Document:

SECURITY AGREEMENT

     SECURITY  AGREEMENT, dated as of August 30, 2006 (this "AGREEMENT") made by
CHARYS  HOLDING  COMPANY,  INC., a Delaware corporation (the "COMPANY"), and the
undersigned  subsidiaries  of the Company (each a "GRANTOR" and collectively and
together  with  the  Company  the  "GRANTORS"),  in  favor of GOTTBETTER CAPITAL
FINANCE,  LLC,  a  Delaware  limited  liability  company,  in  its  capacity  as
collateral agent (in such capacity, the "COLLATERAL AGENT") for the "Buyers" (as
defined  below)  parties  to the Securities Purchase Agreement, dated as of even
date herewith (as amended, restated or otherwise modified from time to time, the
"SECURITIES  PURCHASE  AGREEMENT").

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

          WHEREAS,  the  Company  and  each  party  listed  as  a "Buyer" on the
Schedule  of  Buyers  (collectively,  the  "Buyers")  attached to the Securities
Purchase Agreement have entered into the Securities Purchase Agreement, pursuant
to which the Company shall be required to sell, and the Buyers shall purchase or
have  the  right  to  purchase  the "Notes" (as defined therein) issued pursuant
thereto  (as such Notes may be amended, restated, replaced or otherwise modified
from  time  to  time  in  accordance  with  the terms thereof, collectively, the
"Notes");  and

          WHEREAS,  all  capitalized  terms  used  herein  shall  have  the same
meanings  ascribed  to  those  terms  as  defined  in  the  Securities  Purchase
Agreement,  unless  the  context  provides  otherwise;  and

          WHEREAS,  it  is  a  condition  precedent to the Buyers purchasing the
Notes pursuant to the Securities Purchase Agreement that the Grantors shall have
executed  and delivered to the Collateral Agent this Agreement providing for the
grant  to  the  Collateral  Agent  for  the  benefit of the Buyers of a security
interest  in  certain  personal  property  of  each Grantor to secure all of the
Company's  obligations  under  the Securities Purchase Agreement, the Notes, the
"TRANSACTION  DOCUMENTS"  (as defined in the Securities Purchase Agreement) (the
"Transaction  Documents");

          NOW,  THEREFORE,  in  consideration of the premises and the agreements
herein  and  in  order  to  induce  the  Buyers  to perform under the Securities
Purchase  Agreement,  each  Grantor  agrees  with  the Collateral Agent, for the
benefit  of  the  Buyers,  as  follows:

          SECTION  1.  Definitions.
                       -----------

          Reference  is hereby made to the Securities Purchase Agreement and the
Notes  for  a  statement of the terms thereof.  All terms used in this Agreement
and  the recitals hereto which are defined in the Securities Purchase Agreement,
the Notes or in Articles 8 or 9 of the Uniform Commercial Code as in effect from
time  to time in the State of New York (the "CODE"), and which are not otherwise
defined  herein  shall  have  the  same  meanings  herein  as set forth therein;
provided  that  terms  used herein which are defined in the Code as in effect in
--------
the  State  of  New

                                      -1-
<PAGE>
York  on the date hereof shall continue to have the same meaning notwithstanding
any  replacement or amendment of such statute except as the Collateral Agent may
otherwise  determine.

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

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

          "COPYRIGHT  LICENSES"  means  all  licenses,  contracts  or  other
agreements,  whether written or oral, naming any Grantor as licensee or licensor
and providing for the grant of any right to use or sell any works covered by any
copyright  (including,  without  limitation, all Copyright Licenses set forth in
Schedule  II  hereto).
------------

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

          "EVENT  OF  DEFAULT"  shall  have  the meaning set forth in the Notes.

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

          "INTELLECTUAL  PROPERTY" means the Copyrights, Trademarks and Patents.

          "LICENSES"  means  the  Copyright Licenses, the Trademark Licenses and
the  Patent  Licenses.

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

                                      -2-
<PAGE>
          "PATENT  LICENSES"  means all licenses, contracts or other agreements,
whether  written  or  oral,  naming  any  Grantor  as  licensee  or licensor and
providing  for  the grant of any right to manufacture, use or sell any invention
covered  by  any  Patent (including, without limitation, all Patent Licenses set
forth  in  Schedule  II  hereto).
           ------------

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

          "TRADEMARK  LICENSES"  means  all  licenses,  contracts  or  other
agreements,  whether written or oral, naming any Grantor as licensor or licensee
and providing for the grant of any right concerning any Trademark, together with
any  goodwill  connected  with  and  symbolized  by any such trademark licenses,
contracts  or  agreements and the right to prepare for sale or lease and sell or
lease  any  and  all  Inventory now or hereafter owned by any Grantor and now or
hereafter covered by such licenses (including, without limitation, all Trademark
Licenses  described  in  Schedule  II  hereto).
                         ------------

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

          SECTION  2.  Grant  of  Security Interest.  As collateral security for
                       -----------------------------
all of the "Obligations" (as defined in Section 3 hereof), each Grantor, subject
                                        ---------
to  the  Permitted Liens, hereby pledges and assigns to the Collateral Agent for
the benefit of the Buyers, and grants to the Collateral Agent for the benefit of
the  Buyers  a  continuing  security  interest in, all personal property of each
Grantor,  wherever  located  and  whether  now or hereafter existing and whether

                                      -3-
<PAGE>
now  owned  or  hereafter  acquired,  of every kind and description, tangible or
intangible  (collectively, the "COLLATERAL"), including, without limitation, the
following:

          (a)     all  Accounts;

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

          (c)     the  Commercial  Tort  Claims specified on Schedule VI hereto;
                                                             -----------

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

          (e)     all  Documents;

          (f)     all  Equipment;

          (g)     all  Fixtures;

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

          (i)     all  Goods

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

          (k)     all  Inventory;

          (l)     all  Investment  Property;

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

          (n)     all  Letter-of-Credit  Rights;

          (o)     all  Supporting  Obligations;

          (p)     all  other  tangible  and intangible personal property of each
Grantor (whether or not subject to the Code), including, without limitation, all
bank  and other accounts and all cash and all investments therein, all proceeds,
products, offspring, accessions, rents, profits, income, benefits, substitutions
and  replacements  of and to any of the property of any Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds
                          ---------
of  insurance  thereon  and  all  causes of action, claims and warranties now or
hereafter held by each Grantor in respect of any of the items listed above), and
all  books,  correspondence,  files  and  other  Records,  including,  without
limitation, all tapes, desks, cards, Software, data and computer programs in the
possession  or  under  the  control  of  any  Grantor  or  any  other  Person

                                      -4-
<PAGE>
from  time  to  time acting for any Grantor, in each case, to the extent of such
Grantor's  rights  therein,  that  at  any  time evidence or contain information
relating  to  any  of  the  property  described in the preceding clauses of this
Section 2 or are otherwise necessary or helpful in the collection or realization
---------
thereof;  and

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

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

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

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

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

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

          (a)     Schedule  I hereto sets forth (i) the exact legal name of each
                  -----------
Grantor,  and (ii) the state of incorporation, organization or formation and the
organizational  identification  number  of  each  Grantor  in  such  state.

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

          (c)     Except  as  disclosed  on  Schedule  3(bb)  of  the Securities
Purchase  Agreement,  all Federal, state and local tax returns and other reports
required  by  applicable  law  to

                                      -5-
<PAGE>
be  filed  by any Grantor have been filed, or extensions have been obtained, and
all  taxes,  assessments and other governmental charges imposed upon any Grantor
or  any  property  of  any  Grantor  (including, without limitation, all federal
income  and social security taxes on employees' wages) and which have become due
and  payable on or prior to the date hereof have been paid, except to the extent
contested  in  good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which  adequate  reserves  have  been  set  aside  for  the  payment  thereof in
accordance  with  generally  accepted accounting principles consistently applied
("GAAP").

          (d)     All  Equipment,  Fixtures, Goods and Inventory of each Grantor
now  existing  are,  and  all  Equipment,  Fixtures, Goods and Inventory of each
Grantor  hereafter  existing  will  be,  located  and/or  based at the addresses
specified  therefor  in  Schedule III hereto, except that each Grantor will give
                         ------------
the  Collateral  Agent  written notice of any change in the location of any such
Collateral  within  20 days of such change, other than to locations set forth on
Schedule  III  hereto (or a new Schedule III delivered by Grantors to Collateral
-------------                   ------------
Agent  from  time  to  time)  and with respect to which the Collateral Agent has
filed  financing  statements  and otherwise fully perfected its Liens thereon or
will  take such actions pursuant to Section 5(n).  Each Grantor's chief place of
business  and  chief  executive  office,  the place where each Grantor keeps its
Records  concerning  Accounts and all originals of all Chattel Paper are located
at  the  addresses  specified  therefor  in  Schedule  III  hereto.  None of the
                                             -------------
Accounts  is  evidenced  by Promissory Notes or other Instruments.  Set forth in
Schedule  IV  hereto  is  a  complete  and accurate list, as of the date of this
------------
Agreement,  of  (i) each Promissory Note, Security and other Instrument owned by
each  Grantor  and (ii) each Deposit Account, Securities Account and Commodities
Account  of each Grantor, together with the name and address of each institution
at  which  each  such  account  is  maintained, the account number for each such
account  and  a  description  of  the purpose of each such account. Set forth in
Schedule  II  hereto  is  a complete and correct list of each trade name used by
------------
each  Grantor  and  the  name  of, and each trade name used by, each person from
which  each  Grantor  has  acquired  any  substantial  part  of  the Collateral.

          (e)     Each  Grantor  has  delivered to the Collateral Agent complete
and  correct  copies  of each License described in Schedule II hereto, including
                                                   -----------
all  schedules  and  exhibits  thereto,  which  represents  all  of the Licenses
existing on the date of this Agreement.  Each such License sets forth the entire
agreement  and  understanding  of  the  parties  thereto relating to the subject
matter  thereof,  and  there  are  no  other  agreements,  arrangements  or
understandings,  written or oral, relating to the matters covered thereby or the
rights  of  such  Grantor  or  any  of  its affiliates in respect thereof.  Each
material  License  now existing is, and any material License entered into in the
future  will be, the legal, valid and binding obligation of the parties thereto,
enforceable against such parties in accordance with its terms.  No default under
any  material  License  by  any  such  party has occurred, nor does any defense,
offset,  deduction  or counterclaim exist thereunder in favor of any such party.

          (f)     Each  Grantor  owns  and  controls,  or  otherwise  possesses
adequate  rights  to  use, all Trademarks, Patents and Copyrights, which are the
only  trademarks,  patents,  copyrights,  inventions, trade secrets, proprietary
information and technology, know-how, formulae, rights of publicity necessary to
conduct  its  business  in  substantially the same manner as conducted as of the
date  hereof.  Schedule  II  hereto  sets  forth a true and complete list of all
               ------------
registered  copyrights,  issued Patents, Trademarks, and Licenses annually owned
or  used  by  each  Grantor  as  of  the  date

                                      -6-
<PAGE>
hereof.  To  the  best knowledge of each Grantor, all such Intellectual Property
of  each  Grantor  is  subsisting  and  in  full  force and effect, has not been
adjudged  invalid  or  unenforceable,  is valid and enforceable and has not been
abandoned  in  whole  or  in  part.  Except as set forth in Schedule II, no such
                                                            -----------
Intellectual  Property is the subject of any licensing or franchising agreement.
Each  Grantor  has no knowledge of any conflict with the rights of others to any
such  Intellectual  Property  and,  to  the best knowledge of each Grantor, each
Grantor  is  not now infringing or in conflict with any such rights of others in
any material respect, and to the best knowledge of each Grantor, no other Person
is  now  infringing  or  in  conflict  in  any  material  respect  with any such
properties,  assets  and  rights  owned or used by each Grantor.  No Grantor has
received  any  notice  that  it  is  violating  or  has violated the trademarks,
patents,  copyrights,  inventions,  trade  secrets,  proprietary information and
technology,  know-how,  formulae,  rights  of  publicity  or  other intellectual
property  rights  of  any  third  party.

