Document:

LETTER AGREEMENT

Exhibit 10.45

LETTER AGREEMENT

This LETTER AGREEMENT (“Agreement”) is made between Azco Mining Inc. (“AZCO”), a company registered in Delaware and Metallica Ventures, LLC (Metallica), a company registered in Wyoming (also a “Party” or the “Parties”).

THIS AGREEMENT WITNESSES that in consideration of the mutual promises and other valuable consideration herein contained, the receipt and sufficiency of which are hereby acknowledged, THE PARTIES HERETO AGREE AS FOLLOWS:

1.

In return for consideration that AZCO shall pay or cause to be paid to Metallica, Metallica shall enter into the Assignment and Assumption of Planet Lease Agreement (“Assignment Agreement”) with AZCO.  The consideration paid to Metallica shall consist of:  A) ten thousand dollars ($10,000); and B) two million (2,000,000) shares of AZCO common stock which shall be issued to W. Pierce Carson and which shall carry “piggyback” registration rights.

 

2.

Metallica has made lease payments current to the payment due September 5, 2005.  AZCO shall make lease payments commencing with the payment due October 5, 2005.         

3.

AZCO shall pay all outstanding taxes due under the lease.

4.

Time is of the essence in this Agreement.

5.

If any litigation arises between the Parties relating to this Agreement, the losing Party shall pay the prevailing Party’s costs and expenses of litigation, including, but not limited to, reasonable attorneys’ fees.  

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and effective as of the 22nd day of September, 2005.

Azco Mining Inc.

Metallica Ventures, LLC

By:_________________________

By:_________________________

Its:_________________________

Its:_________________________SECURITIES PURCHASE AGREEMENT
                          -----------------------------

     THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
                                               ---------
_____,  2005,  by  and among CHARYS HOLDING COMPANY INC., a Delaware corporation
(the "Company"), BILLY V. RAY, JR. ("Ray"), and MEL HARRIS and STEVEN POSNER, or
      -------                        ---
their  designees  (collectively,  the  "Buyer").
                                        -----

                                   WITNESSETH:
                                   -----------

     WHEREAS,  the  Company  and  the  Buyer  are  executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section  4(2) and/or Rule 506 of Regulation D ("Regulation D") as promulgated by
                                                ------------
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
                                                  ---
of  1933,  as  amended  (the  "Securities  Act");  and
                               ---------------

     WHEREAS,  Ray  is  the  Chairman,  Chief Executive Officer, and controlling
stockholder  of  the  Company;  and

     WHEREAS,  the  parties  desire  that,  upon  the  terms  and subject to the
conditions  contained  herein, the Company shall issue and sell to the Buyer, as
provided  herein, and the Buyer shall purchase at the Closing (as defined below)
(i)  a  $1,000,000  Secured Convertible Debenture (the "Convertible Debenture"),
                                                        ---------------------
which shall be convertible, unless redeemed by the Company before the expiration
of  120 days from the Closing Date (as defined below) (the "Exclusive Redemption
                                                            --------------------
Date"), into shares of the Company's common stock, par value $0.001 (the "Common
----                                                                      ------
Stock")  (as  converted,  the  "Conversion  Shares"),  and  (ii)  warrants  (the
-----                           ------------------
"Warrants")  to purchase an aggregate of 250,000 shares of the Common Stock (the
 --------
"Warrant  Shares").  The  total purchase price for the Convertible Debenture and
 ---------------
the  Warrants  shall  be  $1,000,000  (the  "Purchase  Price");  and
                                             ---------------

     WHEREAS,  the  Company  shall  issue  to the Buyer the Warrants to purchase
shares  of  the  Common Stock for a period of three years with an exercise price
equal  to  the  lower  of:  (i) $0.80 per share of the Common Stock, or (ii) 120
percent  of  the average closing bid price for the five trading days immediately
preceding  the  Closing  Date  (the  "Fixed  Price"), or (iii) 80 percent of the
                                      ------------
lowest  closing  bid  price  for the five trading days immediately preceding the
date of exercise (the "Future Price").  The shares underlying the Warrants shall
be  included  on  the  registration  statement  to  be filed by the Company; and

     WHEREAS,  the  Buyer  at its sole option may convert any or all of the face
amount  of the Convertible Debenture at any time after 120 days from the Closing
Date,  plus a premium on that amount accruing at a rate of 12 percent per annum,
compounded  monthly,  from  the  date  of closing to the date of conversion (the
"Conversion  Amount").  The  number of shares of the Common Stock to be received
 ------------------
upon  conversion  will  be  determined  by dividing the Conversion Amount by the
Conversion  Price;  and

     WHEREAS,  at  the  Buyer's  sole  option,  the  Convertible  Debenture  is
convertible  into  shares of the Common Stock at a conversion price equal to the
lower  of:  (i)  $0.80 per share of the Common Stock, or (ii) 120 percent of the
average  closing  bid  price for the five trading days immediately preceding the
Closing  Date (the "Fixed Price"), or (iii) 80 percent of the lowest closing bid
                    -----------
price  for  the  five  trading days immediately preceding the date of conversion
(the  "Future  Price");  and
       -------------

     WHEREAS,  at  the  Closing,  the parties hereto shall execute and deliver a
Registration  Rights  Agreement  substantially  in  the  form attached hereto as
Exhibit  A  (the "Investor Registration Rights Agreement") pursuant to which the
----------        --------------------------------------
Company  has  agreed to provide certain registration rights under the Securities
Act  and the rules and regulations promulgated there under, and applicable state
securities  laws;  and

     WHEREAS,  at  the  Closing,  the parties hereto shall execute and deliver a
Security  Agreement  substantially in the form attached hereto as Exhibit B (the
                                                                  ---------
"Security  Agreement")  pursuant  to which the Company has agreed to provide the
 -------------------
Buyer  a security interest in Pledged Collateral (as this term is defined in the
Security  Agreement)  to  secure the Company's obligations as reflected therein;
and

                                      - 1 -
<PAGE>
     WHEREAS,  at  the  Closing, the parties hereto shall execute and deliver an
Escrow  Shares  Escrow  Agreement  substantially  in the form attached hereto as
Exhibit  C  (the "Escrow Shares Escrow Agreement") pursuant to which the Company
----------        ------------------------------
shall issue and deliver to the Escrow Agent 1,500,000 shares of the Common Stock
or  "security stock" (the "Escrow Shares") and the Escrow Agent shall distribute
                           -------------
some or all of the Escrow Shares to the Buyer upon conversion, if applicable, of
the  Convertible  Debenture  pursuant to a Conversion Notice (as defined herein)
and/or  exercise of the Warrants; provided, however, that the Escrow Agent shall
distribute all of such Escrow Shares (less 250,000 of such shares which shall be
retained  by  the  Escrow  Agent for purposes of distributing the Warrant Shares
upon  exercise  by  the  Buyer  of the Warrants to the Company upon receipt of a
Redemption  Notice  (as  defined  in  the  Escrow  Shares  Agreement);  and

     WHEREAS,  at  the  Closing,  Ray  and the Buyer shall execute and deliver a
Stock  Pledge  and Escrow Agreement substantially in the form attached hereto as
Exhibit  D  (the  "Stock  Pledge  Escrow Agreement") pursuant to which Ray shall
----------         -------------------------------
pledge  certain  shares  of the Company owned by him (the "Pledged Shares"); and
                                                           --------------

     WHEREAS,  at  the  Closing,  the  parties  hereto shall execute and deliver
Irrevocable  Transfer  Agent  Instructions  substantially  in  the form attached
hereto  as  Exhibit  E  (the  "Irrevocable  Transfer  Agent  Instructions"); and
            ----------         ------------------------------------------

     WHEREAS,  the  Registration  Rights  Agreement, the Security Agreement, the
Escrow  Shares Agreement, the Stock Pledge Escrow Agreement, and the Irrevocable
Transfer  Agent  Instructions  are  sometimes  referred  to herein as the "Other
                                                                           -----
Transaction  Documents";
----------------------

     NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and  other
agreements  contained  in  this Agreement the Company, Ray, and the Buyer hereby
agree  as  follows:

          1.     Purchase  and  Sale  of  Convertible  Debenture;  Closing.
                 ---------------------------------------------------------

               (a)     Purchase  of  Convertible  Debenture.  Subject  to  the
                       ------------------------------------
satisfaction  (or  waiver)  of  the  terms and conditions of this Agreement, the
Buyer  agrees  to  purchase  at  the  Closing  (as defined herein below) and the
Company  agrees  to  sell and issue to the Buyer at the Closing, the Convertible
Debenture and the Warrants.  Upon execution hereof by the Buyer, the Buyer shall
wire  transfer  the  Purchase  Price  in  same-day  funds.

               (b)     Closing.  The closing (the "Closing") of the purchase and
                       -------
sale  of  the  Convertible Debenture and Warrants shall take place at 10:00 a.m.
Eastern  Time  within  five  business days following the date hereof, subject to
notification  of  satisfaction of the conditions to the Closing set forth herein
and  in  Sections  7 and 8 below (or such later date as is mutually agreed to by
the Company and the Buyer) (the "Closing Date").  The Closing shall occur on the
                                 ------------
Closing  Date at the offices of Donald Bezahler, Esq., 10800 Biscayne Boulevard,
10th  Floor,  Miami, Florida 33161 (or such other place as is mutually agreed to
by  the  Company  and  the  Buyer).

               (c)     Deliveries  at  the Closing.  Subject to the satisfaction
                       ---------------------------
of  the  terms  and  conditions  of this Agreement, on the Closing Date, (i) the
Buyer  shall  deliver  to  the  Company  the  Purchase Price for the Convertible
Debenture  and Warrants to be issued and sold to the Buyer, and (ii) the Company
shall  deliver to the Buyer, the Convertible Debenture, the Warrants, the Escrow
Shares  Escrow  Agreement,  and the Irrevocable Transfer Agent Instructions, all
duly  executed  on behalf of the Company.  In addition, Ray shall deliver to the
Buyer  the  Stock  Pledge  Escrow  Agreement.

          2.     Buyer's  Representations  and  Warranties.
                 -----------------------------------------

     The  Buyer  represents  and  warrants  to  the  Company  that:

               (a)     Investment  Purpose.  The  Buyer  is  acquiring  the
                       -------------------
Convertible  Debenture and the Warrants, and, upon conversion of the Convertible
Debenture,  if  applicable  and/or  the exercise of the Warrants, the Buyer will
acquire  the  Conversion  Shares  and/or  Warrant Shares, as defined below, then
issuable,  for  its own account for investment only and not with a view towards,
or  for  resale  in  connection  with,  the public sale or distribution thereof,
except  pursuant  to  sales  registered  or  exempted  under the Securities Act;
provided,  however,

                                      - 2 -
<PAGE>
that  by  making  the  representations  herein,  the Buyer reserves the right to
dispose  of  the  Conversion Shares, if applicable, and the Warrants and Warrant
Shares  at  any time in accordance with or pursuant to an effective registration
statement  covering  such  Conversion  Shares, Warrants and Warrant Shares or an
available  exemption  under  the  Securities  Act.

               (b)     Accredited  Investor Status.  The Buyer is an "Accredited
                       ---------------------------                    ----------
Investor"  as  that  term  is  defined  in  Rule  501(a)(3)  of  Regulation  D.
--------

               (c)     Reliance  on  Exemptions.  The Buyer understands that the
                       ------------------------
Convertible  Debenture  and  the  Warrants  are  being offered and sold to it in
reliance  on  specific  exemptions  from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon  the  truth  and  accuracy  of,  and  the  Buyer's  compliance  with,  the
representations,  warranties,  agreements, acknowledgments and understandings of
the  Buyer  set  forth  herein  in  order  to determine the availability of such
exemptions  and  the  eligibility  of  the  Buyer  to  acquire  such securities.

               (d)     Information.  The  Buyer and his advisors and counsel, if
                       -----------
any,  have  been furnished with all materials relating to the business, finances
and  operations  of  the Company and information he deemed material to making an
informed investment decision regarding its purchase of the Convertible Debenture
and  the  Warrants,  and the Warrant Shares and the Conversion Shares into which
the  Convertible  Debenture  and Warrants are convertible or exercisable, as the
case  may  be,  which  have  been  requested  by  the  Buyer.  The Buyer and his
advisors,  if  any,  have  been afforded the opportunity to ask questions of the
Company  and its management.  Neither such inquiries nor any other due diligence
investigations  conducted  by  the  Buyer  or  his  advisors,  if  any,  or  his
representatives  shall  modify, amend or affect the Buyer's right to rely on the
Company's  representations  and  warranties  contained  in Section 3 below.  The
Buyer  understands  that  its  investment  in  the Convertible Debenture and the
Warrants,  and  the  Warrant  Shares  and  Conversion  Shares  into  which  the
Convertible  Debenture  and Warrants are convertible or exercisable, as the case
may  be,  involves  a high degree of risk.  THE BUYER IS IN A POSITION REGARDING
THE  COMPANY,  WHICH,  BASED  UPON  EMPLOYMENT,  FAMILY RELATIONSHIP OR ECONOMIC
BARGAINING  POWER,  ENABLED AND ENABLES THE BUYER TO OBTAIN INFORMATION FROM THE
COMPANY IN ORDER TO EVALUATE THE MERITS AND RISKS OF THIS INVESTMENT.  The Buyer
has sought such accounting, legal and tax advice, as it has considered necessary
to  make  an informed investment decision with respect to its acquisition of the
Convertible  Debenture  and  the Warrants, and the Warrant Shares and Conversion
Shares  into  which  the  Convertible  Debenture and Warrants are convertible or
exercisable,  as  the  case  may  be.

               (e)     No  Governmental  Review.  The  Buyer understands that no
                       ------------------------
United  States  federal  or state agency or any other government or governmental
agency  has  passed  on  or  made  any  recommendation  or  endorsement  of  the
Convertible  Debenture,  the  Warrants,  the  Warrant  Shares  or the Conversion
Shares,  or  the  fairness  or  suitability of the investment in the Convertible
Debenture  and  the  Warrants, and the Warrant Shares and Conversion Shares into
which  the Convertible Debenture and Warrants are convertible or exercisable, as
the case may be, nor have such authorities passed upon or endorsed the merits of
the  offering  of  the  Convertible  Debenture and the Warrants, and the Warrant
Shares  and  Conversion Shares into which the Convertible Debenture and Warrants
are  convertible  or  exercisable,  as  the  case  may  be.

               (f)     Transfer  or  Resale.  The Buyer understands that, except
                       --------------------
as  provided  in the Investor Registration Rights Agreement: (i) the Convertible
Debenture,  the Conversion Shares, the Warrants, and the Warrant Shares have not
been  and  are  not  being  registered  under  the  Securities  Act or any state
securities  laws, and may not be offered for sale, sold, assigned or transferred
unless  (A)  subsequently  registered  thereunder,  or  (B) the Buyer shall have
delivered  to the Company an opinion of counsel, in a generally acceptable form,
to  the  effect  that such securities to be sold, assigned or transferred may be
sold,  assigned  or  transferred pursuant to an exemption from such registration
requirements;  (ii)  any  sale  of  such securities made in reliance on Rule 144
under  the Securities Act (or a successor rule thereto) ("Rule 144") may be made
                                                          --------
only  in  accordance  with the terms of Rule 144 and further, if Rule 144 is not
applicable,  any  resale  of  such  securities  under circumstances in which the
seller  (or  the  person  through  whom the sale is made) may be deemed to be an
underwriter  (as  that  term  is  defined  in  the  Securities  Act) may require
compliance  with  some other exemption under the Securities Act or the rules and
regulations  of  the  Securities and Exchange Commission ("SEC") thereunder, and
                                                           ---
(iii)  neither  the  Company  nor  any  other  person is under any obligation to
register  such  securities under the Securities Act or any state securities laws
or  to  comply  with  the  terms  and  conditions  of  any exemption thereunder.

                                      - 3 -
<PAGE>
               (g)     Legends.  The  Buyer understands that the certificates or
                       -------
other  instruments  representing  the  Convertible  Debenture, the Warrants, the
Warrant  Shares,  the  Escrow  Shares  and/or the Conversion Shares shall bear a
restrictive  legend  in  substantially  the  following form (and a stop transfer
order  may  be  placed  against  transfer  of  such  stock  certificates):

     THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
     STATE  SECURITIES  LAWS.  THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR
     INVESTMENT  PURPOSES  AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE
     OFFERED  FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (i)
     AN  EFFECTIVE  REGISTRATION  STATEMENT  FOR  THE  SECURITIES UNDER THE
     SECURITIES  ACT  OF  1933,  AS AMENDED, OR APPLICABLE STATE SECURITIES
     LAWS,  OR  (ii) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
     THAT  REGISTRATION  IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
     SECURITIES  LAWS.

     The  legend  set  forth  above shall be removed and the Company within five
business days shall cause its transfer agent to issue a certificate without such
legend to the holder of the Convertible Debenture, Warrants, the Warrant Shares,
and/or Conversion Shares upon which it is stamped, if, unless otherwise required
by  state  securities  laws,  (i)  in connection with a public sale transaction,
provided  the  applicable securities subject to such public sale transaction are
registered  under  the Securities Act, or (ii) in connection with a private sale
transaction,  after such holder provides the Company with an opinion of counsel,
which  opinion  shall  be in form, substance and scope customary for opinions of
counsel  in  comparable  transactions,  to the effect that a sale, assignment or
transfer  of the securities subject to such private sale transaction may be made
without  registration  under  the  Securities  Act.

               (h)     Authorization, Enforcement.  This Agreement has been duly
                       --------------------------
and  validly  authorized, executed and delivered on behalf of the Buyer and is a
valid  and  binding  agreement  of  the Buyer enforceable in accordance with its
terms,  except  as  such  enforceability may be limited by general principles of
equity  or  applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
liquidation  and  other  similar  laws  relating to, or affecting generally, the
enforcement  of  applicable  creditors'  rights  and  remedies.

               (i)     Receipt  of  Documents.  The  Buyer  and  its counsel has
                       ----------------------
received and read in their entirety: (i) this Agreement and each representation,
warranty  and  covenant  set  forth herein, the Security Agreement, the Investor
Registration  Rights  Agreement,  the  Escrow Agreement, the Stock Pledge Escrow
Agreement,  and the Irrevocable Transfer Agent Agreement; (ii) all due diligence
and  other information necessary to verify the accuracy and completeness of such
representations,  warranties  and covenants; (iii) the Company's Form 10-KSB for
the  fiscal  year  ended  April 30, 2005; (iv) the Company's Form 10-QSB for the
fiscal  quarter  ended  July 31, 2005; (v) the Company's Form 8-K related to the
restatement  of  the  Company's  Financial  Statements, and (vi) it has received
answers  to  all  questions  the  Buyer  submitted  to  the Company regarding an
investment in the Company, and the Buyer has relied on the information contained
therein  and  has not been furnished any other documents, literature, memorandum
or  prospectus.

