stock.

          (dd)     Sarbanes-Oxley  Act.  The  Company  is in compliance with the
                   -------------------
applicable  provisions  of  the  Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
                                                                  --------------
Act"),  and the rules and regulations promulgated thereunder, that are effective
---
and  presently  applicable  to  the  Company  and  intends  to comply with other
applicable  provisions  of  the Sarbanes-Oxley Act that may become effective and
applicable,  and  the  rules  and  regulations  promulgated thereunder, upon the
effectiveness  and applicability of such provisions with respect to the Company.

          (ee)     Dilutive  Effect.  The  Company  understands and acknowledges
                   ----------------
that  its  obligation to issue Conversion Shares upon conversion of the Notes in
accordance  with  this  Agreement and the Notes and its obligations to issue the
Warrant  Shares  upon  the  exercise  of  the  Warrants  in accordance with this
Agreement  and  the  Warrants,  is,  in  each  case,  absolute and unconditional
regardless  of  the dilutive effect that such issuance may have on the ownership
interest  of  other  stockholders  of  the  Company.

          (ff)     DTC  Status.  The  Company's  current  transfer  agent  is  a
                   -----------
participant  in  and  the  Common Stock is eligible for transfer pursuant to the
Depository  Trust  Company  Automated  Securities  Transfer  Program.  The name,
address,  telephone  number, fax number, contact person and email address of the
Company's  transfer  agent  is  set  forth  on  Schedule  2.1(ff)  hereto.
                                                -----------------

          Section  2.2     Representations  and  Warranties  of  the Purchasers.
                           ----------------------------------------------------
Each  of  the  Purchasers  hereby  represents  and  warrants to the Company with
respect  solely to itself and not with respect to any other Purchaser as follows
as  of  the  date  hereof  and  as  of  the  Closing  Date:

          (a)     Organization and Standing of the Purchasers.  If the Purchaser
                  -------------------------------------------
is  an  entity,  such  Purchaser  is a corporation, limited liability company or
partnership  duly  incorporated  or  organized,  validly  existing  and  in good
standing  under  the  laws  of  the  jurisdiction  of  its  incorporation  or
organization.

          (b)     Authorization  and  Power.  Each  Purchaser  has the requisite
                  -------------------------
power  and  authority  to  enter  into  and  perform  its  obligations under the
Transaction Documents and to purchase the Securities being sold to it hereunder.
The  execution,  delivery  and  performance  of

                                       13
<PAGE>
the  Transaction  Documents  by each Purchaser and the consummation by it of the
transactions  contemplated  hereby  and thereby have been duly authorized by all
necessary  corporate,  limited  liability  company or partnership action, and no
further  consent  or  authorization of such Purchaser or its Board of Directors,
stockholders,  managers,  members  or partners, as the case may be, is required.
When  executed  and delivered by the Purchasers, the other Transaction Documents
shall  constitute  valid  and  binding obligations of each Purchaser enforceable
against  such  Purchaser  in  accordance  with  their  terms,  except  as  such
enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  liquidation,  conservatorship,  receivership  or
similar  laws relating to, or affecting generally the enforcement of, creditor's
rights  and  remedies  or  by other equitable principles of general application.

          (c)     No  Conflict.  The  execution, delivery and performance of the
                  ------------
Transaction  Documents by the Purchaser and the consummation by the Purchaser of
the transactions contemplated thereby and hereby do not and will not (i) violate
any  provision  of  the  Purchaser's  charter  or organizational documents, (ii)
conflict  with,  or constitute a default (or an event which with notice or lapse
of  time  or both would become a default) under, or give to others any rights of
termination,  amendment,  acceleration  or  cancellation  of,  any  agreement,
mortgage,  deed  of  trust,  indenture,  note,  bond,  license, lease agreement,
instrument  or  obligation  to  which  the  Purchaser is a party or by which the
Purchaser's  respective  properties  or  assets  are bound, or (iii) result in a
violation  of  any  federal,  state, local or foreign statute, rule, regulation,
order,  judgment  or  decree  (including  federal  and state securities laws and
regulations)  applicable  to  the Purchaser or by which any property or asset of
the Purchaser are bound or affected, except, in all cases, other than violations
pursuant  to  clauses (i) or (iii) (with respect to federal and state securities
laws)  above,  except,  for  such conflicts, defaults, terminations, amendments,
acceleration,  cancellations and violations as would not, individually or in the
aggregate,  materially  and  adversely affect the Purchaser's ability to perform
its  obligations  under  the  Transaction  Documents.

          (d)     Acquisition  for Investment.  Each Purchaser is purchasing the
                  ---------------------------
Securities  solely  for  its  own account and not with a view to, or for sale in
connection  with,  public sale or distribution thereof.  Each Purchaser does not
have  a  present  intention  to  sell  any  of  the  Securities,  nor  a present
arrangement  (whether  or  not  legally  binding)  or  intention  to  effect any
distribution  of  any  of  the  Securities  to  or through any person or entity;
provided,  however,  that  by  making the representations herein, such Purchaser
--------   -------
does not agree to hold the Securities for any minimum or other specific term and
reserves  the  right to dispose of the Securities at any time in accordance with
Federal  and  state  securities  laws  applicable  to  such  disposition.  Each
Purchaser  acknowledges  that  it  (i)  has  such  knowledge  and  experience in
financial  and business matters such that Purchaser is capable of evaluating the
merits  and risks of Purchaser's investment in the Company, (ii) is able to bear
the  financial  risks  associated with an investment in the Securities and (iii)
has  been  given full access to such records of the Company and the Subsidiaries
and  to  the  officers  of  the  Company  and  the Subsidiaries as it has deemed
necessary  or  appropriate  to  conduct  its  due  diligence  investigation.

          (e)     Rule 144.  Each Purchaser understands that the Securities must
                  --------
be  held indefinitely unless such Securities are registered under the Securities
Act or an exemption from registration is available.  Each Purchaser acknowledges
that  it  is  familiar  with  Rule  144  of  the  rules  and  regulations of the
Commission,  as  amended,  promulgated  pursuant  to  the  Securities

                                       14
<PAGE>
Act ("Rule 144"), and that such Purchaser has been advised that Rule 144 permits
      --------
resales  only  under  certain circumstances.  Each Purchaser understands that to
the extent that Rule 144 is not available, such Purchaser will be unable to sell
any  Securities  without  either  registration  under  the Securities Act or the
existence  of  another  exemption  from  such  registration  requirement.

          (f)     General.  Each  Purchaser  understands that the Securities are
                  -------
being  offered  and  sold  in  reliance  on  a  transactional exemption from the
registration  requirements  of  federal  and  state  securities laws, including,
without  limitation,  the  Securities  Act,  and the Company is relying upon the
truth  and  accuracy  of  the  representations,  warranties,  agreements,
acknowledgments  and  understandings of such Purchaser set forth herein in order
to  determine  the  applicability of such exemptions and the suitability of such
Purchaser  to  acquire the Securities. Each Purchaser understands that no United
States  federal  or  state  agency  or any government or governmental agency has
passed  upon  or  made  any  recommendation  or  endorsement  of the Securities.

          (g)     No General Solicitation.  Each Purchaser acknowledges that the
                  -----------------------
Securities were not offered to such Purchaser by means of any form of general or
public  solicitation  or  general  advertising,  or  publicly  disseminated
advertisements  or  sales  literature, including (i) any advertisement, article,
notice  or  other  communication  published in any newspaper, magazine, Internet
website  or  similar  media,  or broadcast over television or radio, or (ii) any
seminar  or  meeting to which such Purchaser was invited by any of the foregoing
means  of communications. Each Purchaser, in making the decision to purchase the
Securities,  has  relied  upon  independent investigation made by it and has not
relied  on  any  information  or  representations  made  by  third  parties.

          (h)     Accredited  Investor.  Each  Purchaser  is  an  "accredited
                  --------------------
investor"  (as defined in Rule 501 of Regulation D), and such Purchaser has such
experience  in  business  and financial matters that it is capable of evaluating
the  merits  and risks of an investment in the Securities. Such Purchaser is not
required  to  be  registered as a broker-dealer under Section 15 of the Exchange
Act  and such Purchaser is not a broker-dealer. Each Purchaser acknowledges that
an  investment  in  the  Securities is speculative and involves a high degree of
risk.

          (i)     Certain  Fees.  The Purchasers have not employed any broker or
                  -------------
finder  or  incurred any liability for any brokerage or investment banking fees,
commissions, finders' structuring fees, financial advisory fees or other similar
fees  in  connection  with  the  Transaction  Documents.

          (j)     Independent  Investment.  Except  as  may  be disclosed in any
                  -----------------------
filings  made by a Purchaser with the Commission, no Purchaser has agreed to act
with  any  other  Purchaser  for  the  purpose  of acquiring, holding, voting or
disposing  of  the  Securities purchased hereunder for purposes of Section 13(d)
under  the Exchange Act, and each Purchaser is acting independently with respect
to  its  investment  in  the  Securities.

                                       15
<PAGE>
                                   ARTICLE III

                                    COVENANTS

     The  Company  covenants with each Purchaser during the time period that any
Purchaser  holds  any  of the Securities as follows, which covenants are for the
benefit  of  each  Purchaser  and  their  respective  permitted  assignees.

          Section  3.1     Securities  Compliance.  The Company shall notify the
                           ----------------------
Commission  in  accordance  with  its rules and regulations, of the transactions
contemplated  by  any  of  the  Transaction  Documents  and shall take all other
necessary  action and proceedings as may be required and permitted by applicable
law,  rule and regulation, for the legal and valid issuance of the Securities to
the  Purchasers,  or  their  respective  subsequent  holders.

          Section 3.2     Registration and Listing.  The Company shall cause its
                          ------------------------
Common  Stock  to continue to be registered under Sections 12(b) or 12(g) of the
Exchange  Act,  to  comply  in  all  respects  with  its  reporting  and  filing
obligations  under  the Exchange Act, to comply with all requirements related to
any registration statement filed pursuant to this Agreement, and to not take any
action  or  file any document (whether or not permitted by the Securities Act or
the  rules  promulgated thereunder) to terminate or suspend such registration or
to  terminate or suspend its reporting and filing obligations under the Exchange
Act  or  Securities  Act, except as permitted herein.  The Company will take all
action  necessary  to continue the listing or trading of its Common Stock on the
OTC  Bulletin  Board  or  other  exchange or market on which the Common Stock is
trading.  Subject to the terms of the Transaction Documents, the Company further
covenants that it will take such further action as the Purchasers may reasonably
request,  all  to the extent required from time to time to enable the Purchasers
to  sell the Securities without registration under the Securities Act within the
limitation  of  the  exemptions  provided  by  Rule  144  promulgated  under the
Securities  Act.  Upon  the request of the Purchasers, the Company shall deliver
to  the  Purchasers  a  written certification of a duly authorized officer as to
whether  it  has  complied  with  the  issuer  requirements  of  Rule  144.

          Section  3.3     Inspection Rights.  Provided the same would not be in
                           -----------------
violation  of  Regulation  FD,  the Company shall permit, during normal business
hours  and  upon  reasonable  request  and at least forty-eight (48) hours prior
written  notice,  each  Purchaser  or  any  employees, agents or representatives
thereof, so long as such Purchaser holds the Notes or shall beneficially own any
Conversion  Shares  or  Warrant  Shares, for purposes reasonably related to such
Purchaser's  interests  as  a  stockholder,  to  examine the publicly available,
non-confidential  records  and  books  of  account,  and  visit  and inspect the
properties,  assets, operations and business, of the Company and any Subsidiary,
and  to  discuss  the publicly available, non-confidential affairs, finances and
accounts  of  the  Company  and  any  Subsidiary  with  any  of  its  officers,
consultants,  directors  and  key  employees.

          Section  3.4     Compliance  with Laws.  The Company shall comply, and
                           ---------------------
cause  each  Subsidiary  to comply, with all applicable laws, rules, regulations
and  orders,  noncompliance  with  which  would  be  reasonably likely to have a
Material  Adverse  Effect.

                                       16
<PAGE>
          Section  3.5     Keeping of Records and Books of Account.  The Company
                           ---------------------------------------
shall  keep  and  cause  each  Subsidiary  to keep adequate records and books of
account,  in  which  complete  entries  will  be  made  in  accordance with GAAP
consistently  applied,  reflecting all financial transactions of the Company and
its  Subsidiaries,  and  in which, for each fiscal year, all proper reserves for
depreciation,  depletion, obsolescence, amortization, taxes, bad debts and other
purposes  in  connection  with  its  business  shall  be  made.

          Section  3.6     Reporting  Requirements.  If  the  Commission  ceases
                           -----------------------
making the Company's periodic reports available via the Internet without charge,
then  the  Company shall furnish the following to each Purchaser so long as such
Purchaser  shall  be  obligated  hereunder  to  purchase the Securities or shall
beneficially  own  Securities:

          (a)     Quarterly  Reports filed with the Commission on Form 10-QSB as
soon  as  practical  after the document is filed with the Commission, and in any
event  within  five  (5)  days  after the document is filed with the Commission;

          (b)     Annual  Reports  filed  with  the Commission on Form 10-KSB as
soon  as  practical  after the document is filed with the Commission, and in any
event  within five (5) days after the document is filed with the Commission; and

          (c)     Copies  of  all  notices,  information and proxy statements in
connection  with  any  meetings  that  are, in each case, provided to holders of
shares  of  Common Stock, contemporaneously with the delivery of such notices or
information  to  such  holders  of  Common  Stock.

          Section  3.7     Other  Agreements.  The  Company shall not enter into
                           -----------------
any  agreement in which the terms of such agreement would restrict or impair the
right  or  ability  to  perform  of  the  Company  or  any  Subsidiary under any
Transaction  Document.

          Section  3.8     Use  of  Proceeds.  The net proceeds from the sale of
                           -----------------
the Securities hereunder shall be used by the Company for the purposes set forth
on  Schedule 3.8 hereto, including the acquisition of forty percent (40%) of the
    ------------
issued  and  outstanding  capital  stock  of Cotton Companies, Inc. (the "Cotton
                                                                          ------
Acquisition"),  and  not  to  redeem any Common Stock or securities convertible,
-----------
exercisable  or  exchangeable  into  Common  Stock  or to settle any outstanding
litigation.

          Section 3.9     Reporting Status.  So long as a Purchaser beneficially
                          ----------------
owns  any  of the Securities, the Company shall timely file all reports required
to  be  filed  with the Commission pursuant to the Exchange Act, and the Company
shall  not  terminate its status as an issuer required to file reports under the
Exchange  Act  even  if the Exchange Act or the rules and regulations thereunder
would  permit  such  termination.

          Section 3.10     Disclosure of Transaction.  The Company shall issue a
                           -------------------------
press  release  describing  the  material terms of the transactions contemplated
hereby  (the  "Press  Release")  on the day of the Closing but in no event later
               --------------
than  one  hour after the Closing; provided, however, that if the Closing occurs
                                   --------  -------
after  4:00  P.M.  Eastern  Time on any Trading Day, the Company shall issue the
Press  Release  no  later  than  9:00  A.M.  Eastern  Time  on  the  first

                                       17
<PAGE>
Trading  Day  following  the Closing Date.  The Company shall also file with the
Commission a Current Report on Form 8-K (the "Form 8-K") describing the material
                                              --------
terms of the transactions contemplated hereby (and attaching as exhibits thereto
this  Agreement,  the form of Note, the Registration Rights Agreement, each form
of  Warrant  and the Press Release) as soon as practicable following the Closing
Date  but in no event more than two (2) Trading Days following the Closing Date,
which Press Release and Form 8-K shall be subject to prior review and reasonable
comment  by  the  Purchasers.  "Trading  Day"  means  any  day  during which the
                                ------------
principal  exchange  on  which  the  Common  Stock  is  traded shall be open for
trading.

          Section  3.11     Disclosure  of  Material  Information.  The  Company
                            -------------------------------------
covenants  and  agrees that neither it nor any other person acting on its behalf
has  provided  or  will  provide any Purchaser or its agents or counsel with any
information  that  the  Company  believes  constitutes  material  non-public
information,  unless  prior thereto such Purchaser shall have executed a written
agreement  regarding  the  confidentiality  and  use  of  such information.  The
Company  understands  and  confirms  that each Purchaser shall be relying on the
foregoing  representations  in  effecting  transactions  in  securities  of  the
Company.

          Section  3.12     Pledge of Securities.  The Company acknowledges that
                            --------------------
the  Securities  may  be  pledged  by a Purchaser in connection with a bona fide
                                                                       ---- ----
margin  agreement  or other loan or financing arrangement that is secured by the
Securities.  The pledge of Securities shall not be deemed to be a transfer, sale
or  assignment  of the Securities hereunder, and no Purchaser effecting a pledge
of  the  Securities  shall  be  required  to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or  any  other  Transaction  Document; provided that a Purchaser and its pledgee
shall  be required to comply with the provisions of Article V hereof in order to
effect  a  sale,  transfer  or  assignment of Securities to such pledgee. At the
Purchasers'  expense,  the  Company  hereby  agrees  to execute and deliver such
documentation  as  a  pledgee  of  the  Securities  may  reasonably  request  in
connection  with  a  pledge  of  the  Securities to such pledgee by a Purchaser.

          Section 3.13     Amendments.  The Company shall not amend or waive any
                           ----------
provision  of  the  Certificate  or  Bylaws of the Company in any way that would
adversely  affect  exercise rights, voting rights, conversion rights, prepayment
rights  or  redemption  rights  of  the  holder  of  the  Notes.

          Section  3.14     Distributions.  So  long  as  any  Notes or Warrants
                            -------------
remain  outstanding, the Company agrees that it shall not (i) declare or pay any
dividends  or  make  any  distributions to any holder(s) of Common Stock or (ii)
purchase  or  otherwise  acquire  for  value, directly or indirectly, any Common
Stock  or  other  equity  security  of  the  Company.

          Section  3.15     Reservation  of Shares.  So long as any of the Notes
                            ----------------------
or  Warrants  remain outstanding, the Company shall take all action necessary to
at  all  times  have  authorized  and  reserved  for  the purpose of issuance, a
sufficient  number  of shares of Common Stock to provide for the issuance of the
Conversion  Shares  and  the  Warrant  Shares.

          Section 3.16     Transfer Agent Instructions.  The Company shall issue
                           ---------------------------
irrevocable  instructions  to  its  transfer  agent, and any subsequent transfer
agent,  to  issue  certificates, registered in the name of each Purchaser or its
respective  nominee(s),  for  the  Conversion  Shares

                                       18
<PAGE>
and  the  Warrant  Shares in such amounts as specified from time to time by each
Purchaser  to  the  Company  upon  conversion  of  the  Notes or exercise of the
Warrants  in  the  form  of Exhibit F attached hereto (the "Irrevocable Transfer
                            ---------                       --------------------
Agent  Instructions").  Prior  to  registration of the Conversion Shares and the
-------------------
Warrant  Shares  under  the Securities Act, all such certificates shall bear the
restrictive  legend  specified  in  Section  5.1 of this Agreement.  The Company
warrants  that  no  instruction  other  than  the  Irrevocable  Transfer  Agent
Instructions  referred  to  in this Section 3.16 will be given by the Company to
its  transfer  agent  and  that  the  Conversion Shares and Warrant Shares shall
otherwise  be freely transferable on the books and records of the Company as and
to  the extent provided in this Agreement and the Registration Rights Agreement.
If  a  Purchaser  provides  the  Company  with  an opinion of counsel, in a form
reasonably  acceptable  to  the  Company,  to  the  effect  that  a public sale,
assignment  or  transfer  of the Conversion Shares or Warrant Shares may be made
without  registration  under  the  Securities  Act or the Purchaser provides the
Company  with  reasonable  assurances,  and based thereon the Company reasonably
determines, that the Conversion Shares or Warrant Shares can be sold pursuant to
Rule 144 without any restriction as to the number of securities acquired as of a
particular  date that can then be immediately sold, the Company shall permit the
transfer,  and,  in  the  case  of the Conversion Shares and the Warrant Shares,
promptly  instruct  its transfer agent to issue one or more certificates in such
name  and  in  such denominations as specified by such Purchaser and without any
restrictive  legend.  The  Company  acknowledges  that  a  breach  by  it of its
obligations  under  this  Section  3.16  will  cause  irreparable  harm  to  the
Purchasers  by  vitiating the intent and purpose of the transaction contemplated
hereby.  Accordingly,  the  Company  acknowledges  that  the remedy at law for a
breach of its obligations under this Section 3.16 will be inadequate and agrees,
in  the  event of a breach or threatened breach by the Company of the provisions
of  this Section 3.16, that the Purchasers shall be entitled, in addition to all
other  available  remedies, to an order and/or injunction restraining any breach
and  requiring immediate issuance and transfer, without the necessity of showing
economic  loss  and  without  any  bond  or  other  security  being  required.

          Section  3.17     Disposition  of Assets.  So long as the Notes remain
                            ----------------------
outstanding,  neither  the  Company  nor  any Subsidiary shall sell, transfer or
otherwise dispose of any of its properties, assets and rights including, without
limitation, its software and intellectual property, to any person except (i) for
sales  of  obsolete  assets  and  sales  to  customers in the ordinary course of
business and (ii) with the prior written consent of the holders of a majority of
the  principal  amount  of  the  Notes  then  outstanding.

          Section  3.18     Form  SB-2 Eligibility.  The Company currently meets
                            -----------------------
the  "registrant  eligibility"  and  transaction  requirements  set forth in the
general  instructions  to Form SB-2 applicable to "resale" registrations on Form
SB-2  and the Company shall file all reports required to be filed by the Company
with  the  Commission  in  a  timely  manner.

          Section  3.19     Subsequent  Financings.
                            ----------------------

          (a)     For  a  period of one (1) year following the effective date of
the  Registration  Statement  (as defined in the Registration Rights Agreement),
the  Company  covenants  and  agrees  to  promptly  notify in writing (a "Rights
                                                                          ------
Notice")  the  Purchasers  of  the terms and conditions of any proposed offer or
------
sale  to, or exchange with (or other type of distribution to) any third party (a
"Subsequent  Financing"),  of  Common  Stock  or  any  debt  or
 ---------------------

                                       19
<PAGE>
equity  securities  convertible,  exercisable or exchangeable into Common Stock;
provided,  however,  prior  to delivering to each Purchaser a Rights Notice, the
--------   -------
Company  shall first deliver to each Purchaser a written notice of its intention
to effect a Subsequent Financing ("Pre-Notice") within three (3) Trading Days of
                                   ----------
receiving  an  applicable offer, which Pre-Notice shall ask such Purchaser if it
wants to review the details of such financing.  Upon the request of a Purchaser,
and  only  upon  a  request  by  such Purchaser within three (3) Trading Days of
receipt  of  a Pre-Notice, the Company shall promptly, but no later than two (2)
Trading Days after such request, deliver a Rights Notice to such Purchaser.  The
Rights  Notice  shall  describe,  in  reasonable detail, the proposed Subsequent
Financing,  the  names  and investment amounts of all investors participating in
the Subsequent Financing (if known), the proposed closing date of the Subsequent
Financing,  which shall be within twenty (20) calendar days from the date of the
Rights  Notice,  and  all  of  the  terms  and  conditions  thereof and proposed
definitive documentation to be entered into in connection therewith.  The Rights
Notice  shall  provide each Purchaser an option (the "Rights Option") during the
                                                      -------------
ten  (10)  Trading  Days  following  delivery  of the Rights Notice (the "Option
                                                                          ------
Period")  to  inform  the Company whether such Purchaser will purchase up to its
------
pro  rata  portion  of  all or a portion of the securities being offered in such
Subsequent  Financing on the same, absolute terms and conditions as contemplated
by  such  Subsequent  Financing.  If  any Purchaser elects not to participate in
such  Subsequent  Financing,  the other Purchasers may participate on a pro-rata
basis  so  long as such participation in the aggregate does not exceed the total
Purchase  Price hereunder.  For purposes of this Section, all references to "pro
                                                                             ---
rata"  means,  for  any  Purchaser  electing  to  participate in such Subsequent
----
Financing,  the  percentage obtained by dividing (x) the principal amount of the
Notes  purchased by such Purchaser at the Closing by (y) the principal amount of
all  of  the  Notes  purchased  by  all  of  the participating Purchasers at the
Closing.  Delivery  of  any  Rights  Notice  constitutes  a  representation  and
warranty  by  the Company that there are no other material terms and conditions,
arrangements,  agreements  or otherwise except for those disclosed in the Rights
Notice,  to  provide  additional  compensation to any party participating in any
proposed  Subsequent  Financing,  including,  but  not  limited  to,  additional
compensation  based  on  changes  in  the Purchase Price or any type of reset or
adjustment  of  a purchase or conversion price or to issue additional securities
at  any  time  after the closing date of a Subsequent Financing.  If the Company
does  not  receive  notice  of exercise of the Rights Option from the Purchasers
within  the  Option  Period,  the  Company  shall  have  the  right to close the
Subsequent  Financing on the scheduled closing date with a third party; provided
                                                                        --------
that  all  of  the  material terms and conditions of the closing are the same as
those  provided  to  the Purchasers in the Rights Notice.  If the closing of the
proposed  Subsequent  Financing  does not occur on that date, any closing of the
contemplated  Subsequent  Financing  or  any other Subsequent Financing shall be
subject  to  all  of  the provisions of this Section 3.19(a), including, without
limitation, the delivery of a new Rights Notice.  The provisions of this Section
3.19(a)  shall  not  apply  to issuances of securities in a Permitted Financing.

          (b)  For purposes of this Agreement, a Permitted Financing (as defined
hereinafter)  shall  not  be  considered  a  Subsequent Financing.  A "Permitted
                                                                       ---------
Financing"  shall mean (i) securities issued (other than for cash) in connection
---------
with a merger, acquisition, or consolidation, (ii) securities issued pursuant to
the  conversion  or  exercise of convertible or exercisable securities issued or
outstanding on or prior to the date of this Agreement or issued pursuant to this
Agreement  (so  long  as the conversion or exercise price in such securities are
not

                                       20
<PAGE>
amended  to  lower  such  price  and/or  adversely affect the Purchasers), (iii)
securities  issued  in connection with bona fide strategic license agreements or
other  partnering arrangements so long as such issuances are not for the purpose
of  raising  capital,  (iv)  Common  Stock  issued  or the issuance or grants of
options  to  purchase  Common Stock pursuant to the Company's stock option plans
and  employee stock purchase plans outstanding as they exist on the date of this
Agreement,  and (v) any warrants issued to the placement agent and its designees
for  the  transactions  contemplated  by  the  Purchase  Agreement.

                                   ARTICLE IV

                                   CONDITIONS

          Section  4.1     Conditions Precedent to the Obligation of the Company
                           -----------------------------------------------------
to Close and to Sell the Securities.  The obligation hereunder of the Company to
-----------------------------------
close  and  issue  and  sell  the Securities to the Purchasers at the Closing is
subject  to  the  satisfaction  or  waiver,  at  or  before  the  Closing of the
conditions set forth below.  These conditions are for the Company's sole benefit
and  may  be  waived  by  the  Company  at  any  time  in  its  sole discretion.

          (a)     Accuracy  of  the  Purchasers' Representations and Warranties.
                  -------------------------------------------------------------
The  representations  and warranties of each Purchaser shall be true and correct
in  all  material respects (except for those representations and warranties that
are qualified by materiality or Material Adverse Effect, which shall be true and
correct  in  all  respects,  taking  into  account  such materiality or Material
Adverse  Effect  qualifiers) as of the date when made and as of the Closing Date
as  though made at that time, except for representations and warranties that are
expressly  made  as of a particular date, which shall be true and correct in all
material  respects  (except  for  those  representations and warranties that are
qualified  by  materiality  or  Material Adverse Effect, which shall be true and
correct  in  all  respects,  taking  into  account  such materiality or Material
Adverse  Effect  qualifiers)  as  of  such  date.

          (b)     Performance  by  the  Purchasers.  Each  Purchaser  shall have
                  --------------------------------
performed,  satisfied  and complied in all material respects with all covenants,
agreements  and conditions required by this Agreement to be performed, satisfied
or  complied  with  by  the  Purchasers  at  or  prior  to  the  Closing  Date.

          (c)     No Injunction.  No statute, rule, regulation, executive order,
                  -------------
decree,  ruling  or  injunction shall have been enacted, entered, promulgated or
endorsed  by any court or governmental authority of competent jurisdiction which
prohibits  the  consummation  of  any  of  the transactions contemplated by this
Agreement.

          (d)     Delivery  of  Purchase  Price.  The  Purchase  Price  for  the
                  -----------------------------
Securities  shall  have  been  delivered  to  the  Company  on the Closing Date.

          (e)     Delivery  of Transaction Documents.  The Transaction Documents
                  ----------------------------------
shall  have been duly executed and delivered by the Purchasers and, with respect
to  the  Escrow  Agreement,  the  escrow  agent,  to  the  Company.

                                       21
<PAGE>
          Section  4.2     Conditions  Precedent  to  the  Obligation  of  the
                           ---------------------------------------------------
Purchasers to Close and to Purchase the Securities.  The obligation hereunder of
--------------------------------------------------
the  Purchasers  to  purchase  the  Securities  and  consummate the transactions
contemplated  by  this Agreement is subject to the satisfaction or waiver, at or
before the Closing, of each of the conditions set forth below.  These conditions
are  for the Purchasers' sole benefit and may be waived by the Purchasers at any
time  in  their  sole  discretion.

          (a)     Accuracy  of  the  Company's  Representations  and Warranties.
                  -------------------------------------------------------------
Each  of the representations and warranties of the Company in this Agreement and
the  other  Transaction  Documents  shall  be  true  and correct in all material
respects  (except for those representations and warranties that are qualified by
materiality  or  Material Adverse Effect, which shall be true and correct in all
respects,  taking  into  account  such  materiality  or  Material Adverse Effect
qualifiers)  as  of the date when made and as of the Closing Date as though made
at  that time, except for representations and warranties that are expressly made
as  of  a  particular  date,  which  shall  be  true and correct in all material
respects  (except for those representations and warranties that are qualified by
materiality  or  Material Adverse Effect, which shall be true and correct in all
respects,  taking  into  account  such  materiality  or  Material Adverse Effect
qualifiers)  as  of  such  date.

          (b)     Performance by the Company.  The Company shall have performed,
                  --------------------------
satisfied  and  complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with  by  the  Company  at  or  prior  to  the  Closing  Date.

          (c)     No  Suspension,  Etc.  Trading  in  the Common Stock shall not
                  ---------------------
have  been suspended by the Commission or the OTC Bulletin Board (except for any
suspension  of  trading  of  limited  duration  agreed  to by the Company, which
suspension  shall be terminated prior to the Closing), and, at any time prior to
the  Closing  Date,  trading  in  securities  generally as reported by Bloomberg
Financial  Markets  ("Bloomberg")  shall  not have been suspended or limited, or
                      ---------
minimum  prices  shall  not have been established on securities whose trades are
reported  by  Bloomberg,  or on the New York Stock Exchange, nor shall a banking
moratorium  have  been  declared  either  by the United States or New York State
authorities,  nor  shall there have occurred any material outbreak or escalation
of  hostilities  or  other  national or international calamity or crisis of such
magnitude  in  its  effect  on,  or any material adverse change in any financial
market  which, in each case, in the reasonable judgment of such Purchaser, makes
it  impracticable  or  inadvisable  to  purchase  the  Securities.

          (d)     No Injunction.  No statute, rule, regulation, executive order,
                  -------------
decree,  ruling  or  injunction shall have been enacted, entered, promulgated or
endorsed  by any court or governmental authority of competent jurisdiction which
prohibits  the  consummation  of  any  of  the transactions contemplated by this
Agreement.

          (e)     No  Proceedings  or Litigation.  No action, suit or proceeding
                  ------------------------------
before  any  arbitrator or any governmental authority shall have been commenced,
and  no  investigation  by  any  governmental  authority shall, to the Company's
knowledge,  have  been threatened, against the Company or any Subsidiary, or any
of  the  officers,  directors  or  affiliates  of  the  Company  or

                                       22
<PAGE>
any  Subsidiary  seeking  to  restrain,  prevent  or  change  the  transactions
contemplated  by  this  Agreement,  or  seeking  damages in connection with such
transactions.

          (f)     Opinion  of  Counsel.  The  Purchasers  shall have received an
                  --------------------
opinion  of counsel to the Company, dated the date of the Closing, substantially
in  the  form of Exhibit G hereto, with such exceptions and limitations as shall
                 ---------
be  reasonably  acceptable  to  counsel  to  the  Purchasers.

          (g)     Notes  and  Warrants.  At  or  prior  to the Closing Date, the
                  --------------------
Company  shall have delivered to the Purchasers the Notes (in such denominations
as  each  Purchaser may request) and the Warrants (in such denominations as each
Purchaser  may  request).

          (h)     Secretary's  Certificate.  The Company shall have delivered to
                  ------------------------
the  Purchasers  a  secretary's certificate, dated as of the Closing Date, as to
(i) the resolutions adopted by the Board of Directors approving the transactions
contemplated  hereby,  (ii) the Certificate, (iii) the Bylaws, each as in effect
at  the  Closing,  and  (iv) the authority and incumbency of the officers of the
Company  executing the Transaction Documents and any other documents required to
be  executed  or  delivered  in  connection  therewith.

          (i)     Officer's Certificate.  On the Closing Date, the Company shall
                  ---------------------
have delivered to the Purchasers a certificate signed by an executive officer on
behalf  of the Company, dated as of the Closing Date, confirming the accuracy of
the  Company's  representations, warranties and covenants as of the Closing Date
(except  those  representations  and  warranties made as of a specific date) and
confirming the compliance by the Company with the conditions precedent set forth
in  paragraphs  (b)-(e)  and  (l)  of  this  Section  4.2 as of the Closing Date
(provided  that,  with  respect to the matters in paragraphs (d) and (e) of this
Section  4.2, such confirmation shall be based on the knowledge of the executive
officer  after  due  inquiry).

          (j)     Registration  Rights  Agreement.  As  of the Closing Date, the
                  -------------------------------
Company  shall  have executed and delivered the Registration Rights Agreement to
each  Purchaser.

          (k)     Transfer  Agent  Instructions.  The Irrevocable Transfer Agent
                  -----------------------------
Instructions,  in  the  form  of  Exhibit  F  attached  hereto,  shall have been
                                  ----------
delivered  to  the  Company's  transfer  agent.

          (l)     Escrow  Agreement.  At the Closing, the Company and the escrow
                  -----------------
agent  shall have executed and delivered the Escrow Agreement to each Purchaser.

          (m)     Withdrawal  of  Pending  Registration  Statement.  The
                  -------------------------------------------------
registration  statement  on Form SB-2 (File No. 333-131928) filed by the Company
currently  pending  before  the  Commission  shall  have  been  withdrawn.

          (n)     Cotton  Acquisition.  The  Company  shall have consummated the
                  -------------------
Cotton  Acquisition.

          (o)     Material Adverse Effect.  Except as otherwise set forth herein
                  -----------------------
or  on  the  Schedule  of Exceptions attached hereto, no Material Adverse Effect
shall  have  occurred  at  or  before  the  Closing  Date.

                                       23
<PAGE>
          (p)     Consent  of  Existing  Noteholders.  The  Company's  existing
                  ----------------------------------
noteholders  shall  have  consented  in  writing  to  the  consummation  of  the
transactions  contemplated  by  this  Agreement.

                                    ARTICLE V

                               CERTIFICATE LEGEND

          Section  5.1     Legend.  Each certificate representing the Securities
                           ------
shall  be  stamped  or  otherwise  imprinted  with a legend substantially in the
following  form  (in  addition  to  any  legend  required  by  applicable  state
securities  or  "blue  sky"  laws):

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
     NOT  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
     "SECURITIES  ACT")  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
     TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED UNDER THE
     SECURITIES  ACT  AND  UNDER APPLICABLE STATE SECURITIES LAWS OR CHARYS
     HOLDING COMPANY, INC. SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
     THAT  REGISTRATION  OF  SUCH  SECURITIES  UNDER THE SECURITIES ACT AND
     UNDER  THE  PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS IS NOT
     REQUIRED.

     The Company agrees to issue or reissue certificates representing any of the
Conversion  Shares and the Warrant Shares, without the legend set forth above if
at  such  time,  prior  to  making any transfer of any such Conversion Shares or
Warrant  Shares,  such  holder  thereof shall give written notice to the Company
describing  the manner and terms of such transfer and removal as the Company may
reasonably  request.  Such  proposed  transfer  and removal will not be effected
until:  (a)  either  (i)  the  Company has received a written opinion of counsel
reasonably  satisfactory  to the Company, to the effect that the registration of
the Conversion Shares or Warrant Shares under the Securities Act is not required
in  connection  with such proposed transfer, (ii) a registration statement under
the  Securities  Act  covering  such  proposed disposition has been filed by the
Company  with  the Commission and has become effective under the Securities Act,
(iii)  the  Company  has  received other evidence reasonably satisfactory to the
Company  that  such  registration and qualification under the Securities Act and
state  securities laws are not required (which may include an opinion of counsel
provided  by  the  Company),  or  (iv)  the  holder  provides  the  Company with
reasonable assurances, and based thereon the Company reasonably determines, that
such  security  can be sold pursuant to Rule 144 under the Securities Act (which
may  include  an opinion of counsel provided by the Company); and (b) either (i)
the  Company  has  received an opinion of counsel reasonably satisfactory to the
Company,  to  the effect that registration or qualification under the securities
or "blue sky" laws of any state is not required in connection with such proposed
disposition, (ii) compliance with applicable state securities or "blue sky" laws
has  been  effected,  or  (iii)  the holder provides the Company with reasonable
assurances,  and  based  thereon  the  Company  reasonably  determines,

                                       24
<PAGE>
that a valid exemption exists with respect thereto (which may include an opinion
of  counsel  provided  by  the  Company).  The  Company will respond to any such
notice  from  a  holder  within  three  (3)  business  days.  In the case of any
proposed  transfer  under  this  Section  5.1, the Company will use commercially
reasonable  efforts to comply with any such applicable state securities or "blue
sky"  laws,  but shall in no event be required, (x) to qualify to do business in
any  state  where  it  is  not then qualified, (y) to take any action that would
subject  it to tax or to the general service of process in any state where it is
not  then  subject, or (z) to comply with state securities or "blue sky" laws of
any  state for which registration by coordination is unavailable to the Company.
The  restrictions on transfer contained in this Section 5.1 shall be in addition
to,  and  not  by  way  of  limitation  of,  any  other restrictions on transfer
contained  in  any  other  section  of  this  Agreement.  Whenever a certificate
representing the Conversion Shares or Warrant Shares is required to be issued to
a  Purchaser  without  a  legend,  in  lieu  of delivering physical certificates
representing  the  Conversion  Shares  or Warrant Shares, provided the Company's
transfer  agent  is  participating  in the Depository Trust Company ("DTC") Fast
                                                                      ---
Automated  Securities  Transfer  program, the Company shall use its commercially
reasonable  efforts  to  cause its transfer agent to electronically transmit the
Conversion  Shares  or Warrant Shares to a Purchaser by crediting the account of
such  Purchaser's  Prime  Broker  with  DTC through its Deposit Withdrawal Agent
Commission  ("DWAC")  system (to the extent not inconsistent with any provisions
              ----
of  this  Agreement).

                                   ARTICLE VI

                                 INDEMNIFICATION

          Section  6.1     Company  Indemnity.  The  Company agrees to indemnify
                           ------------------
and  hold  harmless  the  Purchasers  (and their respective directors, officers,
affiliates, agents, successors and assigns) from and against any and all losses,
liabilities,  deficiencies,  costs,  damages  and  expenses  (including, without
limitation,  reasonable  attorneys' fees, charges and disbursements) incurred by
the  Purchasers  as  a  result  of  any  inaccuracy  in  or  breach  of  the
representations,  warranties  or  covenants  made  by  the  Company  herein.

          Section  6.2     Indemnification  Procedure.  Any  party  entitled  to
                           --------------------------
indemnification under this Article VI (an "indemnified party") will give written
notice  to  the  indemnifying  party  of  any  matter giving rise to a claim for
indemnification;  provided,  that  the  failure  of  any  party  entitled  to
indemnification  hereunder  to  give notice as provided herein shall not relieve
the  indemnifying  party  of its obligations under this Article VI except to the
extent  that  the  indemnifying  party is actually prejudiced by such failure to
give notice.  In case any such action, proceeding or claim is brought against an
indemnified  party  in respect of which indemnification is sought hereunder, the
indemnifying  party  shall  be  entitled  to  participate  in and, unless in the
reasonable  judgment of the indemnifying party a conflict of interest between it
and  the  indemnified  party  exists  with respect to such action, proceeding or
claim  (in  which  case  the  indemnifying  party  shall  be responsible for the
reasonable  fees  and  expenses  of  one  separate  counsel  for the indemnified
parties),  to assume the defense thereof with counsel reasonably satisfactory to
the  indemnified  party.  In  the  event  that the indemnifying party advises an
indemnified  party  that  it  will  contest  such  a  claim  for indemnification
hereunder,  or  fails, within thirty (30) days of receipt of any indemnification
notice  to  notify, in writing, such person of its election to defend, settle or
compromise,  at  its  sole  cost  and  expense,  any  action,  proceeding  or

                                       25
<PAGE>
claim (or discontinues its defense at any time after it commences such defense),
then  the  indemnified  party  may,  at  its option, defend, settle or otherwise
compromise  or  pay  such  action  or claim.  In any event, unless and until the
indemnifying party elects in writing to assume and does so assume the defense of
any such claim, proceeding or action, the indemnified party's costs and expenses
arising  out  of the defense, settlement or compromise of any such action, claim
or  proceeding  shall  be  losses  subject  to  indemnification  hereunder.  The
indemnified  party  shall  cooperate  fully  with  the  indemnifying  party  in
connection  with  any  negotiation or defense of any such action or claim by the
indemnifying  party  and shall furnish to the indemnifying party all information
reasonably  available  to  the indemnified party which relates to such action or
claim.  The  indemnifying  party shall keep the indemnified party fully apprised
at all times as to the status of the defense or any settlement negotiations with
respect  thereto.  If the indemnifying party elects to defend any such action or
claim,  then  the  indemnified  party  shall  be entitled to participate in such
defense  with  counsel  of  its  choice  at  its  sole  cost  and  expense.  The
indemnifying  party  shall not be liable for any settlement of any action, claim
or  proceeding  effected  without  its  prior  written consent.  Notwithstanding
anything  in  this Article VI to the contrary, the indemnifying party shall not,
without  the indemnified party's prior written consent, settle or compromise any
claim  or  consent to entry of any judgment in respect thereof which imposes any
future  obligation  on  the  indemnified  party or which does not include, as an
unconditional  term  thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such claim.  The
indemnification  obligations  to  defend  the indemnified party required by this
Article  VI  shall be made by periodic payments of the amount thereof during the
course  of  investigation or defense, as and when bills are received or expense,
loss,  damage  or  liability is incurred, so long as the indemnified party shall
refund  such  moneys  if  it  is  ultimately  determined by a court of competent
jurisdiction that such party was not entitled to indemnification.  The indemnity
agreements  contained  herein shall be in addition to (a) any cause of action or
similar  rights  of  the  indemnified  party  against  the indemnifying party or
others,  and  (b)  any  liabilities  the  indemnifying  party  may be subject to
pursuant  to  the  law.  No indemnifying party will be liable to the indemnified
party  under  this  Agreement to the extent, but only to the extent that a loss,
claim,  damage or liability is attributable to the indemnified party's breach of
any  of  the representations, warranties or covenants made by such party in this
Agreement  or  in  the  other  Transaction  Documents.

                                   ARTICLE VII

                                  MISCELLANEOUS

          Section  7.1     Fees  and Expenses.  Except as otherwise set forth in
                           ------------------
this  Agreement  and  the  other Transaction Documents, each party shall pay the
fees  and  expenses  of its advisors, counsel, accountants and other experts, if
any, and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement and the other
Transaction Documents, provided that the Company shall pay all actual attorneys'
                       --------
fees  and expenses (including disbursements and out-of-pocket expenses) incurred
by  Vision  Opportunity  Master Fund, Ltd. ("Vision") in connection with (i) the
                                             ------
preparation, negotiation, execution and delivery of this Agreement and the other
Transaction  Documents  and  the  transactions  contemplated  thereunder,  which
payment  shall  be  made  at  the  Closing  and  shall  not exceed $40,000 (plus
disbursements  and  out-of-pocket  expenses), (ii) the filing and declaration of
effectiveness  by  the  Commission  of  the Registration Statement and (iii) any

                                       26
<PAGE>
amendments,  modifications  or  waivers  of  this  Agreement or any of the other
Transaction  Documents.  The  Company  shall also pay up to $25,000 to Vision at
the Closing in connection with all due diligence expenses incurred by Vision and
all  reasonable  fees and expenses incurred by the Purchasers in connection with
the  enforcement  of  this  Agreement or any of the other Transaction Documents,
including, without limitation, all reasonable attorneys' fees and expenses.  The
Purchasers  hereby  acknowledge  that  the  Company  has  already paid to Vision
$10,000, which shall be credited against the foregoing amounts set forth in this
Section  7.1.

          Section  7.2     Specific Performance; Consent to Jurisdiction; Venue.
                           ----------------------------------------------------

          (a)     The  Company  and  the  Purchasers  acknowledge and agree that
irreparable  damage  would occur in the event that any of the provisions of this
Agreement  or  the  other Transaction Documents were not performed in accordance
with  their specific terms or were otherwise breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure  breaches  of  the  provisions  of  this Agreement or the other Transaction
Documents  and  to  enforce  specifically  the  terms  and  provisions hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled  by  law  or  equity.

          (b)     The  parties  agree  that  venue for any dispute arising under
this  Agreement  will  lie exclusively in the state or federal courts located in
New  York County, New York, and the parties irrevocably waive any right to raise
forum  non  conveniens  or  any  other  argument that New York is not the proper
venue.  The  parties  irrevocably  consent to personal jurisdiction in the state
and  federal  courts  of  the state of New York.  The Company and each Purchaser
consent  to  process  being  served  in  any  such suit, action or proceeding by
delivering  a  copy thereof via reputable overnight carrier to such party at the
address  in  effect  for notices to it under this Agreement and agrees that such
service  shall  constitute  good  and  sufficient  service of process and notice
thereof.  Nothing  in  this Section 7.2 shall affect or limit any right to serve
process  in  any  other manner permitted by law.  The Company and the Purchasers
hereby agree that the prevailing party in any suit, action or proceeding arising
out  of  or  relating to the Securities, this Agreement or the other Transaction
Documents, shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing  party.  The  parties hereby waive all rights to a trial by jury.

          Section  7.3     Entire  Agreement; Amendment.  This Agreement and the
                           ----------------------------
Transaction  Documents  contain  the  entire  understanding and agreement of the
parties  with  respect to the matters covered hereby and, except as specifically
set  forth herein or in the other Transaction Documents, neither the Company nor
any  Purchaser  make  any representation, warranty, covenant or undertaking with
respect  to  such  matters,  and  they  supersede  all  prior understandings and
agreements  with respect to said subject matter, all of which are merged herein.
No  provision of this Agreement may be waived or amended other than by a written
instrument  signed by the Company and the Purchasers holding at least a majority
of the principal amount of the Notes then held by the Purchasers.  Any amendment
or  waiver  effected  in  accordance with this Section 7.3 shall be binding upon
each  Purchaser  (and  their  permitted  assigns)  and  the  Company.

          Section 7.4     Notices.  Any notice, demand, request, waiver or other
                          -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be

                                       27
<PAGE>
effective  (a)  upon  hand  delivery  by telecopy or facsimile at the address or
number  designated  below (if delivered on a business day during normal business
hours  where such notice is to be received), or the first business day following
such  delivery (if delivered other than on a business day during normal business
hours  where  such  notice  is  to  be received) or (b) upon actual receipt of a
delivery  by  express  courier  service.  The  addresses for such communications
shall  be:

If to the Company:            Charys Holding Company, Inc.
                              1117 Perimeter Center West, Suite N415
                              Atlanta, Georgia 30338
                              Attention: Chief Executive Officer
                              Tel. No.: (678) 443-2300
                              Fax No.: (678) 443-2320
with copies (which copies
shall not constitute notice
to the Company) to:           Glast, Phillips & Murray, P.C.
                              815 Walker Street, Suite 1250
                              Houston, Texas 77002
                              Attention: Norman T. Reynolds, Esq.
                              Tel. No.: (713) 237-3135
                              Fax No.: (713) 237-3202

If to any Purchaser:          At the address of such Purchaser set forth on
                              Exhibit A to  this Agreement, with copies to
                              ---------
                              Purchaser's counsel as set forth on Exhibit A
                                                                  ---------
                              or  as  specified  in  writing  by  such
                              Purchaser  with  copies  to:

                              Kramer Levin Naftalis  & Frankel LLP
                              1177 Avenue of the Americas
                              New York, New York 10036
                              Attention: Christopher S. Auguste, Esq.
                              Tel. No.: (212) 715-9100
                              Fax No.: (212) 715-8000

     Any  party  hereto  may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto pursuant
to  the  provisions  of  this  Section  7.4.

          Section  7.5     Waivers.  No  waiver  by  either party of any default
                           -------
with  respect to any provision, condition or requirement of this Agreement shall
be  deemed  to  be  a  continuing  waiver in the future or a waiver of any other
provision,  condition  or requirement hereof, nor shall any delay or omission of
any  party  to exercise any right hereunder in any manner impair the exercise of
any  such right accruing to it thereafter.  No consideration shall be offered or
paid  to  any  Purchaser  to amend or consent to a waiver or modification of any
provision  of  any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents.  This provision
constitutes  a separate right granted to each Purchaser by the Company and shall
not  in  any  way be construed as the Purchasers acting in concert or as a group
with  respect to the purchase, disposition or voting of Securities or otherwise.

                                       28
<PAGE>
          Section  7.6     Headings.  The  article,  section  and  subsection
                           --------
headings  in  this Agreement are for convenience only and shall not constitute a
part of this Agreement for any other purpose and shall not be deemed to limit or
affect  any  of  the  provisions  hereof.

          Section  7.7     Successors  and  Assigns.  This  Agreement  shall  be
                           ------------------------
binding  upon  and  inure to the benefit of the parties and their successors and
assigns.  After  the Closing, the assignment by a party to this Agreement of any
rights  hereunder  shall  not  affect  the  obligations of such party under this
Agreement.  Subject  to  Section  5.1  hereof,  the  Purchasers  may  assign the
Securities  and  its  rights  under  this  Agreement  and  the other Transaction
Documents  and  any  other  rights hereto and thereto without the consent of the
Company.

          Section  7.8     No Third Party Beneficiaries.  Except as contemplated
                           ----------------------------
by  Article VI hereof, this Agreement is intended for the benefit of the parties
hereto  and their respective permitted successors and assigns and is not for the
benefit  of,  nor  may  any  provision  hereof be enforced by, any other person.

          Section  7.9     Governing  Law.  This  Agreement shall be governed by
                           --------------
and  construed  in  accordance  with the internal laws of the State of New York,
without  giving  effect  to  any  of the conflicts of law principles which would
result  in the application of the substantive law of another jurisdiction.  This
Agreement shall not be interpreted or construed with any presumption against the
party  causing  this  Agreement  to  be  drafted.

          Section  7.10     Survival.  The representations and warranties of the
                            --------
Company  and  the Purchasers shall survive the execution and delivery hereof and
the  Closing  hereunder.

          Section  7.11     Counterparts.  This Agreement may be executed in any
                            ------------
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each  party  and delivered to the other parties hereto, it being understood that
all  parties  need  not  sign  the  same  counterpart.

          Section  7.12     Publicity.  The  Company  agrees  that  it  will not
                            ---------
disclose,  and  will  not  include  in any public announcement, the names of the
Purchasers  without  the  consent  of the Purchasers, which consent shall not be
unreasonably  withheld  or  delayed,  or  unless  and  until  such disclosure is
required by law, rule or applicable regulation, including without limitation any
disclosure  pursuant  to the Registration Statement, and then only to the extent
of  such  requirement.

          Section  7.13     Severability.  The  provisions of this Agreement are
                            ------------
severable  and,  in  the  event  that  any court of competent jurisdiction shall
determine  that  any  one  or  more  of the provisions or part of the provisions
contained  in  this  Agreement  shall,  for  any  reason, be held to be invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other provision or part of a provision of
this  Agreement  and  this  Agreement shall be reformed and construed as if such
invalid  or  illegal  or unenforceable provision, or part of such provision, had
never  been  contained herein, so that such provisions would be valid, legal and
enforceable  to  the  maximum  extent  possible.

          Section  7.14     Further Assurances.  From and after the date of this
                            ------------------
Agreement,  upon  the  request of the Purchasers or the Company, the Company and
each  Purchaser  shall

                                       29
<PAGE>
execute  and  deliver  such  instruments, documents and other writings as may be
reasonably  necessary  or  desirable  to confirm and carry out and to effectuate
fully  the  intent  and  purposes  of  this  Agreement and the other Transaction
Documents.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       30
<PAGE>
     IN  WITNESS  WHEREOF,  the parties hereto have caused this Note and Warrant
Purchase  Agreement  to be duly executed by their respective authorized officers
as  of  the  date  first  above  written.

                                     CHARYS HOLDING COMPANY, INC.

                                     By:
                                        -----------------------------------
                                        Name:
                                        Title:

                                     PURCHASER:

                                     By:
                                        -----------------------------------
                                        Name:
                                        Title:

<PAGE>
<TABLE>
<CAPTION>
                                    EXHIBIT A
                               LIST OF PURCHASERS

NAMES AND ADDRESSES                   INVESTMENT AMOUNT AND NUMBER OF
OF PURCHASERS                         WARRANTS PURCHASED
-------------                         ------------------
<S>                                   <C>

Vision Opportunity Master Fund, Ltd.  Investment Amount: $10,000,000
20 W. 55th Street, 5th floor          Series A Warrants: 3,333,333
New York, NY 10019                    Series B Warrants: 3,333,333
                                      Series J Warrants: 4,444,444
                                      Series C Warrants: 3,333,333
                                      Series D Warrants: 3,333,333

Fort Mason Master, L.P.               Investment Amount: $3,286,850
4 Embarcadero Center                  Series A Warrants: 1,095,616
Suite 2050                            Series B Warrants: 1,095,616
San Francisco, CA 94111               Series J Warrants: 1,460,822
                                      Series C Warrants: 1,095,616
                                      Series D Warrants: 1,095,616

Fort Mason Partners, L.P.             Investment Amount: $213,150
4 Embarcadero Center                  Series A Warrants: 71,050
Suite 2050                            Series B Warrants: 71,050
San Francisco, CA 94111               Series J Warrants: 94,733
                                      Series C Warrants: 71,050
                                      Series D Warrants: 71,050

Opal Limited                          Investment Amount: $450,000
New Moon House                        Series A Warrants: 150,000
Eastern Road                          Series B Warrants: 150,000
PO Box N-1808
Nassau
Bahamas
</TABLE>

                                        i
<PAGE>
                                    EXHIBIT B
                                  FORM OF NOTE

                                        ii
<PAGE>
THIS  NOTE  AND  THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED  OF  IN  THE  ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF A
WRITTEN  OPINION  OF  COUNSEL  IN  THE  FORM,  SUBSTANCE  AND  SCOPE  REASONABLY
SATISFACTORY TO THE MAKER THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE
UPON  CONVERSION  HEREOF  MAY  BE  SOLD, TRANSFERRED,  OR OTHERWISE DISPOSED OF,
UNDER  AN  EXEMPTION  FROM  REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES
LAWS.

                          CHARYS HOLDING COMPANY, INC.

                    Subordinated Convertible Promissory Note
                              due December 4, 2009

No. CN-06-__                                                        $___________
Dated: December 4, 2006

     For  value  received,  Charys Holding Company, Inc., a Delaware corporation
(the  "Maker"),  hereby  promises to pay to the order of _______________________
       -----
(together  with  its  successors,  representatives,  and  permitted assigns, the
"Holder"),  in  accordance  with  the  terms hereinafter provided, the principal
 ------
amount  of  ________________________  ($______________),  together with interest
thereon.  Concurrently  with  the  issuance  of  this Note, the Maker is issuing
separate convertible promissory notes (the "Other Notes") to separate purchasers
                                            -----------
(the  "Other Holders") pursuant to the Purchase Agreement (as defined in Section
       -------------
1.1  hereof).   This  Note  and the Other Notes are sometimes referred to as the
"Notes".
 -----

     All  payments under or pursuant to this Note shall be made in United States
Dollars  in  immediately  available  funds  to  the Holder at the address of the
Holder  first set forth above or at such other place as the Holder may designate
from  time  to  time in writing to the Maker or by wire transfer of funds to the
Holder's  account, instructions for which are attached hereto as Exhibit A.  The
                                                                 ---------
outstanding  principal balance of this Note shall be due and payable on December
4,  2009  (the  "Maturity  Date")  or  at  such earlier time as provided herein.
                 --------------

                                    ARTICLE I

          Section  1.1     Purchase  Agreement.  This Note has been executed and
                           -------------------
delivered  pursuant  to  the  Note  and  Warrant  Purchase Agreement dated as of
December  4,  2006  (the  "Purchase  Agreement")  by and among the Maker and the
                           -------------------
purchasers  listed  therein.  Capitalized  terms  used and not otherwise defined
herein  shall  have  the  meanings  set  forth  for  such  terms in the Purchase
Agreement.

<PAGE>
          Section 1.2     Interest.  Beginning on the issuance date of this Note
                          --------
(the "Issuance Date"), the outstanding principal balance of this Note shall bear
      -------------
interest,  in  arrears, at a rate per annum equal to eight percent (8%), payable
in  cash  quarterly commencing on March 1, 2007 and on the first business day of
each  June,  September  and  December thereafter so long as any principal amount
evidenced  by  this Note remains outstanding.  Interest shall be computed on the
basis of a 360-day year of twelve (12) 30-day months and shall accrue commencing
on  the  Issuance Date.  Furthermore, upon the occurrence of an Event of Default
(as  defined  in  Section  2.1 hereof), then to the extent permitted by law, the
Maker  will  pay  interest  in  cash  to  the  Holder, payable on demand, on the
outstanding  principal balance of the Note from the date of the Event of Default
until  such  Event  of  Default  is  cured  at the rate of the lesser of fifteen
percent  (15%)  and  the  maximum  applicable  legal  rate  per  annum.

          Section  1.3     Subordination. All payments due under this Note shall
                           -------------
be  subordinated  and made junior, in all respects to the payment in full of all
principal,  all  interest  accrued  thereon  and  all  other  amounts due on any
indebtedness  outstanding  prior  to  the  Issuance  Date.

          Section 1.4     Payment on Non-Business Days.  Whenever any payment to
                          ----------------------------
be made shall be due on a Saturday, Sunday or a public holiday under the laws of
the  State  of New York, such payment may be due on the next succeeding business
day  and  such  next  succeeding day shall be included in the calculation of the
amount  of  accrued  interest  payable  on  such  date.

          Section  1.5     Transfer.  This  Note  may  be  transferred  or sold,
                           --------
subject  to the provisions of Section 4.8 of this Note, or pledged, hypothecated
or  otherwise  granted  as  security  by  the  Holder.

          Section  1.6     Replacement.  Upon  receipt  of  a  duly  executed,
                           -----------
notarized  and  unsecured  written statement from the Holder with respect to the
loss,  theft  or  destruction  of  this  Note  (or any replacement hereof) and a
standard  indemnity  reasonably  satisfactory to the Maker, or, in the case of a
mutilation of this Note, upon surrender and cancellation of such Note, the Maker
shall  issue a new Note, of like tenor and amount, in lieu of such lost, stolen,
destroyed  or  mutilated  Note.