          (g)     Each  Grantor  is  and  will  be  at  all  times  the sole and
exclusive  owner  of,  or  otherwise  has  and will have adequate rights in, the
Collateral  free  and  clear  of  any  Liens,  except for Permitted Liens on any
Collateral.  Except for the Permitted Liens described in the Securities Purchase
Agreement,  no  effective  financing  statement  or  other instrument similar in
effect covering all or any part of the Collateral is on file in any recording or
filing  office except such as (i) may have been filed in favor of the Collateral
Agent  and/or  the  Buyers  relating  to this Agreement or the other Transaction
Documents  and  (ii)  are  described  on  Schedule  4(g)  hereto.
                                          --------------

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

          (i)     No authorization or approval or other action by, and no notice
to  or  filing  with,  any  governmental  authority or other regulatory body, is
required  for  (i) the grant by each Grantor, or the perfection, of the security
interest  purported to be created hereby in the Collateral, or (ii) the exercise
by  the  Collateral  Agent  of  any of its rights and remedies hereunder, except
(except (A) for the filing under the Uniform Commercial Code as in effect in the
applicable  jurisdiction  of  the  financing  statements described in Schedule V
                                                                      ----------
hereto  (or a new Schedule V delivered by Grantors to Collateral Agent from time
                  ----------
to time), all of which financing statements have been duly filed and are in full
force  and  effect  or will be duly filed and in full force and effect, (B) with
respect  to  Deposit Accounts, and all cash and other property from time to time
deposited  therein, for the execution of a control agreement with the depository
institution  with which such account is maintained, as provided in Section 5(i),
                                                                   ------------
(C)  with  respect  to the perfection of the security interest created hereby in
the  United  States Intellectual Property and Licenses, for the recording of the
appropriate  Assignment  for  Security,  substantially  in the form of Exhibit A
                                                                       ---------
hereto  in  the  United  States Patent and Trademark Office or the United States
Copyright  Office,  as  applicable,  (D)  with  respect to the perfection of the
security  interest created hereby in foreign Intellectual Property and Licenses,
for  registrations  and  filings  in jurisdictions located outside of the United
States  and  covering  rights  in  such  jurisdictions  relating to such foreign
Intellectual  Property  and  Licenses, (E) with respect to the perfection of the
security  interest created hereby in Titled Collateral, for the submission of an
appropriate  application  requesting  that  the  Lien of the Collateral Agent be
noted  on  the  Certificate  of  Title  or  certificate

                                      -7-
<PAGE>
of  ownership,  completed  and authenticated by the applicable Grantor, together
with  the Certificate of Title or certificate of ownership, with respect to such
Titled  Collateral,  to the appropriate governmental authority, (F) with respect
to  the  perfection  of  the  security  interest  created  hereby  in  any
Letter-of-Credit  Rights, for the consent of the issuer of the applicable letter
of  credit  to  the assignment of proceeds as provided in the Uniform Commercial
Code as in effect in the applicable jurisdiction, (G) with respect to any action
that  may  be  necessary  to  obtain  control of Collateral constituting Deposit
Accounts,  Commodity Contracts, Electronic Chattel Paper, Investment Property or
Letter-of-Credit  Rights,  the  taking  of  such actions, and (H) the Collateral
Agent  having  possession  of all Documents, Chattel Paper, Instruments and cash
constituting  Collateral  (subclauses (A), (B), (C), (D), (E), (F), G), and (H),
each  a  "Perfection  Requirement"  and  collectively,  the  "Perfection
                                                              ----------
Requirements").
------------

          (j)     This  Agreement,  subject  to  the  Permitted Liens creates in
favor  of  the Collateral Agent a legal, valid and enforceable security interest
in  the Collateral as security for the Obligations.  The Perfection Requirements
result  in  the  perfection of such security interests.  Such security interests
are, or in the case of Collateral in which each Grantor obtains rights after the
date hereof, will be, perfected, first priority security interests, subject only
to  Permitted Liens and the Perfection Requirements and the financing statements
described  in  Schedule  4(g).  Such recordings and filings and all other action
               --------------
necessary  to perfect and protect such security interest have been duly taken or
will  be taken pursuant to Section 5(n), and, in the case of Collateral in which
each  Grantor  obtains  rights after the date hereof, will be duly taken, except
for  the  Collateral  Agent's having possession of all Documents, Chattel Paper,
Instruments and cash constituting Collateral after the date hereof and the other
actions,  filings  and  recordations  described  above, including the Perfection
Requirements.

          (k)     As  of  the  date hereof, no Grantor holds any Commercial Tort
Claims  or  has knowledge of any pending Commercial Tort Claims, except for such
Commercial  Tort  Claims  described  in  Schedule  VI.
                                         ------------

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

          (a)     Further  Assurances.  Each Grantor will at its expense, at any
                  -------------------
time and from time to time, promptly execute and deliver all further instruments
and  documents  and  take  all  further  action  that  the  Collateral Agent may
reasonably  request  in  order to: (i) perfect and protect the security interest
purported to be created hereby; (ii) enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder in respect of the Collateral; or (iii)
otherwise  effect the purposes of this Agreement, including, without limitation:
(A) marking conspicuously all Chattel Paper and each License and, at the request
of the Collateral Agent, each of its Records pertaining to the Collateral with a
legend,  in  form and substance satisfactory to the Collateral Agent, indicating
that  such  Chattel  Paper,  License  or  Collateral  is subject to the security
interest  created  hereby,  (B)  delivering and pledging to the Collateral Agent
pursuant  to  the  Pledge each Promissory Note, Security, Chattel Paper or other
Instrument, now or hereafter owned by any Grantor, duly endorsed and accompanied
by  executed  instruments  of  transfer or assignment, all in form and substance
satisfactory  to  the Collateral Agent, (C) executing and filing (to the extent,
if  any, that any Grantor's signature is required thereon) or authenticating the

                                      -8-
<PAGE>
filing  of, such financing or continuation statements, or amendments thereto, as
may be necessary or that the Collateral Agent may reasonably request in order to
perfect  and  preserve the security interest purported to be created hereby, (D)
furnishing  to  the  Collateral Agent from time to time statements and schedules
further  identifying  and  describing  the  Collateral and such other reports in
connection  with  the  Collateral  in  each  case  as  the  Collateral Agent may
reasonably  request, all in reasonable detail, (E) if any Collateral shall be in
the possession of a third party, notifying such Person of the Collateral Agent's
security  interest  created  hereby  and obtaining a written acknowledgment from
such  Person that such Person holds possession of the Collateral for the benefit
of the Collateral Agent, which such written acknowledgement shall be in form and
substance  reasonably  satisfactory  to the Collateral Agent, (F) if at any time
after  the date hereof, any Grantor acquires or holds any Commercial Tort Claim,
promptly  notifying  the  Collateral  Agent  in a writing signed by such Grantor
setting  forth a brief description of such Commercial Tort Claim and granting to
the  Collateral  Agent  a security interest therein and in the proceeds thereof,
which  writing  shall incorporate the provisions hereof and shall be in form and
substance  satisfactory  to the Collateral Agent, (G) upon the acquisition after
the  date  hereof by any Grantor of any motor vehicle or other Equipment subject
to  a certificate of title or ownership (other than a Motor Vehicle or Equipment
that  is  subject to a purchase money security interest), causing the Collateral
Agent  to  be listed as the lienholder on such certificate of title or ownership
and  delivering  evidence of the same to the Collateral Agent in accordance with
Section 5(j) hereof; and (H) taking all actions required by any earlier versions
------------
of  the  Uniform Commercial Code or by other law, as applicable, in any relevant
Uniform  Commercial  Code  jurisdiction,  or  by  other law as applicable in any
foreign  jurisdiction.

          (b)     Location  of  Equipment and Inventory.  Each Grantor will keep
                  -------------------------------------
the  Equipment and Inventory (i) at the locations specified therefor on Schedule
                                                                        --------
III  hereto, or (ii) at such other locations set forth on Schedule III (or a new
---                                                       ------------
Schedule  III  delivered  by Grantors to Collateral Agent from time to time) and
-------------
with  respect  to  which the Collateral Agent has filed financing statements and
otherwise fully perfected its Liens thereon, or (iii) at such other locations in
the  United  States,  provided  that  within 20 days following the relocation of
Equipment or Inventory to such other location or the acquisition of Equipment or
Inventory,  Grantor  shall  deliver  to  the Collateral Agent a new Schedule III
                                                                    ------------
indicating  such  new  locations.

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

          (d)     Taxes,  Etc.  Each Grantor agrees to pay promptly when due all
                  ------------
property and other taxes, assessments and governmental charges or levies imposed
upon,  and  all  claims  (including  claims  for  labor, materials and supplies)
against,  the Equipment and Inventory, except to the extent the validity thereof
is  being  contested  in  good  faith  by  proper  proceedings  which

                                      -9-
<PAGE>
stay  the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves in accordance with GAAP have
been  set  aside  for  the  payment  thereof.

          (e)     Insurance.

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

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

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

          (f)     Provisions  Concerning  the  Accounts  and  the  Licenses.
                  ---------------------------------------------------------

                                      -10-
<PAGE>
               (i)     Any  Grantor  will (A) give the Collateral Agent at least
30  days' prior written notice of any change in such Grantor's name, identity or
organizational  structure,  (B)  maintain  its  jurisdiction  of  incorporation,
organization  or  formation  as  set forth in Schedule I hereto, (C) immediately
                                              ----------
notify  the  Collateral  Agent  upon  obtaining an organizational identification
number,  if  on  the  date  hereof such Grantor did not have such identification
number,  and (D) keep adequate records concerning the Accounts and Chattel Paper
and  permit representatives of the Collateral Agent during normal business hours
on  reasonable  notice  to such Grantor, to inspect and make abstracts from such
Records  and  Chattel  Paper.

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

               (iii)     Upon  the  occurrence and during the continuance of any
breach  or  default under any material License referred to in Schedule II hereto
                                                              -----------
by  any  party  thereto other than any Grantor, each Grantor party thereto will,
promptly  after  obtaining  knowledge thereof, give the Collateral Agent written
notice  of  the  nature  and  duration  thereof,  specifying  what

                                      -11-
<PAGE>
action,  if  any,  it  has  taken  and proposes to take with respect thereto and
thereafter  will  take  reasonable  steps to protect and preserve its rights and
remedies  in  respect  of  such  breach or default, or will obtain or acquire an
appropriate  substitute  License.

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

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

          (g)     Transfers  and  Other  Liens.
                  ----------------------------

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

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

          (h)     Intellectual  Property.
                  ----------------------

               (i)     If  applicable,  any  Grantor  shall, upon the Collateral
Agent's  written request, duly execute and deliver the applicable Assignment for
Security  in the form attached hereto as Exhibit A.  Each Grantor (either itself
                                         ---------
or  through  licensees)  will, and will cause each licensee thereof to, take all
action  necessary to maintain all of the Intellectual Property in full force and
effect,  including,  without  limitation, using the proper statutory notices and
markings and using the Trademarks on each applicable trademark class of goods in
order  to  so  maintain  the Trademarks in full force and free from any claim of
abandonment  for  non-use,  and  each  Grantor will not (nor permit any licensee
thereof  to) do any act or knowingly omit to do any act whereby any Intellectual
Property  may become invalidated; provided, however, that so long as no Event of
                                  --------  -------
Default  has  occurred and is continuing, no Grantor shall have an obligation to
use  or  to  maintain  any  Intellectual Property (A) that relates solely to any
product  or  work,  that  has been, or is in the process of being, discontinued,
abandoned  or  terminated, (B) that is being replaced with Intellectual Property
substantially  similar  to  the  Intellectual  Property that may be abandoned or
otherwise  become  invalid,  so  long  as  the  failure  to use or maintain such
Intellectual  Property  does

                                      -12-
<PAGE>
not  materially  adversely  affect the validity of such replacement Intellectual
Property and so long as such replacement Intellectual Property is subject to the
Lien  created by this Agreement or (C) that is substantially the same as another
Intellectual  Property  that  is  in  full  force, so long the failure to use or
maintain  such  Intellectual  Property  does not materially adversely affect the
validity  of  such  replacement  Intellectual Property and so long as such other
Intellectual  Property  is  subject to the Lien and security interest created by
this  Agreement.  Each Grantor will cause to be taken all necessary steps in any
proceeding  before  the United States Patent and Trademark Office and the United
States  Copyright Office or any similar office or agency in any other country or
political  subdivision thereof to maintain each registration of the Intellectual
Property  (other  than the Intellectual Property described in the proviso to the
immediately  preceding  sentence),  including,  without  limitation,  filing  of
renewals,  affidavits  of  use,  affidavits  of incontestability and opposition,
interference  and  cancellation  proceedings  and  payment  of maintenance fees,
filing  fees,  taxes  or  other governmental fees.  If any Intellectual Property
(other than Intellectual Property described in the proviso to the first sentence
of  subsection (i) of this clause (h)) is infringed, misappropriated, diluted or
otherwise  violated in any material respect by a third party, each Grantor shall
(x)  upon  learning  of  such  infringement, misappropriation, dilution or other
violation,  promptly  notify  the  Collateral  Agent  and  (y) to the extent any
Grantor  shall  deem  appropriate  under  the  circumstances,  promptly  sue for
infringement,  misappropriation,  dilution  or  other violation, seek injunctive
relief  where appropriate and recover any and all damages for such infringement,
misappropriation,  dilution  or  other  violation, or take such other actions as
such  Grantor  shall  deem  appropriate  under the circumstances to protect such
Intellectual  Property.  Each Grantor shall furnish to the Collateral Agent from
time  to  time upon its request statements and schedules further identifying and
describing  the  Intellectual  Property  and  Licenses and such other reports in
connection  with  the Intellectual Property and Licenses as the Collateral Agent
may  reasonably  request,  all in reasonable detail and promptly upon request of
the  Collateral  Agent,  following  receipt  by the Collateral Agent of any such
statements,  schedules  or  reports, each Grantor shall modify this Agreement by
amending  Schedule  II  hereto,  as the case may be, to include any Intellectual
          ------------
Property  and  License, as the case may be, which becomes part of the Collateral
under  this  Agreement  and shall execute and authenticate such documents and do
such acts as shall be necessary or, in the reasonable judgment of the Collateral
Agent,  desirable to subject such Intellectual Property and Licenses to the Lien
and  security  interest  created  by  this  Agreement.  Notwithstanding anything
herein  to  the  contrary,  upon the occurrence and during the continuance of an
Event  of  Default,  no Grantor may abandon or otherwise permit any Intellectual
Property  to  become invalid without the prior written consent of the Collateral
Agent,  and  if any Intellectual Property is infringed, misappropriated, diluted
or  otherwise  violated  in  any material respect by a third party, each Grantor
will  take  such action as the Collateral Agent shall deem appropriate under the
circumstances  to  protect  such  Intellectual  Property.