               (j)     No Legal Advice from the Company.  The Buyer acknowledges
                       --------------------------------
that  it  had  the  opportunity  to  review  this Agreement and the transactions
contemplated by this Agreement with its own legal counsel and investment and tax
advisors.  The  Buyer  is relying solely on such counsel and advisors and not on
any  statements  or representations of the Company or any of its representatives
or  agents  for legal, tax or investment advice with respect to this investment,
the  transactions  contemplated  by this Agreement or the securities laws of any
jurisdiction.

               (k)     No  Group Participation.  The Buyer and its affiliates is
                       -----------------------
not  a  member  of  any group, nor is the Buyer acting in concert with any other
person  with  respect  to  its  acquisition of the Convertible Debenture and the
Warrants,  and  the  Warrant  Shares  and  Conversion  Shares  into  which  the
Convertible  Debenture  and Warrants are convertible or exercisable, as the case
may  be.

               (l)     Company  Registration  Statement.  The  Buyer  makes  no
                       --------------------------------
representation  or  warranty  regarding  the  Company's  ability  to  have  any
registration  statement  filed  pursuant  to  the  Investor

                                      - 4 -
<PAGE>
Registration  Rights  Agreement or otherwise declared effective by the SEC.  The
Company  has  the  sole  obligation  to  make any and all such filings as may be
necessary  and  to have any registration statement declared effective by the SEC
to  the  extent  required  by  the  Investor  Registration  Rights  Agreement.

          3.     Representations and  Warranties of the Company.
                 ----------------------------------------------

     The  Company represents and warrants to the Buyer that, except as set forth
in  the  SEC  Documents  (as  defined  herein)  or  otherwise on the schedule of
exceptions  delivered  to  the  Buyer  in  connection with the execution of this
Agreement  (the  "Schedules"):
                  ---------

               (a)     Organization  and  Qualification.  The  Company  and  its
                       --------------------------------
subsidiaries  are  corporations  duly  organized  and  validly  existing in good
standing  under the laws of the jurisdiction in which they are incorporated, and
have the requisite corporate power to own their properties and to carry on their
business  as  now  being conducted.  Each of the Company and its subsidiaries is
duly  qualified  as a foreign corporation to do business and is in good standing
in  every jurisdiction in which the nature of the business conducted by it makes
such  qualification  necessary,  except  to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company  and  its  subsidiaries  taken  as  a  whole.

               (b)     Authorization,  Enforcement,  Compliance  with  Other
                       -----------------------------------------------------
Instruments.  (i) The Company has the requisite corporate power and authority to
-----------
enter  into  and  perform  this  Agreement, the Security Agreement, the Investor
Registration  Rights  Agreement,  the  Escrow  Shares  Escrow Agreement, and the
Irrevocable  Transfer  Agent  Instructions  (collectively  the  "Transaction
                                                                 -----------
Documents")  and  to  issue  the Convertible Debenture and the Warrants, and the
---------
Warrant  Shares  and  Conversion Shares into which the Convertible Debenture and
Warrants  are  convertible  or  exercisable, as the case may be (including those
comprising  the Escrow Shares), in accordance with the terms hereof and thereof;
(ii)  the execution and delivery of the Transaction Documents by the Company and
the  consummation  by  it  of  the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Convertible Debenture and the
Warrants,  and  the  reservation for issuance and the issuance of the Conversion
Shares  and  Warrant Shares issuable upon conversion or exercise thereof, as the
case  may  be  (including  those  comprising  the Escrow Shares), have been duly
authorized  by  the  Company's  Board  of  Directors  and  no further consent or
authorization  is  required  by  the  Company,  its  Board  of  Directors or its
stockholders;  (iii)  the  Transaction  Documents  have  been  duly executed and
delivered  by  the  Company,  and  (iv) the Transaction Documents constitute the
valid  and binding obligations of the Company enforceable against the Company in
accordance  with  their  terms,  except as such enforceability may be limited by
general  principles  of  equity  or  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally,  the  enforcement  of creditors' rights and remedies.  The
authorized  officer  of the Company executing the Transaction Documents knows of
no  reason  why  the  Company cannot file the registration statement as required
under the Investor Registration Rights Agreement or perform any of the Company's
other  obligations  under  such  documents.

               (c)     Capitalization.  The  Company's  authorized capital stock
                       --------------
is  comprised  of:  (i) 300,000,000 shares of Common Stock, $0.001 par value per
share,  of  which 8,930,951 shares are issued and outstanding, 11,361,682 shares
are reserved for issuance pursuant to outstanding options and 862,069 shares are
reserved  for  issuance  pursuant  to  outstanding  warrants, and (ii) 5,000,000
shares  of  Preferred  Stock,  $0.001  par value per share.  There are currently
three series of Preferred Stock designated as follows: (i) 1,000,000 shares have
been  designated as Series A Preferred Stock, $0.001 par value per share, all of
which  have  been  issued  and  are  outstanding;  (ii) 400,000 shares have been
designated as Series B Preferred Stock, $0.001 par value per share, all of which
have  been  issued  and  are  outstanding,  and (iii) 500,000 shares of Series C
Preferred  Stock,  $0.001 par value per share, all of which have been issued and
are  outstanding.  All  of  such outstanding shares have been validly issued and
are  fully paid and nonassessable.  Except as disclosed in the SEC Documents (as
defined  in  Section  3(f))  or  in the Schedules, no shares of Common Stock are
subject  to  preemptive  rights  or  any  other  similar  rights or any liens or
encumbrances  suffered  or permitted by the Company.  Except as disclosed in the
SEC  Documents  or in the Schedules, as of the date of this Agreement, (i) there
are  no  outstanding  options, warrants, scrip, rights to subscribe to, calls or
commitments  of  any  character  whatsoever relating to, or securities or rights
convertible  into,  any  shares  of  capital  stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the  Company  or  any  of  its  subsidiaries  is  or  may  become bound to issue
additional  shares of capital stock of the Company or any of its subsidiaries or
options,  warrants,  scrip,  rights  to  subscribe  to,  calls  or

                                      - 5 -
<PAGE>
commitments  of  any  character  whatsoever relating to, or securities or rights
convertible  into,  any  shares  of  capital  stock of the Company or any of its
subsidiaries;  (ii) there are no outstanding debt securities; (iii) there are no
agreements or arrangements under which the Company or any of its subsidiaries is
obligated  to  register the sale of any of their securities under the Securities
Act  (except  pursuant  to the Investor Registration Rights Agreement), and (iv)
there  are  no  outstanding registration statements and there are no outstanding
comment  letters  from  the  SEC  or  any other regulatory agency.  There are no
securities  or  instruments  containing anti-dilution or similar provisions that
will  be  triggered by the issuance of the Convertible Debenture and Warrants as
described  in  this  Agreement.  The  Convertible  Debenture,  Warrants, Warrant
Shares, and Conversion Shares when issued, if applicable, will be free and clear
of  all  pledges,  liens,  encumbrances and other restrictions (other than those
arising  under  federal  or  state  securities  laws  as a result of the private
placement  of  the Convertible Debenture and Warrants).  No co-sale right, right
of  first  refusal or other similar right exists with respect to the Convertible
Debenture,  Warrants,  Warrant  Shares,  and/or  the  Conversion  Shares  or the
issuance  and sale thereof.  The issue and sale of the Convertible Debenture and
the  Warrants,  and  the  Warrant  Shares  and  Conversion Shares into which the
Convertible  Debenture  and Warrants are convertible or exercisable, as the case
may be, will not result in a right of any holder of Company securities to adjust
the  exercise,  conversion,  exchange or reset price under such securities.  The
Company  has  furnished  to  the  Buyer true and correct copies of the Company's
Certificate  of  Incorporation,  as  amended and as in effect on the date hereof
(the "Certificate of Incorporation"), and the Company's By-laws, as in effect on
      ----------------------------
the  date  hereof  (the  "By-laws"), and the terms of all securities convertible
                          -------
into  or  exercisable  for  Common  Stock and the material rights of the holders
thereof  in  respect  thereto  other  than stock options issued to employees and
consultants.

               (d)     Issuance  of  Securities.  The  Convertible Debenture and
                       ------------------------
Warrants  are  duly  authorized  and, upon issuance in accordance with the terms
hereof,  shall  be  duly issued, fully paid and nonassessable, are and free from
all  taxes, liens and charges with respect to the issue thereof.  The Conversion
Shares  and  the  Warrant  Shares  issuable  upon  conversion of the Convertible
Debenture  and  Warrants,  as  the  case  may be (including those comprising the
Escrow  Shares),  have  been  duly  authorized  and reserved for issuance.  Upon
conversion  or  exercise  in  accordance  with  the  Transaction  Documents, the
Conversion  Shares,  and the Warrant Shares, as the case may be (including those
comprising  the  Escrow  Shares),  will  be  duly  issued,  fully  paid  and
nonassessable.

               (e)     No  Conflicts.  Except  as disclosed in the SEC Documents
                       -------------
or  in the Schedules, the execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated  thereby  will  not (i) result in a violation of the Certificate of
Incorporation,  any  certificate  of  designations  of any outstanding series of
preferred  stock  of  the  Company  or  the  By-laws,  or  (ii) conflict with or
constitute  a  default  (or  an event which with notice or lapse of time or both
would  become  a  default)  under,  or give to others any rights of termination,
amendment,  acceleration  or  cancellation  of,  any  agreement,  indenture  or
instrument to which the Company or any of its subsidiaries is a party, or result
in  a  violation  of  any  law,  rule,  regulation,  order,  judgment  or decree
(including  federal  and state securities laws and regulations and the rules and
regulations  of  The  National  Association  of  Securities  Dealers  Inc.'s OTC
Bulletin Board on which the Common Stock is quoted) applicable to the Company or
any  of its subsidiaries or by which any property or asset of the Company or any
of  its  subsidiaries  is  bound  or  affected.  Except  as disclosed in the SEC
Documents  or  in  the Schedules, neither the Company nor its subsidiaries is in
violation of any term of or in default under its Certificate of Incorporation or
By-laws  or  their  organizational  charter  or  by-laws,  respectively,  or any
material  contract,  agreement,  mortgage,  indebtedness, indenture, instrument,
judgment,  decree  or order or any statute, rule or regulation applicable to the
Company  or  its subsidiaries.  The business of the Company and its subsidiaries
is  not being conducted, and shall not be conducted in violation of any material
law,  ordinance,  or  regulation  of  any  governmental  entity.  Except  as
specifically contemplated by this Agreement and as required under the Securities
Act  and  any  applicable  state securities laws, the Company is not required to
obtain  any  consent,  authorization  or  order  of,  or  make  any  filing  or
registration  with, any court or governmental agency in order for it to execute,
deliver  or  perform  any  of  its  obligations  under  or  contemplated by this
Agreement  or  the Investor Registration Rights Agreement in accordance with the
terms  hereof  or  thereof.  Except  as disclosed in the SEC Documents or in the
Schedules, all consents, authorizations, orders, filings and registrations which
the  Company  is required to obtain pursuant to the preceding sentence have been
obtained  or  effected  on  or  prior  to  the date hereof.  The Company and its
subsidiaries  are unaware of any facts or circumstance, which might give rise to
any  of  the  foregoing.

               (f)     SEC  Documents:  Financial Statements.  Since February 4,
                       -------------------------------------
2004,  the Company has filed all reports, schedules, forms, statements and other
documents  required  to  be  filed  by  it  with  the  SEC  under

                                      - 6 -
<PAGE>
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (all of the
                                                      ------------
foregoing  filed  prior  to the date hereof or amended after the date hereof and
all exhibits included therein and financial statements and schedules thereto and
documents  incorporated  by  reference therein, being hereinafter referred to as
the  "SEC  Documents").  The  Company  has  delivered  to  the  Buyer  or  its
      --------------
representatives,  or  made  available  through  the  SEC's  website  at
http://www.sec.gov.,  true  and complete copies of the SEC Documents.  Except as
otherwise  set  forth  in  the  Schedules,  as  of  their  respective dates, the
financial  statements  of  the  Company  disclosed  in  the  SEC  Documents (the
"Financial  Statements")  complied  as  to  form  in  all material respects with
 ---------------------
applicable  accounting  requirements  and the published rules and regulations of
the  SEC  with respect thereto.  Such financial statements have been prepared in
accordance  with generally accepted accounting principles, consistently applied,
during  the  periods  involved (except (i) as may be otherwise indicated in such
Financial  Statements  or  the  notes  thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or  summary  statements)  and,  fairly  present  in  all  material  respects the
financial position of the Company as of the dates thereof and the results of its
operations  and  cash  flows for the periods then ended (subject, in the case of
unaudited  statements,  to  normal  year-end  audit  adjustments).  No  other
information  provided  by  or on behalf of the Company to the Buyer which is not
included  in  the  SEC  Documents,  including,  without  limitation, information
referred  to in this Agreement, contains any untrue statement of a material fact
or  omits  to  state any material fact necessary in order to make the statements
therein,  in  the  light  of  the  circumstances under which they were made, not
misleading.

               (g)     10(b)-5.  Except as otherwise set forth in the Schedules,
                       -------
the  SEC Documents do not include any untrue statements of material fact, nor do
they  omit to state any material fact required to be stated therein necessary to
make  the  statements  made, in light of the circumstances under which they were
made,  not  misleading.

               (h)     Absence  of  Litigation.  Except  as disclosed in the SEC
                       -----------------------
Documents  or in the Schedules, there is no action, suit, proceeding, inquiry or
investigation  before  or  by  any  court,  public  board,  government  agency,
self-regulatory  organization  or body pending against or affecting the Company,
the  Common  Stock  or any of the Company's subsidiaries, wherein an unfavorable
decision,  ruling  or  finding  would  (i) have a material adverse effect on the
transactions  contemplated  hereby,  (ii)  adversely  affect  the  validity  or
enforceability  of,  or  the  authority or ability of the Company to perform its
obligations  under,  this Agreement or any of the documents contemplated herein,
or (iii) except as expressly disclosed in the SEC Documents or in the Schedules,
have  a  material  adverse  effect  on  the  business,  operations,  properties,
financial condition or results of operations of the Company and its subsidiaries
taken  as  a  whole.

               (i)     Acknowledgment  Regarding  Buyer's  Purchase  of  the
                       -----------------------------------------------------
Convertible  Debenture.  The  Company  acknowledges and agrees that the Buyer is
----------------------
acting  solely in the capacity of an arm's length purchaser with respect to this
Agreement  and  the  transactions  contemplated  hereby.  The  Company  further
acknowledges that the Buyer is not acting as a financial advisor or fiduciary of
the  Company (or in any similar capacity) with respect to this Agreement and the
transactions contemplated hereby and any advice given by the Buyer or any of his
respective  representatives  or agents in connection with this Agreement and the
transactions  contemplated  hereby is merely incidental to such Buyer's purchase
of  the  Convertible  Debenture  and  the  Warrants,  and the Warrant Shares and
Conversion  Shares  into  which  the  Convertible  Debenture  and  Warrants  are
convertible  or exercisable, as the case may be.  The Company further represents
to  the  Buyer that the Company's decision to enter into this Agreement has been
based  solely  on  the  independent  evaluation  by  the  Company  and  its
representatives.

               (j)     No General Solicitation.  Neither the Company, nor any of
                       -----------------------
its affiliates, nor any person acting on its or their behalf, has engaged in any
form  of  general  solicitation  or  general  advertising (within the meaning of
Regulation  D  under the Securities Act) in connection with the offer or sale of
the  Convertible  Debenture  and  the  Warrants,  and  the  Warrant  Shares  and
Conversion  Shares  into  which  the  Convertible  Debenture  and  Warrants  are
convertible  or  exercisable,  as  the  case  may  be.

               (k)     No  Integrated Offering.  Neither the Company, nor any of
                       -----------------------
its  affiliates,  nor  any person acting on its or their behalf has, directly or
indirectly,  made any offers or sales of any security or solicited any offers to
buy  any  security,  under  circumstances that would require registration of the
Convertible  Debenture  and  the Warrants, and the Warrant Shares and Conversion
Shares  into  which  the  Convertible  Debenture and Warrants are convertible or
exercisable, as the case may be, under the Securities Act or cause this offering
of  the  Convertible  Debenture  and  the  Warrants,  and the Warrant Shares and
Conversion  Shares  into  which  the  Convertible  Debenture

                                      - 7 -
<PAGE>
and  Warrants  are  convertible  or  exercisable,  as  the  case  may  be, to be
integrated  with  prior  offerings by the Company for purposes of the Securities
Act.

               (l)     Employee  Relations.  Neither  the Company nor any of its
                       -------------------
subsidiaries  is  involved neither in any labor dispute nor, to the knowledge of
the Company or any of its subsidiaries, is any such dispute threatened.  None of
the  Company's  or  its  subsidiaries'  employees is a member of a union and the
Company  and  its subsidiaries believe that their relations with their employees
are  good.

               (m)     Intellectual  Property  Rights.  The  Company  and  its
                       ------------------------------
subsidiaries  own  or possess adequate rights or licenses to use all trademarks,
trade  names, service marks, service mark registrations, service names, patents,
patent  rights,  copyrights,  inventions,  licenses,  approvals,  governmental
authorizations,  trade  secrets and rights necessary to conduct their respective
businesses  as  now conducted.  The Company and its subsidiaries do not have any
knowledge  of  any infringement by the Company or its subsidiaries of trademark,
trade  name  rights,  patents,  patent rights, copyrights, inventions, licenses,
service  names, service marks, service mark registrations, trade secret or other
similar  rights  of  others,  and,  to  the knowledge of the Company there is no
claim,  action  or proceeding being made or brought against, or to the Company's
knowledge,  being  threatened against, the Company or its subsidiaries regarding
trademark,  trade  name,  patents, patent rights, invention, copyright, license,
service  names, service marks, service mark registrations, trade secret or other
infringement,  and  the Company and its subsidiaries are unaware of any facts or
circumstances  which  might  give  rise  to  any  of  the  foregoing.