                                   ARTICLE II

                          EVENTS OF DEFAULT;  REMEDIES
                          ----------------------------

          Section  2.1     Events  of  Default.  The  occurrence  of  any of the
                           -------------------
following events shall be an "Event of Default" under this Note:
                              ----------------

          (a)     the  Maker  shall  fail  to  make  any  principal  or interest
payments  due under this Note on the date such payments are due and such default
is  not fully cured within three (3) business days after the occurrence thereof;
or

          (b)     the  failure  of the registration statement (the "Registration
                                                                    ------------
Statement")  providing  for  the  resale  of shares of the Maker's common stock,
---------
$0.001 par value per share (the "Common Stock") issuable upon conversion of this
                                 ------------
Note  to  be  declared effective by the Securities and Exchange Commission on or
prior  to  the date which is two hundred ten (210) days after the Issuance Date;
or

                                      -2-
<PAGE>
          (c)     the suspension from listing, without subsequent listing on any
one  of,  or  the failure of the Common Stock to be listed or quoted on at least
one  of the OTC Bulletin Board, the American Stock Exchange, the Nasdaq National
Market,  the  Nasdaq  Capital  Market or The New York Stock Exchange, Inc. for a
period of ten (10) consecutive Trading Days; or

          (d)     the  Maker's  notice to the Holder, including by way of public
announcement,  at any time, of its inability to comply (including for any of the
reasons  described in Section 3.8(a) hereof) or its intention not to comply with
proper requests for conversion of this Note into shares of Common Stock; or

          (e)     the  Maker  shall  fail  to  (i)  timely deliver the shares of
Common  Stock  upon conversion of the Note, (ii) file the Registration Statement
in  accordance with the terms of the Registration Rights Agreement or (iii) make
the  payment of any fees and/or liquidated damages under this Note, the Purchase
Agreement  or  the  Registration  Rights Agreement, which failure in the case of
items  (i)  and  (iii)  of  this  Section 2.1(e) is not remedied within ten (10)
business  days  after  the  incurrence  thereof and, solely with respect to item
(iii)  above,  after  the  Holder  delivers  written  notice to the Maker of the
incurrence  thereof;  or

          (f)     while  the Registration Statement is required to be maintained
effective  pursuant  to  the  terms  of  the  Registration Rights Agreement, the
effectiveness  of  the  Registration Statement lapses for any reason (including,
without  limitation,  the  issuance  of  a  stop order) or is unavailable to the
Holder  for  sale  of the Registrable Securities (as defined in the Registration
Rights  Agreement)  in  accordance  with  the  terms  of the Registration Rights
Agreement,  and  such lapse or unavailability continues for a period of ten (10)
consecutive  Trading  Days, provided that the Maker has not exercised its rights
                            --------
pursuant  to  Section  3(n)  of  the  Registration  Rights  Agreement;  or

          (g)     default  shall be made in the performance or observance of (i)
any  covenant,  condition or agreement contained in this Note (other than as set
forth  in  clause  (f)  of this Section 2.1) and such default is not fully cured
within  ten  (10)  business days after the Holder delivers written notice to the
Maker  of  the  occurrence  thereof or (ii) any covenant, condition or agreement
contained  in  the  Purchase Agreement, the Other Notes, the Registration Rights
Agreement  or  any  other Transaction Document which is not covered by any other
provisions  of  this  Section 2.1 and such default is not fully cured within ten
(10)  business days after the Holder delivers written notice to the Maker of the
occurrence  thereof;  or

          (h)     any  material  representation  or  warranty  made by the Maker
herein  or  in  the  Purchase  Agreement, the Registration Rights Agreement, the
Other  Notes or any other Transaction Document shall prove to have been false or
incorrect or breached in a material respect on the date as of which made and the
Holder  delivers  written  notice  to  the  Maker  of the occurrence thereof; or

          (i)     the  Maker  shall  after  the Issuance Date (A) default in any
payment of any amount or amounts of principal of or interest on any Indebtedness
(other  than the Indebtedness

                                      -3-
<PAGE>
hereunder)  the aggregate principal amount of which Indebtedness is in excess of
$100,000  or (B) default in the observance or performance of any other agreement
or  condition  relating  to  any  Indebtedness or contained in any instrument or
agreement  evidencing,  securing  or  relating thereto, or any other event shall
occur  or  condition  exist,  the  effect  of  which  default  or other event or
condition  is  to  cause,  or  to permit the holder or holders or beneficiary or
beneficiaries  of  such  Indebtedness  to  cause  with  the  giving of notice if
required,  such  Indebtedness  to  become  due  prior to its stated maturity; or

          (j)     the  Maker  shall  (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property or assets, (ii) make a
general  assignment for the benefit of its creditors, (iii) commence a voluntary
case  under the United States Bankruptcy Code (as now or hereafter in effect) or
under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition  seeking  to  take advantage of any bankruptcy, insolvency, moratorium,
reorganization  or  other  similar  law  affecting the enforcement of creditors'
rights  generally,  (v) acquiesce in writing to any petition filed against it in
an  involuntary case under United States Bankruptcy Code (as now or hereafter in
effect)  or under the comparable laws of any jurisdiction (foreign or domestic),
or  (vi) issue a notice of bankruptcy or winding down of its operations or issue
a  press  release  regarding  same;  or

          (k)     a  proceeding  or  case  shall  be commenced in respect of the
Maker,  without  its  application  or  consent,  in  any  court  of  competent
jurisdiction,  seeking  (i)  the  liquidation,  reorganization,  moratorium,
dissolution,  winding  up, or composition or readjustment of its debts, (ii) the
appointment  of  a trustee, receiver, custodian, liquidator or the like of it or
of  all or any substantial part of its assets in connection with the liquidation
or  dissolution  of the Maker or (iii) similar relief in respect of it under any
law  providing  for the relief of debtors, and such proceeding or case described
in  clause  (i),  (ii)  or  (iii) shall continue undismissed, or unstayed and in
effect,  for  a  period  of  thirty  (30)  days or any order for relief shall be
entered  in  an  involuntary case under United States Bankruptcy Code (as now or
hereafter  in  effect) or under the comparable laws of any jurisdiction (foreign
or  domestic)  against  the  Maker  or action under the laws of any jurisdiction
(foreign  or  domestic)  analogous  to  any of the foregoing shall be taken with
respect  to  the Maker and shall continue undismissed, or unstayed and in effect
for  a  period  of  thirty  (30)  days;  or

          (l)     the  failure  of  the  Maker to instruct its transfer agent to
remove  any  legends  from shares of Common Stock eligible to be sold under Rule
144  of  the Securities Act and issue such unlegended certificates to the Holder
within  five (5) business days of the Holder's request so long as the Holder has
provided  reasonable  assurances  to  the Maker, and based thereon the Maker has
determined,  that  such shares of Common Stock can be sold pursuant to Rule 144;
or

          (m)     the  failure of the Maker to pay any amounts due to the Holder
herein  or  any  other Transaction Document within five (5) business days of the
date  such  payments  are  due  and  such default is not fully cured within five
(5)business  days  after  the Holder delivers written notice to the Maker of the
occurrence  thereof;  or

          (n)     the  occurrence  of an Event of Default under the Other Notes.

                                      -4-
<PAGE>
          Section  2.2     Remedies  Upon  An  Event of Default.  If an Event of
                           ------------------------------------
Default shall have occurred and shall be continuing, the Holder of this Note may
at  any  time  at its option, (a) declare the entire unpaid principal balance of
this  Note,  together  with  all  interest  accrued hereon, due and payable, and
thereupon,  the  same  shall  be  accelerated  and  so  due and payable, without
presentment,  demand,  protest,  or  notice,  all  of which are hereby expressly
unconditionally  and  irrevocably  waived  by the Maker; provided, however, that
                                                         --------  -------
upon  the occurrence of an Event of Default described in (i) Sections 2.1 (j) or
(k),  the  outstanding principal balance and accrued interest hereunder shall be
automatically  due  and payable and (ii) Sections 2.1 (b)-(i), (l), (m) and (n),
demand  the  prepayment  of this Note pursuant to Section 3.7 hereof, (b) demand
that  the principal amount of this Note then outstanding shall be converted into
shares  of  Common  Stock at a Conversion Price per share calculated pursuant to
Section  3.1  hereof  assuming that the date that the Event of Default occurs is
the  Conversion  Date  (as  defined  in  Section 3.1 hereof), or (c) exercise or
otherwise  enforce  any  one or more of the Holder's rights, powers, privileges,
remedies and interests under this Note, the Purchase Agreement, the Registration
Rights  Agreement  or  applicable  law.  No  course  of delay on the part of the
Holder shall operate as a waiver thereof or otherwise prejudice the right of the
Holder.  No  remedy  conferred  hereby  shall  be  exclusive of any other remedy
referred  to  herein or now or hereafter available at law, in equity, by statute
or  otherwise.

                                   ARTICLE III

                      CONVERSION; ANTIDILUTION; PREPAYMENT

          Section  3.1     Conversion  Option.
                           ------------------

          (a)     At  any time on or after the Issuance Date, this Note shall be
convertible  (in whole or in part), at the option of the Holder (the "Conversion
                                                                      ----------
Option"),  into  such  number  of fully paid and non-assessable shares of Common
------
Stock  (the  "Conversion Rate") as is determined by dividing (x) that portion of
              ---------------
the  outstanding  principal  balance  under  this  Note as of such date that the
Holder  elects  to  convert  by  (y) the Conversion Price (as defined in Section
3.2(a)  hereof) then in effect on the date on which the Holder faxes a notice of
conversion  (the  "Conversion  Notice"),  duly executed, to the Maker (facsimile
                   ------------------
number  (678) 443-2320, Attn.: Chief Executive Officer) (the "Conversion Date"),
                                                              ---------------
provided,  however,  that the Conversion Price shall be subject to adjustment as
described  in  Section  3.6 of this Note.  The Holder shall deliver this Note to
the  Maker at the address designated in the Purchase Agreement at such time that
this Note is fully converted.  With respect to partial conversions of this Note,
the  Maker  shall  keep  and attach hereto written records of the amount of this
Note  converted  as  of  each  Conversion  Date.

          Section  3.2     Conversion  Price.
                           -----------------

          (a)     The  term  "Conversion  Price"  shall  mean  $2.25, subject to
                              -----------------
adjustment  under  Section  3.6  hereof.

          (b)     Notwithstanding  any  of  the  foregoing  to  the contrary, if
during  any  period  (a  "Black-out  Period"), the Holder is unable to trade any
                          -----------------
Common  Stock issued or issuable upon conversion of this Note immediately due to
the  postponement  of  filing  or  delay  or  suspension of effectiveness of the
Registration  Statement  or  because  the  Maker  has  otherwise  informed  such

                                      -5-
<PAGE>
Holder  that  an  existing prospectus cannot be used at that time in the sale or
transfer  of  such  Common  Stock  (provided  that  such  postponement,  delay,
suspension  or  fact  that  the  prospectus cannot be used is not due to factors
solely  within  the  control  of  the  Holder  of  this Note or due to the Maker
exercising  its rights under Section 3(n) of the Registration Rights Agreement),
such  Holder shall have the option but not the obligation on any Conversion Date
within ten (10) Trading Days following the expiration of the Black-out Period of
using  the Conversion Price applicable on such Conversion Date or any Conversion
Price selected by the Holder that would have been applicable had such Conversion
Date been at any earlier time during the Black-out Period or within the ten (10)
Trading Days thereafter.  In no event shall the Black-out Period have any effect
on  the  Maturity  Date  of  this  Note.

          Section  3.3     Mechanics  of  Conversion.
                           -------------------------

          (a)     Not  later  than  three  (3) Trading Days after any Conversion
Date  (the  "Delivery  Date"),  the  Maker  or its designated transfer agent, as
             --------------
applicable,  shall  issue  and  deliver  to the Depository Trust Company ("DTC")
                                                                           ---
account  on  the  Holder's  behalf  via  the Deposit Withdrawal Agent Commission
System ("DWAC") as specified in the Conversion Notice, registered in the name of
         ----
the  Holder  or  its designee, for the number of shares of Common Stock to which
the Holder shall be entitled.  Notwithstanding the foreging, in the alternative,
not  later  than  the  Delivery  Date, the Maker shall deliver to the applicable
Holder  by  express courier a certificate or certificates which shall be free of
restrictive  legends  and  trading  restrictions  (other  than those required by
Section  5.1  of  the  Purchase  Agreement) representing the number of shares of
Common Stock being acquired upon the conversion of this Note.  If in the case of
any  Conversion Notice such DWAC transfer or certificate or certificates are not
delivered  to  or as directed by the applicable Holder by the Delivery Date, the
Holder shall be entitled by written notice to the Maker at any time on or before
its  receipt  of  such  certificate  or certificates thereafter, to rescind such
conversion, in which event the Maker shall immediately return this Note tendered
for  conversion,  whereupon  the  Maker and the Holder shall each be restored to
their  respective  positions immediately prior to the delivery of such notice of
revocation,  except  that any amounts described in Sections 3.3(b) and (c) shall
be  payable  through  the  date  notice  of  rescission  is  given to the Maker.

          (b)     The  Maker  understands  that  a  delay in the delivery of the
shares  of  Common  Stock  upon conversion of this Note beyond the Delivery Date
could  result  in economic loss to the Holder.  If the Maker fails to deliver to
the  Holder  such  shares  via DWAC or a certificate or certificates pursuant to
this Section hereunder by the Delivery Date, the Maker shall pay to such Holder,
in  cash,  an  amount per Trading Day for each Trading Day until such shares are
delivered via DWAC or certificates are delivered, together with interest on such
amount  at  a  rate of 10% per annum, accruing until such amount and any accrued
interest  thereon  is  paid  in  full, equal to the greater of (A) (i) 1% of the
aggregate  principal amount of the Notes requested to be converted for the first
five  (5)  Trading  Days  after  the  Delivery Date and (ii) 2% of the aggregate
principal  amount  of  the  Notes requested to be converted for each Trading Day
thereafter  and  (B)  $2,000  per  day (which amount shall be paid as liquidated
damages  and  not as a penalty).  Nothing herein shall limit a Holder's right to
pursue  actual  damages  for  the  Maker's  failure  to  deliver  certificates
representing  shares of Common Stock upon conversion within the period specified
herein  and such Holder shall have the right to pursue all remedies available to
it  at  law  or  in  equity (including, without limitation, a decree of specific
performance  and/or

                                      -6-
<PAGE>
injunctive  relief).  Notwithstanding anything to the contrary contained herein,
the  Holder  shall  be  entitled  to withdraw a Conversion Notice, and upon such
withdrawal  the  Maker  shall  only  be  obligated to pay the liquidated damages
accrued  in  accordance with this Section 3.3(b) through the date the Conversion
Notice  is  withdrawn.

          (c)     In  addition  to  any other rights available to the Holder, if
the  Maker  fails  to  cause  its  transfer  agent  to  transmit to the Holder a
certificate  or  certificates  representing  the shares of Common Stock issuable
upon  conversion  of this Note on or before the Delivery Date, and if after such
date  the  Holder  is  required  by  its  broker  to purchase (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale  by  the  Holder  of the shares of Common Stock issuable upon conversion of
this  Note  which  the  Holder  anticipated  receiving  upon  such  exercise  (a
"Buy-In"),  then  the  Maker  shall  (1) pay in cash to the Holder the amount by
which (x) the Holder's total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of shares of Common Stock issuable upon conversion
of  this Note that the Maker was required to deliver to the Holder in connection
with  the conversion at issue times (B) the price at which the sell order giving
rise  to  such  purchase  obligation  was executed, and (2) at the option of the
Holder, either reinstate the portion of the Note and equivalent number of shares
of  Common  Stock  for  which  such conversion was not honored or deliver to the
Holder  the number of shares of Common Stock that would have been issued had the
Maker  timely  complied  with its conversion and delivery obligations hereunder.
For  example, if the Holder purchases Common Stock having a total purchase price
of  $11,000  to cover a Buy-In with respect to an attempted conversion of shares
of  Common  Stock  with  an  aggregate  sale  price giving rise to such purchase
obligation  of  $10,000,  under clause (1) of the immediately preceding sentence
the  Maker  shall be required to pay the Holder $1,000. The Holder shall provide
the Maker written notice indicating the amounts payable to the Holder in respect
of  the  Buy-In,  together  with  applicable  confirmations  and  other evidence
reasonably  requested by the Maker.  Nothing herein shall limit a Holder's right
to  pursue  any  other  remedies  available to it hereunder, at law or in equity
including,  without  limitation,  a  decree  of  specific  performance  and/or
injunctive  relief  with  respect  to  the  Maker's  failure  to  timely deliver
certificates representing shares of Common Stock upon conversion of this Note as
required  pursuant  to  the  terms  hereof.

          Section  3.4     Ownership  Cap  and  Certain  Conversion Restriction.
                           ----------------------------------------------------
Notwithstanding anything to the contrary set forth in Section 3 of this Note, at
no  time  may  the Holder convert all or a portion of this Note if the number of
shares  of  Common  Stock to be issued pursuant to such conversion would exceed,
when  aggregated  with  all  other shares of Common Stock owned by the Holder at
such time, the number of shares of Common Stock which would result in the Holder
beneficially  owning  (as  determined  in  accordance  with Section 13(d) of the
Exchange Act and the rules thereunder) more than 9.9% of all of the Common Stock
outstanding  at such time; provided, however, that upon the Holder providing the
Maker  with  sixty-one  (61)  days  notice (pursuant to Section 4.1 hereof) (the
"Waiver  Notice")  that  the  Holder  would  like to waive this Section 3.4 with
regard  to  any  or  all shares of Common Stock issuable upon conversion of this
Note,  this  Section  3.4  will be of no force or effect with regard to all or a
portion  of  the  Note  referenced  in  the  Waiver  Notice.

          Section  3.5     Intentionally  Omitted.
                           ----------------------

                                      -7-
<PAGE>
          Section  3.6     Adjustment  of  Conversion  Price.
                           ---------------------------------

          (a)     The  Conversion Price shall be subject to adjustment from time
to  time  as  follows:

               (i)     Adjustments  for  Stock  Splits and Combinations.  If the
                       ------------------------------------------------
Maker  shall  at any time or from time to time after the Issuance Date, effect a
stock  split of the outstanding Common Stock, the applicable Conversion Price in
effect  immediately prior to the stock split shall be proportionately decreased.
If  the  Maker  shall  at any time or from time to time after the Issuance Date,
combine  the outstanding shares of Common Stock, the applicable Conversion Price
in  effect  immediately  prior  to  the  combination  shall  be  proportionately
increased.  Any  adjustments  under this Section 3.6(a)(i) shall be effective at
the  close  of  business  on  the  date  the  stock split or combination occurs.

               (ii)     Adjustments for Certain Dividends and Distributions.  If
                        ---------------------------------------------------
the  Maker  shall at any time or from time to time after the Issuance Date, make
or  issue  or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock,  then,  and  in  each  event,  the  applicable Conversion Price in effect
immediately  prior  to  such  event  shall  be  decreased as of the time of such
issuance  or,  in  the  event  such record date shall have been fixed, as of the
close of business on such record date, by multiplying, the applicable Conversion
Price  then  in  effect  by  a  fraction:

                    (1)     the  numerator of which shall be the total number of
shares  of  Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date; and

                    (2)     the  denominator  of which shall be the total number
of  shares  of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution.

               (iii)     Adjustment  for  Other Dividends and Distributions.  If
                         --------------------------------------------------
the  Maker  shall at any time or from time to time after the Issuance Date, make
or  issue  or set a record date for the determination of holders of Common Stock
entitled  to  receive  a  dividend  or  other distribution payable in other than
shares  of Common Stock, then, and in each event, an appropriate revision to the
applicable  Conversion  Price  shall  be  made  and  provision shall be made (by
adjustments  of  the  Conversion Price or otherwise) so that the holders of this
Note shall receive upon conversions thereof, in addition to the number of shares
of  Common Stock receivable thereon, the number of securities of the Maker which
they  would  have received had this Note been converted into Common Stock on the
date  of  such event and had thereafter, during the period from the date of such
event  to  and including the Conversion Date, retained such securities (together
with  any  distributions payable thereon during such period), giving application
to  all adjustments called for during such period under this Section 3.6(a)(iii)
with  respect  to  the  rights  of the holders of this Note and the Other Notes;
provided,  however,  that  if  such  record  date shall have been fixed and such
--------   -------
dividend is not fully paid or if such distribution is not fully made on the date
fixed  therefor,  the Conversion Price shall be adjusted to the

                                      -8-
<PAGE>
Conversion  Price  in effect immediately prior to such adjustment until the time
of  actual  payment  of  such  dividends  or  distributions.

               (iv)     Adjustments  for  Reclassification,  Exchange  or
                        -------------------------------------------------
Substitution.  If  the Common Stock issuable upon conversion of this Note at any
------------
time  or  from time to time after the Issuance Date shall be changed to the same
or  different  number  of  shares  of  any class or classes of stock, whether by
reclassification,  exchange,  substitution  or otherwise (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections
3.6(a)(i),  (ii)  and (iii), or a reorganization, merger, consolidation, or sale
of  assets  provided  for  in  Section  3.6(a)(v)),  then, and in each event, an
appropriate  revision to the Conversion Price shall be made and provisions shall
be made (by adjustments of the Conversion Price or otherwise) so that the Holder
shall have the right thereafter to convert this Note into the kind and amount of
shares of stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into  which  such  Note  might  have  been  converted  immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment  as  provided  herein.

               (v)     Adjustments  for Reorganization, Merger, Consolidation or
                       ---------------------------------------------------------
Sales  of  Assets.  If  at any time or from time to time after the Issuance Date
-----------------
there  shall  be  a  capital reorganization of the Maker (other than by way of a
stock  split  or  combination  of  shares  or  stock  dividends or distributions
provided  for  in  Section  3.6(a)(i),  (ii)  and  (iii), or a reclassification,
exchange  or  substitution  of  shares provided for in Section 3.6(a)(iv)), or a
merger  or consolidation of the Maker with or into another corporation where the
holders  of  outstanding  voting securities of the Maker prior to such merger or
consolidation  do  not  own  over  fifty percent (50%) of the outstanding voting
securities  of  the merged or consolidated entity, immediately after such merger
or  consolidation,  or  the  sale  of  all  or  substantially all of the Maker's
properties  or  assets to any other person (an "Organic Change"), then as a part
                                                --------------
of  such  Organic Change, (A) if the surviving entity in any such Organic Change
is  a  public company that is registered pursuant to the Securities Exchange Act
of  1934,  as  amended,  and  its common stock is listed or quoted on a national
exchange  or  the  OTC Bulletin Board, an appropriate revision to the Conversion
Price  shall  be  made  and  provision  shall  be  made  (by  adjustments of the
Conversion  Price) so that the Holder shall have the right thereafter to convert
such  Note  into  the kind and amount of shares of stock and other securities or
property  of the Maker or any successor corporation as it would have received as
a  result of such Organic Change if it had converted this Note into Common Stock
immediately prior to such Organic Change, and (B) if the surviving entity in any
such  Organic  Change is not a public company that is registered pursuant to the
Securities  Exchange  Act of 1934, as amended, or its common stock is not listed
or  quoted  on  a  national exchange or the OTC Bulletin Board, the Holder shall
have  the  right to demand prepayment pursuant to Section 3.7(b) hereof.  In any
such  case,  appropriate  adjustment  shall  be  made  in the application of the
provisions  of  this  Section 3.6(a)(v) with respect to the rights of the Holder
after  the  Organic  Change  to  the  end  that  the  provisions of this Section
3.6(a)(v)  (including  any adjustment in the applicable Conversion Price then in
effect  and  the  number of shares of stock or other securities deliverable upon
conversion  of  this Note and the Other Notes) shall be applied after that event
in  as  nearly  an  equivalent  manner  as  may  be  practicable.

               (vi)     Adjustments  for Issuance of Additional Shares of Common
                        --------------------------------------------------------
Stock.
------

                                      -9-
<PAGE>
                    (1)     For  a  period of eighteen (18) months following the
Issuance  Date, in the event the Maker shall issue or sell any additional shares
of  common  stock  (otherwise than as provided  in the foregoing subsections (i)
through  (v)  of  this  Section  3.6(a)  or pursuant to Common Stock Equivalents
(hereafter  defined)  granted or issued prior to the Issuance Date) ("Additional
                                                                      ----------
Shares  of  Common  Stock"), at a price per share less than the Conversion Price
-------------------------
then  in  effect  or  without consideration, then the Conversion Price upon each
such  issuance  shall  be  adjusted  to  a  price  (rounded to the nearest cent)
determined  by  multiplying  the  Conversion Price then in effect by a fraction:

                         (A)     the  numerator  of  which shall be equal to the
sum of (x) the number of shares of Common Stock outstanding immediately prior to
the  issuance  of  such Additional Shares of Common Stock plus (y) the number of
                                                          ----
shares  of Common Stock (rounded to the nearest whole share) which the aggregate
consideration  for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the Conversion Price then in
effect,  and

                         (B)     the  denominator of which shall be equal to the
number  of  shares of Common Stock outstanding immediately after the issuance of
such  Additional  Shares  of  Common  Stock.

                    (2)     The  provisions  of  paragraph  (1)  of this Section
3.6(a)(vi)  shall not apply to any issuance of Additional Shares of Common Stock
for which an adjustment is provided under Section 3.6(a)(vii).  No adjustment of
the  number  of  shares of Common Stock for which this Note shall be convertible
shall  be  made under paragraph (1) of this Section 3.6(a)(vi) upon the issuance
of  any  Additional  Shares  of  Common  Stock  which are issued pursuant to the
exercise  of  any  Common  Stock  Equivalents,  if  any  such  adjustment  shall
previously  have  been  made  upon the issuance of such Common Stock Equivalents
pursuant  to  Section  3.6(a)(vii).

               (vii)     Issuance  of Common Stock Equivalents.  For a period of
                         -------------------------------------
eighteen  (18)  months following the Issuance Date, in the event the Maker shall
issue  any  securities  convertible  into  or  exchangeable  for,  directly  or
indirectly,  Common  Stock  ("Convertible Securities"), other than the Notes, or
                              ----------------------
any  rights  or  warrants  or  options  to  purchase  any  such  Common Stock or
Convertible Securities, shall be issued or sold (collectively, the "Common Stock
                                                                    ------------
Equivalents")  and  the aggregate price per share for which Additional Shares of
-----------
Common  Stock  may  be  issuable  thereafter  pursuant  to  such  Common  Stock
Equivalent,  plus  the  consideration received by the Maker for issuance of such
Common  Stock  Equivalent  divided  by  the  number  of  shares  of Common Stock
issuable  pursuant  to  such  Common Stock Equivalent (the "Aggregate Per Common
                                                            --------------------
Share Price") shall be less than the applicable Conversion Price then in effect,
-----------
or  if, after any such issuance of Common Stock Equivalents, the price per share
for  which  Additional  Shares  of  Common  Stock  may be issuable thereafter is
amended  or  adjusted, and such price as so amended shall make the Aggregate Per
Common Share Price be less than the applicable Conversion Price in effect at the
time  of such amendment or adjustment, then the applicable Conversion Price upon
each  such  issuance  or  amendment  shall  be adjusted as provided in the first
sentence  of  subsection  (vi)  of this Section 3.6(a) on the basis that (1) the
maximum  number  of  Additional  Shares of Common Stock issuable pursuant to all
such  Common

                                      -10-
<PAGE>
Stock  Equivalents  shall  be  deemed  to  have been issued (whether or not such
Common  Stock  Equivalents  are  actually  then  exercisable,  convertible  or
exchangeable in whole or in part) as of the earlier of (A) the date on which the
Maker  shall  enter  into  a firm contract for the issuance of such Common Stock
Equivalent,  or (B) the date of actual issuance of such Common Stock Equivalent.
No  adjustment  of  the  applicable  Conversion  Price  shall be made under this
subsection  (vii)  upon the issuance of any Convertible Security which is issued
pursuant  to  the  exercise  of  any  warrants or other subscription or purchase
rights  therefor,  if  any  adjustment  shall  previously  have been made to the
exercise  price  of  such  warrants  or  other  subscription  or purchase rights
therefor,  then  in  effect  upon  the  issuance  of  such  warrants  or  other
subscription  or purchase rights therefor pursuant to this subsection (vii).  No
adjustment  shall  be  made  to the Conversion Price upon the issuance of Common
Stock  pursuant  to  the  exercise,  conversion  or  exchange of any Convertible
Security  or Common Stock Equivalent where an adjustment to the Conversion Price
was  made as a result of the issuance or purchase of any Convertible Security or
Common  Stock  Equivalent.

               (viii)     Consideration for Stock.  In case any shares of Common
                          -----------------------
Stock or any Common Stock Equivalents shall be issued or sold:

                    (1)     in  connection  with  any merger or consolidation in
which  the  Maker  is the surviving corporation (other than any consolidation or
merger  in  which the previously outstanding shares of Common Stock of the Maker
shall  be  changed  to or exchanged for the stock or other securities of another
corporation),  the  amount  of consideration therefor shall be, deemed to be the
fair  market  value,  as determined reasonably and in good faith by the board of
directors of the Maker (the "Board"), of such portion of the assets and business
                             -----
of the nonsurviving corporation as the Board may determine to be attributable to
such  shares  of  Common  Stock,  Convertible  Securities, rights or warrants or
options,  as  the  case  may  be;  or

                    (2)     in  the  event of any consolidation or merger of the
Maker  in  which  the  Maker  is  not  the surviving corporation or in which the
previously outstanding shares of Common Stock of the Maker shall be changed into
or exchanged for the stock or other securities of another corporation, or in the
event  of  any  sale  of all or substantially all of the assets of the Maker for
stock  or other securities of any corporation, the Maker shall be deemed to have
issued  a  number of shares of its Common Stock for stock or securities or other
property  of  the other corporation computed on the basis of the actual exchange
ratio  on which the transaction was predicated, and for a consideration equal to
the  fair  market  value  on  the  date of such transaction of all such stock or
securities  or other property of the other corporation.  If any such calculation
results  in  adjustment  of  the  applicable  Conversion Price, or the number of
shares  of Common Stock issuable upon conversion of the Notes, the determination
of  the  applicable  Conversion  Price  or  the number of shares of Common Stock
issuable  upon  conversion  of  the  Notes  immediately  prior  to  such merger,
consolidation  or  sale, shall be made after giving effect to such adjustment of
the  number of shares of Common Stock issuable upon conversion of the Notes.  In
the event Common Stock is issued with other shares or securities or other assets
of  the Maker for consideration which covers both, the consideration computed as
provided  in this Section 3.6(viii) shall be allocated among such securities and
assets  as  determined  in  good  faith  by  the  Board.

                                      -11-
<PAGE>
          (b)     Record  Date.  In  case  the  Maker  shall  take record of the
                  ------------
holders  of  its Common Stock for the purpose of entitling them to subscribe for
or  purchase  Common Stock or Convertible Securities, then the date of the issue
or sale of the shares of Common Stock shall be deemed to be such record date.

          (c)     Certain  Issues  Excepted.  Anything  herein  to  the contrary
                  -------------------------
notwithstanding,  the  Maker shall not be required to make any adjustment to the
Conversion  Price in connection with (i) securities issued (other than for cash)
in  connection  with  a  merger,  acquisition, or consolidation, (ii) securities
issued  pursuant  to  the  conversion  or exercise of convertible or exercisable
securities  issued  or  outstanding  on  or  prior  to  the date of the Purchase
Agreement  or  issued  pursuant  to  the  Purchase  Agreement  (so  long  as the
conversion  or  exercise  price in such securities are not amended to lower such
price and/or adversely affect the Holder), (iii) securities issued in connection
with  bona fide strategic license agreements or other partnering arrangements so
long  as  such  issuances are not for the purpose of raising capital, (v) Common
Stock  issued  or  the  issuance  or  grants of options to purchase Common Stock
pursuant  to  the  Maker's  stock option plans and employee stock purchase plans
outstanding  as they exist on the Issuance Date, and (vi) any warrants issued to
the  placement  agent and its designees for the transactions contemplated by the
Purchase  Agreement.

          (d)     No  Impairment.  The  Maker  shall  not,  by  amendment of its
                  --------------
Certificate  of Incorporation or through any reorganization, transfer of assets,
consolidation,  merger,  dissolution,  issue  or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the  terms  to  be observed or performed hereunder by the Maker, but will at all
times  in  good  faith, assist in the carrying out of all the provisions of this
Section  3.6  and  in  the  taking  of  all  such  action as may be necessary or
appropriate  in  order  to  protect  the conversion rights of the Holder against
impairment.  In  the event a Holder shall elect to convert any Notes as provided
herein,  the  Maker cannot refuse conversion based on any claim that such Holder
or  any  one  associated  or affiliated with such Holder has been engaged in any
violation  of  law, violation of an agreement to which such Holder is a party or
for  any  reason  whatsoever,  unless,  an  injunction  from a court, or notice,
restraining  and  or  adjoining  conversion  of  all or of said Notes shall have
issued  and  the  Maker posts a surety bond for the benefit of such Holder in an
amount equal to one hundred percent (100%) of the amount of the Notes the Holder
has  elected  to convert, which bond shall remain in effect until the completion
of  arbitration/litigation  of  the  dispute  and the proceeds of which shall be
payable to such Holder (as liquidated damages) in the event it obtains judgment.

          (e)     Certificates  as  to  Adjustments.  Upon  occurrence  of  each
                  ---------------------------------
adjustment or readjustment of the Conversion Price or number of shares of Common
Stock  issuable  upon  conversion of this Note pursuant to this Section 3.6, the
Maker  at  its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Holder a certificate setting
forth  such  adjustment and readjustment, showing in detail the facts upon which
such adjustment or readjustment is based.  The Maker shall, upon written request
of  the  Holder,  at  any time, furnish or cause to be furnished to the Holder a
like  certificate  setting  forth  such  adjustments  and  readjustments,  the
applicable  Conversion  Price in effect at the time, and the number of shares of
Common  Stock  and  the amount, if any, of other securities or property which at
the  time  would  be received upon the conversion of this Note.  Notwithstanding
the  foregoing, the Maker shall not be obligated to deliver a certificate unless
such  certificate  would reflect an increase or decrease of at least one percent
(1%)  of  such  adjusted  amount.

                                      -12-
<PAGE>
          (f)     Issue  Taxes.  The Maker shall pay any and all issue and other
                  ------------
taxes,  excluding  federal,  state or local income taxes, that may be payable in
respect of any issue or delivery of shares of Common Stock on conversion of this
Note  pursuant thereto; provided, however, that the Maker shall not be obligated
                        --------  -------
to pay any transfer taxes resulting from any transfer requested by the Holder in
connection  with  any  such  conversion.

          (g)     Fractional Shares.  No fractional shares of Common Stock shall
                  -----------------
be  issued  upon  conversion  of this Note.  In lieu of any fractional shares to
which  the Holder would otherwise be entitled, the Maker shall pay cash equal to
the  product  of  the  fraction  that  would  evidence  such  fractional  shares
multiplied  by the average of the Closing Bid Prices of the Common Stock for the
five  (5)  consecutive  Trading  Days immediately preceding the Conversion Date.
The  term  "Closing  Bid  Price" shall mean, on any particular date (i) the last
            -------------------
closing bid price per share of the Common Stock on such date on the OTC Bulletin
Board or another registered national stock exchange on which the Common Stock is
then  listed,  or  if there is no such price on such date, then the last closing
bid  price  on  such  exchange or quotation system on the date nearest preceding
such  date,  or  (ii) if the Common Stock is not listed then on the OTC Bulletin
Board  or  any  registered national stock exchange, the last trading price for a
share  of  Common  Stock  in the over-the-counter market, as reported by the OTC
Bulletin  Board  or  in  the  National  Quotation Bureau Incorporated or similar
organization  or  agency succeeding to its functions of reporting prices) at the
close  of  business  on  such  date,  or  (iii)  if the Common Stock is not then
reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated
(or  similar  organization  or  agency  succeeding to its functions of reporting
prices), then the average of the "Pink Sheet" quotes for the relevant conversion
period,  as  determined in good faith by the Holder and reasonably acceptable to
the  Maker,  or  (iv)  if  the Common Stock is not then publicly traded the fair
market  value  of  a  share  of  Common  Stock  as  determined by the Holder and
reasonably  acceptable  to  the  Maker.

          (h)     Reservation  of  Common  Stock.  The  Maker shall at all times
                  ------------------------------
when  this  Note  shall  be  outstanding,  reserve and keep available out of its
authorized  but  unissued Common Stock, such number of shares of Common Stock as
shall  from  time  to  time be sufficient to effect the conversion of this Note.
The Maker shall, from time to time in accordance with Delaware law, increase the
authorized  number  of shares of Common Stock if at any time the unissued number
of  authorized shares shall not be sufficient to satisfy the Maker's obligations
under  this  Section  3.6(h).

          (i)     Regulatory  Compliance.  If  any  shares of Common Stock to be
                  ----------------------
reserved  for  the  purpose  of  conversion of this Note require registration or
listing  with or approval of any governmental authority, stock exchange or other
regulatory body under any federal or state law or regulation or otherwise before
such shares may be validly issued or delivered upon conversion, the Maker shall,
at  its  sole  cost and expense, in good faith and as expeditiously as possible,
endeavor  to  secure such registration, listing or approval, as the case may be.

                                      -13-
<PAGE>
          Section  3.7     Prepayment.
                           ----------

          (a)     Prepayment Upon an Event of Default.  Notwithstanding anything
                  -----------------------------------
to  the  contrary  contained  herein, upon the occurrence of an Event of Default
described  in  Sections  2.1(b)-(k)  hereof, the Holder shall have the right, at
such Holder's option, to require the Maker to prepay in cash all or a portion of
this  Note  at  a price equal to one hundred ten percent (110%) of the aggregate
principal amount of this Note plus all accrued and unpaid interest applicable at
the  time  of  such  request.  Nothing  in  this  Section 3.7(a) shall limit the
Holder's  rights  under  Section  2.2  hereof.

          (b)     Prepayment  Option Upon Major Transaction.  In addition to all
                  -----------------------------------------
other rights of the Holder contained herein, simultaneous with the occurrence of
a  Major Transaction (as defined below), the Holder shall have the right, at the
Holder's  option, to require the Maker to prepay in cash all or a portion of the
Holder's  Notes  at  a  price  equal  to  one  hundred ten percent (110%) of the
aggregate  principal  amount  of  this Note plus all accrued and unpaid interest
(the  "Major  Transaction  Prepayment  Price").
       -------------------------------------

          (c)     Prepayment  Option  Upon Triggering Event.  In addition to all
                  -----------------------------------------
other  rights  of  the  Holder  contained  herein,  after a Triggering Event (as
defined  below),  the  Holder  shall  have the right, at the Holder's option, to
require  the  Maker  to  prepay all or a portion of this Note in cash at a price
equal  to one hundred twenty percent (120%) of the aggregate principal amount of
this Note plus all accrued and unpaid interest (the "Triggering Event Prepayment
                                                     ---------------------------
Price,"  and,  collectively  with  the  Major  Transaction Prepayment Price, the
-----
"Prepayment  Price").
 -----------------

          (d)     Intentionally  Omitted.
                  ----------------------

          (e)     "Major Transaction."  A "Major Transaction" shall be deemed to
                   -----------------       -----------------
have occurred at such time as any of the following events:

               (i)     the  consolidation,  merger or other business combination
of  the  Maker  with  or into another Person (as defined in Section 4.13 hereof)
(other  than  (A) pursuant to a migratory merger effected solely for the purpose
of  changing  the  jurisdiction  of  incorporation  of  the  Maker  or  (B)  a
consolidation,  merger  or  other  business  combination in which holders of the
Maker's  voting  power  immediately  prior to the transaction continue after the
transaction  to  hold, directly or indirectly, the voting power of the surviving
entity  or entities necessary to elect a majority of the members of the board of
directors  (or  their  equivalent if other than a corporation) of such entity or
entities).

               (ii)     the sale or transfer of more than fifty percent (50%) of
the  Maker's  assets (based on the fair market value as determined in good faith
by  the Board) other than inventory in the ordinary course of business in one or
a  related  series  of  transactions;  or

               (iii)     closing of a purchase, tender or exchange offer made to
the holders of more than fifty percent (50%) of the outstanding shares of Common
Stock in which more than fifty percent (50%) of the outstanding shares of Common
Stock  were  tendered  and  accepted;  or

                                      -14-
<PAGE>
               (iv)     a change in more than fifty percent (50%) of the current
members of the Company's Board of Directors as of the Issuance Date.

          (f)     "Triggering  Event."  A  "Triggering Event" shall be deemed to
                   -----------------        ----------------
have occurred at such time as any of the following events:

               (i)     so  long  as any Notes are outstanding, the effectiveness
of  the  Registration  Statement, after it becomes effective, (i) lapses for any
reason  (including, without limitation, the issuance of a stop order) or (ii) is
unavailable to the Holder for sale of the shares of Common Stock, and such lapse
or  unavailability  continues  for  a  period of twenty (20) consecutive Trading
Days,  and  the  shares  of  Common  Stock  into which the Holder's Notes can be
converted cannot be sold in the public securities market pursuant to Rule 144(k)
under  the  Securities  Act,  provided  that  the  cause  of  such  lapse  or
unavailability  is not due to factors primarily within the control of the Holder
of  the  Notes;  and  provided  further  that  a Triggering Event shall not have
occurred  if  and  to  the  extent  the  Maker exercised its rights set forth in
Section  3(n)  of  the  Registration  Rights  Agreement;

               (ii)     the  suspension from listing, without subsequent listing
on  any  one of, or the failure of the Common Stock to be listed on at least one
of  the  OTC  Bulletin  Board,  the American Stock Exchange, the Nasdaq National
Market,  the  Nasdaq  Capital Market or The New York Stock Exchange, Inc., for a
period  of  ten  (10)  consecutive  Trading  Days;

               (iii)     the  Maker's  notice to the Holder or any Other Holder,
including by way of public announcement, at any time, of its inability to comply
(including  for  any  of  the reasons described in Section 3.8(a) hereof) or its
intention  not  to  comply with proper requests for conversion of any Notes into
shares  of  Common  Stock;  or

               (iv)     the  Maker's  failure to comply with a Conversion Notice
tendered  in  accordance  with  the  provisions  of this Note within twelve (12)
Trading Days after the receipt by the Maker of the Conversion Notice; or

               (v)     the Maker deregisters its shares of Common Stock and as a
result such shares of Common Stock are no longer publicly traded; or

               (vi)     the  Maker consummates a "going private" transaction and
as  a  result  the  Common Stock is no longer registered under Sections 12(b) or
12(g)  of  the  Exchange  Act;  or

               (vii)     the  Maker  breaches  any  representation,  warranty,
covenant  or other term or condition of the Purchase Agreement, this Note or any
other  agreement,  document,  certificate  or  other  instrument  delivered  in
connection  with  the transactions contemplated thereby or hereby, except to the
extent  that such breach would not have a Material Adverse Effect (as defined in
the  Purchase Agreement) and except, in the case of a breach of a covenant which
is  curable,  only  if such breach continues for a period of a least twenty (20)
business  days.

          (g)     Intentionally  Omitted.
                  ----------------------

                                      -15-
<PAGE>
          (h)     Mechanics  of  Prepayment  at  Option  of  Holder  Upon  Major
                  --------------------------------------------------------------
Transaction.  No  sooner  than  fifteen  (15)  days nor later than ten (10) days
-----------
prior  to the consummation of a Major Transaction, but in  no event prior to the
public  announcement  of such Major Transaction, the Maker shall deliver written
notice  thereof  via  facsimile  and  overnight  courier  ("Notice  of  Major
                                                            -----------------
Transaction")  to  the  Holder  of this Note and the Other Holders.  At any time
-----------
after  receipt  of  a  Notice of Major Transaction (or, in the event a Notice of
Major  Transaction  is  not  delivered  at  least ten (10) days prior to a Major
Transaction,  at  any  time  during  the  ten  (10)  day period prior to a Major
Transaction),  the  Holder of this Note and the Other Holders of the Other Notes
then outstanding may require the Maker to prepay, effective immediately prior to
the consummation of such Major Transaction, all or any portion of this Note then
outstanding  by  delivering  written  notice thereof via facsimile and overnight
courier  ("Notice  of Prepayment at Option of Holder Upon Major Transaction") to
           ----------------------------------------------------------------
the Maker, which Notice of Prepayment at Option of Holder Upon Major Transaction
shall indicate (i) the principal amount of this Note that the Holder is electing
to  have  prepaid and (ii) the applicable Major Transaction Prepayment Price, as
calculated  pursuant  to  Section  3.7(b)  above.

          (i)     Mechanics  of  Prepayment  at Option of Holder Upon Triggering
                  --------------------------------------------------------------
Event.  Within  three  (3)  business  days  after the occurrence of a Triggering
-----
Event,  the  Maker  shall  deliver  written  notice  thereof  via  facsimile and
overnight  courier  ("Notice  of  Triggering Event") to the Holder and the Other
                      ----------------------------
Holders.  At  any  time after the earlier of the Holder's receipt of a Notice of
Triggering Event and the Holder becoming aware of a Triggering Event, the Holder
of  this  Note  and  the  Other  Holders of the Other Notes then outstanding may
require  the Maker to prepay all or any portion of this Note then outstanding by
delivering  written  notice thereof via facsimile and overnight courier ("Notice
                                                                          ------
of  Prepayment  at  Option of Holder Upon Triggering Event") to the Maker, which
----------------------------------------------------------
Notice  of  Prepayment  at Option of Holder Upon Triggering Event shall indicate
(i)  the amount of the Note that the Holder is electing to have prepaid and (ii)
the  applicable  Triggering  Event  Prepayment  Price, as calculated pursuant to
Section  3.7(c)  above.  The Holder shall only be permitted to require the Maker
to  prepay  this Note pursuant to Section 3.7 hereof for the greater of a period
of  ten (10) days after receipt by the Holder of a Notice of Triggering Event or
for  so  long  as  such  Triggering  Event  is  continuing.

          (j)     Payment  of  Prepayment  Price.  Upon the Maker's receipt of a
                  ------------------------------
Notice(s) of Prepayment at Option of Holder Upon Triggering Event or a Notice(s)
of  Prepayment at Option of Holder Upon Major Transaction from the Holder or the
Other  Holders,  the  Maker shall notify the Holder or such Other Holder, as the
case may be, by facsimile of the Maker's receipt of such Notice(s) of Prepayment
at  Option  of Holder Upon Triggering Event or Notice(s) of Prepayment at Option
of  Holder  Upon  Major  Transaction within two (2) business days of the Maker's
receipt  of  the same and the Holder and each Other Holder which has sent such a
notice  shall promptly thereafter submit to the Maker this Note (or certificates
representing  a portion of this Note if the Holder elects not to have all of the
outstanding principal and accrued interest hereunder prepaid) or the Other Notes
(or  certificates representing a portion of the Other Notes if the Other Holders
elect  not  to  have  all  of  the  outstanding  principal  and accrued interest
hereunder  prepaid)  which the Holder or Other Holders, as the case may be, have
elected  to  have  prepaid.  The  Maker  shall deliver the applicable Triggering
Event Prepayment Price to the Holder or Other Holder, as applicable, within five
(5) business days after the Maker's receipt of this Note, the Other Notes or the
certificates  related  thereto,  as  the  case  may  be,  and,  in the case of a
prepayment  pursuant  to  Section 3.7(h), the Maker shall deliver the applicable
Major  Transaction  Prepayment  Price

                                      -16-
<PAGE>
immediately  prior  to  the consummation of the Major Transaction; provided that
the  Holder's  original  Note  or the Other Holder's original Other Note, or the
certificates  related  thereto,  shall  have  been  so  delivered  to the Maker;
provided  further  that  if the Maker is unable to prepay all of the Notes to be
prepaid, the Maker shall prepay an amount to the Holder and each Other Holder of
this  Note  and  the  Other  Notes being prepaid equal to such holder's pro-rata
amount  (based  on the principal amount outstanding under the Notes held by such
holder  relative  to the principal amount outstanding under all of the Notes) of
all  Notes  being  prepaid.  If  the Maker shall fail to prepay all of the Notes
submitted  for prepayment (other than pursuant to a dispute as to the arithmetic
calculation  of  the Prepayment Price), in addition to any remedy such holder of
the  Notes  may  have under this Note and the Purchase Agreement, the applicable
Prepayment  Price  payable  in  respect  of  such  Notes  not prepaid shall bear
interest at the rate of two percent (2%) per month (prorated for partial months)
until  paid  in  full.  Until  the  Maker pays such unpaid applicable Prepayment
Price  in  full  to  a holder of the Notes submitted for prepayment, such holder
shall  have  the  option  (the "Void Optional Prepayment Option") to, in lieu of
                                -------------------------------
prepayment,  require  the  Maker to promptly return to such holder(s) all of the
Notes  that  were  submitted for prepayment by such holder(s) under this Section
3.7  and for which the applicable Prepayment Price has not been paid, by sending
written notice thereof to the Maker via facsimile (the "Void Optional Prepayment
                                                        ------------------------
Notice").  Upon  the  Maker's receipt of such Void Optional Prepayment Notice(s)
------
and prior to payment of the full applicable Prepayment Price to such holder, (i)
the  Notice(s)  of  Prepayment  at Option of Holder Upon Triggering Event or the
Notice(s)  of Prepayment at Option of Holder Upon Major Transaction, as the case
may  be,  shall be null and void ab initio with respect to those Notes submitted
for  prepayment and for which the applicable Prepayment Price has not been paid,
(ii) the Maker shall immediately return any such Notes submitted to the Maker by
each  holder  for  prepayment  under  this  Section  3.7(j)  and  for  which the
applicable  Prepayment Price has not been paid and (iii) the Conversion Price of
such  returned Notes shall be adjusted to the lesser of (A) the Conversion Price
as  in  effect  on  the  date  on  which the applicable Void Optional Prepayment
Notice(s)  is delivered to the Maker and (B) the lowest Closing Bid Price during
the  period beginning on the date on which the Notice(s) of Prepayment of Option
of  Holder  Upon  Major  Transaction or the Notice(s) of Prepayment at Option of
Holder  Upon Triggering Event, as the case may be, is delivered to the Maker and
ending  on the date on which the Void Optional Prepayment Notice(s) is delivered
to the Maker; provided that no adjustment shall be made if such adjustment would
result  in  an  increase  of  the  Conversion  Price then in effect.  A holder's
delivery  of  a  Void  Optional  Prepayment  Notice  and  exercise of its rights
following  such  notice  shall  not  effect  the Maker's obligations to make any
payments which have accrued prior to the date of such notice.  Payments provided
for in this Section 3.7 shall have priority to payments to other stockholders in
connection  with  a  Major  Transaction.

          (k)     Maker  Prepayment  Option.  Following the date that is one (1)
                  -------------------------
year  following  the  Issuance  Date,  the  Maker  may prepay in cash all or any
portion  of  the  outstanding  principal  amount  of this Note together with all
accrued  and  unpaid  interest  thereon upon ten (10) Trading Days prior written
notice  to the Holder (the "Maker's Prepayment Notice") at a price (the "Maker's
                            -------------------------                    -------
Prepayment  Price")  equal to one hundred twenty percent (120%) of the aggregate
-----------------
principal  amount  of this Note plus any accrued but unpaid interest outstanding
at  such  time; provided, however, that if the Holder has delivered a Conversion
-               --------  -------
Notice to the Maker or delivers a Conversion Notice within such ten (10) Trading
Day  period  following  delivery of the Maker's Prepayment Notice, the principal
amount  of  this  Note  designated  to  be  converted  may  not  be

                                      -17-
<PAGE>
prepaid  by  the  Maker  and  shall  be converted in accordance with Section 3.3
hereof;  provided  further  that  if  during  the period between delivery of the
         --------  -------
Maker's  Prepayment Notice and the Maker's Prepayment Date (as defined below), a
holder  shall  become  entitled  to  deliver a Notice of Prepayment at Option of
Holder  Upon  Major Transaction or Notice of Prepayment at Option of Holder upon
Triggering  Event,  then such rights of the holders, at their option, shall take
precedence  over  the previously delivered Maker Prepayment Notice.  The Maker's
Prepayment  Notice  shall  state  the date of prepayment which date shall be the
eleventh (11th) Trading Day after the Maker has delivered the Maker's Prepayment
Notice  (the  "Maker's  Prepayment  Date"), the Maker's Prepayment Price and the
               -------------------------
principal  amount  of  this  Note  to  be prepaid by the Maker.  The Maker shall
deliver  the  Maker's Prepayment Price on the Maker's Prepayment Date, provided,
                                                                       --------
that  if  the  Holder delivers a Conversion Notice before the Maker's Prepayment
Date,  then  the  portion of the Maker's Prepayment Price which would be paid to
prepay  this  Note  covered  by  such Conversion Notice shall be returned to the
Maker  upon  delivery  of  the  Common  Stock  issuable  in connection with such
Conversion  Notice  to  the  Holder.  On  the Maker's Prepayment Date, the Maker
shall  pay  the  Maker's Prepayment Price, subject to any adjustment pursuant to
the immediately preceding sentence, to the Holder and the Other Holders on a pro
rata  basis.  If  the  Maker  fails  to  pay the Maker's Prepayment Price by the
eleventh (11th) Trading Day after the Maker has delivered the Maker's Prepayment
Notice,  the  Maker's Prepayment Notice will be declared null and void ab initio
and  the Maker shall lose its right to prepay this Note pursuant to this Section
3.7(k)  in the future.  Notwithstanding the foregoing to the contrary, the Maker
may  effect  a  prepayment  pursuant  to  this  Section  3.7(k)  only if (A) the
Registration  Statement  is  effective  and has been effective, without lapse or
suspension  of  any  kind,  for  a  period thirty (30) consecutive calendar days
immediately  preceding  the  Maker's  Prepayment  Notice  through  the  Maker's
Prepayment  Date,  (B) trading in the Common Stock shall not have been suspended
by  the  Securities  and Exchange Commission or the OTC Bulletin Board (or other
exchange  or  market  on which the Common Stock is trading), (C) the Maker is in
material  compliance  with  the  terms and conditions of this Note and the other
Transaction  Documents,  and  (D) the Maker is not in possession of any material
non-public  information.

          Section  3.8     Inability  to  Fully  Convert.
                           -----------------------------

          (a)     Holder's  Option  if Maker Cannot Fully Convert.  If, upon the
                  -----------------------------------------------
Maker's  receipt of a Conversion Notice, the Maker cannot issue shares of Common
Stock  registered  for  resale  under the Registration Statement for any reason,
including,  without limitation, because the Maker (x) does not have a sufficient
number  of  shares  of  Common  Stock authorized and available, (y) is otherwise
prohibited  by  applicable  law  or  by  the  rules  or regulations of any stock
exchange,  interdealer  quotation  system  or other self-regulatory organization
with  jurisdiction  over  the Maker or any of its securities from issuing all of
the  Common  Stock  which is to be issued to the Holder pursuant to a Conversion
Notice  or  (z)  fails  to  have  a  sufficient number of shares of Common Stock
registered  for  resale  under  the Registration Statement, then the Maker shall
issue  as  many shares of Common Stock as it is able to issue in accordance with
the  Holder's  Conversion Notice and, with respect to the unconverted portion of
this  Note,  the  Holder,  solely  at  Holder's  option,  can  elect  to:

               (i)     require the Maker to prepay that portion of this Note for
which  the Maker is unable to issue Common Stock in accordance with the Holder's
Conversion Notice (the

                                      -18-
<PAGE>
"Mandatory  Prepayment")  at  a  price  per  share equal to the Triggering Event
 ---------------------
Prepayment  Price as of such Conversion Date (the "Mandatory Prepayment Price");
                                                   --------------------------

               (ii)     if the Maker's inability to fully convert is pursuant to
Section  3.8(a)(y) above, require the Maker to issue restricted shares of Common
Stock,  if  it  is  permissible  for  the Maker to do so, in accordance with the
Holder's  Conversion  Notice;

               (iii)     void its Conversion Notice and retain or have returned,
as  the  case  may  be,  this  Note  that  was  to  be converted pursuant to the
Conversion  Notice  (provided  that  the  Holder's voiding its Conversion Notice
shall not effect the Maker's obligations to make any payments which have accrued
prior  to  the  date  of  such  notice);

               (iv)     exercise its Buy-In rights pursuant to and in accordance
with  the  terms  and  provisions  of  Section  3.3(c)  of  this  Note.

          (b)     Mechanics  of Fulfilling Holder's Election.  Upon receipt of a
                  ------------------------------------------
facsimile  copy  of  a  Conversion  Notice from the Holder which cannot be fully
satisfied  as  described in Section 3.8(a) above, the Maker shall within two (2)
Trading  Days send via facsimile to the Holder a notice of the Maker's inability
to  fully  satisfy  the  Conversion  Notice  (the  "Inability  to  Fully Convert
                                                    ----------------------------
Notice").  Such  Inability to Fully Convert Notice shall indicate (i) the reason
------
why  the  Maker  is unable to fully satisfy the Holder's Conversion Notice, (ii)
the  amount  of  this  Note  which  cannot be converted and (iii) the applicable
Mandatory  Prepayment  Price.  The Holder shall notify the Maker of its election
pursuant  to  Section 3.8(a) above by delivering written notice via facsimile to
the  Maker  ("Notice  in  Response  to  Inability  to  Convert").
              ------------------------------------------------

          (c)     Payment  of  Prepayment  Price.  If  the Holder shall elect to
                  ------------------------------
have  its Notes prepaid pursuant to Section 3.8(a)(i) above, the Maker shall pay
the  Mandatory  Prepayment  Price  to  the Holder within thirty (30) days of the
Maker's  receipt  of  the  Holder's  Notice in Response to Inability to Convert,
provided that prior to the Maker's receipt of the Holder's Notice in Response to
--------
Inability to Convert the Maker has not delivered a notice to the Holder stating,
to  the satisfaction of the Holder, that the event or condition resulting in the
Mandatory  Prepayment  has  been cured and all Conversion Shares issuable to the
Holder  can  and will be delivered to the Holder in accordance with the terms of
this  Note.  If  the Maker shall fail to pay the applicable Mandatory Prepayment
Price  to  the  Holder on the date that is three (3) business days following the
Maker's  receipt  of  the  Holder's  Notice  in Response to Inability to Convert
(other  than  pursuant  to  a  dispute as to the determination of the arithmetic
calculation  of  the Prepayment Price), in addition to any remedy the Holder may
have  under  this Note and the Purchase Agreement, such unpaid amount shall bear
interest at the rate of two percent (2%) per month (prorated for partial months)
until  paid  in full.  Until the full Mandatory Prepayment Price is paid in full
to  the Holder, the Holder may (i) void the Mandatory Prepayment with respect to
that  portion  of the Note for which the full Mandatory Prepayment Price has not
been  paid,  (ii)  receive back such Note, and (iii) require that the Conversion
Price  of  such  returned  Note  be adjusted to the lesser of (A) the Conversion
Price  as  in  effect  on  the  date  on  which  the Holder voided the Mandatory
Prepayment  and  (B) the lowest Closing Bid Price during the period beginning on
the  Conversion  Date  and  ending  on  the date the Holder voided the Mandatory
Prepayment.

                                      -19-
<PAGE>
          (d)     Pro-rata  Conversion  and  Prepayment.  In the event the Maker
                  -------------------------------------
receives  a  Conversion Notice from the Holder and the Other Holders on the same
day and the Maker can convert and prepay some, but not all, of this Note and the
Other  Notes  pursuant  to  this Section 3.8, the Maker shall convert and prepay
from the Holder and each Other Holder electing to have its Other Notes converted
and  prepaid  at  such time an amount equal to the Holder or such Other Holder's
pro-rata  amount  (based on the principal amount of this Note held by the Holder
or  the Other Notes held by the Other Holder relative to the principal amount of
the  Notes  and  Other  Notes  outstanding) of all the Notes and the Other Notes
being  converted  and  prepaid  at  such  time.

          Section  3.9     No  Rights as Stockholder.  Nothing contained in this
                           -------------------------
Note  shall  be construed as conferring upon the Holder, prior to the conversion
of  this  Note,  the  right  to vote or to receive dividends or to consent or to
receive  notice  as  a stockholder in respect of any meeting of stockholders for
the  election  of  directors  of  the Maker or of any other matter, or any other
rights  as  a  stockholder  of  the  Maker.

                                   ARTICLE IV

                                  MISCELLANEOUS
                                  -------------

          Section 4.1     Notices.  Any notice, demand, request, waiver or other
                          -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective  (a)  upon hand delivery, telecopy or facsimile at the
address  or  number  designated  in  the  Purchase  Agreement (if delivered on a
business  day during normal business hours where such notice is to be received),
or  the first business day following such delivery (if delivered other than on a
business  day  during normal business hours where such notice is to be received)
or  (b)  on  the  second  business  day following the date of mailing by express
courier  service,  fully  prepaid,  addressed  to  such  address, or upon actual
receipt  of  such  mailing,  whichever  shall  first occur.  The Maker will give
written  notice  to the Holder at least ten (10) days prior to the date on which
the  Maker  takes a record (x) with respect to any dividend or distribution upon
the Common Stock, (y) with respect to any pro rata subscription offer to holders
of  Common  Stock  or  (z)  for  determining  rights to vote with respect to any
Organic  Change,  dissolution,  liquidation  or winding-up but in no event shall
such notice be provided to the Holder prior to such information being made known
to  the  public.  The Maker will also give written notice to the Holder at least
ten  (10)  days  prior  to  the  date  on which any Organic Change, dissolution,
liquidation  or  winding-up will take place but in no event shall such notice be
provided to the Holder prior to such information being made known to the public.
The  Maker  shall promptly notify the Holder of any notices sent or received, or
any  actions  taken  with  respect  to  the  Other  Notes.

          Section  4.2     Governing  Law.  This  Note  shall be governed by and
                           --------------
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction.  This Note shall
not  be  interpreted or construed with any presumption against the party causing
this  Note  to  be  drafted.

                                      -20-
<PAGE>
          Section  4.3     Headings.  Article  and section headings in this Note
                           --------
are  included herein for purposes of convenience of reference only and shall not
constitute  a  part  of  this  Note  for  any  other  purpose.

          Section  4.4     Remedies,  Characterizations,  Other  Obligations,
                           --------------------------------------------------
Breaches  and  Injunctive  Relief.  The  remedies provided in this Note shall be
---------------------------------
cumulative  and  in addition to all other remedies available under this Note, at
law  or  in  equity  (including,  without  limitation,  a  decree  of  specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing  herein  shall  limit  a Holder's right to pursue actual damages for any
failure  by  the Maker to comply with the terms of this Note.  Amounts set forth
or  provided  for  herein with respect to payments, conversion and the like (and
the  computation  thereof)  shall  be  the  amounts to be received by the Holder
hereof  and  shall  not,  except as expressly provided herein, be subject to any
other  obligation  of  the  Maker  (or  the  performance  thereof).  The  Maker
acknowledges  that  a  breach  by  it  of  its  obligations hereunder will cause
irreparable  and  material harm to the Holder and that the remedy at law for any
such  breach may be inadequate. Therefore the Maker agrees that, in the event of
any  such breach or threatened breach, the Holder shall be entitled, in addition
to  all  other  available  rights and remedies, at law or in equity, to seek and
obtain  such  equitable  relief,  including  but  not  limited  to an injunction
restraining  any  such  breach  or  threatened  breach, without the necessity of
showing  economic  loss  and  without any bond or other security being required.

          Section  4.5     Enforcement  Expenses.  The  Maker  agrees to pay all
                           ---------------------
costs  and  expenses  of  the Holder incurred as a result of enforcement of this
Note,  including,  without  limitation, reasonable attorneys' fees and expenses.

          Section  4.6     Binding Effect.  The obligations of the Maker and the
                           --------------
Holder set forth herein shall be binding upon the successors and assigns of each
such party, whether or not such successors or assigns are permitted by the terms
hereof.

          Section  4.7     Amendments.  This Note may not be modified or amended
                           ----------
in  any  manner  except  in  writing  executed  by  the  Maker  and  the Holder.

          Section  4.8     Compliance  with Securities Laws.  The Holder of this
                           --------------------------------
Note  acknowledges  that this Note is being acquired solely for the Holder's own
account  and  not as a nominee for any other party, and for investment, and that
the  Holder  shall not offer, sell or otherwise dispose of this Note.  This Note
and  any Note issued in substitution or replacement therefor shall be stamped or
imprinted  with  a  legend  in  substantially  the  following  form:

          "THIS  NOTE  AND  THE  SHARES  OF COMMON STOCK ISSUABLE UPON
          CONVERSION  HEREOF  HAVE  NOT   BEEN  REGISTERED  UNDER  THE
          SECURITIES  ACT  OF  1933,   AS  AMENDED   (THE  "ACT"),  OR
          APPLICABLE  STATE  SECURITIES  LAWS,  AND MAY NOT BE SOLD OR
          TRANSFERRED  IN  THE ABSENCE OF SUCH REGISTRATION OR RECEIPT
          BY  THE  MAKER  OF A WRITTEN OPINION OF COUNSEL IN THE FORM,

                                      -21-
<PAGE>
          SUBSTANCE  AND  SCOPE  REASONABLY  SATISFACTORY TO THE MAKER
          THAT  THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
          CONVERSION   HEREOF   HAVE   MAY   BE   SOLD,   TRANSFERRED,
          HYPOTHECATED  OR  OTHERWISE  DISPOSED OF, UNDER AN EXEMPTION
          FROM  REGISTRATION  UNDER  THE ACT AND SUCH STATE SECURITIES
          LAWS."

          Section  4.9     Accredited  Investor  Status.  In  no  event  may the
                           ----------------------------
Holder convert this Note in whole or in part unless the Holder is an "accredited
investor"  as  defined  in  Regulation  D  under  the  Act.

          Section  4.10     Consent  to Jurisdiction.  Each of the Maker and the
                            ------------------------
Holder  (i)  hereby  irrevocably  submits  to  the exclusive jurisdiction of the
United  States  District  Court sitting in the Southern District of New York and
the  courts of the State of New York located in New York County for the purposes
of  any  suit,  action or proceeding arising out of or relating to this Note and
(ii)  hereby  waives,  and  agrees  not  to  assert  in any such suit, action or
proceeding,  any  claim that it is not personally subject to the jurisdiction of
such  court,  that  the suit, action or proceeding is brought in an inconvenient
forum  or that the venue of the suit, action or proceeding is improper.  Each of
the  Maker  and  the  Holder  consents to process being served in any such suit,
action  or  proceeding by delivering a copy thereof to such party at the address
in  effect  for  notices to it under the Purchase Agreement and agrees that such
service  shall  constitute  good  and  sufficient  service of process and notice
thereof.  Nothing  in this Section 4.10 shall affect or limit any right to serve
process  in any other manner permitted by law.  Each of the Maker and the Holder
hereby agree that the prevailing party in any suit, action or proceeding arising
out  of  or  relating  to  this  Note  shall  be  entitled  to reimbursement for
reasonable  legal  fees  from  the  non-prevailing  party.