               (ii)     In  no event shall any Grantor, either itself or through
any  agent,  employee,  licensee  or  designee,  file  an  application  for  the
registration  of  any  Trademark or Copyright or the issuance of any Patent with
the  United  States  Patent  and Trademark Office or the United States Copyright
Office,  as  applicable, or in any similar office or agency of the United States
or  any  country  or  any  political  subdivision  thereof  unless  it gives the
Collateral  Agent  prior written notice thereof.  Upon request of the Collateral
Agent,  any  Grantor  shall  execute,  authenticate  and  deliver  any  and  all
assignments,  agreements,  instruments,  documents  and papers as the Collateral
Agent  may  reasonably  request  to  evidence  the  Collateral  Agent's security
interest  hereunder in such Intellectual Property and the General Intangibles of
any  Grantor

                                      -13-
<PAGE>
relating  thereto  or  represented thereby, and each Grantor hereby appoints the
Collateral  Agent  its  attorney-in-fact to execute and/or authenticate and file
all  such  writings  for the foregoing purposes, all acts of such attorney being
hereby  ratified  and confirmed, and such power (being coupled with an interest)
shall  be  irrevocable  until the indefeasible payment in full in cash of all of
the  Obligations  in  full.

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

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

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

               (ii)     Each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact, effective the date hereof and terminating upon the termination
of  this  Agreement,  for the purpose of (A) executing on behalf of such Grantor
title  or  ownership  applications for filing with appropriate state agencies to
enable  motor  vehicles  now  owned  or hereafter acquired by such Grantor to be
retitled  and the Collateral Agent listed as lienholder thereof, (B) filing such
applications  with  such  state agencies, and (C) executing such other documents
and  instruments

                                      -14-
<PAGE>
on  behalf  of, and taking such other action in the name of, such Grantor as the
Collateral  Agent  may  deem  necessary  or advisable to accomplish the purposes
hereof  (including,  without limitation, for the purpose of creating in favor of
the  Collateral  Agent a perfected Lien on the motor vehicles and exercising the
rights  and  remedies  of  the Collateral Agent hereunder).  This appointment as
attorney-in-fact is coupled with an interest and is irrevocable until all of the
Obligations  are  indefeasibly  paid  in  full in cash and after all Transaction
Documents  have  been  terminated.

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

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

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

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

          (m)     Future Subsidiaries.  If any Grantor shall hereafter create or
                  -------------------
acquire  any Subsidiary, simultaneously with the creation or acquisition of such
Subsidiary,  such  Grantor  shall (i) cause such Subsidiary to become a party to
this  Agreement  as  an  additional "Grantor" hereunder, (ii) such Grantor shall
deliver  to  Collateral  Agent  revised  Schedules  to  this

                                      -15-
<PAGE>
Agreement,  as  appropriate,  (iii) shall duly execute and deliver a guaranty of
the  Obligations  in  favor  of  the  Collateral  Agent  in  form  and substance
reasonably  acceptable  to  the  Collateral  Agent,  and (iv) shall duly execute
and/or  deliver  such  opinions  of  counsel  and  other  documents, in form and
substance reasonably acceptable to the Collateral Agent, as the Collateral Agent
shall  reasonably  request  with respect thereto, provided that any Grantor that
acquires a subsidiary on or within two days after the Closing Date shall have 10
Business  Days  in  which  to  satisfy  the  requirements  of this Section 5(m).
                                                                   ------------

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

          SECTION  6.  Additional  Provisions  Concerning  the  Collateral.
                       ---------------------------------------------------

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

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

          (c)     For  the  purpose of enabling the Collateral Agent to exercise
rights  and  remedies  hereunder,  at such time as the Collateral Agent shall be
lawfully  entitled  to  exercise  such  rights  and  remedies,  and for no other
purpose,  each  Grantor  hereby  grants  to  the Collateral Agent, to the extent
assignable,  an  irrevocable, non-exclusive license (exercisable without payment
of  royalty  or  other  compensation  to any Grantor) to use, assign, license or
sublicense

                                      -16-
<PAGE>
any  Intellectual  Property  now  owned  or  hereafter acquired by such Grantor,
wherever the same may be located, including in such license reasonable access to
all  media  in  which any of the licensed items may be recorded or stored and to
all  computer  programs  used  for  the  compilation  or  printout  thereof.
Notwithstanding  anything  contained  herein to the contrary, but subject to the
provisions  of  the  Securities  Purchase  Agreement that limit the right of any
Grantor to dispose of its property, and Section 5(g) and Section 5(h) hereof, so
                                        ------------     ------------
long  as  no Event of Default shall have occurred and be continuing, any Grantor
may  exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of
or  take other actions with respect to the Intellectual Property in the ordinary
course  of  its  business.  In  furtherance of the foregoing, unless an Event of
Default  shall  have occurred and be continuing, the Collateral Agent shall from
time  to  time,  upon  the  request  of  any  Grantor,  execute  and deliver any
instruments,  certificates  or  other documents, in the form so requested, which
such  Grantor  shall have certified are appropriate (in such Grantor's judgment)
to  allow it to take any action permitted above (including relinquishment of the
license  provided  pursuant to this clause (c) as to any Intellectual Property).
Further,  upon  the  indefeasible  payment  in  full  in  cash  of  all  of  the
Obligations,  the  Collateral  Agent  (subject  to  Section  10(e) hereof) shall
                                                    --------------
release  and  reassign to any Grantor all of the Collateral Agent's right, title
and  interest in and to the Intellectual Property, and the Licenses, all without
recourse,  representation  or  warranty  whatsoever.  The exercise of rights and
remedies hereunder by the Collateral Agent shall not terminate the rights of the
holders  of  any  licenses or sublicenses theretofore granted by each Grantor in
accordance  with  the  second  sentence of this clause (c).  Each Grantor hereby
releases  the  Collateral Agent from any claims, causes of action and demands at
any  time  arising  out of or with respect to any actions taken or omitted to be
taken  by the Collateral Agent under the powers of attorney granted herein other
than  actions  taken or omitted to be taken through the Collateral Agent's gross
negligence  or  willful  misconduct, as determined by a final determination of a
court  of  competent  jurisdiction.

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

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

          (f)     Anything  herein  to  the  contrary  notwithstanding  (i) each
Grantor shall remain liable under the Licenses and otherwise with respect to any
of  the  Collateral  to  the  extent  set  forth  therein  to perform all of its
obligations  thereunder  to  the  same  extent as if this Agreement had not been
executed,  (ii)  the  exercise  by  the  Collateral  Agent  of any of its rights
hereunder  shall  not  release any Grantor from any of its obligations under the
Licenses  or  otherwise  in  respect of the Collateral, and (iii) the Collateral
Agent  shall  not  have  any obligation or liability by reason of this Agreement
under  the  Licenses  or  with  respect  to  any  of  the  other

                                      -17-
<PAGE>
Collateral,  nor  shall  the Collateral Agent be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or  enforce  any  claim  for  payment  assigned  hereunder.

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

          (a)     The  Collateral  Agent  may  exercise  in  respect  of  the
Collateral,  in addition to any other rights and remedies provided for herein or
otherwise  available  to  it,  all of the rights and remedies of a secured party
upon  default  under  the  Code (whether or not the Code applies to the affected
Collateral),  and  also  may  (i)  take  absolute  control  of  the  Collateral,
including, without limitation, transfer into the Collateral Agent's name or into
the  name of its nominee or nominees (to the extent the Collateral Agent has not
theretofore  done  so) and thereafter receive, for the benefit of the Collateral
Agent,  all  payments made thereon, give all consents, waivers and ratifications
in  respect thereof and otherwise act with respect thereto as though it were the
outright  owner  thereof,  (ii) require each Grantor to, and each Grantor hereby
agrees  that  it  will  at  its expense and upon request of the Collateral Agent
forthwith,  assemble all or part of its respective Collateral as directed by the
Collateral  Agent  and  make  it available to the Collateral Agent at a place or
places to be designated by the Collateral Agent that is reasonably convenient to
both  parties,  and  the Collateral Agent may enter into and occupy any premises
owned  or  leased  by  any  Grantor  where the Collateral or any part thereof is
located  or  assembled  for  a  reasonable  period  in  order  to effectuate the
Collateral  Agent's  rights  and  remedies  hereunder  or  under  law,  without
obligation  to  any  Grantor  in  respect  of such occupation, and (iii) without
notice  except  as  specified  below  and  without  any obligation to prepare or
process  the Collateral for sale, (A) sell the Collateral or any part thereof in
one  or more parcels at public or private sale, at any of the Collateral Agent's
offices  or  elsewhere,  for cash, on credit or for future delivery, and at such
price  or  prices  and  upon  such  other terms as the Collateral Agent may deem
commercially  reasonable  and/or (B) lease, license or dispose of the Collateral
or  any  part  thereof  upon  such  terms  as  the  Collateral  Agent  may  deem
commercially reasonable.  Each Grantor agrees that, to the extent notice of sale
or  any other disposition of its respective Collateral shall be required by law,
at  least  ten  (10)  days'  notice  to any Grantor of the time and place of any
public sale or the time after which any private sale or other disposition of its
respective  Collateral  is  to be made shall constitute reasonable notification.
The  Collateral  Agent  shall  not  be  obligated  to  make  any  sale  or other
disposition  of  any  Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement  at  the  time and place fixed therefor, and such sale may, without
further  notice,  be  made  at  the time and place to which it was so adjourned.
Each  Grantor  hereby  waives  any  claims  against the Collateral Agent and the
Buyers  arising  by  reason  of  the fact that the price at which its respective
Collateral  may  have  been sold at a private sale was less than the price which
might  have been obtained at a public sale or was less than the aggregate amount
of  the  Obligations,  even  if  the  Collateral  Agent  accepts the first offer
received and does not offer such Collateral to more than one offeree, and waives
all  rights  that  any  Grantor may have to require that all or any part of such
Collateral be marshaled upon any sale (public or private) thereof.  Each Grantor
hereby  acknowledges  that (i) any such sale of its respective Collateral by the
Collateral  Agent  shall be made without warranty, (ii) the Collateral Agent may
specifically  disclaim  any  warranties of title, possession, quiet enjoyment or
the  like,  and  (iii)  such  actions  set

                                      -18-
<PAGE>
forth  in  clauses  (i) and (ii) above shall not adversely affect the commercial
reasonableness  of  any  such sale of Collateral.  In addition to the foregoing,
(1)  upon  written  notice  to  any  Grantor from the Collateral Agent after and
during  the continuance of an Event of Default, such Grantor shall cease any use
of  the  Intellectual  Property  or  any  trademark, patent or copyright similar
thereto  for any purpose described in such notice; (2) the Collateral Agent may,
at  any  time and from time to time after and during the continuance of an Event
of  Default,  upon  10  days'  prior  notice  to  such Grantor, license, whether
general,  special  or  otherwise,  and  whether on an exclusive or non-exclusive
basis,  any  of the Intellectual Property, throughout the universe for such term
or  terms, on such conditions, and in such manner, as the Collateral Agent shall
in its sole discretion determine; and (3) the Collateral Agent may, at any time,
pursuant  to  the  authority  granted  in Section 6 hereof (such authority being
                                          ---------
effective  upon  the  occurrence  and  during  the  continuance  of  an Event of
Default), execute and deliver on behalf of such Grantor, one or more instruments
of  assignment  of the Intellectual Property (or any application or registration
thereof), in form suitable for filing, recording or registration in any country.

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

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

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

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

                                      -19-
<PAGE>
Collateral  Agent's  rights  under  this Agreement or under any other instrument
creating  or  evidencing  any  of  the  Obligations  or  under  which any of the
Obligations  is  outstanding  or  by  which any of the Obligations is secured or
payment  thereof  is otherwise assured, and, to the extent that it lawfully may,
each  Grantor  hereby  irrevocably  waives  the  benefits  of  all  such  laws.

          SECTION  8.  Indemnity  and  Expenses.
                       ------------------------

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

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

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

          SECTION  10.   Miscellaneous.
                        ---------------

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

                                      -20-
<PAGE>
          (b)     No  failure  on  the part of the Collateral Agent to exercise,
and  no  delay  in  exercising,  any  right  hereunder or under any of the other
Transaction Documents shall operate as a waiver thereof; nor shall any single or
partial  exercise  of  any  such  right  preclude  any other or further exercise
thereof  or  the  exercise  of  any other right.  The rights and remedies of the
Collateral  Agent  or  any  Buyer  provided  herein and in the other Transaction
Documents  are  cumulative  and  are  in  addition to, and not exclusive of, any
rights  or  remedies provided by law.  The rights of the Collateral Agent or any
Buyer under any of the other Transaction Documents against any party thereto are
not  conditional  or contingent on any attempt by such Person to exercise any of
its  rights  under  any of the other Transaction Documents against such party or
against  any  other  Person,  including  but  not  limited  to,  any  Grantor.