               (n)     Environmental  Laws.
                       -------------------

                    (i)     To the knowledge of the Company, each of the Company
and  its  subsidiaries  has  complied with all applicable Environmental Laws (as
defined  below),  except for violations of Environmental Laws that, individually
or in the aggregate, have not had and would not reasonably be expected to have a
material  adverse  effect  on  the  assets,  business,  condition  (financial or
otherwise),  results  of  operations  or  future  prospects  of  the  Company (a
"Material  Adverse  Effect").  There  is  no pending or, to the knowledge of the
 -------------------------
Company,  threatened  civil or criminal litigation, written notice of violation,
formal  administrative  proceeding,  or  investigation,  inquiry  or information
request,  relating  to  any  Environmental  Law  involving  the  Company  or any
subsidiary,  except for litigation, notices of violations, formal administrative
proceedings  or  investigations,  inquiries  or  information  requests  that,
individually  or  in  the  aggregate,  have  not had and would not reasonably be
expected  to  have  a  Material Adverse Effect.  For purposes of this Agreement,
"Environmental  Law"  means  any  federal,  state or local law, statute, rule or
regulation  or the common law relating to the environment or occupational health
and safety, including without limitation any statute, regulation, administrative
decision or order pertaining to (i) treatment, storage, disposal, generation and
transportation  of  industrial,  toxic  or  hazardous materials or substances or
solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater
and  soil  contamination;  (iv)  the  release  or  threatened  release  into the
environment  of industrial, toxic or hazardous materials or substances, or solid
or  hazardous  waste,  including  without  limitation  emissions,  discharges,
injections, spills, escapes or dumping of pollutants, contaminants or chemicals;
(v)  the  protection  of  wild life, marine life and wetlands, including without
limitation  all  endangered and threatened species; (vi) storage tanks, vessels,
containers,  abandoned or discarded barrels, and other closed receptacles; (vii)
health  and  safety  of  employees  and other persons, and (viii) manufacturing,
processing,  using,  distributing, treating, storing, disposing, transporting or
handling of materials regulated under any law as pollutants, contaminants, toxic
or  hazardous  materials  or substances or oil or petroleum products or solid or
hazardous  waste.  As  used  above,  the terms "release" and "environment" shall
have  the  meaning  set  forth  in  the  Comprehensive  Environmental  Response,
Compensation  and  Liability  Act  of  1980,  as  amended  ("CERCLA").
                                                             ------

                    (ii)     Set  forth  in the Schedules to this Agreement is a
list of all documents (whether in hard copy or electronic form) that contain any
environmental  reports, investigations and audits relating to premises currently
or  previously  owned  or  operated  by  the  Company  or  a subsidiary (whether
conducted  by  or on behalf of the Company or a subsidiary or a third party, and
whether  done  at the initiative of the Company or a subsidiary or directed by a
third party) which were issued or conducted during the past five years and which
the  Company  has  possession  of or access to.  A complete and accurate copy of
each  such  document  has  been  provided  to  the  Buyer.

                                      - 8 -
<PAGE>
                    (iii)     To  the  knowledge  of  the  Company  there  is no
material  environmental  liability  with respect to any solid or hazardous waste
transporter or treatment, storage or disposal facility that has been used by the
Company  or  any  subsidiary.

                    (iv)     The  Company and its subsidiaries (i) have received
all  permits,  licenses  or  other  approvals  required of them under applicable
Environmental  Laws  to  conduct  their  respective  businesses, and (ii) are in
compliance  with  all  terms  and  conditions  of  any  such  permit, license or
approval.

               (o)     Title.  Any real property and facilities held under lease
                       -----
by the Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with  the use made and proposed to be made of such property and buildings by the
Company  and  its  subsidiaries.

               (p)     Insurance.  The  Company and each of its subsidiaries are
                       ---------
insured  by  insurers of recognized financial responsibility against such losses
and  risks  and  in  such  amounts  as  management of the Company believes to be
prudent  and  customary  in  the  businesses  in  which  the  Company  and  its
subsidiaries  are engaged.  Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any  such subsidiary has any reason to believe that it will not be able to renew
its  existing  insurance coverage as and when such coverage expires or to obtain
similar  coverage  from  similar  insurers  as  may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial  or  otherwise, or the earnings, business or operations of the Company
and  its  subsidiaries,  taken  as  a  whole.

               (q)     Regulatory  Permits.  The  Company  and  its subsidiaries
                       -------------------
possess  all  material  certificates,  authorizations  and permits issued by the
appropriate  federal,  state  or  foreign  regulatory  authorities  necessary to
conduct  their  respective  businesses,  and  neither  the  Company nor any such
subsidiary  has received any notice of proceedings relating to the revocation or
modification  of  any  such  certificate,  authorization  or  permit.

               (r)     Internal  Accounting  Controls.  Except  as otherwise set
                       ------------------------------
forth  in  the  Schedules,  the  Company and each of its subsidiaries maintain a
system  of  internal  accounting  controls  sufficient  to  provide  reasonable
assurance  that  (i)  transactions  are executed in accordance with management's
general  or specific authorizations; (ii) transactions are recorded as necessary
to  permit  preparation  of  financial  statements  in conformity with generally
accepted  accounting  principles and to maintain asset accountability, and (iii)
the  recorded  amounts  for  assets  is  compared  with  the  existing assets at
reasonable  intervals  and  appropriate  action  is  taken  with  respect to any
differences.

               (s)     No  Material  Adverse Breaches, etc.  Except as set forth
                       -----------------------------------
in  the  SEC  Documents  or in the Schedules, neither the Company nor any of its
subsidiaries is subject to any charter, corporate or other legal restriction, or
any  judgment,  decree,  order,  rule or regulation which in the judgment of the
Company's  officers  has or is expected in the future to have a Material Adverse
Effect.  Except  as  set forth in the SEC Documents or in the Schedules, neither
the  Company  nor  any  of  its  subsidiaries  is  in  breach of any contract or
agreement  which  breach,  in  the judgment of the Company's officers, has or is
expected  to  have  a  Material  Adverse  Effect.

               (t)     Tax  Status.  Except as set forth in the SEC Documents or
                       -----------
in  the  Schedules,  the Company and each of its subsidiaries has made and filed
all federal and state income and all other tax returns, reports and declarations
required  by any jurisdiction to which it is subject and (unless and only to the
extent  that the Company and each of its subsidiaries has set aside on its books
provisions  reasonably  adequate  for  the  payment of all unpaid and unreported
taxes)  has  paid  all taxes and other governmental assessments and charges that
are  material  in amount, shown or determined to be due on such returns, reports
and  declarations,  except those being contested in good faith and has set aside
on  its  books  provision  reasonably  adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply.  There  are  no  unpaid taxes in any material amount claimed to be due by
the  taxing  authority of any jurisdiction, and the officers of the Company know
of  no  basis  for  any  such  claim.

               (u)     Certain  Transactions.  Except  as  set  forth in the SEC
                       ---------------------
Documents or in the Schedules, and except for arm's length transactions pursuant
to  which  the  Company  makes  payments in the ordinary course of business upon
terms  no  less  favorable  than the Company could obtain from third parties and
other  than  the

                                      - 9 -
<PAGE>
grant  of  stock  options  disclosed in the SEC Documents, none of the officers,
directors,  or  employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the
furnishing  of  services  to  or  by,  providing  for rental of real or personal
property  to  or  from,  or otherwise requiring payments to or from any officer,
director  or such employee or, to the knowledge of the Company, any corporation,
partnership,  trust  or other entity in which any officer, director, or any such
employee  has  a  substantial  interest  or  is an officer, director, trustee or
partner.

               (v)     Fees  and  Rights  of  First Refusal.  The Company is not
                       ------------------------------------
obligated  to offer the securities offered hereunder on a right of first refusal
basis  or otherwise to any third parties, including, but not limited to, current
or  former  stockholders  of the Company, underwriters, brokers, agents or other
third  parties.

               (w)     Reliance.  The  Company  acknowledges  that  the Buyer is
                       --------
relying  on the representations and warranties made by the Company hereunder and
that  such representations and warranties are a material inducement to the Buyer
purchasing  the  Convertible  Debenture  and  Warrants.  The  Company  further
acknowledges  that  without  such  representations and warranties of the Company
made  hereunder,  the  Buyer  would  not  enter  into  this  Agreement.

               (x)     Sarbanes-Oxley.  The  Company  is  in compliance with the
                       --------------
applicable  requirements  of the Sarbanes-Oxley Act of 2002, as amended, and the
rules  and  regulations thereunder, that are currently in effect and is actively
taking  steps  to  ensure  that  it  will be in compliance with other applicable
provisions  of  such  Act  not  currently  in  effect  at  all  times  after the
effectiveness  of such provisions except where such noncompliance would not have
or  reasonably be expected to result in a Material Adverse Effect or which would
be  reasonably  likely  to  have  a  material adverse effect on the transactions
contemplated  hereby  or  by  the  Investor  Registration  Rights  Agreement.

               (y)     Registration  Form.  The  Company  meets the requirements
                       ------------------
for  the  use  of Form SB-2 for the registration of the resale of the Conversion
Shares,  the  Escrow Shares and Warrant Shares, as the case may be, by the Buyer
to  the  extent  required  by  the  Investor  Registration  Rights  Agreement.

               (z)     Non-Public  Information.  The  Company  confirms  that
                       ------------------------
neither  it  nor  any  person acting on its behalf has provided the Buyer or its
agents  or  counsel  with  any information that the Company believes constitutes
material, non-public information.  The Company understands and confirms that the
Buyer  will  rely  on  the foregoing representation in effecting transactions in
securities  of  the  Company.

               (aa)     Anti-Takeover  Provision.  The  Company and its Board of
                        ------------------------
Directors  have  taken  all  necessary  action,  if  any,  in  order  to  render
inapplicable  any  control  share acquisition, business combination, poison pill
(including  any  distribution  under  a  rights  agreement)  or  other  similar
anti-takeover  provision  under  the  Company's Certificate of Incorporation (or
similar charter documents) or the laws of its jurisdiction of incorporation that
is  or  could  become  applicable  to the Buyer as a result of the Buyer and the
Company  fulfilling  their  obligations  or  exercising  their rights under this
Agreement,  including  without  limitation  the  Company's  issuance  of  the
Convertible  Debenture,  Warrants,  Warrant Shares and Conversion Shares, as the
case  may  be,  and  the  Buyer's  ownership  thereof.

          4.     Covenants.
                 ---------

               (a)     Reasonable  Best  Efforts.  Each  party  shall  use  its
                       -------------------------
commercially reasonable best efforts timely to satisfy each of the conditions to
be  satisfied  by  it  as  provided  in  Sections  7  and  8  of this Agreement.

               (b)     Form D.  The Company agrees to file a Form D with respect
                       ------
to the Convertible Debenture, Warrants, Warrant Shares, and Conversion Shares as
required  under Regulation D and to provide a copy thereof to the Buyer promptly
after  such filing.  The Company shall, on or before the Closing Date, take such
action  as  the  Company  shall reasonably determine is necessary to qualify the
Convertible  Debenture,  Warrants, the Warrant Shares, and Conversion Shares, or
obtain an exemption for the Convertible Debenture, Warrants, the Warrant Shares,
and  Conversion Shares, as the case may be, for sale to the Buyer at the Closing
pursuant  to  this

                                     - 10 -
<PAGE>
Agreement  under  applicable  securities or "Blue Sky" laws of the states of the
United  States,  and  shall  provide evidence of any such action so taken to the
Buyer  on  or  prior  to  the  Closing  Date.

               (c)     Reporting  Status.  Until  the earlier of (i) the date as
                       -----------------
of  which  the  Buyer  may  sell  all  of  the Warrants, the Warrant Shares, and
Conversion  Shares,  as  the  case  may be, without restriction pursuant to Rule
144(k)  promulgated under the Securities Act (or successor thereto), or (ii) the
date  on  which  (A)  the  Buyer  shall  have sold all the Warrants, the Warrant
Shares,  and  Conversion  Shares,  as  the case may be, and (B) no amount of the
Convertible  Debenture  is  outstanding (the "Registration Period"), the Company
                                              -------------------
shall  file  in  a  timely  manner all reports required to be filed with the SEC
pursuant  to the Exchange Act and the regulations of the SEC thereunder, and the
Company  shall  not  terminate  its status as an issuer required to file reports
under  the  Exchange  Act  even if the Exchange Act or the rules and regulations
thereunder  would  otherwise  permit  such  termination.

               (d)     Use of Proceeds.  The Company shall use the proceeds from
                       ---------------
the  sale  of  the Convertible Debenture and Warrants for the purpose of closing
the Method IQ transaction hereinafter described.  To the extent that any of such
proceeds  are  not  used  to  close the Method IQ transaction, any such proceeds
shall  be  used  solely  for  the  repayment  of  the  Convertible  Debenture.

               (e)     Reservation of Shares.  The Company shall take all action
                       ---------------------
reasonably  necessary  to  at  all  times  have authorized, and reserved for the
purpose  of  issuance, that number of shares of Common Stock equal to a multiple
of  five  times  the number of shares of Common Stock into which the Convertible
Debenture  is  from time to time convertible at the Default Conversion Price (as
defined in the Convertible Debenture) unless a change in such multiple is agreed
to in writing by the Buyer and the Company.  If at any time the Company does not
have  available such number of authorized and unissued shares of Common Stock as
shall  from  time to time be sufficient to effect the issuance of all of (i) the
Conversion  Shares,  (including  those  comprising  the Escrow Shares), upon the
conversion of the entire principal amount of the Convertible Debenture, and (ii)
Warrant  Shares upon exercise of the Warrants, the Company shall call and hold a
special  meeting of the stockholders within 120 days of such occurrence, for the
sole  purpose  of  increasing  the  number  of shares authorized.  The Company's
management  shall  recommend  to the stockholders to vote in favor of increasing
the  number  of  shares of Common Stock authorized.  Subject to any restrictions
under  the proxy rules under the Exchange Act, management shall also vote all of
its  shares  in  favor  of  increasing the number of authorized shares of Common
Stock.  Notwithstanding  the  foregoing,  the  Company's  obligations under this
Section 4(e) (other than an obligation to keep reserved for issuance the Warrant
Shares upon exercise of the Warrants) shall terminate and be of no further force
and  effect  in  the event the Convertible Debenture is redeemed by the Company.

               (f)     Listings  or Quotation.  The Company shall promptly after
                       ----------------------
the  Closing  secure  the  listing or quotation of the Conversion Shares and the
Warrant  Shares  upon a national securities exchange, automated quotation system
or  The  National  Association  of  Securities  Dealers  Inc.'s Over-The-Counter
Bulletin  Board  ("OTCBB")  or  other  market,  if any, upon which shares of the
                   -----
Common  Stock are then listed or quoted (subject to official notice of issuance)
and  shall  use its commercially reasonable best efforts to maintain, so long as
any  other  shares  of  the Common Stock shall be so listed, such listing of the
Conversion  Shares  and  Warrant  Shares.  The Company shall maintain the Common
Stock's  authorization  for  quotation  on  the  OTCBB.  It shall be an event of
default  hereunder  if  the Company fails to strictly comply with its obligation
under  this  Section  4(f).

               (g)     Fees and Expenses.  The Company shall bear all of its own
                       -----------------
legal  and  professional fees and expenses, including, but not limited to, those
associated  with the filing of any registration statement to the extent required
under  the  Investor Registration Rights Agreement.  Each of the Company and the
Buyer shall pay all costs and expenses incurred by such party in connection with
the  negotiation,  investigation,  preparation,  execution  and  delivery of the
Transaction Documents.  The Company shall also pay Gunn Allen a fee equal to ten
percent  of  the  Gross  Proceeds  of  the  Convertible Debenture which shall be
deducted  from  the  monies  delivered  by  the  Buyer  at  the  Closing.

               (h)     Warrants.  The  Company  shall  issue the Warrants to the
                       --------
Buyer at the Closing.  The Warrant Shares shall have such registration rights as
set  forth  in  the  Investor  Registration  Rights  Agreement.

               (i)     Registration  Statement.  The  Company  shall  be  solely
                       -----------------------
responsible  for the contents of any registration statement, prospectus or other
filing  made  with  the  SEC  or  otherwise  used  in  the

                                     - 11 -
<PAGE>
offering  of  the Company's securities (except as such disclosure relates solely
to  the  Buyer  and  then  only to the extent that such disclosure conforms with
information furnished in writing by the Buyer to the Company), even if the Buyer
or  its  agents  as an accommodation to the Company participate or assist in the
preparation of such registration statement, prospectus or other SEC filing.  The
Company  shall  retain its own legal counsel to review, edit, confirm and do all
things such counsel deems necessary or desirable to such registration statement,
prospectus  or  other  SEC  filing  to ensure that it does not contain an untrue
statement  or  alleged  untrue  statement of material fact or omit or alleged to
omit  a material fact necessary to make the statements made therein, in light of
the  circumstances  under  which  the  statements  were  made,  not  misleading.

               (j)     Corporate  Existence.  So  long as any of the Convertible
                       --------------------
Debenture  remains  outstanding,  the  Company  shall not directly or indirectly
consummate  any  merger,  reorganization,  restructuring,  reverse  stock  split
consolidation,  sale  of all or substantially all of the Company's assets or any
similar  transaction  or  related  transactions  (each  such  transaction,  an
"Organizational  Change") unless, prior to the consummation of an Organizational
 ----------------------
Change,  the  Company  obtains  the  written consent of each Buyer.  In any such
case,  the Company will make appropriate provision with respect to such holders'
rights  and  interests  to  insure that the provisions of this Section 4(j) will
thereafter  be  applicable  to  the  Convertible  Debenture.

               (k)     Transactions  with  Affiliates.  So  long  as  any of the
                       ------------------------------
Convertible  Debenture  remains  outstanding,  the  Company shall not, and shall
cause  each of its subsidiaries not to, enter into, amend, modify or supplement,
or  permit  any  subsidiary  to  enter  into,  amend,  modify  or supplement any
agreement,  transaction,  commitment,  or  arrangement  with  any  of its or any
subsidiary's  officers,  directors, person who were officers or directors at any
time  during  the  previous  two  years,  stockholders who beneficially own five
percent  or  more  of the Common Stock, or Affiliates (as defined below) or with
any individual related by blood, marriage, or adoption to any such individual or
with  any  entity  in which any such entity or individual owns a five percent or
more  beneficial  interest  (each  a  "Related Party"), except for (a) customary
                                       -------------
employment  arrangements  and  benefit  programs  on  reasonable  terms; (b) any
investment  in  an  Affiliate  of  the  Company; (c) any agreement, transaction,
commitment,  or  arrangement  on an arms-length basis on terms no less favorable
than  terms  which  would  have  been  obtainable  from a person other than such
Related  Party,  or  (d)  any  agreement transaction, commitment, or arrangement
which  is  approved  by a majority of the disinterested directors of the Company
and  for  purposes hereof, any director who is also an officer of the Company or
any subsidiary of the Company shall not be a disinterested director with respect
to any such agreement, transaction, commitment, or arrangement.  "Affiliate" for
                                                                  ---------
purposes  hereof  means, with respect to any person or entity, another person or
entity  that,  directly  or  indirectly,  (i)  has  a ten percent or more equity
interest in that person or entity; (ii) has ten percent or more common ownership
with that person or entity; (iii) controls that person or entity, or (iv) shares
common control with that person or entity.  "Control" or "controls" for purposes
                                             -------      --------
hereof  means  that  a  person  or  entity has the power, direct or indirect, to
conduct  or  govern  the  policies  of  another  person  or  entity.

               (l)     Transfer  Agent.  The  Company covenants and agrees that,
                       ---------------
in  the  event  that  the  Company's agency relationship with the transfer agent
should be terminated for any reason prior to a date which is two years after the
Closing  Date,  the  Company  shall immediately appoint a new transfer agent and
shall  require  that the new transfer agent execute and agree to be bound by the
terms  of  the  Irrevocable  Transfer  Agent  Instructions  (as defined herein).