          Section  4.11     Parties  in  Interest.  This  Note  shall be binding
                            ---------------------
upon,  inure  to  the benefit of and be enforceable by the Maker, the Holder and
their  respective  successors  and  permitted  assigns.

          Section  4.12     Failure  or  Indulgence  Not  Waiver.  No failure or
                            ------------------------------------
delay on the part of the Holder in the exercise of any power, right or privilege
hereunder  shall  operate  as  a waiver thereof, nor shall any single or partial
exercise  of  any  such  power,  right  or  privilege  preclude other or further
exercise thereof or of any other right, power or privilege, nor shall any waiver
by the Holder of any such right or rights on any one occasion be deemed a waiver
of  the  same  right  or  rights  on  any  future  occasion.

          Section  4.13     Maker  Waivers.
                            --------------

          (a)     Except  as  otherwise  specifically provided herein, the Maker
and  all  others  that  may become liable for all or any part of the obligations
evidenced  by this Note, hereby waive presentment, demand, notice of nonpayment,
protest  and  all  other  demands'  and notices in connection with the delivery,
acceptance,  performance  and enforcement of this Note, and do hereby consent to
any  number  of  renewals  of extensions of the time or payment hereof and agree
that  any  such  renewals  or  extensions may be made without notice to any such
persons  and

                                      -22-
<PAGE>
without  affecting  their liability herein and do further consent to the release
of  any  person  liable hereon, all without affecting the liability of the other
persons, firms or Maker liable for the payment of this Note, AND DO HEREBY WAIVE
TRIAL  BY  JURY.

          (b)     THE MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE
IS  A  PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE
LAW,  HEREBY  WAIVES  ITS  RIGHT  TO  NOTICE  AND  HEARING  WITH  RESPECT TO ANY
PREJUDGMENT  REMEDY  WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO
USE.

          Section  4.13     Definitions.  For the purposes hereof, the following
                            -----------
terms  shall  have  the  following  meanings:

          "Person"  means  an  individual  or a corporation, partnership, trust,
           ------
incorporated  or  unincorporated  association,  joint venture, limited liability
company,  joint stock company, government (or an agency or political subdivision
thereof)  or  other  entity  of  any  kind.

          "Trading  Day"  means (a) a day on which the Common Stock is traded on
           ------------
the  OTC  Bulletin  Board,  or  (b) if the Common Stock is not traded on the OTC
Bulletin  Board,  a  day  on  which  the  Common  Stock  is  quoted  in  the
over-the-counter  market  as  reported  by  the  National  Quotation  Bureau
Incorporated  (or any similar organization or agency succeeding its functions of
reporting prices); provided, however, that in the event that the Common Stock is
                   --------  -------
not  listed  or quoted as set forth in (a) or (b) hereof, then Trading Day shall
mean  any day except Saturday, Sunday and any day which shall be a legal holiday
or  a  day on which banking institutions in the State of New York are authorized
or  required  by  law  or  other  government  action  to  close.

                                      -23-
<PAGE>
                                              CHARYS HOLDING COMPANY, INC.

                                              By: ______________________________
                                                  Name:
                                                  Title:

                                      -24-
<PAGE>
                                    EXHIBIT A

                                WIRE INSTRUCTIONS

Payee:  _________________________________________________________

Bank:  __________________________________________________________

Address:  _______________________________________________________

          _______________________________________________________

Bank  No.:  _____________________________________________________

Account  No.:  __________________________________________________

Account  Name:  _________________________________________________

                                      -25-
<PAGE>
                                     FORM OF

                              NOTICE OF CONVERSION

     (To be Executed by the Registered Holder in order to Convert the Note)

The  undersigned  hereby irrevocably elects to convert $ ________________ of the
principal amount of the above Note No. ___ into shares of Common Stock of Charys
Holding  Company,  Inc.  (the "Maker") according to the conditions hereof, as of
the  date  written  below.

Date  of  Conversion  _________________________________________________________

Applicable  Conversion  Price __________________________________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  Date  of  Conversion:  _________________________

Signature___________________________________________________________________
         [Name]

Address:__________________________________________________________________

        __________________________________________________________________

                                      -26-
<PAGE>
                                   EXHIBIT C-1
                            FORM OF SERIES A WARRANT

                                        iii
<PAGE>
THIS  WARRANT  AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR  OTHERWISE  DISPOSED  OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO  THE  ISSUER  THAT  REGISTRATION  OF  SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES  LAWS  IS  NOT  REQUIRED.

                          SERIES A WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                          CHARYS HOLDING COMPANY, INC.

                            Expires December 4, 2011

No.:  W-A-06-__                                  Number of Shares:  ____________
Date of Issuance: December 4, 2006

     FOR  VALUE  RECEIVED,  the  undersigned,  Charys  Holding  Company, Inc., a
Delaware  corporation  (together with its successors and assigns, the "Issuer"),
                                                                       ------
hereby  certifies  that ___________________________ or its registered assigns is
entitled  to  subscribe  for  and  purchase,  during  the  Term  (as hereinafter
defined),  up to ____________________ (__________) shares (subject to adjustment
as  hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable  Common Stock of the Issuer, at an exercise price per share equal
to  the  Warrant  Price  then in effect, subject, however, to the provisions and
upon  the terms and conditions hereinafter set forth.  Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified  in  Section  8  hereof.

     1.     Term.  The  term  of this Warrant shall commence on December 4, 2006
            ----
and  shall  expire  at 5:00 p.m., Eastern Time, on December 4, 2011 (such period
being  the  "Term").
             ----

     2.     Method  of  Exercise; Payment; Issuance of New Warrant; Transfer and
            --------------------------------------------------------------------
Exchange.
--------

     (a)     Time  of Exercise.  The purchase rights represented by this Warrant
             -----------------
may  be  exercised  in  whole  or  in  part  during  the  Term.

     (b)     Method  of  Exercise.  The Holder hereof may exercise this Warrant,
             --------------------
in  whole  or  in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment  to  the  Issuer  of  an  amount  of consideration therefor equal to the
Warrant  Price  in  effect  on  the  date  of  such  exercise  multiplied by the

                                      -1-
<PAGE>
number  of  shares  of  Warrant Stock with respect to which this Warrant is then
being  exercised, payable at such Holder's election (i) by certified or official
bank  check  or by wire transfer to an account designated by the Issuer, (ii) by
"cashless  exercise" in accordance with the provisions of subsection (c) of this
Section  2,  but  only  when  a  registration statement under the Securities Act
providing for the resale of the Warrant Stock is not then in effect, or (iii) by
a combination of the foregoing methods of payment selected by the Holder of this
Warrant,  if  applicable.

     (c)     Cashless  Exercise.  Notwithstanding  any  provisions herein to the
             ------------------
contrary  and  commencing  one (1) year following the Original Issue Date if (i)
the  Per  Share  Market  Value  of one share of Common Stock is greater than the
Warrant  Price  (at  the  date  of  calculation  as  set forth below) and (ii) a
registration  statement under the Securities Act providing for the resale of the
Warrant  Stock  is not then in effect by the date such registration statement is
required  to  be  effective  pursuant  to  the Registration Rights Agreement (as
defined  in  the  Purchase  Agreement)  or  not effective at any time during the
Effectiveness  Period  (as  defined  in  the  Registration  Rights Agreement) in
accordance  with  the  terms  of  the  Registration Rights Agreement, unless the
registration statement is not effective as a result of the Issuer exercising its
rights  under  Section  3(n)  of  the  Registration Rights Agreement, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by  a  cashless  exercise and shall receive the number of shares of Common Stock
equal  to  an  amount  (as determined below) by surrender of this Warrant at the
principal  office  of  the  Issuer together with the properly endorsed Notice of
Exercise  in which event the Issuer shall issue to the Holder a number of shares
of  Common  Stock  computed  using  the  following  formula:

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

Where     X =  the number of shares of Common Stock to be issued to the
               Holder.

          Y =  the  number  of shares of  Common Stock purchasable upon exercise
               of  all  of  the  Warrant or, if only a portion of the Warrant is
               being  exercised,  the  portion  of  the Warrant being exercised.

          A =  the Warrant Price.

          B =  the  Per  Share  Market  Value  of one share of Common Stock.

     (d)     Issuance  of  Stock  Certificates.  In the event of any exercise of
             ---------------------------------
this  Warrant in accordance with and subject to the terms and conditions hereof,
certificates  for  the  shares  of Warrant Stock so purchased shall be dated the
date  of  such  exercise  and delivered to the Holder hereof within a reasonable
time,  not  exceeding  three (3) Trading Days after such exercise (the "Delivery
                                                                        --------
Date")  or, at the request of the Holder (provided that a registration statement
----
under  the  Securities Act providing for the resale of the Warrant Stock is then
in effect), issued and delivered to the Depository Trust Company ("DTC") account
                                                                   ---
on  the  Holder's  behalf  via  the  Deposit  Withdrawal Agent Commission System
("DWAC")  within  a  reasonable time, not exceeding three (3) Trading Days after
  ----
such  exercise, and the Holder hereof shall be deemed for all purposes to be the
holder  of  the  shares  of  Warrant  Stock  so purchased as of the date of such
exercise.  Notwithstanding  the  foregoing  to  the  contrary, the Issuer or its
transfer  agent  shall  only

                                      -2-
<PAGE>
be obligated to issue and deliver the shares to the DTC on a holder's behalf via
DWAC  if  such  exercise  is  in  connection  with a sale and the Issuer and its
transfer  agent  are  participating  in DTC through the DWAC system.  The Holder
shall  deliver  this  original  Warrant,  or an indemnification undertaking with
respect  to  such Warrant in the case of its loss, theft or destruction, at such
time that this Warrant is fully exercised.  With respect to partial exercises of
this  Warrant,  the Issuer shall keep written records of the number of shares of
Warrant  Stock  exercised  as  of  each  date  of  exercise.

     (e)     Compensation  for  Buy-In on Failure to Timely Deliver Certificates
             -------------------------------------------------------------------
Upon  Exercise.  In addition to any other rights available to the Holder, if the
--------------
Issuer fails to cause its transfer agent to transmit to the Holder a certificate
or  certificates  representing  the  Warrant Stock pursuant to an exercise on or
before  the  Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock  to  deliver  in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
                                                              ------
Issuer  shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell  order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number  of  shares  of  Warrant Stock for which such exercise was not honored or
deliver  to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder.  For  example,  if  the  Holder purchases Common Stock having a total
purchase  price  of  $11,000  to  cover  a  Buy-In  with respect to an attempted
exercise  of  shares of Common Stock with an aggregate sale price giving rise to
such  purchase  obligation  of  $10,000,  under  clause  (1)  of the immediately
preceding  sentence  the  Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the  Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer.  Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive  relief  with  respect  to  the  Issuer's  failure  to timely deliver
certificates  representing  shares of Common Stock upon exercise of this Warrant
as  required  pursuant  to  the  terms  hereof.

     (f)     Transferability  of  Warrant.  Subject to Section 2(h) hereof, this
             ----------------------------
Warrant may be transferred by a Holder, in whole or in part, without the consent
of  the  Issuer.  If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized  attorney,  upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached  hereto)  and  upon  payment  of  any  necessary  transfer tax or other
governmental charge imposed upon such transfer.  This Warrant is exchangeable at
the  principal  office of the Issuer for Warrants to purchase the same aggregate
number  of  shares  of Warrant Stock, each new Warrant to represent the right to
purchase  such  number  of  shares  of  Warrant Stock as the Holder hereof shall
designate  at  the  time  of such exchange.  All Warrants issued on transfers or
exchanges  shall  be  dated  the Original Issue Date and shall be identical with
this  Warrant  except  as  to  the  number  of  shares of Warrant Stock issuable
pursuant  thereto.

                                      -3-
<PAGE>
     (g)     Continuing Rights of Holder.  The Issuer will, at the time of or at
             ---------------------------
any  time  after  each  exercise of this Warrant, upon the request of the Holder
hereof,  acknowledge in writing the extent, if any, of its continuing obligation
to  afford  to  such Holder all rights to which such Holder shall continue to be
entitled  after  such  exercise  in  accordance  with the terms of this Warrant,
provided  that  if  any  such  Holder  shall  fail to make any such request, the
--------
failure  shall not affect the continuing obligation of the Issuer to afford such
rights  to  such  Holder.

     (h)     Compliance  with  Securities  Laws.
             -----------------------------------

          (i)     The Holder of this Warrant, by acceptance hereof, acknowledges
     that  this  Warrant  and  the  shares  of  Warrant  Stock to be issued upon
     exercise  hereof are being acquired solely for the Holder's own account and
     not  as  a  nominee  for  any other party, and for investment, and that the
     Holder  will  not  offer,  sell or otherwise dispose of this Warrant or any
     shares  of  Warrant Stock to be issued upon exercise hereof except pursuant
     to  an effective registration statement, or an exemption from registration,
     under the Securities Act and any applicable state securities laws.

          (ii)     Except as provided in paragraph (iii) below, this Warrant and
     all  certificates representing shares of Warrant Stock issued upon exercise
     hereof  shall  be  stamped  or imprinted with a legend in substantially the
     following  form:

          THIS  WARRANT  AND  THE SHARES OF COMMON STOCK ISSUABLE UPON
          EXERCISE  HEREOF  HAVE  NOT  BEEN  REGISTERED  UNDER  THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
          ANY  STATE  SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
          OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED  UNDER  THE
          SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
          THE  ISSUER SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
          REASONABLY  SATISFACTORY  TO THE ISSUER THAT REGISTRATION OF
          SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT  AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT
          REQUIRED.

          (iii)     The  Issuer  agrees  to reissue this Warrant or certificates
     representing  any  of the Warrant Stock, without the legend set forth above
     if  at  such time, prior to making any transfer of any such securities, the
     Holder  shall  give  written notice to the Issuer describing the manner and
     terms  of  such transfer and the conditions set forth below shall have been
     satisfied.  Such  proposed  transfer will not be effected until: (a) either
     (i)  the  Issuer has received an opinion of counsel reasonably satisfactory
     to the Issuer, to the effect that the registration of such securities under
     the  Securities  Act  is  not  required  in  connection  with such proposed
     transfer,  (ii)  a registration statement under the Securities Act covering
     the  Warrant  Stock  subject to such proposed disposition has been filed by
     the  Issuer  with  the  Securities  and  Exchange Commission and has become
     effective  and

                                      -4-
<PAGE>
     continues  to  be  effective under the Securities Act, (iii) the Issuer has
     received  other  evidence  reasonably  satisfactory to the Issuer that such
     registration  and  qualification  under  the  Securities  Act  and  state
     securities  laws  are  not required, or (iv) the Holder provides the Issuer
     with  reasonable assurances that such security can be sold pursuant to Rule
     144 under the Securities Act; and (b) either (i) the Issuer has received an
     opinion  of  counsel  reasonably  satisfactory to the Issuer, to the effect
     that  registration or qualification under the securities or "blue sky" laws
     of  any state is not required in connection with such proposed disposition,
     or  (ii) compliance with applicable state securities or "blue sky" laws has
     been  effected or a valid exemption exists with respect thereto. The Issuer
     will  respond  to  any  such  notice from a holder within three (3) Trading
     Days.  In  the  case  of any proposed transfer under this Section 2(h), the
     Issuer will use reasonable efforts to comply with any such applicable state
     securities  or  "blue  sky" laws, but shall in no event be required, (x) to
     qualify  to do business in any state where it is not then qualified, (y) to
     take  any  action that would subject it to tax or to the general service of
     process  in  any  state where it is not then subject, or (z) to comply with
     state  securities or "blue sky" laws of any state for which registration by
     coordination  is  unavailable  to  the Issuer. The restrictions on transfer
     contained  in  this Section 2(h) shall be in addition to, and not by way of
     limitation  of,  any  other restrictions on transfer contained in any other
     section  of  this  Warrant. Whenever a certificate representing the Warrant
     Stock is required to be issued to a the Holder without a legend, in lieu of
     delivering physical certificates representing the Warrant Stock, the Issuer
     shall,  upon  the  request  of  such  Holder,  cause  its transfer agent to
     electronically  transmit  the  Warrant Stock to the Holder by crediting the
     account  of  the Holder's Prime Broker with DTC through its DWAC system (to
     the  extent  not  inconsistent  with  any provisions of this Warrant or the
     Purchase  Agreement),  if  applicable.

     (i)     Accredited  Investor  Status.  In  no event may the Holder exercise
             ----------------------------
this  Warrant  in whole or in part unless the Holder is an "accredited investor"
as defined in Regulation D under the Securities Act.

     3.     Stock  Fully  Paid;  Reservation  and  Listing of Shares; Covenants.
            -------------------------------------------------------------------

     (a)     Stock  Fully  Paid.  The Issuer represents, warrants, covenants and
             ------------------
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this  Warrant  hereunder  will, when issued in accordance with the terms of this
Warrant,  be  duly authorized, validly issued, fully paid and non-assessable and
free  from  all  taxes,  liens and charges created by or through the Issuer with
respect  to issuance (other than restrictions under federal and state securities
laws).  The  Issuer  further  covenants and agrees that during the period within
which  this  Warrant  may  be  exercised,  the  Issuer  will  at  all times have
authorized  and  reserved  for the purpose of the issuance upon exercise of this
Warrant a sufficient number of authorized but unissued shares of Common Stock to
provide  for  the  exercise of this Warrant without regard to any limitations on
exercise.

     (b)     Reservation.  If any shares of Common Stock required to be reserved
             -----------
for  issuance  upon  exercise of this Warrant or as otherwise provided hereunder
require  registration or qualification with any Governmental Authority under any
federal  or  state  law  before such shares may be so issued, the Issuer will in
good  faith  use  its  commercially  reasonable  efforts  as

                                      -5-
<PAGE>
expeditiously  as  possible  at  its  expense  to  cause  such shares to be duly
registered  or  qualified.  To  the  extent  permissible  under  the  applicable
securities  exchange  or  market  rules  on  which the Common Stock is traded or
quoted,  if  the  Issuer shall list any shares of Common Stock on any securities
exchange  or  market  it  will,  at  its expense, list thereon, and maintain and
increase  when necessary such listing, of, all shares of Warrant Stock from time
to  time issued upon exercise of this Warrant or as otherwise provided hereunder
(provided that such Warrant Stock has been registered pursuant to a registration
statement  under the Securities Act then in effect), and, all unissued shares of
Warrant Stock which are at any time issuable hereunder, so long as any shares of
Common  Stock  shall  be  so  listed.  The  Issuer  will  also  so  list on each
securities  exchange  or  market,  and  will maintain such listing of, any other
securities  which  the  Holder of this Warrant shall be entitled to receive upon
the  exercise  of  this  Warrant if at the time any securities of the same class
shall be listed on such securities exchange or market by the Issuer.

     (c)     Covenants.  The  Issuer  shall not by any action including, without
             ---------
limitation,  amending  the  Certificate  of  Incorporation or the by-laws of the
Issuer,  or  through  any  reorganization,  transfer  of  assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and  in  the  taking  of  all such actions as may be necessary or appropriate to
protect  the  rights  of  the  Holder  hereof  against  dilution  (to the extent
specifically provided herein) or impairment.  Without limiting the generality of
the  foregoing,  the  Issuer  will  (i) not permit the par value, if any, of its
Common  Stock  to  exceed  the  then  effective Warrant Price, (ii) not amend or
modify  any  provision  of  the  Certificate  of Incorporation or by-laws of the
Issuer  in  any  manner that would adversely affect the rights of the Holders of
the Warrants, (iii) take all such action as may be reasonably necessary in order
that  the  Issuer  may  validly  and  legally issue fully paid and nonassessable
shares  of  Common  Stock, free and clear of any liens, claims, encumbrances and
restrictions  (other  than as provided herein and restrictions under federal and
state  securities  laws)  upon  the  exercise  of this Warrant, and (iv) use its
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents  from  any public regulatory body having jurisdiction thereof as may be
reasonably  necessary to enable the Issuer to perform its obligations under this
Warrant.

     (d)     Loss,  Theft,  Destruction  of  Warrants.  Upon receipt of evidence
             ----------------------------------------
satisfactory  to the Issuer of the ownership of and the loss, theft, destruction
or  mutilation  of  any  Warrant  and,  in  the  case of any such loss, theft or
destruction,  upon  receipt  of indemnity or security satisfactory to the Issuer
or,  in the case of any such mutilation, upon surrender and cancellation of such
Warrant,  the  Issuer  will  make  and  deliver,  in  lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right  to  purchase  the  same  number  of  shares  of  Common  Stock.

     (e)     Payment  of Taxes.  The Issuer will pay any documentary stamp taxes
             -----------------
attributable to the initial issuance of the Warrant Stock issuable upon exercise
of this Warrant; provided, however, that the Issuer shall not be required to pay
                 --------  -------
any tax or taxes which may be payable in respect of any transfer involved in the
issuance  or  delivery  of any certificates representing Warrant Stock in a name
other than that of the Holder in respect to which such shares are issued.

                                      -6-
<PAGE>
     4.     Adjustment  of  Warrant  Price  and  Number  of Shares Issuable Upon
            --------------------------------------------------------------------
Exercise.  The  Warrant  Price  and the Warrant Share Number shall be subject to
--------
adjustment  from  time  to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section  5.

     (a)     Recapitalization,  Reorganization, Reclassification, Consolidation,
             -------------------------------------------------------------------
Merger  or  Sale.
----------------

          (i)  In  case the Issuer after the Original Issue Date shall do any of
     the  following  (each, a "Triggering Event"): (a) consolidate or merge with
                               ----------------
     or  into  any  other  Person  and the Issuer shall not be the continuing or
     surviving  corporation  of  such consolidation or merger, or (b) permit any
     other  Person  to  consolidate with or merge into the Issuer and the Issuer
     shall  be  the  continuing or surviving Person but, in connection with such
     consolidation  or  merger, any Capital Stock of the Issuer shall be changed
     into  or  exchanged for Securities of any other Person or cash or any other
     property,  or  (c)  transfer  all or substantially all of its properties or
     assets  to  any  other  Person,  or  (d) effect a capital reorganization or
     reclassification  of  its Capital Stock, then, and in the case of each such
     Triggering  Event,  proper provision shall be made to the Warrant Price and
     the  Warrant  Share Number of shares of Warrant Stock that may be purchased
     upon  exercise of this Warrant so that, upon the basis and the terms and in
     the  manner  provided  in this Warrant, the Holder of this Warrant shall be
     entitled  upon  the  exercise  hereof at any time after the consummation of
     such Triggering Event, to the extent this Warrant is not exercised prior to
     such  Triggering Event, to receive at the Warrant Price as adjusted to take
     into  account  the  consummation  of  such Triggering Event, in lieu of the
     Common  Stock  issuable  upon  such  exercise of this Warrant prior to such
     Triggering  Event,  the  Securities, cash and property to which such Holder
     would  have been entitled upon the consummation of such Triggering Event if
     such  Holder  had  exercised  the  rights  represented  by  this  Warrant
     immediately  prior  thereto  (including the right of a shareholder to elect
     the type of consideration it will receive upon a Triggering Event), subject
     to  adjustments  (subsequent to such corporate action) as nearly equivalent
     as  possible  to  the adjustments provided for elsewhere in this Section 4,
     and  the  Warrant  Price  shall be adjusted to equal the product of (A) the
     closing  price  of  the  common  stock  of  the  continuing  or  surviving
     corporation as a result of such Triggering Event as of the date immediately
     preceding  the date of the consummation of such Triggering Event multiplied
     by  (B) the quotient of (i) the Warrant Price divided by (ii) the Per Share
     Market  Value  of the Common Stock as of the date immediately preceding the
     Original  Issue Date; provided, however, the Holder at its option may elect
                           --------  -------
     to  receive an amount in cash equal to the value of this Warrant calculated
     in  accordance  with  the  Black-Scholes  formula.  Immediately  upon  the
     occurrence  of  a  Triggering  Event, the Issuer shall notify the Holder in
     writing  of  such  Triggering  Event  and  provide  the  calculations  in
     determining the number of shares of Warrant Stock issuable upon exercise of
     the  new warrant and the adjusted Warrant Price. Upon the Holder's request,
     the  continuing  or  surviving  corporation  as a result of such Triggering
     Event  shall issue to the Holder a new warrant of like tenor evidencing the
     right  to  purchase  the adjusted number of shares of Warrant Stock and the
     adjusted Warrant Price pursuant to the terms and provisions of this Section
     4(a)(i).  Notwithstanding  the  foregoing  to  the  contrary,  this Section
     4(a)(i)  shall  only  apply  if  the  surviving entity pursuant to any such
     Triggering  Event  is  a  company  that  has  a  class  of

                                      -7-
<PAGE>
     equity  securities  registered  pursuant  to the Securities Exchange Act of
     1934,  as  amended,  and its common stock is listed or quoted on a national
     securities  exchange,  national  automated  quotation  system  or  the  OTC
     Bulletin Board. In the event that the surviving entity pursuant to any such
     Triggering Event is not a public company that is registered pursuant to the
     Securities  Exchange  Act  of  1934, as amended, or its common stock is not
     listed  or  quoted  on  a  national securities exchange, national automated
     quotation  system or the OTC Bulletin Board, then the Holder shall have the
     right  to  demand that the Issuer pay to the Holder an amount in cash equal
     to  the  value  of  this  Warrant  calculated  in  accordance  with  the
     Black-Scholes  formula.

          (ii)     In the event that the Holder has elected not to exercise this
     Warrant  prior  to  the  consummation  of  a  Triggering Event and has also
     elected not to receive an amount in cash equal to the value of this Warrant
     calculated  in  accordance  with  the Black-Scholes formula pursuant to the
     provisions  of  Section  4(a)(i)  above,  so  long  as the surviving entity
     pursuant  to  any  Triggering Event is a company that has a class of equity
     securities  registered  pursuant to the Securities Exchange Act of 1934, as
     amended,  and its common stock is listed or quoted on a national securities
     exchange,  national  automated  quotation system or the OTC Bulletin Board,
     the  surviving  entity and/or each Person (other than the Issuer) which may
     be  required  to deliver any Securities, cash or property upon the exercise
     of  this  Warrant  as  provided  herein shall assume, by written instrument
     delivered  to,  and reasonably satisfactory to, the Holder of this Warrant,
     (A)  the  obligations  of  the Issuer under this Warrant (and if the Issuer
     shall  survive  the  consummation of such Triggering Event, such assumption
     shall  be  in  addition  to,  and  shall  not  release the Issuer from, any
     continuing  obligations  of  the  Issuer  under  this  Warrant) and (B) the
     obligation  to deliver to such Holder such Securities, cash or property as,
     in  accordance  with  the foregoing provisions of this subsection (a), such
     Holder  shall  be entitled to receive, and the surviving entity and/or each
     such  Person  shall  have  similarly delivered to such Holder an opinion of
     counsel  for  the  surviving  entity and/or each such Person, which counsel
     shall  be  reasonably satisfactory to such Holder, or in the alternative, a
     written  acknowledgement  executed  by  the  President  or  Chief Financial
     Officer  of the Issuer, stating that this Warrant shall thereafter continue
     in  full  force  and  effect  and  the  terms  hereof  (including,  without
     limitation,  all  of  the  provisions  of  this  subsection  (a))  shall be
     applicable  to  the Securities, cash or property which the surviving entity
     and/or  each  such  Person  may be required to deliver upon any exercise of
     this  Warrant  or  the  exercise  of  any  rights  pursuant  hereto.

          (b)     Stock  Dividends,  Subdivisions  and  Combinations.  If at any
                  --------------------------------------------------
time  the  Issuer  shall:

               (i)     make or issue or set a record date for the holders of the
     Common  Stock  for  the  purpose  of  entitling  them to receive a dividend
     payable in, or other distribution of, shares of Common Stock,

               (ii)     subdivide  its outstanding shares of Common Stock into a
     larger number of shares of Common Stock, or

               (iii)     combine  its  outstanding shares of Common Stock into a
     smaller number of shares of Common Stock,

                                      -8-
<PAGE>
then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to  equal the number of shares of Common Stock which a record holder of the same
number  of  shares  of  Common  Stock  for  which  this  Warrant  is exercisable
immediately  prior  to  the occurrence of such event would own or be entitled to
receive  after  the  happening  of such event, and (2) the Warrant Price then in
effect  shall  be  adjusted  to  equal  (A)  the  Warrant  Price  then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such  adjustment.

     (c)     Certain  Other Distributions.  If at any time the Issuer shall make
             ----------------------------
or  issue  or  set  a  record  date  for the holders of the Common Stock for the
purpose  of  entitling  them  to  receive any dividend or other distribution of:

               (i)     cash  (other than a cash dividend payable out of earnings
     or  earned surplus legally available for the payment of dividends under the
     laws  of  the  jurisdiction  of  incorporation  of  the  Issuer),

               (ii)     any  evidences  of its indebtedness, any shares of stock
     of  any  class or any other securities or property of any nature whatsoever
     (other  than  cash, Common Stock Equivalents or Additional Shares of Common
     Stock),  or

               (iii)     any  warrants  or  other  rights  to  subscribe  for or
     purchase  any  evidences  of  its  indebtedness, any shares of stock of any
     class  or  any other securities or property of any nature whatsoever (other
     than  cash, Common Stock Equivalents or Additional Shares of Common Stock),

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable  shall  be  adjusted to equal the product of the number of shares of
Common  Stock  for  which  this Warrant is exercisable immediately prior to such
adjustment  multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator  of  which  shall  be  such  Per Share Market Value minus the amount
allocable  to one share of Common Stock of any such cash so distributable and of
the  fair  value (as determined in good faith by the Board and, upon the request
of  the Holder, supported by an opinion from an investment banking firm mutually
agreed  upon  by  the  Issuer  and  the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in  effect  shall  be  adjusted  to  equal  (A) the Warrant Price then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such adjustment.  A reclassification of the Common Stock (other than a change in
par  value, or from par value to no par value or from no par value to par value)
into  shares  of  Common  Stock  and shares of any other class of stock shall be
deemed  a  distribution by the Issuer to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section 4(c) and,
if  the  outstanding  shares  of  Common  Stock

                                      -9-
<PAGE>
shall  be changed into a larger or smaller number of shares of Common Stock as a
part  of  such  reclassification,  such  change shall be deemed a subdivision or
combination,  as  the  case  may  be,  of the outstanding shares of Common Stock
within  the  meaning  of  Section  4(b).

     (d)     Issuance  of  Additional  Shares  of  Common  Stock.
             ---------------------------------------------------

          (i)     For  a  period  of eighteen (18) months following the Original
Issue  Date,  in  the  event the Issuer shall at any time following the Original
Issue  Date  issue  any  Additional  Shares  of  Common Stock (otherwise than as
provided  in  the foregoing subsections (a) through (c) of this Section 4), at a
price  per  share  less  than  the  Warrant  Price  then  in  effect  or without
consideration,  then the Warrant Price upon each such issuance shall be adjusted
to  that  price  determined by multiplying the Warrant Price then in effect by a
fraction:

               (A)     the  numerator  of which shall be equal to the sum of (x)
          the  number of shares of Outstanding Common Stock immediately prior to
          the  issuance  of  such Additional Shares of Common Stock plus (y) the
                                                                    ----
          number  of shares of Common Stock (rounded to the nearest whole share)
          which  the  aggregate  consideration  for  the  total  number  of such
          Additional  Shares of Common Stock so issued would purchase at a price
          per  share  equal  to  the  Warrant  Price  then  in  effect,  and

               (B)     the denominator of which shall be equal to the number of
          shares  of  Outstanding Common Stock immediately after the issuance of
          such  Additional  Shares  of  Common  Stock.

          (ii)     No  adjustment  of  the  number of shares of Common Stock for
which  this  Warrant  shall  be exercisable shall be made under paragraph (i) of
Section  4(d)  upon  the issuance of any Additional Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment  shall  previously  have  been  made upon the issuance of such Common
Stock Equivalents (or upon the issuance of any warrant or other rights therefor)
pursuant  to  Section  4(e).

     (e)     Issuance  of  Common  Stock  Equivalents.  For a period of eighteen
             ----------------------------------------
(18)  months  following the Original Issue Date, if at any time the Issuer shall
take  a  record  of the holders of its Common Stock for the purpose of entitling
them  to  receive a distribution of, or shall in any manner (whether directly or
by  assumption  in  a  merger  in which the Issuer is the surviving corporation)
issue  or  sell,  any  Common  Stock  Equivalents,  whether or not the rights to
exchange  or  convert  thereunder are immediately exercisable, and the price per
share  for which Common Stock is issuable upon such conversion or exchange shall
be  less  than the Warrant Price in effect immediately prior to the time of such
issue  or  sale, or if, after any such issuance of Common Stock Equivalents, the
price  per  share  for  which  Additional Shares of Common Stock may be issuable
thereafter  is  amended  or adjusted, and such price as so amended shall be less
than  the  Warrant  Price in effect at the time of such amendment or adjustment,
then  the  Warrant Price then in effect shall be adjusted as provided in Section
4(d).  No  further adjustments of the Warrant Share Number and the Warrant Price
then  in  effect  shall  be made upon the actual issue of such Common Stock upon
conversion  or  exchange  of  such  Common  Stock  Equivalents.

                                      -10-
<PAGE>
     (f)     Other Provisions applicable to Adjustments under this Section.  The
             -------------------------------------------------------------
following  provisions  shall  be  applicable to the making of adjustments of the
Warrant  Share  Number and the Warrant Price then in effect provided for in this
Section  4:

          (i)     Computation  of  Consideration.  To  the  extent  that  any
                  ------------------------------
Additional  Shares  of  Common  Stock  or  any  Common Stock Equivalents (or any
warrants  or  other rights therefor) shall be issued for cash consideration, the
consideration  received  by  the Issuer therefor shall be the amount of the cash
received  by  the Issuer therefor, or, if such Additional Shares of Common Stock
or  Common  Stock  Equivalents  are  offered by the Issuer for subscription, the
subscription  price,  or,  if  such  Additional Shares of Common Stock or Common
Stock  Equivalents  are  sold  to  underwriters  or  dealers for public offering
without  a subscription offering, the initial public offering price (in any such
case  subtracting any amounts paid or receivable for accrued interest or accrued
dividends  and  without  taking  into  account  any  compensation,  discounts or
expenses  paid  or  incurred  by  the  Issuer for and in the underwriting of, or
otherwise  in  connection  with,  the issuance thereof).  In connection with any
merger  or consolidation in which the Issuer is the surviving corporation (other
than  any  consolidation or merger in which the previously outstanding shares of
Common  Stock  of  the  Issuer shall be changed to or exchanged for the stock or
other  securities of another corporation), the amount of consideration therefore
shall  be,  deemed  to  be  the fair value, as determined reasonably and in good
faith  by  the  Board,  of  such  portion  of  the  assets  and  business of the
nonsurviving  corporation  as the Board may determine to be attributable to such
shares  of  Common  Stock  or Common Stock Equivalents, as the case may be.  The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants  or  other  rights  to  subscribe for or purchase the same shall be the
consideration  received  by the Issuer for issuing such warrants or other rights
plus  the  additional  consideration payable to the Issuer upon exercise of such
warrants or other rights.  The consideration for any Additional Shares of Common
Stock  issuable  pursuant  to the terms of any Common Stock Equivalents shall be
the consideration received by the Issuer for issuing warrants or other rights to
subscribe  for or purchase such Common Stock Equivalents, plus the consideration
paid  or payable to the Issuer in respect of the subscription for or purchase of
such  Common  Stock  Equivalents,  plus  the  additional  consideration, if any,
payable  to  the Issuer upon the exercise of the right of conversion or exchange
in  such  Common Stock Equivalents.  In the event of any consolidation or merger
of  the  Issuer in which the Issuer is not the surviving corporation or in which
the previously outstanding shares of Common Stock of the Issuer shall be changed
into  or  exchanged for the stock or other securities of another corporation, or
in the event of any sale of all or substantially all of the assets of the Issuer
for  stock or other securities of any corporation, the Issuer shall be deemed to
have  issued  a  number of shares of its Common Stock for stock or securities or
other  property  of  the  other  corporation computed on the basis of the actual
exchange  ratio on which the transaction was predicated, and for a consideration
equal to the fair market value on the date of such transaction of all such stock
or  securities  or  other  property  of the other corporation.  In the event any
consideration  received  by  the  Issuer for any securities consists of property
other  than  cash,  the  fair market value thereof at the time of issuance or as
otherwise  applicable shall be as determined in good faith by the Board.  In the
event  Common Stock is issued with other shares or securities or other assets of
the  Issuer  for  consideration which covers both, the consideration computed as
provided  in  this  Section 4(f)(i) shall be allocated among such securities and
assets  as  determined  in  good  faith  by  the  Board.

          (ii)     When  Adjustments  to  Be  Made.  The adjustments required by
                   -------------------------------
this  Section

                                      -11-
<PAGE>
4  shall  be  made  whenever  and  as  often as any specified event requiring an
adjustment  shall  occur, except that any adjustment of the Warrant Share Number
that  would  otherwise  be  required  may  be postponed (except in the case of a
subdivision  or  combination  of  shares of the Common Stock, as provided for in
Section  4(b))  up  to,  but  not beyond the date of exercise if such adjustment
either by itself or with other adjustments not previously made adds or subtracts
less  than one percent (1%) of the shares of Common Stock for which this Warrant
is  exercisable  immediately  prior  to  the  making  of  such  adjustment.  Any
adjustment  representing  a  change  of less than such minimum amount (except as
aforesaid)  which is postponed shall be carried forward and made as soon as such
adjustment,  together  with other adjustments required by this Section 4 and not
previously  made,  would  result  in  a  minimum  adjustment  or  on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to  have  occurred  at  the  close  of  business  on the date of its occurrence.

          (iii)     Fractional  Interests.  In  computing adjustments under this
                    ---------------------
Section  4,  fractional interests in Common Stock shall be taken into account to
the nearest one one-hundredth (1/100th) of a share.

          (iv)     When  Adjustment  Not  Required.  If  the Issuer shall take a
                   -------------------------------
record  of  the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter  and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights,  then thereafter no adjustment shall be required by reason of the taking
of  such record and any such adjustment previously made in respect thereof shall
be  rescinded  and  annulled.

     (g)     Form  of  Warrant after Adjustments.  The form of this Warrant need
             -----------------------------------
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

     (h)     Escrow  of  Warrant  Stock.  If  after  any  property  becomes
             --------------------------
distributable  pursuant  to this Section 4 by reason of the taking of any record
of  the  holders  of  Common Stock, but prior to the occurrence of the event for
which such record is taken, and the Holder exercises this Warrant, any shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the  last  shares  of  Common  Stock  for  which  this  Warrant  is  exercised
(notwithstanding  any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to  the  Holder upon and to the extent that the event actually takes place, upon
payment  of  the  current Warrant Price.  Notwithstanding any other provision to
the contrary herein, if the event for which such record was taken fails to occur
or  is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed  property  returned.

     5.     Notice  of Adjustments.  Whenever the Warrant Price or Warrant Share
            ----------------------
Number  shall  be  adjusted  pursuant  to Section 4 hereof (for purposes of this
Section  5,  each  an  "adjustment"), the Issuer shall cause its Chief Financial
                        ----------
Officer  to  prepare  and  execute  a  certificate  setting forth, in reasonable
detail,  the  event  requiring the adjustment, the amount of the adjustment, the
method  by  which such adjustment was calculated (including a description of the
basis  on  which  the  Board  made any determination hereunder), and the Warrant
Price  and

                                      -12-
<PAGE>
Warrant  Share  Number  after  giving effect to such adjustment, and shall cause
copies  of  such  certificate  to  be  delivered  to  the Holder of this Warrant
promptly  after  each adjustment.  Any dispute between the Issuer and the Holder
of this Warrant with respect to the matters set forth in such certificate may at
the  option of the Holder of this Warrant be submitted to a national or regional
accounting  firm  chosen  by the Issuer and reasonably acceptable to the Holder,
which  firm shall deliver a written opinion as to such matters to the Issuer and
such  Holder  within  thirty  (30)  days after submission to it of such dispute.
Such  opinion  shall  be final and binding on the parties hereto.  The costs and
expenses  of the initial accounting firm shall be paid equally by the Issuer and
the  Holder.

     6.     Fractional  Shares.  No  fractional  shares of Warrant Stock will be
            ------------------
issued  in  connection  with any exercise hereof, but in lieu of such fractional
shares,  the  Issuer shall round the number of shares to be issued upon exercise
up  to  the  nearest  whole  number  of  shares.

     7.     Ownership Cap and Exercise Restriction.  Notwithstanding anything to
            ---------------------------------------
the  contrary set forth in this Warrant, at no time may a Holder of this Warrant
exercise  this  Warrant  if  the  number  of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common  Stock  owned by such Holder at such time, the number of shares of Common
Stock  which  would  result in such Holder beneficially owning (as determined in
accordance  with Section 13(d) of the Exchange Act and the rules  thereunder) in
excess  of  9.9%  of  the  then  issued  and outstanding shares of Common Stock;
provided,  however, that upon a holder of this Warrant providing the Issuer with
--------   -------
sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice")
                                                                 -------------
that  such  Holder  would like to waive this Section 7 with regard to any or all
shares  of  Common  Stock issuable upon exercise of this Warrant, this Section 7
will  be  of  no  force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this provision shall be
                                 --------  -------
of  no  further  force  or  effect  during  the  sixty-one (61) days immediately
preceding  the  expiration  of  the  term  of  this  Warrant.

     8.     Definitions.  For  the purposes of this Warrant, the following terms
            -----------
have  the  following  meanings:

          "Additional  Shares  of Common Stock" means all shares of Common Stock
           -----------------------------------
     issued by the Issuer after the Original Issue Date, and all shares of Other
     Common, if any, issued by the Issuer after the Original Issue Date, except:
     (i)  securities  issued  (other than for cash) in connection with a merger,
     acquisition,  or  consolidation,  (ii)  securities  issued  pursuant to the
     conversion  or  exercise of convertible or exercisable securities issued or
     outstanding  on  or  prior  to the date of the Purchase Agreement or issued
     pursuant  to  the Purchase Agreement (so long as the conversion or exercise
     price  in  such  securities  are  not  amended  to  lower such price and/or
     adversely  affect  the  Holders),  (iii) the Warrant Stock, (iv) securities
     issued  in  connection with bona fide strategic license agreements or other
     partnering  arrangements  so long as such issuances are not for the purpose
     of  raising  capital,  (v) Common Stock issued or the issuance or grants of
     options  to  purchase  Common  Stock  pursuant to the Issuer's stock option
     plans  and  employee  stock purchase plans outstanding as they exist on the
     date  of  the  Purchase  Agreement,  and  (vi)  any  warrants issued to the
     placement  agent and its designees for the transactions contemplated by the
     Purchase  Agreement.

                                      -13-
<PAGE>
          "Board"  shall  mean  the  Board  of  Directors  of  the  Issuer.
           -----

          "Capital  Stock" means and includes (i) any and all shares, interests,
           --------------
     participations or other equivalents of or interests in (however designated)
     corporate  stock,  including,  without  limitation,  shares of preferred or
     preference  stock,  (ii)  all  partnership  interests  (whether  general or
     limited)  in  any  Person  which  is  a  partnership,  (iii) all membership
     interests  or  limited liability company interests in any limited liability
     company,  and  (iv)  all equity or ownership interests in any Person of any
     other  type.

          "Certificate  of Incorporation" means the Certificate of Incorporation
           -----------------------------
     of  the  Issuer  as  in effect on the Original Issue Date, and as hereafter
     from time to time amended, modified, supplemented or restated in accordance
     with the terms hereof and thereof and pursuant to applicable law.

          "Common  Stock" means the Common Stock, $0.001 par value per share, of
           -------------
     the  Issuer and any other Capital Stock into which such stock may hereafter
     be  changed.

          "Common  Stock  Equivalent" means any Convertible Security or warrant,
           -------------------------
     option or other right to subscribe for or purchase any Additional Shares of
     Common  Stock  or  any  Convertible  Security.

          "Convertible  Securities"  means  evidences of Indebtedness, shares of
           -----------------------
     Capital  Stock  or  other  Securities  which  are  or  may  be  at any time
     convertible into or exchangeable for Additional Shares of Common Stock. The
     term "Convertible Security" means one of the Convertible Securities.

          "Governmental  Authority"  means  any  governmental,  regulatory  or
           -----------------------
     self-regulatory  entity, department, body, official, authority, commission,
     board,  agency  or  instrumentality,  whether  federal, state or local, and
     whether  domestic  or  foreign.

          "Holders"  mean  the  Persons  who  shall  from  time  to time own any
           -------
     Warrant. The term "Holder" means one of the Holders.

          "Independent  Appraiser"  means  a  nationally  recognized  or  major
           ----------------------
     regional  investment  banking  firm or firm of independent certified public
     accountants  of  recognized  standing (which may be the firm that regularly
     examines  the financial statements of the Issuer) that is regularly engaged
     in  the  business of appraising the Capital Stock or assets of corporations
     or  other  entities  as  going  concerns,  and which is not affiliated with
     either  the  Issuer  or  the  Holder  of  any  Warrant.

          "Issuer"  means  Charys Holding Company, Inc., a Delaware corporation,
           ------
     and  its  successors.

          "Majority  Holders"  means  at  any  time  the  Holders  of  Warrants
           -----------------
     exercisable  for  a  majority of the shares of Warrant Stock issuable under
     the  Warrants  at  the  time  outstanding.

                                      -14-
<PAGE>
          "Original Issue Date" means December 4, 2006.
           -------------------

          "OTC  Bulletin  Board"  means the over-the-counter electronic bulletin
           --------------------
     board.

          "Other  Common"  means  any  other  Capital Stock of the Issuer of any
           -------------
     class  which shall be authorized at any time after the date of this Warrant
     (other  than Common Stock) and which shall have the right to participate in
     the distribution of earnings and assets of the Issuer without limitation as
     to  amount.

          "Outstanding  Common  Stock"  means,  at any given time, the aggregate
           --------------------------
     amount  of  outstanding  shares  of  Common  Stock, assuming full exercise,
     conversion  or  exchange (as applicable) of all options, warrants and other
     Securities  which  are convertible into or exercisable or exchangeable for,
     and any right to subscribe for, shares of Common Stock that are outstanding
     at  such  time.

          "Person"  means an individual, corporation, limited liability company,
           ------
     partnership, joint stock company, trust, unincorporated organization, joint
     venture,  Governmental  Authority  or  other  entity  of  whatever  nature.

          "Per  Share  Market  Value"  means on any particular date (a) the last
           -------------------------
     closing  bid  price  per  share of the Common Stock on such date on the OTC
     Bulletin  Board  or another registered national stock exchange on which the
     Common  Stock  is  then  listed, or if there is no such price on such date,
     then the closing bid price on such exchange or quotation system on the date
     nearest  preceding such date, or (b) if the Common Stock is not listed then
     on  the  OTC  Bulletin Board or any registered national stock exchange, the
     last  closing bid price for a share of Common Stock in the over-the-counter
     market,  as reported by the OTC Bulletin Board or in the National Quotation
     Bureau  Incorporated  or  similar  organization or agency succeeding to its
     functions  of  reporting  prices) at the close of business on such date, or
     (c)  if  the Common Stock is not then reported by the OTC Bulletin Board or
     the  National  Quotation  Bureau  Incorporated  (or similar organization or
     agency  succeeding  to  its  functions of reporting prices), then the "Pink
     Sheet"  quotes  for  the  applicable  Trading  Days  preceding such date of
     determination,  or  (d) if the Common Stock is not then publicly traded the
     fair  market  value  of  a  share  of  Common  Stock  as  determined  by an
     Independent  Appraiser  selected  in  good  faith  by the Majority Holders;
     provided,  however,  that the Issuer, after receipt of the determination by
     --------   -------
     such  Independent  Appraiser,  shall have the right to select an additional
     Independent  Appraiser, in which case, the fair market value shall be equal
     to  the  average  of the determinations by each such Independent Appraiser;
     and provided, further that all determinations of the Per Share Market Value
         --------  -------
     shall  be  appropriately  adjusted for any stock dividends, stock splits or
     other  similar  transactions  during such period. The determination of fair
     market  value  by  an  Independent  Appraiser  shall be based upon the fair
     market value of the Issuer determined on a going concern basis as between a
     willing  buyer  and  a  willing seller and taking into account all relevant
     factors  determinative  of  value,  and  shall  be final and binding on all
     parties.  In  determining  the  fair  market  value of any shares of Common
     Stock,  no  consideration shall be given to any restrictions on transfer of
     the  Common  Stock  imposed  by agreement or by federal or state securities
     laws,  or  to  the  existence  or absence of, or any limitations on, voting
     rights.

                                      -15-
<PAGE>
          "Purchase  Agreement"  means  the  Note and Warrant Purchase Agreement
           -------------------
     dated as of December 4, 2006, among the Issuer and the Purchasers.

          "Purchasers"  means  the  purchasers  of  the subordinated convertible
           ----------
     promissory  notes  and  the  Warrants  issued by the Issuer pursuant to the
     Purchase  Agreement.

          "Securities"  means  any  debt  or  equity  securities  of the Issuer,
           ----------
     whether  now  or  hereafter  authorized, any instrument convertible into or
     exchangeable for Securities or a Security, and any option, warrant or other
     right  to  purchase  or  acquire  any Security. "Security" means one of the
     Securities.

          "Securities  Act" means the Securities Act of 1933, as amended, or any
           ---------------
     similar  federal  statute  then  in  effect.

          "Subsidiary"  means  any corporation at least 50% of whose outstanding
           ----------
     Voting  Stock  shall  at  the  time  be owned directly or indirectly by the
     Issuer  or  by one or more of its Subsidiaries, or by the Issuer and one or
     more  of  its  Subsidiaries.

          "Term"  has  the  meaning  specified  in  Section  1  hereof.
           ----

          "Trading  Day"  means (a) a day on which the Common Stock is traded on
           ------------
     the OTC Bulletin Board, or (b) if the Common Stock is not traded on the OTC
     Bulletin  Board,  a  day  on  which  the  Common  Stock  is  quoted  in the
     over-the-counter  market  as  reported  by  the  National  Quotation Bureau
     Incorporated  (or  any  similar  organization  or  agency  succeeding  its
     functions  of  reporting prices); provided, however, that in the event that
                                       --------  -------
     the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
     then  Trading  Day  shall  mean any day except Saturday, Sunday and any day
     which  shall  be  a legal holiday or a day on which banking institutions in
     the State of New York are authorized or required by law or other government
     action  to  close.

          "Voting  Stock"  means,  as  applied  to  the  Capital  Stock  of  any
           -------------
     corporation,  Capital  Stock  of  any class or classes (however designated)
     having  ordinary voting power for the election of a majority of the members
     of  the  board  of directors (or other governing body) of such corporation,
     other  than Capital Stock having such power only by reason of the happening
     of  a  contingency.

          "Warrants" means the Warrants issued and sold pursuant to the Purchase
           --------
     Agreement,  including,  without  limitation,  this  Warrant,  and any other
     warrants  of  like tenor issued in substitution or exchange for any thereof
     pursuant  to  the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
     of  such  other  Warrants.

          "Warrant  Price"  initially means $4.00, as such price may be adjusted
           --------------
     from  time  to  time as shall result from the adjustments specified in this
     Warrant,  including  Section  4  hereto.

                                      -16-
<PAGE>
          "Warrant  Share  Number"  means  at  any  time the aggregate number of
           ----------------------
     shares  of  Warrant Stock which may at such time be purchased upon exercise
     of this Warrant, after giving effect to all prior adjustments and increases
     to  such  number  made  or  required  to  be  made  under the terms hereof.

          "Warrant  Stock"  means  Common  Stock  issuable  upon exercise of any
           --------------
     Warrant  or  Warrants  or  otherwise  issuable  pursuant  to any Warrant or
     Warrants.

     9.   Other Notices. In case at any time:
          -------------

                    (A)  the  Issuer shall make any distributions to the holders
                         of  Common  Stock;  or

                    (B)  the  Issuer shall authorize the granting to all holders
                         of  its  Common  Stock  of  rights  to subscribe for or
                         purchase  any  shares  of Capital Stock of any class or
                         other  rights;  or

                    (C)  there  shall  be  any  reclassification  of the Capital
                         Stock  of  the  Issuer;  or

                    (D)  there  shall  be  any  capital  reorganization  by  the
                         Issuer;  or

                    (E)  there  shall  be  any  (i)  consolidation  or  merger
                         involving  the  Issuer  or (ii) sale, transfer or other
                         disposition of all or substantially all of the Issuer's
                         property,  assets or business (except a merger or other
                         reorganization  in  which  the  Issuer  shall  be  the
                         surviving  corporation  and its shares of Capital Stock
                         shall  continue  to  be  outstanding  and unchanged and
                         except a consolidation, merger, sale, transfer or other
                         disposition  involving  a  wholly-owned Subsidiary); or

                    (F)  there  shall be a voluntary or involuntary dissolution,
                         liquidation  or winding-up of the Issuer or any partial
                         liquidation of the Issuer or distribution to holders of
                         Common  Stock;

then,  in each of such cases, the Issuer shall give written notice to the Holder
of  the  date on which (i) the books of the Issuer shall close or a record shall
be  taken  for  such  dividend, distribution or subscription rights or (ii) such
reorganization,  reclassification,  consolidation,  merger,  disposition,
dissolution,  liquidation  or  winding-up, as the case may be, shall take place.
Such  notice also shall specify the date as of which the holders of Common Stock
of  record  shall  participate  in  such  dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities  or  other  property  deliverable  upon  such  reorganization,
reclassification,  consolidation,  merger, disposition, dissolution, liquidation
or  winding-up,  as  the case may be. Such notice shall be given at least twenty
(20)  days prior to the action in question and not less than ten (10) days prior
to  the  record date or the date on which the Issuer's transfer books are closed
in  respect  thereto.  This  Warrant  entitles  the  Holder  to  receive

                                      -17-
<PAGE>
copies  of  all  financial  and  other information distributed or required to be
distributed  to  the  holders  of  the  Common  Stock.

     10.     Amendment  and  Waiver.  Any term, covenant, agreement or condition
             ----------------------
in  this  Warrant  may be amended, or compliance therewith may be waived (either
generally  or  in  a  particular  instance  and  either  retroactively  or
prospectively),  by  a written instrument or written instruments executed by the
Issuer  and  the  Majority Holders; provided, however, that no such amendment or
                                    --------  -------
waiver  shall  reduce  the  Warrant  Share  Number,  increase the Warrant Price,
shorten  the  period  during  which  this Warrant may be exercised or modify any
provision  of this Section 10 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver  or  modification  of  any  provision  of  this  Warrant  unless the same
consideration  is  also  offered  to  all  holders  of  the  Warrants.

     11.     Governing Law; Jurisdiction.  This Warrant shall be governed by and
             ---------------------------
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  any of the conflicts of law principles which would result in
the  application  of  the substantive law of another jurisdiction.  This Warrant
shall  not  be  interpreted  or construed with any presumption against the party
causing  this Warrant to be drafted.  The Issuer and the Holder agree that venue
for  any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive  any  right  to  raise forum non conveniens or any other argument that New
York  is not the proper venue.  The Issuer and the Holder irrevocably consent to
personal  jurisdiction in the state and federal courts of the state of New York.
The  Issuer  and  the  Holder  consent to process being served in any such suit,
action  or  proceeding by mailing a copy thereof to such party at the address in
effect  for  notices to it under this Warrant and agrees that such service shall
constitute  good  and sufficient service of process and notice thereof.  Nothing
in this Section 11 shall affect or limit any right to serve process in any other
manner  permitted  by  law.  The  Issuer  and  the  Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this  Warrant  or the Purchase Agreement, shall be entitled to reimbursement for
reasonable  legal  fees from the non-prevailing party.  The parties hereby waive
all  rights  to  a  trial  by  jury.

     12.     Notices.  Any  notice,  demand,  request,  waiver  or  other
             -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:

If to the Issuer:             Charys Holding Company, Inc.
                              1117 Perimeter Center West, Suite N415
                              Atlanta, Georgia 30338
                              Attention: Chief Executive Officer
                              Tel. No.: (678) 443-2300
                              Fax  No.: (678) 443-2320

                                      -18-
<PAGE>
with copies (which copies
shall not constitute notice)
to:                           Glast, Phillips & Murray, P.C.
                              815 Walker Street, Suite 1250
                              Houston, Texas 77002
                              Attention: Norman T. Reynolds, Esq.
                              Tel. No.: (713) 237-3135
                              Fax  No.: (713) 237-3202

If  to  any  Holder:          At the address of such Holder set forth on Exhibit
                              A  to  this  Agreement,  with  copies  to Holder's
                              counsel  as set forth on Exhibit A or as specified
                              in  writing  by  such  Holder  with  copies  to:

with copies (which copies
shall not constitute notice)
to:                           Kramer Levin Naftalis & Frankel LLP
                              1177  Avenue of the Americas
                              New  York,  New  York 10036
                              Attention:  Christopher S. Auguste
                              Tel. No.:  (212) 715-9100
                              Fax  No.:  (212) 715-8000

     Any  party  hereto  may from time to time change its address for notices by
giving  written  notice  of  such  changed  address  to  the other party hereto.

     13.     Warrant Agent.  The Issuer may, by written notice to each Holder of
             -------------
this  Warrant,  appoint  an agent having an office in New York, New York for the
purpose  of  issuing  shares  of  Warrant  Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to  subsection  (d)  of  Section  2 hereof or replacing this Warrant pursuant to
subsection  (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such  issuance,  exchange  or  replacement, as the case may be, shall be made at
such  office  by  such  agent.

     14.     Remedies.  The  Issuer  stipulates  that the remedies at law of the
             --------
Holder  of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are  not  and  will not be adequate and that, to the fullest extent permitted by
law,  such  terms  may  be  specifically  enforced  by a decree for the specific
performance  of  any  agreement  contained  herein or by an injunction against a
violation  of  any  of  the  terms  hereof  or  otherwise.

     15.     Successors  and  Assigns.  This  Warrant  and  the rights evidenced
             ------------------------
hereby  shall  inure  to  the  benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such  Holder  or  Holder  of  Warrant  Stock.

                                      -19-
<PAGE>
     16.     Modification  and Severability.  If, in any action before any court
             ------------------------------
or  agency  legally  empowered  to  enforce  any provision contained herein, any
provision  hereof  is  found  to  be unenforceable, then such provision shall be
deemed  modified to the extent necessary to make it enforceable by such court or
agency.  If  any such provision is not enforceable as set forth in the preceding
sentence,  the  unenforceability  of  such  provision shall not affect the other
provisions  of  this  Warrant,  but  this  Warrant shall be construed as if such
unenforceable  provision  had  never  been  contained  herein.

     17.     Headings.  The  headings  of  the  Sections of this Warrant are for
             --------
convenience  of  reference only and shall not, for any purpose, be deemed a part
of  this  Warrant.

     18.     Registration Rights.  The Holder of this Warrant is entitled to the
             -------------------
benefit  of  certain  registration  rights with respect to the shares of Warrant
Stock  issuable  upon  the  exercise  of  this  Warrant pursuant to that certain
Registration  Rights  Agreement, of even date herewith, by and among the Company
and  Persons  listed on Schedule I thereto (the "Registration Rights Agreement")
                                                 -----------------------------
and the registration rights with respect to the shares of Warrant Stock issuable
upon  the exercise of this Warrant by any subsequent Holder may only be assigned
in  accordance  with  the  terms  and  provisions  of  the  Registrations Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -20-
<PAGE>
     IN WITNESS WHEREOF, the Issuer has executed this Series A Warrant as of the
day  and  year  first  above  written.

                                        CHARYS HOLDING COMPANY, INC.

                                        By:
                                           ---------------------------------
                                           Name:
                                           Title:

                                      -21-
<PAGE>
                                  EXERCISE FORM
                                SERIES A WARRANT

                          CHARYS HOLDING COMPANY, INC.

The  undersigned  _______________,  pursuant  to  the  provisions  of the within
Warrant,  hereby  elects  to  purchase  _____  shares  of Common Stock of Charys
Holding  Company,  Inc.  covered  by  the  within  Warrant.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  date  of  Exercise:  _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The undersigned intends that payment of the Warrant Price shall be made as
(check one):

          Cash Exercise_______

          Cashless Exercise_______

If  the  Holder  has  elected  a  Cash Exercise, the Holder shall pay the sum of
$________  by  certified  or  official  bank check (or via wire transfer) to the
Issuer  in  accordance  with  the  terms  of  the  Warrant.

If  the Holder has elected a Cashless Exercise, a certificate shall be issued to
the  Holder  for  the  number of shares equal to the whole number portion of the
product  of the calculation set forth below, which is ___________.   The Company
shall  pay a cash adjustment in respect of the fractional portion of the product
of  the  calculation  set  forth  below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise,  which  product  is  ____________.

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

Where:

The number of shares of Common Stock to be issued to the Holder ________________
("X").

The  number  of  shares  of Common Stock purchasable upon exercise of all of the
Warrant  or, if only a portion of the Warrant is being exercised, the portion of
the  Warrant  being  exercised

                                      -22-
<PAGE>
___________________________  ("Y").

The  Warrant  Price  ______________  ("A").

The Per Share Market Value of one share of Common Stock  _______________________
("B").

                                   ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant  on  the  books  of  the  within  named  corporation.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the  right  to  purchase  _________  shares of Warrant Stock
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint ___________________, attorney, to transfer
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

                           FOR USE BY THE ISSUER ONLY:

This  Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________,  _____,  shares  of  Common  Stock  issued  therefor in the name of
_______________,  Warrant  No. W-_____ issued for ____ shares of Common Stock in
the  name  of  _______________.

                                      -23-
<PAGE>
                                   EXHIBIT C-2
                            FORM OF SERIES B WARRANT

                                        iv
<PAGE>
THIS  WARRANT  AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR  OTHERWISE  DISPOSED  OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO  THE  ISSUER  THAT  REGISTRATION  OF  SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES  LAWS  IS  NOT  REQUIRED.

                          SERIES B WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                          CHARYS HOLDING COMPANY, INC.

                            Expires December 4, 2011

No.:  W-B-06-__                                Number  of  Shares:  ____________
Date  of  Issuance:  December  4,  2006

     FOR  VALUE  RECEIVED,  the  undersigned,  Charys  Holding  Company, Inc., a
Delaware  corporation  (together with its successors and assigns, the "Issuer"),
                                                                       ------
hereby  certifies  that ___________________________ or its registered assigns is
entitled  to  subscribe  for  and  purchase,  during  the  Term  (as hereinafter
defined),  up to ____________________ (__________) shares (subject to adjustment
as  hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable  Common Stock of the Issuer, at an exercise price per share equal
to  the  Warrant  Price  then in effect, subject, however, to the provisions and
upon  the terms and conditions hereinafter set forth.  Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified  in  Section  8  hereof.