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

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

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

          (f)     THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED
IN  ACCORDANCE  WITH  THE  LAWS  OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY
MANDATORY  PROVISIONS  OF  LAW  AND  EXCEPT  TO THE EXTENT THAT THE VALIDITY AND
PERFECTION  OR  THE  PERFECTION  AND

                                      -21-
<PAGE>
THE  EFFECT  OF  PERFECTION  OR  NON-PERFECTION OF THE SECURITY INTEREST CREATED
HEREBY,  OR  REMEDIES  HEREUNDER,  IN  RESPECT  OF ANY PARTICULAR COLLATERAL ARE
GOVERNED  BY  THE  LAW  OF  A  JURISDICTION  OTHER  THAN  THE STATE OF NEW YORK.

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

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

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

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

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

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

                                      -22-
<PAGE>
          (m)     This  Agreement  may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which shall be
deemed  to be an original, but all of which taken together constitute one in the
same  Agreement.

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

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                      -23-
<PAGE>
          IN  WITNESS  WHEREOF,  each  Grantor  has  caused this Agreement to be
executed  and delivered by its officer thereunto duly authorized, as of the date
first  above  written.

                             CHARYS HOLDING COMPANY, INC.

                             By:
                                ------------------------------------------------
                                Name: Billy V. Ray, Jr.
                                Title: Chief Executive Officer
                                Address: 1117 Perimeter Center West, Suite N415,
                                Atlanta, Georgia 30338
                                Telephone: 678-443-2300
                                Facsimile: 678-443-2320
                                Email: bray@charys.com

                             PERSONNEL RESOURCES OF GEORGIA, INC.

                             By:
                                ------------------------------------------------
                                Name: Lee Yarborough
                                Title: President
                                Address: 880 South Pleasantburg Drive, Suite 3C,
                                Greenville, South Carolina 29607
                                Telephone: 864-271-7611
                                Facsimile: 864-232-0178

                             CCI TELECOM, INC.

                             By:
                                ------------------------------------------------
                                Name: Wayde Clark
                                Title: President
                                Address: 19240 Red Land Road, San Antonio,
                                Texas 78259
                                Telephone: 210-496-1926
                                Facsimile: 210-491-0932

                             METHOD IQ, INC.

                             By:
                                ------------------------------------------------
                                Name: Jerry J. Harrison, Jr.
                                Title: Chief Executive Officer

<PAGE>

                                Address: 1750 Founders Parkway, Suite 180,
                                Alpharetta, Georgia 30004
                                Telephone: 678-507-1300
                                Facsimile: 678-507-1302

                             VIASYS SERVICES, INC.

                             By:
                                ------------------------------------------------
                                Name: Gerry Hall
                                Title: President
                                Address: 26 Lake Wire Drive, Lakeland, Florida
                                33815
                                Telephone: 863-607-9988
                                Facsimile: 863-607-9955

                             VIASYS NETWORK SERVICES, INC.

                             By:
                                ------------------------------------------------
                                Name: Gerry Hall
                                Title: President
                                Address: 26 Lake Wire Drive, Lakeland, Florida
                                33815
                                Telephone: 863-607-9988
                                Facsimile: 863-607-9955

                             CROCHET AND BOREL SERVICES. INC.

                             By:
                                ------------------------------------------------
                                Name: Troy Crochet
                                Title: Chief Executive Officer
                                Address: 346 Twin City Highway, Port Neches,
                                Texas 77651
                                Telephone: 409-722-9697
                                Facsimile: 409-722-7273

<PAGE>
                             DIGITAL COMMUNICATION SERVICES, INC.

                             By:
                                ------------------------------------------------
                                Name: Billy Caudill
                                Title: Co-President
                                Address: 96 North 5th Avenue, Delray Beach,
                                Florida 33483

ACCEPTED BY:
-----------

GOTTBETTER CAPITAL FINANCE, LLC
as Collateral Agent

By:
   -----------------------------------
Name:        Michael W. Chorske
Title:       President
Address:     488 Madison Avenue, 12th Floor
             New York, NY 10022
Facsimile:   212.400.6999
Email:       mwc@gottbettercapital.com

<PAGE>
                                   SCHEDULE I
                                   ----------

  LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OR JURISDICTION OF
  -----------------------------------------------------------------------------
                                  ORGANIZATION
                                  ------------

<TABLE>
<CAPTION>
          GRANTOR'S NAME                STATE OF       FEDERAL      ORGANIZATIONAL I.D.
                                      ORGANIZATION  EMPLOYER I.D.
------------------------------------  ------------  -------------  --------------------
<S>                                   <C>           <C>            <C>
Charys Holding Company, Inc.               DE        54-2152284          3791748

Personnel Resources of Georgia, Inc.       GA        58-2605116          0104816

CCI Telecom, Inc.                          NV        74-2980663       C-25002-2000

Method IQ, Inc.                            GA         80-005704          0153426

Viasys Services, Inc.                      FL        59-2234741          G09210

Viasys Network Services, Inc.              FL        03-0386211       P05000012213

Crochet & Borel Services, Inc.             TX        76-0486425         138054100

Digital Communication Services, Inc.       KY        61-1304636          0416787
</TABLE>

<PAGE>
                                   SCHEDULE II
                                   -----------

                              INTELLECTUAL PROPERTY
                              ---------------------

                                      None.

<PAGE>
<TABLE>
<CAPTION>
                                                 SCHEDULE III
                                                 ------------

                                                   LOCATIONS
                                                   ---------

         GRANTOR            CHIEF PLACE OF BUSINESS       BOOKS AND RECORDS          EQUIPMENT, FIXTURES,
                           AND CHIEF EXECUTIVE OFFICE                                GOODS AND INVENTORY
-------------------------  --------------------------  ------------------------  ----------------------------
<S>                        <C>                         <C>                       <C>

Charys Holding Company,    1117 Perimeter Center West  1117 Perimeter Center     1117 Perimeter Center West
Inc.                       Suite N415                  West; Suite N415          Suite N415
                           Atlanta, GA 30338           Atlanta, GA 30338         Atlanta, GA 30338

Crochet & Borel Services,  346 Twin City Highway       346 Twin City Highway     346 Twin City Highway
Inc.                       Port Neches, TX 77651       Port Neches, TX 77651     Port Neches, TX 77651

CCI Telecom, Inc.          19240 Red Land Rd           19240 Red Land Rd         19240 Red Land Rd
                           San Antonio, TX 78259       San Antonio, TX 78259     San Antonio, TX 78259

Method IQ, Inc.            1750 Founders Pkwy          1750 Founders Pkwy        1750 Founders Pkwy
                           Suite 180                   Suite 180                 Suite 180
                           Alpharetta, GA 30004        Alpharetta, GA 30004      Alpharetta, GA 30004

Personnel Resources of     880 South Pleasantburg      880 South Pleasantburg    880 South Pleasantburg
Georgia, Inc.              Drive; Suite 3C             Drive; Suite 3C           Drive; Suite 3C
                           Greenville, SC 29607        Greenville, SC 29607      Greenville, SC 29607

Viasys Services, Inc.      26 Lake Wire Dr             26 Lake Wire Dr           26 Lake Wire Dr
                           Lakeland, FL 33815          Lakeland, FL 33815        Lakeland, FL 33815

Viasys Network Services,   26 Lake Wire Dr             26 Lake Wire Dr           26 Lake Wire Dr
Inc.                       Lakeland, FL 33815          Lakeland, FL 33815        Lakeland, FL 33815

Digital Communication      96 North 5th Avenue         96 North 5th Avenue       96 North 5th Avenue
Services, Inc.             Delray Beach, FL 33483      Delray Beach, FL 33483    Delray Beach, FL 33483
</TABLE>

<PAGE>
                                   SCHEDULE IV
                                   -----------

      PROMISSORY NOTES, SECURITIES, DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND
      -----------------------------------------------------------------------
                              COMMODITIES ACCOUNTS
                              --------------------

SECURITIES
----------

GRANTOR               NAME OF ISSUER  NUMBER OF  CLASS   CERTIFICATE
                                       SHARES               NO.(S)
--------------------  --------------  ---------  ------  ------------

Berkshire Wireless,   Optasite, Inc.     18,844  Common  C3
a wholly owned
subsidiary
of CCI Telecom, Inc.

<TABLE>
<CAPTION>
DEPOSIT ACCOUNTS
----------------

GRANTOR                    NAME AND                PURPOSE OF           ACCOUNT #
                    ADDRESS OF INSTITUTION                               ACCOUNT
----------------  --------------------------  --------------------  -----------------
<S>               <C>                         <C>                   <C>
CHC               BB&T                        Operating             5147412004
                  11650 Alpharetta Hwy
                  Roswell, GA 30076

C & B             Wachovia                    Credit Card Machine   10003347
                  4000 Twin City Hwy
                  Groves, TX 77619

C & B             Wells Fargo                 CAT Account           7962077793
                  2905 Nall St.
                  Port Neches, TX 77651       Branch Acct for       9712191734
                                              Houston office

                                              Branch Acct for       9712191726
                                              Austin office

C & B             Texas State Bank            Operating             160034211
                  2927 Nall St
                  Port Neches, TX 77651       Money Market          51223562

                                              Flex Spending         51224046

C & B             Capital One                 CAT Account           3620176787
                  1227 Tulane Ave
                  New Orleans, LA 70118

C & B             Edward Jones                Money Market          631-04123-14
                  1501 A 16th St
                  Orange, TX 77630

DCI               Wachovia                    Operations            2000014575257
                  2500 Weston Rd
                  Suite 100
                  Weston, FL 33331

<PAGE>
VSI               Bank of America             Misc Expenses         005486004748
                  PO Box 25118                Corporate
                  Tampa, FL 33622-5118

                                              Misc Expenses         005486004735
                                              Tampa

                                              Misc Expenses         005486004751
                                              Virginia

                                              Misc Expenses         005493630406
                                              Albany

                                              Misc Expenses         005491549065
                                              Raleigh

VSI               Suntrust                    Operations            0417006228435
                  501 E Las Olas Blvd
                  Ft. Lauderdale, FL 33301

VSI               TSC Suntrust                Payroll               1000044161601
                  PO Box 622227
                  Orlando, FL 32862-2227

MIQ               Carolina First Bank         Primary Operating     7100450390
                  104 South Main St
                  Greenville, SC 29501

MIQ               BB&T                        Local Operating       5147158779
                  11650 Alpharetta Hwy
                  Roswell, GA 30076

PRG               Wachovia                    Deposits/ Transfers   2000014791934
                  PO Box 969
                  Greenville, SC 29602
                                              Accounts Payable      2000014791947

                                              Payroll               2000014791950

                                              Payroll               2000004070597

PRG               Regions Bank                Payroll               38-5305-2486
                  PO Box 17308
                  Greenville, SC 29606

PRG               PRMorgan Chase              Payroll               000001592250680
                  PO Box 260180
                  Baton Rouge, LA 70826-0180

PRG               GrandSouth Bank             Money Market          2012656
                  381 Halton Rd
                  Greenville, SC 29607

<PAGE>
CCI               Frost National Bank         Operating             292016346
                  100 W Houston St
                  San Antonio, TX 78205
                                              BWI Acct.             610187720

                                              ISI Sys. Serv         015932696

                                              CCI Integ. Sol.       610188921

                                              CCI Corp.             015932688

                                              Payroll               010384518

CCI               Wells Fargo                 Lockbox               4121170708
                  PO Box 535015
                  Atlanta, GA 30353-5015
</TABLE>

LEGEND:
CHC - Charys Holding Company, Inc.
C & B - Crochet and Borel Services Inc.
DCI  - Digital Communications Services Inc.
VSI - Viasys Services Inc. and Viasys Network Services Inc
MIQ - Method IQ Inc
PRG - Personnel Resources of GA
CCI - CCI Telecom Inc.

<PAGE>
                                     SCHEDULE V
                                     ----------

                                FINANCING STATEMENTS
                                --------------------

                                               JURISDICTIONS FOR FILING
              GRANTORS                           FINANCING STATEMENTS
Charys Holding Company, Inc.                           Georgia
Personnel Resources of Georgia, Inc.               South Carolina
CCI Telecom, Inc.                                       Texas
Method IQ, Inc.                                        Georgia
Viasys Services, Inc.                                  Florida
Viasys Network Services, Inc.                          Florida
Crochet & Borel Services, Inc.                          Texas
Digital Communication Services, Inc.                   Florida

<PAGE>
                                   SCHEDULE VI
                                   -----------

                             COMMERCIAL TORT CLAIMS
                             ----------------------

                                      None.