               (m)     Restriction  on Issuance of the Capital Stock. So long as
                       ---------------------------------------------
any  of  the  Convertible  Debenture remains outstanding, the Company shall not,
without  the  prior  written  consent  of  the  Buyer,  (i)  except for proposed
issuances  disclosed  in Schedule 3(c), issue or sell shares of the Common Stock
or  the  Preferred  Stock without consideration or for a consideration per share
less than the Closing Bid Price of the Common Stock determined immediately prior
to  its issuance, (ii) except for proposed issuances disclosed in Schedule 3(c),
issue  any  warrant, option, right, contract, call, or other security instrument
granting  the  holder  thereof,  the  right  to  acquire  Common  Stock  without
consideration  or  for  a  consideration less than such Common Stock's Bid Price
value  determined  immediately  prior  to  its  issuance,  or  (iii)  file  any
registration statement on Form S-8.  "Closing Bid Price" on any day shall be the
closing bid price for a share of Common Stock on such date on the OTCBB (or such
other  exchange,  market,  or  other system that the Common Stock is then traded
on),  as  reported  on  Bloomberg,  L.P.  (or  similar  organization  or  agency
succeeding  to  its  functions  of  reporting  prices).

                                     - 12 -
<PAGE>
               (n)     Resales  Absent  Effective  Registration  Statement.  The
                       ---------------------------------------------------
Buyer  understands  and  acknowledges that (i) this Agreement and the agreements
contemplated  hereby  may  require  the  Company to issue and deliver Conversion
Shares  (including  those comprising the Escrow Shares) or Warrant Shares to the
Buyer  with  legend  restricting their transferability under the Securities Act,
and  (ii)  it  is  aware that resales of such Conversion Shares (including those
comprising  the  Escrow Shares) or Warrant Shares may not be made unless, at the
time  of  resale,  there  is  an  effective  registration  statement  under  the
Securities  Act  covering such Buyer's resale(s) or an applicable exemption from
registration.

               (o)     Legend.  Certificates  evidencing  the Warrant Shares and
                       ------
Conversion  Shares  shall not contain any legend (including the legend set forth
above),  (A) while a registration statement covering the resale of such security
is  effective  under  the  Securities  Act  (provided, however, that the Buyer's
prospectus  delivery  requirements  under  the  Securities  Act  will  remain
applicable);  (B)  following  any  sale of such Warrant Shares and/or Conversion
Shares pursuant to Rule 144; (C) if such Warrant Shares and/or Conversion Shares
are  eligible  for sale under Rule 144(k), or (D) if such legend is not required
under  applicable  requirements  of  the  Securities  Act  (including  judicial
interpretations  and pronouncements issued by the Staff of the SEC).  Subject to
the  foregoing,  upon  written request of the Buyer to have such legend removed,
the  Company  shall  cause its counsel to issue a legal opinion to the Company's
transfer  agent  promptly after the effective date of any registration statement
(the "Effective Date") if required by the Company's transfer agent to effect the
removal of the legend hereunder. The Company agrees that following the Effective
Date  or  at  such  time as such legend is no longer required under this Section
4(o),  it  will,  no later than three trading days following the delivery by the
Buyer  to  the  Company  or  the  Company's  transfer  agent  of  a  certificate
representing  Warrant  Shares and/or Conversion Shares issued with a restrictive
legend,  deliver  or  cause  to  be  delivered  to  such  Buyer  a  certificate
representing  such Warrant Shares and/or Conversion Shares that is free from all
restrictive  and  other  legends.  The  Company may not make any notation on its
records  or  give  instructions  to  any  transfer  agent  of  the  Company that
enlarge(s)  the  restrictions  on  transfer  set  forth  herein.

               (p)     Pledge.  The  Company  acknowledges  and  agrees that the
                       ------
Buyer may from time to time pledge pursuant to a bona fide margin agreement with
a  registered  broker-dealer  or grant a security interest in some or all of the
Convertible  Debenture,  Warrants,  Warrant Shares and/or Conversion Shares to a
financial institution that is an "accredited investor" as defined in Rule 501(a)
under  the  Securities Act and, if required under the terms of such arrangement,
the  Buyer  may  transfer  pledged  or  secured Convertible Debenture, Warrants,
Warrant  Shares,  and/or  Conversion  Shares to the pledgees or secured parties.
Such  a  pledge  or  transfer  would  not  be subject to approval of the Company
provided  that  the  Company may require a legal opinion of legal counsel to the
Buyer  in  connection  therewith.  Further,  no notice shall be required of such
pledge.  At  the  Buyer's  expense,  the  Company  will execute and deliver such
reasonable documentation as a pledgee or secured party of Convertible Debenture,
Warrants,  Warrant Shares, Escrow Shares and/or Conversion Shares may reasonably
request  in  connection  with a pledge or transfer of the Convertible Debenture,
Warrants,  Warrant  Shares,  and/or Conversion Shares, including the preparation
and  filing  of  any  required prospectus supplement under Rule 424(b)(3) of the
Securities  Act  or  other  applicable  provision  of  the  Securities  Act  to
appropriately  amend  the  list  of  selling  stockholders  thereunder.

               (q)     Removal  of  Legend.  In  addition  to  the Buyer's other
                       -------------------
available  remedies  and  provided that the conditions permitting the removal of
legend specified in Section 4(o) are met, the Company shall pay to the Buyer, in
cash,  as  partial  liquidated  damages and not as a penalty, for each $1,000 of
Warrant  Shares  and/or  Conversion  Shares  (based  on the closing price of the
Common  Stock  on  the  date  such  Warrant  Shares and/or Conversion Shares are
submitted  to  the  Company's transfer agent), $5 per trading day (increasing to
$10  per  trading day five trading days after such damages have begun to accrue)
for  each  trading  day  after the seventh trading day following delivery by the
Buyer  to  the  Company  or  the  Company's  transfer  agent  of  a  certificate
representing  Warrant  Shares and/or Conversion Shares issued with a restrictive
legend,  until  such  certificate  is  delivered  to  the Buyer with such legend
removed.  Nothing  herein shall limit the Buyer's right to pursue actual damages
for  the  failure  of the Company and its transfer agent to deliver certificates
representing  any  securities  as required hereby or by the Irrevocable Transfer
Agent  Instructions,  and  the Buyer shall have the right to pursue all remedies
available  to it at law or in equity, including, without limitation, a decree of
specific  performance  and/or  injunctive  relief.

               (r)     Press  Release.  In  addition to any and all other public
                       --------------
statements or disclosures made by the Company in its sole discretion (subject to
the  last  sentence  of  this  Section  4(r),  the  Company  will  issue

                                     - 13 -
<PAGE>
a press release and file a Current Report on Form 8-K with the SEC regarding the
Closing of the purchase and sale of the Convertible Debenture and Warrants on or
before  four  business  days after the date of the Closing.  Notwithstanding the
foregoing,  the  Company  shall not publicly disclose the names of the Buyer, or
include  the  names  of  the Buyer in any filing with the SEC, without the prior
written  consent of the Buyer, except (i) as required by federal securities law,
and  (ii)  to  the  extent such disclosure is required by law or regulations, in
which  case  the  Company  shall  provide  the  Buyer  with prior notice of such
disclosure  permitted  under  subclause  (i)  or (ii).  Furthermore, the Company
covenants  and  agrees that neither it nor any other person acting on its behalf
will  provide  the  Buyer or his agents or counsel with any information that the
Company  believes  constitutes  material  non-public  information,  unless prior
thereto  the  Buyer  shall  have  executed  a  written  agreement  regarding the
confidentiality  and  use  of  such  information.  The  Company  understands and
confirms  that  the  Buyer  shall be relying on the foregoing representations in
effecting  transactions  in  securities  of  the  Company.

               (s)     Stock Splits, etc. The provisions of this Agreement shall
                       -----------------
be  appropriately  adjusted  to  reflect any stock split, stock divided, reverse
stock  split,  reorganization  or  other  similar  event effected after the date
hereof.

               (t)     No  Short  Position.  Each  of  the  Buyer and any of its
                       -------------------
Affiliates do not have an open short position in the Common Stock, and the Buyer
agrees that it will not, and that it will cause its Affiliates not to, engage in
any  short  sales  of,  or hedging transactions with respect to the Common Stock
until  the earlier to occur of (i) the fifth anniversary of the Closing Date, or
(ii)  the Buyer no longer owns a principal balance of the Convertible Debenture.

               (u)     Stock  Pledge Escrow Agreement.  At  the Closing, Ray and
                       ------------------------------
the  Buyer  shall  execute  and  deliver  a  Stock  Pledge and Escrow Agreement.

          5.     Transfer  Agent  Instructions.
                 -----------------------------

     The  Company shall issue the Irrevocable Transfer Agent Instructions to its
transfer  agent  irrevocably  appointing  Donald Bezahler, Esq. as its agent for
purpose  of  having  certificates issued, registered in the name of the Buyer or
its  respective  nominee(s), for the Conversion Shares representing such amounts
of  Convertible  Debenture  as  specified  from time to time by the Buyer to the
Company upon conversion of the Convertible Debenture, for interest owed pursuant
to  the  Convertible  Debenture, and for any and all Liquidated Damages (as this
term  is defined in the Investor Registration Rights Agreement).  For so long as
any  of  the  Conversion  Debenture  remains  outstanding, the Company shall not
change  its  transfer  agent  without  the express written consent of the Buyer,
which  may  be  withheld  by the Buyer in its sole discretion, and any successor
transfer  agent  shall  be  required  to  execute the Irrevocable Transfer Agent
Instructions.  Prior  to  registration  of the Conversion Shares, if applicable,
under  the  Securities  Act,  all  such  certificates shall bear the restrictive
legend  specified  in Section 2(g) of this Agreement.  The Company warrants that
no  instruction  other than the Irrevocable Transfer Agent Instructions referred
to  in  this  Section 5 and stop transfer instructions to give effect to Section
2(g)  hereof (in the case of the Conversion Shares prior to registration of such
shares  under  the  Securities Act) will be given by the Company to its transfer
agent  and  that the Conversion Shares shall otherwise be freely transferable on
the  books  and  records  of  the  Company as and to the extent provided in this
Agreement  and  the  Investor  Registration  Rights  Agreement.  Nothing in this
Section  5  shall  affect  in  any  way the Buyer's obligations and agreement to
comply with all applicable securities laws upon resale of Conversion Shares.  If
the  Buyer  provides  the Company with an opinion of counsel, in form, scope and
substance  customary  for  opinions of counsel in comparable transactions to the
effect  that  registration  of  a  resale  by the Buyer of any of the Conversion
Shares  is  not  required under the Securities Act, and absent manifest error in
such  opinion, the Company shall within five business days instruct its transfer
agent  to  issue one or more certificates in such name and in such denominations
as  specified by the Buyer.  The Company acknowledges that a breach by it of its
obligations  hereunder will cause irreparable harm to the Buyer by vitiating the
intent  and  purpose  of  the transaction contemplated hereby.  Accordingly, the
Company  acknowledges  that  the  remedy  at law for a breach of its obligations
under  this Section 5 will be inadequate and agrees, in the event of a breach or
threatened  breach  by the Company of the provisions of this Section 5, that the
Buyer  shall  be  entitled,  in  addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer,
without  the  necessity  of  showing economic loss and without any bond or other
security  being  required.

                                     - 14 -
<PAGE>
          6.     The  Escrow  Shares;  Limitation  on  Conversion.
                 ------------------------------------------------

               (a)     Share  Denominations.  The  Escrow Agent shall retain and
                       --------------------
hold  the Escrow Shares which shall be held in accordance with the terms of this
Agreement and the Escrow Shares Escrow Agreement.  The Escrow Shares shall be in
the  share denominations specified in Schedule II hereto, registered in the name
of  the  Buyer.

               (b)     Conversion  Notice.  Exhibit F attached hereto and made a
                       -------------------  ---------
part  hereof  sets  forth  the  procedures with respect to the conversion of the
Convertible  Debenture,  including the forms of Conversion Notice to be provided
upon conversion, instructions as to the procedures for conversion and such other
information  and instructions as may be reasonably necessary to enable the Buyer
or  its permitted transferee(s) to exercise the right of conversion smoothly and
expeditiously.  Said  Exhibit  F  also sets forth the procedures with respect to
the  exercise  of  the  Warrants,  the  Company's  redemption of the Convertible
Debenture  and  the  release  of  the  Escrow  Shares by the Escrow Agent to the
Company  in  connection  therewith.

               (c)     From and after the Closing Date, the Company agrees that,
at  any  time the conversion price of the Convertible Debenture is such that the
number of Escrow Shares for the Convertible Debenture is less than two times the
number of shares of Common Stock that would be needed to satisfy full conversion
of  such  Convertible  Debenture  then  outstanding,  given  the  then  current
conversion price (the "Full Conversion Shares"), upon five business days written
                       ----------------------
notice  of  such  circumstance to the Company by the Buyer and the Escrow Agent,
the  Company  shall issue additional share certificates in the name of the Buyer
and/or  its assigns in denominations specified by the Buyer, and deliver same to
the  Escrow Agent, such that the new number of Escrow Shares with respect to the
Convertible  Debenture  is  equal  to  two  times  the  Full  Conversion Shares.

               (d)     Buyer's  Ownership  of  Common Stock.  In addition to and
                       ------------------------------------
not  in  lieu  of  the  limitations  on  conversion set forth in the Convertible
Debenture,  the  conversion  rights  of  the  Buyer set forth in the Convertible
Debenture  shall  be  limited, solely to the extent required, from time to time,
such  that,  unless  the  Buyer  gives  written notice 65 days in advance to the
Company  of  the  Buyer's  intention  to  exceed the Limitation on Conversion as
defined  herein,  with  respect  to all or a specified amount of the Convertible
Debenture  and  the corresponding number of the Conversion Shares in no instance
shall  the Buyer (singularly, together with any Persons who in the determination
of  the  Buyer,  together  with the Buyer, constitute a group as defined in Rule
13d-5  of  the Exchange Act) be entitled to convert the Convertible Debenture to
the  extent  such  conversion would result in the Buyer beneficially owning more
than 4.99 percent of the outstanding shares of Common Stock of the Company.  For
these  purposes,  beneficial  ownership  shall  be  defined  and  calculated  in
accordance  with  Rule  13d-3, promulgated under the Exchange Act (the foregoing
being  herein referred to as the "Limitation on Conversion"); provided, however,
                                  ------------------------    --------  -------
that  the  Limitation  on  Conversion shall not apply to any forced or automatic
conversion  pursuant  to  this  Agreement  or  the  Convertible  Debenture;  and
provided, further that if the Company shall have breached any of the Transaction
--------  -------
Documents,  the  provisions of this Section 6(d) shall be null and void from and
after  such  date.  The Company shall, promptly upon its receipt of a Conversion
Notice  tendered  by  the  Buyer  (or  its  sole  designee)  for the Convertible
Debenture,  as  applicable,  notify the Buyer by telephone and by facsimile (the
"Limitation Notice") of the number of shares of Common Stock outstanding on such
 -----------------
date  and  the number of Conversion Shares, which would be issuable to the Buyer
(or  its  sole designee, as the case may be) if the conversion requested in such
Conversion Notice were effected in full and the number of shares of Common Stock
outstanding  giving full effect to such conversion whereupon, in accordance with
the Convertible Debenture, notwithstanding anything to the contrary set forth in
the  Convertible  Debenture,  the Buyer may, by notice to the Company within one
business  day  of its receipt of the Limitation Notice by facsimile, revoke such
conversion  to  the  extent (in whole or in part) that the Buyer determines that
such  conversion  would result in the ownership by the Buyer of shares of Common
Stock  in  excess  of the Limitation on Conversion.  The Limitation Notice shall
begin  the  65  day  advance  notice  required  in  this  Section  6(d).

               (e)     Attorney's  fees.  The  Company  shall pay all reasonable
                       ----------------
attorney's  fees  of the Buyer and Escrow Agent related to the redemption of the
Convertible  Debenture  but  in  no  event  shall  such  fees  exceed  $2,000.

                                     - 15 -
<PAGE>
          7.     Conditions  to  the  Company's  Obligation  to  Sell.
                 ----------------------------------------------------

               (a)     Closing.  The  obligation  of  the  Company  hereunder to
                       -------
issue  and  sell  the Convertible Debenture and the Warrants to the Buyer at the
Closing  is  subject to the satisfaction, at or before the Closing Date, of each
of  the  following  conditions,  provided  that  these  conditions  are  for the
Company's  sole benefit and may be waived by the Company at any time in its sole
discretion:

                    (i)     The  Buyer  shall  have  executed  the  Transaction
Documents  and  delivered  them  to  the  Company.

                    (ii)     The  Buyer  shall have delivered to the Company the
Purchase  Price  for the Convertible Debenture and the Warrants by wire transfer
of  immediately  available U.S. funds pursuant to the wire instructions provided
by  the  Company.

                    (iii)     The  representations  and  warranties of the Buyer
shall  be true and correct in all material respects as of the date when made and
as  of  the Closing Date as though made at that time (except for representations
and  warranties  that  speak  as  of  a specific date), and the Buyer shall have
performed,  satisfied  and complied in all material respects with the covenants,
agreements  and conditions required by this Agreement to be performed, satisfied
or  complied with by the Buyer at or prior to the Closing Date.  If requested by
the  Company,  the  Company  shall  have  received a certificate, executed by an
executive  officer  of the Buyer, dated as of the Closing Date, to the foregoing
effect  and  as  to  such  other  matters  as may be reasonably requested by the
Company.

                    (iv)     The  Company  shall  have  filed  a form UCC-1 with
regard  to  the  Pledged  Property  and  Pledged  Collateral  as detailed in the
Security  Agreement  dated  the date hereof and provided proof of such filing to
the  Buyer.

                    (v)     The  Company  shall have executed a definitive stock
purchase  agreement  with  Method  IQ.

          8.     Conditions  to  the  Buyer's  Obligation  to  Purchase.
                 ------------------------------------------------------

               (a)     Closing.  The  obligation  of  the  Buyer  hereunder  to
                       -------
purchase the Convertible Debenture and the Warrants at the Closing is subject to
the  satisfaction,  at  or  before  the  Closing  Date, of each of the following
conditions,  provided that these conditions are for the Buyer's sole benefit and
may  be  waived  by  the  Buyer  at  any  time  in  its  sole  discretion:

                    (i)     The  Company  shall  have  executed  the Transaction
Documents  and  delivered  the  same  to  the  Buyer.

                    (ii)     The  Common Stock shall be authorized for quotation
on  the OTCBB, trading in the Common Stock shall not have been suspended for any
reason,  and  all  the  Conversion  Shares  issuable  upon the conversion of the
Convertible  Debenture  shall  have  been  approved  by  the  OTCBB.