     1.     Term.  The  term  of this Warrant shall commence on December 4, 2006
            ----
and  shall  expire  at 5:00 p.m., Eastern Time, on December 4, 2011 (such period
being  the  "Term").
             ----

     2.     Method  of  Exercise; Payment; Issuance of New Warrant; Transfer and
            --------------------------------------------------------------------
Exchange.
--------

     (a)     Time  of Exercise.  The purchase rights represented by this Warrant
             -----------------
may  be  exercised  in  whole  or  in  part  during  the  Term.

     (b)     Method  of  Exercise.  The Holder hereof may exercise this Warrant,
             --------------------
in  whole  or  in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment  to  the  Issuer  of  an  amount  of consideration therefor equal to the
Warrant  Price  in  effect  on  the  date  of  such  exercise  multiplied by the

                                     -1-
<PAGE>
number  of  shares  of  Warrant Stock with respect to which this Warrant is then
being  exercised, payable at such Holder's election (i) by certified or official
bank  check  or by wire transfer to an account designated by the Issuer, (ii) by
"cashless  exercise" in accordance with the provisions of subsection (c) of this
Section  2,  but  only  when  a  registration statement under the Securities Act
providing for the resale of the Warrant Stock is not then in effect, or (iii) by
a combination of the foregoing methods of payment selected by the Holder of this
Warrant,  if  applicable.

     (c)     Cashless  Exercise.  Notwithstanding  any  provisions herein to the
             ------------------
contrary  and  commencing  one (1) year following the Original Issue Date if (i)
the  Per  Share  Market  Value  of one share of Common Stock is greater than the
Warrant  Price  (at  the  date  of  calculation  as  set forth below) and (ii) a
registration  statement under the Securities Act providing for the resale of the
Warrant  Stock  is not then in effect by the date such registration statement is
required  to  be  effective  pursuant  to  the Registration Rights Agreement (as
defined  in  the  Purchase  Agreement)  or  not effective at any time during the
Effectiveness  Period  (as  defined  in  the  Registration  Rights Agreement) in
accordance  with  the  terms  of  the  Registration Rights Agreement, unless the
registration statement is not effective as a result of the Issuer exercising its
rights  under  Section  3(n)  of  the  Registration Rights Agreement, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by  a  cashless  exercise and shall receive the number of shares of Common Stock
equal  to  an  amount  (as determined below) by surrender of this Warrant at the
principal  office  of  the  Issuer together with the properly endorsed Notice of
Exercise  in which event the Issuer shall issue to the Holder a number of shares
of  Common  Stock  computed  using  the  following  formula:

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

Where     X =  the number of shares of Common Stock to be issued to the
               Holder.

          Y =  the number of shares of Common Stock purchasable upon exercise of
               all  of  the  Warrant  or,  if  only  a portion of the Warrant is
               being  exercised,  the  portion  of  the Warrant being exercised.

          A =  the Warrant Price.

          B =  the  Per  Share  Market  Value  of one share of Common Stock.

     (d)     Issuance  of  Stock  Certificates.  In the event of any exercise of
             ---------------------------------
this  Warrant in accordance with and subject to the terms and conditions hereof,
certificates  for  the  shares  of Warrant Stock so purchased shall be dated the
date  of  such  exercise  and delivered to the Holder hereof within a reasonable
time,  not  exceeding  three (3) Trading Days after such exercise (the "Delivery
                                                                        --------
Date")  or, at the request of the Holder (provided that a registration statement
----
under  the  Securities Act providing for the resale of the Warrant Stock is then
in effect), issued and delivered to the Depository Trust Company ("DTC") account
                                                                   ---
on  the  Holder's  behalf  via  the  Deposit  Withdrawal Agent Commission System
("DWAC")  within  a  reasonable time, not exceeding three (3) Trading Days after
  ----
such  exercise, and the Holder hereof shall be deemed for all purposes to be the
holder  of  the  shares  of  Warrant  Stock  so purchased as of the date of such
exercise.  Notwithstanding  the  foregoing  to  the  contrary, the Issuer or its
transfer  agent  shall  only

                                     -2-
<PAGE>
be obligated to issue and deliver the shares to the DTC on a holder's behalf via
DWAC  if  such  exercise  is  in  connection  with a sale and the Issuer and its
transfer  agent  are  participating  in DTC through the DWAC system.  The Holder
shall  deliver  this  original  Warrant,  or an indemnification undertaking with
respect  to  such Warrant in the case of its loss, theft or destruction, at such
time that this Warrant is fully exercised.  With respect to partial exercises of
this  Warrant,  the Issuer shall keep written records of the number of shares of
Warrant  Stock  exercised  as  of  each  date  of  exercise.

     (e)     Compensation  for  Buy-In on Failure to Timely Deliver Certificates
             -------------------------------------------------------------------
Upon  Exercise.  In addition to any other rights available to the Holder, if the
--------------
Issuer fails to cause its transfer agent to transmit to the Holder a certificate
or  certificates  representing  the  Warrant Stock pursuant to an exercise on or
before  the  Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock  to  deliver  in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
                                                              -------
Issuer  shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell  order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number  of  shares  of  Warrant Stock for which such exercise was not honored or
deliver  to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder.  For  example,  if  the  Holder purchases Common Stock having a total
purchase  price  of  $11,000  to  cover  a  Buy-In  with respect to an attempted
exercise  of  shares of Common Stock with an aggregate sale price giving rise to
such  purchase  obligation  of  $10,000,  under  clause  (1)  of the immediately
preceding  sentence  the  Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the  Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer.  Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive  relief  with  respect  to  the  Issuer's  failure  to timely deliver
certificates  representing  shares of Common Stock upon exercise of this Warrant
as  required  pursuant  to  the  terms  hereof.

     (f)     Transferability  of  Warrant.  Subject to Section 2(h) hereof, this
             ----------------------------
Warrant may be transferred by a Holder, in whole or in part, without the consent
of  the  Issuer.  If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized  attorney,  upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached  hereto)  and  upon  payment  of  any  necessary  transfer tax or other
governmental charge imposed upon such transfer.  This Warrant is exchangeable at
the  principal  office of the Issuer for Warrants to purchase the same aggregate
number  of  shares  of Warrant Stock, each new Warrant to represent the right to
purchase  such  number  of  shares  of  Warrant Stock as the Holder hereof shall
designate  at  the  time  of such exchange.  All Warrants issued on transfers or
exchanges  shall  be  dated  the Original Issue Date and shall be identical with
this  Warrant  except  as  to  the  number  of  shares of Warrant Stock issuable
pursuant  thereto.

                                     -3-
<PAGE>
     (g)     Continuing  Rights of Holder.  The Issuer will, at the time of or
             ----------------------------
at  any time after each exercise of this Warrant, upon the request of the Holder
hereof,  acknowledge in writing the extent, if any, of its continuing obligation
to  afford  to  such Holder all rights to which such Holder shall continue to be
entitled  after  such  exercise  in  accordance  with the terms of this Warrant,
provided  that  if  any  such  Holder  shall  fail to make any such request, the
--------
failure  shall not affect the continuing obligation of the Issuer to afford such
rights  to  such  Holder.

     (h)     Compliance  with  Securities  Laws.
             -----------------------------------

          (i)     The Holder of this Warrant, by acceptance hereof, acknowledges
     that  this  Warrant  and  the  shares  of  Warrant  Stock to be issued upon
     exercise  hereof are being acquired solely for the Holder's own account and
     not  as  a  nominee  for  any other party, and for investment, and that the
     Holder  will  not  offer,  sell or otherwise dispose of this Warrant or any
     shares  of  Warrant Stock to be issued upon exercise hereof except pursuant
     to  an effective registration statement, or an exemption from registration,
     under  the  Securities  Act  and  any  applicable  state  securities  laws.

          (ii)     Except as provided in paragraph (iii) below, this Warrant and
     all  certificates  representing  shares  of  Warrant  Stock  issued  upon
     exercise  hereof  shall  be  stamped  or  imprinted  with  a  legend  in
     substantially  the  following  form:

          THIS  WARRANT  AND  THE  SHARES  OF  COMMON  STOCK  ISSUABLE
          UPON  EXERCISE  HEREOF  HAVE  NOT  BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
          ANY  STATE  SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
          OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED  UNDER  THE
          SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
          THE  ISSUER SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
          REASONABLY  SATISFACTORY  TO THE ISSUER THAT REGISTRATION OF
          SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT  AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT
          REQUIRED.

          (iii)     The  Issuer  agrees  to reissue this Warrant or certificates
     representing  any  of  the  Warrant  Stock,  without  the  legend set forth
     above if at such time, prior to making any transfer of any such securities,
     the  Holder  shall  give written notice to the Issuer describing the manner
     and  terms  of  such transfer and the conditions set forth below shall have
     been  satisfied.  Such  proposed  transfer  will not be effected until: (a)
     either  (i)  the  Issuer  has  received  an  opinion  of counsel reasonably
     satisfactory  to  the  Issuer,  to the effect that the registration of such
     securities under the Securities Act is not required in connection with such
     proposed  transfer,  (ii) a registration statement under the Securities Act
     covering  the  Warrant  Stock subject to such proposed disposition has been
     filed  by  the  Issuer  with the Securities and Exchange Commission and has
     become  effective  and

                                     -4-
<PAGE>
     continues  to  be  effective  under  the  Securities  Act, (iii) the Issuer
     has received other evidence reasonably satisfactory to the Issuer that such
     registration  and  qualification  under  the  Securities  Act  and  state
     securities  laws  are  not required, or (iv) the Holder provides the Issuer
     with  reasonable assurances that such security can be sold pursuant to Rule
     144 under the Securities Act; and (b) either (i) the Issuer has received an
     opinion  of  counsel  reasonably  satisfactory to the Issuer, to the effect
     that  registration or qualification under the securities or "blue sky" laws
     of  any state is not required in connection with such proposed disposition,
     or  (ii) compliance with applicable state securities or "blue sky" laws has
     been  effected or a valid exemption exists with respect thereto. The Issuer
     will  respond  to  any  such  notice from a holder within three (3) Trading
     Days.  In  the  case  of any proposed transfer under this Section 2(h), the
     Issuer will use reasonable efforts to comply with any such applicable state
     securities  or  "blue  sky" laws, but shall in no event be required, (x) to
     qualify  to do business in any state where it is not then qualified, (y) to
     take  any  action that would subject it to tax or to the general service of
     process  in  any  state where it is not then subject, or (z) to comply with
     state  securities or "blue sky" laws of any state for which registration by
     coordination  is  unavailable  to  the Issuer. The restrictions on transfer
     contained  in  this Section 2(h) shall be in addition to, and not by way of
     limitation  of,  any  other restrictions on transfer contained in any other
     section  of  this  Warrant. Whenever a certificate representing the Warrant
     Stock is required to be issued to a the Holder without a legend, in lieu of
     delivering physical certificates representing the Warrant Stock, the Issuer
     shall,  upon  the  request  of  such  Holder,  cause  its transfer agent to
     electronically  transmit  the  Warrant Stock to the Holder by crediting the
     account  of  the Holder's Prime Broker with DTC through its DWAC system (to
     the  extent  not  inconsistent  with  any provisions of this Warrant or the
     Purchase  Agreement),  if  applicable.

     (i)     Accredited  Investor  Status.  In  no event may the Holder exercise
             ----------------------------
this  Warrant  in whole or in part unless the Holder is an "accredited investor"
as  defined  in  Regulation  D  under  the  Securities  Act.

     3.     Stock  Fully  Paid;  Reservation  and  Listing of Shares; Covenants.
            -------------------------------------------------------------------

     (a)     Stock  Fully  Paid.  The Issuer represents, warrants, covenants and
             ------------------
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this  Warrant  hereunder  will, when issued in accordance with the terms of this
Warrant,  be  duly authorized, validly issued, fully paid and non-assessable and
free  from  all  taxes,  liens and charges created by or through the Issuer with
respect  to issuance (other than restrictions under federal and state securities
laws).  The  Issuer  further  covenants and agrees that during the period within
which  this  Warrant  may  be  exercised,  the  Issuer  will  at  all times have
authorized  and  reserved  for the purpose of the issuance upon exercise of this
Warrant a sufficient number of authorized but unissued shares of Common Stock to
provide  for  the  exercise of this Warrant without regard to any limitations on
exercise.

     (b)     Reservation.  If any shares of Common Stock required to be reserved
             -----------
for  issuance  upon  exercise of this Warrant or as otherwise provided hereunder
require  registration or qualification with any Governmental Authority under any
federal  or  state  law  before such shares may be so issued, the Issuer will in
good  faith  use  its  commercially  reasonable  efforts  as

                                     -5-
<PAGE>
expeditiously  as  possible  at  its  expense  to  cause  such shares to be duly
registered  or  qualified.  To  the  extent  permissible  under  the  applicable
securities  exchange  or  market  rules  on  which the Common Stock is traded or
quoted,  if  the  Issuer shall list any shares of Common Stock on any securities
exchange  or  market  it  will,  at  its expense, list thereon, and maintain and
increase  when necessary such listing, of, all shares of Warrant Stock from time
to  time issued upon exercise of this Warrant or as otherwise provided hereunder
(provided that such Warrant Stock has been registered pursuant to a registration
statement  under the Securities Act then in effect), and, all unissued shares of
Warrant Stock which are at any time issuable hereunder, so long as any shares of
Common  Stock  shall  be  so  listed.  The  Issuer  will  also  so  list on each
securities  exchange  or  market,  and  will maintain such listing of, any other
securities  which  the  Holder of this Warrant shall be entitled to receive upon
the  exercise  of  this  Warrant if at the time any securities of the same class
shall  be  listed  on  such  securities  exchange  or  market  by  the  Issuer.

     (c)     Covenants.  The  Issuer  shall not by any action including, without
             ---------
limitation,  amending  the  Certificate  of  Incorporation or the by-laws of the
Issuer,  or  through  any  reorganization,  transfer  of  assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and  in  the  taking  of  all such actions as may be necessary or appropriate to
protect  the  rights  of  the  Holder  hereof  against  dilution  (to the extent
specifically provided herein) or impairment.  Without limiting the generality of
the  foregoing,  the  Issuer  will  (i) not permit the par value, if any, of its
Common  Stock  to  exceed  the  then  effective Warrant Price, (ii) not amend or
modify  any  provision  of  the  Certificate  of Incorporation or by-laws of the
Issuer  in  any  manner that would adversely affect the rights of the Holders of
the Warrants, (iii) take all such action as may be reasonably necessary in order
that  the  Issuer  may  validly  and  legally issue fully paid and nonassessable
shares  of  Common  Stock, free and clear of any liens, claims, encumbrances and
restrictions  (other  than as provided herein and restrictions under federal and
state  securities  laws)  upon  the  exercise  of this Warrant, and (iv) use its
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents  from  any public regulatory body having jurisdiction thereof as may be
reasonably  necessary to enable the Issuer to perform its obligations under this
Warrant.

     (d)     Loss,  Theft,  Destruction  of  Warrants.  Upon receipt of evidence
             ----------------------------------------
satisfactory  to the Issuer of the ownership of and the loss, theft, destruction
or  mutilation  of  any  Warrant  and,  in  the  case of any such loss, theft or
destruction,  upon  receipt  of indemnity or security satisfactory to the Issuer
or,  in the case of any such mutilation, upon surrender and cancellation of such
Warrant,  the  Issuer  will  make  and  deliver,  in  lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right  to  purchase  the  same  number  of  shares  of  Common  Stock.

     (e)     Payment  of Taxes.  The Issuer will pay any documentary stamp taxes
             -----------------
attributable to the initial issuance of the Warrant Stock issuable upon exercise
of this Warrant; provided, however, that the Issuer shall not be required to pay
                 --------  -------
any tax or taxes which may be payable in respect of any transfer involved in the
issuance  or  delivery  of any certificates representing Warrant Stock in a name
other  than  that  of  the  Holder  in  respect to which such shares are issued.

                                     -6-
<PAGE>
     4.     Adjustment  of  Warrant  Price  and  Number  of Shares Issuable Upon
            --------------------------------------------------------------------
Exercise.  The  Warrant  Price  and the Warrant Share Number shall be subject to
--------
adjustment  from  time  to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section  5.

     (a)     Recapitalization,  Reorganization, Reclassification, Consolidation,
             -------------------------------------------------------------------
Merger  or  Sale.
----------------

          (i)  In  case the Issuer after the Original Issue Date shall do any of
     the  following  (each,  a  "Triggering  Event"):  (a)  consolidate or merge
                                 -----------------
     with or into any other Person and the Issuer shall not be the continuing or
     surviving  corporation  of  such consolidation or merger, or (b) permit any
     other  Person  to  consolidate with or merge into the Issuer and the Issuer
     shall  be  the  continuing or surviving Person but, in connection with such
     consolidation  or  merger, any Capital Stock of the Issuer shall be changed
     into  or  exchanged for Securities of any other Person or cash or any other
     property,  or  (c)  transfer  all or substantially all of its properties or
     assets  to  any  other  Person,  or  (d) effect a capital reorganization or
     reclassification  of  its Capital Stock, then, and in the case of each such
     Triggering  Event,  proper provision shall be made to the Warrant Price and
     the  Warrant  Share Number of shares of Warrant Stock that may be purchased
     upon  exercise of this Warrant so that, upon the basis and the terms and in
     the  manner  provided  in this Warrant, the Holder of this Warrant shall be
     entitled  upon  the  exercise  hereof at any time after the consummation of
     such Triggering Event, to the extent this Warrant is not exercised prior to
     such  Triggering Event, to receive at the Warrant Price as adjusted to take
     into  account  the  consummation  of  such Triggering Event, in lieu of the
     Common  Stock  issuable  upon  such  exercise of this Warrant prior to such
     Triggering  Event,  the  Securities, cash and property to which such Holder
     would  have been entitled upon the consummation of such Triggering Event if
     such  Holder  had  exercised  the  rights  represented  by  this  Warrant
     immediately  prior  thereto  (including the right of a shareholder to elect
     the type of consideration it will receive upon a Triggering Event), subject
     to  adjustments  (subsequent to such corporate action) as nearly equivalent
     as  possible  to  the adjustments provided for elsewhere in this Section 4,
     and  the  Warrant  Price  shall be adjusted to equal the product of (A) the
     closing  price  of  the  common  stock  of  the  continuing  or  surviving
     corporation as a result of such Triggering Event as of the date immediately
     preceding  the date of the consummation of such Triggering Event multiplied
     by  (B) the quotient of (i) the Warrant Price divided by (ii) the Per Share
     Market  Value  of the Common Stock as of the date immediately preceding the
     Original  Issue Date; provided, however, the Holder at its option may elect
                           --------  -------
     to  receive an amount in cash equal to the value of this Warrant calculated
     in  accordance  with  the  Black-Scholes  formula.  Immediately  upon  the
     occurrence  of  a  Triggering  Event, the Issuer shall notify the Holder in
     writing  of  such  Triggering  Event  and  provide  the  calculations  in
     determining the number of shares of Warrant Stock issuable upon exercise of
     the  new warrant and the adjusted Warrant Price. Upon the Holder's request,
     the  continuing  or  surviving  corporation  as a result of such Triggering
     Event  shall issue to the Holder a new warrant of like tenor evidencing the
     right  to  purchase  the adjusted number of shares of Warrant Stock and the
     adjusted Warrant Price pursuant to the terms and provisions of this Section
     4(a)(i).  Notwithstanding  the  foregoing  to  the  contrary,  this Section
     4(a)(i)  shall  only  apply  if  the  surviving entity pursuant to any such
     Triggering  Event  is  a  company  that  has  a  class  of

                                     -7-
<PAGE>
     equity  securities  registered  pursuant  to  the  Securities  Exchange Act
     of 1934, as amended, and its common stock is listed or quoted on a national
     securities  exchange,  national  automated  quotation  system  or  the  OTC
     Bulletin Board. In the event that the surviving entity pursuant to any such
     Triggering Event is not a public company that is registered pursuant to the
     Securities  Exchange  Act  of  1934, as amended, or its common stock is not
     listed  or  quoted  on  a  national securities exchange, national automated
     quotation  system or the OTC Bulletin Board, then the Holder shall have the
     right  to  demand that the Issuer pay to the Holder an amount in cash equal
     to  the  value  of  this  Warrant  calculated  in  accordance  with  the
     Black-Scholes  formula.

          (ii)     In the event that the Holder has elected not to exercise this
     Warrant  prior  to  the  consummation  of  a  Triggering Event and has also
     elected not to receive an amount in cash equal to the value of this Warrant
     calculated  in  accordance  with  the Black-Scholes formula pursuant to the
     provisions  of  Section  4(a)(i)  above,  so  long  as the surviving entity
     pursuant  to  any  Triggering Event is a company that has a class of equity
     securities  registered  pursuant to the Securities Exchange Act of 1934, as
     amended,  and its common stock is listed or quoted on a national securities
     exchange,  national  automated  quotation system or the OTC Bulletin Board,
     the  surviving  entity and/or each Person (other than the Issuer) which may
     be  required  to deliver any Securities, cash or property upon the exercise
     of  this  Warrant  as  provided  herein shall assume, by written instrument
     delivered  to,  and reasonably satisfactory to, the Holder of this Warrant,
     (A)  the  obligations  of  the Issuer under this Warrant (and if the Issuer
     shall  survive  the  consummation of such Triggering Event, such assumption
     shall  be  in  addition  to,  and  shall  not  release the Issuer from, any
     continuing  obligations  of  the  Issuer  under  this  Warrant) and (B) the
     obligation  to deliver to such Holder such Securities, cash or property as,
     in  accordance  with  the foregoing provisions of this subsection (a), such
     Holder  shall  be entitled to receive, and the surviving entity and/or each
     such  Person  shall  have  similarly delivered to such Holder an opinion of
     counsel  for  the  surviving  entity and/or each such Person, which counsel
     shall  be  reasonably satisfactory to such Holder, or in the alternative, a
     written  acknowledgement  executed  by  the  President  or  Chief Financial
     Officer  of the Issuer, stating that this Warrant shall thereafter continue
     in  full  force  and  effect  and  the  terms  hereof  (including,  without
     limitation,  all  of  the  provisions  of  this  subsection  (a))  shall be
     applicable  to  the Securities, cash or property which the surviving entity
     and/or  each  such  Person  may be required to deliver upon any exercise of
     this  Warrant  or  the  exercise  of  any  rights  pursuant  hereto.

          (b)     Stock  Dividends,  Subdivisions  and  Combinations.  If at any
                  --------------------------------------------------
time  the  Issuer  shall:

          (i)     make  or  issue  or  set  a record date for the holders of the
     Common  Stock  for  the  purpose  of  entitling  them to receive a dividend
     payable  in,  or  other  distribution  of,  shares  of  Common  Stock,

          (ii)     subdivide  its  outstanding  shares  of  Common  Stock into a
     larger  number  of  shares  of  Common  Stock,  or

          (iii)     combine  its  outstanding  shares  of  Common  Stock  into a
     smaller

                                     -8-
<PAGE>
     number  of  shares  of  Common  Stock,

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to  equal the number of shares of Common Stock which a record holder of the same
number  of  shares  of  Common  Stock  for  which  this  Warrant  is exercisable
immediately  prior  to  the occurrence of such event would own or be entitled to
receive  after  the  happening  of such event, and (2) the Warrant Price then in
effect  shall  be  adjusted  to  equal  (A)  the  Warrant  Price  then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such  adjustment.

     (c)     Certain  Other Distributions.  If at any time the Issuer shall make
             ----------------------------
or  issue  or  set  a  record  date  for the holders of the Common Stock for the
purpose  of  entitling  them  to receive any dividend or  other distribution of:

               (i)     cash  (other than a cash dividend payable out of earnings
     or  earned  surplus  legally  available  for the payment of dividends under
     the  laws  of  the  jurisdiction  of  incorporation  of  the  Issuer),

               (ii)     any  evidences  of its indebtedness, any shares of stock
     of  any  class  or  any  other  securities  or  property  of  any  nature
     whatsoever  (other than cash, Common Stock Equivalents or Additional Shares
     of  Common  Stock),  or

               (iii)     any  warrants  or  other  rights  to  subscribe  for or
     purchase  any  evidences  of  its  indebtedness, any shares of stock of any
     class  or  any other securities or property of any nature whatsoever (other
     than  cash, Common Stock Equivalents or Additional Shares of Common Stock),

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable  shall  be  adjusted to equal the product of the number of shares of
Common  Stock  for  which  this Warrant is exercisable immediately prior to such
adjustment  multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator  of  which  shall  be  such  Per Share Market Value minus the amount
allocable  to one share of Common Stock of any such cash so distributable and of
the  fair  value (as determined in good faith by the Board and, upon the request
of  the Holder, supported by an opinion from an investment banking firm mutually
agreed  upon  by  the  Issuer  and  the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in  effect  shall  be  adjusted  to  equal  (A) the Warrant Price then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such adjustment.  A reclassification of the Common Stock (other than a change in
par  value, or from par value to no par value or from no par value to par value)
into  shares  of  Common  Stock  and shares of any other class of stock shall be
deemed  a  distribution by the Issuer to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section 4(c) and,
if  the  outstanding  shares  of  Common  Stock

                                     -9-
<PAGE>
shall  be changed into a larger or smaller number of shares of Common Stock as a
part  of  such  reclassification,  such  change shall be deemed a subdivision or
combination,  as  the  case  may  be,  of the outstanding shares of Common Stock
within  the  meaning  of  Section  4(b).

     (d)     Issuance  of  Additional  Shares  of  Common  Stock.
             ---------------------------------------------------

          (i)     For  a  period  of eighteen (18) months following the Original
Issue  Date,  in  the  event the Issuer shall at any time following the Original
Issue  Date  issue  any  Additional  Shares  of  Common Stock (otherwise than as
provided  in  the foregoing subsections (a) through (c) of this Section 4), at a
price  per  share  less  than  the  Warrant  Price  then  in  effect  or without
consideration,  then the Warrant Price upon each such issuance shall be adjusted
to  that  price  determined by multiplying the Warrant Price then in effect by a
fraction:

               (A)     the  numerator  of which shall be equal to the sum of (x)
          the  number  of  shares  of  Outstanding  Common  Stock  immediately
          prior  to  the issuance of such Additional Shares of Common Stock plus
                                                                            ----
          (y) the number of shares of Common Stock (rounded to the nearest whole
          share)  which the aggregate consideration for the total number of such
          Additional  Shares of Common Stock so issued would purchase at a price
          per  share  equal  to  the  Warrant  Price  then  in  effect,  and

               (B)     the denominator of which shall be equal to the number of
          shares  of  Outstanding  Common  Stock  immediately after the issuance
          of  such  Additional  Shares  of  Common  Stock.

          (ii)     No  adjustment  of  the  number of shares of Common Stock for
which  this  Warrant  shall  be exercisable shall be made under paragraph (i) of
Section  4(d)  upon  the issuance of any Additional Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment  shall  previously  have  been  made upon the issuance of such Common
Stock Equivalents (or upon the issuance of any warrant or other rights therefor)
pursuant  to  Section  4(e).

     (e)     Issuance  of  Common  Stock  Equivalents.  For a period of eighteen
             ----------------------------------------
(18)  months  following the Original Issue Date, if at any time the Issuer shall
take  a  record  of the holders of its Common Stock for the purpose of entitling
them  to  receive a distribution of, or shall in any manner (whether directly or
by  assumption  in  a  merger  in which the Issuer is the surviving corporation)
issue  or  sell,  any  Common  Stock  Equivalents,  whether or not the rights to
exchange  or  convert  thereunder are immediately exercisable, and the price per
share  for which Common Stock is issuable upon such conversion or exchange shall
be  less  than the Warrant Price in effect immediately prior to the time of such
issue  or  sale, or if, after any such issuance of Common Stock Equivalents, the
price  per  share  for  which  Additional Shares of Common Stock may be issuable
thereafter  is  amended  or adjusted, and such price as so amended shall be less
than  the  Warrant  Price in effect at the time of such amendment or adjustment,
then  the  Warrant Price then in effect shall be adjusted as provided in Section
4(d).  No  further adjustments of the Warrant Share Number and the Warrant Price
then  in  effect  shall  be made upon the actual issue of such Common Stock upon
conversion  or  exchange  of  such  Common  Stock  Equivalents.

                                      -10-
<PAGE>
     (f)     Other Provisions applicable to Adjustments under this Section.  The
             -------------------------------------------------------------
following  provisions  shall  be applicable  to the making of adjustments of the
Warrant  Share  Number and the Warrant Price then in effect provided for in this
Section  4:

          (i)     Computation  of  Consideration.  To  the  extent  that  any
                  ------------------------------
Additional  Shares  of  Common  Stock  or  any  Common Stock Equivalents (or any
warrants  or  other rights therefor) shall be issued for cash consideration, the
consideration  received  by  the Issuer therefor shall be the amount of the cash
received  by  the Issuer therefor, or, if such Additional Shares of Common Stock
or  Common  Stock  Equivalents  are  offered by the Issuer for subscription, the
subscription  price,  or,  if  such  Additional Shares of Common Stock or Common
Stock  Equivalents  are  sold  to  underwriters  or  dealers for public offering
without  a subscription offering, the initial public offering price (in any such
case  subtracting any amounts paid or receivable for accrued interest or accrued
dividends  and  without  taking  into  account  any  compensation,  discounts or
expenses  paid  or  incurred  by  the  Issuer for and in the underwriting of, or
otherwise  in  connection  with,  the issuance thereof).  In connection with any
merger  or consolidation in which the Issuer is the surviving corporation (other
than  any  consolidation or merger in which the previously outstanding shares of
Common  Stock  of  the  Issuer shall be changed to or exchanged for the stock or
other  securities of another corporation), the amount of consideration therefore
shall  be,  deemed  to  be  the fair value, as determined reasonably and in good
faith  by  the  Board,  of  such  portion  of  the  assets  and  business of the
nonsurviving  corporation  as the Board may determine to be attributable to such
shares  of  Common  Stock  or Common Stock Equivalents, as the case may be.  The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants  or  other  rights  to  subscribe for or purchase the same shall be the
consideration  received  by the Issuer for issuing such warrants or other rights
plus  the  additional consideration  payable to the Issuer upon exercise of such
warrants or other rights.  The consideration for any Additional Shares of Common
Stock  issuable  pursuant  to the terms of any Common Stock Equivalents shall be
the  consideration  received by the Issuer for issuing war-rants or other rights
to  subscribe  for  or  purchase  such  Common  Stock  Equivalents,  plus  the
consideration  paid  or payable to the Issuer in respect of the subscription for
or purchase of such Common Stock Equivalents, plus the additional consideration,
if  any,  payable  to the Issuer upon the exercise of the right of conversion or
exchange in such Common Stock Equivalents.  In the event of any consolidation or
merger  of the Issuer in which the Issuer is not the surviving corporation or in
which  the  previously outstanding shares of Common Stock of the Issuer shall be
changed  into  or  exchanged  for  the  stock  or  other  securities  of another
corporation,  or  in  the  event  of any sale of all or substantially all of the
assets  of  the  Issuer  for  stock  or other securities of any corporation, the
Issuer shall be deemed to have issued a number of shares of its Common Stock for
stock  or  securities or other property of the other corporation computed on the
basis  of the actual exchange ratio on which the transaction was predicated, and
for  a  consideration  equal  to  the  fair  market  value  on  the date of such
transaction  of  all  such  stock  or  securities or other property of the other
corporation.  In  the  event  any  consideration  received by the Issuer for any
securities  consists  of property other than cash, the fair market value thereof
at  the  time  of  issuance or as otherwise applicable shall be as determined in
good  faith by the Board.  In the event Common Stock is issued with other shares
or securities or other assets of the Issuer for consideration which covers both,
the  consideration  computed  as  provided  in  this  Section  4(f)(i)  shall be
allocated  among  such  securities and assets as determined in good faith by the
Board.

          (ii)     When  Adjustments  to  Be  Made.  The adjustments required by
                   -------------------------------
this  Section

                                      -11-
<PAGE>
4  shall  be  made  whenever  and  as  often as any specified event requiring an
adjustment  shall  occur, except that any adjustment of the Warrant Share Number
that  would  otherwise  be  required  may  be postponed (except in the case of a
subdivision  or  combination  of  shares of the Common Stock, as provided for in
Section  4(b))  up  to,  but  not beyond the date of exercise if such adjustment
either by itself or with other adjustments not previously made adds or subtracts
less  than one percent (1%) of the shares of Common Stock for which this Warrant
is  exercisable  immediately  prior  to  the  making  of  such  adjustment.  Any
adjustment  representing  a  change  of less than such minimum amount (except as
aforesaid)  which is postponed shall be carried forward and made as soon as such
adjustment,  together  with other adjustments required by this Section 4 and not
previously  made,  would  result  in  a  minimum  adjustment  or  on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to  have  occurred  at  the  close  of  business  on the date of its occurrence.

          (iii)     Fractional  Interests.  In computing  adjustments under this
                    ---------------------
Section  4,  fractional interests in Common Stock shall be taken into account to
the  nearest  one  one-hundredth  (1/100th)  of  a  share.

          (iv)     When  Adjustment  Not  Required.  If  the Issuer shall take a
                   -------------------------------
record  of  the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter  and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights,  then thereafter no adjustment shall be required by reason of the taking
of  such record and any such adjustment previously made in respect thereof shall
be  rescinded  and  annulled.

     (g)     Form  of  Warrant after Adjustments.  The form of this Warrant need
             -----------------------------------
not be changed because of any adjustments in the Warrant Price or the number and
kind  of  Securities  purchasable  upon  the  exercise  of  this  Warrant.

     (h)     Escrow  of  Warrant  Stock.  If  after  any  property  becomes
             --------------------------
distributable  pursuant  to this Section 4 by reason of the taking of any record
of  the  holders  of  Common Stock, but prior to the occurrence of the event for
which  such  record is taken, and the Holder exercises  this Warrant, any shares
of  Common  Stock  issuable  upon exercise by reason of such adjustment shall be
deemed  the  last  shares  of  Common  Stock for which this Warrant is exercised
(notwithstanding  any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to  the  Holder upon and to the extent that the event actually takes place, upon
payment  of  the  current Warrant Price.  Notwithstanding any other provision to
the contrary herein, if the event for which such record was taken fails to occur
or  is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed  property  returned.

     5.     Notice  of Adjustments.  Whenever the Warrant Price or Warrant Share
            ----------------------
Number  shall  be  adjusted  pursuant  to Section 4 hereof (for purposes of this
Section  5,  each  an  "adjustment"), the Issuer shall cause its Chief Financial
                        ----------
Officer  to  prepare  and  execute  a  certificate  setting forth, in reasonable
detail,  the  event  requiring the adjustment, the amount of the adjustment, the
method  by  which such adjustment was calculated (including a description of the
basis  on  which  the  Board  made any determination hereunder), and the Warrant
Price  and

                                      -12-
<PAGE>
Warrant  Share  Number  after  giving effect to such adjustment, and shall cause
copies  of  such  certificate  to  be  delivered  to  the Holder of this Warrant
promptly  after  each adjustment.  Any dispute between the Issuer and the Holder
of this Warrant with respect to the matters set forth in such certificate may at
the  option of the Holder of this Warrant be submitted to a national or regional
accounting  firm  chosen  by the Issuer and reasonably acceptable to the Holder,
which  firm shall deliver a written opinion as to such matters to the Issuer and
such  Holder  within  thirty  (30)  days after submission to it of such dispute.
Such  opinion  shall  be final and binding on the parties hereto.  The costs and
expenses  of the initial accounting firm shall be paid equally by the Issuer and
the  Holder.

     6.     Fractional  Shares.  No  fractional  shares of Warrant Stock will be
            ------------------
issued  in  connection  with any exercise hereof, but in lieu of such fractional
shares,  the  Issuer shall round the number of shares to be issued upon exercise
up  to  the  nearest  whole  number  of  shares.

     7.     Ownership Cap and Exercise Restriction.  Notwithstanding anything to
            ---------------------------------------
the  contrary set forth in this Warrant, at no time may a Holder of this Warrant
exercise  this  Warrant  if  the  number  of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common  Stock  owned by such Holder at such time, the number of shares of Common
Stock  which  would  result in such Holder beneficially owning (as determined in
accordance  with Section 13(d) of the Exchange Act and the rules  thereunder) in
excess  of  9.9%  of  the  then  issued  and outstanding shares of Common Stock;
provided,  however, that upon a holder of this Warrant providing the Issuer with
--------   -------
sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice")
                                                                 -------------
that  such  Holder  would like to waive this Section 7 with regard to any or all
shares  of  Common  Stock issuable upon exercise of this Warrant, this Section 7
will  be  of  no  force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this provision shall be
                                 --------  -------
of  no  further  force  or  effect  during  the  sixty-one (61) days immediately
preceding  the  expiration  of  the  term  of  this  Warrant.

     8.     Definitions.  For  the purposes of this Warrant, the following terms
            -----------
have  the  following  meanings:

          "Additional  Shares  of Common Stock" means all shares of Common Stock
           -----------------------------------
     issued  by  the  Issuer  after  the  Original Issue Date, and all shares of
     Other  Common,  if any, issued by the Issuer after the Original Issue Date,
     except:  (i)  securities  issued (other than for cash) in connection with a
     merger,  acquisition,  or consolidation, (ii) securities issued pursuant to
     the  conversion or exercise of convertible or exercisable securities issued
     or  outstanding on or prior to the date of the Purchase Agreement or issued
     pursuant  to  the Purchase Agreement (so long as the conversion or exercise
     price  in  such  securities  are  not  amended  to  lower such price and/or
     adversely  affect  the  Holders),  (iii) the Warrant Stock, (iv) securities
     issued  in  connection with bona fide strategic license agreements or other
     partnering  arrangements  so long as such issuances are not for the purpose
     of  raising  capital,  (v) Common Stock issued or the issuance or grants of
     options  to  purchase  Common  Stock  pursuant to the Issuer's stock option
     plans  and  employee  stock purchase plans outstanding as they exist on the
     date  of  the  Purchase  Agreement,  and  (vi)  any  warrants issued to the
     placement  agent and its designees for the transactions contemplated by the
     Purchase  Agreement.

                                      -13-
<PAGE>
          "Board"  shall  mean  the  Board  of  Directors  of  the  Issuer.
           -----

          "Capital  Stock" means and includes (i) any and all shares, interests,
           --------------
     participations  or  other  equivalents  of  or  interests  in  (however
     designated)  corporate  stock,  including,  without  limitation,  shares of
     preferred  or  preference  stock,  (ii)  all partnership interests (whether
     general  or  limited)  in  any  Person  which  is  a partnership, (iii) all
     membership  interests or limited liability company interests in any limited
     liability company, and (iv) all equity or ownership interests in any Person
     of  any  other  type.

          "Certificate  of Incorporation" means the Certificate of Incorporation
           -----------------------------
     of  the  Issuer  as  in  effect  on  the  Original  Issue  Date,  and  as
     hereafter  from time to time amended, modified, supplemented or restated in
     accordance  with  the  terms  hereof and thereof and pursuant to applicable
     law.

          "Common  Stock" means the Common Stock, $0.001 par value per share, of
           -------------
     the  Issuer  and  any  other  Capital  Stock  into  which  such  stock  may
     hereafter  be  changed.

          "Common  Stock  Equivalent" means any Convertible Security or warrant,
           -------------------------
     option  or  other  right  to  subscribe  for  or  purchase  any  Additional
     Shares  of  Common  Stock  or  any  Convertible  Security.

          "Convertible  Securities"  means  evidences of Indebtedness, shares of
           -----------------------
     Capital  Stock  or  other  Securities  which  are  or  may  be  at any time
     convertible into or exchangeable for Additional Shares of Common Stock. The
     term  "Convertible  Security"  means  one  of  the  Convertible Securities.

          "Governmental  Authority"  means  any  governmental,  regulatory  or
           -----------------------
     self-regulatory  entity,  department,  body,  official,  authority,
     commission,  board,  agency  or  instrumentality, whether federal, state or
     local,  and  whether  domestic  or  foreign.

          "Holders"  mean  the  Persons  who  shall  from  time  to time own any
           -------
     Warrant.  The  term  "Holder"  means  one  of  the  Holders.

          "Independent  Appraiser"  means  a  nationally  recognized  or  major
           ----------------------
     regional  investment  banking  firm  or  firm  of  independent  certified
     public  accountants  of  recognized  standing  (which  may be the firm that
     regularly  examines  the  financial  statements  of  the  Issuer)  that  is
     regularly engaged in the business of appraising the Capital Stock or assets
     of  corporations  or  other  entities  as  going concerns, and which is not
     affiliated  with  either  the  Issuer  or  the  Holder  of  any  Warrant.

          "Issuer"  means  Charys Holding Company, Inc., a Delaware corporation,
           ------
     and  its  successors.

          "Majority  Holders"  means  at  any  time  the  Holders  of  Warrants
           -----------------
     exercisable  for  a  majority  of  the  shares  of  Warrant  Stock issuable
     under  the  Warrants  at  the  time  outstanding.

                                      -14-
<PAGE>
          "Original  Issue  Date"  means  December  4,  2006.
           ---------------------

          "OTC  Bulletin  Board"  means the over-the-counter electronic bulletin
           --------------------
     board.

          "Other  Common"  means  any  other  Capital Stock of the Issuer of any
           -------------
     class  which  shall  be  authorized  at  any  time  after  the date of this
     Warrant  (other  than  Common  Stock)  and  which  shall  have the right to
     participate  in  the  distribution  of  earnings  and  assets of the Issuer
     without  limitation  as  to  amount.

          "Outstanding  Common  Stock"  means,  at any given time, the aggregate
           --------------------------
     amount  of  outstanding  shares  of  Common  Stock, assuming full exercise,
     conversion  or  exchange (as applicable) of all options, warrants and other
     Securities  which  are convertible into or exercisable or exchangeable for,
     and any right to subscribe for, shares of Common Stock that are outstanding
     at  such  time.

          "Person"  means an individual, corporation, limited liability company,
           ------
     partnership,  joint  stock  company,  trust,  unincorporated  organization,
     joint  venture,  Governmental Authority or other entity of whatever nature.

          "Per  Share  Market  Value"  means on any particular date (a) the last
           -------------------------
     closing  bid  price  per  share  of  the  Common  Stock on such date on the
     OTC  Bulletin  Board or another registered national stock exchange on which
     the Common Stock is then listed, or if there is no such price on such date,
     then the closing bid price on such exchange or quotation system on the date
     nearest  preceding such date, or (b) if the Common Stock is not listed then
     on  the  OTC  Bulletin Board or any registered national stock exchange, the
     last  closing bid price for a share of Common Stock in the over-the-counter
     market,  as reported by the OTC Bulletin Board or in the National Quotation
     Bureau  Incorporated  or  similar  organization or agency succeeding to its
     functions  of  reporting  prices) at the close of business on such date, or
     (c)  if  the Common Stock is not then reported by the OTC Bulletin Board or
     the  National  Quotation  Bureau  Incorporated  (or similar organization or
     agency  succeeding  to  its  functions of reporting prices), then the "Pink
     Sheet"  quotes  for  the  applicable  Trading  Days  preceding such date of
     determination,  or  (d) if the Common Stock is not then publicly traded the
     fair  market  value  of  a  share  of  Common  Stock  as  determined  by an
     Independent  Appraiser  selected  in  good  faith  by the Majority Holders;
     provided,  however,  that the Issuer, after receipt of the determination by
     --------   -------
     such  Independent  Appraiser,  shall have the right to select an additional
     Independent  Appraiser, in which case, the fair market value shall be equal
     to  the  average  of the determinations by each such Independent Appraiser;
     and provided, further that all determinations of the Per Share Market Value
         --------  -------
     shall  be  appropriately  adjusted for any stock dividends, stock splits or
     other  similar  transactions  during such period. The determination of fair
     market  value  by  an  Independent  Appraiser  shall be based upon the fair
     market value of the Issuer determined on a going concern basis as between a
     willing  buyer  and  a  willing seller and taking into account all relevant
     factors  determinative  of  value,  and  shall  be final and binding on all
     parties.  In  determining  the  fair  market  value of any shares of Common
     Stock,  no  consideration shall be given to any restrictions on transfer of
     the  Common  Stock  imposed  by agreement or by federal or state securities
     laws,  or  to  the  existence  or absence of, or any limitations on, voting
     rights.

                                      -15-
<PAGE>
          "Purchase  Agreement"  means  the  Note and Warrant Purchase Agreement
           -------------------
     dated  as  of  December  4,  2006,  among  the  Issuer  and the Purchasers.

          "Purchasers"  means  the  purchasers  of  the subordinated convertible
           ----------
     promissory  notes  and  the  Warrants  issued by the Issuer pursuant to the
     Purchase  Agreement.

          "Securities"  means  any  debt  or  equity  securities  of the Issuer,
           ----------
     whether  now  or  hereafter  authorized,  any  instrument  convertible into
     or  exchangeable  for  Securities or a Security, and any option, warrant or
     other  right  to  purchase or acquire any Security. "Security" means one of
     the  Securities.

          "Securities  Act" means the Securities Act of 1933, as amended, or any
           ---------------
     similar  federal  statute  then  in  effect.

          "Subsidiary"  means  any corporation at least 50% of whose outstanding
           ----------
     Voting  Stock  shall  at  the  time  be owned directly or indirectly by the
     Issuer  or  by one or more of its Subsidiaries, or by the Issuer and one or
     more  of  its  Subsidiaries.

          "Term"  has  the  meaning  specified  in  Section  1  hereof.
           ----

          "Trading  Day"  means (a) a day on which the Common Stock is traded on
           ------------
     the  OTC  Bulletin  Board,  or  (b)  if  the  Common Stock is not traded on
     the  OTC  Bulletin  Board, a day on which the Common Stock is quoted in the
     over-the-counter  market  as  reported  by  the  National  Quotation Bureau
     Incorporated  (or  any  similar  organization  or  agency  succeeding  its
     functions  of  reporting prices); provided, however, that in the event that
                                       --------  -------
     the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
     then  Trading  Day  shall  mean any day except Saturday, Sunday and any day
     which  shall  be  a legal holiday or a day on which banking institutions in
     the State of New York are authorized or required by law or other government
     action  to  close.

          "Voting  Stock"  means,  as  applied  to  the  Capital  Stock  of  any
           -------------
     corporation,  Capital  Stock  of  any  class  or  classes  (however
     designated)  having ordinary voting power for the election of a majority of
     the  members  of  the  board of directors (or other governing body) of such
     corporation,  other  than Capital Stock having such power only by reason of
     the  happening  of  a  contingency.

          "Warrants" means the Warrants issued and sold pursuant to the Purchase
           --------
     Agreement,  including,  without  limitation,  this  Warrant,  and any other
     warrants  of  like tenor issued in substitution or exchange for any thereof
     pursuant  to  the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
     of  such  other  Warrants.

          "Warrant  Price"  initially means $5.00, as such price may be adjusted
           --------------
     from  time  to  time  as  shall  result  from  the adjustments specified in
     this  Warrant,  including  Section  4  hereto.

                                      -16-
<PAGE>
          "Warrant  Share  Number"  means  at  any  time the aggregate number of
           ----------------------
     shares  of  Warrant  Stock  which  may  at  such  time  be  purchased  upon
     exercise  of this Warrant, after giving effect to all prior adjustments and
     increases  to  such  number  made  or  required  to be made under the terms
     hereof.

          "Warrant  Stock"  means  Common  Stock  issuable  upon exercise of any
           --------------
     Warrant  or  Warrants  or  otherwise  issuable  pursuant  to any Warrant or
     Warrants.

     9.     Other  Notices.  In  case  at  any  time:
            --------------

                         (A)  the Issuer  shall  make  any  distributions to the
                               holders  of  Common  Stock;  or

                         (B)  the  Issuer  shall  authorize  the granting to all
                              holders of its Common Stock of rights to subscribe
                              for or purchase any shares of Capital Stock of any
                              class  or  other  rights;  or

                         (C)  there shall be any reclassification of the Capital
                              Stock  of  the  Issuer;  or

                         (D)  there  shall  be any capital reorganization by the
                              Issuer;  or

                         (E)  there  shall  be  any  (i) consolidation or merger
                              involving  the  Issuer  or  (ii) sale, transfer or
                              other  disposition  of all or substantially all of
                              the  Issuer's property, assets or business (except
                              a  merger  or  other  reorganization  in which the
                              Issuer  shall be the surviving corporation and its
                              shares  of  Capital  Stock  shall  continue  to be
                              outstanding  and  unchanged  and  except  a
                              consolidation,  merger,  sale,  transfer  or other
                              disposition  involving a wholly-owned Subsidiary);
                              or

                         (F)  there  shall  be  a  voluntary  or  involuntary
                              dissolution,  liquidation  or  winding-up  of  the
                              Issuer or any partial liquidation of the Issuer or
                              distribution  to  holders  of  Common  Stock;

then,  in each of such cases, the Issuer shall give written notice to the Holder
of  the  date on which (i) the books of the Issuer shall close or a record shall
be  taken  for  such  dividend, distribution or subscription rights or (ii) such
reorganization,  reclassification,  consolidation,  merger,  disposition,
dissolution,  liquidation  or  winding-up, as the case may be, shall take place.
Such  notice also shall specify the date as of which the holders of Common Stock
of  record  shall  participate  in  such  dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities  or  other  property  deliverable  upon  such  reorganization,
reclassification,  consolidation,  merger, disposition, dissolution, liquidation
or  winding-up,  as the case may be.  Such notice shall be given at least twenty
(20)  days prior to the action in question and not less than ten (10) days prior
to  the  record date or the date on which the Issuer's transfer books are closed
in  respect  thereto.  This  Warrant  entitles  the  Holder  to  receive

                                      -17-
<PAGE>
copies  of  all  financial  and  other information distributed or required to be
distributed  to  the  holders  of  the  Common  Stock.

     10.     Amendment  and  Waiver.  Any term, covenant, agreement or condition
             ----------------------
in  this  Warrant  may be amended, or compliance therewith may be waived (either
generally  or  in  a  particular  instance  and  either  retroactively  or
prospectively),  by  a written instrument or written instruments executed by the
Issuer  and  the  Majority Holders; provided, however, that no such amendment or
                                    --------  -------
waiver  shall  reduce  the  Warrant  Share  Number,  increase the Warrant Price,
shorten  the  period  during  which  this Warrant may be exercised or modify any
provision  of this Section 10 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver  or  modification  of  any  provision  of  this  Warrant  unless the same
consideration  is  also  offered  to  all  holders  of  the  Warrants.

     11.     Governing Law; Jurisdiction.  This Warrant shall be governed by and
             ---------------------------
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  any of the conflicts of law principles which would result in
the  application  of  the substantive law of another jurisdiction.  This Warrant
shall  not  be  interpreted  or construed with any presumption against the party
causing  this Warrant to be drafted.  The Issuer and the Holder agree that venue
for  any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive  any  right  to  raise forum non conveniens or any other argument that New
York  is not the proper venue.  The Issuer and the Holder irrevocably consent to
personal  jurisdiction in the state and federal courts of the state of New York.
The  Issuer  and  the  Holder  consent to process being served in any such suit,
action  or  proceeding by mailing a copy thereof to such party at the address in
effect  for  notices to it under this Warrant and agrees that such service shall
constitute  good  and sufficient service of process and notice thereof.  Nothing
in this Section 11 shall affect or limit any right to serve process in any other
manner  permitted  by  law.  The  Issuer  and  the  Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this  Warrant  or the Purchase Agreement, shall be entitled to reimbursement for
reasonable  legal  fees from the non-prevailing party.  The parties hereby waive
all  rights  to  a  trial  by  jury.

     12.     Notices.  Any  notice,  demand,  request,  waiver  or  other
             -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:

If to the Issuer:             Charys Holding Company, Inc.
                              1117 Perimeter Center West, Suite N415
                              Atlanta, Georgia 30338
                              Attention: Chief Executive Officer
                              Tel. No.: (678) 443-2300
                              Fax  No.:  (678)  443-2320

                                      -18-
<PAGE>
with copies (which copies
shall not constitute notice)
to:                           Glast, Phillips & Murray, P.C.
                              815 Walker Street, Suite 1250
                              Houston, Texas 77002
                              Attention: Norman T. Reynolds, Esq.
                              Tel. No.: (713) 237-3135
                              Fax No.: (713) 237-3202

If  to  any  Holder:          At the address of such Holder set forth on Exhibit
                                                                         -------
                              A  to  this  Agreement,  with  copies  to Holder's
                              -
                              counsel  as set forth on Exhibit A or as specified
                                                       ---------
                              in  writing  by  such  Holder  with  copies  to:

with copies (which copies
shall not constitute notice)
to:                           Kramer Levin Naftalis & Frankel LLP
                              1177  Avenue  of  the  Americas
                              New  York,  New  York  10036
                              Attention:  Christopher  S.  Auguste,  Esq.
                              Tel.  No.:  (212)  715-9100
                              Fax  No.:  (212)  715-8000

     Any  party  hereto  may from time to time change its address for notices by
giving  written  notice  of  such  changed  address  to  the other party hereto.

     13.     Warrant Agent.  The Issuer may, by written notice to each Holder of
             -------------
this  Warrant,  appoint  an agent having an office in New York, New York for the
purpose  of  issuing  shares  of  Warrant  Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to  subsection  (d)  of  Section  2 hereof or replacing this Warrant pursuant to
subsection  (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such  issuance,  exchange  or  replacement, as the case may be, shall be made at
such  office  by  such  agent.

     14.     Remedies.  The  Issuer  stipulates  that the remedies at law of the
             --------
Holder  of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are  not  and  will not be adequate and that, to the fullest extent permitted by
law,  such  terms  may  be  specifically  enforced  by a decree for the specific
performance  of  any  agreement  contained  herein or by an injunction against a
violation  of  any  of  the  terms  hereof  or  otherwise.

     15.     Successors  and  Assigns.  This  Warrant  and  the rights evidenced
             ------------------------
hereby  shall  inure  to  the  benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such  Holder  or  Holder  of  Warrant  Stock.

                                      -19-
<PAGE>
     16.     Modification  and Severability.  If, in any action before any court
             ------------------------------
or  agency  legally  empowered  to  enforce  any provision contained herein, any
provision  hereof  is  found  to  be unenforceable, then such provision shall be
deemed  modified to the extent necessary to make it enforceable by such court or
agency.  If  any such provision is not enforceable as set forth in the preceding
sentence,  the  unenforceability  of  such  provision shall not affect the other
provisions  of  this  Warrant,  but  this  Warrant shall be construed as if such
unenforceable  provision  had  never  been  contained  herein.

     17.     Headings.  The  headings  of  the  Sections of this Warrant are for
             --------
convenience  of  reference only and shall not, for any purpose, be deemed a part
of  this  Warrant.

     18.     Registration Rights.  The Holder of this Warrant is entitled to the
             -------------------
benefit  of  certain  registration  rights with respect to the shares of Warrant
Stock  issuable  upon  the  exercise  of  this  Warrant pursuant to that certain
Registration  Rights  Agreement, of even date herewith, by and among the Company
and  Persons  listed on Schedule I thereto (the "Registration Rights Agreement")
                                                 -----------------------------
and the registration rights with respect to the shares of Warrant Stock issuable
upon  the exercise of this Warrant by any subsequent Holder may only be assigned
in  accordance  with  the  terms  and  provisions  of  the  Registrations Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -20-
<PAGE>
     IN WITNESS WHEREOF, the Issuer has executed this Series B Warrant as of the
day  and  year  first  above  written.

                                        CHARYS  HOLDING  COMPANY,  INC.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      -21-
<PAGE>
                                  EXERCISE FORM
                                SERIES B WARRANT

                          CHARYS HOLDING COMPANY, INC.

The  undersigned  _______________,  pursuant  to  the  provisions  of the within
Warrant,  hereby  elects  to  purchase  _____  shares  of Common Stock of Charys
Holding  Company,  Inc.  covered  by  the  within  Warrant.

Dated: _________________           Signature      ___________________________

                                   Address        _____________________
                                                  _____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  date  of  Exercise:  _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The undersigned intends that payment of the Warrant Price shall be made as
(check one):

          Cash Exercise_______

          Cashless Exercise_______

If  the  Holder  has  elected  a  Cash Exercise, the Holder shall pay the sum of
$________  by  certified  or  official  bank check (or via wire transfer) to the
Issuer  in  accordance  with  the  terms  of  the  Warrant.

If  the Holder has elected a Cashless Exercise, a certificate shall be issued to
the  Holder  for  the  number of shares equal to the whole number portion of the
product  of the calculation set forth below, which is ___________.   The Company
shall  pay a cash adjustment in respect of the fractional portion of the product
of  the  calculation  set  forth  below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise,  which  product  is  ____________.

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

Where:

The  number  of  shares  of  Common  Stock  to  be  issued  to  the  Holder
__________________("X").

The  number  of  shares  of Common Stock purchasable upon exercise of all of the
Warrant  or, if only a portion of the Warrant is being exercised, the portion of
the  Warrant  being  exercised

                                      -22-
<PAGE>
___________________________  ("Y").

The  Warrant  Price  ______________  ("A").

The Per Share Market Value of one share of Common Stock  _________________("B").

                                   ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant  on  the  books  of  the  within  named  corporation.

Dated: _________________           Signature      ___________________________

                                   Address        _____________________
                                                  _____________________

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the  right  to  purchase  _________  shares of Warrant Stock
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint ___________________, attorney, to transfer
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated: _________________           Signature      ___________________________

                                   Address        _____________________
                                                  _____________________

                           FOR USE BY THE ISSUER ONLY:

This  Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________,  _____,  shares  of  Common  Stock  issued  therefor in the name of
_______________,  Warrant  No. W-_____ issued for ____ shares of Common Stock in
the  name  of  _______________.

                                      -23-
<PAGE>
                                   EXHIBIT C-3
                            FORM OF SERIES J WARRANT

                                        v
<PAGE>
THIS  WARRANT  AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR  OTHERWISE  DISPOSED  OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO  THE  ISSUER  THAT  REGISTRATION  OF  SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES  LAWS  IS  NOT  REQUIRED.

                          SERIES J WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                          CHARYS HOLDING COMPANY, INC.

                            Expires September 4, 2007

No.:  W-J-06-___                                 Number of Shares:______________
Date of Issuance: December 4, 2006

     FOR  VALUE  RECEIVED,  the  undersigned,  Charys  Holding  Company, Inc., a
Delaware  corporation  (together with its successors and assigns, the "Issuer"),
                                                                       ------
hereby  certifies  that                             or its registered assigns is
                        ---------------------------
entitled  to  subscribe  for  and  purchase,  during  the  Term  (as hereinafter
defined),  up to                      (          ) shares (subject to adjustment
                 --------------------  ----------
as  hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable  Common Stock of the Issuer, at an exercise price per share equal
to  the  Warrant  Price  then in effect, subject, however, to the provisions and
upon  the terms and conditions hereinafter set forth.  Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified  in  Section  8  hereof.

     1.     Term.  The  term of this Warrant shall commence on December 4, 2006
            ----
and shall expire at 5:00 p.m., Eastern Time, on September 4, 2007 (such period
being the  "Term").
            ----

     2.     Method  of  Exercise;  Payment;  Issuance  of New Warrant; Transfer
            -------------------------------------------------------------------
and Exchange.
------------

     (a)     Time  of Exercise.  The purchase rights represented by this Warrant
             -----------------
may  be  exercised  in  whole  or  in  part  during  the  Term.

     (b)     Method  of  Exercise.  The Holder hereof may exercise this Warrant,
             --------------------
in  whole  or  in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment  to  the  Issuer  of  an  amount  of consideration therefor equal to the
Warrant  Price  in  effect  on  the  date  of  such  exercise  multiplied by the

                                     -1-
<PAGE>
number  of  shares  of  Warrant Stock with respect to which this Warrant is then
being exercised, payable at such Holder's election by certified or official bank
check or by wire transfer to an account designated by the Issuer, if applicable.

     (c)     Issuance  of  Stock  Certificates.  In the event of any exercise of
             ---------------------------------
this  Warrant in accordance with and subject to the terms and conditions hereof,
certificates  for  the  shares  of Warrant Stock so purchased shall be dated the
date  of  such  exercise  and delivered to the Holder hereof within a reasonable
time,  not  exceeding  three (3) Trading Days after such exercise (the "Delivery
                                                                        --------
Date")  or, at the request of the Holder (provided that a registration statement
----
under  the  Securities Act providing for the resale of the Warrant Stock is then
in effect), issued and delivered to the Depository Trust Company ("DTC") account
                                                                   ---
on  the  Holder's  behalf  via  the  Deposit  Withdrawal Agent Commission System
("DWAC")  within  a  reasonable time, not exceeding three (3) Trading Days after
  ----
such  exercise, and the Holder hereof shall be deemed for all purposes to be the
holder  of  the  shares  of  Warrant  Stock  so purchased as of the date of such
exercise.  Notwithstanding  the  foregoing  to  the  contrary, the Issuer or its
transfer  agent  shall  only be obligated to issue and deliver the shares to the
DTC  on a holder's behalf via DWAC if such exercise is in connection with a sale
and  the Issuer and its transfer agent are participating in DTC through the DWAC
system.  The  Holder  shall deliver this original Warrant, or an indemnification
undertaking  with  respect  to  such  Warrant  in the case of its loss, theft or
destruction, at such time that this Warrant is fully exercised.  With respect to
partial  exercises of this Warrant, the Issuer shall keep written records of the
number  of  shares  of  Warrant  Stock  exercised  as  of each date of exercise.

     (d)     Compensation  for  Buy-In on Failure to Timely Deliver Certificates
             -------------------------------------------------------------------
Upon  Exercise.  In addition to any other rights available to the Holder, if the
--------------
Issuer fails to cause its transfer agent to transmit to the Holder a certificate
or  certificates  representing  the  Warrant Stock pursuant to an exercise on or
before  the  Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock  to  deliver  in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
                                                              ------
Issuer  shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell  order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number  of  shares  of  Warrant Stock for which such exercise was not honored or
deliver  to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder.  For  example,  if  the  Holder purchases Common Stock having a total
purchase  price  of  $11,000  to  cover  a  Buy-In  with respect to an attempted
exercise  of  shares of Common Stock with an aggregate sale price giving rise to
such  purchase  obligation  of  $10,000,  under  clause  (1)  of the immediately
preceding  sentence  the  Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the  Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer.  Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive  relief  with

                                     -2-
<PAGE>
respect  to  the  Issuer's  failure  to timely deliver certificates representing
shares of Common Stock upon exercise of this Warrant as required pursuant to the
terms  hereof.

     (e)     Transferability  of  Warrant.  Subject to Section 2(g) hereof, this
             ----------------------------
Warrant may be transferred by a Holder, in whole or in part, without the consent
of  the  Issuer.  If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized  attorney,  upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached  hereto)  and  upon  payment  of  any  necessary  transfer tax or other
governmental charge imposed upon such transfer.  This Warrant is exchangeable at
the  principal  office of the Issuer for Warrants to purchase the same aggregate
number  of  shares  of Warrant Stock, each new Warrant to represent the right to
purchase  such  number  of  shares  of  Warrant Stock as the Holder hereof shall
designate  at  the  time  of such exchange.  All Warrants issued on transfers or
exchanges  shall  be  dated  the Original Issue Date and shall be identical with
this  Warrant  except  as  to  the  number  of  shares of Warrant Stock issuable
pursuant  thereto.