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

                             ASSIGNMENT FOR SECURITY
                             -----------------------

                       [TRADEMARKS] [PATENTS] [COPYRIGHTS]
                       -----------------------------------

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

          WHEREAS,  the Assignor has entered into a Security Agreement, dated as
of August 17, 2006 (as amended, restated or otherwise modified from time to time
the  "Security  Agreement"),  in  favor  GOTTBETTER  CAPITAL  FINANCE,  LLC,  as
      -------------------
collateral  agent  for  certain  purchasers  (the  "Assignee");
                                                    --------

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

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

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

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

                                        [GRANTORS]

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

<PAGE>
STATE OF
         ------------
                    ss.:
COUNTY OF
          -----------

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

<PAGE>
                     SCHEDULE 1A TO ASSIGNMENT FOR SECURITY
                     --------------------------------------

[Trademarks and Trademark Applications]
[Patent and Patent Applications]
[Copyright and Copyright Applications]
Owned by
         ------------------------------

<PAGE>
                                  Schedule 4(g)

                         Effective Financing Statements
                         ------------------------------

                                      None.
                                      -----[FORM OF WARRANT]

NEITHER  THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS WARRANT NOR
THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED UNDER
THE  SECURITIES  ACT  OF  1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE  ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE  SECURITIES  ACT  OF  1933,  AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH
COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY,  THAT  REGISTRATION  IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT  TO  RULE  144  OR  RULE  144A  UNDER  SAID  ACT.  NOTWITHSTANDING  THE
FOREGOING,  THE  SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT  OR  OTHER  LOAN  OR  FINANCING  ARRANGEMENT  SECURED BY THE SECURITIES.

                          CHARYS HOLDING COMPANY, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: 1
Number of Shares of Common Stock:
Date of Issuance: August 30, 2006 ("ISSUANCE DATE")

     Charys  Holding  Company,  Inc.,  a  Delaware  corporation (the "COMPANY"),
hereby  certifies  that,  for  good  and valuable consideration, the receipt and
sufficiency  of  which are hereby acknowledged, GOTTBETTER CAPITAL FINANCE, LLC,
the  registered  holder  hereof  or  its  permitted  assigns  (the "HOLDER"), is
entitled, subject to the terms set forth below, to purchase from the Company, at
the  Exercise  Price  (as  defined below) then in effect, upon surrender of this
Warrant  to  purchase  Common  Stock  (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the "WARRANT"), at any
time  or  times  on or after the date hereof, but not after 11:59 p.m., New York
Time,  on the Expiration Date (as defined below), Two Hundred Forty One Thousand
Nine  Hundred  Eighty  Four [241,984)] fully paid nonassessable shares of Common
Stock  (as  defined  below) (the "WARRANT SHARES").  Except as otherwise defined
herein,  capitalized  terms in this Warrant shall have the meanings set forth in
Section  15.  This  Warrant is one of the Warrants to purchase Common Stock (the
"SPA WARRANTS") issued pursuant to Section 1 of that certain Securities Purchase
Agreement,  dated  as of August 30, 2006 (the "SUBSCRIPTION DATE"), by and among
the  Company  and  the  investors  (the  "BUYERS")  referred  to  therein  (the
"SECURITIES  PURCHASE  AGREEMENT").

1.     EXERCISE  OF  WARRANT.

     (a)     Mechanics  of Exercise.  Subject to the terms and conditions hereof
             ----------------------
(including, without limitation, the limitations set forth in Section 1(f)), this
Warrant  may  be exercised by the Holder on any day on or after the date hereof,
in  whole  or in part, by (i) delivery of a written notice, in the form attached
hereto  as  Exhibit  A  (the  "EXERCISE  NOTICE"),  of  the Holder's election to
            ----------
exercise  this Warrant and (ii) (A) payment to the Company of an amount equal to
the  applicable  Exercise Price multiplied by the number of Warrant Shares as to
which  this  Warrant  is

                                        1
<PAGE>
being  exercised (the "AGGREGATE EXERCISE PRICE") in cash or by wire transfer of
immediately  available  funds  or (B) notifying the Company that this Warrant is
being  exercised  pursuant  to a Cashless Exercise (as defined in Section 1(d)).
The  Holder  shall  not  be required to deliver the original Warrant in order to
affect  an  exercise  hereunder.  Execution  and delivery of the Exercise Notice
with  respect  to less than all of the Warrant Shares shall have the same effect
as cancellation of the original Warrant and issuance of a new Warrant evidencing
the  right to purchase the remaining number of Warrant Shares.  On or before the
first  (1st)  Business  Day following the date on which the Company has received
each  of  the  Exercise  Notice and the Aggregate Exercise Price (or notice of a
Cashless  Exercise)  (the  "EXERCISE  DELIVERY  DOCUMENTS"),  the  Company shall
transmit  by  facsimile  an  acknowledgment  of  confirmation  of receipt of the
Exercise  Delivery Documents to the Holder and the Company's transfer agent (the
"TRANSFER  AGENT").  On  or  before  the second (2nd) Business Day following the
date  on  which  the Company has received all of the Exercise Delivery Documents
(the  "SHARE  DELIVERY  DATE"), the Company shall (X) provided that the Transfer
Agent  is  participating  in The Depository Trust Company ("DTC") Fast Automated
Securities  Transfer  Program,  credit such aggregate number of shares of Common
Stock  to which the Holder is entitled pursuant to such exercise to the Holder's
or  its designee's balance account with DTC through its Deposit Withdrawal Agent
Commission  system, or (Y) if the Transfer Agent is not participating in the DTC
Fast  Automated  Securities  Transfer  Program,  issue and dispatch by overnight
courier  to  the  address  as  specified  in the Exercise Notice, a certificate,
registered  in  the  Company's  share  register in the name of the Holder or its
designee,  for  the  number  of  shares  of  Common Stock to which the Holder is
entitled  pursuant  to  such  exercise.  Upon  delivery of the Exercise Delivery
Documents,  the Holder shall be deemed for all corporate purposes to have become
the  holder  of  record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to
the  Holder's DTC account or the date of delivery of the certificates evidencing
such  Warrant  Shares  as  the  case  may  be.  If  this Warrant is submitted in
connection  with  any  exercise  pursuant to this Section 1(a) and the number of
Warrant  Shares  represented  by  this Warrant submitted for exercise is greater
than  the  number  of  Warrant  Shares being acquired upon an exercise, then the
Company  shall  as soon as practicable and in no event later than three Business
Days  after  any  exercise  and  at  its  own  expense,  issue a new Warrant (in
accordance  with  Section 7(d)) representing the right to purchase the number of
Warrant  Shares  purchasable  immediately  prior  to  such  exercise  under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised.  No  fractional  shares  of  Common  Stock  are to be issued upon the
exercise  of this Warrant, but rather the number of shares of Common Stock to be
issued  shall  be rounded up to the nearest whole number.  The Company shall pay
any and all taxes which may be payable with respect to the issuance and delivery
of  Warrant  Shares  upon  exercise  of  this  Warrant.

     (b)     Exercise  Price.  For  purposes  of  this Warrant, "EXERCISE PRICE"
             ---------------
means  $4.44  subject  to  adjustment  as  provided  herein.

     (c)     Company's  Failure  to  Timely  Deliver Securities.  If the Company
             --------------------------------------------------
shall  fail  for any reason or for no reason to issue to the Holder within three
(3)  Trading  Days  of receipt of the Exercise Delivery Documents, a certificate
for  the  number  of  shares of Common Stock to which the Holder is entitled and
register  such  shares  of  Common  Stock  on the Company's share register or to
credit the Holder's balance account with DTC for such number of shares of Common
Stock  to  which  the  Holder  is  entitled  upon  the Holder's exercise of this
Warrant,  then,  in  addition  to  all

                                        2
<PAGE>
other  remedies  available  to  the Holder, the Company shall pay in cash to the
Holder  on  each  day  after  such  third Business Day that the issuance of such
shares  of  Common  Stock  is not timely effected an amount equal to 1.5% of the
product of (A) the sum of the number of shares of Common Stock not issued to the
Holder on a timely basis and to which the Holder is entitled and (B) the Closing
Sale  Price  of a share of Common Stock on the Trading Day immediately preceding
the last possible date which the Company could have issued such shares of Common
Stock to the Holder without violating Section 1(a).  In addition if within three
(3)  Trading  Days  after  the Company's receipt of a copy (whether delivered by
facsimile  or  any other method) of an Exercise Notice the Company shall fail to
issue and deliver a certificate to the Holder and register such shares of Common
Stock  on  the  Company's  share register or credit the Holder's balance account
with  DTC  for  the  number  of  shares  of  Common Stock to which the Holder is
entitled  upon  the Holder's exercise hereunder, and if on or after such Trading
Day  the Holder purchases (in an open market transaction or otherwise) shares of
Common  Stock  to  deliver  in satisfaction of a sale by the Holder of shares of
Common  Stock  issuable upon such exercise that the Holder anticipated receiving
from  the  Company  (a  "BUY-IN"  ),  then  the  Company shall, within three (3)
Business  Days  after  the Holder's request and in the Holder's sole discretion,
either  (i)  pay  cash  to  the  Holder in an amount equal to the Holder's total
purchase  price  (including  brokerage  commissions,  if  any) for the shares of
Common  Stock  so  purchased  (the "BUY-IN PRICE"), at which point the Company's
obligation  to  deliver  such  certificate  (and  to issue such shares of Common
Stock)  shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder  a  certificate  or certificates representing such Warrant Shares and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over  the  product  of  (A) such number of shares of Common Stock, times (B) the
Closing  Bid  Price  on  the  date  of exercise.  Nothing herein shall limit the
holder's  right to pursue actual damages for the Company's failure to maintain a
sufficient  number  of  authorized  shares of Common Stock or to otherwise issue
shares  of  Common  Stock  upon  exercise of this Warrant in accordance with the
terms  hereof,  and  the  Holder  shall  have  the  right to pursue all remedies
available at law or in equity (including a decree of specific performance and/or
injunctive  relief).

     (d)     Cashless  Exercise.  Notwithstanding  anything  contained herein to
             ------------------
the  contrary,  if,  at  the  time  of  exercise of this Warrant, a Registration
Statement (as defined in the Registration Rights Agreement) covering the Warrant
Shares  that  are  the  subject of the Exercise Notice (the "UNAVAILABLE WARRANT
SHARES") is not available for the resale of such Unavailable Warrant Shares, the
Holder  may,  in  its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to be made to the
Company  upon  such  exercise  in payment of the Aggregate Exercise Price, elect
instead to receive upon such exercise the "Net Number" of shares of Common Stock
determined  according  to  the  following  formula  (a  "CASHLESS  EXERCISE"):

               Net Number = (A x B) - (A x C)
                            -----------------
                                    B

               For purposes of the foregoing formula:

          A    =    the  total  number  of  shares  with  respect  to which this
                    Warrant  is  then  being  exercised.

                                        3
<PAGE>
          B    =    the  Closing  Sale  Price  of the shares of Common Stock (as
                    reported by Bloomberg) on the date immediately preceding the
                    date  of  the  Exercise  Notice.

          C    =    the Exercise Price then in effect for the applicable Warrant
                    Shares  at  the  time  of  such  exercise.

     (e)     Disputes.  In  the case of a dispute as to the determination of the
             --------
Exercise  Price or the arithmetic calculation of the Warrant Shares, the Company
shall  promptly  issue  to  the Holder the number of Warrant Shares that are not
disputed  and  resolve  such  dispute  in  accordance  with  Section  12.

     (f)     Limitations  on  Exercises.
             ---------------------------

          (1)     Beneficial  Ownership.  The  Company  shall  not  effect  the
                  ---------------------
     exercise  of  this  Warrant,  and  the  Holder  shall not have the right to
     exercise  this  Warrant,  to  the  extent  that after giving effect to such
     exercise,  such  Person  (together  with  such  Person's  affiliates) would
     beneficially  own  (directly  or  indirectly  through  Warrant  Shares  or
     otherwise)  in  excess  of  4.99% of the shares of Common Stock outstanding
     immediately  after  giving  effect  to  such  exercise. For purposes of the
     foregoing  sentence,  the  aggregate  number  of  shares  of  Common  Stock
     beneficially  owned  (directly  or  indirectly  through  Warrant  Shares or
     otherwise)  by  such  Person and its affiliates shall include the number of
     shares  of Common Stock issuable upon exercise of this Warrant with respect
     to  which  the  determination  of  such  sentence  is being made, but shall
     exclude shares of Common Stock which would be issuable upon (i) exercise of
     the  remaining,  unexercised  portion of this Warrant beneficially owned by
     such  Person  and  its  affiliates  and  (ii) exercise or conversion of the
     unexercised  or  unconverted portion of any other securities of the Company
     beneficially  owned  by  such Person and its affiliates (including, without
     limitation,  any  convertible  notes  or  convertible  preferred  stock  or
     warrants)  subject  to  a limitation on conversion or exercise analogous to
     the  limitation  contained  herein.  Except  as  set forth in the preceding
     sentence,  for  purposes  of  this paragraph, beneficial ownership shall be
     calculated  in accordance with Section 13(d) of the Securities Exchange Act
     of  1934,  as  amended.  For  purposes  of this Warrant, in determining the
     number  of  outstanding  shares of Common Stock, the Holder may rely on the
     number  of  outstanding  shares  of  Common  Stock  as reflected in (1) the
     Company's  most recent Form 10-KSB, Form 10-QSB, Current Report on Form 8-K
     or  other public filing with the Securities and Exchange Commission, as the
     case  may  be,  (2) a more recent public announcement by the Company or (3)
     any  other  notice  by  the Company or the Transfer Agent setting forth the
     number  of  shares of Common Stock outstanding. For any reason at any time,
     upon  the  written  request  of  the  Holder,  the Company shall within two
     Business  Days  confirm  orally  and in writing to the Holder the number of
     shares  of  Common  Stock  then  outstanding.  In  any  case, the number of
     outstanding  shares of Common Stock shall be determined after giving effect
     to  the  conversion or exercise of securities of the Company, including the
     SPA  Securities  and  the  SPA  Warrants,  by  the

                                        4
<PAGE>
     Holder  and  its  affiliates  since  the  date  as  of which such number of
     outstanding  shares  of Common Stock was reported. By written notice to the
     Company,  the Holder may from time to time increase or decrease the Maximum
     Percentage  specified  in  such notice; provided that (i) any such increase
     will not be effective until the sixty-first (61st) day after such notice is
     delivered  to  the  Company,  (ii) any such increase or decrease will apply
     only  to  the  Holder and not to any other holder of SPA Warrants and (iii)
     and  in  no case shall Holder or its Affiliates acquire in excess of 9.999%
     of  the  outstanding  shares  of  Common  Stock  or the voting power of the
     Company.