                    (iii)     The  representations and warranties of the Company
shall  be  true  and correct in all material respects (except to the extent that
any  of  such  representations  and  warranties  is  already  qualified  as  to
materiality  in  Section  3  above,  in  which  case,  such  representations and
warranties  shall  be  true and correct without further qualification) as of the
date  when  made  and as of the Closing Date as though made at that time (except
for  representations  and  warranties that speak as of a specific date), and the
Company  shall  have  performed, satisfied and complied in all material respects
with  the  covenants, agreements and conditions required by this Agreement to be
performed,  satisfied or complied with by the Company at or prior to the Closing
Date.  If  requested  by the Buyer, the Buyer shall have received a certificate,
executed  by  the President of the Company, dated as of the Closing Date, to the
foregoing  effect and as to such other matters as may be reasonably requested by
the  Buyer,  including,  without  limitation,  an  update as of the Closing Date
regarding  the  representation  contained  in  Section  3(c)  above.

                                     - 16 -
<PAGE>
                    (iv)     The  Company  shall  have executed and delivered to
the  Buyer  the  Convertible  Debenture  and  the  Warrants.

                    (v)     The  Buyer shall have received an opinion of counsel
in  a  form  satisfactory  to  the  Buyer.

                    (vi)     The  Company  shall  have  provided  to the Buyer a
certificate of good standing from the Secretary of State from the state in which
the  Company  is  incorporated.

                    (vii)     The  Company  shall  have  delivered to the Escrow
Agent  the  Escrow  Shares.

                    (viii)     The  Company  shall have provided to the Buyer an
acknowledgement,  to the satisfaction of the Buyer, from the Company's certified
public accountant as to its ability to provide all consents required in order to
file  a  registration  statement  in  connection  with  this  transaction.

                    (ix)     The  Company  shall  have  reserved  out  of  its
authorized  and  unissued  Common Stock, solely for the purpose of effecting the
conversion  of  the  Convertible Debenture, shares of Common Stock sufficient to
effect  the  conversion  of  all  of  such  Convertible  Debenture.

                    (x)     The  Irrevocable  Transfer  Agent Instructions shall
have  been  delivered  to  and acknowledged in writing by the Company's transfer
agent.

                    (xi)     Ray  shall have executed and delivered to the Buyer
the  Stock  Pledge  Escrow  Agreement.

          9.     Indemnification.
                 ---------------

               (a)     In consideration of the Buyer's execution and delivery of
this  Agreement  and  acquiring  the  Convertible  Debenture  and  the  Warrants
hereunder,  and  the  Conversion  Shares and Warrants into which the Convertible
Debenture  and  Warrants are convertible or exercisable, as the case may be, and
in  addition to all of the Company's other obligations under this Agreement, the
Company  shall  defend,  protect, indemnify and hold harmless the Buyer, and his
employees  and  agents  (including,  without  limitation,  those  retained  in
connection  with the transactions contemplated by this Agreement) (collectively,
the "Buyer Indemnitees") from and against any and all actions, causes of action,
     -----------------
suits,  claims,  losses,  costs,  penalties,  fees, liabilities and damages, and
expenses  in  connection  therewith  (irrespective  of  whether  any  such Buyer
Indemnitee  is  a  party  to  the  action for which indemnification hereunder is
sought),  and  including  reasonable  attorneys'  fees  and  disbursements  (the
"Indemnified  Liabilities"), incurred by the Buyer Indemnitees or any of them as
 ------------------------
a  result  of,  or  arising  out of, or relating to (a) any misrepresentation or
breach  of any representation or warranty made by the Company in this Agreement,
or any other certificate, instrument or document contemplated hereby executed by
the  Company;  (b)  any  breach  of any covenant, agreement or obligation of the
Company  contained  in this Agreement, the Convertible Debenture or the Investor
Registration  Rights  Agreement or any other certificate, instrument or document
contemplated hereby executed by the Company, or (c) any cause of action, suit or
claim  brought  or  made  against  such  Buyer  Indemnitee  based  on  material
misrepresentations or due to a material breach by the Company and arising out of
or  resulting  from  the execution, delivery, performance or enforcement of this
Agreement  or  any  other  instrument,  document  or agreement executed pursuant
hereto  by  any  of  the  Buyer  Indemnities,  any transaction financed or to be
financed  in  whole or in part, directly or indirectly, with the proceeds of the
issuance  of  the  Convertible  Debenture.  To  the  extent  that  the foregoing
undertaking  by  the  Company  may  be unenforceable for any reason, the Company
shall  make  the maximum contribution to the payment and satisfaction of each of
the  Indemnified  Liabilities,  which  is  permissible  under  applicable  law.

               (b)     In  consideration of the Company's execution and delivery
of  this  Agreement,  and issuance of the Convertible Debenture and the Warrants
hereunder,  and  the  Conversion  Shares and Warrants into which the Convertible
Debenture  and  Warrants are convertible or exercisable, as the case may be, and
in  addition  to  all of the Buyer's other obligations under this Agreement, the
Buyer  shall  defend,  protect,  indemnify  and

                                     - 17 -
<PAGE>
hold  harmless  the  Company  and  all of its officers, directors, employees and
agents  (including,  without  limitation,  those retained in connection with the
transactions  contemplated  by  this  Agreement)  (collectively,  the  "Company
                                                                        -------
Indemnitees")  from  and against any and all Indemnified Liabilities incurred by
-----------
the  Company  Indemnitees  or  any of them as a result of, or arising out of, or
relating  to  (a)  any  misrepresentation  or  breach  of  any representation or
warranty  made  by  the  Buyer  in  this  Agreement,  or  any other certificate,
instrument or document contemplated hereby executed by the Buyer; (b) any breach
of  any  covenant,  agreement  or  obligation  of  the  Buyer  contained in this
Agreement,  the  Convertible  Debenture  or  the  Investor  Registration  Rights
Agreement  or  any other certificate, instrument or document contemplated hereby
executed by the Buyer, or (c) any cause of action, suit or claim brought or made
against such Company Indemnitee based on material misrepresentations or due to a
material breach by the Buyer and arising out of or resulting from the execution,
delivery,  performance  or  enforcement  of  this  Agreement,  the  Convertible
Debenture or the Investor Registration Rights Agreement or any other instrument,
document  or  agreement  executed  pursuant  hereto  by  any  of  the  Company
Indemnities.  To  the  extent that the foregoing undertaking by the Buyer may be
unenforceable  for  any reason, the Buyer shall make the maximum contribution to
the  payment  and  satisfaction of each of the Indemnified Liabilities, which is
permissible  under  applicable  law.

          10.     Governing  Law:  Miscellaneous.
                  ------------------------------

               (a)     Governing  Law.  The  parties hereto acknowledge that the
                       --------------
transactions  contemplated  by  this  Agreement  and  the exhibits hereto bear a
reasonable  relation to the State of Florida.  The parties hereto agree that the
internal  laws  of  the  State  of  Florida  shall govern this Agreement and the
exhibits  hereto,  including,  but  not limited to, all issues related to usury.
Any  action  to enforce the terms of this Agreement or any of its exhibits shall
be brought exclusively in the state and/or federal courts situated in the County
and  State of Florida.  Service of process in any action by the Buyer to enforce
the  terms  of  this  Agreement may be made by serving a copy of the summons and
complaint,  in addition to any other relevant documents, by commercial overnight
courier  to  the  Company  at its principal address set forth in this Agreement.

               (b)     Counterparts.  This  Agreement  may be executed in two or
                       ------------
more  identical  counterparts, all of which shall be considered one and the same
agreement  and shall become effective when counterparts have been signed by each
party  and  delivered  to  the  other party.  In the event any signature page is
delivered  by  facsimile  transmission,  the  party using such means of delivery
shall  cause  four additional original executed signature pages to be physically
delivered  to  the  other  party  within five days of the execution and delivery
hereof.

               (c)     Headings.  The  headings  of  this  Agreement  are  for
                       --------
convenience  of  reference  and  shall  not  form  part  of,  or  affect  the
interpretation  of,  this  Agreement.

               (d)     Severability.  If  any  provision of this Agreement shall
                       ------------
be  invalid  or  unenforceable  in  any  jurisdiction,  such  invalidity  or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder  of  this  Agreement  in  that  jurisdiction  or  the  validity  or
enforceability  of  any  provision  of this Agreement in any other jurisdiction.

               (e)     Entire  Agreement, Amendments.  This Agreement supersedes
                       -----------------------------
all other prior oral or written agreements between the Buyer, the Company, their
affiliates  and  persons  acting  on  their  behalf  with respect to the matters
discussed  herein,  and  this  Agreement  and  the instruments referenced herein
contain  the  entire  understanding  of  the parties with respect to the matters
covered  herein  and  therein  and,  except  as specifically set forth herein or
therein,  neither  the Company nor any Buyer makes any representation, warranty,
covenant  or  undertaking  with  respect  to such matters.  No provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by  the  party  to  be  charged  with  enforcement.

               (f)     Notices.  Any  notices,  consents,  waivers,  or  other
                       -------
communications  required  or  permitted  to  be  given  under  the terms of this
Agreement  must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon confirmation of receipt, when sent
by  facsimile;  (iii) seven days after being sent by U.S. certified mail, return
receipt  requested,  or  (iv) one day after deposit with a nationally recognized
overnight  delivery  service,  in  each  case properly addressed to the party to
receive  the  same.  The addresses and facsimile numbers for such communications
shall  be:

                                     - 18 -
<PAGE>
If to the Company, to:               Charys Holding Company Inc.
                                     1117 Perimeter Center West, Suite N415
                                     Atlanta, Georgia 30338
                                     Attention: Billy Ray, Jr.
                                     Telephone: (678) 443-2300
                                     Facsimile: (678) 443-2320

With a copy to:                      Michael Brenner
                                     Attorney at Law
                                     1643 North Harrison Parkway
                                     Sunrise, Florida 33323
                                     Telephone: (954) 838-6251
                                     Facsimile: (954) 838-6844

With a copy to:                      Glast, Phillips & Murray, P.C.
                                     815 Walker Street, Suite 1250
                                     Houston, Texas 77002
                                     Attention: Norman T. Reynolds, Esq.
                                     Telephone: (713) 237-3135
                                     Facsimile: (713) 237-3202
                                     Email: nreynolds@gpm-law.com

If to the Buyers, to:                Preferred Employers Holdings, Inc.
                                     10800 Biscayne Boulevard, Miami, FL 33161
                                     attention Donald J. Bezahler, Esq.,
                                     Email: dbezahler@pegi.net,

                                     Attention:
                                     Telephone:
                                     Facsimile:

     If  to  the  Buyer, to his address and facsimile number on Schedule I, with
copies  to  the  Buyer's  counsel  as set forth on Schedule I.  Each party shall
provide  five  days'  prior  written  notice to the other party of any change in
address  or  facsimile  number.

               (g)     Successors  and Assigns.  This Agreement shall be binding
                       -----------------------
upon and inure to the benefit of the parties and their respective successors and
assigns.  Neither  the  Company nor the Buyer shall assign this Agreement or any
rights  or  obligations hereunder without the prior written consent of the other
party  hereto.

               (h)     No Third Party Beneficiaries.  This Agreement is intended
                       ----------------------------
for  the benefit of the parties hereto and their respective permitted successors
and  assigns,  and  is  not  for the benefit of, nor may any provision hereof be
enforced  by,  any  other  person.

               (i)     Survival.  Unless  this  Agreement  is  terminated  under
                       --------
Section  10(l),  the representations and warranties of the Company and the Buyer
contained  in  Sections  2  and  3,  the  agreements  and covenants set forth in
Sections 4, 5 and 10, and the indemnification provisions set forth in Section 9,
shall  survive  the  Closing for a period of two (2) years following the date on
which  the  Convertible  Debenture  is  redeemed  or  converted  in  full.

               (j)     Publicity.  The  Company  and  the  Buyer  shall have the
                       ---------
right  to  approve,  before  issuance  any  press  release  or  any other public
statement  with  respect  to  the  transactions  contemplated hereby made by any
party;  provided, however, that the Company shall be entitled, without the prior
approval  of  the  Buyer,  to issue any press release or other public disclosure
with  respect to such transactions required under applicable securities or other
laws  or  regulations  provided,  that  the  Company  shall use its commercially
reasonable  best  efforts

                                     - 19 -
<PAGE>
to  consult  the Buyer in connection with any such press release or other public
disclosure  prior to its release and Buyer shall be provided with a copy thereof
upon  release  thereof.

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

               (l)     No  Strict  Construction.  The  language  used  in  this
                       ------------------------
Agreement  will  be  deemed  to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any  party.

               (m)     Remedies.  In  addition to being entitled to exercise all
                       --------
rights  provided  herein  or  granted by law, including recovery of damages, the
Buyer  and  the  Company  will  be  entitled  to  specific performance under the
Agreement.  The  parties  agree  that  monetary  damages  may  not  be  adequate
compensation  for  any  loss  incurred  by  reason  of any breach of obligations
described  in the foregoing sentence and hereby agree to waive in any action for
specific  performance  of  any  such obligation the defense that a remedy at law
would  be  adequate.

     IN  WITNESS  WHEREOF, the Buyer and the Company have caused this Securities
Purchase  Agreement  to  be  duly  executed  as of the date first written above.

                        CHARYS HOLDING COMPANY, INC.

                        By
                          ------------------------------------------------------
                          Billy V. Ray, Jr. Chairman and Chief Executive Officer

                        --------------------------------------------------------
                        BILLY V. RAY, JR.

                        --------------------------------------------------------
                        MEL HARRIS

                        --------------------------------------------------------
                        STEVEN POSNER

                                     - 20 -
<PAGE>
                                    EXHIBIT A

                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT
                 ----------------------------------------------

                     INVESTOR REGISTRATION RIGHTS AGREEMENT
                     --------------------------------------

     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of December
                                               ---------
___, 2005, by and among CHARYS HOLDING COMPANY INC., a Delaware corporation (the
"Company"),  MEL HARRIS and STEVEN POSNER, or their designees (collectively, the
 -------
"Investor").
 --------

     WHEREAS:

     A.     The Company and the Investor have entered into a Securities Purchase
Agreement  (the  "Securities Purchase Agreement"), pursuant to which the Company
                  -----------------------------
proposes  to  sell  a $1,000,000 secured convertible debenture (the "Convertible
                                                                     -----------
Debenture")  which  shall  be  convertible  into the Company's Common Stock, par
---------
value  $0.001  per  share  (the  "Common Stock") and in connection therewith the
                                  ------------
Company  has  agreed  to  issue  certain  of  its  warrants  (the  "Warrants");
                                                                    --------

     B.     To  induce  the  Investor  to  execute  and  deliver  the Securities
Purchase  Agreement,  the  Company  has  agreed  to provide certain registration
rights  under  the  Securities  Act  of  1933,  as  amended,  and  the rules and
regulations  there  under,  or  any similar successor statute (collectively, the
"Securities  Act"),  and  applicable  state  securities  laws;  and
 ---------------

     C.     Capitalized  terms  used but not otherwise defined herein shall have
the  meanings  set  forth  in  the  Securities  Purchase  Agreement.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein  and  other  good  and valuable consideration, the receipt and
sufficiency  of  which  are  hereby  acknowledged,  the Company and the Investor
hereby  agrees  as  follows:

     1.        DEFINITIONS.
               -----------

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

          (a)       "Person"  means  a corporation, a limited liability company,
                     ------
an  association,  a  partnership,  an organization, a business, an individual, a
governmental  or  political  subdivision  thereof  or  a  governmental  agency.

          (b)       "Register,"  "registered,"  and  "registration"  refer  to a
                     --------     ----------          ------------
registration  effected  by  preparing  and  filing  one  or  more  Registration
Statements (as defined below) in compliance with the Securities Act and pursuant
to  Rule  415  under  the  Securities  Act  or  any successor rule providing for
offering  securities  on  a  continuous  or  delayed basis ("Rule 415"), and the
                                                             --------
declaration  or  ordering  of effectiveness of such Registration Statement(s) by
the  United  States  Securities  and  Exchange  Commission  (the  "SEC").
                                                                   ---

          (c)       "Registrable  Securities" means (i) the Escrow Shares issued
                     -----------------------
or issuable as "security stock" for conversion of the Convertible Debenture, and
(ii)  the Warrant Shares; provided, however, that if the Company has redeemed in
full  all  amounts  owing  under  the  Convertible  Debenture  on  or before the
Exclusive  Redemption  Date,  Registrable Securities shall mean only the Warrant
Shares;  and  provided further that Registrable Securities shall not include any
shares  of  Common Stock convertible from interest accrued under the Convertible
Debenture  subsequent  to  the  date  of  the filing of the Initial Registration
Statement  (as  defined  below).

          (d)       "Registration  Statement"  means  a  registration  statement
                     -----------------------
under  the  Securities  Act  which  covers  the  Registrable  Securities.

                                      - 1 -
<PAGE>
     2.        REGISTRATION.
               ------------

          (a)       Subject  to  the terms and conditions of this Agreement, the
Company  shall  prepare  and  file, no later than ninety (90) days from the date
hereof  (the "Scheduled Filing Deadline"), with the SEC a registration statement
              -------------------------
on  Form  SB-2  (or  similar  form)  under  the  Securities  Act  (the  "Initial
                                                                         -------
Registration  Statement")  for  the  resale  by  the Investor of all Registrable
-----------------------
Securities.  The  Company  shall keep the Registration Statement "Evergreen" for
the  life  of  the Convertible Debentures or until Rule 144(k) of the Securities
Act of 1933, as amended, is available to the Investor with respect to all of the
Conversion  Shares  and  Warrant  Shares  whichever is later.  The Company shall
retain,  and  pay  at  its  sole  expense,  a  law firm to file the Registration
Statement  subject  to  the  reasonable  approval of the Investor.  Prior to the
filing  of  the Registration Statement with the SEC, the Company shall furnish a
copy  of  the  Initial Registration Statement to the Investor for its review and
comment.  The  Investor  shall  furnish  comments  on  the  Initial Registration
Statement  to  the  Company within twenty-four (24) hours of the receipt thereof
from  the  Company.

          (b)       Effectiveness  of  the  Initial Registration Statement.  The
                    ------------------------------------------------------
Company  shall  use  its  commercially  reasonable  best efforts (i) to have the
Initial  Registration  Statement  declared  effective  by  the SEC no later than
ninety  (90)  days  after  the  date  filed,  provided  that  if the Convertible
Debenture  is  redeemed  before the Exclusive Redemption Date, no later than one
hundred  twenty  (120)  days  after  the  date  filed  (the "Scheduled Effective
                                                             -------------------
Deadline")  and  (ii)  to insure that the Initial Registration Statement and any
--------
subsequent Registration Statement remains in effect until all of the Registrable
Securities  have  been  sold,  subject  to  the  terms  and  conditions  of this
Agreement.  It  shall  be  an  event  of  default  hereunder  if  the  Initial
Registration  Statement  is not declared effective by the SEC within one hundred
and  twenty  (120)  days  after  filing  thereof.