     (f)     Continuing Rights of Holder.  The Issuer will, at the time of or at
             ---------------------------
any  time  after  each  exercise of this Warrant, upon the request of the Holder
hereof,  acknowledge in writing the extent, if any, of its continuing obligation
to  afford  to  such Holder all rights to which such Holder shall continue to be
entitled  after  such  exercise  in  accordance  with the terms of this Warrant,
provided  that  if  any  such  Holder  shall  fail to make any such request, the
--------
failure  shall not affect the continuing obligation of the Issuer to afford such
rights  to  such  Holder.

     (g)     Compliance  with  Securities  Laws.
             -----------------------------------

          (i)     The Holder of this Warrant, by acceptance hereof, acknowledges
     that  this  Warrant  and  the  shares  of  Warrant  Stock to be issued upon
     exercise  hereof are being acquired solely for the Holder's own account and
     not  as  a  nominee  for  any other party, and for investment, and that the
     Holder  will  not  offer,  sell or otherwise dispose of this Warrant or any
     shares  of  Warrant Stock to be issued upon exercise hereof except pursuant
     to  an effective registration statement, or an exemption from registration,
     under  the  Securities  Act  and  any  applicable  state  securities  laws.

          (ii)     Except as provided in paragraph (iii) below, this Warrant and
     all  certificates representing shares of Warrant Stock issued upon exercise
     hereof  shall  be  stamped  or imprinted with a legend in substantially the
     following  form:

          THIS  WARRANT  AND  THE SHARES OF COMMON STOCK ISSUABLE UPON
          EXERCISE  HEREOF  HAVE  NOT  BEEN  REGISTERED  UNDER  THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
          ANY  STATE  SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
          OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED  UNDER  THE
          SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
          THE  ISSUER SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
          REASONABLY  SATISFACTORY  TO THE ISSUER THAT REGISTRATION OF

                                     -3-
<PAGE>
          SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT  AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT
          REQUIRED.

          (iii)     The  Issuer  agrees  to reissue this Warrant or certificates
     representing  any  of the Warrant Stock, without the legend set forth above
     if  at  such time, prior to making any transfer of any such securities, the
     Holder  shall  give  written notice to the Issuer describing the manner and
     terms  of  such transfer and the conditions set forth below shall have been
     satisfied.  Such  proposed  transfer will not be effected until: (a) either
     (i)  the  Issuer has received an opinion of counsel reasonably satisfactory
     to the Issuer, to the effect that the registration of such securities under
     the  Securities  Act  is  not  required  in  connection  with such proposed
     transfer,  (ii)  a registration statement under the Securities Act covering
     the  Warrant  Stock  subject to such proposed disposition has been filed by
     the  Issuer  with  the  Securities  and  Exchange Commission and has become
     effective and continues to be effective under the Securities Act, (iii) the
     Issuer  has  received  other evidence reasonably satisfactory to the Issuer
     that such registration and qualification under the Securities Act and state
     securities  laws  are  not required, or (iv) the Holder provides the Issuer
     with  reasonable assurances that such security can be sold pursuant to Rule
     144 under the Securities Act; and (b) either (i) the Issuer has received an
     opinion  of  counsel  reasonably  satisfactory to the Issuer, to the effect
     that  registration or qualification under the securities or "blue sky" laws
     of  any state is not required in connection with such proposed disposition,
     or  (ii) compliance with applicable state securities or "blue sky" laws has
     been  effected or a valid exemption exists with respect thereto. The Issuer
     will  respond  to  any  such  notice from a holder within three (3) Trading
     Days.  In  the  case  of any proposed transfer under this Section 2(h), the
     Issuer will use reasonable efforts to comply with any such applicable state
     securities  or  "blue  sky" laws, but shall in no event be required, (x) to
     qualify  to do business in any state where it is not then qualified, (y) to
     take  any  action that would subject it to tax or to the general service of
     process  in  any  state where it is not then subject, or (z) to comply with
     state  securities or "blue sky" laws of any state for which registration by
     coordination  is  unavailable  to  the Issuer. The restrictions on transfer
     contained  in  this Section 2(h) shall be in addition to, and not by way of
     limitation  of,  any  other restrictions on transfer contained in any other
     section  of  this  Warrant. Whenever a certificate representing the Warrant
     Stock is required to be issued to a the Holder without a legend, in lieu of
     delivering physical certificates representing the Warrant Stock, the Issuer
     shall,  upon  the  request  of  such  Holder,  cause  its transfer agent to
     electronically  transmit  the  Warrant Stock to the Holder by crediting the
     account  of  the Holder's Prime Broker with DTC through its DWAC system (to
     the  extent  not  inconsistent  with  any provisions of this Warrant or the
     Purchase  Agreement),  if  applicable.

     (h)     Accredited  Investor  Status.  In  no event may the Holder exercise
             ----------------------------
this  Warrant  in whole or in part unless the Holder is an "accredited investor"
as  defined  in  Regulation  D  under  the  Securities  Act.

                                     -4-
<PAGE>
     3.     Stock  Fully  Paid;  Reservation  and  Listing of Shares; Covenants.
            -------------------------------------------------------------------

     (a)     Stock  Fully  Paid.  The Issuer represents, warrants, covenants and
             ------------------
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this  Warrant  hereunder  will, when issued in accordance with the terms of this
Warrant,  be  duly authorized, validly issued, fully paid and non-assessable and
free  from  all  taxes,  liens and charges created by or through the Issuer with
respect  to issuance (other than restrictions under federal and state securities
laws).  The  Issuer  further  covenants and agrees that during the period within
which  this  Warrant  may  be  exercised,  the  Issuer  will  at  all times have
authorized  and  reserved  for the purpose of the issuance upon exercise of this
Warrant a sufficient number of authorized but unissued shares of Common Stock to
provide  for  the  exercise of this Warrant without regard to any limitations on
exercise.

     (b)     Reservation.  If any shares of Common Stock required to be reserved
             -----------
for  issuance  upon  exercise of this Warrant or as otherwise provided hereunder
require  registration or qualification with any Governmental Authority under any
federal  or  state  law  before such shares may be so issued, the Issuer will in
good  faith use its commercially reasonable efforts as expeditiously as possible
at  its expense to cause such shares to be duly registered or qualified.  To the
extent  permissible  under the applicable securities exchange or market rules on
which  the Common Stock is traded or quoted, if the Issuer shall list any shares
of  Common  Stock  on any securities exchange or market it will, at its expense,
list  thereon,  and  maintain  and increase when necessary such listing, of, all
shares  of  Warrant Stock from time to time issued upon exercise of this Warrant
or  as  otherwise  provided hereunder (provided that such Warrant Stock has been
registered pursuant to a registration statement under the Securities Act then in
effect),  and,  all  unissued  shares  of  Warrant  Stock  which are at any time
issuable  hereunder,  so  long as any shares of Common Stock shall be so listed.
The  Issuer  will  also  so list on each securities exchange or market, and will
maintain  such listing of, any other securities which the Holder of this Warrant
shall  be  entitled  to receive upon the exercise of this Warrant if at the time
any  securities of the same class shall be listed on such securities exchange or
market  by  the  Issuer.

     (c)     Covenants.  The  Issuer  shall not by any action including, without
             ---------
limitation,  amending  the  Certificate  of  Incorporation or the by-laws of the
Issuer,  or  through  any  reorganization,  transfer  of  assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and  in  the  taking  of  all such actions as may be necessary or appropriate to
protect  the  rights  of  the  Holder  hereof  against  dilution  (to the extent
specifically provided herein) or impairment.  Without limiting the generality of
the  foregoing,  the  Issuer  will  (i) not permit the par value, if any, of its
Common  Stock  to  exceed  the  then  effective Warrant Price, (ii) not amend or
modify  any  provision  of  the  Certificate  of Incorporation or by-laws of the
Issuer  in  any  manner that would adversely affect the rights of the Holders of
the Warrants, (iii) take all such action as may be reasonably necessary in order
that  the  Issuer  may  validly  and  legally issue fully paid and nonassessable
shares  of  Common  Stock, free and clear of any liens, claims, encumbrances and
restrictions  (other  than as provided herein and restrictions under federal and
state  securities  laws)  upon  the  exercise  of this Warrant, and (iv) use its
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents  from  any  public  regulatory  body  having  jurisdiction

                                     -5-
<PAGE>
thereof  as  may  be  reasonably  necessary  to enable the Issuer to perform its
obligations  under  this  Warrant.

     (d)     Loss,  Theft,  Destruction  of  Warrants.  Upon receipt of evidence
             ----------------------------------------
satisfactory  to the Issuer of the ownership of and the loss, theft, destruction
or  mutilation  of  any  Warrant  and,  in  the  case of any such loss, theft or
destruction,  upon  receipt  of indemnity or security satisfactory to the Issuer
or,  in the case of any such mutilation, upon surrender and cancellation of such
Warrant,  the  Issuer  will  make  and  deliver,  in  lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right  to  purchase  the  same  number  of  shares  of  Common  Stock.

     (e)     Payment  of Taxes.  The Issuer will pay any documentary stamp taxes
             -----------------
attributable to the initial issuance of the Warrant Stock issuable upon exercise
of this Warrant; provided, however, that the Issuer shall not be required to pay
                 --------  -------
any tax or taxes which may be payable in respect of any transfer involved in the
issuance  or  delivery  of any certificates representing Warrant Stock in a name
other  than  that  of  the  Holder  in  respect to which such shares are issued.

     4.     Adjustment  of  Warrant  Price  and  Number  of Shares Issuable Upon
            --------------------------------------------------------------------
Exercise.  The  Warrant  Price  and the Warrant Share Number shall be subject to
--------
adjustment  from  time  to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section  5.

     (a)     Recapitalization,  Reorganization, Reclassification, Consolidation,
             -------------------------------------------------------------------
Merger  or  Sale.
----------------

          (i)     In  case the Issuer after the Original Issue Date shall do any
     of  the  following  (each,  a "Triggering Event"): (a) consolidate or merge
                                    ----------------
     with or into any other Person and the Issuer shall not be the continuing or
     surviving  corporation  of  such consolidation or merger, or (b) permit any
     other  Person  to  consolidate with or merge into the Issuer and the Issuer
     shall  be  the  continuing or surviving Person but, in connection with such
     consolidation  or  merger, any Capital Stock of the Issuer shall be changed
     into  or  exchanged for Securities of any other Person or cash or any other
     property,  or  (c)  transfer  all or substantially all of its properties or
     assets  to  any  other  Person,  or  (d) effect a capital reorganization or
     reclassification  of  its Capital Stock, then, and in the case of each such
     Triggering  Event,  proper provision shall be made to the Warrant Price and
     the  Warrant  Share Number of shares of Warrant Stock that may be purchased
     upon  exercise of this Warrant so that, upon the basis and the terms and in
     the  manner  provided  in this Warrant, the Holder of this Warrant shall be
     entitled  upon  the  exercise  hereof at any time after the consummation of
     such Triggering Event, to the extent this Warrant is not exercised prior to
     such  Triggering Event, to receive at the Warrant Price as adjusted to take
     into  account  the  consummation  of  such Triggering Event, in lieu of the
     Common  Stock  issuable  upon  such  exercise of this Warrant prior to such
     Triggering  Event,  the  Securities, cash and property to which such Holder
     would  have been entitled upon the consummation of such Triggering Event if
     such  Holder  had  exercised  the  rights  represented  by  this  Warrant
     immediately  prior  thereto  (including the right of a shareholder to elect
     the type of consideration it will receive upon a Triggering Event), subject
     to  adjustments  (subsequent to such corporate action) as nearly equivalent
     as  possible  to  the  adjustments  provided  for

                                     -6-
<PAGE>
     elsewhere  in  this  Section  4,  and  the  Warrant Price shall be adjusted
     to  equal  the  product of (A) the closing price of the common stock of the
     continuing or surviving corporation as a result of such Triggering Event as
     of  the  date  immediately  preceding  the date of the consummation of such
     Triggering  Event  multiplied  by (B) the quotient of (i) the Warrant Price
     divided  by  (ii)  the Per Share Market Value of the Common Stock as of the
     date  immediately preceding the Original Issue Date; provided, however, the
                                                          --------  -------
     Holder  at  its  option  may  elect  to  receive an amount in cash equal to
     the  value  of this Warrant calculated in accordance with the Black-Scholes
     formula.  Immediately upon the occurrence of a Triggering Event, the Issuer
     shall notify the Holder in writing of such Triggering Event and provide the
     calculations  in determining the number of shares of Warrant Stock issuable
     upon  exercise  of the new warrant and the adjusted Warrant Price. Upon the
     Holder's  request,  the  continuing or surviving corporation as a result of
     such Triggering Event shall issue to the Holder a new warrant of like tenor
     evidencing  the  right to purchase the adjusted number of shares of Warrant
     Stock  and  the adjusted Warrant Price pursuant to the terms and provisions
     of  this  Section  4(a)(i).  Notwithstanding the foregoing to the contrary,
     this  Section  4(a)(i) shall only apply if the surviving entity pursuant to
     any  such  Triggering  Event  is  a  company  that  has  a  class of equity
     securities  registered  pursuant to the Securities Exchange Act of 1934, as
     amended,  and its common stock is listed or quoted on a national securities
     exchange, national automated quotation system or the OTC Bulletin Board. In
     the  event  that the surviving entity pursuant to any such Triggering Event
     is  not  a  public  company  that  is registered pursuant to the Securities
     Exchange  Act  of  1934,  as  amended, or its common stock is not listed or
     quoted  on  a  national  securities  exchange, national automated quotation
     system  or  the OTC Bulletin Board, then the Holder shall have the right to
     demand  that  the  Issuer  pay to the Holder an amount in cash equal to the
     value  of  this  Warrant  calculated  in  accordance with the Black-Scholes
     formula.

          (ii)     In the event that the Holder has elected not to exercise this
     Warrant  prior  to  the  consummation  of  a  Triggering Event and has also
     elected not to receive an amount in cash equal to the value of this Warrant
     calculated  in  accordance  with  the Black-Scholes formula pursuant to the
     provisions  of  Section  4(a)(i)  above,  so  long  as the surviving entity
     pursuant  to  any  Triggering Event is a company that has a class of equity
     securities  registered  pursuant to the Securities Exchange Act of 1934, as
     amended,  and its common stock is listed or quoted on a national securities
     exchange,  national  automated  quotation system or the OTC Bulletin Board,
     the  surviving  entity and/or each Person (other than the Issuer) which may
     be  required  to deliver any Securities, cash or property upon the exercise
     of  this  Warrant  as  provided  herein shall assume, by written instrument
     delivered  to,  and reasonably satisfactory to, the Holder of this Warrant,
     (A)  the  obligations  of  the Issuer under this Warrant (and if the Issuer
     shall  survive  the  consummation of such Triggering Event, such assumption
     shall  be  in  addition  to,  and  shall  not  release the Issuer from, any
     continuing  obligations  of  the  Issuer  under  this  Warrant) and (B) the
     obligation  to deliver to such Holder such Securities, cash or property as,
     in  accordance  with  the foregoing provisions of this subsection (a), such
     Holder  shall  be entitled to receive, and the surviving entity and/or each
     such  Person  shall  have  similarly delivered to such Holder an opinion of
     counsel  for  the  surviving  entity and/or each such Person, which counsel
     shall  be  reasonably satisfactory to such Holder, or in the alternative, a
     written  acknowledgement  executed  by  the  President  or  Chief

                                     -7-
<PAGE>
     Financial Officer of the Issuer, stating that this Warrant shall thereafter
     continue  in full force and effect and the terms hereof (including, without
     limitation,  all  of  the  provisions  of  this  subsection  (a))  shall be
     applicable  to  the Securities, cash or property which the surviving entity
     and/or  each  such  Person  may be required to deliver upon any exercise of
     this  Warrant  or  the  exercise  of  any  rights  pursuant  hereto.

          (b)     Stock  Dividends,  Subdivisions  and  Combinations.  If at any
                  --------------------------------------------------
time  the  Issuer  shall:

               (i)     make or issue or set a record date for the holders of the
     Common  Stock  for  the  purpose  of  entitling  them to receive a dividend
     payable in, or other distribution of, shares of Common Stock,

               (ii)     subdivide  its outstanding shares of Common Stock into a
     larger number of shares of Common Stock, or

               (iii)     combine  its  outstanding shares of Common Stock into a
     smaller number of shares of Common Stock,

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to  equal the number of shares of Common Stock which a record holder of the same
number  of  shares  of  Common  Stock  for  which  this  Warrant  is exercisable
immediately  prior  to  the occurrence of such event would own or be entitled to
receive  after  the  happening  of such event, and (2) the Warrant Price then in
effect  shall  be  adjusted  to  equal  (A)  the  Warrant  Price  then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such  adjustment.

     (c)     Certain  Other Distributions.  If at any time the Issuer shall make
             ----------------------------
or  issue  or  set  a  record  date  for the holders of the Common Stock for the
purpose of entitling them to receive any divi-dend or other distribution of:

               (i)     cash  (other than a cash dividend payable out of earnings
     or  earned  surplus  legally  available  for the payment of dividends under
     the laws of the jurisdiction of incorporation of the Issuer),

               (ii)     any  evidences  of its indebtedness, any shares of stock
     of  any  class or any other securities or property of any nature whatsoever
     (other  than  cash, Common Stock Equivalents or Additional Shares of Common
     Stock),  or

               (iii)     any  warrants  or  other  rights  to  subscribe  for or
     purchase  any  evidences  of  its  indebtedness, any shares of stock of any
     class  or  any other securities or property of any nature whatsoever (other
     than  cash, Common Stock Equivalents or Additional Shares of Common Stock),

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable  shall  be

                                     -8-
<PAGE>
adjusted  to equal the product of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such adjustment multiplied by a
fraction  (A)  the  numerator  of  which  shall be the Per Share Market Value of
Common  Stock at the date of taking such record and (B) the denominator of which
shall  be such Per Share Market Value minus the amount allocable to one share of
Common  Stock  of  any  such  cash  so  distributable  and of the fair value (as
determined  in  good  faith  by  the  Board and, upon the request of the Holder,
supported  by an opinion from an investment banking firm mutually agreed upon by
the Issuer and the Holder) of any and all such evidences of indebtedness, shares
of  stock,  other  securities  or  property or warrants or other subscription or
purchase rights so distributable, and (2) the Warrant Price then in effect shall
be  adjusted  to  equal  (A)  the Warrant Price then in effect multiplied by the
number  of  shares  of  Common  Stock  for  which  this  Warrant  is exercisable
immediately  prior  to  the  adjustment  divided  by (B) the number of shares of
Common  Stock  for  which  this  Warrant  is  exercisable immediately after such
adjustment.  A  reclassification of the Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par value) into
shares  of Common Stock and shares of any other class of stock shall be deemed a
distribution  by the Issuer to the holders of its Common Stock of such shares of
such  other  class  of stock within the meaning of this Section 4(c) and, if the
outstanding  shares  of  Common  Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall  be  deemed  a  subdivision  or  combination,  as  the case may be, of the
outstanding  shares  of  Common  Stock  within  the  meaning  of  Section  4(b).

     (d)     Issuance  of  Additional  Shares  of  Common  Stock.
             ---------------------------------------------------

          (i)     In  the  event  the  Issuer  shall  at  any time following the
Original  Issue Date issue any Additional Shares of Common Stock (otherwise than
as  provided in the foregoing subsections (a) through (c) of this Section 4), at
a  price  per  share  less  than  the  Warrant  Price  then in effect or without
consideration,  then the Warrant Price upon each such issuance shall be adjusted
to  that  price  determined by multiplying the Warrant Price then in effect by a
fraction:

               (A)     the  numerator  of  which  shall  be equal to the sum of
          (x)  the  number  of  shares  of  Outstanding Common Stock immediately
          prior  to  the issuance of such Additional Shares of Common Stock plus
                                                                            ----
          (y)  the  number  of  shares  of  Common Stock (rounded to the nearest
          whole share) which the aggregate consideration for the total number of
          such  Additional  Shares of Common Stock so issued would purchase at a
          price  per  share  equal  to  the  Warrant  Price  then in effect, and

               (B)     the denominator of which shall be equal to the number of
          shares  of  Outstanding  Common  Stock  immediately after the issuance
          of  such  Additional  Shares  of  Common  Stock.

          (ii)     No  adjustment  of  the  number of shares of Common Stock for
which  this  Warrant  shall  be exercisable shall be made under paragraph (i) of
Section  4(d)  upon  the issuance of any Additional Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment  shall  previously  have  been  made upon the issuance of such Common
Stock Equivalents (or upon the issuance of any warrant or other rights therefor)
pursuant  to  Section  4(e).

                                     -9-
<PAGE>
     (e)     Issuance  of  Common  Stock  Equivalents.  For a period of eighteen
             ----------------------------------------
(18)  months  following the Original Issue Date, if at any time the Issuer shall
take  a  record  of the holders of its Common Stock for the purpose of entitling
them  to  receive a distribution of, or shall in any manner (whether directly or
by  assumption  in  a  merger  in which the Issuer is the surviving corporation)
issue  or  sell,  any  Common  Stock  Equivalents,  whether or not the rights to
exchange  or  convert  thereunder are immediately exercisable, and the price per
share  for which Common Stock is issuable upon such conversion or exchange shall
be  less  than the Warrant Price in effect immediately prior to the time of such
issue  or  sale, or if, after any such issuance of Common Stock Equivalents, the
price  per  share  for  which  Additional Shares of Common Stock may be issuable
thereafter  is  amended  or adjusted, and such price as so amended shall be less
than  the  Warrant  Price in effect at the time of such amendment or adjustment,
then  the  Warrant Price then in effect shall be adjusted as provided in Section
4(d).  No  further adjustments of the Warrant Share Number and the Warrant Price
then  in  effect  shall  be made upon the actual issue of such Common Stock upon
conversion  or  exchange  of  such  Common  Stock  Equivalents.

     (f)     Other Provisions applicable to Adjustments under this Section.  The
             -------------------------------------------------------------
following  provisions  shall  be  applicable to the making of adjustments of the
Warrant  Share  Number and the Warrant Price then in effect provided for in this
Section  4:

          (i)     Computation  of  Consideration.  To  the  extent  that  any
                  ------------------------------
Additional  Shares  of  Common  Stock  or  any  Common Stock Equivalents (or any
warrants  or  other rights therefor) shall be issued for cash consideration, the
consideration  received  by  the Issuer therefor shall be the amount of the cash
received  by  the Issuer therefor, or, if such Additional Shares of Common Stock
or  Common  Stock  Equivalents  are  offered by the Issuer for subscription, the
subscription  price,  or,  if  such  Additional Shares of Common Stock or Common
Stock  Equivalents  are  sold  to  underwriters  or  dealers for public offering
without  a subscription offering, the initial public offering price (in any such
case  subtracting any amounts paid or receivable for accrued interest or accrued
dividends  and  without  taking  into  account  any  compensation,  discounts or
expenses  paid  or  incurred  by  the  Issuer for and in the underwriting of, or
otherwise  in  connection  with,  the issuance thereof).  In connection with any
merger  or consolidation in which the Issuer is the surviving corporation (other
than  any  consolidation or merger in which the previously outstanding shares of
Common  Stock  of  the  Issuer shall be changed to or exchanged for the stock or
other  securities of another corporation), the amount of consideration therefore
shall  be,  deemed  to  be  the fair value, as determined reasonably and in good
faith  by  the  Board,  of  such  portion  of  the  assets  and  business of the
nonsurviving  corporation  as the Board may determine to be attributable to such
shares  of  Common  Stock  or  Common Stock Equivalents, as the case may be. The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants  or  other  rights  to  subscribe for or purchase the same shall be the
consideration  received  by the Issuer for issuing such warrants or other rights
plus  the  additional  consideration payable to the Issuer upon exercise of such
warrants  or other rights. The consideration for any Additional Shares of Common
Stock  issuable  pursuant  to the terms of any Common Stock Equivalents shall be
the  consideration  received by the Issuer for issuing war-rants or other rights
to  subscribe  for  or  purchase  such  Common  Stock  Equivalents,  plus  the
consideration  paid  or payable to the Issuer in respect of the subscription for
or purchase of such Common Stock Equivalents, plus the additional consideration,
if  any,  payable  to the Issuer upon the exercise of the right of conversion or
exchange  in such Common Stock Equivalents. In the event of any consolidation or
merger  of

                                      -10-
<PAGE>
the  Issuer in which the Issuer is not the surviving corporation or in which the
previously  outstanding  shares  of  Common Stock of the Issuer shall be changed
into  or  exchanged for the stock or other securities of another corporation, or
in the event of any sale of all or substantially all of the assets of the Issuer
for  stock or other securities of any corporation, the Issuer shall be deemed to
have  issued  a  number of shares of its Common Stock for stock or securities or
other  property  of  the  other  corporation computed on the basis of the actual
exchange  ratio on which the transaction was predicated, and for a consideration
equal to the fair market value on the date of such transaction of all such stock
or  securities  or  other  property  of the other corporation.  In the event any
consideration  received  by  the  Issuer for any securities consists of property
other  than  cash,  the  fair market value thereof at the time of issuance or as
otherwise  applicable shall be as determined in good faith by the Board.  In the
event  Common Stock is issued with other shares or securities or other assets of
the  Issuer  for  consideration which covers both, the consideration computed as
provided  in  this  Section 4(f)(i) shall be allocated among such securities and
assets  as  determined  in  good  faith  by  the  Board.

          (ii)     When  Adjustments  to  Be  Made.  The adjustments required by
                   -------------------------------
this  Section  4  shall  be  made  whenever  and as often as any specified event
requiring  an  adjustment shall occur, except that any adjustment of the Warrant
Share  Number  that  would otherwise be required may be postponed (except in the
case  of a subdivision or combination of shares of the Common Stock, as provided
for  in  Section  4(b))  up  to,  but  not  beyond  the date of exercise if such
adjustment  either  by itself or with other adjustments not previously made adds
or  subtracts less than one percent (1%) of the shares of Common Stock for which
this  Warrant is exercisable immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount (except as
aforesaid)  which is postponed shall be carried forward and made as soon as such
adjustment,  together  with other adjustments required by this Section 4 and not
previously  made,  would  result  in  a  minimum  adjustment  or  on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to  have  occurred  at  the  close  of  business  on the date of its occurrence.

          (iii)     Fractional  Interests.  In computing  adjustments under this
                    ---------------------
Section  4,  fractional interests in Common Stock shall be taken into account to
the  nearest  one  one-hundredth  (1/100th)  of  a  share.

          (iv)     When  Adjustment  Not  Required.  If  the Issuer shall take a
                   -------------------------------
record  of  the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter  and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights,  then thereafter no adjustment shall be required by reason of the taking
of  such record and any such adjustment previously made in respect thereof shall
be  rescinded  and  annulled.

     (g)     Form  of  Warrant after Adjustments.  The form of this Warrant need
             -----------------------------------
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

     (h)     Escrow  of  Warrant  Stock.  If  after  any  property  becomes
             --------------------------
distributable  pursuant  to this Section 4 by reason of the taking of any record
of  the  holders  of  Common  Stock,  but  prior  to

                                      -11-
<PAGE>
the  occurrence  of  the  event  for  which such record is taken, and the Holder
exercises  this  Warrant,  any  shares of Common Stock issuable upon exercise by
reason  of  such  adjustment shall be deemed the last shares of Common Stock for
which  this  Warrant  is  exercised  (notwithstanding any other provision to the
contrary  herein)  and such shares or other property shall be held in escrow for
the  Holder by the Issuer to be issued to the Holder upon and to the extent that
the  event  actually  takes  place,  upon  payment of the current Warrant Price.
Notwithstanding  any  other  provision  to the contrary herein, if the event for
which  such  record was taken fails to occur or is rescinded, then such escrowed
shares  shall  be  cancelled  by  the  Issuer  and  escrowed  property returned.

     5.     Notice  of Adjustments.  Whenever the Warrant Price or Warrant Share
            ----------------------
Number  shall  be  adjusted  pursuant  to Section 4 hereof (for purposes of this
Section  5,  each  an  "adjustment"), the Issuer shall cause its Chief Financial
                        ----------
Officer  to  prepare  and  execute  a  certificate  setting forth, in reasonable
detail,  the  event  requiring the adjustment, the amount of the adjustment, the
method  by  which such adjustment was calculated (including a description of the
basis  on  which  the  Board  made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause  copies  of such certificate to be delivered to the Holder of this Warrant
promptly  after  each adjustment.  Any dispute between the Issuer and the Holder
of this Warrant with respect to the matters set forth in such certificate may at
the  option of the Holder of this Warrant be submitted to a national or regional
accounting  firm  chosen  by the Issuer and reasonably acceptable to the Holder,
which  firm shall deliver a written opinion as to such matters to the Issuer and
such  Holder  within  thirty  (30)  days after submission to it of such dispute.
Such  opinion  shall  be final and binding on the parties hereto.  The costs and
expenses  of the initial accounting firm shall be paid equally by the Issuer and
the  Holder.

     6.     Fractional  Shares.  No  fractional  shares of Warrant Stock will be
            ------------------
issued  in  connection  with any exercise hereof, but in lieu of such fractional
shares,  the  Issuer shall round the number of shares to be issued upon exercise
up  to  the  nearest  whole  number  of  shares.

     7.     Ownership Cap and Exercise Restriction.  Notwithstanding anything to
            ---------------------------------------
the  contrary set forth in this Warrant, at no time may a Holder of this Warrant
exercise  this  Warrant  if  the  number  of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common  Stock  owned by such Holder at such time, the number of shares of Common
Stock  which  would  result in such Holder beneficially owning (as determined in
accordance  with Section 13(d) of the Exchange Act and the rules  thereunder) in
excess  of  9.9%  of  the  then  issued  and outstanding shares of Common Stock;
provided,  however, that upon a holder of this Warrant providing the Issuer with
--------   -------
sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice")
                                                                 -------------
that  such  Holder  would like to waive this Section 7 with regard to any or all
shares  of  Common  Stock issuable upon exercise of this Warrant, this Section 7
will  be  of  no  force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this provision shall be
                                 --------  -------
of  no  further  force  or  effect  during  the  sixty-one (61) days immediately
preceding  the  expiration  of  the  term  of  this  Warrant.

     8.     Definitions.  For  the purposes of this Warrant, the following terms
            -----------
have  the  following  meanings:

                                      -12-
<PAGE>
          "Additional  Shares  of Common Stock" means all shares of Common Stock
           -----------------------------------
     issued by the Issuer after the Original Issue Date, and all shares of Other
     Common, if any, issued by the Issuer after the Original Issue Date, except:
     (i)  securities  issued  (other than for cash) in connection with a merger,
     acquisition,  or  consolidation,  (ii)  securities  issued  pursuant to the
     conversion  or  exercise of convertible or exercisable securities issued or
     outstanding  on  or  prior  to the date of the Purchase Agreement or issued
     pursuant  to  the Purchase Agreement (so long as the conversion or exercise
     price  in  such  securities  are  not  amended  to  lower such price and/or
     adversely  affect  the  Holders),  (iii) the Warrant Stock, (iv) securities
     issued  in  connection with bona fide strategic license agreements or other
     partnering  arrangements  so long as such issuances are not for the purpose
     of  raising  capital,  (v) Common Stock issued or the issuance or grants of
     options  to  purchase  Common  Stock  pursuant to the Issuer's stock option
     plans  and  employee  stock purchase plans outstanding as they exist on the
     date  of  the  Purchase  Agreement,  and  (vi)  any  warrants issued to the
     placement  agent and its designees for the transactions contemplated by the
     Purchase  Agreement.

          "Board"  shall  mean  the  Board  of  Directors  of  the  Issuer.
           -----

          "Capital  Stock" means and includes (i) any and all shares, interests,
           --------------
     participations or other equivalents of or interests in (however designated)
     corporate  stock,  including,  without  limitation,  shares of preferred or
     preference  stock,  (ii)  all  partnership  interests  (whether  general or
     limited)  in  any  Person  which  is  a  partnership,  (iii) all membership
     interests  or  limited liability company interests in any limited liability
     company,  and  (iv)  all equity or ownership interests in any Person of any
     other  type.

          "Certificate  of Incorporation" means the Certificate of Incorporation
           -----------------------------
     of  the  Issuer  as  in effect on the Original Issue Date, and as hereafter
     from time to time amended, modified, supplemented or restated in accordance
     with  the  terms  hereof  and  thereof  and  pursuant  to  applicable  law.

          "Common  Stock" means the Common Stock, $0.001 par value per share, of
           -------------
     the  Issuer and any other Capital Stock into which such stock may hereafter
     be  changed.

          "Common  Stock  Equivalent" means any Convertible Security or warrant,
           -------------------------
     option or other right to subscribe for or purchase any Additional Shares of
     Common  Stock  or  any  Convertible  Security.

          "Convertible  Securities"  means  evidences of Indebtedness, shares of
           -----------------------
     Capital  Stock  or  other  Securities  which  are  or  may  be  at any time
     convertible into or exchangeable for Additional Shares of Common Stock. The
     term  "Convertible  Security"  means  one  of  the  Convertible Securities.

          "Governmental  Authority"  means  any  governmental,  regulatory  or
           -----------------------
     self-regulatory  entity, department, body, official, authority, commission,
     board,  agency  or  instrumentality,  whether  federal, state or local, and
     whether  domestic  or  foreign.

                                      -13-
<PAGE>
          "Holders"  mean  the  Persons  who  shall  from  time  to time own any
           -------
     Warrant. The term "Holder" means one of the Holders.

          "Independent  Appraiser"  means  a  nationally  recognized  or  major
           ----------------------
     regional  investment  banking  firm or firm of independent certified public
     accountants  of  recognized  standing (which may be the firm that regularly
     examines  the financial statements of the Issuer) that is regularly engaged
     in  the  business of appraising the Capital Stock or assets of corporations
     or  other  entities  as  going  concerns,  and which is not affiliated with
     either  the  Issuer  or  the  Holder  of  any  Warrant.

          "Issuer"  means  Charys Holding Company, Inc., a Delaware corporation,
           ------
     and its successors.

          "Majority  Holders"   means  at  any  time  the  Holders  of  Warrants
           -----------------
     exercisable  for  a  majority of the shares of Warrant Stock issuable under
     the  Warrants  at  the  time  outstanding.

          "Original Issue Date" means December 4, 2006.
           -------------------

          "OTC  Bulletin  Board"  means the over-the-counter electronic bulletin
           --------------------
     board.

          "Other  Common"  means  any  other  Capital Stock of the Issuer of any
           -------------
     class  which shall be authorized at any time after the date of this Warrant
     (other  than Common Stock) and which shall have the right to participate in
     the distribution of earnings and assets of the Issuer without limitation as
     to  amount.

          "Outstanding  Common  Stock"  means,  at any given time, the aggregate
           --------------------------
     amount  of  outstanding  shares  of  Common  Stock, assuming full exercise,
     conversion  or  exchange (as applicable) of all options, warrants and other
     Securities  which  are convertible into or exercisable or exchangeable for,
     and any right to subscribe for, shares of Common Stock that are outstanding
     at  such  time.

          "Person"  means an individual, corporation, limited liability company,
           ------
     partnership, joint stock company, trust, unincorporated organization, joint
     venture,  Governmental  Authority  or  other  entity  of  whatever  nature.

          "Per  Share  Market  Value"  means on any particular date (a) the last
           -------------------------
     closing  bid  price  per  share of the Common Stock on such date on the OTC
     Bulletin  Board  or another registered national stock exchange on which the
     Common  Stock  is  then  listed, or if there is no such price on such date,
     then the closing bid price on such exchange or quotation system on the date
     nearest  preceding such date, or (b) if the Common Stock is not listed then
     on  the  OTC  Bulletin Board or any registered national stock exchange, the
     last  closing bid price for a share of Common Stock in the over-the-counter
     market,  as reported by the OTC Bulletin Board or in the National Quotation
     Bureau  Incorporated  or  similar  organization or agency succeeding to its
     functions  of  reporting  prices) at the close of business on such date, or
     (c)  if  the Common Stock is not then reported by the OTC Bulletin Board or
     the  National  Quotation  Bureau  Incorporated  (or similar organization or

                                      -14-
<PAGE>
     agency  succeeding  to  its  functions of reporting prices), then the "Pink
     Sheet"  quotes  for  the  applicable  Trading  Days  preceding such date of
     determination,  or  (d) if the Common Stock is not then publicly traded the
     fair  market  value  of  a  share  of  Common  Stock  as  determined  by an
     Independent  Appraiser  selected  in  good  faith  by the Majority Holders;
     provided,  however,  that the Issuer, after receipt of the determination by
     --------   -------
     such  Independent  Appraiser,  shall have the right to select an additional
     Independent  Appraiser, in which case, the fair market value shall be equal
     to  the  average  of the determinations by each such Independent Appraiser;
     and provided, further that all determinations of the Per Share Market Value
         --------  -------
     shall  be  appropriately  adjusted for any stock dividends, stock splits or
     other  similar  transactions  during such period. The determination of fair
     market  value  by  an  Independent  Appraiser  shall be based upon the fair
     market value of the Issuer determined on a going concern basis as between a
     willing  buyer  and  a  willing seller and taking into account all relevant
     factors  determinative  of  value,  and  shall  be final and binding on all
     parties.  In  determining  the  fair  market  value of any shares of Common
     Stock,  no  consideration shalven to any restrictions on transfer of
     the  Common  Stock  imposed  by agreement or by federal or state securities
     laws,  or  to  the  existence  or absence of, or any limitations on, voting
     rights.

          "Purchase  Agreement"  means  the  Note and Warrant Purchase Agreement
           -------------------
     dated as of December 4, 2006, among the Issuer and the Purchasers.

          "Purchasers"  means  the  purchasers  of  the subordinated convertible
           ----------
     promissory  notes  and  the  Warrants  issued by the Issuer pursuant to the
     Purchase  Agreement.

          "Securities"  means  any  debt  or  equity  securities  of the Issuer,
           ----------
     whether  now  or  hereafter  authorized, any instrument convertible into or
     exchangeable for Securities or a Security, and any option, warrant or other
     right  to  purchase  or  acquire  any Security. "Security" means one of the
     Securities.

          "Securities  Act" means the Securities Act of 1933, as amended, or any
           ---------------
     similar federal statute then in effect.

          "Subsidiary"  means  any corporation at least 50% of whose outstanding
           ----------
     Voting  Stock  shall  at  the  time  be owned directly or indirectly by the
     Issuer  or  by one or more of its Subsidiaries, or by the Issuer and one or
     more  of  its  Subsidiaries.

          "Term" has the meaning specified in Section 1 hereof.
           ----

          "Trading  Day"  means (a) a day on which the Common Stock is traded on
           ------------
     the OTC Bulletin Board, or (b) if the Common Stock is not traded on the OTC
     Bulletin  Board,  a  day  on  which  the  Common  Stock  is  quoted  in the
     over-the-counter  market  as  reported  by  the  National  Quotation Bureau
     Incorporated  (or  any  similar  organization  or  agency  succeeding  its
     functions  of  reporting prices); provided, however, that in the event that
                                       --------  -------
     the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
     then  Trading  Day  shall  mean any day except Saturday, Sunday and any day
     which  shall  be  a legal holiday or a day on which banking institutions in
     the State of New York are authorized or required by law or other government
     action  to  close.

                                      -15-
<PAGE>
          "Voting  Stock"  means,  as  applied  to  the  Capital  Stock  of  any
           -------------
     corporation,  Capital  Stock  of  any class or classes (however designated)
     having  ordinary voting power for the election of a majority of the members
     of  the  board  of directors (or other governing body) of such corporation,
     other  than Capital Stock having such power only by reason of the happening
     of  a  contingency.

          "Warrants" means the Warrants issued and sold pursuant to the Purchase
           --------
     Agreement,  including,  without  limitation,  this  Warrant,  and any other
     warrants  of  like tenor issued in substitution or exchange for any thereof
     pursuant  to  the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
     of  such  other  Warrants.

          "Warrant  Price"  initially means $3.25, as such price may be adjusted
           --------------
     from  time  to  time as shall result from the adjustments specified in this
     Warrant,  including  Section  4  hereto.

          "Warrant  Share  Number"  means  at  any  time the aggregate number of
           ----------------------
     shares  of  Warrant Stock which may at such time be purchased upon exercise
     of this Warrant, after giving effect to all prior adjustments and increases
     to  such  number  made  or  required  to  be  made  under the terms hereof.

          "Warrant  Stock"  means  Common  Stock  issuable  upon exercise of any
           --------------
     Warrant  or  Warrants  or  otherwise  issuable  pursuant  to any Warrant or
     Warrants.

     9.   Other Notices. In case at any time:
          -------------

                    (A)  the  Issuer shall make any distributions to the holders
                         of  Common  Stock;  or

                    (B)  the  Issuer shall authorize the granting to all holders
                         of  its  Common  Stock  of  rights  to subscribe for or
                         purchase  any  shares  of Capital Stock of any class or
                         other  rights;  or

                    (C)  there  shall  be  any  reclassification  of the Capital
                         Stock  of  the  Issuer;  or

                    (D)  there  shall  be  any  capital  reorganization  by  the
                         Issuer;  or

                    (E)  there  shall  be  any  (i)  consolidation  or  merger
                         involving  the  Issuer  or (ii) sale, transfer or other
                         disposition of all or substantially all of the Issuer's
                         property,  assets or business (except a merger or other
                         reorganization  in  which  the  Issuer  shall  be  the
                         surviving  corporation  and its shares of Capital Stock
                         shall  continue  to  be  outstanding  and unchanged and
                         except a consolidation, merger, sale, transfer or other
                         disposition  involving  a  wholly-owned Subsidiary); or

                                      -16-
<PAGE>
                    (F)  there  shall be a voluntary or involuntary dissolution,
                         liquidation  or winding-up of the Issuer or any partial
                         liquidation of the Issuer or distribution to holders of
                         Common  Stock;

then,  in each of such cases, the Issuer shall give written notice to the Holder
of  the  date on which (i) the books of the Issuer shall close or a record shall
be  taken  for  such  dividend, distribution or subscription rights or (ii) such
reorganization,  reclassification,  consolidation,  merger,  disposition,
dissolution,  liquidation  or  winding-up, as the case may be, shall take place.
Such  notice also shall specify the date as of which the holders of Common Stock
of  record  shall  participate  in  such  dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities  or  other  property  deliverable  upon  such  reorganization,
reclassification,  consolidation,  merger, disposition, dissolution, liquidation
or  winding-up,  as  the case may be. Such notice shall be given at least twenty
(20)  days prior to the action in question and not less than ten (10) days prior
to  the  record date or the date on which the Issuer's transfer books are closed
in  respect  thereto.  This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders  of  the  Common  Stock.

     10.     Amendment  and  Waiver.  Any term, covenant, agreement or condition
             ----------------------
in  this  Warrant  may be amended, or compliance therewith may be waived (either
generally  or  in  a  particular  instance  and  either  retroactively  or
prospectively),  by  a written instrument or written instruments executed by the
Issuer  and  the  Majority Holders; provided, however, that no such amendment or
                                    --------  -------
waiver  shall  reduce  the  Warrant  Share  Number,  increase the Warrant Price,
shorten  the  period  during  which  this Warrant may be exercised or modify any
provision  of this Section 10 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver  or  modification  of  any  provision  of  this  Warrant  unless the same
consideration  is  also  offered  to  all  holders  of  the  Warrants.

     11.     Governing Law; Jurisdiction.  This Warrant shall be governed by and
             ---------------------------
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  any of the conflicts of law principles which would result in
the  application  of  the substantive law of another jurisdiction.  This Warrant
shall  not  be  interpreted  or construed with any presumption against the party
causing  this Warrant to be drafted.  The Issuer and the Holder agree that venue
for  any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive  any  right  to  raise forum non conveniens or any other argument that New
York  is not the proper venue.  The Issuer and the Holder irrevocably consent to
personal  jurisdiction in the state and federal courts of the state of New York.
The  Issuer  and  the  Holder  consent to process being served in any such suit,
action  or  proceeding by mailing a copy thereof to such party at the address in
effect  for  notices to it under this Warrant and agrees that such service shall
constitute  good  and sufficient service of process and notice thereof.  Nothing
in this Section 11 shall affect or limit any right to serve process in any other
manner  permitted  by  law.  The  Issuer  and  the  Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this  Warrant  or the Purchase Agreement, shall be entitled to reimbursement for
reasonable  legal  fees from the non-prevailing party.  The parties hereby waive
all  rights  to  a  trial  by  jury.

                                      -17-
<PAGE>
     12.     Notices.  Any  notice,  demand,  request,  waiver  or  other
             -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:

If to the Issuer:             Charys Holding Company, Inc.
                              1117 Perimeter Center West, Suite N415
                              Atlanta, Georgia 30338
                              Attention: Chief Executive Officer
                              Tel. No.: (678) 443-2300
                              Fax  No.:  (678)  443-2320

with copies (which copies
shall not constitute notice)
to:                           Glast, Phillips & Murray, P.C.
                              815 Walker Street, Suite 1250
                              Houston, Texas 77002
                              Attention: Norman T. Reynolds, Esq.
                              Tel. No.: (713) 237-3135
                              Fax No.: (713) 237-3202

If  to  any  Holder:          At the address of such Holder set forth on Exhibit
                                                                         -------
                              A  to  this  Agreement,  with  copies  to Holder's
                              -
                              counsel  as set forth on Exhibit A or as specified
                                                       ---------
                              in  writing  by  such  Holder  with  copies  to:

with copies (which copies
shall not constitute notice)
to:                           Kramer Levin Naftalis & Frankel LLP
                              1177  Avenue  of  the  Americas
                              New  York,  New  York  10036
                              Attention:  Christopher  S.  Auguste,  Esq.
                              Tel.  No.:  (212)  715-9100
                              Fax  No.:  (212)  715-8000

     Any  party  hereto  may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto.

     13.     Warrant Agent.  The Issuer may, by written notice to each Holder of
             -------------
this  Warrant,  appoint  an agent having an office in New York, New York for the
purpose  of  issuing  shares  of  Warrant  Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to  subsection  (d)  of  Section  2 hereof or replacing this Warrant pursuant to
subsection  (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such

                                      -18-
<PAGE>
issuance,  exchange  or  replacement,  as the case may be, shall be made at such
office  by  such  agent.

     14.     Remedies.  The  Issuer  stipulates  that the remedies at law of the
             --------
Holder  of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are  not  and  will not be adequate and that, to the fullest extent permitted by
law,  such  terms  may  be  specifically  enforced  by a decree for the specific
performance  of  any  agreement  contained  herein or by an injunction against a
violation of any of the terms hereof or otherwise.

     15.     Successors  and  Assigns.  This  Warrant  and  the rights evidenced
             ------------------------
hereby  shall  inure  to  the  benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such  Holder  or  Holder  of  Warrant  Stock.

     16.     Modification  and Severability.  If, in any action before any court
             ------------------------------
or  agency  legally  empowered  to  enforce  any provision contained herein, any
provision  hereof  is  found  to  be unenforceable, then such provision shall be
deemed  modified to the extent necessary to make it enforceable by such court or
agency.  If  any such provision is not enforceable as set forth in the preceding
sentence,  the  unenforceability  of  such  provision shall not affect the other
provisions  of  this  Warrant,  but  this  Warrant shall be construed as if such
unenforceable  provision  had  never  been  contained  herein.

     17.     Headings.  The  headings  of  the  Sections of this Warrant are for
             --------
convenience  of  reference only and shall not, for any purpose, be deemed a part
of  this  Warrant.

     18.     Registration Rights.  The Holder of this Warrant is entitled to the
             -------------------
benefit  of  certain  registration  rights with respect to the shares of Warrant
Stock  issuable  upon  the  exercise  of  this  Warrant pursuant to that certain
Registration  Rights  Agreement, of even date herewith, by and among the Company
and  Persons  listed on Schedule I thereto (the "Registration Rights Agreement")
                                                 -----------------------------
and the registration rights with respect to the shares of Warrant Stock issuable
upon  the exercise of this Warrant by any subsequent Holder may only be assigned
in  accordance  with  the  terms  and  provisions  of  the  Registrations Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -19-
<PAGE>
     IN WITNESS WHEREOF, the Issuer has executed this Series J Warrant as of the
day  and  year  first  above  written.

                                        CHARYS  HOLDING  COMPANY,  INC.

                                        By:  -----------------------------------
                                             Name:
                                             Title:

                                      -20-
<PAGE>
                                  EXERCISE FORM
                                SERIES J WARRANT

                          CHARYS HOLDING COMPANY, INC.

The  undersigned                 ,  pursuant  to  the  provisions  of the within
                  ---------------
Warrant,  hereby  elects  to  purchase         shares  of Common Stock of Charys
                                        -----
Holding  Company,  Inc.  covered  by  the  within  Warrant.

Dated:                                   Signature
       -----------------                               -------------------------

                                         Address
                                                       ---------------------
                                                       ---------------------

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  date  of  Exercise:
                                               -------------------------

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

                                   ASSIGNMENT

FOR  VALUE  RECEIVED,                   hereby sells, assigns and transfers unto
                      -----------------
                    the within Warrant and all rights evidenced thereby and does
------------------
irrevocably constitute and appoint              , attorney, to transfer the said
                                   -------------
Warrant  on  the  books  of  the  within  named  corporation.

Dated:                                   Signature
       -----------------                               -------------------------

                                         Address
                                                       ---------------------
                                                       ---------------------

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED,                   hereby sells, assigns and transfers unto
                      -----------------
                    the  right  to  purchase             shares of Warrant Stock
------------------                            ---------
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint                    , attorney, to transfer
                                      -------------------
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated:                                   Signature
       -----------------                               -------------------------

                                         Address
                                                       ---------------------
                                                       ---------------------

                                      -21-
<PAGE>
                           FOR USE BY THE ISSUER ONLY:

This  Warrant No. W-    canceled (or transferred or exchanged) this       day of
                    ---                                             -----
           ,       ,  shares  of  Common  Stock  issued  therefor in the name of
-----------   -----
               ,  Warrant  No. W-      issued for      shares of Common Stock in
---------------                  -----            ----
the  name  of                 .
               ---------------

                                      -22-
<PAGE>
                                   EXHIBIT C-4
                            FORM OF SERIES C WARRANT

                                        vi
<PAGE>
THIS  WARRANT  AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR  OTHERWISE  DISPOSED  OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO  THE  ISSUER  THAT  REGISTRATION  OF  SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES  LAWS  IS  NOT  REQUIRED.

                          SERIES C WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                          CHARYS HOLDING COMPANY, INC.

                            Expires December 4, 2011

No.:  W-C-06-__                                Number  of  Shares:  ____________
Date  of  Issuance:  December  4,  2006

     FOR  VALUE  RECEIVED,  the  undersigned,  Charys  Holding  Company, Inc., a
Delaware  corporation  (together with its successors and assigns, the "Issuer"),
                                                                       ------
hereby  certifies  that ___________________________ or its registered assigns is
entitled  to  subscribe  for  and  purchase,  during  the  Term  (as hereinafter
defined),  up to ____________________ (__________) shares (subject to adjustment
as  hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable  Common Stock of the Issuer, at an exercise price per share equal
to  the  Warrant  Price  then in effect, subject, however, to the provisions and
upon  the terms and conditions hereinafter set forth.  Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified  in  Section  8  hereof.

     1.     Term.  The  term  of this Warrant shall commence on December 4, 2006
            ----
and  shall  expire  at 5:00 p.m., Eastern Time, on December 4, 2011 (such period
being  the  "Term").
             ----

     2.     Method  of  Exercise; Payment; Issuance of New Warrant; Transfer and
            --------------------------------------------------------------------
Exchange.
--------

     (a)     Time  of Exercise.  The purchase rights represented by this Warrant
             -----------------
may  be  exercised in whole or in part during the Term for such number of shares
of  Common Stock that have been exercised by the Holder pursuant to the Series J
Warrant  issued  by the Issuer to the Holder pursuant to the Purchase Agreement.

     (b)     Method  of  Exercise.  The Holder hereof may exercise this Warrant,
             --------------------
in  whole  or  in part, by the surrender of this Warrant (with the exercise form
attached  hereto  duly  executed)  at

                                      -1-
<PAGE>
the  principal  office  of  the  Issuer,  and by the payment to the Issuer of an
amount  of  consideration  therefor  equal to the Warrant Price in effect on the
date  of  such exercise multiplied by the number of shares of Warrant Stock with
respect  to which this Warrant is then being exercised, payable at such Holder's
election  (i)  by  certified  or  official  bank check or by wire transfer to an
account designated by the Issuer, (ii) by "cashless exercise" in accordance with
the provisions of subsection (c) of this Section 2, but only when a registration
statement under the Securities Act providing for the resale of the Warrant Stock
is  not  then  in  effect, or (iii) by a combination of the foregoing methods of
payment  selected  by  the  Holder  of  this  Warrant,  if  applicable.

     (c)     Cashless  Exercise.  Notwithstanding  any  provisions herein to the
             ------------------
contrary  and  commencing  one (1) year following the Original Issue Date if (i)
the  Per  Share  Market  Value  of one share of Common Stock is greater than the
Warrant  Price  (at  the  date  of  calculation  as  set forth below) and (ii) a
registration  statement under the Securities Act providing for the resale of the
Warrant  Stock  is not then in effect by the date such registration statement is
required  to  be  effective  pursuant  to  the Registration Rights Agreement (as
defined  in  the  Purchase  Agreement)  or  not effective at any time during the
Effectiveness  Period  (as  defined  in  the  Registration  Rights Agreement) in
accordance  with  the  terms  of  the  Registration Rights Agreement, unless the
registration statement is not effective as a result of the Issuer exercising its
rights  under  Section  3(n)  of  the  Registration Rights Agreement, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by  a  cashless  exercise and shall receive the number of shares of Common Stock
equal  to  an  amount  (as determined below) by surrender of this Warrant at the
principal  office  of  the  Issuer together with the properly endorsed Notice of
Exercise  in which event the Issuer shall issue to the Holder a number of shares
of  Common  Stock  computed  using  the  following  formula:

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

Where     X =  the  number of shares of Common Stock to be issued to the Holder.

          Y =  the number of shares of Common Stock purchasable upon exercise of
               all  of the Warrant or, if only a portion of the Warrant is being
               exercised,  the  portion  of  the  Warrant  being  exercised.

          A =  the Warrant Price.

          B =  the  Per  Share  Market  Value  of one share of Common Stock.

     (d)     Issuance  of  Stock  Certificates.  In the event of any exercise of
             ---------------------------------
this  Warrant in accordance with and subject to the terms and conditions hereof,
certificates  for  the  shares  of Warrant Stock so purchased shall be dated the
date  of  such  exercise  and delivered to the Holder hereof within a reasonable
time,  not  exceeding  three (3) Trading Days after such exercise (the "Delivery
                                                                        --------
Date")  or, at the request of the Holder (provided that a registration statement
----
under  the  Securities Act providing for the resale of the Warrant Stock is then
in effect), issued and delivered to the Depository Trust Company ("DTC") account
                                                                   ---
on  the  Holder's  behalf  via  the  Deposit  Withdrawal Agent Commission System
("DWAC")  within  a  reasonable time, not exceeding three (3) Trading Days after
  ----
such  exercise,  and  the  Holder  hereof  shall  be  deemed  for

                                      -2-
<PAGE>
all  purposes to be the holder of the shares of Warrant Stock so purchased as of
the  date  of such exercise.  Notwithstanding the foregoing to the contrary, the
Issuer  or  its  transfer agent shall only be obligated to issue and deliver the
shares  to  the  DTC  on  a  holder's  behalf  via  DWAC  if such exercise is in
connection  with  a sale and the Issuer and its transfer agent are participating
in DTC through the DWAC system.  The Holder shall deliver this original Warrant,
or  an  indemnification  undertaking with respect to such Warrant in the case of
its  loss,  theft  or  destruction,  at  such  time  that  this Warrant is fully
exercised.  With  respect to partial exercises of this Warrant, the Issuer shall
keep  written  records  of the number of shares of Warrant Stock exercised as of
each  date  of  exercise.

     (e)     Compensation  for  Buy-In on Failure to Timely Deliver Certificates
             -------------------------------------------------------------------
Upon  Exercise.  In addition to any other rights available to the Holder, if the
--------------
Issuer fails to cause its transfer agent to transmit to the Holder a certificate
or  certificates  representing  the  Warrant Stock pursuant to an exercise on or
before  the  Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock  to  deliver  in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
                                                              -------
Issuer  shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell  order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number  of  shares  of  Warrant Stock for which such exercise was not honored or
deliver  to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder.  For  example,  if  the  Holder purchases Common Stock having a total
purchase  price  of  $11,000  to  cover  a  Buy-In  with respect to an attempted
exercise  of  shares of Common Stock with an aggregate sale price giving rise to
such  purchase  obligation  of  $10,000,  under  clause  (1)  of the immediately
preceding  sentence  the  Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the  Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer.  Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive  relief  with  respect  to  the  Issuer's  failure  to timely deliver
certificates  representing  shares of Common Stock upon exercise of this Warrant
as  required  pursuant  to  the  terms  hereof.

     (f)     Transferability  of  Warrant.  Subject to Section 2(h) hereof, this
             ----------------------------
Warrant may be transferred by a Holder, in whole or in part, without the consent
of  the  Issuer.  If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized  attorney,  upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached  hereto)  and  upon  payment  of  any  necessary  transfer tax or other
governmental charge imposed upon such transfer.  This Warrant is exchangeable at
the  principal  office of the Issuer for Warrants to purchase the same aggregate
number  of  shares  of Warrant Stock, each new Warrant to represent the right to
purchase  such  number  of  shares  of  Warrant Stock as the Holder hereof shall
designate  at  the  time  of such exchange.  All Warrants issued on transfers or

                                      -3-
<PAGE>
exchanges  shall  be  dated  the Original Issue Date and shall be identical with
this  Warrant  except  as  to  the  number  of  shares of Warrant Stock issuable
pursuant  thereto.

     (g)     Continuing Rights of Holder.  The Issuer will, at the time of or at
             ---------------------------
any  time  after  each  exercise of this Warrant, upon the request of the Holder
hereof,  acknowledge in writing the extent, if any, of its continuing obligation
to  afford  to  such Holder all rights to which such Holder shall continue to be
entitled  after  such  exercise  in  accordance  with the terms of this Warrant,
provided  that  if  any  such  Holder  shall  fail to make any such request, the
--------
failure  shall not affect the continuing obligation of the Issuer to afford such
     -
rights  to  such  Holder.

     (h)     Compliance  with  Securities  Laws.
             -----------------------------------

          (i)     The Holder of this Warrant, by acceptance hereof, acknowledges
     that  this  Warrant  and  the  shares  of  Warrant  Stock to be issued upon
     exercise  hereof are being acquired solely for the Holder's own account and
     not  as  a  nominee  for  any other party, and for investment, and that the
     Holder  will  not  offer,  sell or otherwise dispose of this Warrant or any
     shares  of  Warrant Stock to be issued upon exercise hereof except pursuant
     to  an effective registration statement, or an exemption from registration,
     under  the  Securities  Act  and  any  applicable  state  securities  laws.

          (ii)     Except as provided in paragraph (iii) below, this Warrant and
     all  certificates representing shares of Warrant Stock issued upon exercise
     hereof  shall  be  stamped  or imprinted with a legend in substantially the
     following  form:

          THIS  WARRANT  AND  THE SHARES OF COMMON STOCK ISSUABLE UPON
          EXERCISE  HEREOF  HAVE   NOT   BEEN  REGISTERED   UNDER  THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
          ANY  STATE  SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
          OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED  UNDER   THE
          SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
          THE  ISSUER SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
          REASONABLY  SATISFACTORY  TO THE ISSUER THAT REGISTRATION OF
          SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT  AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT
          REQUIRED.

          (iii)     The  Issuer  agrees  to reissue this Warrant or certificates
     representing  any  of the Warrant Stock, without the legend set forth above
     if  at  such time, prior to making any transfer of any such securities, the
     Holder  shall  give  written notice to the Issuer describing the manner and
     terms  of  such transfer and the conditions set forth below shall have been
     satisfied.  Such  proposed  transfer will not be effected until: (a) either
     (i)  the  Issuer has received an opinion of counsel reasonably satisfactory
     to the Issuer, to the effect that the registration of such securities under
     the  Securities  Act  is  not  required  in  connection  with such proposed
     transfer,  (ii)  a  registration  statement  under  the  Securities

                                      -4-
<PAGE>
     Act  covering  the  Warrant  Stock subject to such proposed disposition has
     been  filed  by  the Issuer with the Securities and Exchange Commission and
     has  become  effective  and  continues to be effective under the Securities
     Act,  (iii)  the Issuer has received other evidence reasonably satisfactory
     to the Issuer that such registration and qualification under the Securities
     Act and state securities laws are not required, or (iv) the Holder provides
     the  Issuer  with  reasonable  assurances  that  such  security can be sold
     pursuant  to  Rule  144  under  the  Securities Act; and (b) either (i) the
     Issuer  has  received  an opinion of counsel reasonably satisfactory to the
     Issuer,  to  the  effect  that  registration  or  qualification  under  the
     securities  or  "blue  sky" laws of any state is not required in connection
     with  such  proposed  disposition, or (ii) compliance with applicable state
     securities or "blue sky" laws has been effected or a valid exemption exists
     with  respect  thereto.  The  Issuer will respond to any such notice from a
     holder  within three (3) Trading Days. In the case of any proposed transfer
     under  this  Section 2(h), the Issuer will use reasonable efforts to comply
     with  any such applicable state securities or "blue sky" laws, but shall in
     no  event  be required, (x) to qualify to do business in any state where it
     is  not then qualified, (y) to take any action that would subject it to tax
     or  to  the  general  service  of process in any state where it is not then
     subject,  or  (z) to comply with state securities or "blue sky" laws of any
     state  for which registration by coordination is unavailable to the Issuer.
     The  restrictions  on  transfer  contained in this Section 2(h) shall be in
     addition  to,  and  not  by way of limitation of, any other restrictions on
     transfer  contained  in  any  other  section  of  this  Warrant. Whenever a
     certificate  representing  the  Warrant Stock is required to be issued to a
     the  Holder  without  a legend, in lieu of delivering physical certificates
     representing  the Warrant Stock, the Issuer shall, upon the request of such
     Holder,  cause  its  transfer  agent to electronically transmit the Warrant
     Stock  to  the Holder by crediting the account of the Holder's Prime Broker
     with  DTC  through its DWAC system (to the extent not inconsistent with any
     provisions  of  this  Warrant  or  the  Purchase Agreement), if applicable.

     (i)     Accredited  Investor  Status.  In  no event may the Holder exercise
             ----------------------------
this  Warrant  in whole or in part unless the Holder is an "accredited investor"
as  defined  in  Regulation  D  under  the  Securities  Act.