     (g)     Insufficient  Authorized  Shares.  If  at any time while any of the
             --------------------------------
Warrants  remain  outstanding  the  Company does not have a sufficient number of
authorized and unreserved shares of Common Stock (an "AUTHORIZED SHARE FAILURE")
to  satisfy its obligation to reserve for issuance upon exercise of the Warrants
at  least  a  number  of  shares  of Common Stock equal to 175% of the number of
shares  of  Common  Stock  as shall from time to time be necessary to effect the
exercise  of  all  of  the  Warrants  then  outstanding  (the  "REQUIRED RESERVE
AMOUNT"),  then  the  Company  shall  immediately  take  all action necessary to
increase the Company's authorized shares of Common Stock to an amount sufficient
to  allow  the  Company  to reserve the Required Reserve Amount for the Warrants
then outstanding.  Without limiting the generality of the foregoing sentence, as
soon  as  practicable  after  the  date of the occurrence of an Authorized Share
Failure,  but  in  no  event later than ninety (90) days after the occurrence of
such  Authorized  Share  Failure,  the  Company  shall  hold  a  meeting  of its
stockholders  for the approval of an increase in the number of authorized shares
of  Common  Stock.  In  connection  with such meeting, the Company shall provide
each  stockholder  with  a  proxy  statement  and  shall use its reasonable best
efforts  to  solicit  its  stockholders' approval of such increase in authorized
shares  of  Common Stock and to cause its board of directors to recommend to the
stockholders  that  they  approve  such  proposal.

2.     ADJUSTMENT  OF  EXERCISE  PRICE  AND  NUMBER  OF  WARRANT  SHARES.

The  Exercise Price and the number of Warrant Shares shall be adjusted from time
to  time  as  follows:

     (a)     Adjustment  upon  Issuance  of  shares  of  Common  Stock.  If  and
             ---------------------------------------------------------
whenever  on  or  after the Subscription Date the Company issues or sells, or in
accordance  with  this Section 2 is deemed to have issued or sold, any shares of
Common  Stock (including the issuance or sale of shares of Common Stock owned or
held  by or for the account of the Company, but excluding shares of Common Stock
deemed  to  have  been  issued  by  the  Company in connection with any Excluded
Securities  (as  defined  in  the SPA Securities)) for a consideration per share
(the  "NEW  ISSUANCE PRICE") less than a price (the "APPLICABLE PRICE") equal to
the  Exercise  Price in effect immediately prior to such issue or sale or deemed
issuance  or  sale (the foregoing a "DILUTIVE ISSUANCE"), then immediately after
such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an
amount  equal  to  the  New  Issuance  Price.  Upon  each such adjustment of the
Exercise  Price hereunder, the number of Warrant Shares shall be adjusted to the
number of shares of Common Stock determined by multiplying the Exercise Price in
effect  immediately  prior  to  such  adjustment by the number of Warrant Shares
acquirable  upon  exercise  of this Warrant immediately prior to such adjustment
and  dividing  the  product  thereof  by  the  Exercise

                                        5
<PAGE>
Price  resulting from such adjustment.  For purposes of determining the adjusted
Exercise  Price  under  this  Section  2(a),  the following shall be applicable:

          (i)  Issuance  of  Options.  If  the  Company in any manner grants any
               ---------------------
               Options  and  the  lowest  price per share for which one share of
               Common  Stock is issuable upon the exercise of any such Option or
               upon  conversion,  exercise  or  exchange  of  any  Convertible
               Securities issuable upon exercise of any such Option is less than
               the Applicable Price, then such shares of Common Stock underlying
               such  Option  shall  be deemed to be outstanding and to have been
               issued  and  sold  by  the Company at the time of the granting or
               sale  of  such  Option  for such price per share. For purposes of
               this  Section  2(a)(i), the "lowest price per share for which one
               share  of  Common Stock is issuable upon exercise of such Options
               or  upon  conversion,  exercise  or  exchange of such Convertible
               Securities"  shall  be  equal to the sum of the lowest amounts of
               consideration (if any) received or receivable by the Company with
               respect  to  any  one  share of Common Stock upon the granting or
               sale  of  the  Option,  upon  exercise  of  the  Option  and upon
               conversion,  exercise  or  exchange  of  any Convertible Security
               issuable  upon  exercise of such Option. No further adjustment of
               the Exercise Price or number of Warrant Shares shall be made upon
               the  actual  issuance  of  such shares of Common Stock or of such
               Convertible  Securities upon the exercise of such Options or upon
               the  actual  issuance  of  such  shares  of  Common  Stock  upon
               conversion,  exercise or exchange of such Convertible Securities.

         (ii)  Issuance  of Convertible Securities. If the Company in any manner
               -----------------------------------
               issues  or  sells any Convertible Securities and the lowest price
               per  share  for  which one share of Common Stock is issuable upon
               the  conversion,  exercise  or  exchange thereof is less than the
               Applicable  Price, then such shares of Common Stock issuable upon
               conversion  of  such Convertible Securities shall be deemed to be
               outstanding  and  to  have been issued and sold by the Company at
               the  time  of the issuance or sale of such Convertible Securities
               for  such  price  per  share.  For  the  purposes of this Section
               2(a)(ii),  the  "lowest  price  per  share for which one share of
               Common  Stock  is  issuable  upon  the  conversion,  exercise  or
               exchange"  shall  be  equal  to  the sum of the lowest amounts of
               consideration (if any) received or receivable by the Company with
               respect to one share of Common Stock upon the issuance or sale of
               the  Convertible  Security  and  upon  conversion,  exercise  or
               exchange  of  such Convertible Security. No further adjustment of
               the Exercise Price or number of Warrant Shares shall be made upon
               the  actual  issuance  of  such  shares  of  Common  Stock  upon
               conversion,  exercise or exchange of such Convertible Securities,
               and  if  any such issue or sale of such Convertible Securities is
               made  upon  exercise  of any Options for which adjustment of this
               Warrant has been or is to be made pursuant to other provisions of
               this Section 2(a), no further adjustment of the Exercise Price or
               number of Warrant Shares shall be made by reason of such issue or
               sale.  A  change  that  permits  the  holder  of  an  Option  or
               Convertible

                                        6
<PAGE>
               Security  to  utilize  a  cashless  exercise feature shall not be
               deemed to decrease the consideration payable by the holder solely
               by  reason  of  the fact that the cashless exercise feature would
               result  in  a  reduction  in cash consideration receivable by the
               Company.

        (iii)  Change  in  Option Price or Rate of Conversion. If the purchase
               ----------------------------------------------
               price  provided for in any Options, the additional consideration,
               if  any, payable upon the issue, conversion, exercise or exchange
               of  any  Convertible  Securities,  or  the  rate  at  which  any
               Convertible  Securities  are  convertible  into or exercisable or
               exchangeable for shares of Common Stock increases or decreases at
               any  time, the Exercise Price and the number of Warrant Shares in
               effect at the time of such increase or decrease shall be adjusted
               to  the  Exercise  Price  and  the number of Warrant Shares which
               would  have  been  in  effect  at  such  time had such Options or
               Convertible  Securities  provided for such increased or decreased
               purchase  price,  additional  consideration  or  increased  or
               decreased  conversion  rate,  as  the  case  may  be, at the time
               initially  granted,  issued or sold. For purposes of this Section
               2(a)(iii),  if  the  terms  of any Option or Convertible Security
               that  was  outstanding as of the date of issuance of this Warrant
               are  increased  or  decreased  in  the  manner  described  in the
               immediately  preceding  sentence, then such Option or Convertible
               Security  and  the  shares  of  Common Stock deemed issuable upon
               exercise,  conversion or exchange thereof shall be deemed to have
               been  issued  as  of  the  date  of such increase or decrease. No
               adjustment  pursuant  to  this Section 2(a) shall be made if such
               adjustment would result in an increase of the Exercise Price then
               in effect or a decrease in the number of Warrant Shares. A change
               that  permits  the holder of an Option or Convertible Security to
               utilize  a  cashless  exercise  feature  shall  not  be deemed to
               decrease the consideration payable by the holder solely by reason
               of  the fact that the cashless exercise feature would result in a
               reduction  in  cash  consideration  receivable  by  the  Company.

         (iv)  Calculation  of  Consideration  Received.  In  case any Option is
               ----------------------------------------
               issued  in  connection with the issue or sale of other securities
               of the Company, together comprising one integrated transaction in
               which  no  specific consideration is allocated to such Options by
               the  parties  thereto,  the  Options  will be deemed to have been
               issued  for  a  consideration  of $0.001. If any shares of Common
               Stock,  Options  or  Convertible Securities are issued or sold or
               deemed  to  have  been issued or sold for cash, the consideration
               received therefor will be deemed to be the amount received by the
               Company  therefor.  If  any  shares  of  Common Stock, Options or
               Convertible  Securities  are  issued  or sold for a consideration
               other than cash, the amount of such consideration received by the
               Company  will  be  the  fair  value of such consideration, except
               where  such consideration consists of publicly traded securities,
               in which case the amount of consideration received by the Company
               will  be  the  Closing  Sale

                                        7
<PAGE>
               Price of such publicly traded security on the date of receipt. If
               any shares of Common Stock, Options or Convertible Securities are
               issued  to  the  owners of the non-surviving entity in connection
               with any merger in which the Company is the surviving entity, the
               amount  of  consideration  therefor will be deemed to be the fair
               value  of  such  portion  of  the  net assets and business of the
               non-surviving  entity as is attributable to such shares of Common
               Stock, Options or Convertible Securities, as the case may be. The
               fair  value  of  any  consideration  other  than cash or publicly
               traded  securities  will be determined jointly by the Company and
               the  Required  Holders.  If  such  parties  are  unable  to reach
               agreement  within  ten (10) days after the occurrence of an event
               requiring  valuation  (the  "VALUATION EVENT"), the fair value of
               such  consideration  will  be determined within five (5) Business
               Days  after  the  tenth  day  following the Valuation Event by an
               independent,  reputable appraiser jointly selected by the Company
               and  the  Required  Holders.  The determination of such appraiser
               shall be final and binding upon all parties absent manifest error
               and the fees and expenses of such appraiser shall be borne by the
               Company.

          (v)  Record  Date.  If  the  Company  takes a record of the holders of
               ------------
               shares  of  Common Stock for the purpose of entitling them (A) to
               receive  a  dividend  or  other distribution payable in shares of
               Common  Stock,  Options  or  in  Convertible Securities or (B) to
               subscribe  for  or  purchase  shares  of Common Stock, Options or
               Convertible  Securities,  then such record date will be deemed to
               be  the  date  of the issue or sale of the shares of Common Stock
               deemed  to  have been issued or sold upon the declaration of such
               dividend  or the making of such other distribution or the date of
               the  granting  of  such right of subscription or purchase, as the
               case  may  be.

          (b)     Adjustment  upon  Subdivision  or Combination of Common Stock.
                  -------------------------------------------------------------
If  the Company at any time on or after the Subscription Date subdivides (by any
stock  split, stock dividend, recapitalization or otherwise) one or more classes
of  its  outstanding shares of Common Stock into a greater number of shares, the
Exercise  Price  in  effect  immediately  prior  to  such  subdivision  will  be
proportionately reduced and the number of Warrant Shares will be proportionately
increased.  If  the  Company  at  any  time  on  or  after the Subscription Date
combines  (by combination, reverse stock split or otherwise) one or more classes
of  its  outstanding shares of Common Stock into a smaller number of shares, the
Exercise  Price  in  effect  immediately  prior  to  such  combination  will  be
proportionately  increased  and  the  number  of  Warrant  Shares  will  be
proportionately  decreased.  Any adjustment under this Section 2(b) shall become
effective  at  the  close of business on the date the subdivision or combination
becomes  effective.