          (c)       Failure  to File or Obtain Effectiveness of the Registration
                    ------------------------------------------------------------
Statement.  In  the  event  the  Registration  Statement  is  not  filed  by the
---------
Scheduled  Filing  Deadline or is not declared effective by the SEC on or before
the  Scheduled  Effective  Deadline,  or if after the Registration Statement has
been  declared  effective  by  the  SEC,  sales  cannot  be made pursuant to the
Registration  Statement  (whether  because of a failure to keep the Registration
Statement  effective,  failure  to disclose such information as is necessary for
sales  to  be  made  pursuant to the Registration Statement, failure to register
sufficient  shares  of  Common Stock or otherwise then as partial relief for the
damages  to  any holder of Registrable Securities by reason of any such delay in
or reduction of its ability to sell the underlying shares of Common Stock (which
remedy  shall  not  be exclusive of any other remedies at law or in equity), the
Company  will  pay as liquidated damages (the "Liquidated Damages") and not as a
                                               ------------------
penalty, to the holder, a cash amount equal to two percent (2%) per month of the
outstanding  principal  amount  of  the  Convertible Debenture outstanding.  The
initial  payment  of  Liquidated Damages shall be made within three (3) business
days  from  the  end  of  the  month  in  which the Scheduled Filing Deadline or
Scheduled  Effective  Deadline  occurred, as the case may be, and shall continue
thereafter  until  the Registration Statement is filed or declared effective, as
the  case  may  be.

          (d)       Liquidated  Damages.  The  Company  and  the Investor hereto
                    -------------------
acknowledge  and  agree  that the sums payable under subsection 2(c) above shall
constitute liquidated damages and not penalties and are in addition to all other
rights  of  the  Investor,  including  the right to call a default.  The parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
is  incapable  or is difficult to precisely estimate; (ii) the amounts specified
in  such  subsection  bear  a reasonable relationship to, and are not plainly or
grossly  disproportionate  to,  the  probable  loss  likely  to  be  incurred in
connection  with  any failure by the Company to file a Registration Statement or
to  obtain  or maintain the effectiveness of a Registration Statement; (iii) one
of the reasons for the Company and the Investor reaching an agreement as to such
amounts  was  the  uncertainty  and cost of litigation regarding the question of
actual damages, and (iv) the Company and the Investor are sophisticated business
parties  and  have  been represented by sophisticated and able legal counsel and
negotiated  this  Agreement  at  arm's  length.

     3.        RELATED  OBLIGATIONS.
               --------------------

          (a)       The  Company shall keep the Registration Statement effective
pursuant  to  Rule  415  at all times until the date on which the Investor shall
have  sold all the Registrable Securities covered by such Registration Statement
(the  "Registration  Period"),  which  Registration  Statement  (including  any
       --------------------
amendments  or supplements thereto and prospectuses contained therein) shall not
contain  any  untrue  statement  of  a  material  fact  or

                                      - 2 -
<PAGE>
omit  to  state  a  material fact required to be stated therein, or necessary to
make  the  statements  therein, in light of the circumstances in which they were
made,  not  misleading.

          (b)       The  Company  shall  prepare  and  file  with  the  SEC such
amendments  (including  post-effective  amendments)  and  supplements  to  a
Registration  Statement  and  the  prospectus  used  in  connection  with  such
Registration  Statement,  which  prospectus  is to be filed pursuant to Rule 424
promulgated  under  the  Securities  Act,  as  may  be  necessary  to  keep such
Registration  Statement  effective  at all times during the Registration Period,
and,  during  such period, comply with the provisions of the Securities Act with
respect  to the disposition of all Registrable Securities of the Company covered
by  such  Registration  Statement  until  such  time  as all of such Registrable
Securities  shall  have been disposed of in accordance with the intended methods
of  disposition  by  the  seller  or  sellers  thereof  as  set  forth  in  such
Registration  Statement.  In  the  case  of  amendments  and  supplements  to  a
Registration Statement which are required to be filed pursuant to this Agreement
(including  pursuant  to  this Section 3(b)) by reason of the Company's filing a
report on Form 10-KSB, Form 10-QSB or Form 8-K or any analogous report under the
Securities  Exchange  Act  of 1934, as amended (the "Exchange Act"), the Company
                                                     ------------
shall  incorporate  such report by reference into the Registration Statement, if
applicable,  or  shall  file  such amendments or supplements with the SEC on the
same day on which the Exchange Act report is filed which created the requirement
for  the  Company  to  amend  or  supplement  the  Registration  Statement.

          (c)       The  Company shall furnish to the Investor whose Registrable
Securities  are  included  in any Registration Statement, without charge, (i) at
least  one  (1) copy of such Registration Statement as declared effective by the
SEC  and any amendment(s) thereto, including financial statements and schedules,
all  documents  incorporated  therein  by  reference,  all  exhibits  and  each
preliminary prospectus; (ii) ten (10) copies of the final prospectus included in
such  Registration Statement and all amendments and supplements thereto (or such
other  number of copies as such Investor may reasonably request), and (iii) such
other  documents  as  such  Investor may reasonably request from time to time in
order  to facilitate the disposition of the Registrable Securities owned by such
Investor.

          (d)       The  Company  shall  use  its  commercially  reasonable best
efforts  to  (i)  register  and  qualify the Registrable Securities covered by a
Registration  Statement  under  such other securities or "blue sky" laws of such
jurisdictions  in  the  United  States as the Investor reasonably requests; (ii)
prepare  and  file  in  those  jurisdictions,  such  amendments  (including
post-effective  amendments)  and  supplements  to  such  registrations  and
qualifications  as may be necessary to maintain the effectiveness thereof during
the  Registration  Period;  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period,  and  (iv)  take all other actions reasonably necessary or
advisable  to qualify the Registrable Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not  be  required  in connection
therewith  or  as  a condition thereto to (1) make any change to its articles of
incorporation  or  by-laws; (2) qualify to do business in any jurisdiction where
it  would  not  otherwise  be required to qualify but for this Section 3(d); (3)
subject  itself  to  general  taxation  in  any such jurisdiction, or (4) file a
general  consent  to  service  of process in any such jurisdiction.  The Company
shall  promptly  notify  the  Investor  who  holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the
registration  or  qualification  of  any  of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or  its  receipt  of actual notice of the initiation or threat of any proceeding
for  such  purpose.

          (e)       As  promptly  as  practicable  after  becoming aware of such
event  or  development,  the Company shall notify the Investor in writing of the
happening  of  any  event  as  a  result  of  which the prospectus included in a
Registration  Statement,  as  then  in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which  they  were  made,  not  misleading  (provided that in no event shall such
notice  contain  any  material,  nonpublic  information), and promptly prepare a
supplement  or  amendment  to such Registration Statement to correct such untrue
statement  or  omission,  and  deliver  ten  (10)  copies  of such supplement or
amendment  to  the Investor.  Notwithstanding any provision of this Agreement to
the  contrary, if the Company makes such a notification, the Company may suspend
the  use  of  any prospectus contained in any Registration Statement for periods
not  to  exceed  forty  five (45) business days in any three month period or two
periods  not  to  exceed an aggregate of ninety (90) business days in any twelve
(12)  month  period in the event that the Company determines, in the exercise of
its  reasonable  discretion,  confirmed by a legal opinion from outside counsel,
that  sales  of Registrable Securities thereunder could constitute violations of
the  Securities  Act  due  to  the  Registration  Statement  containing

                                      - 3 -
<PAGE>
an  untrue  statement  of  a  material fact or omission to state a material fact
required  to  be  stated therein or necessary to make the statements therein, in
light  of the circumstances under which they were made, not misleading.  In each
case,  the  Company shall use commercially reasonable best efforts to remedy the
deficiency  in the Registration Statement within thirty (30) business days.  The
Company shall also promptly notify the Investor in writing (i) when a prospectus
or  any  prospectus  supplement  or post-effective amendment has been filed, and
when  a  Registration  Statement  or  any  post-effective  amendment  has become
effective  (notification  of  such  effectiveness  shall  be  delivered  to each
Investor  by  facsimile  on  the  same  day  of such effectiveness); (ii) of any
request  by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, and (iii) of the Company's reasonable
determination  that a post-effective amendment to a Registration Statement would
be  appropriate.

          (f)       The  Company  shall  use  its  commercially  reasonable best
efforts  to  prevent  the  issuance  of  any  stop  order or other suspension of
effectiveness  of  a  Registration  Statement,  or  the  suspension  of  the
qualification  of any of the Registrable Securities for sale in any jurisdiction
within  the  United  States  of  America  and, if such an order or suspension is
issued,  to  obtain  the  withdrawal of such order or suspension at the earliest
possible  moment  and  to  notify  the Investor who holds Registrable Securities
being  sold  of  the  issuance  of  such order and the resolution thereof or its
receipt  of actual notice of the initiation or threat of any proceeding for such
purpose.

          (g)       At the reasonable request of the Investor, the Company shall
furnish  to  such Investor, on the date of the effectiveness of the Registration
Statement  and  thereafter  from  time  to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the Company's independent
certified  public  accountants  in form and substance as is customarily given by
independent  certified  public  accountants  to  underwriters in an underwritten
public  offering,  and  (ii)  an  opinion,  dated  as  of  such date, of counsel
representing  the  Company for purposes of such Registration Statement, in form,
scope  and substance as is customarily given in an underwritten public offering,
addressed  to  the  Investor.

          (h)       The  Company  shall make available for inspection by (i) the
Investor  and  (ii)  one (1) firm of accountants or other agents retained by the
Investor  (collectively,  the  "Inspectors")  all  pertinent financial and other
                                ----------
records,  and  pertinent  corporate  documents  and  properties  of  the Company
(collectively,  the  "Records"), as shall be reasonably deemed necessary by each
                      -------
Inspector,  and  cause the Company's officers, directors and employees to supply
all  information  which the Inspector may reasonably request; provided, however,
that  each  Inspector  shall  agree,  and the Investor hereby agrees, to hold in
strict  confidence  and shall not make any disclosure (except to an Investor) or
use  any  Record or other information which the Company determines in good faith
to  be  confidential, and of which determination the Inspectors are so notified,
unless  (a)  the  disclosure  of such Records is necessary to avoid or correct a
misstatement  or omission in any Registration Statement or is otherwise required
under the Securities Act; (b) the release of such Records is ordered pursuant to
a  final,  non-appealable  subpoena  or order from a court or government body of
competent  jurisdiction,  or  (c)  the information in such Records has been made
generally  available to the public other than by disclosure in violation of this
or  any  other  agreement of which the Inspector and the Investor has knowledge.
The Investor agrees that it shall, upon learning that disclosure of such Records
is  sought  in  or  by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
its  expense,  to  undertake  appropriate action to prevent disclosure of, or to
obtain  a  protective  order  for,  the  Records  deemed  confidential.

          (i)       The  Company  shall  hold  in  confidence  and  not make any
disclosure of information concerning the Investor provided to the Company unless
(i)  disclosure of such information is necessary to comply with federal or state
securities  laws;  (ii) the disclosure of such information is necessary to avoid
or  correct  a misstatement or omission in any Registration Statement; (iii) the
release  of  such  information is ordered pursuant to a subpoena or other final,
non-appealable  order  from  a  court  or  governmental  body  of  competent
jurisdiction,  or (iv) such information has been made generally available to the
public  other  than  by  disclosure  in violation of this Agreement or any other
agreement.  The  Company  agrees that it shall, upon learning that disclosure of
such  information  concerning  the  Investor  is  sought  in  or  by  a court or
governmental  body of competent jurisdiction or through other means, give prompt
written  notice  to  such  Investor  and  allow  the Investor, at the Investor's
expense,  to undertake appropriate action to prevent disclosure of, or to obtain
a  protective  order  for,  such  information.

          (j)       The  Company  shall  use  its  commercially  reasonable best
efforts either to cause all the Registrable Securities covered by a Registration
Statement  (i)  to  be  listed  on  each  securities  exchange  on  which

                                      - 4 -
<PAGE>
securities of the same class or series issued by the Company are then listed, if
any,  if  the listing of such Registrable Securities is then permitted under the
rules  of  such  exchange,  or  (ii) the inclusion for quotation on the National
Association  of Securities Dealers, Inc. OTC Bulletin Board for such Registrable
Securities.  The  Company  shall  pay  all  fees and expenses in connection with
satisfying  its  obligation  under  this  Section  3(j).

          (k)       The  Company  shall  cooperate  with  the Investor who holds
Registrable  Securities  being  offered  and,  to  the  extent  applicable,  to
facilitate  the  timely preparation and delivery of certificates to a transferee
of  the  Investor  (not  bearing  any  restrictive  legend)  representing  the
Registrable  Securities  to  be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be,  as  the Investor may reasonably request and registered in such names as the
Investor  may  request.

          (l)       The  Company  shall  use  its  commercially  reasonable best
efforts  to  cause  the  Registrable  Securities  covered  by  the  applicable
Registration  Statement  to  be  registered  with  or  approved  by  such  other
governmental  agencies  or  authorities  as  may  be necessary to consummate the
disposition  of  such  Registrable  Securities.

          (m)       The  Company  shall make generally available to its security
holders  as  soon  as  practical,  but not later than ninety (90) days after the
close  of  the  period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a twelve (12)
month  period  beginning  not  later  than the first day of the Company's fiscal
quarter  next  following  the  effective  date  of  the  Registration Statement.

          (n)       The  Company shall otherwise use its commercially reasonable
best  efforts  to comply with all applicable rules and regulations of the SEC in
connection  with  any  registration  hereunder.

          (o)       Within  two (2) business days after a Registration Statement
which  covers  Registrable  Securities  is  declared  effective  by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to  the  transfer  agent  for  such  Registrable  Securities (with copies to the
Investor  whose  Registrable  Securities  are  included  in  such  Registration
Statement)  confirmation  that  such  Registration  Statement  has been declared
effective  by  the  SEC  in  the  form  attached  hereto  as  Exhibit  A.
                                                              ----------

          (p)       The  Company  shall  take  all  other  reasonable  actions
necessary  to expedite and facilitate disposition by the Investor of Registrable
Securities  pursuant  to  a  Registration  Statement.

     4.        OBLIGATIONS  OF  THE  INVESTOR.
               ------------------------------

     The  Investor  agrees  that, upon receipt of any notice from the Company of
the  happening  of  any event of the kind described in Section 3(f) or the first
sentence of Section 3(e), such Investor will immediately discontinue disposition
of  Registrable  Securities  pursuant  to any Registration Statement(s) covering
such  Registrable  Securities until such Investor's receipt of the copies of the
supplemented  or  amended  prospectus contemplated by Section 3(e) or receipt of
notice  from  the  Company  that  no  supplement  or  amendment  is  required.
Notwithstanding  anything  to the contrary, the Company shall cause its transfer
agent  to  deliver  unlegended  certificates  for  shares  of  Common Stock to a
transferee  of  an  Investor  in  accordance  with  the  terms of the Securities
Purchase  Agreement  in  connection with any sale of Registrable Securities with
respect  to  which an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of any event of
the  kind  described in Section 3(f) or the first sentence of 3(e) and for which
the  Investor  has  not  yet  settled.

     5.        EXPENSES  OF  REGISTRATION.
               --------------------------

     All  expenses  incurred  in  connection  with  registrations,  filings  or
qualifications  pursuant  to  the  Agreement, including, without limitation, all
registration,  listing  and  qualifications fees, printers, legal and accounting
fees  shall  be  paid  by  the  Company.

                                      - 5 -
<PAGE>
     6.        INDEMNIFICATION.
               ---------------

     With respect to Registrable Securities which are included in a Registration
Statement  under  this  Agreement:

          (a)       To  the  fullest  extent permitted by law, the Company will,
and  hereby  does,  indemnify,  hold  harmless  and  defend  the  Investor,  the
directors,  officers,  partners, employees, agents, representatives of, and each
Person,  if  any, who controls the Investor within the meaning of the Securities
Act  or  the  Exchange  Act (each, an "Indemnified Person"), against any losses,
                                       ------------------
claims,  damages,  liabilities,  judgments,  fines,  penalties,  charges, costs,
reasonable  attorneys'  fees,  amounts  paid in settlement or expenses, joint or
several  (collectively,  the  "Claims")  incurred in investigating, preparing or
                               ------
defending  any action, claim, suit, inquiry, proceeding, investigation or appeal
taken  from the foregoing by or before any court or governmental, administrative
or  other  regulatory  agency,  body  or the SEC, whether pending or threatened,
whether  or  not  an  indemnified  party  is  or  may  be  a  party thereto (the
"Indemnified  Damages"), to which any of them may become subject insofar as such
 --------------------
Claims  (or  actions or proceedings, whether commenced or threatened, in respect
thereof)  arise  out  of  or are based upon: (i) any untrue statement or alleged
untrue  statement  of  a  material  fact  in  a  Registration  Statement  or any
post-effective  amendment  thereto  or in any filing made in connection with the
qualification  of  the offering under the securities or other "blue sky" laws of
any  jurisdiction  in  which  Registrable  Securities are offered (the "Blue Sky
                                                                        --------
Filing"),  or the omission or alleged omission to state a material fact required
------
to be stated therein or necessary to make the statements therein not misleading;
(ii)  any  untrue  statement  or  alleged  untrue  statement  of a material fact
contained  in  any  final prospectus (as amended or supplemented, if the Company
files  any amendment thereof or supplement thereto with the SEC) or the omission
or  alleged  omission  to  state therein any material fact necessary to make the
statements  made  therein,  in  light  of  the  circumstances  under  which  the
statements  therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including,  without  limitation,  any  state  securities  law,  or  any  rule or
regulation  there  under  relating  to  the  offer  or  sale  of the Registrable
Securities  pursuant  to  a Registration Statement (the matters in the foregoing
clauses  (i)  through (iii) (collectively, the "Violations").  The Company shall
                                                ----------
reimburse  the  Investor  and  each  such  controlling  person  promptly as such
expenses  are  incurred  and  are  due  and  payable,  for  any  legal  fees  or
disbursements  or  other reasonable expenses incurred by them in connection with
investigating  or  defending  any  such  Claim.  Notwithstanding anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section  6(a):  (1)  shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with  information furnished in writing to the Company by such Indemnified Person
expressly  for  use  in  connection  with  the  preparation  of the Registration
Statement  or any such amendment thereof or supplement thereto; (2) shall not be
available  to  the  extent  such  Claim is based on a failure of the Investor to
deliver  or  to  cause  to  be  delivered  the  prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(c), and (3) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full  force  and  effect regardless of any investigation made by or on behalf of
the  Indemnified  Person  and  shall  survive  the  transfer  of the Registrable
Securities  by  the  Investor  pursuant  to  Section  9  hereof.