     3.     Stock  Fully  Paid;  Reservation  and  Listing of Shares; Covenants.
            -------------------------------------------------------------------

     (a)     Stock  Fully  Paid.  The Issuer represents, warrants, covenants and
             ------------------
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this  Warrant  hereunder  will, when issued in accordance with the terms of this
Warrant,  be  duly authorized, validly issued, fully paid and non-assessable and
free  from  all  taxes,  liens and charges created by or through the Issuer with
respect  to issuance (other than restrictions under federal and state securities
laws).  The  Issuer  further  covenants and agrees that during the period within
which  this  Warrant  may  be  exercised,  the  Issuer  will  at  all times have
authorized  and  reserved  for the purpose of the issuance upon exercise of this
Warrant a sufficient number of authorized but unissued shares of Common Stock to
provide  for  the  exercise of this Warrant without regard to any limitations on
exercise.

     (b)     Reservation.  If any shares of Common Stock required to be reserved
             -----------
for  issuance  upon  exercise of this Warrant or as otherwise provided hereunder
require  registration  or

                                      -5-
<PAGE>
qualification  with  any  Governmental  Authority under any federal or state law
before  such  shares  may  be  so  issued, the Issuer will in good faith use its
commercially  reasonable  efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified.  To the extent permissible
under  the  applicable  securities  exchange or market rules on which the Common
Stock  is  traded or quoted, if the Issuer shall list any shares of Common Stock
on  any securities exchange or market it will, at its expense, list thereon, and
maintain  and  increase  when  necessary such listing, of, all shares of Warrant
Stock  from  time  to  time issued upon exercise of this Warrant or as otherwise
provided  hereunder  (provided  that  such  Warrant  Stock  has  been registered
pursuant  to  a registration statement under the Securities Act then in effect),
and,  all  unissued  shares  of  Warrant  Stock  which  are at any time issuable
hereunder, so long as any shares of Common Stock shall be so listed.  The Issuer
will  also so list on each securities exchange or market, and will maintain such
listing  of,  any  other  securities  which  the Holder of this Warrant shall be
entitled  to  receive  upon  the  exercise  of  this  Warrant if at the time any
securities  of  the  same  class  shall be listed on such securities exchange or
market  by  the  Issuer.

     (c)     Covenants.  The  Issuer  shall not by any action including, without
             ---------
limitation,  amending  the  Certificate  of  Incorporation or the by-laws of the
Issuer,  or  through  any  reorganization,  transfer  of  assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and  in  the  taking  of  all such actions as may be necessary or appropriate to
protect  the  rights  of  the  Holder  hereof  against  dilution  (to the extent
specifically provided herein) or impairment.  Without limiting the generality of
the  foregoing,  the  Issuer  will  (i) not permit the par value, if any, of its
Common  Stock  to  exceed  the  then  effective Warrant Price, (ii) not amend or
modify  any  provision  of  the  Certificate  of Incorporation or by-laws of the
Issuer  in  any  manner that would adversely affect the rights of the Holders of
the Warrants, (iii) take all such action as may be reasonably necessary in order
that  the  Issuer  may  validly  and  legally issue fully paid and nonassessable
shares  of  Common  Stock, free and clear of any liens, claims, encumbrances and
restrictions  (other  than as provided herein and restrictions under federal and
state  securities  laws)  upon  the  exercise  of this Warrant, and (iv) use its
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents  from  any public regulatory body having jurisdiction thereof as may be
reasonably  necessary to enable the Issuer to perform its obligations under this
Warrant.

     (d)     Loss,  Theft,  Destruction  of  Warrants.  Upon receipt of evidence
             ----------------------------------------
satisfactory  to the Issuer of the ownership of and the loss, theft, destruction
or  mutilation  of  any  Warrant  and,  in  the  case of any such loss, theft or
destruction,  upon  receipt  of indemnity or security satisfactory to the Issuer
or,  in the case of any such mutilation, upon surrender and cancellation of such
Warrant,  the  Issuer  will  make  and  deliver,  in  lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right  to  purchase  the  same  number  of  shares  of  Common  Stock.

     (e)     Payment  of Taxes.  The Issuer will pay any documentary stamp taxes
             -----------------
attributable to the initial issuance of the Warrant Stock issuable upon exercise
of this Warrant; provided, however, that the Issuer shall not be required to pay
                 --------  -------
any tax or taxes which may be payable in respect of any transfer involved in the
issuance  or  delivery  of any certificates representing Warrant Stock in a name
other  than  that  of  the  Holder  in  respect to which such shares are issued.

                                      -6-
<PAGE>
     4.     Adjustment  of  Warrant  Price  and  Number  of Shares Issuable Upon
            --------------------------------------------------------------------
Exercise.  The  Warrant  Price  and the Warrant Share Number shall be subject to
--------
adjustment  from  time  to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section  5.

     (a)     Recapitalization,  Reorganization, Reclassification, Consolidation,
             -------------------------------------------------------------------
Merger  or  Sale.
----------------

          (i)  In  case the Issuer after the Original Issue Date shall do any of
     the  following  (each, a "Triggering Event"): (a) consolidate or merge with
                               ----------------
     or  into  any  other  Person  and the Issuer shall not be the continuing or
     surviving  corporation  of  such consolidation or merger, or (b) permit any
     other  Person  to  consolidate with or merge into the Issuer and the Issuer
     shall  be  the  continuing or surviving Person but, in connection with such
     consolidation  or  merger, any Capital Stock of the Issuer shall be changed
     into  or  exchanged for Securities of any other Person or cash or any other
     property,  or  (c)  transfer  all or substantially all of its properties or
     assets  to  any  other  Person,  or  (d) effect a capital reorganization or
     reclassification  of  its Capital Stock, then, and in the case of each such
     Triggering  Event,  proper provision shall be made to the Warrant Price and
     the  Warrant  Share Number of shares of Warrant Stock that may be purchased
     upon  exercise of this Warrant so that, upon the basis and the terms and in
     the  manner  provided  in this Warrant, the Holder of this Warrant shall be
     entitled  upon  the  exercise  hereof at any time after the consummation of
     such Triggering Event, to the extent this Warrant is not exercised prior to
     such  Triggering Event, to receive at the Warrant Price as adjusted to take
     into  account  the  consummation  of  such Triggering Event, in lieu of the
     Common  Stock  issuable  upon  such  exercise of this Warrant prior to such
     Triggering  Event,  the  Securities, cash and property to which such Holder
     would  have been entitled upon the consummation of such Triggering Event if
     such  Holder  had  exercised  the  rights  represented  by  this  Warrant
     immediately  prior  thereto  (including the right of a shareholder to elect
     the type of consideration it will receive upon a Triggering Event), subject
     to  adjustments  (subsequent to such corporate action) as nearly equivalent
     as  possible  to  the adjustments provided for elsewhere in this Section 4,
     and  the  Warrant  Price  shall be adjusted to equal the product of (A) the
     closing  price  of  the  common  stock  of  the  continuing  or  surviving
     corporation as a result of such Triggering Event as of the date immediately
     preceding  the date of the consummation of such Triggering Event multiplied
     by  (B) the quotient of (i) the Warrant Price divided by (ii) the Per Share
     Market  Value  of the Common Stock as of the date immediately preceding the
     Original  Issue Date; provided, however, the Holder at its option may elect
                           --------  -------
     to  receive an amount in cash equal to the value of this Warrant calculated
     in  accordance  with  the  Black-Scholes  formula.  Immediately  upon  the
     occurrence  of  a  Triggering  Event, the Issuer shall notify the Holder in
     writing  of  such  Triggering  Event  and  provide  the  calculations  in
     determining the number of shares of Warrant Stock issuable upon exercise of
     the  new warrant and the adjusted Warrant Price. Upon the Holder's request,
     the  continuing  or  surviving  corporation  as a result of such Triggering
     Event  shall issue to the Holder a new warrant of like tenor evidencing the
     right  to  purchase  the adjusted number of shares of Warrant Stock and the
     adjusted Warrant Price pursuant to the terms and provisions of this Section
     4(a)(i).  Notwithstanding  the  foregoing  to  the  contrary,  this Section
     4(a)(i)  shall  only  apply  if  the

                                      -7-
<PAGE>
     surviving  entity  pursuant  to any such Triggering Event is a company that
     has  a  class  of  equity  securities registered pursuant to the Securities
     Exchange  Act of 1934, as amended, and its common stock is listed or quoted
     on  a  national securities exchange, national automated quotation system or
     the  OTC Bulletin Board. In the event that the surviving entity pursuant to
     any  such  Triggering  Event  is  not  a  public company that is registered
     pursuant  to the Securities Exchange Act of 1934, as amended, or its common
     stock  is  not listed or quoted on a national securities exchange, national
     automated quotation system or the OTC Bulletin Board, then the Holder shall
     have  the  right  to  demand that the Issuer pay to the Holder an amount in
     cash  equal  to the value of this Warrant calculated in accordance with the
     Black-Scholes  formula.

          (ii)     In the event that the Holder has elected not to exercise this
     Warrant  prior  to  the  consummation  of  a  Triggering Event and has also
     elected not to receive an amount in cash equal to the value of this Warrant
     calculated  in  accordance  with  the Black-Scholes formula pursuant to the
     provisions  of  Section  4(a)(i)  above,  so  long  as the surviving entity
     pursuant  to  any  Triggering Event is a company that has a class of equity
     securities  registered  pursuant to the Securities Exchange Act of 1934, as
     amended,  and its common stock is listed or quoted on a national securities
     exchange,  national  automated  quotation system or the OTC Bulletin Board,
     the  surviving  entity and/or each Person (other than the Issuer) which may
     be  required  to deliver any Securities, cash or property upon the exercise
     of  this  Warrant  as  provided  herein shall assume, by written instrument
     delivered  to,  and reasonably satisfactory to, the Holder of this Warrant,
     (A)  the  obligations  of  the Issuer under this Warrant (and if the Issuer
     shall  survive  the  consummation of such Triggering Event, such assumption
     shall  be  in  addition  to,  and  shall  not  release the Issuer from, any
     continuing  obligations  of  the  Issuer  under  this  Warrant) and (B) the
     obligation  to deliver to such Holder such Securities, cash or property as,
     in  accordance  with  the foregoing provisions of this subsection (a), such
     Holder  shall  be entitled to receive, and the surviving entity and/or each
     such  Person  shall  have  similarly delivered to such Holder an opinion of
     counsel  for  the  surviving  entity and/or each such Person, which counsel
     shall  be  reasonably satisfactory to such Holder, or in the alternative, a
     written  acknowledgement  executed  by  the  President  or  Chief Financial
     Officer  of the Issuer, stating that this Warrant shall thereafter continue
     in  full  force  and  effect  and  the  terms  hereof  (including,  without
     limitation,  all  of  the  provisions  of  this  subsection  (a))  shall be
     applicable  to  the Securities, cash or property which the surviving entity
     and/or  each  such  Person  may be required to deliver upon any exercise of
     this  Warrant  or  the  exercise  of  any  rights  pursuant  hereto.

          (b)     Stock  Dividends,  Subdivisions  and  Combinations.  If at any
                  --------------------------------------------------
time  the  Issuer  shall:

               (i)     make or issue or set a record date for the holders of the
     Common  Stock  for  the  purpose  of  entitling  them to receive a dividend
     payable  in,  or  other  distribution  of,  shares  of  Common  Stock,

               (ii)     subdivide  its outstanding shares of Common Stock into a
     larger  number  of  shares  of  Common  Stock,  or

                                      -8-
<PAGE>
               (iii)     combine  its  outstanding shares of Common Stock into a
     smaller  number  of  shares  of  Common  Stock,

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to  equal the number of shares of Common Stock which a record holder of the same
number  of  shares  of  Common  Stock  for  which  this  Warrant  is exercisable
immediately  prior  to  the occurrence of such event would own or be entitled to
receive  after  the  happening  of such event, and (2) the Warrant Price then in
effect  shall  be  adjusted  to  equal  (A)  the  Warrant  Price  then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such  adjustment.

     (c)     Certain  Other Distributions.  If at any time the Issuer shall make
             ----------------------------
or  issue  or  set  a  record  date  for the holders of the Common Stock for the
purpose  of  entitling  them  to  receive any dividend or other distribution of:

               (i)     cash  (other than a cash dividend payable out of earnings
     or  earned surplus legally available for the payment of dividends under the
     laws  of  the  jurisdiction  of  incorporation  of  the  Issuer),

               (ii)     any  evidences  of its indebtedness, any shares of stock
     of  any  class or any other securities or property of any nature whatsoever
     (other  than  cash, Common Stock Equivalents or Additional Shares of Common
     Stock),  or

               (iii)     any  warrants  or  other  rights  to  subscribe  for or
     purchase  any  evidences  of  its  indebtedness, any shares of stock of any
     class  or  any other securities or property of any nature whatsoever (other
     than  cash, Common Stock Equivalents or Additional Shares of Common Stock),

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable  shall  be  adjusted to equal the product of the number of shares of
Common  Stock  for  which  this Warrant is exercisable immediately prior to such
adjustment  multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator  of  which  shall  be  such  Per Share Market Value minus the amount
allocable  to one share of Common Stock of any such cash so distributable and of
the  fair  value (as determined in good faith by the Board and, upon the request
of  the Holder, supported by an opinion from an investment banking firm mutually
agreed  upon  by  the  Issuer  and  the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in  effect  shall  be  adjusted  to  equal  (A) the Warrant Price then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such adjustment.  A reclassification of the Common Stock (other than a change in
par  value, or from par value to no par value or from no par value to par value)
into  shares  of  Common  Stock  and shares of any other class of stock shall be
deemed  a  distribution by the Issuer to the holders of its Common Stock of such
shares  of  such  other  class

                                      -9-
<PAGE>
of  stock within the meaning of this Section 4(c) and, if the outstanding shares
of  Common  Stock  shall be changed into a larger or smaller number of shares of
Common  Stock  as a part of such reclassification, such change shall be deemed a
subdivision  or  combination,  as  the case may be, of the outstanding shares of
Common  Stock  within  the  meaning  of  Section  4(b).

     (d)     Issuance  of  Additional  Shares  of  Common  Stock.
             ---------------------------------------------------

          (i)     For  a  period  of eighteen (18) months following the Original
Issue  Date,  in  the  event the Issuer shall at any time following the Original
Issue  Date  issue  any  Additional  Shares  of  Common Stock (otherwise than as
provided  in  the foregoing subsections (a) through (c) of this Section 4), at a
price  per  share  less  than  the  Warrant  Price  then  in  effect  or without
consideration,  then the Warrant Price upon each such issuance shall be adjusted
to  that  price  determined by multiplying the Warrant Price then in effect by a
fraction:

               (A)     the  numerator  of which shall be equal to the sum of (x)
          the  number of shares of Outstanding Common Stock immediately prior to
          the  issuance  of  such Additional Shares of Common Stock plus (y) the
                                                                    ----
          number  of shares of Common Stock (rounded to the nearest whole share)
          which  the  aggregate  consideration  for  the  total  number  of such
          Additional  Shares of Common Stock so issued would purchase at a price
          per  share  equal  to  the  Warrant  Price  then  in  effect,  and

               (B)     the denominator of which shall be equal to the number of
          shares  of  Outstanding Common Stock immediately after the issuance of
          such  Additional  Shares  of  Common  Stock.

          (ii)     No  adjustment  of  the  number of shares of Common Stock for
which  this  Warrant  shall  be exercisable shall be made under paragraph (i) of
Section  4(d)  upon  the issuance of any Additional Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment  shall  previously  have  been  made upon the issuance of such Common
Stock Equivalents (or upon the issuance of any warrant or other rights therefor)
pursuant  to  Section  4(e).

     (e)     Issuance  of  Common  Stock  Equivalents.  For a period of eighteen
             ----------------------------------------
(18)  months  following the Original Issue Date, if at any time the Issuer shall
take  a  record  of the holders of its Common Stock for the purpose of entitling
them  to  receive a distribution of, or shall in any manner (whether directly or
by  assumption  in  a  merger  in which the Issuer is the surviving corporation)
issue  or  sell,  any  Common  Stock  Equivalents,  whether or not the rights to
exchange  or  convert  thereunder are immediately exercisable, and the price per
share  for which Common Stock is issuable upon such conversion or exchange shall
be  less  than the Warrant Price in effect immediately prior to the time of such
issue  or  sale, or if, after any such issuance of Common Stock Equivalents, the
price  per  share  for  which  Additional Shares of Common Stock may be issuable
thereafter  is  amended  or adjusted, and such price as so amended shall be less
than  the  Warrant  Price in effect at the time of such amendment or adjustment,
then  the  Warrant Price then in effect shall be adjusted as provided in Section
4(d).  No  further adjustments of the Warrant Share Number and the Warrant Price
then  in  effect  shall  be made upon the actual issue of such Common Stock upon
conversion  or  exchange  of  such  Common  Stock  Equivalents.

                                      -10-
<PAGE>
     (f)     Other Provisions applicable to Adjustments under this Section.  The
             -------------------------------------------------------------
following  provisions  shall  be  applicable to the making of adjustments of the
Warrant  Share  Number and the Warrant Price then in effect provided for in this
Section  4:

          (i)     Computation  of  Consideration.  To  the  extent  that  any
                  ------------------------------
Additional  Shares  of  Common  Stock  or  any  Common Stock Equivalents (or any
warrants  or  other rights therefor) shall be issued for cash consideration, the
consideration  received  by  the Issuer therefor shall be the amount of the cash
received  by  the Issuer therefor, or, if such Additional Shares of Common Stock
or  Common  Stock  Equivalents  are  offered by the Issuer for subscription, the
subscription  price,  or,  if  such  Additional Shares of Common Stock or Common
Stock  Equivalents  are  sold  to  underwriters  or  dealers for public offering
without  a subscription offering, the initial public offering price (in any such
case  subtracting any amounts paid or receivable for accrued interest or accrued
dividends  and  without  taking  into  account  any  compensation,  discounts or
expenses  paid  or  incurred  by  the  Issuer for and in the underwriting of, or
otherwise  in  connection  with,  the  issuance thereof). In connection with any
merger  or consolidation in which the Issuer is the surviving corporation (other
than  any  consolidation or merger in which the previously outstanding shares of
Common  Stock  of  the  Issuer shall be changed to or exchanged for the stock or
other  securities of another corporation), the amount of consideration therefore
shall  be,  deemed  to  be  the fair value, as determined reasonably and in good
faith  by  the  Board,  of  such  portion  of  the  assets  and  business of the
nonsurviving  corporation  as the Board may determine to be attributable to such
shares  of  Common  Stock  or  Common Stock Equivalents, as the case may be. The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants  or  other  rights  to  subscribe for or purchase the same shall be the
consideration  received  by the Issuer for issuing such warrants or other rights
plus  the  additional  consideration payable to the Issuer upon exercise of such
warrants  or other rights. The consideration for any Additional Shares of Common
Stock  issuable  pursuant  to the terms of any Common Stock Equivalents shall be
the  consideration  received by the Issuer for issuing war-rants or other rights
to  subscribe  for  or  purchase  such  Common  Stock  Equivalents,  plus  the
consideration  paid  or payable to the Issuer in respect of the subscription for
or purchase of such Common Stock Equivalents, plus the additional consideration,
if  any,  payable  to the Issuer upon the exercise of the right of conversion or
exchange  in such Common Stock Equivalents. In the event of any consolidation or
merger  of the Issuer in which the Issuer is not the surviving corporation or in
which  the  previously outstanding shares of Common Stock of the Issuer shall be
changed  into  or  exchanged  for  the  stock  or  other  securities  of another
corporation,  or  in  the  event  of any sale of all or substantially all of the
assets  of  the  Issuer  for  stock  or other securities of any corporation, the
Issuer shall be deemed to have issued a number of shares of its Common Stock for
stock  or  securities or other property of the other corporation computed on the
basis  of the actual exchange ratio on which the transaction was predicated, and
for  a  consideration  equal  to  the  fair  market  value  on  the date of such
transaction  of  all  such  stock  or  securities or other property of the other
corporation.  In  the  event  any  consideration  received by the Issuer for any
securities  consists  of property other than cash, the fair market value thereof
at  the  time  of  issuance or as otherwise applicable shall be as determined in
good  faith  by the Board. In the event Common Stock is issued with other shares
or securities or other assets of the Issuer for consideration which covers both,
the  consideration  computed  as  provided  in  this  Section  4(f)(i)  shall be
allocated  among  such  securities and assets as determined in good faith by the
Board.

                                      -11-
<PAGE>
          (ii)     When  Adjustments  to  Be  Made.  The adjustments required by
                   -------------------------------
this  Section  4  shall  be  made  whenever  and as often as any specified event
requiring  an  adjustment shall occur, except that any adjustment of the Warrant
Share  Number  that  would otherwise be required may be postponed (except in the
case  of a subdivision or combination of shares of the Common Stock, as provided
for  in  Section  4(b))  up  to,  but  not  beyond  the date of exercise if such
adjustment  either  by itself or with other adjustments not previously made adds
or  subtracts less than one percent (1%) of the shares of Common Stock for which
this  Warrant is exercisable immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount (except as
aforesaid)  which is postponed shall be carried forward and made as soon as such
adjustment,  together  with other adjustments required by this Section 4 and not
previously  made,  would  result  in  a  minimum  adjustment  or  on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to  have  occurred  at  the  close  of  business  on the date of its occurrence.

          (iii)     Fractional  Interests.  In  computing adjustments under this
                    ---------------------
Section  4,  fractional interests in Common Stock shall be taken into account to
the  nearest  one  one-hundredth  (1/100th)  of  a  share.

          (iv)     When  Adjustment  Not  Required.  If  the Issuer shall take a
                   -------------------------------
record  of  the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter  and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights,  then thereafter no adjustment shall be required by reason of the taking
of  such record and any such adjustment previously made in respect thereof shall
be  rescinded  and  annulled.

     (g)     Form  of  Warrant after Adjustments.  The form of this Warrant need
             -----------------------------------
not be changed because of any adjustments in the Warrant Price or the number and
kind  of  Securities  purchasable  upon  the  exercise  of  this  Warrant.

     (h)     Escrow  of  Warrant  Stock.  If  after  any  property  becomes
             --------------------------
distributable  pursuant  to this Section 4 by reason of the taking of any record
of  the  holders  of  Common Stock, but prior to the occurrence of the event for
which such record is taken, and the Holder exercises this Warrant, any shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the  last  shares  of  Common  Stock  for  which  this  Warrant  is  exercised
(notwithstanding  any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to  the  Holder upon and to the extent that the event actually takes place, upon
payment of the current Warrant Price. Notwithstanding any other provision to the
contrary  herein, if the event for which such record was taken fails to occur or
is  rescinded,  then  such  escrowed shares shall be cancelled by the Issuer and
escrowed  property  returned.

     5.     Notice  of Adjustments.  Whenever the Warrant Price or Warrant Share
            ----------------------
Number  shall  be  adjusted  pursuant  to Section 4 hereof (for purposes of this
Section  5,  each  an  "adjustment"), the Issuer shall cause its Chief Financial
                        ----------
Officer  to  prepare  and  execute  a  certificate  setting forth, in reasonable
detail,  the  event  requiring the adjustment, the amount of the adjustment, the
method  by  which  such  adjustment  was  calculated (including a description of

                                      -12-
<PAGE>
the  basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause  copies  of such certificate to be delivered to the Holder of this Warrant
promptly  after  each adjustment.  Any dispute between the Issuer and the Holder
of this Warrant with respect to the matters set forth in such certificate may at
the  option of the Holder of this Warrant be submitted to a national or regional
accounting  firm  chosen  by the Issuer and reasonably acceptable to the Holder,
which  firm shall deliver a written opinion as to such matters to the Issuer and
such  Holder  within  thirty  (30)  days after submission to it of such dispute.
Such  opinion  shall  be final and binding on the parties hereto.  The costs and
expenses  of the initial accounting firm shall be paid equally by the Issuer and
the  Holder.

     6.     Fractional  Shares.  No  fractional  shares of Warrant Stock will be
            ------------------
issued  in  connection  with any exercise hereof, but in lieu of such fractional
shares,  the  Issuer shall round the number of shares to be issued upon exercise
up  to  the  nearest  whole  number  of  shares.

     7.     Ownership Cap and Exercise Restriction.  Notwithstanding anything to
            ---------------------------------------
the  contrary set forth in this Warrant, at no time may a Holder of this Warrant
exercise  this  Warrant  if  the  number  of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common  Stock  owned by such Holder at such time, the number of shares of Common
Stock  which  would  result in such Holder beneficially owning (as determined in
accordance  with Section 13(d) of the Exchange Act and the rules  thereunder) in
excess  of  9.9%  of  the  then  issued  and outstanding shares of Common Stock;
provided,  however, that upon a holder of this Warrant providing the Issuer with
--------   -------
sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice")
                                                                 -------------
that  such  Holder  would like to waive this Section 7 with regard to any or all
shares  of  Common  Stock issuable upon exercise of this Warrant, this Section 7
will  be  of  no  force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this provision shall be
                                 --------  -------
of  no  further  force  or  effect  during  the  sixty-one (61) days immediately
preceding  the  expiration  of  the  term  of  this  Warrant.

     8.     Definitions.  For  the purposes of this Warrant, the following terms
            -----------
have  the  following  meanings:

          "Additional  Shares  of Common Stock" means all shares of Common Stock
           -----------------------------------
     issued by the Issuer after the Original Issue Date, and all shares of Other
     Common, if any, issued by the Issuer after the Original Issue Date, except:
     (i)  securities  issued  (other than for cash) in connection with a merger,
     acquisition,  or  consolidation,  (ii)  securities  issued  pursuant to the
     conversion  or  exercise of convertible or exercisable securities issued or
     outstanding  on  or  prior  to the date of the Purchase Agreement or issued
     pursuant  to  the Purchase Agreement (so long as the conversion or exercise
     price  in  such  securities  are  not  amended  to  lower such price and/or
     adversely  affect  the  Holders),  (iii) the Warrant Stock, (iv) securities
     issued  in  connection with bona fide strategic license agreements or other
     partnering  arrangements  so long as such issuances are not for the purpose
     of  raising  capital,  (v) Common Stock issued or the issuance or grants of
     options  to  purchase  Common  Stock  pursuant to the Issuer's stock option
     plans  and  employee  stock purchase plans outstanding as they exist on the
     date  of  the  Purchase  Agreement,  and  (vi)  any  warrants issued to the
     placement  agent and its designees for the transactions contemplated by the
     Purchase  Agreement.

                                      -13-
<PAGE>
          "Board"  shall  mean  the  Board  of  Directors  of  the  Issuer.
           -----

          "Capital  Stock" means and includes (i) any and all shares, interests,
           --------------
     participations or other equivalents of or interests in (however designated)
     corporate  stock,  including,  without  limitation,  shares of preferred or
     preference  stock,  (ii)  all  partnership  interests  (whether  general or
     limited)  in  any  Person  which  is  a  partnership,  (iii) all membership
     interests  or  limited liability company interests in any limited liability
     company,  and  (iv)  all equity or ownership interests in any Person of any
     other  type.

          "Certificate  of Incorporation" means the Certificate of Incorporation
           -----------------------------
     of  the  Issuer  as  in effect on the Original Issue Date, and as hereafter
     from time to time amended, modified, supplemented or restated in accordance
     with  the  terms  hereof  and  thereof  and  pursuant  to  applicable  law.

          "Common  Stock" means the Common Stock, $0.001 par value per share, of
           -------------
     the  Issuer and any other Capital Stock into which such stock may hereafter
     be  changed.

          "Common  Stock  Equivalent" means any Convertible Security or warrant,
           -------------------------
     option or other right to subscribe for or purchase any Additional Shares of
     Common  Stock  or  any  Convertible  Security.

          "Convertible  Securities"  means  evidences of Indebtedness, shares of
           -----------------------
     Capital  Stock  or  other  Securities  which  are  or  may  be  at any time
     convertible into or exchangeable for Additional Shares of Common Stock. The
     term  "Convertible  Security"  means  one  of  the  Convertible Securities.

          "Governmental  Authority"  means  any  governmental,  regulatory  or
           -----------------------
     self-regulatory  entity, department, body, official, authority, commission,
     board,  agency  or  instrumentality,  whether  federal, state or local, and
     whether  domestic  or  foreign.

          "Holders"  mean  the  Persons  who  shall  from  time  to time own any
           -------
     Warrant.  The  term  "Holder"  means  one  of  the  Holders.

          "Independent  Appraiser"  means  a  nationally  recognized  or  major
           ----------------------
     regional  investment  banking  firm or firm of independent certified public
     accountants  of  recognized  standing (which may be the firm that regularly
     examines  the financial statements of the Issuer) that is regularly engaged
     in  the  business of appraising the Capital Stock or assets of corporations
     or  other  entities  as  going  concerns,  and which is not affiliated with
     either  the  Issuer  or  the  Holder  of  any  Warrant.

          "Issuer"  means  Charys Holding Company, Inc., a Delaware corporation,
           ------
     and  its  successors.

          "Majority  Holders"  means  at  any  time  the  Holders  of  Warrants
           -----------------
     exercisable  for  a  majority of the shares of Warrant Stock issuable under
     the  Warrants  at  the  time  outstanding.

                                      -14-
<PAGE>
          "Original  Issue  Date"  means  December  4,  2006.
           ---------------------

          "OTC  Bulletin  Board"  means the over-the-counter electronic bulletin
           --------------------
     board.

          "Other  Common"  means  any  other  Capital Stock of the Issuer of any
           -------------
     class  which shall be authorized at any time after the date of this Warrant
     (other  than Common Stock) and which shall have the right to participate in
     the distribution of earnings and assets of the Issuer without limitation as
     to  amount.

          "Outstanding  Common  Stock"  means,  at any given time, the aggregate
           --------------------------
     amount  of  outstanding  shares  of  Common  Stock, assuming full exercise,
     conversion  or  exchange (as applicable) of all options, warrants and other
     Securities  which  are convertible into or exercisable or exchangeable for,
     and any right to subscribe for, shares of Common Stock that are outstanding
     at  such  time.

          "Person"  means an individual, corporation, limited liability company,
           ------
     partnership, joint stock company, trust, unincorporated organization, joint
     venture,  Governmental  Authority  or  other  entity  of  whatever  nature.

          "Per  Share  Market  Value"  means on any particular date (a) the last
           -------------------------
     closing  bid  price  per  share of the Common Stock on such date on the OTC
     Bulletin  Board  or another registered national stock exchange on which the
     Common  Stock  is  then  listed, or if there is no such price on such date,
     then the closing bid price on such exchange or quotation system on the date
     nearest  preceding such date, or (b) if the Common Stock is not listed then
     on  the  OTC  Bulletin Board or any registered national stock exchange, the
     last  closing bid price for a share of Common Stock in the over-the-counter
     market,  as reported by the OTC Bulletin Board or in the National Quotation
     Bureau  Incorporated  or  similar  organization or agency succeeding to its
     functions  of  reporting  prices) at the close of business on such date, or
     (c)  if  the Common Stock is not then reported by the OTC Bulletin Board or
     the  National  Quotation  Bureau  Incorporated  (or similar organization or
     agency  succeeding  to  its  functions of reporting prices), then the "Pink
     Sheet"  quotes  for  the  applicable  Trading  Days  preceding such date of
     determination,  or  (d) if the Common Stock is not then publicly traded the
     fair  market  value  of  a  share  of  Common  Stock  as  determined  by an
     Independent  Appraiser  selected  in  good  faith  by the Majority Holders;
     provided,  however,  that the Issuer, after receipt of the determination by
     --------   -------
     such  Independent  Appraiser,  shall have the right to select an additional
     Independent  Appraiser, in which case, the fair market value shall be equal
     to  the  average  of the determinations by each such Independent Appraiser;
     and provided, further that all determinations of the Per Share Market Value
         --------  -------
     shall  be  appropriately  adjusted for any stock dividends, stock splits or
     other  similar  transactions  during such period. The determination of fair
     market  value  by  an  Independent  Appraiser  shall be based upon the fair
     market value of the Issuer determined on a going concern basis as between a
     willing  buyer  and  a  willing seller and taking into account all relevant
     factors  determinative  of  value,  and  shall  be final and binding on all
     parties.  In  determining  the  fair  market  value of any shares of Common
     Stock,  no  consideration shall be given to any restrictions on transfer of
     the  Common

                                      -15-
<PAGE>
     Stock  imposed  by  agreement or by federal or state securities laws, or to
     the  existence  or  absence  of,  or  any  limitations  on,  voting rights.

          "Purchase  Agreement"  means  the  Note and Warrant Purchase Agreement
           -------------------
     dated  as  of  December  4,  2006,  among  the  Issuer  and the Purchasers.

          "Purchasers"  means  the  purchasers  of  the subordinated convertible
           ----------
     promissory  notes  and  the  Warrants  issued by the Issuer pursuant to the
     Purchase  Agreement.

          "Securities"  means  any  debt  or  equity  securities  of the Issuer,
           ----------
     whether  now  or  hereafter  authorized, any instrument convertible into or
     exchangeable for Securities or a Security, and any option, warrant or other
     right  to  purchase  or  acquire  any Security. "Security" means one of the
     Securities.

          "Securities  Act" means the Securities Act of 1933, as amended, or any
           ---------------
     similar  federal  statute  then  in  effect.

          "Subsidiary"  means  any corporation at least 50% of whose outstanding
           ----------
     Voting  Stock  shall  at  the  time  be owned directly or indirectly by the
     Issuer  or  by one or more of its Subsidiaries, or by the Issuer and one or
     more  of  its  Subsidiaries.

          "Term"  has  the  meaning  specified  in  Section  1  hereof.
           ----

          "Trading  Day"  means (a) a day on which the Common Stock is traded on
           ------------
     the OTC Bulletin Board, or (b) if the Common Stock is not traded on the OTC
     Bulletin  Board,  a  day  on  which  the  Common  Stock  is  quoted  in the
     over-the-counter  market  as  reported  by  the  National  Quotation Bureau
     Incorporated  (or  any  similar  organization  or  agency  succeeding  its
     functions  of  reporting prices); provided, however, that in the event that
                                       --------  -------
     the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
     then  Trading  Day  shall  mean any day except Saturday, Sunday and any day
     which  shall  be  a legal holiday or a day on which banking institutions in
     the State of New York are authorized or required by law or other government
     action  to  close.

          "Voting  Stock"  means,  as  applied  to  the  Capital  Stock  of  any
           -------------
     corporation,  Capital  Stock  of  any class or classes (however designated)
     having  ordinary voting power for the election of a majority of the members
     of  the  board  of directors (or other governing body) of such corporation,
     other  than Capital Stock having such power only by reason of the happening
     of  a  contingency.

          "Warrants" means the Warrants issued and sold pursuant to the Purchase
           --------
     Agreement,  including,  without  limitation,  this  Warrant,  and any other
     warrants  of  like tenor issued in substitution or exchange for any thereof
     pursuant  to  the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
     of  such  other  Warrants.

          "Warrant  Price"  initially means $4.00, as such price may be adjusted
           --------------
     from  time  to  time as shall result from the adjustments specified in this
     Warrant,  including  Section  4  hereto.

                                      -16-
<PAGE>
          "Warrant  Share  Number"  means  at  any  time the aggregate number of
           ----------------------
     shares  of  Warrant Stock which may at such time be purchased upon exercise
     of this Warrant, after giving effect to all prior adjustments and increases
     to  such  number  made  or  required  to  be  made  under the terms hereof.

          "Warrant  Stock"  means  Common  Stock  issuable  upon exercise of any
           --------------
     Warrant  or  Warrants  or  otherwise  issuable  pursuant  to any Warrant or
     Warrants.

     9.     Other  Notices.  In  case  at  any  time:
            --------------

                        (A)   the  Issuer  shall  make  any distributions to the
                              holders  of  Common  Stock;  or

                        (B)   the  Issuer  shall  authorize  the granting to all
                              holders of its Common Stock of rights to subscribe
                              for or purchase any shares of Capital Stock of any
                              class  or  other  rights;  or

                        (C)   there shall be any reclassification of the Capital
                              Stock  of  the  Issuer;  or

                        (D)   there  shall  be any capital reorganization by the
                              Issuer;  or

                        (E)   there  shall  be  any  (i) consolidation or merger
                              involving  the  Issuer  or  (ii) sale, transfer or
                              other  disposition  of all or substantially all of
                              the  Issuer's property, assets or business (except
                              a  merger  or  other  reorganization  in which the
                              Issuer  shall be the surviving corporation and its
                              shares  of  Capital  Stock  shall  continue  to be
                              outstanding  and  unchanged  and  except  a
                              consolidation,  merger,  sale,  transfer  or other
                              disposition  involving a wholly-owned Subsidiary);
                              or

                        (F)   there  shall  be  a  voluntary  or  involuntary
                              dissolution,  liquidation  or  winding-up  of  the
                              Issuer or any partial liquidation of the Issuer or
                              distribution  to  holders  of  Common  Stock;

then,  in each of such cases, the Issuer shall give written notice to the Holder
of  the  date on which (i) the books of the Issuer shall close or a record shall
be  taken  for  such  dividend, distribution or subscription rights or (ii) such
reorganization,  reclassification,  consolidation,  merger,  disposition,
dissolution,  liquidation  or  winding-up, as the case may be, shall take place.
Such  notice also shall specify the date as of which the holders of Common Stock
of  record  shall  participate  in  such  dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities  or  other  property  deliverable  upon  such  reorganization,
reclassification,  consolidation,  merger, disposition, dissolution, liquidation
or  winding-up,  as  the case may be. Such notice shall be given at least twenty
(20)  days prior to the action in question and not less than ten (10) days prior
to  the  record date or the date on which the

                                      -17-
<PAGE>
Issuer's transfer books are closed in respect thereto. This Warrant entitles the
Holder  to  receive copies of all financial and other information distributed or
required  to  be  distributed  to  the  holders  of  the  Common  Stock.

     10.     Amendment  and  Waiver.  Any term, covenant, agreement or condition
             ----------------------
in  this  Warrant  may be amended, or compliance therewith may be waived (either
generally  or  in  a  particular  instance  and  either  retroactively  or
prospectively),  by  a written instrument or written instruments executed by the
Issuer  and  the  Majority Holders; provided, however, that no such amendment or
                                    --------  -------
waiver  shall  reduce  the  Warrant  Share  Number,  increase the Warrant Price,
shorten  the  period  during  which  this Warrant may be exercised or modify any
provision  of this Section 10 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver  or  modification  of  any  provision  of  this  Warrant  unless the same
consideration  is  also  offered  to  all  holders  of  the  Warrants.

     11.     Governing Law; Jurisdiction.  This Warrant shall be governed by and
             ---------------------------
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  any of the conflicts of law principles which would result in
the  application  of  the substantive law of another jurisdiction.  This Warrant
shall  not  be  interpreted  or construed with any presumption against the party
causing  this Warrant to be drafted.  The Issuer and the Holder agree that venue
for  any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive  any  right  to  raise forum non conveniens or any other argument that New
York  is not the proper venue.  The Issuer and the Holder irrevocably consent to
personal  jurisdiction in the state and federal courts of the state of New York.
The  Issuer  and  the  Holder  consent to process being served in any such suit,
action  or  proceeding by mailing a copy thereof to such party at the address in
effect  for  notices to it under this Warrant and agrees that such service shall
constitute  good  and sufficient service of process and notice thereof.  Nothing
in this Section 11 shall affect or limit any right to serve process in any other
manner  permitted  by  law.  The  Issuer  and  the  Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this  Warrant  or the Purchase Agreement, shall be entitled to reimbursement for
reasonable  legal  fees from the non-prevailing party.  The parties hereby waive
all  rights  to  a  trial  by  jury.

     12.     Notices.  Any  notice,  demand,  request,  waiver  or  other
             -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:

If to the Issuer:             Charys Holding Company, Inc.
                              1117 Perimeter Center West, Suite N415
                              Atlanta, Georgia 30338
                              Attention: Chief Executive Officer
                              Tel. No.: (678) 443-2300

                                      -18-
<PAGE>
                              Fax  No.:  (678)  443-2320

with copies (which copies
shall not constitute notice)
to:                           Glast, Phillips & Murray, P.C.
                              815 Walker Street, Suite 1250
                              Houston, Texas 77002
                              Attention: Norman T. Reynolds, Esq.
                              Tel. No.: (713) 237-3135
                              Fax No.: (713) 237-3202

If to any Holder:             At  the  address  of  such  Holder  set  forth  on
                              Exhibit  A  to  this  Agreement,  with  copies  to
                              ----------
                              Holder's  counsel  as set forth on Exhibit A or as
                                                                 ---------
                              specified  in  writing  by such Holder with copies
                              to:

with copies (which copies
shall not constitute notice)
to:                           Kramer Levin Naftalis & Frankel LLP
                              1177  Avenue  of  the  Americas
                              New  York,  New  York  10036
                              Attention:  Christopher  S.  Auguste,  Esq.
                              Tel.  No.:  (212)  715-9100
                              Fax  No.:  (212)  715-8000

     Any  party  hereto  may from time to time change its address for notices by
giving  written  notice  of  such  changed  address  to  the other party hereto.

     13.     Warrant Agent.  The Issuer may, by written notice to each Holder of
             -------------
this  Warrant,  appoint  an agent having an office in New York, New York for the
purpose  of  issuing  shares  of  Warrant  Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to  subsection  (d)  of  Section  2 hereof or replacing this Warrant pursuant to
subsection  (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such  issuance,  exchange  or  replacement, as the case may be, shall be made at
such  office  by  such  agent.

     14.     Remedies.  The  Issuer  stipulates  that the remedies at law of the
             --------
Holder  of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are  not  and  will not be adequate and that, to the fullest extent permitted by
law,  such  terms  may  be  specifically  enforced  by a decree for the specific
performance  of  any  agreement  contained  herein or by an injunction against a
violation  of  any  of  the  terms  hereof  or  otherwise.

     15.     Successors  and  Assigns.  This  Warrant  and  the rights evidenced
             ------------------------
hereby  shall  inure  to  the  benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such  Holder  or  Holder  of  Warrant  Stock.

                                      -19-
<PAGE>
     16.     Modification  and Severability.  If, in any action before any court
             ------------------------------
or  agency  legally  empowered  to  enforce  any provision contained herein, any
provision  hereof  is  found  to  be unenforceable, then such provision shall be
deemed  modified to the extent necessary to make it enforceable by such court or
agency.  If  any such provision is not enforceable as set forth in the preceding
sentence,  the  unenforceability  of  such  provision shall not affect the other
provisions  of  this  Warrant,  but  this  Warrant shall be construed as if such
unenforceable  provision  had  never  been  contained  herein.

     17.     Headings.  The  headings  of  the  Sections of this Warrant are for
             --------
convenience  of  reference only and shall not, for any purpose, be deemed a part
of  this  Warrant.

     18.     Registration Rights.  The Holder of this Warrant is entitled to the
             -------------------
benefit  of  certain  registration  rights with respect to the shares of Warrant
Stock  issuable  upon  the  exercise  of  this  Warrant pursuant to that certain
Registration  Rights  Agreement, of even date herewith, by and among the Company
and  Persons  listed on Schedule I thereto (the "Registration Rights Agreement")
                                                 -----------------------------
and the registration rights with respect to the shares of Warrant Stock issuable
upon  the exercise of this Warrant by any subsequent Holder may only be assigned
in  accordance  with  the  terms  and  provisions  of  the  Registrations Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -20-
<PAGE>
     IN WITNESS WHEREOF, the Issuer has executed this Series C Warrant as of the
day  and  year  first  above  written.

                                   CHARYS  HOLDING  COMPANY,  INC.

                                   By: ------------------------------------
                                        Name:
                                        Title:

                                      -21-
<PAGE>
                                  EXERCISE FORM
                                SERIES C WARRANT

                          CHARYS HOLDING COMPANY, INC.

The  undersigned  _______________,  pursuant  to  the  provisions  of the within
Warrant,  hereby  elects  to  purchase  _____  shares  of Common Stock of Charys
Holding  Company,  Inc.  covered  by  the  within  Warrant.

Dated: _________________          Signature   ___________________________

                                  Address     _____________________

                                              _____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  date  of  Exercise:  _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.
The undersigned intends that payment of the Warrant Price shall be made as
(check one):

          Cash Exercise_______

          Cashless Exercise_______

If  the  Holder  has  elected  a  Cash Exercise, the Holder shall pay the sum of
$________  by  certified  or  official  bank check (or via wire transfer) to the
Issuer  in  accordance  with  the  terms  of  the  Warrant.

If  the Holder has elected a Cashless Exercise, a certificate shall be issued to
the  Holder  for  the  number of shares equal to the whole number portion of the
product  of the calculation set forth below, which is ___________.   The Company
shall  pay a cash adjustment in respect of the fractional portion of the product
of  the  calculation  set  forth  below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise,  which  product  is  ____________.

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

Where:

The  number  of  shares  of  Common  Stock  to  be  issued  to  the  Holder
__________________("X").

The  number  of  shares  of Common Stock purchasable upon exercise of all of the
Warrant  or, if only a portion of the Warrant is being exercised, the portion of
the  Warrant  being  exercised

                                      -22-
<PAGE>
___________________________  ("Y").

The  Warrant  Price  ______________  ("A").

The Per Share Market Value of one share of Common Stock  _______________________
("B").

                                   ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant  on  the  books  of  the  within  named  corporation.

Dated: _________________          Signature   ___________________________

                                  Address     _____________________

                                              _____________________

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the  right  to  purchase  _________  shares of Warrant Stock
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint ___________________, attorney, to transfer
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated: _________________          Signature   ___________________________

                                  Address     _____________________

                                              _____________________

                           FOR USE BY THE ISSUER ONLY:

This  Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________,  _____,  shares  of  Common  Stock  issued  therefor in the name of
_______________,  Warrant  No. W-_____ issued for ____ shares of Common Stock in
the  name  of  _______________.

                                      -23-
<PAGE>
                                   EXHIBIT C-5
                            FORM OF SERIES D WARRANT

                                        vii
<PAGE>
THIS  WARRANT  AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
"SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR  OTHERWISE  DISPOSED  OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL  REASONABLY  SATISFACTORY  TO  THE  ISSUER  THAT  REGISTRATION  OF  SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES  LAWS  IS  NOT  REQUIRED.

                          SERIES D WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                          CHARYS HOLDING COMPANY, INC.

                            Expires December 4, 2011

No.:  W-D-06-__                                Number  of  Shares:  ____________
Date  of  Issuance:  December  4,  2006

     FOR  VALUE  RECEIVED,  the  undersigned,  Charys  Holding  Company, Inc., a
Delaware  corporation  (together with its successors and assigns, the "Issuer"),
                                                                       ------
hereby  certifies  that ___________________________ or its registered assigns is
entitled  to  subscribe  for  and  purchase,  during  the  Term  (as hereinafter
defined),  up to ____________________ (__________) shares (subject to adjustment
as  hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable  Common Stock of the Issuer, at an exercise price per share equal
to  the  Warrant  Price  then in effect, subject, however, to the provisions and
upon  the terms and conditions hereinafter set forth.  Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified  in  Section  8  hereof.

     1.     Term.  The  term  of this Warrant shall commence on December 4, 2006
            ----
and  shall  expire  at 5:00 p.m., Eastern Time, on December 4, 2011 (such period
being  the  "Term").
             ----

     2.     Method  of  Exercise; Payment; Issuance of New Warrant; Transfer and
            --------------------------------------------------------------------
Exchange.
--------

     (a)     Time  of Exercise.  The purchase rights represented by this Warrant
             -----------------
may  be  exercised in whole or in part during the Term for such number of shares
of  Common Stock that have been exercised by the Holder pursuant to the Series J
Warrant  issued  by the Issuer to the Holder pursuant to the Purchase Agreement.

     (b)     Method  of  Exercise.  The Holder hereof may exercise this Warrant,
             --------------------
in  whole  or  in part, by the surrender of this Warrant (with the exercise form
attached  hereto  duly  executed)  at

                                     -1-
<PAGE>
the  principal  office  of  the  Issuer,  and by the payment to the Issuer of an
amount  of  consideration  therefor  equal to the Warrant Price in effect on the
date  of  such exercise multiplied by the number of shares of Warrant Stock with
respect  to which this Warrant is then being exercised, payable at such Holder's
election  (i)  by  certified  or  official  bank check or by wire transfer to an
account designated by the Issuer, (ii) by "cashless exercise" in accordance with
the provisions of subsection (c) of this Section 2, but only when a registration
statement under the Securities Act providing for the resale of the Warrant Stock
is  not  then  in  effect, or (iii) by a combination of the foregoing methods of
payment  selected  by  the  Holder  of  this  Warrant,  if  applicable.

     (c)     Cashless  Exercise.  Notwithstanding  any  provisions herein to the
             ------------------
contrary  and  commencing  one (1) year following the Original Issue Date if (i)
the  Per  Share  Market  Value  of one share of Common Stock is greater than the
Warrant  Price  (at  the  date  of  calculation  as  set forth below) and (ii) a
registration  statement under the Securities Act providing for the resale of the
Warrant  Stock  is not then in effect by the date such registration statement is
required  to  be  effective  pursuant  to  the Registration Rights Agreement (as
defined  in  the  Purchase  Agreement)  or  not effective at any time during the
Effectiveness  Period  (as  defined  in  the  Registration  Rights Agreement) in
accordance  with  the  terms  of  the  Registration Rights Agreement, unless the
registration statement is not effective as a result of the Issuer exercising its
rights  under  Section  3(n)  of  the  Registration Rights Agreement, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by  a  cashless  exercise and shall receive the number of shares of Common Stock
equal  to  an  amount  (as determined below) by surrender of this Warrant at the
principal  office  of  the  Issuer together with the properly endorsed Notice of
Exercise  in which event the Issuer shall issue to the Holder a number of shares
of  Common  Stock  computed  using  the  following  formula:

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

Where     X =     the number of shares of Common Stock to be issued to the
                  Holder.

          Y =     the  number  of  shares  of  Common  Stock   purchasable  upon
                  exercise  of  all  of  the  Warrant or,  if only a portion  of
                  the  Warrant  is  being exercised, the portion of the  Warrant
                  being  exercised.

          A =     the Warrant Price.

          B =     the  Per  Share  Market  Value  of  one share of Common Stock.

     (d)     Issuance  of  Stock  Certificates.  In the event of any exercise of
             ---------------------------------
this  Warrant in accordance with and subject to the terms and conditions hereof,
certificates  for  the  shares  of Warrant Stock so purchased shall be dated the
date  of  such  exercise  and delivered to the Holder hereof within a reasonable
time,  not  exceeding  three (3) Trading Days after such exercise (the "Delivery
                                                                        --------
Date")  or, at the request of the Holder (provided that a registration statement
----
under  the  Securities Act providing for the resale of the Warrant Stock is then
in effect), issued and delivered to the Depository Trust Company ("DTC") account
                                                                   ---
on  the  Holder's  behalf  via  the  Deposit  Withdrawal Agent Commission System
("DWAC")  within  a  reasonable time, not exceeding three (3) Trading Days after
  ----
such  exercise,  and  the  Holder  hereof  shall  be  deemed  for

                                     -2-
<PAGE>
all  purposes to be the holder of the shares of Warrant Stock so purchased as of
the  date  of such exercise.  Notwithstanding the foregoing to the contrary, the
Issuer  or  its  transfer agent shall only be obligated to issue and deliver the
shares  to  the  DTC  on  a  holder's  behalf  via  DWAC  if such exercise is in
connection  with  a sale and the Issuer and its transfer agent are participating
in DTC through the DWAC system.  The Holder shall deliver this original Warrant,
or  an  indemnification  undertaking with respect to such Warrant in the case of
its  loss,  theft  or  destruction,  at  such  time  that  this Warrant is fully
exercised.  With  respect to partial exercises of this Warrant, the Issuer shall
keep  written  records  of the number of shares of Warrant Stock exercised as of
each  date  of  exercise.

     (e)     Compensation  for  Buy-In on Failure to Timely Deliver Certificates
             -------------------------------------------------------------------
Upon  Exercise.  In addition to any other rights available to the Holder, if the
--------------
Issuer fails to cause its transfer agent to transmit to the Holder a certificate
or  certificates  representing  the  Warrant Stock pursuant to an exercise on or
before  the  Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock  to  deliver  in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
                                                              -------
Issuer  shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell  order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number  of  shares  of  Warrant Stock for which such exercise was not honored or
deliver  to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder.  For  example,  if  the  Holder purchases Common Stock having a total
purchase  price  of  $11,000  to  cover  a  Buy-In  with respect to an attempted
exercise  of  shares of Common Stock with an aggregate sale price giving rise to
such  purchase  obligation  of  $10,000,  under  clause  (1)  of the immediately
preceding  sentence  the  Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the  Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer.  Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive  relief  with  respect  to  the  Issuer's  failure  to timely deliver
certificates  representing  shares of Common Stock upon exercise of this Warrant
as  required  pursuant  to  the  terms  hereof.

     (f)     Transferability  of  Warrant.  Subject to Section 2(h) hereof, this
             ----------------------------
Warrant may be transferred by a Holder, in whole or in part, without the consent
of  the  Issuer.  If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized  attorney,  upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached  hereto)  and  upon  payment  of  any  necessary  transfer tax or other
governmental charge imposed upon such transfer.  This Warrant is exchangeable at
the  principal  office of the Issuer for Warrants to purchase the same aggregate
number  of  shares  of Warrant Stock, each new Warrant to represent the right to
purchase  such  number  of  shares  of  Warrant Stock as the Holder hereof shall
designate  at  the  time  of such exchange.  All Warrants issued on transfers or

                                     -3-
<PAGE>
exchanges  shall  be  dated  the Original Issue Date and shall be identical with
this  Warrant  except  as  to  the  number  of  shares of Warrant Stock issuable
pursuant  thereto.

     (g)     Continuing Rights of Holder.  The Issuer will, at the time of or at
             ---------------------------
any  time  after  each  exercise of this Warrant, upon the request of the Holder
hereof,  acknowledge in writing the extent, if any, of its continuing obligation
to  afford  to  such Holder all rights to which such Holder shall continue to be
entitled  after  such  exercise  in  accordance  with the terms of this Warrant,
provided  that  if  any  such  Holder  shall  fail to make any such request, the
--------
failure  shall not affect the continuing obligation of the Issuer to afford such
rights  to  such  Holder.

     (h)     Compliance  with  Securities  Laws.
             -----------------------------------

          (i)     The Holder of this Warrant, by acceptance hereof, acknowledges
     that  this  Warrant  and  the  shares  of  Warrant  Stock to be issued upon
     exercise  hereof are being acquired solely for the Holder's own account and
     not  as  a  nominee  for  any other party, and for investment, and that the
     Holder  will  not  offer,  sell or otherwise dispose of this Warrant or any
     shares  of  Warrant Stock to be issued upon exercise hereof except pursuant
     to  an effective registration statement, or an exemption from registration,
     under  the  Securities  Act  and  any  applicable  state  securities  laws.

          (ii)     Except as provided in paragraph (iii) below, this Warrant and
     all  certificates  representing  shares  of  Warrant  Stock  issued  upon
     exercise  hereof  shall  be  stamped  or  imprinted  with  a  legend  in
     substantially  the  following  form:

          THIS  WARRANT  AND  THE SHARES OF COMMON STOCK ISSUABLE UPON
          EXERCISE  HEREOF   HAVE  NOT   BEEN  REGISTERED   UNDER  THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
          ANY  STATE  SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
          OR  OTHERWISE  DISPOSED  OF   UNLESS  REGISTERED  UNDER  THE
          SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
          THE  ISSUER SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
          REASONABLY  SATISFACTORY  TO THE ISSUER THAT REGISTRATION OF
          SUCH  SECURITIES  UNDER  THE  SECURITIES  ACT  AND UNDER THE
          PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT
          REQUIRED.

          (iii)     The Issuer agrees to reissue this  Warrant  or  certificates
     representing  any  of  the  Warrant  Stock,  without  the  legend set forth
     above if at such time, prior to making any transfer of any such securities,
     the  Holder  shall  give written notice to the Issuer describing the manner
     and  terms  of  such transfer and the conditions set forth below shall have
     been  satisfied.  Such  proposed  transfer  will not be effected until: (a)
     either  (i)  the  Issuer  has  received  an  opinion  of counsel reasonably
     satisfactory  to  the  Issuer,  to the effect that the registration of such
     securities under the Securities Act is not required in connection with such
     proposed  transfer,  (ii)  a  registration  statement  under the Securities

                                     -4-
<PAGE>
     Act  covering  the  Warrant  Stock  subject  to  such  proposed disposition
     has  been  filed  by the Issuer with the Securities and Exchange Commission
     and has become effective and continues to be effective under the Securities
     Act,  (iii)  the Issuer has received other evidence reasonably satisfactory
     to the Issuer that such registration and qualification under the Securities
     Act and state securities laws are not required, or (iv) the Holder provides
     the  Issuer  with  reasonable  assurances  that  such  security can be sold
     pursuant  to  Rule  144  under  the  Securities Act; and (b) either (i) the
     Issuer  has  received  an opinion of counsel reasonably satisfactory to the
     Issuer,  to  the  effect  that  registration  or  qualification  under  the
     securities  or  "blue  sky" laws of any state is not required in connection
     with  such  proposed  disposition, or (ii) compliance with applicable state
     securities or "blue sky" laws has been effected or a valid exemption exists
     with  respect  thereto.  The  Issuer will respond to any such notice from a
     holder  within three (3) Trading Days. In the case of any proposed transfer
     under  this  Section 2(h), the Issuer will use reasonable efforts to comply
     with  any such applicable state securities or "blue sky" laws, but shall in
     no  event  be required, (x) to qualify to do business in any state where it
     is  not then qualified, (y) to take any action that would subject it to tax
     or  to  the  general  service  of process in any state where it is not then
     subject,  or  (z) to comply with state securities or "blue sky" laws of any
     state  for which registration by coordination is unavailable to the Issuer.
     The  restrictions  on  transfer  contained in this Section 2(h) shall be in
     addition  to,  and  not  by way of limitation of, any other restrictions on
     transfer  contained  in  any  other  section  of  this  Warrant. Whenever a
     certificate  representing  the  Warrant Stock is required to be issued to a
     the  Holder  without  a legend, in lieu of delivering physical certificates
     representing  the Warrant Stock, the Issuer shall, upon the request of such
     Holder,  cause  its  transfer  agent to electronically transmit the Warrant
     Stock  to  the Holder by crediting the account of the Holder's Prime Broker
     with  DTC  through its DWAC system (to the extent not inconsistent with any
     provisions  of  this  Warrant  or  the  Purchase Agreement), if applicable.

     (i)     Accredited  Investor  Status.  In  no event may the Holder exercise
             ----------------------------
this  Warrant  in whole or in part unless the Holder is an "accredited investor"
as  defined  in  Regulation  D  under  the  Securities  Act.

     3.     Stock  Fully  Paid;  Reservation  and  Listing of Shares; Covenants.
            -------------------------------------------------------------------

     (a)     Stock  Fully  Paid.  The Issuer represents, warrants, covenants and
             ------------------
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this  Warrant  hereunder  will, when issued in accordance with the terms of this
Warrant,  be  duly authorized, validly issued, fully paid and non-assessable and
free  from  all  taxes,  liens and charges created by or through the Issuer with
respect  to issuance (other than restrictions under federal and state securities
laws).  The  Issuer  further  covenants and agrees that during the period within
which  this  Warrant  may  be  exercised,  the  Issuer  will  at  all times have
authorized  and  reserved  for the purpose of the issuance upon exercise of this
Warrant a sufficient number of authorized but unissued shares of Common Stock to
provide  for  the  exercise of this Warrant without regard to any limitations on
exercise.

     (b)     Reservation.  If any shares of Common Stock required to be reserved
             -----------
for  issuance  upon  exercise of this Warrant or as otherwise provided hereunder
require  registration  or

                                     -5-
<PAGE>
qualification  with  any  Governmental  Authority under any federal or state law
before  such  shares  may  be  so  issued, the Issuer will in good faith use its
commercially  reasonable  efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified.  To the extent permissible
under  the  applicable  securities  exchange or market rules on which the Common
Stock  is  traded or quoted, if the Issuer shall list any shares of Common Stock
on  any securities exchange or market it will, at its expense, list thereon, and
maintain  and  increase  when  necessary such listing, of, all shares of Warrant
Stock  from  time  to  time issued upon exercise of this Warrant or as otherwise
provided  hereunder  (provided  that  such  Warrant  Stock  has  been registered
pursuant  to  a registration statement under the Securities Act then in effect),
and,  all  unissued  shares  of  Warrant  Stock  which  are at any time issuable
hereunder, so long as any shares of Common Stock shall be so listed.  The Issuer
will  also so list on each securities exchange or market, and will maintain such
listing  of,  any  other  securities  which  the Holder of this Warrant shall be
entitled  to  receive  upon  the  exercise  of  this  Warrant if at the time any
securities  of  the  same  class  shall be listed on such securities exchange or
market  by  the  Issuer.

     (c)     Covenants.  The  Issuer  shall not by any action including, without
             ---------
limitation,  amending  the  Certificate  of  Incorporation or the by-laws of the
Issuer,  or  through  any  reorganization,  transfer  of  assets, consolidation,
merger,  dissolution,  issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and  in  the  taking  of  all such actions as may be necessary or appropriate to
protect  the  rights  of  the  Holder  hereof  against  dilution  (to the extent
specifically provided herein) or impairment.  Without limiting the generality of
the  foregoing,  the  Issuer  will  (i) not permit the par value, if any, of its
Common  Stock  to  exceed  the  then  effective Warrant Price, (ii) not amend or
modify  any  provision  of  the  Certificate  of Incorporation or by-laws of the
Issuer  in  any  manner that would adversely affect the rights of the Holders of
the Warrants, (iii) take all such action as may be reasonably necessary in order
that  the  Issuer  may  validly  and  legally issue fully paid and nonassessable
shares  of  Common  Stock, free and clear of any liens, claims, encumbrances and
restrictions  (other  than as provided herein and restrictions under federal and
state  securities  laws)  upon  the  exercise  of this Warrant, and (iv) use its
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents  from  any public regulatory body having jurisdiction thereof as may be
reasonably  necessary to enable the Issuer to perform its obligations under this
Warrant.

     (d)     Loss,  Theft,  Destruction  of  Warrants.  Upon receipt of evidence
             ----------------------------------------
satisfactory  to the Issuer of the ownership of and the loss, theft, destruction
or  mutilation  of  any  Warrant  and,  in  the  case of any such loss, theft or
destruction,  upon  receipt  of indemnity or security satisfactory to the Issuer
or,  in the case of any such mutilation, upon surrender and cancellation of such
Warrant,  the  Issuer  will  make  and  deliver,  in  lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right  to  purchase  the  same  number  of  shares  of  Common  Stock.

     (e)     Payment  of Taxes.  The Issuer will pay any documentary stamp taxes
             -----------------
attributable to the initial issuance of the Warrant Stock issuable upon exercise
of this Warrant; provided, however, that the Issuer shall not be required to pay
                 --------  -------
any tax or taxes which may be payable in respect of any transfer involved in the
issuance  or  delivery  of any certificates representing Warrant Stock in a name
other  than  that  of  the  Holder  in  respect to which such shares are issued.

                                     -6-
<PAGE>
     4.     Adjustment  of  Warrant  Price  and  Number  of Shares Issuable Upon
            --------------------------------------------------------------------
Exercise.  The  Warrant  Price  and the Warrant Share Number shall be subject to
--------
adjustment  from  time  to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section  5.