          (c)     Other Events.  If any event occurs of the type contemplated by
                  ------------
the  provisions  of  this  Section  2  but  not  expressly  provided for by such
provisions  (including,  without

                                        8
<PAGE>
limitation,  the  granting of stock appreciation rights, phantom stock rights or
other  rights  with equity features), then the Company's Board of Directors will
make  an  appropriate adjustment in the Exercise Price and the number of Warrant
Shares  so  as  to  protect  the  rights  of  the  Holder; provided that no such
adjustment  pursuant  to  this  Section 2(c) will increase the Exercise Price or
decrease  the  number of Warrant Shares as otherwise determined pursuant to this
Section  2.

3.     RIGHTS  UPON  DISTRIBUTION  OF  ASSETS.

If  the  Company shall declare or make any dividend or other distribution of its
assets  (or  rights to acquire its assets) to holders of shares of Common Stock,
by  way  of  return  of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way of a
dividend,  spin  off,  reclassification,  corporate  rearrangement,  scheme  of
arrangement  or other similar transaction) (a "DISTRIBUTION"), at any time after
the  issuance  of  this  Warrant,  then,  in  each  such  case:

     (a)     any  Exercise  Price  in  effect  immediately prior to the close of
business  on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of  the  close  of  business  on  such  record  date,  to  a price determined by
multiplying  such  Exercise Price by a fraction of which (i) the numerator shall
be  the  Closing  Bid  Price  of  a  share  of  Common  Stock on the Trading Day
immediately  preceding  such record date minus the value of the Distribution (as
determined  in good faith by the Company's Board of Directors) applicable to one
share  of  Common Stock, and (ii) the denominator shall be the Closing Bid Price
of  a share of Common Stock on the Trading Day immediately preceding such record
date;  and

     (b)     the  number  of  Warrant  Shares  shall be increased to a number of
shares  equal  to  the  number  of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination of
holders  of  shares  of  Common  Stock  entitled  to  receive  the  Distribution
multiplied  by  the  reciprocal  of  the  fraction  set forth in the immediately
preceding  paragraph (a); provided that in the event that the Distribution is of
shares  of  Common Stock (or common stock) ("OTHER SHARES OF COMMON STOCK") of a
company  whose  common  shares are traded on a national securities exchange or a
national  automated  quotation  system,  then  the Holder may elect to receive a
warrant  to  purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the number of shares
of  Other  Shares  of  Common  Stock  that would have been payable to the Holder
pursuant  to  the Distribution had the Holder exercised this Warrant immediately
prior  to  such  record  date  and with an aggregate exercise price equal to the
product  of the amount by which the exercise price of this Warrant was decreased
with  respect  to  the  Distribution  pursuant  to  the terms of the immediately
preceding  paragraph  (a)  and  the  number  of  Warrant  Shares  calculated  in
accordance  with  the  first  part  of  this  paragraph  (b).

4.     PURCHASE  RIGHTS;  FUNDAMENTAL  TRANSACTIONS.

     (a)     Purchase  Rights.  In  addition  to  any  adjustments  pursuant  to
             ----------------
Section 2 above, if at any time the Company grants, issues or sells any Options,
Convertible  Securities  or  rights  to  purchase stock, warrants, securities or
other  property  pro  rata  to  the  record  holders  of  any  class

                                        9
<PAGE>
of  shares  of  Common  Stock  (the  "PURCHASE RIGHTS"), then the Holder will be
entitled  to  acquire,  upon  the  terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the proportionate number of shares of Common Stock acquirable upon complete
exercise  of  this Warrant (without regard to any limitations on the exercise of
this  Warrant)  immediately  before  the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the  date  as  of  which  the record holders of shares of Common Stock are to be
determined  for  the  grant,  issue  or  sale  of  such  Purchase  Rights.

     (b)     Fundamental  Transactions.  The  Company shall not enter into or be
             -------------------------
party  to  a Fundamental Transaction unless (i)  the Successor Entity assumes in
writing  all  of the obligations of the Company under this Warrant and the other
Transaction  Documents  in accordance with the provisions of this Section (4)(b)
pursuant  to  written  agreements  in  form  and  substance  satisfactory to the
Required  Holders and approved by the Required Holders prior to such Fundamental
Transaction,  including  agreements  to  deliver  to  each holder of Warrants in
exchange  for  such  Warrants  a security of the Successor Entity evidenced by a
written  instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the  shares  of  Common  Stock  reflected  by  the  terms  of  such  Fundamental
Transaction,  and  exercisable  for  a corresponding number of shares of capital
stock  equivalent  to  the shares of Common Stock acquirable and receivable upon
exercise  of  this Warrant (without regard to any limitations on the exercise of
this  Warrant)  prior  to  such Fundamental Transaction, and satisfactory to the
Required  Holders and (ii) the Successor Entity (including its Parent Entity) is
a  publicly  traded  corporation  whose  common stock is quoted on or listed for
trading  on  an  Eligible  Market.  Upon  the  occurrence  of  any  Fundamental
Transaction,  the  Successor Entity shall succeed to, and be substituted for (so
that  from and after the date of such Fundamental Transaction, the provisions of
this  Warrant  referring  to  the "Company" shall refer instead to the Successor
Entity)  the  Company, and may exercise every right and power of the Company and
shall  assume  all of the obligations of the Company under this Warrant with the
same  effect  as  if such Successor Entity had been named as the Company herein.
Upon  consummation  of  the  Fundamental Transaction, the Successor Entity shall
deliver  to  the Holder confirmation that there shall be issued upon exercise of
this  Warrant at any time after the consummation of the Fundamental Transaction,
in  lieu of the shares of the Common Stock (or other securities, cash, assets or
other  property)  issuable  upon  the  exercise  of  the  Warrant  prior to such
Fundamental Transaction, such shares of the publicly traded Common Stock (or its
equivalent)  of  the  Successor  Entity  (including its Parent Entity) which the
Holder  would  have  been  entitled  to  receive  upon  the  happening  of  such
Fundamental  Transaction  had  this  Warrant been converted immediately prior to
such  Fundamental  Transaction, as adjusted in accordance with the provisions of
this  Warrant.  In  addition  to  and  not  in substitution for any other rights
hereunder,  prior to the consummation of any Fundamental Transaction pursuant to
which  holders  of  shares of Common Stock are entitled to receive securities or
other  assets  with  respect  to  or  in  exchange for shares of Common Stock (a
"CORPORATE  EVENT"), the Company shall make appropriate provision to insure that
the  Holder  will  thereafter have the right to receive upon an exercise of this
Warrant  at  any  time after the consummation of the Fundamental Transaction but
prior  to  the  Expiration  Date,  in lieu of the shares of the Common Stock (or
other  securities, cash, assets or other property) issuable upon the exercise of
the  Warrant  prior  to  such  Fundamental  Transaction,  such  shares of stock,
securities,  cash,  assets  or  any  other  property

                                       10
<PAGE>
whatsoever  (including  warrants or other purchase or subscription rights) which
the  Holder  would  have  been  entitled  to  receive upon the happening of such
Fundamental Transaction had the Warrant been exercised immediately prior to such
Fundamental  Transaction.  Provisions  made  pursuant  to the preceding sentence
shall  be  in  the  form  and  substance reasonably satisfactory to the Required
Holders.  The  provisions  of  this Section shall apply similarly and equally to
successive  Fundamental  Transactions  and Corporate Events and shall be applied
without  regard  to  any  limitations  on  the  exercise  of  this  Warrant.

     (c)     Notwithstanding  the  foregoing  and the provisions of Section 4(b)
above,  in  the  event  of  a  Fundamental  Transaction,  if  the Holder has not
exercised  the  Warrant  in  full  prior  to the consummation of the Fundamental
Transaction,  then the Company may enter into a Fundamental Transaction pursuant
to  which  the Holder shall receive, simultaneously with the consummation of the
Fundamental Transaction, in lieu of the warrant referred to in Section 4(b) cash
in  the  amount  equal to the value of the remaining unexercised portion of this
Warrant on the date of such consummation, which value shall be determined by use
of  the  Black  Scholes Option Pricing Model reflecting (A) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term  of  this Warrant as of such date of request and (B) an expected volatility
equal  to  the  greater  of 60% and the 100 day volatility obtained from the HVT
function  on  Bloomberg.

5.     NONCIRCUMVENTION.

The  Company hereby covenants and agrees that the Company will not, by amendment
of its Articles of Incorporation, Bylaws or through any reorganization, transfer
of  assets,  consolidation, merger, scheme of arrangement, 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 of this Warrant, and will at all
times  in  good  faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the Holder.  Without limiting
the  generality  of  the  foregoing,  the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, (ii) shall take all such actions as may
be  necessary  or  appropriate in order that the Company may validly and legally
issue  fully  paid and nonassessable shares of Common Stock upon the exercise of
this  Warrant,  and  (iii)  shall,  so  long  as  any  of  the  SPA Warrants are
outstanding,  take all action necessary to reserve and keep available out of its
authorized  and  unissued  shares  of  Common  Stock,  solely for the purpose of
effecting  the  exercise  of  the  SPA Warrants, 175% of the number of shares of
Common  Stock  as shall from time to time be necessary to effect the exercise of
the  SPA  Warrants  then  outstanding  (without  regard  to  any  limitations on
exercise).

6.     WARRANT  HOLDER  NOT  DEEMED  A  STOCKHOLDER.

Except  as  otherwise  specifically  provided herein, the Holder, solely in such
Person's  capacity as a holder of this Warrant, shall not be entitled to vote or
receive  dividends  or  be deemed the holder of share capital of the Company for
any purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person's capacity as the Holder of this Warrant,
any  of the rights of a stockholder of the Company or any right to vote, give or
withhold  consent  to any corporate action (whether any reorganization, issue of
stock,

                                       11
<PAGE>
reclassification  of  stock,  consolidation,  merger,  conveyance or otherwise),
receive  notice  of  meetings,  receive  dividends  or  subscription  rights, or
otherwise,  prior to the issuance to the Holder of the Warrant Shares which such
Person  is  then  entitled to receive upon the due exercise of this Warrant.  In
addition,  nothing  contained in this Warrant shall be construed as imposing any
liabilities  on  the  Holder  to  purchase any securities (upon exercise of this
Warrant  or  otherwise)  or  as  a  stockholder  of  the  Company,  whether such
liabilities  are  asserted  by  the  Company  or  by  creditors  of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies
of  the  same  notices  and  other  information given to the stockholders of the
Company  generally,  contemporaneously  with  the  giving  thereof  to  the
stockholders.

7.     REISSUANCE  OF  WARRANTS.

     (a)     Transfer  of  Warrant.  If  this  Warrant is to be transferred, the
             ---------------------
Holder  shall  surrender this Warrant to the Company, whereupon the Company will
issue  promptly  following  satisfaction of the transfer provisions contained in
the Securities Purchase Agreement and deliver upon the order of the Holder a new
Warrant (in accordance with Section 7(d)), in the name of the validly registered
assignee or transferee, representing the right to purchase the number of Warrant
Shares  being  transferred  by  the Holder and, if less then the total number of
Warrant  Shares then underlying this Warrant is being transferred, a new Warrant
(in  accordance  with  Section  7(d))  to  the  Holder representing the right to
purchase  the  number  of  Warrant  Shares  not  being  transferred.

     (b)     Lost,  Stolen or Mutilated Warrant.  Upon receipt by the Company of
             ----------------------------------
evidence  reasonably satisfactory to the Company of the loss, theft, destruction
or  mutilation  of this Warrant, and, in the case of loss, theft or destruction,
of  any  indemnification  undertaking  by the Holder to the Company in customary
form  and,  in  the  case of mutilation, upon surrender and cancellation of this
Warrant,  the  Company shall execute and deliver to the Holder a new Warrant (in
accordance  with  Section  7(d))  representing the right to purchase the Warrant
Shares  then  underlying  this  Warrant.

     (c)     Exchangeable  for Multiple Warrants.  This Warrant is exchangeable,
             -----------------------------------
upon  the surrender hereof by the Holder at the principal office of the Company,
for  a new Warrant or Warrants (in accordance with Section 7(d)) representing in
the aggregate the right to purchase the number of Warrant Shares then underlying
this  Warrant,  and  each  such new Warrant will represent the right to purchase
such  portion  of such Warrant Shares as is designated by the Holder at the time
of  such surrender; provided, however, that no Warrants for fractional shares of
Common  Stock  shall  be  given.

     (d)     Issuance  of  New  Warrants.  Whenever  the  Company is required to
             ---------------------------
issue  a new Warrant pursuant to the terms of this Warrant, such new Warrant (i)
shall  be of like tenor with this Warrant, (ii) shall represent, as indicated on
the  face  of  such  new  Warrant, the right to purchase the Warrant Shares then
underlying  this  Warrant (or in the case of a new Warrant being issued pursuant
to  Section  7(a)  or  Section 7(c), the Warrant Shares designated by the Holder
which,  when  added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of  Warrant

                                       12
<PAGE>
Shares  then  underlying  this  Warrant),  (iii) shall have an issuance date, as
indicated on the face of such new Warrant which is the same as the Issuance Date
and  (iv)  shall  have  the  same  rights  and  conditions  as  this  Warrant.