          (b)       In  connection  with  a Registration Statement, the Investor
agrees  to  indemnify,  hold  harmless and defend, to the same extent and in the
same manner as is set forth in Section 6(a), the Company, each of its directors,
each  of its officers, employees, representatives, or agents and each Person, if
any,  who  controls  the Company within the meaning of the Securities Act or the
Exchange  Act  (each  an  "Indemnified Party"), against any Claim or Indemnified
                           -----------------
Damages  to  which any of them may become subject, under the Securities Act, the
Exchange  Act  or  otherwise, insofar as such Claim or Indemnified Damages arise
out  of  or is based upon any Violation, in each case to the extent, and only to
the  extent,  that such Violation occurs in reliance upon and in conformity with
written  information furnished to the Company by such Investor expressly for use
in  connection  with  such Registration Statement; and, subject to Section 6(d),
such  Investor will reimburse any legal or other expenses reasonably incurred by
them  in  connection  with  investigating or defending any such Claim; provided,
however,  that  the  indemnity  agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts  paid  in settlement of any Claim if such settlement is effected without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably  withheld;  provided,  further, however, that the Investor shall be
liable  under  this  Section 6(b) for only that amount of a Claim or Indemnified
Damages  as does not exceed the net proceeds to such Investor as a result of the
sale  of  Registrable  Securities  pursuant  to  such  Registration

                                      - 6 -
<PAGE>
Statement.  Such  indemnity  shall remain in full force and effect regardless of
any  investigation  made  by  or  on  behalf of such Indemnified Party and shall
survive  the  transfer of the Registrable Securities by the Investor pursuant to
Section  9.  Notwithstanding  anything  to  the  contrary  contained herein, the
indemnification  agreement  contained  in  this Section 6(b) with respect to any
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the prospectus was corrected
and  such new prospectus was delivered to each Investor prior to such Investor's
use  of  the  prospectus  to  which  the  Claim  relates.

          (c)       Promptly  after  receipt  by  an  Indemnified  Person  or
Indemnified  Party  under  this  Section  6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a  Claim,  such  Indemnified  Person  or  Indemnified Party shall, if a Claim in
respect  thereof is to be made against any indemnifying party under this Section
6,  deliver  to  the  indemnifying  party  a  written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to  the  extent  the  indemnifying  party  so  desires,  jointly  with any other
indemnifying  party  similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person  or the Indemnified Party, as the case may be; provided, however, that an
Indemnified  Person  or Indemnified Party shall have the right to retain its own
counsel  with  the  fees  and expenses of not more than one (1) counsel for such
Indemnified  Person  or  Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by  such  counsel of the Indemnified Person or Indemnified Party
and  the  indemnifying  party  would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other  party  represented  by  such counsel in such proceeding.  The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with  any  negotiation or defense of any such action or claim by the
indemnifying  party  and shall furnish to the indemnifying party all information
reasonably  available  to  the  Indemnified  Party  or  Indemnified Person which
relates  to  such  action  or  claim.  The  indemnifying  party  shall  keep the
Indemnified  Party  or  Indemnified Person fully apprised at all times as to the
status  of  the defense or any settlement negotiations with respect thereto.  No
indemnifying  party  shall  be liable for any settlement of any action, claim or
proceeding  effected  without its prior written consent; provided, however, that
the  indemnifying  party shall not unreasonably withhold, delay or condition its
consent.  No  indemnifying party shall, without the prior written consent of the
Indemnified  Party  or  Indemnified  Person, consent to entry of any judgment or
enter  into  any  settlement  or  other  compromise which does not include as an
unconditional  term  thereof  the  giving  by  the claimant or plaintiff to such
Indemnified  Party  or  Indemnified  Person  of  a release from all liability in
respect  to such claim or litigation.  Following indemnification as provided for
hereunder,  the  indemnifying  party  shall  be  subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or  corporations relating to the matter for which indemnification has been made.
The  failure  to  deliver  written  notice  to  the  indemnifying party within a
reasonable  time  of  the commencement of any such action shall not relieve such
indemnifying  party  of  any  liability to the Indemnified Person or Indemnified
Party  under this Section 6, except to the extent that the indemnifying party is
prejudiced  in  its  ability  to  defend  such  action.

          (d)       The indemnification required by this Section 6 shall be made
by  periodic  payments  of  the  amount  thereof  during  the  course  of  the
investigation  or defense, as and when bills are received or Indemnified Damages
are  incurred.

          (e)       The  indemnity  agreements  contained  herein  shall  be  in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified  Person  against  the  indemnifying  party  or  others, and (ii) any
liabilities  the  indemnifying  party  may  be  subject  to pursuant to the law.

     7.        CONTRIBUTION.
               ------------

     To the extent any indemnification by an indemnifying party is prohibited or
limited  by  law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no seller
of  Registrable  Securities  guilty  of fraudulent misrepresentation (within the
meaning  of  Section  11(f)  of  the  Securities  Act)  shall  be  entitled  to
contribution  from  any  seller  of Registrable Securities who was not guilty of
fraudulent misrepresentation, and (ii) contribution by any seller of Registrable
Securities  shall be limited in amount to the net amount of proceeds received by
such  seller  from  the  sale  of  such  Registrable  Securities.

                                      - 7 -
<PAGE>
     8.        REPORTS  UNDER  THE  EXHANGE  ACT.
               ---------------------------------

     With  a  view  to making available to the Investor the benefits of Rule 144
promulgated  under  the  Securities Act or any similar rule or regulation of the
SEC  that  may at any time permit the Investor to sell securities of the Company
to  the  public  without  registration  ("Rule  144")  the  Company  agrees  to:
                                          ---------

          (a)       make  and  keep public information available, as those terms
are  understood  and  defined  in  Rule  144;

          (b)       file  with  the SEC in a timely manner all reports and other
documents  required of the Company under the Securities Act and the Exchange Act
so long as the Company remains subject to such requirements (it being understood
that  nothing herein shall limit the Company's obligations under Section 4(c) of
the  Securities  Purchase  Agreement)  and  the filing of such reports and other
documents  as  are  required  by  the  applicable  provisions  of  Rule 144, and

          (c)       furnish  to  each  Investor  so  long  as such Investor owns
Registrable  Securities,  promptly  upon request, (i) a written statement by the
Company  that  it  has complied with the reporting requirements of Rule 144, the
Securities  Act  and  the Exchange Act; (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the  Company, and (iii) such other information as may be reasonably requested to
permit  the  Investor  to  sell  such  securities  pursuant  to Rule 144 without
registration.

     9.        AMENDMENT  OF  REGISTRATION  RIGHTS.
               -----------------------------------

     Provisions  of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or  prospectively),  only  with the written consent of the Company and Investor.
Any  amendment  or  waiver  effected  in accordance with this Section 9 shall be
binding  upon  each  Investor  and  the  Company.  No  such  amendment  shall be
effective  to the extent that it applies to fewer than all of the holders of the
Registrable Securities.  No consideration shall be offered or paid to any Person
to  amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this  Agreement.

     10.       MISCELLANEOUS.
               -------------

          (a)       A  Person is deemed to be a holder of Registrable Securities
whenever  such  Person  owns  or  is  deemed  to  own of record such Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two  (2)  or  more Persons with respect to the same Registrable
Securities,  the  Company  shall  act  upon the basis of instructions, notice or
election  received  from  the  registered  owner of such Registrable Securities.

          (b)       Any  notices,  consents,  waivers  or  other  communications
required  or  permitted to be given under the terms of this Agreement must be in
writing  and  will  be  deemed  to  have  been delivered: (i) upon receipt, when
delivered  personally;  (ii)  upon  receipt,  when  sent  by facsimile (provided
confirmation  of  transmission  is  mechanically or electronically generated and
kept  on file by the sending party), or (iii) one (1) business day after deposit
with  a  nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same.  The addresses and facsimile numbers
for  such  communications  shall  be:

                                      - 8 -
<PAGE>
If to the Company, to:                 Charys Holding Company Inc.
                                       1117 Perimeter Center West, Suite N415
                                       Atlanta, Georgia 30338
                                       Attention: Billy Ray, Jr.
                                       Telephone: (678) 443-2300
                                       Facsimile: (678) 443-2320

With a copy to:                        Michael Brenner
                                       Attorney at Law
                                       1643 North Harrison Parkway
                                       Sunrise, Florida 33323
                                       Telephone: (954) 838-6251
                                       Facsimile: (954) 838-6844

If to the Escrow Agent                 Glast, Phillips & Murray, P.C.
 and with all copies to:               815 Walker Street, Suite 1250
                                       Houston, Texas 77002
                                       Attention: Norman T. Reynolds, Esq.
                                       Telephone: (713) 237-3135
                                       Facsimile: (713) 237-3202
                                       Email: nreynolds@gpm-law.com

If to the Investor, to:                Preferred Employers Holdings, Inc.
                                       10800 Biscayne Boulevard, Miami, FL 33161
                                       attention Donald J. Bezahler, Esq.,
                                       Email: dbezahler@pegi.net,

                                       Attention:
                                       Telephone:
                                       Facsimile:

Written  confirmation  of  receipt  (A)  given  by the recipient of such notice,
consent,  waiver  or  other  communication;  (B)  mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and  an  image of the first page of such transmission, or (C)
provided  by a courier or overnight courier service shall be rebuttable evidence
of  personal  service,  receipt  by  facsimile  or  receipt  from  a  nationally
recognized  overnight  delivery  service  in accordance with clause (i), (ii) or
(iii)  above,  respectively.

          (c)       Failure  of  any party to exercise any right or remedy under
this  Agreement  or  otherwise,  or delay by a party in exercising such right or
remedy,  shall  not  operate  as  a  waiver  thereof.

          (d)       The  parties  hereto  acknowledge  that  the  transactions
contemplated  by  this  Agreement  and  the  exhibits  hereto  bear a reasonable
relation  to  the  State of Florida.  The parties hereto agree that the internal
laws  of  the  State  of  Florida  shall  govern this Agreement and the exhibits
hereto,  including, but not limited to, all issues related to usury.  Any action
to  enforce  the terms of this Agreement or any of its exhibits shall be brought
exclusively  in the state and/or federal courts situated in the County and State
of  Florida.  Each  party  hereby irrevocably waives personal service of process
and  consents  to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service  of  process  and  notice  thereof.  Nothing  contained

                                      - 9 -
<PAGE>
herein  shall  be  deemed  to limit in any way any right to serve process in any
manner permitted by law.  If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or  the  validity  or  enforceability  of  any  provision  of this
Agreement  in  any other jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT  IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF  ANY  DISPUTE  HEREUNDER  OR  IN  CONNECTION  HEREWITH OR ARISING OUT OF THIS
AGREEMENT  OR  ANY  TRANSACTION  CONTEMPLATED  HEREBY.

          (e)       This Agreement, the Irrevocable Transfer Agent Instructions,
the  Securities  Purchase  Agreement  and  related  documents  including  the
Convertible  Debenture,  the  Stock  Pledge  Agreement, the Warrants, the Escrow
Shares  Escrow Agreement, and the Security Agreement, all dated the date hereof,
constitute  the  entire  agreement  among the parties hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This  Agreement,  the  Irrevocable  Transfer  Agent  Instructions, the
Securities  Purchase  Agreement  and related documents including the Convertible
Debenture,  the  Warrants,  the Escrow Shares Escrow Agreement, the Stock Pledge
Agreement,  and  the  Security  Agreement  supersede  all  prior  agreements and
understandings  among  the  parties  hereto  with  respect to the subject matter
hereof  and  thereof.

          (f)       This  Agreement shall inure to the benefit of and be binding
upon  the  permitted  successors  and  assigns  of  each  of the parties hereto.

          (g)       The  headings  in  this  Agreement  are  for  convenience of
reference  only  and  shall  not  limit  or otherwise affect the meaning hereof.

          (h)       This  Agreement  may  be executed in identical counterparts,
each  of which shall be deemed an original but all of which shall constitute one
and  the  same  agreement.  This  Agreement,  once  executed  by a party, may be
delivered  to the other party hereto by facsimile transmission of a copy of this
Agreement  bearing  the  signature  of  the  party so delivering this Agreement.

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

The  language used in this Agreement will be deemed to be the language chosen by
the  parties  to express their mutual intent and no rules of strict construction
will  be  applied  against  any  party.

          (j)       This  Agreement  is  intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit  of,  nor  may  any  provision  hereof be enforced by, any other Person.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 10 -
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  have caused this Investor Registration
Rights  Agreement  to  be  duly executed as of day and year first above written.

                                   COMPANY:
                                   CHARYS HOLDING COMPANY INC.

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

                                   ---------------------------------------------
                                   SECURED PARTY:

                                   ---------------------------------------------
                                   MEL HARRIS

                                   ---------------------------------------------
                                   STEVE POSNER

                                     - 11 -
<PAGE>
                                    EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT
                            -------------------------

Attention:

     Re:     CHARYS HOLDING COMPANY INC.

Ladies and Gentlemen:

     We  are counsel to Charys Holding Company Inc., a Delaware corporation (the
"Company"),  and  have  represented  the Company in connection with that certain
 -------
Securities  Purchase  Agreement  (the  "Securities Purchase Agreement"), entered
                                        -----------------------------
into  by  and among the Company and the Investor named therein (the "Investor"),
                                                                     --------
pursuant to which the Company issued to the Investor shares of its Common Stock,
par  value  $0.001  per  share  (the  "Common Stock").  Pursuant to the Purchase
                                       ------------
Agreement,  the  Company  also  has entered into a Registration Rights Agreement
with  the  Investor  (the  "Investor Registration Rights Agreement") pursuant to
                            --------------------------------------
which  the  Company  agreed,  among  other  things,  to register the Registrable
Securities  (as  defined  in  the  Registration  Rights  Agreement)  under  the
Securities  Act  of 1933, as amended (the "Securities Act").  In connection with
                                           --------------
the  Company's  obligations  under  the  Registration  Rights  Agreement,  on
____________  ____,  the Company filed a Registration Statement on Form ________
(File  No. 333-_____________) (the "Registration Statement") with the Securities
                                    ----------------------
and  Exchange SEC (the "SEC") relating to the Registrable Securities which names
                        ---
each  of  the  Investor  as  a  selling  stockholder  there  under.

     In  connection with the foregoing, we advise you that a member of the SEC's
staff  has  advised  us by telephone that the SEC has entered an order declaring
the  Registration Statement effective under the Securities Act at [ENTER TIME OF
EFFECTIVENESS]  on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic  inquiry  of  a  member  of  the  SEC's  staff,  that  any stop order
suspending  its  effectiveness  has been issued or that any proceedings for that
purpose  are  pending  before,  or  threatened  by,  the SEC and the Registrable
Securities  are  available  for  resale under the Securities Act pursuant to the
Registration  Statement.

                                       Very truly yours,

                                       [LAW FIRM]

                                       By:
                                          ---------------------------------

cc:     Mr. Billy V. Ray, Jr.
        Mr. Mel Harris
        Mr. Steven Posner

<PAGE>
                                    EXHIBIT B

                               SECURITY AGREEMENT
                               ------------------

     THIS  SECURITY  AGREEMENT  (the  "Agreement"),  is  entered  into  and made
                                       ---------
effective  as of December ___, 2005, by and between CHARYS HOLDING COMPANY INC.,
a  Delaware  corporation  (the "Company"), METHOD IQ, INC. a Georgia corporation
                                -------
(the "Subsidiary," and, together with the Company, the "Debtors") and MEL HARRIS
      ----------                                        -------
AND  STEVEN  POSNER,  OR  THEIR  DESIGNEES  (collectively, the "Secured Party").
                                                                -------------

     WHEREAS, the Company shall issue and sell to the Secured Party, as provided
in  the  Securities  Purchase  Agreement, dated the date hereof (the "Securities
                                                                      ----------
Purchase  Agreement"), and the Secured Party shall purchase a $1,000,000 secured
-------------------
convertible  debenture  (the  "Convertible  Debenture"),  all  of which shall be
                               ----------------------
convertible  into  shares  of  the Company's common stock, par value $0.001 (the
"Common  Stock")  (as  converted,  the  "Conversion  Shares");  and
 -------------                           ------------------

     WHEREAS,  for  good and valuable consideration, the receipt and sufficiency
of  which  is  hereby  acknowledged,  the  Subsidiary has agreed to execute this
Agreement;  and

     WHEREAS,  to  induce  the  Secured  Party  to  enter  into  the transaction
contemplated  by  the  Securities Purchase Agreement, the Convertible Debenture,
the Warrants, the Registration Rights Agreement, the Stock Pledge Agreement, the
Escrow  Shares  Agreement,  and the Irrevocable Transfer Agent Instructions (all
dated  the  date  hereof  and  collectively  referred  to  as  the  "Transaction
                                                                     -----------
Documents"),  the  Debtors hereby grant to the Secured Party a security interest
---------
in  and  to the pledged property identified on Exhibit "A" hereto (collectively,
                                               -----------
the  "Pledged  Property")  until the satisfaction of the Obligations, as defined
      -----------------
herein  below;

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
herein  contained,  and  for other good and valuable consideration, the adequacy
and receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                   ARTICLE 1.

                         DEFINITIONS AND INTERPRETATIONS
                         -------------------------------

     Section 1.1.     Recitals.
                      --------

     The  above  recitals  are  true and correct and are incorporated herein, in
their  entirety,  by  this  reference.

     Section 1.2.     Interpretations.
                      ---------------

     Nothing  herein  expressed  or implied is intended or shall be construed to
confer  upon  any person other than the Secured Party any right, remedy or claim
under  or  by  reason  hereof.

     Section  1.3.     Definitions.
                       -----------

     Capitalized  terms  not  otherwise  defined  herein shall have the meanings
ascribed  to  such  terms  in  the  Securities  Purchase  Agreement.

     Section 1.4.     Obligations Secured.
                      -------------------

     The  obligations  secured hereby are any and all obligations of the Company
now  existing or hereinafter incurred to the Secured Party, under the Securities
Purchase  Agreement,  the  Convertible Debenture, the Warrants, the Registration
Rights  Agreement,  the Stock Pledge Agreement, the Escrow Shares Agreement, and
the  Irrevocable  Transfer  Agent  Instructions (as to the obligation to deliver
Escrow  Shares underlying Conversion Shares upon delivery of a Conversion Notice
only)  (collectively,  the  "Obligations").
                             -----------

                                      - 1 -
<PAGE>
                                   ARTICLE 2.

                PLEDGED COLLATERAL, ADMINISTRATION OF COLLATERAL
                ------------------------------------------------
                      AND TERMINATION OF SECURITY INTEREST
                      ------------------------------------

     Section 2.1.     Pledged Property.
                      ----------------

          (a)     The  Debtors hereby pledge to the Secured Party, and create in
the  Secured  Party  for  its  benefit, a security interest in and to all of the
Pledged  Property  for  such time until the Obligations are paid in full subject
only  to  the  existing security interests held by other parties in such Pledged
Property  as  set  forth  in  Exhibit  "A" attached hereto.  Notwithstanding the
                              ------------
foregoing,  the  security  interest  granted  pursuant  to  this Agreement shall
terminate  immediately  in  the  event the Company redeems, or the Secured Party
shall  have  converted,  all  amounts  due  under  the  Convertible  Debenture.