     (a)     Recapitalization,  Reorganization, Reclassification, Consolidation,
             -------------------------------------------------------------------
Merger  or  Sale.
----------------

          (i)  In  case the Issuer after the Original Issue Date shall do any of
     the  following  (each,  a  "Triggering  Event"):  (a)  consolidate or merge
                                 -----------------
     with or into any other Person and the Issuer shall not be the continuing or
     surviving  corporation  of  such consolidation or merger, or (b) permit any
     other  Person  to  consolidate with or merge into the Issuer and the Issuer
     shall  be  the  continuing or surviving Person but, in connection with such
     consolidation  or  merger, any Capital Stock of the Issuer shall be changed
     into  or  exchanged for Securities of any other Person or cash or any other
     property,  or  (c)  transfer  all or substantially all of its properties or
     assets  to  any  other  Person,  or  (d) effect a capital reorganization or
     reclassification  of  its Capital Stock, then, and in the case of each such
     Triggering  Event,  proper provision shall be made to the Warrant Price and
     the  Warrant  Share Number of shares of Warrant Stock that may be purchased
     upon  exercise of this Warrant so that, upon the basis and the terms and in
     the  manner  provided  in this Warrant, the Holder of this Warrant shall be
     entitled  upon  the  exercise  hereof at any time after the consummation of
     such Triggering Event, to the extent this Warrant is not exercised prior to
     such  Triggering Event, to receive at the Warrant Price as adjusted to take
     into  account  the  consummation  of  such Triggering Event, in lieu of the
     Common  Stock  issuable  upon  such  exercise of this Warrant prior to such
     Triggering  Event,  the  Securities, cash and property to which such Holder
     would  have been entitled upon the consummation of such Triggering Event if
     such  Holder  had  exercised  the  rights  represented  by  this  Warrant
     immediately  prior  thereto  (including the right of a shareholder to elect
     the type of consideration it will receive upon a Triggering Event), subject
     to  adjustments  (subsequent to such corporate action) as nearly equivalent
     as  possible  to  the adjustments provided for elsewhere in this Section 4,
     and  the  Warrant  Price  shall be adjusted to equal the product of (A) the
     closing  price  of  the  common  stock  of  the  continuing  or  surviving
     corporation as a result of such Triggering Event as of the date immediately
     preceding  the date of the consummation of such Triggering Event multiplied
     by  (B) the quotient of (i) the Warrant Price divided by (ii) the Per Share
     Market  Value  of the Common Stock as of the date immediately preceding the
     Original  Issue Date; provided, however, the Holder at its option may elect
                           --------  -------
     to  receive an amount in cash equal to the value of this Warrant calculated
     in  accordance  with  the  Black-Scholes  formula.  Immediately  upon  the
     occurrence  of  a  Triggering  Event, the Issuer shall notify the Holder in
     writing  of  such  Triggering  Event  and  provide  the  calculations  in
     determining the number of shares of Warrant Stock issuable upon exercise of
     the  new warrant and the adjusted Warrant Price. Upon the Holder's request,
     the  continuing  or  surviving  corporation  as a result of such Triggering
     Event  shall issue to the Holder a new warrant of like tenor evidencing the
     right  to  purchase  the adjusted number of shares of Warrant Stock and the
     adjusted Warrant Price pursuant to the terms and provisions of this Section
     4(a)(i).  Notwithstanding  the  foregoing  to  the  contrary,  this Section
     4(a)(i)  shall  only  apply  if  the

                                     -7-
<PAGE>
     surviving  entity  pursuant  to  any  such  Triggering  Event  is a company
     that has a class of equity securities registered pursuant to the Securities
     Exchange  Act of 1934, as amended, and its common stock is listed or quoted
     on  a  national securities exchange, national automated quotation system or
     the  OTC Bulletin Board. In the event that the surviving entity pursuant to
     any  such  Triggering  Event  is  not  a  public company that is registered
     pursuant  to the Securities Exchange Act of 1934, as amended, or its common
     stock  is  not listed or quoted on a national securities exchange, national
     automated quotation system or the OTC Bulletin Board, then the Holder shall
     have  the  right  to  demand that the Issuer pay to the Holder an amount in
     cash  equal  to the value of this Warrant calculated in accordance with the
     Black-Scholes  formula.

          (ii)     In the event that the Holder has elected not to exercise this
     Warrant  prior  to  the  consummation  of  a  Triggering Event and has also
     elected not to receive an amount in cash equal to the value of this Warrant
     calculated  in  accordance  with  the Black-Scholes formula pursuant to the
     provisions  of  Section  4(a)(i)  above,  so  long  as the surviving entity
     pursuant  to  any  Triggering Event is a company that has a class of equity
     securities  registered  pursuant to the Securities Exchange Act of 1934, as
     amended,  and its common stock is listed or quoted on a national securities
     exchange,  national  automated  quotation system or the OTC Bulletin Board,
     the  surviving  entity and/or each Person (other than the Issuer) which may
     be  required  to deliver any Securities, cash or property upon the exercise
     of  this  Warrant  as  provided  herein shall assume, by written instrument
     delivered  to,  and reasonably satisfactory to, the Holder of this Warrant,
     (A)  the  obligations  of  the Issuer under this Warrant (and if the Issuer
     shall  survive  the  consummation of such Triggering Event, such assumption
     shall  be  in  addition  to,  and  shall  not  release the Issuer from, any
     continuing  obligations  of  the  Issuer  under  this  Warrant) and (B) the
     obligation  to deliver to such Holder such Securities, cash or property as,
     in  accordance  with  the foregoing provisions of this subsection (a), such
     Holder  shall  be entitled to receive, and the surviving entity and/or each
     such  Person  shall  have  similarly delivered to such Holder an opinion of
     counsel  for  the  surviving  entity and/or each such Person, which counsel
     shall  be  reasonably satisfactory to such Holder, or in the alternative, a
     written  acknowledgement  executed  by  the  President  or  Chief Financial
     Officer  of the Issuer, stating that this Warrant shall thereafter continue
     in  full  force  and  effect  and  the  terms  hereof  (including,  without
     limitation,  all  of  the  provisions  of  this  subsection  (a))  shall be
     applicable  to  the Securities, cash or property which the surviving entity
     and/or  each  such  Person  may be required to deliver upon any exercise of
     this  Warrant  or  the  exercise  of  any  rights  pursuant  hereto.

          (b)     Stock  Dividends,  Subdivisions  and  Combinations.  If at any
                  --------------------------------------------------
time  the  Issuer  shall:

                    (i)     make  or  issue or set a record date for the holders
     of the Common Stock for the purpose of entitling them to receive a dividend
     payable  in,  or  other  distribution  of,  shares  of  Common  Stock,

                    (ii)     subdivide  its  outstanding  shares of Common Stock
     into  a  larger  number  of  shares  of  Common  Stock,  or

                                     -8-
<PAGE>
                    (iii)     combine  its  outstanding  shares  of Common Stock
     into  a  smaller  number  of  shares  of  Common  Stock,

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to  equal the number of shares of Common Stock which a record holder of the same
number  of  shares  of  Common  Stock  for  which  this  Warrant  is exercisable
immediately  prior  to  the occurrence of such event would own or be entitled to
receive  after  the  happening  of such event, and (2) the Warrant Price then in
effect  shall  be  adjusted  to  equal  (A)  the  Warrant  Price  then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such  adjustment.

     (c)     Certain  Other Distributions.  If at any time the Issuer shall make
             ----------------------------
or  issue  or  set  a  record  date  for the holders of the Common Stock for the
purpose  of  entitling  them  to receive any divi-dend or other distribution of:

                    (i)     cash  (other  than  a  cash  dividend payable out of
     earnings  or  earned surplus legally available for the payment of dividends
     under  the  laws  of  the  jurisdiction  of  incorporation  of the Issuer),

                    (ii)     any  evidences  of  its indebtedness, any shares of
     stock  of  any  class  or  any  other  securities or property of any nature
     whatsoever  (other than cash, Common Stock Equivalents or Additional Shares
     of  Common  Stock),  or

                    (iii)     any  warrants  or other rights to subscribe for or
     purchase  any  evidences  of  its  indebtedness, any shares of stock of any
     class  or  any other securities or property of any nature whatsoever (other
     than  cash, Common Stock Equivalents or Additional Shares of Common Stock),

then  (1)  the  number  of  shares  of  Common  Stock  for which this Warrant is
exercisable  shall  be  adjusted to equal the product of the number of shares of
Common  Stock  for  which  this Warrant is exercisable immediately prior to such
adjustment  multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator  of  which  shall  be  such  Per Share Market Value minus the amount
allocable  to one share of Common Stock of any such cash so distributable and of
the  fair  value (as determined in good faith by the Board and, upon the request
of  the Holder, supported by an opinion from an investment banking firm mutually
agreed  upon  by  the  Issuer  and  the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in  effect  shall  be  adjusted  to  equal  (A) the Warrant Price then in effect
multiplied  by  the  number  of shares of Common Stock for which this Warrant is
exercisable  immediately  prior  to  the adjustment divided by (B) the number of
shares  of  Common Stock for which this Warrant is exercisable immediately after
such adjustment.  A reclassification of the Common Stock (other than a change in
par  value, or from par value to no par value or from no par value to par value)
into  shares  of  Common  Stock  and shares of any other class of stock shall be
deemed  a  distribution by the Issuer to the holders of its Common Stock of such
shares  of  such  other  class

                                     -9-
<PAGE>
of  stock within the meaning of this Section 4(c) and, if the outstanding shares
of  Common  Stock  shall be changed into a larger or smaller number of shares of
Common  Stock  as a part of such reclassification, such change shall be deemed a
subdivision  or  combination,  as  the case may be, of the outstanding shares of
Common  Stock  within  the  meaning  of  Section  4(b).

     (d)     Issuance  of  Additional  Shares  of  Common  Stock.
             ---------------------------------------------------

          (i)     For  a  period  of eighteen (18) months following the Original
Issue  Date,  in  the  event the Issuer shall at any time following the Original
Issue  Date  issue  any  Additional  Shares  of  Common Stock (otherwise than as
provided  in  the foregoing subsections (a) through (c) of this Section 4), at a
price  per  share  less  than  the  Warrant  Price  then  in  effect  or without
consideration,  then the Warrant Price upon each such issuance shall be adjusted
to  that  price  determined by multiplying the Warrant Price then in effect by a
fraction:

               (A)     the  numerator of which shall be equal to the sum  of (x)
          the  number of shares of Outstanding Common Stock immediately prior to
          the  issuance  of  such Additional Shares of Common Stock plus (y) the
                                                                    ----
          number  of shares of Common Stock (rounded to the nearest whole share)
          which  the  aggregate  consideration  for  the  total  number  of such
          Additional  Shares of Common Stock so issued would purchase at a price
          per  share  equal  to  the  Warrant  Price  then  in  effect,  and

               (B)     the denominator of which shall be equal to the number  of
          shares  of  Outstanding Common Stock immediately after the issuance of
          such  Additional  Shares  of  Common  Stock.

          (ii)     No  adjustment  of  the  number of shares of Common Stock for
which  this  Warrant  shall  be exercisable shall be made under paragraph (i) of
Section  4(d)  upon  the issuance of any Additional Shares of Common Stock which
are issued pursuant to the exercise of any Common Stock Equivalents, if any such
adjustment  shall  previously  have  been  made upon the issuance of such Common
Stock Equivalents (or upon the issuance of any warrant or other rights therefor)
pursuant  to  Section  4(e).

     (e)     Issuance  of  Common  Stock  Equivalents.  For a period of eighteen
             ----------------------------------------
(18)  months  following the Original Issue Date, if at any time the Issuer shall
take  a  record  of the holders of its Common Stock for the purpose of entitling
them  to  receive a distribution of, or shall in any manner (whether directly or
by  assumption  in  a  merger  in which the Issuer is the surviving corporation)
issue  or  sell,  any  Common  Stock  Equivalents,  whether or not the rights to
exchange  or  convert  thereunder are immediately exercisable, and the price per
share  for which Common Stock is issuable upon such conversion or exchange shall
be  less  than the Warrant Price in effect immediately prior to the time of such
issue  or  sale, or if, after any such issuance of Common Stock Equivalents, the
price  per  share  for  which  Additional Shares of Common Stock may be issuable
thereafter  is  amended  or adjusted, and such price as so amended shall be less
than  the  Warrant  Price in effect at the time of such amendment or adjustment,
then  the  Warrant Price then in effect shall be adjusted as provided in Section
4(d).  No  further adjustments of the Warrant Share Number and the Warrant Price
then  in  effect  shall  be made upon the actual issue of such Common Stock upon
conversion  or  exchange  of  such  Common  Stock  Equivalents.

                                      -10-
<PAGE>
     (f)     Other Provisions applicable to Adjustments under this Section.  The
             -------------------------------------------------------------
following  provisions  shall  be applicable  to the making of adjustments of the
Warrant  Share  Number and the Warrant Price then in effect provided for in this
Section  4:

          (i)     Computation  of  Consideration.  To  the  extent  that  any
                  ------------------------------
Additional  Shares  of  Common  Stock  or  any  Common Stock Equivalents (or any
warrants  or  other rights therefor) shall be issued for cash consideration, the
consideration  received  by  the Issuer therefor shall be the amount of the cash
received  by  the Issuer therefor, or, if such Additional Shares of Common Stock
or  Common  Stock  Equivalents  are  offered by the Issuer for subscription, the
subscription  price,  or,  if  such  Additional Shares of Common Stock or Common
Stock  Equivalents  are  sold  to  underwriters  or  dealers for public offering
without  a subscription offering, the initial public offering price (in any such
case  subtracting any amounts paid or receivable for accrued interest or accrued
dividends  and  without  taking  into  account  any  compensation,  discounts or
expenses  paid  or  incurred  by  the  Issuer for and in the underwriting of, or
otherwise  in  connection  with,  the issuance thereof).  In connection with any
merger  or consolidation in which the Issuer is the surviving corporation (other
than  any  consolidation or merger in which the previously outstanding shares of
Common  Stock  of  the  Issuer shall be changed to or exchanged for the stock or
other  securities of another corporation), the amount of consideration therefore
shall  be,  deemed  to  be  the fair value, as determined reasonably and in good
faith  by  the  Board,  of  such  portion  of  the  assets  and  business of the
nonsurviving  corporation  as the Board may determine to be attributable to such
shares  of  Common  Stock  or Common Stock Equivalents, as the case may be.  The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants  or  other  rights  to  subscribe for or purchase the same shall be the
consideration  received  by the Issuer for issuing such warrants or other rights
plus  the  additional  consideration payable to the Issuer upon exercise of such
warrants or other rights.  The consideration for any Additional Shares of Common
Stock  issuable  pursuant  to the terms of any Common Stock Equivalents shall be
the  consideration  received by the Issuer for issuing war-rants or other rights
to  subscribe  for  or  purchase  such  Common  Stock  Equivalents,  plus  the
consideration  paid  or payable to the Issuer in respect of the subscription for
or purchase of such Common Stock Equivalents, plus the additional consideration,
if  any,  payable  to the Issuer upon the exercise of the right of conversion or
exchange in such Common Stock Equivalents.  In the event of any consolidation or
merger  of the Issuer in which the Issuer is not the surviving corporation or in
which  the  previously outstanding shares of Common Stock of the Issuer shall be
changed  into  or  exchanged  for  the  stock  or  other  securities  of another
corporation,  or  in  the  event  of any sale of all or substantially all of the
assets  of  the  Issuer  for  stock  or other securities of any corporation, the
Issuer shall be deemed to have issued a number of shares of its Common Stock for
stock  or  securities or other property of the other corporation computed on the
basis  of the actual exchange ratio on which the transaction was predicated, and
for  a  consideration  equal  to  the  fair  market  value  on  the date of such
transaction  of  all  such  stock  or  securities or other property of the other
corporation.  In  the  event  any  consideration  received by the Issuer for any
securities  consists  of property other than cash, the fair market value thereof
at  the  time  of  issuance or as otherwise applicable shall be as determined in
good  faith by the Board.  In the event Common Stock is issued with other shares
or securities or other assets of the Issuer for consideration which covers both,
the  consideration  computed  as  provided  in  this  Section  4(f)(i)  shall be
allocated  among  such  securities and assets as determined in good faith by the
Board.

                                      -11-
<PAGE>
          (ii)     When  Adjustments  to  Be  Made.  The adjustments required by
                   -------------------------------
this  Section  4  shall  be  made  whenever  and as often as any specified event
requiring  an  adjustment shall occur, except that any adjustment of the Warrant
Share  Number  that  would otherwise be required may be postponed (except in the
case  of a subdivision or combination of shares of the Common Stock, as provided
for  in  Section  4(b))  up  to,  but  not  beyond  the date of exercise if such
adjustment  either  by itself or with other adjustments not previously made adds
or  subtracts less than one percent (1%) of the shares of Common Stock for which
this  Warrant is exercisable immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount (except as
aforesaid)  which is postponed shall be carried forward and made as soon as such
adjustment,  together  with other adjustments required by this Section 4 and not
previously  made,  would  result  in  a  minimum  adjustment  or  on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to  have  occurred  at  the  close  of  business  on the date of its occurrence.

          (iii)     Fractional  Interests.  In computing  adjustments under this
                    ---------------------
Section  4,  fractional interests in Common Stock shall be taken into account to
the  nearest  one  one-hundredth  (1/100th)  of  a  share.

          (iv)     When  Adjustment  Not  Required.  If  the Issuer shall take a
                   -------------------------------
record  of  the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter  and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights,  then thereafter no adjustment shall be required by reason of the taking
of  such record and any such adjustment previously made in respect thereof shall
be  rescinded  and  annulled.

     (g)     Form  of  Warrant after Adjustments.  The form of this Warrant need
             -----------------------------------
not be changed because of any adjustments in the Warrant Price or the number and
kind  of  Securities  purchasable  upon  the  exercise  of  this  Warrant.

     (h)     Escrow  of  Warrant  Stock.  If  after  any  property  becomes
             --------------------------
distributable  pursuant  to this Section 4 by reason of the taking of any record
of  the  holders  of  Common Stock, but prior to the occurrence of the event for
which  such  record is taken, and the Holder exercises  this Warrant, any shares
of  Common  Stock  issuable  upon exercise by reason of such adjustment shall be
deemed  the  last  shares  of  Common  Stock for which this Warrant is exercised
(notwithstanding  any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to  the  Holder upon and to the extent that the event actually takes place, upon
payment  of  the  current Warrant Price.  Notwithstanding any other provision to
the contrary herein, if the event for which such record was taken fails to occur
or  is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed  property  returned.

     5.     Notice  of Adjustments.  Whenever the Warrant Price or Warrant Share
            ----------------------
Number  shall  be  adjusted  pursuant  to Section 4 hereof (for purposes of this
Section  5,  each  an  "adjustment"), the Issuer shall cause its Chief Financial
                        ----------
Officer  to  prepare  and  execute  a  certificate  setting forth, in reasonable
detail,  the  event  requiring the adjustment, the amount of the adjustment, the
method  by  which  such  adjustment  was  calculated (including a description of

                                      -12-
<PAGE>
the  basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause  copies  of such certificate to be delivered to the Holder of this Warrant
promptly  after  each adjustment.  Any dispute between the Issuer and the Holder
of this Warrant with respect to the matters set forth in such certificate may at
the  option of the Holder of this Warrant be submitted to a national or regional
accounting  firm  chosen  by the Issuer and reasonably acceptable to the Holder,
which  firm shall deliver a written opinion as to such matters to the Issuer and
such  Holder  within  thirty  (30)  days after submission to it of such dispute.
Such  opinion  shall  be final and binding on the parties hereto.  The costs and
expenses  of the initial accounting firm shall be paid equally by the Issuer and
the  Holder.

     6.     Fractional  Shares.  No  fractional  shares of Warrant Stock will be
            ------------------
issued  in  connection  with any exercise hereof, but in lieu of such fractional
shares,  the  Issuer shall round the number of shares to be issued upon exercise
up  to  the  nearest  whole  number  of  shares.

     7.     Ownership Cap and Exercise Restriction.  Notwithstanding anything to
            ---------------------------------------
the  contrary set forth in this Warrant, at no time may a Holder of this Warrant
exercise  this  Warrant  if  the  number  of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common  Stock  owned by such Holder at such time, the number of shares of Common
Stock  which  would  result in such Holder beneficially owning (as determined in
accordance  with Section 13(d) of the Exchange Act and the rules  thereunder) in
excess  of  9.9%  of  the  then  issued  and outstanding shares of Common Stock;
provided,  however, that upon a holder of this Warrant providing the Issuer with
--------   -------
sixty-one (61) days notice (pursuant to Section 12 hereof) (the "Waiver Notice")
                                                                 -------------
that  such  Holder  would like to waive this Section 7 with regard to any or all
shares  of  Common  Stock issuable upon exercise of this Warrant, this Section 7
will  be  of  no  force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this provision shall be
                                 --------  -------
of  no  further  force  or  effect  during  the  sixty-one (61) days immediately
preceding  the  expiration  of  the  term  of  this  Warrant.

     8.     Definitions.  For  the purposes of this Warrant, the following terms
            -----------
have  the  following  meanings:

          "Additional  Shares  of Common Stock" means all shares of Common Stock
           -----------------------------------
     issued  by  the  Issuer  after  the  Original Issue Date, and all shares of
     Other  Common,  if any, issued by the Issuer after the Original Issue Date,
     except:  (i)  securities  issued (other than for cash) in connection with a
     merger,  acquisition,  or consolidation, (ii) securities issued pursuant to
     the  conversion or exercise of convertible or exercisable securities issued
     or  outstanding on or prior to the date of the Purchase Agreement or issued
     pursuant  to  the Purchase Agreement (so long as the conversion or exercise
     price  in  such  securities  are  not  amended  to  lower such price and/or
     adversely  affect  the  Holders),  (iii) the Warrant Stock, (iv) securities
     issued  in  connection with bona fide strategic license agreements or other
     partnering  arrangements  so long as such issuances are not for the purpose
     of  raising  capital,  (v) Common Stock issued or the issuance or grants of
     options  to  purchase  Common  Stock  pursuant to the Issuer's stock option
     plans  and  employee  stock purchase plans outstanding as they exist on the
     date  of  the  Purchase  Agreement,  and  (vi)  any  warrants issued to the
     placement  agent and its designees for the transactions contemplated by the
     Purchase  Agreement.

                                      -13-
<PAGE>
          "Board"  shall  mean  the  Board  of  Directors  of  the  Issuer.
           -----

          "Capital  Stock" means and includes (i) any and all shares, interests,
           --------------
     participations  or  other  equivalents  of  or  interests  in  (however
     designated)  corporate  stock,  including,  without  limitation,  shares of
     preferred  or  preference  stock,  (ii)  all partnership interests (whether
     general  or  limited)  in  any  Person  which  is  a partnership, (iii) all
     membership  interests or limited liability company interests in any limited
     liability company, and (iv) all equity or ownership interests in any Person
     of  any  other  type.

          "Certificate  of Incorporation" means the Certificate of Incorporation
           -----------------------------
     of  the  Issuer  as  in  effect  on  the  Original  Issue  Date,  and  as
     hereafter  from time to time amended, modified, supplemented or restated in
     accordance  with  the  terms  hereof and thereof and pursuant to applicable
     law.

          "Common  Stock" means the Common Stock, $0.001 par value per share, of
           -------------
     the  Issuer  and  any  other  Capital  Stock  into  which  such  stock  may
     hereafter  be  changed.

          "Common  Stock  Equivalent" means any Convertible Security or warrant,
           -------------------------
     option  or  other  right  to  subscribe  for  or  purchase  any  Additional
     Shares  of  Common  Stock  or  any  Convertible  Security.

          "Convertible  Securities"  means  evidences of Indebtedness, shares of
           -----------------------
     Capital  Stock  or  other  Securities  which  are  or  may  be  at any time
     convertible into or exchangeable for Additional Shares of Common Stock. The
     term  "Convertible  Security"  means  one  of  the  Convertible Securities.

          "Governmental  Authority"  means  any  governmental,  regulatory  or
           -----------------------
     self-regulatory  entity,  department,  body,  official,  authority,
     commission,  board,  agency  or  instrumentality, whether federal, state or
     local,  and  whether  domestic  or  foreign.

          "Holders"  mean  the  Persons  who  shall  from  time  to time own any
           -------
     Warrant.  The  term  "Holder"  means  one  of  the  Holders.

          "Independent  Appraiser"  means  a  nationally  recognized  or  major
           ----------------------
     regional  investment  banking  firm  or  firm  of  independent  certified
     public  accountants  of  recognized  standing  (which  may be the firm that
     regularly  examines  the  financial  statements  of  the  Issuer)  that  is
     regularly engaged in the business of appraising the Capital Stock or assets
     of  corporations  or  other  entities  as  going concerns, and which is not
     affiliated  with  either  the  Issuer  or  the  Holder  of  any  Warrant.

          "Issuer"  means  Charys Holding Company, Inc., a Delaware corporation,
           ------
     and  its  successors.

          "Majority  Holders"  means  at  any  time  the  Holders  of  Warrants
           -----------------
     exercisable  for  a  majority  of  the  shares  of  Warrant  Stock issuable
     under  the  Warrants  at  the  time  outstanding.

                                      -14-
<PAGE>
          "Original  Issue  Date"  means  December  4,  2006.
           ---------------------

          "OTC  Bulletin  Board"  means the over-the-counter electronic bulletin
           --------------------
     board.

          "Other  Common"  means  any  other  Capital Stock of the Issuer of any
           -------------
     class  which  shall  be  authorized  at  any  time  after  the date of this
     Warrant  (other  than  Common  Stock)  and  which  shall  have the right to
     participate  in  the  distribution  of  earnings  and  assets of the Issuer
     without  limitation  as  to  amount.

          "Outstanding  Common  Stock"  means,  at any given time, the aggregate
           --------------------------
     amount  of  outstanding  shares  of  Common  Stock, assuming full exercise,
     conversion  or  exchange (as applicable) of all options, warrants and other
     Securities  which  are convertible into or exercisable or exchangeable for,
     and any right to subscribe for, shares of Common Stock that are outstanding
     at  such  time.

          "Person"  means an individual, corporation, limited liability company,
           ------
     partnership,  joint  stock  company,  trust,  unincorporated  organization,
     joint  venture,  Governmental Authority or other entity of whatever nature.

          "Per  Share  Market  Value"  means on any particular date (a) the last
           -------------------------
     closing  bid  price  per  share  of  the  Common  Stock on such date on the
     OTC  Bulletin  Board or another registered national stock exchange on which
     the Common Stock is then listed, or if there is no such price on such date,
     then the closing bid price on such exchange or quotation system on the date
     nearest  preceding such date, or (b) if the Common Stock is not listed then
     on  the  OTC  Bulletin Board or any registered national stock exchange, the
     last  closing bid price for a share of Common Stock in the over-the-counter
     market,  as reported by the OTC Bulletin Board or in the National Quotation
     Bureau  Incorporated  or  similar  organization or agency succeeding to its
     functions  of  reporting  prices) at the close of business on such date, or
     (c)  if  the Common Stock is not then reported by the OTC Bulletin Board or
     the  National  Quotation  Bureau  Incorporated  (or similar organization or
     agency  succeeding  to  its  functions of reporting prices), then the "Pink
     Sheet"  quotes  for  the  applicable  Trading  Days  preceding such date of
     determination,  or  (d) if the Common Stock is not then publicly traded the
     fair  market  value  of  a  share  of  Common  Stock  as  determined  by an
     Independent  Appraiser  selected  in  good  faith  by the Majority Holders;
     provided,  however,  that the Issuer, after receipt of the determination by
     --------   -------
     such  Independent  Appraiser,  shall have the right to select an additional
     Independent  Appraiser, in which case, the fair market value shall be equal
     to  the  average  of the determinations by each such Independent Appraiser;
     and provided, further that all determinations of the Per Share Market Value
         --------  -------
     shall  be  appropriately  adjusted for any stock dividends, stock splits or
     other  similar  transactions  during such period. The determination of fair
     market  value  by  an  Independent  Appraiser  shall be based upon the fair
     market value of the Issuer determined on a going concern basis as between a
     willing  buyer  and  a  willing seller and taking into account all relevant
     factors  determinative  of  value,  and  shall  be final and binding on all
     parties.  In  determining  the  fair  market  value of any shares of Common
     Stock,  no  consideration shall be given to any restrictions on transfer of
     the  Common

                                      -15-
<PAGE>
     Stock  imposed  by  agreement  or  by  federal or state securities laws, or
     to  the  existence  or  absence  of,  or any limitations on, voting rights.

          "Purchase  Agreement"  means  the  Note and Warrant Purchase Agreement
           -------------------
     dated  as  of  December  4,  2006,  among  the  Issuer  and the Purchasers.

          "Purchasers"  means  the  purchasers  of  the subordinated convertible
           ----------
     promissory  notes  and  the  Warrants  issued by the Issuer pursuant to the
     Purchase  Agreement.

          "Securities"  means  any  debt  or  equity  securities  of the Issuer,
           ----------
     whether  now  or  hereafter  authorized,  any  instrument  convertible into
     or  exchangeable  for  Securities or a Security, and any option, warrant or
     other  right  to  purchase or acquire any Security. "Security" means one of
     the  Securities.

          "Securities  Act" means the Securities Act of 1933, as amended, or any
           ---------------
     similar  federal  statute  then  in  effect.

          "Subsidiary"  means  any corporation at least 50% of whose outstanding
           ----------
     Voting  Stock  shall  at  the  time  be owned directly or indirectly by the
     Issuer  or  by one or more of its Subsidiaries, or by the Issuer and one or
     more  of  its  Subsidiaries.

          "Term"  has  the  meaning  specified  in  Section  1  hereof.
           ----

          "Trading  Day"  means (a) a day on which the Common Stock is traded on
           ------------
     the  OTC  Bulletin  Board,  or  (b)  if  the  Common Stock is not traded on
     the  OTC  Bulletin  Board, a day on which the Common Stock is quoted in the
     over-the-counter  market  as  reported  by  the  National  Quotation Bureau
     Incorporated  (or  any  similar  organization  or  agency  succeeding  its
     functions  of  reporting prices); provided, however, that in the event that
                                       --------  -------
     the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
     then  Trading  Day  shall  mean any day except Saturday, Sunday and any day
     which  shall  be  a legal holiday or a day on which banking institutions in
     the State of New York are authorized or required by law or other government
     action  to  close.

          "Voting  Stock"  means,  as  applied  to  the  Capital  Stock  of  any
           -------------
     corporation,  Capital  Stock  of  any  class  or  classes  (however
     designated)  having ordinary voting power for the election of a majority of
     the  members  of  the  board of directors (or other governing body) of such
     corporation,  other  than Capital Stock having such power only by reason of
     the  happening  of  a  contingency.

          "Warrants" means the Warrants issued and sold pursuant to the Purchase
           --------
     Agreement,  including,  without  limitation,  this  Warrant,  and any other
     warrants  of  like tenor issued in substitution or exchange for any thereof
     pursuant  to  the provisions of Section 2(c), 2(d) or 2(e) hereof or of any
     of  such  other  Warrants.

          "Warrant  Price"  initially means $5.00, as such price may be adjusted
           --------------
     from  time  to  time  as  shall  result  from  the adjustments specified in
     this  Warrant,  including  Section  4  hereto.

                                      -16-
<PAGE>
          "Warrant  Share  Number"  means  at  any  time the aggregate number of
           ----------------------
     shares  of  Warrant  Stock  which  may  at  such  time  be  purchased  upon
     exercise  of this Warrant, after giving effect to all prior adjustments and
     increases  to  such  number  made  or  required  to be made under the terms
     hereof.

          "Warrant  Stock"  means  Common  Stock  issuable  upon exercise of any
           --------------
     Warrant  or  Warrants  or  otherwise  issuable  pursuant  to any Warrant or
     Warrants.

     9.     Other  Notices.  In  case  at  any  time:
            --------------

                         (A)  the  Issuer  shall  make  any distributions to the
                              holders  of  Common  Stock;  or

                         (B)  the  Issuer  shall  authorize  the granting to all
                              holders of its Common Stock of rights to subscribe
                              for or purchase any shares of Capital Stock of any
                              class  or  other  rights;  or

                         (C)  there shall be any reclassification of the Capital
                              Stock  of  the  Issuer;  or

                         (D)  there  shall  be any capital reorganization by the
                              Issuer;  or

                         (E)  there  shall  be  any  (i) consolidation or merger
                              involving  the  Issuer  or  (ii) sale, transfer or
                              other  disposition  of all or substantially all of
                              the  Issuer's property, assets or business (except
                              a  merger  or  other  reorganization  in which the
                              Issuer  shall be the surviving corporation and its
                              shares  of  Capital  Stock  shall  continue  to be
                              outstanding  and  unchanged  and  except  a
                              consolidation,  merger,  sale,  transfer  or other
                              disposition  involving a wholly-owned Subsidiary);
                              or

                         (F)  there  shall  be  a  voluntary  or  involuntary
                              dissolution,  liquidation  or  winding-up  of  the
                              Issuer or any partial liquidation of the Issuer or
                              distribution  to  holders  of  Common  Stock;

then,  in each of such cases, the Issuer shall give written notice to the Holder
of  the  date on which (i) the books of the Issuer shall close or a record shall
be  taken  for  such  dividend, distribution or subscription rights or (ii) such
reorganization,  reclassification,  consolidation,  merger,  disposition,
dissolution,  liquidation  or  winding-up, as the case may be, shall take place.
Such  notice also shall specify the date as of which the holders of Common Stock
of  record  shall  participate  in  such  dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities  or  other  property  deliverable  upon  such  reorganization,
reclassification,  consolidation,  merger, disposition, dissolution, liquidation
or  winding-up,  as the case may be.  Such notice shall be given at least twenty
(20)  days prior to the action in question and not less than ten (10) days prior
to  the  record  date  or  the  date  on  which  the

                                      -17-
<PAGE>
Issuer's  transfer  books  are closed in respect thereto.  This Warrant entitles
the  Holder to receive copies of all financial and other information distributed
or  required  to  be  distributed  to  the  holders  of  the  Common  Stock.

     10.     Amendment  and  Waiver.  Any term, covenant, agreement or condition
             ----------------------
in  this  Warrant  may be amended, or compliance therewith may be waived (either
generally  or  in  a  particular  instance  and  either  retroactively  or
prospectively),  by  a written instrument or written instruments executed by the
Issuer  and  the  Majority Holders; provided, however, that no such amendment or
                                    --------  -------
waiver  shall  reduce  the  Warrant  Share  Number,  increase the Warrant Price,
shorten  the  period  during  which  this Warrant may be exercised or modify any
provision  of this Section 10 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver  or  modification  of  any  provision  of  this  Warrant  unless the same
consideration  is  also  offered  to  all  holders  of  the  Warrants.

     11.     Governing Law; Jurisdiction.  This Warrant shall be governed by and
             ---------------------------
construed in accordance with the internal laws of the State of New York, without
giving  effect  to  any of the conflicts of law principles which would result in
the  application  of  the substantive law of another jurisdiction.  This Warrant
shall  not  be  interpreted  or construed with any presumption against the party
causing  this Warrant to be drafted.  The Issuer and the Holder agree that venue
for  any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive  any  right  to  raise forum non conveniens or any other argument that New
York  is not the proper venue.  The Issuer and the Holder irrevocably consent to
personal  jurisdiction in the state and federal courts of the state of New York.
The  Issuer  and  the  Holder  consent to process being served in any such suit,
action  or  proceeding by mailing a copy thereof to such party at the address in
effect  for  notices to it under this Warrant and agrees that such service shall
constitute  good  and sufficient service of process and notice thereof.  Nothing
in this Section 11 shall affect or limit any right to serve process in any other
manner  permitted  by  law.  The  Issuer  and  the  Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this  Warrant  or the Purchase Agreement, shall be entitled to reimbursement for
reasonable  legal  fees from the non-prevailing party.  The parties hereby waive
all  rights  to  a  trial  by  jury.

     12.     Notices.  Any  notice,  demand,  request,  waiver  or  other
             -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:

If to the Issuer:          Charys Holding Company, Inc.
                           1117 Perimeter Center West, Suite N415
                           Atlanta, Georgia 30338
                           Attention: Chief Executive Officer
                           Tel. No.: (678) 443-2300
                           Fax  No.:  (678)  443-2320

                                      -18-
<PAGE>
with copies (which
copies shall not
constitute notice) to:     Glast, Phillips & Murray, P.C.
                           815 Walker Street, Suite 1250
                           Houston, Texas 77002
                           Attention: Norman T. Reynolds, Esq.
                           Tel. No.: (713) 237-3135
                           Fax No.: (713) 237-3202

If  to  any Holder:        At the address of such Holder set forth on Exhibit A
                                                                      ---------
                           to this Agreement,  with copies to  Holder's counsel
                           as set forth on Exhibit A or as specified in writing
                                           ---------
                           by  such  Holder  with  copies  to:

with copies (which
copies shall not
constitute notice) to:     Kramer Levin Naftalis & Frankel LLP
                           1177 Avenue of the Americas
                           New York,  New  York 10036
                           Attention: Christopher S. Auguste, Esq.
                           Tel. No.: (212) 715-9100
                           Fax No.: (212) 715-8000

     Any  party  hereto  may from time to time change its address for notices by
giving  written  notice  of  such  changed  address  to  the other party hereto.

     13.     Warrant Agent.  The Issuer may, by written notice to each Holder of
             -------------
this  Warrant,  appoint  an agent having an office in New York, New York for the
purpose  of  issuing  shares  of  Warrant  Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to  subsection  (d)  of  Section  2 hereof or replacing this Warrant pursuant to
subsection  (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such  issuance,  exchange  or  replacement, as the case may be, shall be made at
such  office  by  such  agent.

     14.     Remedies.  The  Issuer  stipulates  that the remedies at law of the
             --------
Holder  of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are  not  and  will not be adequate and that, to the fullest extent permitted by
law,  such  terms  may  be  specifically  enforced  by a decree for the specific
performance  of  any  agreement  contained  herein or by an injunction against a
violation  of  any  of  the  terms  hereof  or  otherwise.

     15.     Successors  and  Assigns.  This  Warrant  and  the rights evidenced
             ------------------------
hereby  shall  inure  to  the  benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such  Holder  or  Holder  of  Warrant  Stock.

                                      -19-
<PAGE>
     16.     Modification  and Severability.  If, in any action before any court
             ------------------------------
or  agency  legally  empowered  to  enforce  any provision contained herein, any
provision  hereof  is  found  to  be unenforceable, then such provision shall be
deemed  modified to the extent necessary to make it enforceable by such court or
agency.  If  any such provision is not enforceable as set forth in the preceding
sentence,  the  unenforceability  of  such  provision shall not affect the other
provisions  of  this  Warrant,  but  this  Warrant shall be construed as if such
unenforceable  provision  had  never  been  contained  herein.

     17.     Headings.  The  headings  of  the  Sections of this Warrant are for
             --------
convenience  of  reference only and shall not, for any purpose, be deemed a part
of  this  Warrant.

     18.     Registration Rights.  The Holder of this Warrant is entitled to the
             -------------------
benefit  of  certain  registration  rights with respect to the shares of Warrant
Stock  issuable  upon  the  exercise  of  this  Warrant pursuant to that certain
Registration  Rights  Agreement, of even date herewith, by and among the Company
and  Persons  listed on Schedule I thereto (the "Registration Rights Agreement")
                                                 -----------------------------
and the registration rights with respect to the shares of Warrant Stock issuable
upon  the exercise of this Warrant by any subsequent Holder may only be assigned
in  accordance  with  the  terms  and  provisions  of  the  Registrations Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -20-
<PAGE>
     IN WITNESS WHEREOF, the Issuer has executed this Series D Warrant as of the
day  and  year  first  above  written.

                                        CHARYS  HOLDING  COMPANY,  INC.

                                        By:
                                             -----------------------------------
                                             Name:
                                             Title:

                                      -21-
<PAGE>
                                  EXERCISE FORM
                                SERIES D WARRANT

                          CHARYS HOLDING COMPANY, INC.

The  undersigned  _______________,  pursuant  to  the  provisions  of the within
Warrant,  hereby  elects  to  purchase  _____  shares  of Common Stock of Charys
Holding  Company,  Inc.  covered  by  the  within  Warrant.

Dated: _________________          Signature   ___________________________

                                  Address     _____________________
                                              _____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  date  of  Exercise:  _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The undersigned intends that payment of the Warrant Price shall be made as
(check one):

          Cash Exercise_______

          Cashless Exercise_______

If  the  Holder  has  elected  a  Cash Exercise, the Holder shall pay the sum of
$________  by  certified  or  official  bank check (or via wire transfer) to the
Issuer  in  accordance  with  the  terms  of  the  Warrant.
If  the Holder has elected a Cashless Exercise, a certificate shall be issued to
the  Holder  for  the  number of shares equal to the whole number portion of the
product  of the calculation set forth below, which is ___________.   The Company
shall  pay a cash adjustment in respect of the fractional portion of the product
of  the  calculation  set  forth  below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise,  which  product  is  ____________.

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

Where:

The  number  of  shares  of  Common  Stock  to  be  issued  to  the  Holder
__________________("X").

The  number  of  shares  of Common Stock purchasable upon exercise of all of the
Warrant  or, if only a portion of the Warrant is being exercised, the portion of
the  Warrant  being  exercised

                                      -22-
<PAGE>
___________________________  ("Y").

The  Warrant  Price  ______________  ("A").

The Per Share Market Value of one share of Common Stock  _______________________
("B").

                                   ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant  on  the  books  of  the  within  named  corporation.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the  right  to  purchase  _________  shares of Warrant Stock
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint ___________________, attorney, to transfer
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

                           FOR USE BY THE ISSUER ONLY:

This  Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________,  _____,  shares  of  Common  Stock  issued  therefor in the name of
_______________,  Warrant  No. W-_____ issued for ____ shares of Common Stock in
the  name  of  _______________.

                                      -23-
<PAGE>
                                    EXHIBIT D
                      FORM OF REGISTRATION RIGHTS AGREEMENT

                                        viii
<PAGE>
                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

          This  Registration  Rights  Agreement  (this  "Agreement") is made and
                                                         ---------
entered  into as of December 4, 2006, by and among Charys Holding Company, Inc.,
a  Delaware corporation (the "Company"), and the purchasers listed on Schedule I
                              -------                                 ----------
hereto  (the  "Purchasers").
               ----------

          This  Agreement is being entered into pursuant to the Note and Warrant
Purchase  Agreement  dated  as  of  the  date  hereof  among the Company and the
Purchasers  (the  "Purchase  Agreement").
                   -------------------

          The Company and the Purchasers hereby agree as follows:

     1.   Definitions.
          -----------

          Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement.  As used in this Agreement,
the  following  terms  shall  have  the  following  meanings:

          "Advice" shall have meaning set forth in Section 3(m).
           ------

          "Affiliate"  means,  with respect to any Person, any other Person that
           ---------
directly or indirectly controls or is controlled by or under common control with
such  Person.  For  the  purposes  of this definition, "control," when used with
                                                        -------
respect to any Person, means the possession, direct or indirect, of the power to
direct  or  cause  the  direction of the management and policies of such Person,
whether  through  the  ownership of voting securities, by contract or otherwise;
and  the  terms  of  "affiliated,"  "controlling" and "controlled" have meanings
                      ----------     -----------       ----------
correlative  to  the  foregoing.

          "Board" shall have meaning set forth in Section 3(n).
           -----

          "Business Day" means any day except Saturday, Sunday and any day which
           ------------
shall  be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to  close.

          "Closing  Date" means the date of the closing of the purchase and sale
           -------------
of the Notes and the Warrants pursuant to the Purchase Agreement.

          "Commission" means the Securities and Exchange Commission.
           ----------

          "Common  Stock" means the Company's Common Stock, par value $0.001 per
           -------------
share.

          "Effectiveness  Date" means with respect to the Registration Statement
           -------------------
the  earlier  of (A) the one hundred twentieth (120th) day following the Closing
Date (or in the event the Registration Statement receives a "full review" by the
Commission,  the one hundred fiftieth (150th) day following the Closing Date) or
(B) the date which is within three (3) Business Days after the date on which the
Commission  informs  the  Company  (i)  that  the Commission will not review the
Registration  Statement or (ii) that the Company may request the acceleration of
the

<PAGE>
effectiveness  of the Registration Statement and the Company makes such request;
provided  that,  if  the  Effectiveness  Date falls on a Saturday, Sunday or any
--------  ----
other  day  which  shall  be a legal holiday or a day on which the Commission is
authorized  or  required  by  law  or  other  government  actions  to close, the
Effectiveness  Date  shall  be  the  following  Business  Day.

          "Effectiveness  Period" shall have the meaning set forth in Section 2.
           ---------------------

          "Event"  shall  have  the  meaning  set  forth  in  Section  7(e).
           -----

          "Event Date" shall have the meaning set forth in Section 7(e).
           ----------

          "Exchange  Act" means the Securities Exchange Act of 1934, as amended.
           -------------

          "Filing  Date"  means  the  thirtieth (30th) day following the Closing
           ------------
Date; provided that, if the Filing Date falls on a Saturday, Sunday or any other
      -------- ----
day  which  shall  be  a  legal  holiday  or  a  day  on which the Commission is
authorized  or  required by law or other government actions to close, the Filing
Date  shall  be  the  following  Business  Day.

          "Holder" or "Holders" means the holder or holders, as the case may be,
           ------      -------
from time to time of Registrable Securities who agrees in writing to be bound by
the  terms  of  this  Agreement  pursuant  to  Section  7(i)  hereof.

          "Indemnified  Party" shall have the meaning set forth in Section 5(c).
           ------------------

          "Indemnifying Party" shall have the meaning set forth in Section 5(c).
           ------------------

          "Losses" shall have the meaning set forth in Section 5(a).
           ------

          "Person"  means  an  individual  or a corporation, partnership, trust,
           ------
incorporated  or  unincorporated  association,  joint venture, limited liability
company,  joint stock company, government (or an agency or political subdivision
thereof)  or  other  entity  of  any  kind.

          "Proceeding" means an action, claim, suit, investigation or proceeding
           ----------
(including,  without limitation, an investigation or partial proceeding, such as
a  deposition),  whether  commenced  or  threatened.

          "Prospectus"  means  the  prospectus  included  in  the  Registration
           ----------
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities  Act),  as amended or supplemented by any prospectus supplement, with
respect  to  the  terms  of  the  offering  of  any  portion  of the Registrable
Securities  covered  by the Registration Statement, and all other amendments and
supplements  to  the  Prospectus,  including  post-effective amendments, and all
material  incorporated  by  reference  in  such  Prospectus.

          "Registrable  Securities means (i) the shares of Common Stock issuable
           -----------------------
upon  conversion  of the Notes and (ii) the shares of Common Stock issuable upon
exercise  of  the  Warrants.

                                      -2-
<PAGE>
          "Registration  Statement"  means  the  registration statements and any
           -----------------------
additional registration statements contemplated by Section 2, including (in each
case)  the Prospectus, amendments and supplements to such registration statement
or  Prospectus,  including  pre-  and  post-effective  amendments,  all exhibits
thereto,  and  all  material  incorporated  by  reference  in  such registration
statement.

          "Rule  144"  means  Rule 144 promulgated by the Commission pursuant to
           ---------
the  Securities  Act,  as  such  Rule  may  be amended from time to time, or any
similar  rule  or  regulation  hereafter  adopted  by  the  Commission  having
substantially  the  same  effect  as  such  Rule.

          "Rule  158"  means  Rule 158 promulgated by the Commission pursuant to
           ---------
the  Securities  Act,  as  such  Rule  may  be amended from time to time, or any
similar  rule  or  regulation  hereafter  adopted  by  the  Commission  having
substantially  the  same  effect  as  such  Rule.

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

          "Rule  424"  means  Rule 424 promulgated by the Commission pursuant to
           ---------
the  Securities  Act,  as  such  Rule  may  be amended from time to time, or any
similar  rule  or  regulation  hereafter  adopted  by  the  Commission  having
substantially  the  same  effect  as  such  Rule.

          "Securities  Act"  means  the  Securities  Act  of  1933,  as amended.
           ---------------

          "Special Counsel" means Kramer Levin Naftalis & Frankel LLP, for which
           ---------------
the  Holders  will  be  reimbursed  by  the  Company  pursuant  to  Section  4.

          "Warrants"  means  the  warrants  to  purchase  shares of Common Stock
           --------
issued  to  the  Purchasers  pursuant  to  the  Purchase  Agreement.

     2.     Resale  Registration.  On  or  prior to the Filing Date, the Company
            --------------------
shall  prepare  and  file  with the Commission a "resale" Registration Statement
providing  for  the  resale  of all Registrable Securities for an offering to be
made  on  a  continuous  basis  pursuant to Rule 415. The Registration Statement
shall  be  on  Form SB-2 (except if the Company is not then eligible to register
for  resale  the  Registrable  Securities  on  Form  SB-2,  in  which  case such
registration  shall  be  on  another appropriate form in accordance herewith and
with the Securities Act and the rules promulgated thereunder). Such Registration
Statement  shall  cover to the extent allowable under the Securities Act and the
rules  promulgated thereunder (including Rule 416), such indeterminate number of
additional  shares  of Common Stock resulting from stock splits, stock dividends
or  similar transactions with respect to the Registrable Securities. The Company
shall  (i)  not  permit any securities other than the Registrable Securities and
the  securities  listed on Schedule II hereto to be included in the Registration
                           -----------
Statement  and  (ii) use its best efforts to cause the Registration Statement to
be declared effective under the Securities Act as promptly as possible after the
filing  thereof,  but  in any event prior to the Effectiveness Date, and to keep
such  Registration  Statement  continuously  effective  under the Securities Act
until  such  date  as  is  the  earlier  of  (y)  the  date when all Registrable
Securities  covered  by  such  Registration  Statement  have  been  sold  by the
Purchasers  or  (z)  the  date  on  which the Registrable Securities may be sold
without  any

                                      -3-
<PAGE>
restriction  pursuant to Rule 144(k) as determined by the counsel to the Company
pursuant  to a written opinion letter to such effect, addressed to the Company's
transfer  agent (the "Effectiveness Period"). The Company shall request that the
                      --------------------
effective  time  of  the Registration Statement be 4:00 p.m. Eastern Time on the
effective  date.  If  at any time and for any reason, an additional Registration
Statement  is  required  to  be  filed because at such time the actual number of
shares of Common Stock into which the Notes are convertible and the Warrants are
exercisable  exceeds  the  number  of shares of Registrable Securities remaining
under  the  Registration  Statement, the Company shall have twenty (20) Business
Days  to  file such additional Registration Statement, and the Company shall use
its  best efforts to cause such additional Registration Statement to be declared
effective  by  the  Commission  as  soon as reasonably possible, but in no event
later  than  sixty  (60)  days  after  filing.  Notwithstanding  anything to the
contrary  set  forth  in  this  Section  2, in the event the Commission does not
permit  the  Company  to  register  all  of  the  Registrable  Securities in the
Registration Statement, the Company shall register in the Registration Statement
such  number  of  Registrable  Securities  as  is  permitted  by the Commission,
provided,  however,  that the number of Registrable Securities to be included in
--------   -------
such  Registration  Statement  or any subsequent registration statement shall be
determined  in  the  following  order:  (i)  first,  the  shares of Common Stock
issuable  upon  conversion  of the Notes shall be registered on a pro rata basis
among  the  holders  of  the  Notes, and (ii) second, the shares of Common Stock
issuable  upon  exercise of the Warrants shall be registered on a pro rata basis
among  the  holders of the Warrants. In the event the Commission does not permit
the  Company  to  register all of the Registrable Securities in the Registration
Statement,  the  Company  shall use its best efforts to register the Registrable
Securities,  subject  to the foregoing sentence, that were not registered in the
Registration  Statement as promptly as possible and in a manner permitted by the
Commission,  whether  by  filing  a subsequent registration statement, providing
demand  registration  rights,  or  otherwise.

     3.     Registration  Procedures.
            -------------------------

          In  connection  with the Company's registration obligations hereunder,
the  Company  shall:

          (a)     Prepare  and  file  with  the  Commission,  on or prior to the
Filing  Date,  a  Registration  Statement on Form SB-2 (or if the Company is not
then  eligible  to  register  for resale the Registrable Securities on Form SB-2
such  registration  shall  be on another appropriate form in accordance herewith
and  the Securities Act and the rules promulgated thereunder) in accordance with
the plan of distribution as set forth on Exhibit A hereto and in accordance with
                                         ---------
applicable  law, regulations and Commission policies, and cause the Registration
Statement to become effective and remain effective as provided herein; provided,
                                                                       --------
however,  that  not  less than five (5) Business Days prior to the filing of the
-------
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,  the  Company shall (i) furnish to the Holders and any Special Counsel,
copies  of  all  such  documents  proposed  to be filed, which documents will be
subject  to  the reasonable review of such Holders and such Special Counsel, and
(ii)  cause its officers and directors, counsel and independent certified public
accountants  to  respond  to  such  inquiries  as  shall  be  necessary,  in the
reasonable  opinion  of  Special Counsel, to conduct a reasonable review of such
documents.  The  Company  shall  not file the Registration Statement or any such
Prospectus  or  any  amendments or supplements thereto to which the Holders of a
majority  of  the Registrable Securities or any Special Counsel shall reasonably
object  in  writing  within  three  (3)  Business Days of their receipt thereof.

                                      -4-
<PAGE>
          (b)     (i)  Prepare  and  file  with  the Commission such amendments,
including  post-effective  amendments,  to  the Registration Statement as may be
necessary  to  keep  the Registration Statement continuously effective as to the
applicable  Registrable  Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements as necessary in
order  to  register  for  resale under the Securities Act all of the Registrable
Securities;  (ii)  cause the related Prospectus to be amended or supplemented by
any  required  Prospectus  supplement,  and  as so supplemented or amended to be
filed pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; (iii) respond as promptly as possible, but in no event
later  than ten (10) Business Days, to any comments received from the Commission
with  respect  to  the  Registration  Statement  or any amendment thereto and as
promptly  as  possible  provide  the  Holders  true  and  complete copies of all
correspondence  from  and  to  the  Commission  relating  to  the  Registration
Statement; (iv) file the final prospectus pursuant to Rule 424 of the Securities
Act  no later than 9:00 a.m. Eastern Time on the Business Day following the date
the  Registration  Statement  is  declared  effective by the Commission; and (v)
comply  in  all  material respects with the provisions of the Securities Act and
the  Exchange  Act with respect to the disposition of all Registrable Securities
covered  by  the  Registration  Statement  during  the  Effectiveness  Period in
accordance  with  the intended methods of disposition by the Holders thereof set
forth  in  the  Registration Statement as so amended or in such Prospectus as so
supplemented.

          (c)     Notify  the  Holders of Registrable Securities and any Special
Counsel as promptly as possible (and, in the case of (i)(A) below, not less than
three (3) Business Days prior to such filing, and in the case of (iii) below, on
the  same  day of receipt by the Company of such notice from the Commission) and
(if  requested  by any such Person) confirm such notice in writing no later than
one  (1)  Business  Day  following  the  day  (i)(A)  when  a  Prospectus or any
Prospectus  supplement or post-effective amendment to the Registration Statement
is  filed;  (B) when the Commission notifies the Company whether there will be a
"review"  of such Registration Statement and whenever the Commission comments in
writing  on such Registration Statement and (C) with respect to the Registration
Statement  or  any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority  for  amendments  or  supplements  to  the  Registration  Statement or
Prospectus  or  for  additional  information;  (iii)  of  the  issuance  by  the
Commission  of  any  stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the initiation or
threatening  of any Proceedings for that purpose; (iv) if at any time any of the
representations  and  warranties  of  the  Company  contained  in  any agreement
contemplated  hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of  the  qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding  for such purpose; and (vi) of the occurrence of any event that makes
any  statement  made in the Registration Statement or Prospectus or any document
incorporated  or  deemed  to  be incorporated therein by reference untrue in any
material  respect  or that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or  the Prospectus, as the case may be, it will not contain any untrue statement
of  a  material  fact  or  omit to state any material fact required to be stated
therein  or  necessary  to  make  the  statements  therein,  in the light of the
circumstances  under  which  they  were  made,  not  misleading.

                                      -5-
<PAGE>
          (d)     Use  its best efforts to avoid the issuance of, or, if issued,
obtain  the withdrawal of, as promptly as possible, (i) any order suspending the
effectiveness  of  the  Registration  Statement  or  (ii)  any suspension of the
qualification  (or  exemption  from  qualification)  of  any  of the Registrable
Securities  for  sale  in  any  jurisdiction.

          (e)     If  requested  by the Holders having a majority in interest of
the  Registrable Securities, (i) promptly incorporate in a Prospectus supplement
or  post-effective  amendment  to the Registration Statement such information as
the  Company  reasonably  agrees  should  be  included therein and (ii) make all
required  filings of such Prospectus supplement or such post-effective amendment
as  soon  as  reasonably practicable after the Company has received notification
from  such  Holders  of  the  matters  to  be  incorporated  in  such Prospectus
supplement  or  post-effective  amendment.

          (f)     If  requested by any Holder in writing, furnish to such Holder
and  any  Special  Counsel,  without charge, at least one conformed copy of each
Registration  Statement  and  each  amendment  thereto,  including  financial
statements  and  schedules,  all  documents  incorporated  or  deemed  to  be
incorporated  therein  by reference, and all exhibits to the extent requested by
such  Person (including those previously furnished or incorporated by reference)
within  three  (3)  Business  Days  of  the  Company's  receipt of such request.

          (g)     Deliver  to  each  Holder  and  any  Special  Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus)  and  each  amendment  or  supplement  thereto  as  such Persons may
reasonably request; and subject to the provisions of Sections 3(m) and 3(n), the
Company  hereby  consents  to  the  use of such Prospectus and each amendment or
supplement  thereto  by  each  of  the  selling  Holders  in connection with the
offering  and  sale of the Registrable Securities covered by such Prospectus and
any  amendment  or  supplement  thereto.

          (h)     Prior  to  any  public offering of Registrable Securities, use
commercially  reasonable  best  efforts  to  register  or  qualify or reasonably
cooperate  with  the  selling Holders and any Special Counsel in connection with
the  registration  or  qualification  (or  exemption  from  such registration or
qualification)  of  such  Registrable  Securities  for  offer and sale under the
securities  or  Blue  Sky laws of such jurisdictions within the United States as
any  Holder requests in writing, to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period and to do any
and all other acts or things necessary or advisable to enable the disposition in
such  jurisdictions  of  the  Registrable  Securities  covered by a Registration
Statement;  provided, however, that the Company shall not be required to qualify
            --------  -------
generally  to  do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such  jurisdiction where it is not then so subject or subject the Company to any
material  tax  in  any  such  jurisdiction  where  it  is  not  then so subject.

          (i)     Cooperate  with  the  Holders  to  facilitate  the  timely
preparation  and delivery of certificates representing Registrable Securities to
be  sold pursuant to a Registration Statement, which certificates, to the extent
permitted  by the Purchase Agreement, Notes, Warrants and applicable federal and
state  securities  laws, shall be free of all restrictive legends, and to enable
such  Registrable  Securities to be in such denominations and registered in such
names  as  any  Holder  may  request  in connection with any sale of Registrable
Securities.

                                      -6-
<PAGE>
          (j)     Upon  the  occurrence  of  any  event  contemplated by Section
3(c)(vi)  hereof,  as  promptly  as reasonably possible, prepare a supplement or
amendment,  including  a post-effective amendment, to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that,  as  thereafter  delivered,  neither  the  Registration Statement nor such
Prospectus  will contain an untrue statement of a material fact or omit to state
a  material  fact  required  to  be  stated  therein  or  necessary  to make the
statements  therein,  in  the  light  of the circumstances under which they were
made,  not  misleading.

          (k)     Use  its  best  efforts  to  cause  all Registrable Securities
relating  to  the  Registration  Statement  to  be  listed  or quoted on the OTC
Bulletin  Board or any other securities exchange, quotation system or market, if
any, on which similar securities issued by the Company are then listed or traded
as  and  when  required  pursuant  to  the  Purchase  Agreement.

          (l)     Comply  in all material respects with all applicable rules and
regulations  of  the  Commission  and  make  generally available to its security
holders  all  documents  filed  or  required  to  be  filed with the Commission,
including,  but not limited, to, earning statements satisfying the provisions of
Section  11(a)  of  the Securities Act and Rule 158 not later than 90 days after
the end of any 12-month period if such period is a fiscal year commencing on the
first day of the first fiscal quarter of the Company after the effective date of
the Registration Statement, which statement shall conform to the requirements of
Rule  158.

          (m)     The Company may, at its option, require each selling Holder to
furnish to the Company information regarding such Holder and the distribution of
such  Registrable  Securities  as  is  required  by  law  to be disclosed in the
Registration  Statement, Prospectus, or any amendment or supplement thereto, and
the  Company  may, at its option, exclude from such registration the Registrable
Securities of any such Holder who unreasonably fails to furnish such information
within  a  reasonable  time  after  receiving  such  request.

          If  the  Registration  Statement  refers  to  any  Holder  by  name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal or applicable state
law then in force) the deletion of the reference to such Holder in any amendment
or  supplement to the Registration Statement filed or prepared subsequent to the
time  that  such  reference  ceases  to  be  required.

          Each Holder covenants and agrees that it will not sell any Registrable
Securities under the Registration Statement until the Company has electronically
filed  the Prospectus as then amended or supplemented as contemplated in Section
3(g)  and  notice  from  the  Company  that  the  Registration Statement and any
post-effective  amendments  thereto  have  become  effective  as contemplated by
Section  3(c).

          Each  Holder  agrees by its acquisition of such Registrable Securities
that,  upon  receipt of a notice from the Company of the occurrence of any event
of  the  kind  described  in  Section  3(c)(ii),  3(c)(iii),  3(c)(iv), 3(c)(v),
3(c)(vi)  or  3(n),  such  Holder will forthwith discontinue disposition of such
Registrable  Securities  under  the  Registration  Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement  contemplated  by Section 3(j), or until it is advised in writing (the
"Advice")  by  the
 ------

                                      -7-
<PAGE>
Company that the use of the applicable Prospectus may be resumed, and, in either
case,  has  received  copies  of any additional or supplemental filings that are
incorporated  or  deemed  to  be incorporated by reference in such Prospectus or
Registration  Statement.

          (n)     If  (i) there is material non-public information regarding the
Company  which  the Company's Board of Directors (the "Board") determines not to
                                                       -----
be  in  the  Company's  best  interest  to disclose and which the Company is not
otherwise required to disclose, (ii) there is a significant business opportunity
(including,  but not limited to, the acquisition or disposition of assets (other
than  in  the  ordinary course of business) or any merger, consolidation, tender
offer  or  other  similar  transaction) available to the Company which the Board
determines  not  to  be in the Company's best interest to disclose, or (iii) the
Company  is  required  to  file  a  post-effective amendment to the Registration
Statement  to incorporate the Company's quarterly and annual reports and audited
financial  statements  on  Forms  10-QSB  and  10-KSB,  then the Company may (y)
postpone  or  suspend  filing  of  a  registration statement for a period not to
exceed  thirty (30) consecutive days or (z) postpone or suspend effectiveness of
a  registration  statement  for  a  period not to exceed thirty (30) consecutive
days;  provided  that the Company may not postpone or suspend effectiveness of a
registration  statement under this Section 3(n) for more than sixty (60) days in
the  aggregate  during  any  three  hundred  sixty  (360)  day period; provided,
                                                                       --------
however,  that  no  such  postponement  or  suspension  shall  be  permitted for
consecutive  thirty  (30)  day  periods  arising  out  of the same set of facts,
circumstances  or  transactions.