8.     NOTICES.

Whenever  notice  is  required  to be given under this Warrant, unless otherwise
provided  herein,  such notice shall be given in accordance with Section 9(f) of
the  Securities  Purchase  Agreement.  The Company shall provide the Holder with
prompt  written  notice of all actions taken pursuant to this Warrant, including
in  reasonable  detail  a  description  of such action and the reason therefore.
Without  limiting the generality of the foregoing, the Company will give written
notice  to the Holder (i) immediately upon any adjustment of the Exercise Price,
setting  forth  in  reasonable  detail,  and certifying, the calculation of such
adjustment  and  (ii)  at least fifteen (15) days prior to the date on which the
Company  closes  its books or takes a record (A) with respect to any dividend or
distribution  upon  the  shares of Common Stock, (B) with respect to any grants,
issuances  or sales of any Options, Convertible Securities or rights to purchase
stock,  warrants,  securities  or  other property to holders of shares of Common
Stock  or  (C)  for  determining  rights to vote with respect to any Fundamental
Transaction,  dissolution  or  liquidation,  provided  in  each  case  that such
information  shall  be  made known to the public prior to or in conjunction with
such  notice  being  provided  to  the  Holder.

9.     AMENDMENT  AND  WAIVER.

Except  as  otherwise  provided  herein,  the  provisions of this Warrant may be
amended  and  the  Company  may  take  any  action herein prohibited, or omit to
perform  any  act herein required to be performed by it, only if the Company has
obtained  the  written  consent  of  the Required Holders; provided that no such
action may increase the exercise price of any SPA Warrant or decrease the number
of  shares or class of stock obtainable upon exercise of any SPA Warrant without
the  written consent of the Holder.  No such amendment shall be effective to the
extent  that it applies to less than all of the holders of the SPA Warrants then
outstanding.

10.     GOVERNING  LAW.

This Warrant shall be governed by and construed and enforced in accordance with,
and  all  questions  concerning  the  construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State
of  New  York,  without  giving  effect  to any choice of law or conflict of law
provision  or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State  of  New  York.

11.     CONSTRUCTION;  HEADINGS.

This  Warrant  shall  be deemed to be jointly drafted by the Company and all the
Buyers and shall not be construed against any person as the drafter hereof.  The
headings  of  this  Warrant  are for convenience of reference and shall not form
part  of,  or  affect  the  interpretation  of,  this  Warrant.

                                       13
<PAGE>
12.     DISPUTE  RESOLUTION.

In  the  case  of a dispute as to the determination of the Exercise Price or the
arithmetic  calculation  of  the  Warrant  Shares,  the Company shall submit the
disputed  determinations  or  arithmetic  calculations  via facsimile within two
Business  Days of receipt of the Exercise Notice giving rise to such dispute, as
the  case  may  be,  to the Holder.  If the Holder and the Company are unable to
agree  upon  such  determination  or  calculation  of  the Exercise Price or the
Warrant  Shares  within  three  Business  Days of such disputed determination or
arithmetic  calculation  being  submitted to the Holder, then the Company shall,
within  two Business Days submit via facsimile (a) the disputed determination of
the  Exercise Price to an independent, reputable investment bank selected by the
Company  and  approved  by  the  Holder  (such  approval  not to be unreasonably
withheld  or  delayed) or (b) the disputed arithmetic calculation of the Warrant
Shares  to  the  Company's  independent,  outside accountant.  The Company shall
cause  at its expense the investment bank or the accountant, as the case may be,
to  perform  the  determinations  or calculations and notify the Company and the
Holder  of the results no later than ten Business Days from the time it receives
the  disputed  determinations  or  calculations.  Such  investment  bank's  or
accountant's  determination or calculation, as the case may be, shall be binding
upon  all  parties  absent  demonstrable  error.

13.     REMEDIES,  OTHER  OBLIGATIONS,  BREACHES  AND  INJUNCTIVE  RELIEF.

The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at  law  or  in  equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder right
to pursue actual damages for any failure by the Company to comply with the terms
of  this  Warrant.  The  Company  acknowledges  that  a  breach  by  it  of  its
obligations  hereunder  will  cause  irreparable harm to the Holder and that the
remedy  at  law  for  any  such breach may be inadequate.  The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of
this  Warrant shall be entitled, in addition to all other available remedies, to
an  injunction restraining any breach, without the necessity of showing economic
loss  and  without  any  bond  or  other  security  being  required.

14.     TRANSFER.

This  Warrant may be offered for sale, sold, transferred or assigned without the
consent  of  the Company, except as may otherwise be required by Section 2(f) of
the  Securities  Purchase  Agreement.

15.     [Intentionally  Omitted]

16.     CERTAIN  DEFINITIONS.

For  purposes  of  this  Warrant,  the  following terms shall have the following
meanings:

     (a)     "BLOOMBERG"  means  Bloomberg  Financial  Markets.

                                       14
<PAGE>
     (b)     "BUSINESS  DAY"  means any day other than Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized or required
by  law  to  remain  closed.

     (c)     "CLOSING  BID  PRICE"  and  "CLOSING  SALE  PRICE"  means,  for any
security  as  of  any  date,  the  last closing bid price and last closing trade
price,  respectively,  for such security on the Principal Market, as reported by
Bloomberg,  or,  if  the Principal Market begins to operate on an extended hours
basis  and  does not designate the closing bid price or the closing trade price,
as  the  case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or,  if the Principal Market is not the principal securities exchange or trading
market  for  such  security,  the  last  closing  bid price or last trade price,
respectively,  of  such security on the principal securities exchange or trading
market  where  such security is listed or traded as reported by Bloomberg, or if
the  foregoing  do  not  apply,  the last closing bid price or last trade price,
respectively,  of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price  or  last  trade  price,  respectively,  is  reported for such security by
Bloomberg,  the  average  of the bid prices, or the ask prices, respectively, of
any  market  makers  for  such security as reported in the "pink sheets" by Pink
Sheets  LLC  (formerly the National Quotation Bureau, Inc.).  If the Closing Bid
Price  or  the  Closing  Sale  Price  cannot  be  calculated for a security on a
particular  date  on  any  of  the foregoing bases, the Closing Bid Price or the
Closing  Sale  Price, as the case may be, of such security on such date shall be
the  fair market value as mutually determined by the Company and the Holder.  If
the  Company  and  the  Holder are unable to agree upon the fair market value of
such  security, then such dispute shall be resolved pursuant to Section 12.  All
such  determinations  to be appropriately adjusted for any stock dividend, stock
split,  stock  combination  or  other  similar transaction during the applicable
calculation  period.

     (d)     "COMMON  STOCK" means (i) the Company's shares of Common Stock, par
value  $0.001 per share, and (ii) any share capital into which such Common Stock
shall  have  been changed or any share capital resulting from a reclassification
of  such  Common  Stock.

     (e)     "CONVERTIBLE  SECURITIES" means any stock or securities (other than
Options)  directly or indirectly convertible into or exercisable or exchangeable
for  shares  of  Common  Stock.

     (f)     "ELIGIBLE  MARKET"  means  the Principal Market, The New York Stock
Exchange,  Inc.,  the  Nasdaq  National Market, the Nasdaq Capital Market or the
American  Stock  Exchange.

     (g)     "EXPIRATION  DATE"  means  the date sixty months after the Issuance
Date  or,  if  such  date  falls  on a day other than a Business Day or on which
trading does not take place on the Principal Market (a "HOLIDAY"), the next date
that  is  not  a  Holiday.

     (h)     "FUNDAMENTAL TRANSACTION" means that the Company shall, directly or
indirectly,  in  one or more related transactions, (i) consolidate or merge with
or  into  (whether  or  not  the  Company  is the surviving corporation) another
Person,  or  (ii)  sell, assign, transfer, convey or otherwise dispose of all or
substantially  all of the properties or assets of the Company to another Person,
or  (iii) allow another Person to make a purchase, tender or exchange offer that
is accepted by the holders of more than the 50% of either the outstanding shares
of  Common

                                       15
<PAGE>
Stock  (not  including  any shares of Common Stock held by the Person or Persons
making or party to, or associated or affiliated with the Persons making or party
to,  such  purchase,  tender  or  exchange  offer),  or  (iv) consummate a stock
purchase agreement or other business combination (including, without limitation,
a  reorganization,  recapitalization,  spin-off  or  scheme of arrangement) with
another  Person  whereby  such  other  Person  acquires more than the 50% of the
outstanding  shares  of  Common  Stock (not including any shares of Common Stock
held  by  the other Person or other Persons making or party to, or associated or
affiliated  with  the  other  Persons  making  or  party to, such stock purchase
agreement  or  other  business  combination),  (v)  reorganize,  recapitalize or
reclassify  its  Common  Stock (other than a forward or reverse stock split), or
(vi)  any  "person" or "group" (as these terms are used for purposes of Sections
13(d)  and  14(d) of the Exchange Act) is or shall become the "beneficial owner"
(as  defined  in  Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
Common  Stock.

     (i)     "OPTIONS" means any rights, warrants or options to subscribe for or
purchase  shares  of  Common  Stock  or  Convertible  Securities.

     (j)     "PARENT  ENTITY"  of  a  Person  means  an entity that, directly or
indirectly,  controls the applicable Person and whose common stock or equivalent
equity  security is quoted or listed on an Eligible Market, or, if there is more
than  one  such  Person  or  Parent Entity, the Person or Parent Entity with the
largest  public  market  capitalization  as  of  the date of consummation of the
Fundamental  Transaction.

     (k)     "PERSON"  means  an  individual,  a  limited  liability  company, a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization,  any  other  entity  and  a government or any department or agency
thereof.

     (l)     "PRINCIPAL  MARKET"  means  the  Over-the-Counter  Bulletin  Board.

     (m)     "REGISTRATION  RIGHTS  AGREEMENT"  means  that certain registration
rights  agreement  by  and  among  the  Company  and  the  Buyers.

     (n)     "REQUIRED  HOLDERS"  means  the  holders  of  the  SPA  Warrants
representing  at  least  a majority of shares of Common Stock underlying the SPA
Warrants  then  outstanding.

     (o)     "SPA  SECURITIES" means the Notes issued pursuant to the Securities
Purchase  Agreement.

     (p)     "SUCCESSOR  ENTITY"  means  the  Person  (or,  if so elected by the
Required  Holders, the Parent Entity) formed by, resulting from or surviving any
Fundamental  Transaction  or  the  Person  (or,  if  so  elected by the Required
Holders,  the  Parent Entity) with which such Fundamental Transaction shall have
been  entered  into.

                            [SIGNATURE PAGE FOLLOWS]

                                       16
<PAGE>
     IN  WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common
Stock  to  be  duly  executed  as  of  the  Issuance  Date  set  out  above.

                                        CHARYS HOLDING COMPANY, INC.

                                        By:
                                           ------------------------------------
                                           Name:   Billy V. Ray, Jr.
                                           Title:  Chief Executive Officer

                                       17
<PAGE>
                                                                       EXHIBIT A

                                 EXERCISE NOTICE
            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

                          CHARYS HOLDING COMPANY, INC.
     The  undersigned  holder  hereby  exercises  the  right  to  purchase
_________________  of  the  shares  of Common Stock ("WARRANT SHARES") of Charys
Holding  Company, Inc., a Delaware corporation (the "COMPANY"), evidenced by the
attached  Warrant  to  Purchase Common Stock (the "WARRANT").  Capitalized terms
used  herein  and  not  otherwise defined shall have the respective meanings set
forth  in  the  Warrant.

     1.  Form  of  Exercise  Price.  The  Holder  intends  that  payment  of the
Exercise  Price  shall  be  made  as:

                    a  "Cash Exercise" with respect to                   Warrant
                        --------------                 ----------------
                    Shares;  and/or

                    a  "Cashless  Exercise"  with  respect  to
                        -----------------                      ----------------
                    Warrant  Shares.

     2.  Payment  of Exercise Price.  In the event that the holder has elected a
Cash  Exercise  with  respect  to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

     3.  Delivery  of  Warrant  Shares.  The Company shall deliver to the holder
__________  Warrant  Shares  in  accordance  with  the  terms  of  the  Warrant.

     4.  Delivery  of  Warrant.  The Registered Holder shall deliver the Warrant
to  the  Company.

Date:                     ,
       ---------------  --   ------

   Name  of  Registered  Holder

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

                                       18
<PAGE>
                                 ACKNOWLEDGMENT

     The  Company  hereby  acknowledges  this Exercise Notice and hereby directs
Fidelity  Transfer  Company  to  issue  the  above indicated number of shares of
Common  Stock  in  accordance with the Transfer Agent Instructions dated _______
__,  2006  from  the Company and acknowledged and agreed to by Fidelity Transfer
Company.

                                        CHARYS HOLDING COMPANY, INC.

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

                                       19

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