     4.     Registration  Expenses.
            ----------------------

          All  fees  and  expenses  incident to the performance of or compliance
with  this  Agreement  by  the Company, except as and to the extent specified in
this  Section  4,  shall be borne by the Company whether or not the Registration
Statement  is  filed  or  becomes  effective  and whether or not any Registrable
Securities  are  sold  pursuant  to  the  Registration  Statement.  The fees and
expenses  referred  to  in  the  foregoing  sentence  shall  include,  without
limitation, (i) all registration and filing fees (including, without limitation,
fees  and  expenses (A) with respect to filings required to be made with the OTC
Bulletin Board and each other securities exchange or market on which Registrable
Securities  are  required  hereunder  to  be  listed, if any (B) with respect to
filing  fees  required  to  be  paid  to  the National Association of Securities
Dealers,  Inc.  and  the  NASD Regulation, Inc. and (C) in compliance with state
securities  or  Blue  Sky  laws  (including,  without  limitation,  fees  and
disbursements  of  counsel  for  the  Holders  in  connection  with  Blue  Sky
qualifications  of  the  Registrable  Securities  and  determination  of  the
eligibility  of the Registrable Securities for investment under the laws of such
jurisdictions  as  the  Holders  of  a  majority  of  Registrable Securities may
designate)),  (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the  printing  of  prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone  and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
up to a maximum amount of $7,500, (v) Securities Act liability insurance, if the
Company,  at  its  option,  elects  to  obtain such insurance, and (vi) fees and
expenses  of  all  other  Persons retained by the Company in connection with the
consummation  of  the  transactions  contemplated  by this Agreement, including,
without  limitation, the Company's independent public accountants (including the
expenses  of  any  comfort  letters  or  costs  associated  with the delivery by
independent  public  accountants  of  a  comfort  letter or comfort letters). In
addition,  the  Company  shall  be  responsible for all of its internal expenses

                                      -8-
<PAGE>
incurred in connection with the consummation of the transactions contemplated by
this  Agreement (including, without limitation, all salaries and expenses of its
officers  and  employees  performing legal or accounting duties), the expense of
any  annual audit, the fees and expenses incurred in connection with the listing
of  the Registrable Securities on any securities exchange as required hereunder.
The  Company  shall  not be responsible for any discounts, commissions, transfer
taxes  or other similar fees incurred by the Holders in connection with the sale
of  the  Registrable  Securities.

     5.     Indemnification.
            ---------------

          (a)     Indemnification  by  the  Company.  The  Company  shall,
                  ---------------------------------
notwithstanding  any  termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, managers, partners, members, shareholders,
agents,  brokers, investment advisors and employees of each of them, each Person
who controls any such Holder (within the meaning of Section 15 of the Securities
Act  or  Section 20 of the Exchange Act) and the officers, directors, agents and
employees  of  each  such controlling Person, to the fullest extent permitted by
applicable  law,  from  and  against  any  and  all  losses,  claims,  damages,
liabilities,  costs  (including,  without  limitation,  costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "Losses") , as incurred,
                                                         ------
arising out of or relating to any violation of securities laws by the Company or
untrue  or  alleged  untrue  statement  of  a  material  fact  contained  in the
Registration  Statement,  any  Prospectus  or  any  form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of  or  relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any  Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances  under which they were made) not misleading, except to the extent,
but  only  to  the  extent,  that  such untrue statements or omissions are based
solely  upon  information  regarding such Holder or such other Indemnified Party
furnished  in  writing  to the Company by such Holder expressly for use therein.
The  Company  shall  notify  the  Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions  contemplated  by  this  Agreement.

          (b)     Indemnification  by Holders.  Each Holder shall, severally and
                  ---------------------------
not  jointly,  indemnify and hold harmless the Company, its directors, officers,
agents  and  employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents  and employees of such controlling Persons, to the
fullest  extent  permitted  by  applicable  law, from and against all Losses (as
determined  by a court of competent jurisdiction in a final judgment not subject
to  appeal  or  review), as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any  Prospectus,  or  any  form of prospectus, or in any amendment or supplement
thereto,  or  arising  solely  out  of  or  based  solely upon any omission of a
material  fact required to be stated therein or necessary to make the statements
therein  (in  the  case  of  any  Prospectus or form of prospectus or supplement
thereto,  in  the  light  of  the  circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such untrue statement or
omission  is contained in any information so furnished in writing by such Holder
or  other  Indemnifying  Party  to the Company specifically for inclusion in the
Registration  Statement  or  such  Prospectus.  Notwithstanding  anything to the
contrary  contained  herein, each Holder shall be liable under this Section 5(b)
for  only  that  amount  as  does  not

                                      -9-
<PAGE>
exceed  the  net  proceeds to such Holder as a result of the sale of Registrable
Securities  pursuant  to  a  Registration  Statement.

          (c)     Conduct  of  Indemnification  Proceedings.  If  any Proceeding
                  -----------------------------------------
shall  be brought or asserted against any Person entitled to indemnity hereunder
(an  "Indemnified  Party"),  such  Indemnified  Party  promptly shall notify the
      ------------------
Person  from  whom indemnity is sought (the "Indemnifying Party) in writing, and
                                             ------------------
the  Indemnifying  Party  shall  be  entitled  to  assume  the  defense thereof,
including  the  employment of counsel reasonably satisfactory to the Indemnified
Party  and  the  payment  of  all  fees and expenses incurred in connection with
defense  thereof;  provided,  that  the failure of any Indemnified Party to give
such  notice  shall  not  relieve  the  Indemnifying Party of its obligations or
liabilities  pursuant to this Agreement, except (and only) to the extent that it
shall  be  finally  determined  by  a  court  of  competent  jurisdiction (which
determination  is  not  subject  to  appeal or further review) that such failure
shall  have  proximately  and  materially  adversely prejudiced the Indemnifying
Party.

          An  Indemnified  Party shall have the right to employ separate counsel
in  any  such Proceeding and to participate in the defense thereof, but the fees
and  expenses  of such counsel shall be at the expense of such Indemnified Party
unless:  (1)  the  Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified  Party  in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and  the Indemnifying Party, and such parties shall have been advised by counsel
that  a  conflict  of  interest  is  likely to exist if the same counsel were to
represent  such  Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to  employ  separate  counsel  at  the  expense  of  the Indemnifying Party, the
Indemnifying  Party  shall  not have the right to assume the defense thereof and
such  counsel  shall  be  at  the  expense  of  the  Indemnifying  Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected  without  its  written consent, which consent shall not be unreasonably
withheld  or  delayed.  No  Indemnifying  Party shall, without the prior written
consent  of  the  Indemnified  Party,  effect  any  settlement of any pending or
threatened  Proceeding  in respect of which any Indemnified Party is a party and
indemnity  has  been  sought  hereunder,  unless  such  settlement  includes  an
unconditional  release  of  such  Indemnified Party from all liability on claims
that  are  the  subject  matter  of  such  Proceeding.

          All  fees  and expenses of the Indemnified Party (including reasonable
fees  and  expenses  to  the extent incurred in connection with investigating or
preparing  to  defend  such  Proceeding  in  a manner not inconsistent with this
Section)  shall  be  paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification  hereunder; provided, that the Indemnified Party shall reimburse
all  such  fees  and  expenses to the extent it is finally judicially determined
that  such  Indemnified  Party  is  not  entitled to indemnification hereunder).

          (d)     Contribution.  If  a  claim  for indemnification under Section
                  ------------
5(a) or 5(b) is due but unavailable to an Indemnified Party because of a failure
or  refusal  of  a  governmental  authority  to  enforce Section 5(a) or 5(b) in
accordance  with  its terms (by reason of public policy or otherwise), then each
Indemnifying  Party,  in  lieu  of  indemnifying  such  Indemnified  Party,

                                      -10-
<PAGE>
shall  contribute  to  the amount paid or payable by such Indemnified Party as a
result  of  such  Losses,  in  such  proportion as is appropriate to reflect the
relative  benefits  received  by  the Indemnifying Party on the one hand and the
Indemnified  Party on the other from the offering of the Notes and the Warrants.
If,  but  only  if,  the  allocation  provided  by the foregoing sentence is not
permitted  by  applicable  law,  the allocation of contribution shall be made in
such  proportion  as  is  appropriate  to reflect not only the relative benefits
referred  to  in  the  foregoing  sentence  but  also  the  relative  fault,  as
applicable,  of  the Indemnifying Party and Indemnified Party in connection with
the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party  and  Indemnified  Party  shall be determined by reference to, among other
things,  whether  any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has  been  taken  or  made  by,  or  relates  to  information  supplied by, such
Indemnifying  Party  or  Indemnified  Party,  and  the parties' relative intent,
knowledge,  access  to  information  and  opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of  any  Losses shall be deemed to include, subject to the limitations set forth
in  Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred  by  such  party  in  connection with any Proceeding to the extent such
party  would  have  been  indemnified  for  such  fees  or  expenses  if  the
indemnification  provided  for  in  this  Section was available to such party in
accordance  with  its terms. In no event shall any selling Holder be required to
contribute  an  amount  under  this  Section  5(d) in excess of the net proceeds
received  by  such  Holder  upon  sale  of  such Holder's Registrable Securities
pursuant  to  the  Registration  Statement  giving  rise  to  such  contribution
obligation.

          The  parties  hereto  agree that it would not be just and equitable if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation  or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No  Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f)  of  the Securities Act) shall be entitled to contribution from any Person
who  was  not  guilty  of  such  fraudulent  misrepresentation.

          The  indemnity  and  contribution agreements contained in this Section
are  in  addition to any liability that the Indemnifying Parties may have to the
Indemnified  Parties  pursuant  to  the  law.

     6.     Rule  144.
            ---------

          As  long as any Holder owns Notes, Warrants or Registrable Securities,
the  Company  covenants  to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the  Company  after  the  date  hereof pursuant to Section 13(a) or 15(d) of the
Exchange  Act.  As  long  as  any  Holder  owns  Notes,  Warrants or Registrable
Securities,  if  the Company is not required to file reports pursuant to Section
13(a)  or  15(d) of the Exchange Act, it will prepare and furnish to the Holders
and make publicly available in accordance with Rule 144(c) promulgated under the
Securities  Act  annual  and  quarterly  financial  statements,  together with a
discussion  and  analysis  of  such  financial  statements in form and substance
substantially  similar  to those that would otherwise be required to be included
in  reports  required  by Section 13(a) or 15(d) of the Exchange Act, as well as
any  other  information  required  thereby, in the time period that such filings
would  have been required to have been made under the Exchange Act.  The Company
further  covenants  that  it  will  take  such  further

                                      -11-
<PAGE>
action  as  any  Holder  may reasonably request, all to the extent required from
time  to time to enable such Person to sell Conversion Shares and Warrant Shares
without  registration  under  the  Securities  Act  within the limitation of the
exemptions  provided by Rule 144 promulgated under the Securities Act, including
providing  any  legal opinions relating to such sale pursuant to Rule 144.  Upon
the  request  of  any Holder, the Company shall deliver to such Holder a written
certification  of  a  duly authorized officer as to whether it has complied with
such  requirements.

     7.     Miscellaneous.
            -------------

          (a)     Remedies.  In  the  event  of  a breach by the Company or by a
                  --------
Holder,  of  any  of  their obligations under this Agreement, such Holder or the
Company,  as  the  case  may  be,  in addition to being entitled to exercise all
rights  granted  by law and under this Agreement, including recovery of damages,
will  be  entitled  to  specific performance of its rights under this Agreement.
The  Company  and  each  Holder  agree  that  monetary damages would not provide
adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the  defense  that  a  remedy  at  law  would  be  adequate.

          (b)     No  Inconsistent  Agreements.  Neither  the Company nor any of
                  ----------------------------
its  subsidiaries  has,  as  of  the  date  hereof entered into and currently in
effect,  nor  shall the Company or any of its subsidiaries, on or after the date
of  this Agreement, enter into any agreement with respect to its securities that
is  inconsistent  with  the  rights  granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.  Except as disclosed in Schedule
                                                                        --------
2.1(c)  of the Purchase Agreement or Schedule II hereto, neither the Company nor
------                               -----------
any  of  its subsidiaries has previously entered into any agreement currently in
effect granting any registration rights with respect to any of its securities to
any  Person.  Without  limiting  the  generality  of  the foregoing, without the
written consent of the Holders of a majority of the then outstanding Registrable
Securities,  the  Company shall not grant to any Person the right to request the
Company  to  register  any  securities  of  the Company under the Securities Act
unless  the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions  of  this  Agreement.

          (c)     No Piggyback on Registrations.  Neither the Company nor any of
                  -----------------------------
its security holders (other than the Holders in such capacity pursuant hereto or
as disclosed in Schedule 2.1(c) of the Purchase Agreement or Schedule II hereto)
                ---------------                              -----------
may  include  securities  of  the Company in the Registration Statement, and the
Company  shall not after the date hereof enter into any agreement providing such
right  to  any of its securityholders, unless the right so granted is subject in
all respects to the prior rights in full of the Holders set forth herein, and is
not  otherwise  in  conflict  with  the  provisions  of  this  Agreement.

          (d)     Piggy-Back  Registrations.  For  a  period  of thirty-six (36)
                  -------------------------
months  following  the  Closing  Date, if there is not an effective Registration
Statement covering (i) Conversion Shares or (ii) Warrant Shares, and the Company
shall determine to prepare and file with the Commission a registration statement
relating  to  an offering for its own account or the account of others under the
Securities  Act  of any of its equity securities, other than on Form S-4 or Form
S-8  (each  as  promulgated  under the Securities Act) or their then equivalents
relating  to  equity  securities  to  be  issued  solely  in connection with any
acquisition  of  any  entity  or  business

                                      -12-
<PAGE>
or  equity securities issuable in connection with stock option or other employee
benefit  plans,  the Company shall send to each Holder of Registrable Securities
written  notice  of  such  determination  and,  if within thirty (30) days after
receipt  of  such  notice,  or  within  such  shorter  period  of time as may be
specified  by  the  Company  in  such written notice as may be necessary for the
Company  to comply with its obligations with respect to the timing of the filing
of  such  registration  statement,  any such Holder shall so request in writing,
(which  request shall specify the Registrable Securities intended to be disposed
of  by  the  Purchasers),  the  Company  will  cause  the registration under the
Securities  Act  of  all  Registrable  Securities  which the Company has been so
requested  to  register  by  the  Holder,  to the extent requisite to permit the
disposition  of the Registrable Securities so to be registered, provided that if
at  any  time  after  giving  written  notice  of  its intention to register any
securities  and  prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its  election,  give  written  notice  of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration  (but  not  from  its obligation to pay expenses in accordance with
Section 4 hereof), and (ii) in the case of a determination to delay registering,
shall  be  permitted  to  delay  registering  any  Registrable  Securities being
registered  pursuant  to  this  Section 7(d) for the same period as the delay in
registering  such  other  securities.  The  Company  shall  include  in  such
registration  statement  all  or  any  part  of such Registrable Securities such
holder  requests to be registered; provided, however, that the Company shall not
                                   --------  -------
be required to register any Registrable Securities pursuant to this Section 7(d)
that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the
case  of  an  underwritten  public  offering,  if the managing underwriter(s) or
underwriter(s)  should  reasonably  object  to  the inclusion of the Registrable
Securities  in  such  registration  statement,  then  if  the  Company  after
consultation  with the managing underwriter should reasonably determine that the
inclusion  of  such Registrable Securities would materially adversely affect the
offering  contemplated  in  such  registration  statement,  and  based  on  such
determination  recommends  inclusion  in such registration statement of fewer or
none  of  the  Registrable  Securities  of  the  Holders, then (x) the number of
Registrable  Securities  of  the Holders included in such registration statement
shall  be  reduced  pro-rata  among  such  Holders  (based  upon  the  number of
Registrable  Securities  requested  to  be included in the registration), if the
Company  after  consultation with the underwriter(s) recommends the inclusion of
fewer  Registrable  Securities, or (y) none of the Registrable Securities of the
Holders  shall  be included in such registration statement, if the Company after
consultation  with  the  underwriter(s) recommends the inclusion of none of such
Registrable  Securities; provided, however, that if securities are being offered
                         --------  -------
for  the  account  of  other  persons  or  entities as well as the Company, such
reduction  shall  not  represent a greater fraction of the number of Registrable
securities  intended  to  be offered by the Holders than the fraction of similar
reductions  imposed  on such other persons or entities (other than the Company).

          (e)     Failure  to File Registration Statement and Other Events.  The
                  --------------------------------------------------------
Company  and  the  Purchasers  agree that the Holders will suffer damages if the
Registration  Statement  is  not  filed  on  or prior to the Filing Date and not
declared  effective  by the Commission on or prior to the Effectiveness Date and
maintained  in the manner contemplated herein during the Effectiveness Period or
if  certain  other events occur.  The Company and the Holders further agree that
it would not be feasible to ascertain the extent of such damages with precision.
Accordingly,  if  (A) the Registration Statement is not filed on or prior to the
Filing  Date, or (B) the Registration Statement is not declared effective by the
Commission  on  or  prior  to  the

                                      -13-
<PAGE>
Effectiveness  Date,  or  (C)  the  Company  fails to file with the Commission a
request  for  acceleration  in  accordance  with  Rule 461 promulgated under the
Securities  Act  within  three (3) Business Days of the date that the Company is
notified  (orally  or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be "reviewed," or not subject to further review,
or  (D)  the  Registration Statement is filed with and declared effective by the
Commission  but  thereafter  ceases  to  be  effective  as  to  all  Registrable
Securities  at  any  time  prior  to the expiration of the Effectiveness Period,
without being succeeded immediately by a subsequent Registration Statement filed
with  and  declared effective by the Commission, or (E) the Company has breached
Section 3(n) hereof, or (F) trading in the Common Stock shall be suspended or if
the  Common Stock is no longer quoted on or delisted from the OTC Bulletin Board
(or other principal exchange on which the Common Stock is traded) for any reason
for  more  than  three  (3)  Business Days in the aggregate (any such failure or
breach  being referred to as an "Event," and for purposes of clauses (A) and (B)
                                 -----
the  date  on which such Event occurs, or for purposes of clause (C) the date on
which  such three (3) Business Day period is exceeded, or for purposes of clause
(D)  after  more  than fifteen (15) Business Days, or for purposes of clause (F)
the date on which such three (3) Business Day period is exceeded, being referred
to  as  "Event  Date"),  the  Company  shall pay an amount in cash as liquidated
         -----------
damages  to  each Holder equal to two percent (2%) of the amount of the Holder's
initial  investment  in  the  Notes  for  each calendar month or portion thereof
thereafter  from  the  Event Date until the applicable Event is cured; provided,
                                                                       --------
however,  that in no event shall the amount of liquidated damages payable at any
-------
time and from time to time to any Holder pursuant to this Section 7(e) exceed an
aggregate  of  sixteen  percent  (16%)  of  the  amount  of the Holder's initial
investment  in  the  Notes.  Notwithstanding  anything  to  the contrary in this
paragraph  (e), if (a) any of the Events described in clauses (A), (B), (C), (D)
or  (F)  shall  have occurred, (b) on or prior to the applicable Event Date, the
Company  shall  have  exercised its rights under Section 3(n) hereof and (c) the
postponement  or suspension permitted pursuant to such Section 3(n) shall remain
effective as of such applicable Event Date, then the applicable Event Date shall
be  deemed instead to occur on the second Business Day following the termination
of  such  postponement or suspension.  Liquidated damages payable by the Company
pursuant  to  this Section 7(d) shall be payable on the first (1st) Business Day
of  each  thirty  (30)  day  period  following  the Event Date.  Notwithstanding
anything  to  the  contrary  contained  herein, in no event shall any liquidated
damages be payable with respect to the Warrants or the Warrant Shares.

          (f)     Amendments  and  Waivers.  The  provisions  of this Agreement,
                  ------------------------
including  the  provisions  of  this  sentence,  may not be amended, modified or
supplemented,  and  waivers or consents to departures from the provisions hereof
may  not be given, unless the same shall be in writing and signed by the Company
and  the  Holders  of  seventy-five  percent (75%) of the Registrable Securities
outstanding.

                                      -14-
<PAGE>
          (g)     Notices.  Any notice, demand, request, waiver or other
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective  (a)  upon hand delivery, telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:

          If to the Company:            Charys Holding Company, Inc.
                                        1117 Perimeter Center West, Suite N415
                                        Atlanta, Georgia 30338
                                        Attention: Chief Executive Officer
                                        Tel. No.: (678) 443--2300
                                        Fax  No.: (678) 443-2320

          with copies (which            Glast, Phillips & Murray, P.C.
          shall not constitute          815 Walker Street, Suite 1250
          notice) to:                   Houston, Texas 77002
                                        Attention: Norman T. Reynolds, Esq.
                                        Tel. No.: (713) 237-3135
                                        Fax  No.: (713) 237-3202

          If to any Purchaser:          At the address of such Purchaser set
                                        forth on Exhibit A to this Agreement,
                                                 ---------
                                        with copies to Purchaser's counsel as
                                        set forth on Exhibit A or as specified
                                                     ---------
                                        in writing by such:

          with  copies (which           Kramer Levin Naftalis & Frankel  LLP
          shall not constitute          1177 Avenue of the Americas
          notice) to:                   New York, New York 10036
                                        Attention:  Christopher S. Auguste, Esq.
                                        Tel No.: (212) 715-9100
                                        Fax No.: (212) 715-8000

          Any  party hereto may from time to time change its address for notices
by  giving  at least ten (10) days written notice of such changed address to the
other  party  hereto.

          (h)     Successors  and Assigns.  This Agreement shall be binding upon
                  -----------------------
and  inure  to  the  benefit  of  the parties and their successors and permitted
assigns  and  shall  inure  to the benefit of each Holder and its successors and
assigns.  The  Company  may  not  assign  this Agreement or any of its rights or
obligations  hereunder  without  the prior written consent of each Holder.  Each
Purchaser  may  assign  its rights hereunder in the manner and to the Persons as
permitted  under  the  Purchase  Agreement.

                                      -15-
<PAGE>
          (i)     Assignment  of Registration Rights.  The rights of each Holder
                  ----------------------------------
hereunder,  including  the  right  to  have  the  Company  register  for  resale
Registrable  Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any Person of all or a portion of the
Notes  or  the  Registrable Securities if: (i) the Holder agrees in writing with
the  transferee  or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (ii)
the  Company  is,  within  a  reasonable time after such transfer or assignment,
furnished  with written notice of (a) the name and address of such transferee or
assignee,  and (b) the securities with respect to which such registration rights
are  being  transferred or assigned, (iii) following such transfer or assignment
the  further  disposition  of  such securities by the transferee or assignees is
restricted  under  the Securities Act and applicable state securities laws, (iv)
at  or  before  the time the Company receives the written notice contemplated by
clause  (ii)  of this Section, the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions of this Agreement, and (v) such
transfer  shall have been made in accordance with the applicable requirements of
the  Purchase  Agreement.  The  rights  to assignment shall apply to the Holders
(and  to  subsequent)  successors  and  assigns.

          (j)     Counterparts.  This Agreement may be executed in any number of
                  ------------
counterparts,  each  of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not  sign the same counterpart.  In the event that any signature is delivered by
facsimile  transmission,  such signature shall create a valid binding obligation
of  the party executing (or on whose behalf such signature is executed) the same
with  the same force and effect as if such facsimile signature were the original
thereof.

          (k)     Governing Law; Jurisdiction.  This Agreement shall be governed
                  ---------------------------
by  and construed in accordance with the internal laws of the State of New York,
without  giving  effect  to  any  of the conflicts of law principles which would
result  in the application of the substantive law of another jurisdiction.  This
Agreement shall not be interpreted or construed with any presumption against the
party  causing  this Agreement to be drafted.  The Company and the Holders agree
that  venue for any dispute arising under this Agreement will lie exclusively in
the  state  or  federal  courts  located  in  New York County, New York, and the
parties  irrevocably  waive any right to raise forum non conveniens or any other
argument  that  New  York  is not the proper venue.  The Company and the Holders
irrevocably  consent to personal jurisdiction in the state and federal courts of
the  state  of  New  York.  The Company and the Holders consent to process being
served  in  any  such suit, action or proceeding by delivering a copy thereof to
such  party  at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process
and  notice  thereof.  Nothing  in  this  Section 7(k) shall affect or limit any
right  to  serve  process in any other manner permitted by law.  The Company and
the  Holders  hereby  agree  that  the  prevailing  party in any suit, action or
proceeding  arising  out  of  or  relating  to  this  Agreement  or the Purchase
Agreement, shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing  party.  The  parties hereby waive all rights to a trial by jury.

          (l)     Cumulative  Remedies.  The  remedies  provided  herein  are
                  --------------------
cumulative and not exclusive of any remedies provided by law.

                                      -16-
<PAGE>
          (m)     Severability.  If any term, provision, covenant or restriction
                  ------------
of  this  Agreement is held to be invalid, illegal, void or unenforceable in any
respect,  the remainder of the terms, provisions, covenants and restrictions set
forth  herein  shall  remain  in  full  force  and effect and shall in no way be
affected,  impaired  or  invalidated,  and  the  parties  hereto shall use their
reasonable  efforts  to find and employ an alternative means to achieve the same
or  substantially  the same result as that contemplated by such term, provision,
covenant  or  restriction.  It  is  hereby  stipulated  and  declared  to be the
intention  of  the  parties  that  they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter  declared  invalid,  illegal,  void  or  unenforceable.

          (n)     Headings.  The  headings  herein  are for convenience only, do
                  --------
not  constitute  a  part  of  this Agreement and shall not be deemed to limit or
affect  any  of  the  provisions  hereof.

          (o)     Shares  Held  by  the Company and its Affiliates. Whenever the
                  ------------------------------------------------
consent  or  approval  of  Holders  of  a  specified  percentage  of Registrable
Securities  is required hereunder, Registrable Securities held by the Company or
its  Affiliates  (other  than any Holder or transferees or successors or assigns
thereof  if  such  Holder  is  deemed to be an Affiliate solely by reason of its
holdings  of  such  Registrable  Securities) shall not be counted in determining
whether  such  consent  or  approval  was  given by the Holders of such required
percentage.

          (p)     Independent  Nature  of  Purchasers.  The Company acknowledges
                  -----------------------------------
that  the  obligations  of  each  Purchaser  under the Transaction Documents are
several  and  not  joint  with  the  obligations  of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under the Transaction Documents. The Company acknowledges
that  the  decision  of  each  Purchaser  to purchase Securities pursuant to the
Purchase  Agreement  has  been made by such Purchaser independently of any other
Purchaser  and  independently  of  any  information,  materials,  statements  or
opinions  as  to  the  business,  affairs,  operations,  assets,  properties,
liabilities,  results  of  operations,  condition  (financial  or  otherwise) or
prospects  of  the  Company  or  of its Subsidiaries which may have been made or
given by any other Purchaser or by any agent or employee of any other Purchaser,
and  no  Purchaser or any of its agents or employees shall have any liability to
any  Purchaser  (or  any  other  person)  relating  to  or arising from any such
information,  materials,  statements  or opinions. The Company acknowledges that
nothing contained herein, or in any Transaction Document, and no action taken by
any Purchaser pursuant hereto or thereto (including, but not limited to, the (i)
inclusion  of  a Purchaser in the Registration Statement and (ii) review by, and
consent  to,  such  Registration  Statement  by  a Purchaser) shall be deemed to
constitute  the  Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way  acting  in  concert  or  as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company acknowledges
that  each  Purchaser shall be entitled to independently protect and enforce its
rights,  including  without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary for any
other  Purchaser  to be joined as an additional party in any proceeding for such
purpose. The Company acknowledges that for reasons of administrative convenience
only,  the  Transaction  Documents  have been prepared by counsel for one of the
Purchasers  and  such  counsel  does  not  represent  all of the Purchasers. The
Company acknowledges that it has elected to provide all Purchasers with the same
terms  and  Transaction  Documents  for  the  convenience of the Company and not
because  it  was  required  or requested to do so by the Purchasers. The Company
acknowledges  that  such  procedure  with  respect  to  the

                                      -17-
<PAGE>
Transaction Documents in no way creates a presumption that the Purchasers are in
any  way  acting  in  concert  or  as  a  group  with respect to the Transaction
Documents  or  the  transactions  contemplated  hereby  or  thereby.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -18-
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights  Agreement  to be duly executed by their respective authorized persons as
of  the  date  first  indicated  above.

                                        CHARYS HOLDING COMPANY, INC.

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                        PURCHASER:

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                      -19-
<PAGE>
                                   Schedule I
                                   ----------
                                   Purchasers
                                   ----------

<TABLE>
<CAPTION>
                               LIST OF PURCHASERS

<S>                                     <C>
Vision Opportunity Master Fund, Ltd.    $10,000,000
Fort Mason Master, L.P.                 $ 3,286,850
Fort Mason Partners, L.P.               $   213,150
Opal Limited                            $   450,000
</TABLE>

                                      -20-
<PAGE>
                                   Schedule II
                                   -----------
          Other Securities to be Included on the Registration Statement
          -------------------------------------------------------------

See the Company's Registration Statement on Form SB-2 of October 2006 filed with
the Securities and Exchange Commission.

                                      -21-
<PAGE>
                                    Exhibit A
                                    ---------
                              Plan of Distribution
                              --------------------

     The  selling  security holders and any of their pledgees, donees, assignees
and  successors-in-interest  may,  from  time  to time, sell any or all of their
shares  of  common  stock  being  offered  under  this  prospectus  on any stock
exchange,  market  or  trading  facility on which shares of our common stock are
traded  or  in  private transactions.  These sales may be at fixed or negotiated
prices.  The  selling  security holders may use any one or more of the following
methods  when  disposing  of  shares:

     -    ordinary  brokerage  transactions  and  transactions  in  which  the
          broker-dealer  solicits  purchasers;

     -    block  trades  in  which  the  broker-dealer  will attempt to sell the
          shares  as agent but may position and resell a portion of the block as
          principal  to  facilitate  the  transaction;

     -    purchases  by  a  broker-dealer  as  principal  and  resales  by  the
          broker-dealer  for  its  account;

     -    an  exchange  distribution  in  accordance  with  the  rules  of  the
          applicable  exchange;

     -    privately  negotiated  transactions;

     -    to  cover  short  sales  made  after  the  date  that the registration
          statement  of which this prospectus is a part is declared effective by
          the  Commission;

     -    broker-dealers  may  agree with the selling security holders to sell a
          specified  number  of  such  shares  at  a stipulated price per share;

     -    a combination of any of these methods of sale; and

     -    any other method permitted pursuant to applicable law.

     The  shares  may  also  be  sold under Rule 144 under the Securities Act of
1933,  as  amended  ("Securities  Act"),  if  available,  rather than under this
prospectus.  The  selling security holders have the sole and absolute discretion
not  to  accept  any  purchase offer or make any sale of shares if they deem the
purchase  price  to  be  unsatisfactory  at  any  particular  time.

     The selling security holders may pledge their shares to their brokers under
the  margin  provisions  of  customer  agreements.  If a selling security holder
defaults on a margin loan, the broker may, from time to time, offer and sell the
pledged  shares.

     Broker-dealers  engaged  by  the  selling  security holders may arrange for
other  broker-dealers  to  participate  in  sales.  Broker-dealers  may  receive
commissions  or  discounts  from  the  selling  security  holders  (or,  if  any
broker-dealer  acts as agent for the purchaser of shares, from the purchaser) in
amounts  to be negotiated, which commissions as to a particular broker or dealer
may  be in excess of customary commissions to the extent permitted by applicable
law.

                                      -22-
<PAGE>
     If sales of shares offered under this prospectus are made to broker-dealers
as  principals,  we  would be required to file a post-effective amendment to the
registration  statement  of  which  this  prospectus  is  a  part.  In  the
post-effective  amendment,  we  would  be  required to disclose the names of any
participating  broker-dealers and the compensation arrangements relating to such
sales.

     The  selling  security  holders  and  any broker-dealers or agents that are
involved in selling the shares offered under this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales.  Commissions received by these broker-dealers or agents and any profit on
the  resale  of  the  shares  purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Any broker-dealers or agents
that  are  deemed  to  be  underwriters  may  not sell shares offered under this
prospectus  unless  and until we set forth the names of the underwriters and the
material  details  of  their  underwriting  arrangements in a supplement to this
prospectus  or,  if  required,  in  a  replacement  prospectus  included  in  a
post-effective  amendment to the registration statement of which this prospectus
is  a  part.

     The  selling  security  holders  and any other persons participating in the
sale or distribution of the shares offered under this prospectus will be subject
to  applicable  provisions  of  the  Exchange Act, and the rules and regulations
under  that  act,  including  Regulation  M.  These  provisions  may  restrict
activities  of, and limit the timing of purchases and sales of any of the shares
by,  the  selling  security  holders  or  any  other person.  Furthermore, under
Regulation  M,  persons  engaged  in a distribution of securities are prohibited
from  simultaneously engaging in market making and other activities with respect
to  those securities for a specified period of time prior to the commencement of
such distributions, subject to specified exceptions or exemptions.  All of these
limitations  may  affect  the  marketability  of  the  shares.

     If  any  of  the  shares  of common stock offered for sale pursuant to this
prospectus  are transferred other than pursuant to a sale under this prospectus,
then  subsequent  holders  could  not use this prospectus until a post-effective
amendment  or  prospectus supplement is filed, naming such holders.  We offer no
assurance as to whether any of the selling security holders will sell all or any
portion  of  the  shares  offered  under  this  prospectus.

     We  have  agreed  to  pay  all  fees  and expenses we incur incident to the
registration  of  the shares being offered under this prospectus.  However, each
selling  security  holder and purchaser is responsible for paying any discounts,
commissions  and  similar  selling  expenses  they  incur.

     We  and  the  selling security holders have agreed to indemnify one another
against  certain losses, damages and liabilities arising in connection with this
prospectus,  including  liabilities  under  the  Securities  Act.

                                      -23-
<PAGE>
                                    EXHIBIT E
                            FORM OF ESCROW AGREEMENT

                                        ix
<PAGE>
                                ESCROW AGREEMENT
                                ----------------

          THIS  ESCROW  AGREEMENT  (this  "Agreement") is made as of December 4,
                                           ---------
2006,  by  and  among  Charys Holding Company, Inc., a Delaware corporation (the
"Company"),  Vision  Opportunity  Master  Fund,  Ltd.  ("Vision")  and the other
 -------                                                 ------
purchasers  signatory  hereto  (collectively with Vision, the "Purchasers"), and
                                                               ----------
Kramer  Levin  Naftalis  &  Frankel  LLP,  with an address at 1177 Avenue of the
Americas, New York, New York 10036 (the "Escrow Agent").  Capitalized terms used
                                         ------------
but  not  defined  herein  shall  have  the  meanings  set forth in the Purchase
Agreement  (as  defined  below).

                              W I T N E S S E T H:
                              --------------------

          WHEREAS,  the  Purchasers  will  be  purchasing  from  the  Company
subordinated convertible promissory notes (the "Notes"), convertible into shares
                                                -----
of  the  Company's  common stock, par value $0.001 per share, pursuant to a Note
and  Warrant  Purchase  Agreement  dated  as of the date hereof by and among the
Company  and  the  Purchasers  (the  "Purchase  Agreement");
                                      -------------------

          WHEREAS, the Company and the Purchasers have requested that the Escrow
Agent hold the subscription amounts with respect to the purchase of the Notes in
escrow  until the Escrow Agent has received all closing documents and deliveries
required  under  Article  IV  of  the  Purchase  Agreement  with respect to each
Closing;  and

          NOW,  THEREFORE, in consideration of the covenants and mutual promises
contained  herein  and  other  good  and valuable consideration, the receipt and
legal  sufficiency  of which are hereby acknowledged and intending to be legally
bound  hereby,  the  parties  agree  as  follows:

                                    ARTICLE I

                               TERMS OF THE ESCROW

          1.1.     The  parties  hereby  agree  to  establish  an escrow account
with  the  Escrow  Agent  whereby  the Escrow Agent shall hold the funds for the
purchase  of  the  Notes  as  contemplated  by  the  Purchase  Agreement.

          1.2.     Upon the Escrow Agent's receipt of the aggregate subscription
amounts  into  its  master  escrow  account, together with copies of counterpart
signature pages of the Transaction Documents from each Purchaser and the Company
and  all other closing documents and deliveries required under Article IV of the
Purchase  Agreement, it shall advise the Company and Vision, or their designated
attorney or agent, of the amount of funds it has received into its master escrow
account.

                                        1
<PAGE>
          1.3.     Wire  transfers to the Escrow Agent shall be made as follows:

               Bank:           Citibank, N.A.
                               666 Fifth Avenue
                               New York, NY 10103
               ABA No.:        021000089
               Account Name:   Kramer Levin Naftalis & Frankel LLP IOLA Account
               Account No.:    37317968
               Reference:      Charys Holding Company, Inc./
                               Christopher S. Auguste

          1.4.     The  Company  and Vision, promptly after being advised by the
Escrow  Agent  that  it  has  received the subscription amounts for the Closing,
copies  of  counterpart  signature  pages of the Transaction Documents from each
Purchaser  and  the  Company  and  all  other  closing  documents and deliveries
required under Article IV of the Purchase Agreement, shall deliver to the Escrow
Agent  a  Release Notice, in the form attached hereto as Exhibit A (the "Release
                                                         ---------       -------
Notice").
------

          1.5.     Once the Escrow Agent receives the Release Notice executed by
the  Company  and  Vision, the Escrow Agent shall wire the subscription proceeds
per  the  written  instructions of the Company and Vision, net of fees, expenses
and  any  other  disbursements  as  set  forth  in  the  Release  Notice.

          1.6.     Wire  transfers  to  the  Company  shall  be made pursuant to
written  instructions  from  the  Company  provided  to  the  Escrow  Agent.

          1.7.     Upon  the  written  request  from  a  Purchaser to the Escrow
Agent,  the Escrow Agent shall promptly return the subscription proceeds to each
Purchaser  pursuant  to  written  wire  instructions  to  be  delivered  by such
Purchaser  to  the  Escrow  Agent.

                                   ARTICLE II

                                  MISCELLANEOUS

          2.1.       No waiver or any breach of any covenant or provision herein
contained  shall  be  deemed  a  waiver  of  any  preceding or succeeding breach
thereof,  or  of any other covenant or provision herein contained.  No extension
of time for performance of any obligation or act shall be deemed an extension of
the  time  for  performance  of  any  other  obligation  or  act.

          2.2.     All  notices  or  other  communications required or permitted
hereunder  shall  be  in writing, and shall be sent as set forth in the Purchase
Agreement.

          2.3.     This  Escrow  Agreement shall be binding upon and shall inure
to  the benefit of the permitted successors and permitted assigns of the parties
hereto.

          2.4.     This  Escrow  Agreement  is  the  final  expression  of,  and
contains  the  entire agreement between, the parties with respect to the subject
matter  hereof  and  supersedes  all  prior

                                        2
<PAGE>
understandings with respect thereto.  This Escrow Agreement may not be modified,
changed,  supplemented  or  terminated,  nor  may  any  obligations hereunder be
waived,  except  by written instrument signed by the parties to be charged or by
its agent duly authorized in writing or as otherwise expressly permitted herein.

          2.5.     Whenever  required  by  the context of this Escrow Agreement,
the  singular shall include the plural and masculine shall include the feminine.
This  Escrow  Agreement shall not be construed as if it had been prepared by one
of  the  parties,  but  rather as if both parties had prepared the same.  Unless
otherwise  indicated,  all  references to Articles are to this Escrow Agreement.

          2.6.     The parties hereto expressly agree that this Escrow Agreement
shall be governed by, interpreted under and construed and enforced in accordance
with  the  laws  of  the  State  of New York, without regard to conflicts of law
principles  that  would  result  in  the  application of the substantive laws of
another jurisdiction.  Any action to enforce, arising out of, or relating in any
way to, any provisions of this Escrow Agreement shall only be brought in a state
or  Federal  court  sitting  in  New  York  City,  Borough  of  Manhattan.

          2.7.     The  Escrow Agent's duties hereunder may be altered, amended,
modified  or revoked only by a writing signed by the Company, each Purchaser and
the  Escrow  Agent.

          2.8.     The  Escrow Agent shall be obligated only for the performance
of  such  duties  as are specifically set forth herein and may rely and shall be
protected  in  relying  or  refraining  from acting on any instrument reasonably
believed  by the Escrow Agent to be genuine and to have been signed or presented
by the proper party or parties.  The Escrow Agent shall not be personally liable
for  any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent
while  acting  in  good  faith and in the absence of gross negligence, fraud and
willful  misconduct, and any act done or omitted by the Escrow Agent pursuant to
the  advice  of the Escrow Agent's attorneys-at-law shall be conclusive evidence
of  such  good  faith,  in  the  absence  of gross negligence, fraud and willful
misconduct.

          2.9.     The  Escrow Agent is hereby expressly authorized to disregard
any  and  all warnings given by any of the parties hereto or by any other person
or  corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court.  In case the Escrow Agent obeys or complies with any such order, judgment
or  decree, the Escrow Agent shall not be liable to any of the parties hereto or
to  any  other  person,  firm  or  corporation  by  reason  of such decree being
subsequently  reversed,  modified, annulled, set aside, vacated or found to have
been  entered  without  jurisdiction.

          2.10.     The  Escrow  Agent  shall  not  be  liable in any respect on
account  of  the  identity,  authorization or rights of the parties executing or
delivering  or  purporting  to  execute or deliver the Purchase Agreement or any
documents  or  papers deposited or called for thereunder in the absence of gross
negligence,  fraud  and  willful  misconduct.

          2.11.     The  Escrow  Agent  shall  be  entitled to employ such legal
counsel  and  other  experts  as the Escrow Agent may deem necessary properly to
advise  the Escrow Agent in connection with the Escrow Agent's duties hereunder,
may  rely  upon  the  advice  of  such  counsel,

                                        3
<PAGE>
and may pay such counsel reasonable compensation therefor which shall be paid by
the  Escrow  Agent.  THE  ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR ONE OF THE
PURCHASERS AND MAY CONTINUE TO ACT AS LEGAL COUNSEL FOR SUCH PURCHASER FROM TIME
TO  TIME, NOTWITHSTANDING ITS DUTIES AS THE ESCROW AGENT HEREUNDER.  THE COMPANY
AND  THE PURCHASERS CONSENT TO THE ESCROW AGENT ACTING IN SUCH CAPACITY AS LEGAL
COUNSEL  FOR  ONE OF THE PURCHASERS AND WAIVE ANY CLAIM THAT SUCH REPRESENTATION
REPRESENTS  A CONFLICT OF INTEREST ON THE PART OF THE ESCROW AGENT.  THE COMPANY
AND THE PURCHASERS UNDERSTAND THAT THE ESCROW AGENT IS RELYING EXPLICITLY ON THE
FOREGOING  PROVISION  IN  ENTERING  INTO  THIS  ESCROW  AGREEMENT.

          2.12.     The  Escrow  Agent's  responsibilities  as  escrow  agent
hereunder  shall  terminate  if  the Escrow Agent shall resign by giving written
notice to the Company and the Purchasers.  In the event of any such resignation,
the  Purchasers  and  the Company shall appoint a successor Escrow Agent and the
Escrow  Agent  shall deliver to such successor Escrow Agent any escrow funds and
other  documents  held  by  the  Escrow  Agent.

          2.13.     If  the  Escrow  Agent  reasonably requires other or further
instruments  in  connection with this Escrow Agreement or obligations in respect
hereto,  the necessary parties hereto shall join in furnishing such instruments.

          2.14.     It  is  understood  and agreed that should any dispute arise
with  respect  to  the  delivery  and/or ownership or right of possession of the
documents  or  the  escrow  funds held by the Escrow Agent hereunder, the Escrow
Agent  is  authorized  and directed in the Escrow Agent's sole discretion (1) to
retain  in  the Escrow Agent's possession without liability to anyone all or any
part  of  said documents or the escrow funds until such disputes shall have been
settled  either  by mutual written agreement of the parties concerned by a final
order,  decree  or  judgment or a court of competent jurisdiction after the time
for  appeal  has  expired and no appeal has been perfected, but the Escrow Agent
shall be under no duty whatsoever to institute or defend any such proceedings or
(2) to deliver the escrow funds and any other property and documents held by the
Escrow  Agent  hereunder  to  a  state or Federal court having competent subject
matter  jurisdiction  and located in the City of New York, Borough of Manhattan,
in  accordance  with  the  applicable  procedure  therefor.

          2.15.     The  Company  and each Purchaser agree jointly and severally
to  indemnify  and  hold  harmless the Escrow Agent and its partners, employees,
agents  and  representatives  from  any  and  all  claims, liabilities, costs or
expenses in any way arising from or relating to the duties or performance of the
Escrow  Agent  hereunder  or  the  transactions  contemplated  hereby  or by the
Purchase  Agreement other than any such claim, liability, cost or expense to the
extent  the same shall have been determined by final, unappealable judgment of a
court  of  competent  jurisdiction  to  have resulted from the gross negligence,
fraud  or  willful  misconduct  of  the  Escrow  Agent.

                            [SIGNATURE PAGE FOLLOWS]

                                        4
<PAGE>
                      [SIGNATURE PAGE TO ESCROW AGREEMENT]

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of  this  4th  day  of  December,  2006.

CHARYS HOLDING COMPANY, INC.

By:
   -------------------------------------
   Name:
   Title:

ESCROW AGENT:

KRAMER LEVIN NAFTALIS & FRANKEL LLP

By:
   -------------------------------------
   Name:
   Title:

                      [PURCHASERS' SIGNATURE PAGE FOLLOWS]

                                        5
<PAGE>
                [PURCHASER'S SIGNATURE PAGE TO ESCROW AGREEMENT]

Name of Investing Entity:
                         -----------------------------
Signature of Authorized Signatory of Investing Entity:
                                                      --------------------------
Name of Authorized Signatory:
                             ------------------------------
Title of Authorized Signatory:
                              -----------------------------

                                        6
<PAGE>
                                                                    Exhibit A to
                                                                    ------------
                                                                Escrow Agreement
                                                                ----------------

                                 RELEASE NOTICE
                                 --------------

          The UNDERSIGNED, pursuant to the Escrow Agreement dated as of December
4,  2006  among  the  Company, the Purchasers signatory thereto and Kramer Levin
Naftalis  & Frankel LLP, as Escrow Agent (the "Escrow Agreement"), hereby notify
                                               ----------------
the  Escrow Agent that each of the conditions precedent to the purchase and sale
of  the Notes have been satisfied or waived in accordance with Article IV of the
Purchase  Agreement.  The  Company  hereby  confirms  that all of its respective
representations  and  warranties contained in the Purchase Agreement remain true
and  correct  and  authorize  the release by the Escrow Agent of the funds to be
released  as  described  in  the  Escrow Agreement and as set forth below.  This
Release  Notice shall not be effective until executed by the Company and Vision.

          Capitalized  terms  used herein and not defined shall have the meaning
ascribed  to  such  terms  in  the  Escrow  Agreement.

          This Release Notice may be signed in one or more counterparts, each of
which  shall  be  deemed  an  original.

          Please release the $____________ that has been deposited in the escrow
account  pursuant  to  the  Escrow  Agreement  according  to  the  following
instructions:

                                [TO BE COMPLETED]

                                        7
<PAGE>
          IN WITNESS WHEREOF, the undersigned have caused this Release Notice to
be  duly  executed  and  delivered  as  of  this  ____  day  of  December, 2006.

CHARYS HOLDING COMPANY, INC.

By:
   -------------------------------------
   Name:
   Title:

VISION OPPORTUNITY MASTER FUND, LTD.

By:
   -------------------------------------
   Name:
   Title:

                                        8
<PAGE>
                                    EXHIBIT F
                 FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                          CHARYS HOLDING COMPANY, INC.

                                                          as of December 4, 2006

[Name and address of Transfer Agent]
Attn:
     ---------------

LADIES AND GENTLEMEN:

     Reference  is made to that certain Note and Warrant Purchase Agreement (the
"PURCHASE AGREEMENT"), dated as of December 4, 2006, by and among Charys Holding
Company,  Inc., a Delaware corporation (the "COMPANY"), and the purchasers named
therein  (collectively,  the  "PURCHASERS")  pursuant  to  which  the Company is
issuing  to  the  Purchasers  subordinated  convertible  promissory  notes  (the
"NOTES")  and  warrants  (the  "WARRANTS")  to  purchase shares of the Company's
common  stock,  par  value  $0.001  per share (the "COMMON STOCK").  This letter
shall serve as our irrevocable authorization and direction to you (provided that
you  are  the  transfer  agent  of  the Company at such time) to issue shares of
Common Stock upon conversion of the Notes (the "CONVERSION SHARES") and exercise
of  the Warrants (the "WARRANT SHARES") to or upon the order of a Purchaser from
time to time upon (i) surrender to you of a properly completed and duly executed
Conversion  Notice  or Exercise Notice, as the case may be, in the form attached
hereto  as  Exhibit  I  and  Exhibit  II,  respectively, (ii) in the case of the
conversion  of  Notes,  a  copy  of the Note (with the original delivered to the
Company)  representing  the  Notes  being  converted or, in the case of Warrants
being  exercised,  a copy of the Warrants (with  the original Warrants delivered
to  the  Company)  being  exercised  (or,  in  each  case,  an  indemnification
undertaking  with  respect  to  such  Notes or the Warrants in the case of their
loss,  theft  or  destruction),  and (iii) delivery of a treasury order or other
appropriate order duly executed by a duly authorized officer of the Company.  So
long  as  you  have previously received written confirmation from counsel to the
Company  that a registration statement covering resales of the Conversion Shares
or  Warrant Shares, as applicable, has been declared effective by the Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the  "1933 ACT"), and no subsequent notice by the Company or its counsel of the
suspension  or  termination of its effectiveness, then certificates representing
the Conversion Shares and the Warrant Shares, as the case may be, shall not bear
any legend restricting transfer of the Conversion Shares and the Warrant Shares,
as  the  case  may  be,  thereby  and should not be subject to any stop-transfer
restriction.  Provided,  however,  that  if  you  have  not  previously received
written  confirmation  from counsel to the Company that a registration statement
covering  resales of the Conversion Shares or Warrant Shares, as applicable, has
been declared effective by the SEC under the 1933 Act, then the certificates for
the  Conversion  Shares and the Warrant Shares shall bear a legend substantially
as  follows:

     "THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
     REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
     SECURITIES  ACT"),  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
     TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED UNDER THE
     SECURITIES  ACT OR APPLICABLE STATE SECURITIES LAWS, OR CHARYS HOLDING
     COMPANY,  INC.  SHALL  HAVE

                                       x
<PAGE>
     RECEIVED  AN  OPINION  OF  ITS  COUNSEL  THAT  REGISTRATION  OF  SUCH
     SECURITIES  UNDER  THE  SECURITIES  ACT  AND  UNDER  THE PROVISIONS OF
     APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT  REQUIRED."

and,  provided  further,  that  the  Company may from time to time notify you to
place  stop-transfer  restrictions on the certificates for the Conversion Shares
and  the  Warrant  Shares  in  the  event  a registration statement covering the
Conversion Shares and the Warrant Shares is subject to amendment for events then
current.

     A  form  of  written  confirmation  from  counsel  to  the  Company  that a
registration statement covering resales of the Conversion Shares and the Warrant
Shares  has  been  declared  effective by the SEC under the 1933 Act is attached
hereto  as  Exhibit  III.

     Please  be  advised  that the Purchasers are relying upon this letter as an
inducement to enter into the Purchase Agreement and, accordingly, each Purchaser
is  a  third  party  beneficiary  to  these  instructions.

     Please  execute  this  letter  in  the  space indicated to acknowledge your
agreement  to  act  in  accordance with these instructions.  Should you have any
questions  concerning  this  matter,  please  contact  me  at           .
                                                              ----------

                                        Very truly yours,

                                        CHARYS HOLDING COMPANY, INC.

                                        By:
                                           ---------------------------------

                                        Name:
                                             --------------------------
                                        Title:
                                              -------------------------

ACKNOWLEDGED AND AGREED:
[TRANSFER AGENT]

By:
   -----------------------------
Name:
     ---------------------------
Title:
      --------------------------
Date:
     --------

                                       xi
<PAGE>
                                    EXHIBIT I
                                    ---------

                          CHARYS HOLDING COMPANY, INC.
                                CONVERSION NOTICE

     (To be Executed by the Registered Holder in order to Convert the Note)

The undersigned hereby irrevocably elects to convert $                 of the
                                                       ----------------
principal amount of the above Note No.    into shares of Common Stock of CHARYS
                                      ---
HOLDING COMPANY, INC. (the "Maker") according to the conditions hereof, as of
the date written below.

Date of Conversion
                   ---------------------------------------------------------

Applicable Conversion Price
                           ---------------------------------------------------

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  Date  of  Conversion:
                                               ---------------------------

Signature
         -------------------------------------------------------------------

     [Name]

Address:
        ------------------------------------------------------------------

        ------------------------------------------------------------------

                                       xii
<PAGE>
                                   EXHIBIT II
                                   ----------

                             FORM OF EXERCISE NOTICE

                                  EXERCISE FORM

                          CHARYS HOLDING COMPANY, INC.

The  undersigned  _______________,  pursuant  to  the  provisions  of the within
Warrant,  hereby  elects  to  purchase  _____  shares  of Common Stock of Charys
Holding  Company,  Inc.  covered  by  the  within  Warrant.

Dated: _________________          Signature   ___________________________

                                  Address     _____________________
                                              _____________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by  the  Holder  on  the  date  of  Exercise:___________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The undersigned intends that payment of the Warrant Price shall be made as
(check one):

          Cash Exercise_______

          Cashless Exercise_______

If  the  Holder  has  elected  a  Cash Exercise, the Holder shall pay the sum of
$ ________ by  certified  or  official  bank check (or via wire transfer) to the
Issuer  in  accordance  with  the  terms  of  the  Warrant.

If  the Holder has elected a Cashless Exercise, a certificate shall be issued to
the  Holder  for  the  number of shares equal to the whole number portion of the
product  of the calculation set forth below, which is ___________.  The Company
shall  pay a cash adjustment in respect of the fractional portion of the product
of  the  calculation  set  forth  below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise,  which  product  is _____________.

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

Where:

The  number  of  shares  of  Common  Stock  to  be  issued  to  the  Holder
__________________("X").

The  number  of  shares  of Common Stock purchasable upon exercise of all of the
Warrant  or, if only a portion of the Warrant is being exercised, the portion of
the  Warrant  being  exercised ________________________  ("Y").

The  Warrant  Price  ______________  ("A").

                                       xiii
<PAGE>
The Per Share Market Value of one share of Common Stock  _______________________
("B").

                                   ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant  on  the  books  of  the  within  named  corporation.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

                               PARTIAL ASSIGNMENT

FOR  VALUE  RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________  the  right  to  purchase  _________  shares of Warrant Stock
evidenced  by  the  within  Warrant  together  with all rights therein, and does
irrevocably  constitute  and  appoint ___________________, attorney, to transfer
that  part  of  the  said  Warrant on the books of the within named corporation.

Dated: _________________          Signature     ___________________________

                                  Address       _____________________
                                                _____________________

                           FOR USE BY THE ISSUER ONLY:

This  Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________,  _____,  shares  of  Common  Stock  issued  therefor in the name of
_______________,  Warrant  No. W-_____ issued for ____ shares of Common Stock in
the  name  of  _______________.

                                       xiv
<PAGE>
                                   EXHIBIT III
                                   -----------

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]
Attn:
      --------------

     Re:     CHARYS  HOLDING  COMPANY,  INC.
             -------------------------------

Ladies  and  Gentlemen:

     We  are  special  counsel  to  Charys  Holding  Company,  Inc.,  a Delaware
corporation (the "COMPANY"), and have represented the Company in connection with
that  certain  Note  and  Warrant Purchase Agreement (the "PURCHASE AGREEMENT"),
dated  as of December 4, 2006, by and among the Company and the purchasers named
therein (collectively, the "PURCHASERS") pursuant to which the Company issued to
the  Purchasers  subordinated secured convertible promissory notes (the "NOTES")
and  warrants (the "WARRANTS") to purchase shares of the Company's common stock,
par  value  $0.001  per  share  (the  "COMMON STOCK").  Pursuant to the Purchase
Agreement,  the  Company  has  also entered into a Registration Rights Agreement
with  the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), dated as of December
4,  2006,  pursuant to which the Company agreed, among other things, to register
the  Registrable  Securities  (as defined in the Registration Rights Agreement),
including  the  shares of Common Stock issuable upon conversion of the Notes and
exercise  of  the  Warrants,  under  the Securities Act of 1933, as amended (the
"1933  ACT").  In  connection  with  the  Company's  obligations  under  the
Registration  Rights  Agreement,  on ________________, 2006, the Company filed a
Registration  Statement  on Form SB-2 (File No. 333-________) (the "REGISTRATION
STATEMENT")  with the Securities and Exchange Commission (the "SEC") relating to
the  resale  of  the  Registrable  Securities  which  names  each of the present
Purchasers  as  a  selling  stockholder  thereunder.

     In  connection with the foregoing, we advise you that a member of the SEC's
staff  has  advised  us by telephone that the SEC has entered an order declaring
the  Registration  Statement  effective  under  the  1933  Act at [ENTER TIME OF
EFFECTIVENESS]  on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic  inquiry  of  a  member  of  the  SEC's  staff,  that  any stop order
suspending  its  effectiveness  has been issued or that any proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and accordingly, the
Registrable  Securities  are available for resale under the 1933 Act pursuant to
the  Registration  Statement.

                                             Very  truly  yours,

                                             [COMPANY COUNSEL]

                                             By:
                                                --------------------------

cc:     [LIST NAMES OF PURCHASERS]

                                       xv
<PAGE>
                                    EXHIBIT G
                                 FORM OF OPINION

     1.     The Company is a corporation duly incorporated, validly existing and
in  good  standing under the laws of the State of Delaware and has the requisite
corporate  power  to  own,  lease  and operate its properties and assets, and to
carry  on its business as presently conducted.  The Company is duly qualified as
a  foreign  corporation  to  do  business  and  is  in  good  standing  in every
jurisdiction  in  which  the failure to so qualify would have a Material Adverse
Effect.

     2.     The Company has the requisite corporate power and authority to enter
into  and  perform  its obligations under the Transaction Documents and to issue
the  Notes,  the  Warrants  and the Common Stock issuable upon conversion of the
Notes  and exercise of the Warrants.  The execution, delivery and performance of
each  of  the Transaction Documents by the Company and the consummation by it of
the  transactions  contemplated thereby have been duly and validly authorized by
all  necessary  corporate  action and no further consent or authorization of the
Company,  its  Board  of Directors or its stockholders is required.  Each of the
Transaction  Documents  have been duly executed and delivered, and the Notes and
the  Warrants  have  been duly executed, issued and delivered by the Company and
each  of  the  Transaction  Documents  constitutes  a  legal,  valid and binding
obligation of the Company enforceable against the Company in accordance with its
respective  terms.  The  Common  Stock issuable upon conversion of the Notes and
exercise  of  the  Warrants  are  not subject to any preemptive rights under the
Certificate  of  Incorporation  or  the  Bylaws.

     3.     The  Notes  and  the  Warrants  have  been duly authorized and, when
delivered against payment in full as provided in the Purchase Agreement, will be
validly  issued,  fully  paid  and  nonassessable.  The  shares  of Common Stock
issuable  upon  conversion  of  the Notes and exercise of the Warrants have been
duly authorized and reserved for issuance, and when delivered upon conversion or
against  payment  in  full  as  provided  in  the  Notes  and  the  Warrants, as
applicable,  will  be  validly  issued,  fully  paid  and  nonassessable.

     4.     The  execution,  delivery and performance of and compliance with the
terms  of  the Transaction Documents and the issuance of the Notes, the Warrants
and  the  Common Stock issuable upon conversion of the Notes and exercise of the
Warrants do not (a) violate any provision of the Certificate of Incorporation or
Bylaws,  (b)  conflict  with,  or  constitute  a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any  rights  of  termination,  amendment,  acceleration  or cancellation of, any
material  agreement,  mortgage,  deed  of trust, indenture, note, bond, license,
lease  agreement,  instrument  or obligation to which the Company is a party and
which  is  set  forth  on  Schedule  I,  (c)  create or impose a lien, charge or
encumbrance on any property of the Company under any agreement or any commitment
which is set forth on Schedule I to which the Company is a party or by which the
Company  is  bound  or  by  which any of its respective properties or assets are
bound,  or  (d)  result  in  a violation of any Federal, state, local or foreign
statute,  rule,  regulation,  order,  judgment,  injunction or decree (including
Federal  and state securities laws and regulations) applicable to the Company or
by  which  any property or asset of the Company is bound or affected, except, in
all  cases other than violations pursuant to clauses (a) and (d) above, for such
conflicts,  default,  terminations,  amendments, acceleration, cancellations and
violations  as  would  not,  individually  or  in the aggregate, have a Material
Adverse  Effect.

                                       xvi
<PAGE>
     5.     No consent, approval or authorization of or designation, declaration
or filing with any governmental authority on the part of the Company is required
under  Federal,  state  or  local law, rule or regulation in connection with the
valid  execution,  delivery and performance of the Transaction Documents, or the
offer, sale or issuance of the Notes, the Warrants and the Common Stock issuable
upon  conversion of the Notes and exercise of the Warrants other than filings as
may  be required by applicable Federal and state securities laws and regulations
and  any  applicable  stock  exchange  rules  and  regulations.

     6.     To  our knowledge, there is no action, suit, claim, investigation or
proceeding  pending  or  threatened  against  the  Company  which  questions the
validity  of  the Purchase Agreement or the transactions contemplated thereby or
any  action  taken  or  to be taken pursuant thereto.  There is no action, suit,
claim,  investigation  or  proceeding  pending, or to our knowledge, threatened,
against  or  involving the Company or any of its properties or assets and which,
if  adversely  determined,  is reasonably likely to result in a Material Adverse
Effect.  To  our  knowledge,  there  are  no  outstanding  orders,  judgments,
injunctions,  awards  or  decrees  of  any  court, arbitrator or governmental or
regulatory  body against the Company or any officers or directors of the Company
in  their  capacities  as  such.

     7.     Assuming  that all of the Purchasers' representations and warranties
in  the  Purchase  Agreement  are complete and accurate, the offer, issuance and
sale  of  the  Notes  and  the  Warrants and the offer, issuance and sale of the
Common  Stock issuable upon conversion of the Notes and exercise of the Warrants
are  exempt from the registration requirements of the Securities Act of 1933, as
amended.

     8.     The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

                                       xvii

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