     The  Pledged Property, as set forth in Exhibit "A" attached hereto, and the
                                            -----------
products thereof and the proceeds of all such items are hereinafter collectively
referred  to  as  the  "Pledged  Collateral."
                        -------------------

          (b)     Simultaneously  with  the  execution  and  delivery  of  this
Agreement,  the  Debtors  shall  make,  execute,  acknowledge,  file, record and
deliver  to  the Secured Party any documents reasonably requested by the Secured
Party  to perfect its security interest in the Pledged Property.  Simultaneously
with  the  execution  and  delivery  of  this Agreement, the Debtors shall make,
execute,  acknowledge  and  deliver  to  the  Secured  Party  such documents and
instruments,  including, without limitation, financing statements, certificates,
affidavits  and  forms  as  may,  in the Secured Party's reasonable judgment, be
necessary  to  effectuate, complete or perfect, or to continue and preserve, the
security  interest of the Secured Party in the Pledged Property, and the Secured
Party shall hold such documents and instruments as secured party, subject to the
terms  and  conditions  contained  herein.

     Section 2.2.     Rights; Interests; Etc.
                      -----------------------

          (a)     So  long as no Event of Default (as hereinafter defined) shall
have  occurred  and  be  continuing:

               (i)     each of the Debtors shall be entitled to exercise any and
all  rights  pertaining  to  the  Pledged  Property  or any part thereof for any
purpose  not  inconsistent  with  the  terms  hereof,  and

               (ii)     each  of  the  Debtors  shall be entitled to receive and
retain  any  and  all  payments paid or made in respect of the Pledged Property.

          (b)     Upon  the occurrence and during the continuance of an Event of
Default:

               (i)     All  rights of each of the Debtors to exercise the rights
which  it  would otherwise be entitled to exercise pursuant to Section 2.2(a)(i)
hereof and to receive payments which it would otherwise be authorized to receive
and  retain  pursuant  to  Section 2.2(a)(ii) hereof shall be suspended, and all
such  rights  shall  thereupon  become  vested  in  the  Secured Party who shall
thereupon have the sole right to exercise such rights and to receive and hold as
Pledged  Collateral  such payments; provided, however, that if the Secured Party
shall  become  entitled  and shall elect to exercise its right to realize on the
Pledged  Collateral pursuant to Article 5 hereof, then all cash sums received by
the  Secured  Party, or held by the Debtors for the benefit of the Secured Party
and  paid  over  pursuant to Section 2.2(b)(ii) hereof, shall be applied against
any  outstanding  Obligations;

               (ii)     All  interest,  dividends, income and other payments and
distributions  which  are  received by the Debtors contrary to the provisions of
Section  2.2(b)(i)  hereof  shall  be  received  in trust for the benefit of the
Secured  Party, shall be segregated from other property of the Debtors and shall
be  forthwith  paid  over  to  the  Secured  Party,  and

               (iii)     The  Secured  Party  in  its  sole  discretion shall be
authorized  to sell any or all of the Pledged Property at public or private sale
in  order  to recoup all of the outstanding principal plus accrued interest owed
pursuant  to  the  Convertible  Debenture  as  described  herein.

                                        2
<PAGE>
          (c)     Each  of the following events shall constitute a default under
this  Agreement  (an  "Event  of  Default"):
                       ------------------

               (i)     any  default, whether in whole or in part, shall occur in
the  payment to the Secured Party of principal or interest under the Convertible
Debenture  or  other  item  comprising  the  Obligations as and when due or with
respect to any other debt or obligation of the Company to a party other than the
Secured  Party;

               (ii)     any default, whether in whole or in part, shall occur in
the  due  observance or performance of any obligations or other covenants, terms
or  provisions  to  be  performed  under this Agreement, the Securities Purchase
Agreement  or  the  Convertible  Debenture;

               (iii)     each  of  the  Debtors  shall:  (1)  make  a  general
assignment  for  the  benefit  of its creditors; (2) apply for or consent to the
appointment  of  a  receiver,  trustee,  assignee,  custodian,  sequestrator,
liquidator  or  similar official for itself or any of its assets and properties;
(3)  commence  a  voluntary  case for relief as a debtor under the United States
Bankruptcy Code; (4) file with or otherwise submit to any governmental authority
any  petition,  answer  or  other  document seeking:  (A) reorganization; (B) an
arrangement  with  creditors,  or  (C) to take advantage of any other present or
future  applicable  law  respecting  bankruptcy,  reorganization,  insolvency,
readjustment  of  debts, relief of debtors, dissolution or liquidation; (5) file
or otherwise submit any answer or other document admitting or failing to contest
the  material  allegations  of  a  petition or other document filed or otherwise
submitted  against it in any proceeding under any such applicable law, or (6) be
adjudicated  a  bankrupt  or  insolvent  by  a  court of competent jurisdiction;

               (iv)     any  case, proceeding or other action shall be commenced
against  the  Debtors  for  the  purpose  of effecting, or an order, judgment or
decree  shall  be  entered  by any court of competent jurisdiction approving (in
whole  or  in  part)  anything  specified  in Section 2.2(c)(iii) hereof, or any
receiver,  trustee,  assignee,  custodian,  sequestrator,  liquidator  or  other
official  shall  be appointed with respect to the Debtors, or shall be appointed
to take or shall otherwise acquire possession or control of all or a substantial
part of the assets and properties of the Debtors, and any of the foregoing shall
continue unstayed and in effect for any period of one hundred twenty (120) days;

               (v)     any  material  obligation  of  Debtors  (other  than  its
Obligations  under this Agreement) for the payment of borrowed money is not paid
when due or within any applicable grace period, or such obligation becomes or is
declared  to be due and payable before the expressed maturity of the obligation,
or  there  shall have occurred an event that, with the giving of notice or lapse
of  time,  or both, would cause any such obligation to become, or allow any such
obligation  to  be declared to be, due and payable before the expressed maturity
date  of  the  obligation  (other  than  the  default  disclosed in Section 6.11
hereof),  or

               (vi)     a  breach  by  the Debtors of any material contract that
would  have  a  Material Adverse Effect (as defined in Section 6.1 below) (other
than  the  default  disclosed  in  Section  6.11  hereof).

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE
                          -----------------------------

     Section 3.1.     Secured Party Appointed Attorney-In-Fact.
                      ----------------------------------------

     Upon  the occurrence of an Event of Default, the Debtors hereby appoint the
Secured  Party  as  its  attorney-in-fact,  with full authority in the place and
stead  of  the Debtors and in the name of the Debtors or otherwise, from time to
time  in  the  Secured  Party's discretion to take any action and to execute any
instrument  which  the Secured Party may reasonably deem necessary to accomplish
the  purposes  of  this Agreement, including, without limitation, to receive and
collect all instruments made payable to the Company representing any payments in
respect of the Pledged Collateral or any part thereof and to give full discharge
for  the  same.  The  Secured  Party  may  demand, collect, receipt for, settle,
compromise,  adjust,  sue  for, foreclose, or realize on the Pledged Property as
and when the Secured Party may determine.  To facilitate collection, the Secured
Party may notify account debtors and obligors on any Pledged Property or Pledged
Collateral  to  make  payments  directly  to  the  Secured  Party.

                                        3
<PAGE>
     Section 3.2.     Secured Party May Perform.
                      -------------------------

     If  any  of the Debtors fail to perform any agreement contained herein, the
Secured  Party, at its option, may itself perform, or cause performance of, such
agreement,  and  the  expenses  of  the  Secured  Party  incurred  in connection
therewith shall be included in the Obligations secured hereby and payable by the
Company  under  Section  8.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     Section 4.1.     Authorization; Enforceability.
                      -----------------------------

     Each  of  the  parties hereto represents and warrants that it has taken all
action  necessary  to  authorize the execution, delivery and performance of this
Agreement  and  the  transactions  contemplated  hereby;  and upon execution and
delivery,  this Agreement shall constitute a valid and binding obligation of the
respective  party, subject to applicable bankruptcy, insolvency, reorganization,
moratorium  and  similar  laws  affecting creditors' rights or by the principles
governing  the  availability  of  equitable  remedies.

     Section 4.2.     Ownership of Pledged Property.
                      -----------------------------

     Each  of  the  Debtors  warrants  and  represents  that it is the legal and
beneficial  owner  of  the Pledged Property free and clear of any lien, security
interest, option or other charge or encumbrance except for the security interest
created  by  this  Agreement  or  otherwise  set  forth  on  Exhibit  "A".
                                                             ------------

                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
                    ----------------------------------------

     Section 5.1.     Default and Remedies.
                      --------------------

          (a)     If an Event of Default described in Section 2.2(c)(i) and (ii)
occurs,  then in each such case the Secured Party may declare the Obligations to
be  due and payable immediately, by a notice in writing to the Debtors, and upon
any  such declaration, the Obligations shall become immediately due and payable.
If an Event of Default described in Sections 2.2(c)(iii) through (vi) occurs and
is  continuing  for  the  period  set  forth therein, then the Obligations shall
automatically  become  immediately  due and payable without declaration or other
act  on  the  part  of  the  Secured  Party.

          (b)     Upon  the occurrence of an Event of Default, the Secured Party
shall  be entitled: (i) to receive all distributions with respect to the Pledged
Collateral,  (ii)  to cause the Pledged Property to be transferred into the name
of  the  Secured Party or its nominee, (iii) to dispose of the Pledged Property,
and (iv) to realize upon any and all rights in the Pledged Property then held by
the  Secured  Party.

     Section 5.2.     Method of Realizing Upon the Pledged Property: Other
                      ----------------------------------------------------
Remedies.
--------

     Upon  the  occurrence of an Event of Default, in addition to any rights and
remedies  available  at  law or in equity, the following provisions shall govern
the  Secured  Party's  right  to  realize  upon  the  Pledged  Property:

          (a)     Any item of the Pledged Property may be sold for cash or other
value in any number of lots at brokers board, public auction or private sale and
may  be  sold  without  demand, advertisement or notice (except that the Secured
Party  shall  give the related Debtor ten (10) days' prior written notice of the
time  and place or of the time after which a private sale may be made (the "Sale
                                                                            ----
Notice")),  which  notice period is hereby agreed to be commercially reasonable.
------
At  any  sale  or sales of the Pledged Property, the relevant Debtor may bid for
and  purchase the whole or any part of the Pledged Property and, upon compliance
with  the  terms of such sale, may hold, exploit and dispose of the same without
further  accountability  to  the  Secured  Party.  The  Debtors will execute and
deliver,  or  cause  to  be executed and delivered, such instruments, documents,
assignments,  waivers,  certificates,  and

                                        4
<PAGE>
affidavits  and supply or cause to be supplied such further information and take
such  further action as the Secured Party reasonably shall require in connection
with  any  such  sale.

          (b)     Any cash being held by the Secured Party as Pledged Collateral
and  all  cash  proceeds  received  by the Secured Party in respect of, sale of,
collection  from,  or  other  realization  upon  all  or any part of the Pledged
Collateral  shall  be  applied  as  follows:

               (i)     to  the  payment of all amounts due the Secured Party for
the  expenses reimbursable to it hereunder or owed to it pursuant to Section 8.3
hereof;

               (ii)     to  the  payment of the Obligations then due and unpaid.

               (iii)     the  balance, if any, to the person or persons entitled
thereto,  including,  without  limitation,  the  Debtors.

          (c)     In  addition  to  all  of  the  rights  and remedies which the
Secured  Party may have pursuant to this Agreement, the Secured Party shall have
all  of  the rights and remedies provided by law, including, without limitation,
those  under  the  Uniform  Commercial  Code.

               (i)     If the relevant Debtor fails to pay such amounts due upon
the  occurrence  of  an  Event  of Default which is continuing, then the Secured
Party  may institute a judicial proceeding for the collection of the sums so due
and  unpaid,  may  prosecute such proceeding to judgment or final decree and may
enforce  the same against such Debtor and collect the monies adjudged or decreed
to  be  payable in the manner provided by law out of the property of the Debtor,
wherever  situated.

               (ii)     The  Debtors  agree  that  they  shall be liable for any
reasonable  fees, expenses and costs incurred by the Secured Party in connection
with  enforcement,  collection  and  preservation of the obligations, including,
without  limitation,  reasonable legal fees and expenses, and such amounts shall
be  deemed  included  as  Obligations secured hereby and payable as set forth in
Section  8.3  hereof.

     Section 5.3.     Proofs of Claim.
                      ---------------

          In  case of the pendency of any receivership, insolvency, liquidation,
bankruptcy,  reorganization,  arrangement,  adjustment,  composition  or  other
judicial proceeding relating to the Debtors or the property of the Debtors or of
such  other obligor or its creditors, the Secured Party (irrespective of whether
the  Obligations  shall  then  be  due  and  payable  as therein expressed or by
declaration  or  otherwise  and  irrespective of whether the Secured Party shall
have  made  any demand on the Debtors for the payment of the Obligations), shall
be  entitled  and  empowered,  by  intervention in such proceeding or otherwise:

               (i)     to  file  and  prove  a claim for the whole amount of the
Obligations  and  to  file such other papers or documents as may be necessary or
advisable  in order to have the claims of the Secured Party (including any claim
for  the  reasonable legal fees and expenses and other expenses paid or incurred
by  the  Secured  Party  permitted hereunder and of the Secured Party allowed in
such  judicial  proceeding),  and

               (ii)     to  collect  and  receive  any  monies or other property
payable  or  deliverable  on any such claims and to distribute the same; and any
custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator  or  other
similar  official  in  any  such judicial proceeding is hereby authorized by the
Secured  Party to make such payments to the Secured Party and, in the event that
the  Secured  Party shall consent to the making of such payments directed to the
Secured  Party,  to  pay  to  the  Secured Party any amounts for expenses due it
hereunder.

     Section 5.4.     Duties Regarding Pledged Collateral.
                      -----------------------------------

     The  Secured Party shall have no duty as to the collection or protection of
the  Pledged  Property  or  any  income thereon or as to the preservation of any
rights pertaining thereto, beyond the safe custody and reasonable care of any of
the  Pledged  Property  actually  in  the  Secured  Party's  possession.

                                        5
<PAGE>
                                   ARTICLE 6.

                              AFFIRMATIVE COVENANTS
                              ---------------------

     The  Debtors  covenant  and  agree that, from the date hereof and until the
Obligations have been fully paid and satisfied or this Agreement shall otherwise
terminate,  unless  the  Secured  Party  shall  consent otherwise in writing (as
provided  in  Section  8.4  hereof):

     Section 6.1.     Existence, Properties, Etc.
                      ---------------------------

          (a)     Each of the Debtors shall do, or cause to be done, all things,
or proceed with due diligence with any actions or courses of action, that may be
reasonably  necessary  (i)  to  maintain  each of the Debtor's due organization,
valid  existence and good standing under the laws of its state of incorporation,
and  (ii)  to  preserve  and  keep  in full force and effect all qualifications,
licenses  and registrations in those jurisdictions in which the failure to do so
could  have  a  Material  Adverse Effect (as defined below), and (b) the Debtors
shall  not  do,  or  cause  to be done, any act impairing the Debtor's corporate
power  or  authority (i) to carry on the Debtor's business as now conducted, and
(ii)  to  execute  or  deliver this Agreement or any other document delivered in
connection  herewith,  including,  without  limitation,  any  UCC-1  Financing
Statements  required  by  the  Secured  Party  (which  other  loan  instruments
collectively  shall be referred as "Loan Instruments") to which it is or will be
                                    ----------------
a party, or perform any of its obligations hereunder or thereunder.  For purpose
of  this  Agreement,  the term "Material Adverse Effect" shall mean any material
                                -----------------------
and  adverse  effect  as  determined  by  Secured  Party in its sole discretion,
whether  individually  or  in  the  aggregate,  upon  (a)  the  Debtor's assets,
business,  operations,  properties or condition, financial or otherwise; (b) the
Debtor's  to make payment as and when due of all or any part of the Obligations,
or  (c)  the  Pledged  Property.

     Section 6.2.     Financial Statements and Reports.
                      --------------------------------

     The  Company  shall  furnish  to the Secured Party within a reasonable time
such  financial  data  as  the  Secured Party may reasonably request, including,
without  limitation,  the  following:

          (a)     The  balance  sheet  of  the  Company  as of the close of each
fiscal  year,  the statement of earnings and retained earnings of the Company as
of  the  close  of such fiscal year, and statement of cash flows for the Company
for  such  fiscal  year,  all  in reasonable detail, prepared in accordance with
generally  accepted accounting principles consistently applied, certified by the
chief  executive  and  chief financial officers of the Company as being true and
correct  and  accompanied  by  a  certificate  of  the chief executive and chief
financial  officers of the Company, stating that the Company has kept, observed,
performed  and  fulfilled  each  covenant,  term and condition of this Agreement
during  such fiscal year and that no Event of Default hereunder has occurred and
is  continuing,  or  if  an  Event  of  Default  has occurred and is continuing,
specifying  the  nature  of same, the period of existence of same and the action
the  Company  proposes  to  take  in  connection  therewith;

          (b)     A  balance sheet of the Company as of the close of each month,
and  statement  of earnings and retained earnings of the Company as of the close
of  such  month,  all  in  reasonable  detail,  and  prepared  substantially  in
accordance  with  generally accepted accounting principles consistently applied,
certified  by the chief executive and chief financial officers of the Company as
being  true  and  correct,  and

          (c)     Copies  of all accountants' reports and accompanying financial
reports  submitted  to the Company by independent accountants in connection with
each  annual  examination  of  the  Company.

     Section 6.3.     Accounts and Reports.
                      --------------------

     The  Company  shall  maintain a standard system of accounting in accordance
with  generally accepted accounting principles consistently applied and provide,
at  its  sole  expense,  to  the  Secured  Party  the  following:

          (a)     as  soon  as  available,  a  copy  of  any  notice  or  other
communication  received  by  any of the Debtors alleging any nonpayment or other
material  breach  or  default, or any foreclosure or other action respecting any
material  portion  of  its  assets  and  properties,  respecting  any  of  the
indebtedness  of  the  Debtors  in  excess  of

                                        6
<PAGE>
$50,000 (other than the Obligations), or any demand or other request for payment
under  any  guaranty,  assumption,  purchase  agreement  or similar agreement or
arrangement  respecting  the  indebtedness or obligations of others in excess of
$50,000,  including any received from any person acting on behalf of the Secured
Party  or  beneficiary  thereof,  and

          (b)     within  fifteen  (15) days after the making of each submission
or  filing, a copy of any report, financial statement, notice or other document,
whether  periodic or otherwise, submitted to the stockholders of the Company, or
submitted  to  or filed by the Company with any governmental authority involving
or affecting (i) the Debtors that could have a Material Adverse Effect; (ii) the
Obligations;  (iii)  any  part  of  the  Pledged  Collateral, or (iv) any of the
transactions  contemplated  in  Transaction  Documents.

     Section 6.4.     Maintenance of Books and Records; Inspection.
                      --------------------------------------------

     The  Debtors shall maintain their books, accounts and records in accordance
with  generally  accepted accounting principles consistently applied, and permit
the  Secured  Party, its officers and employees and any professionals designated
by  the  Secured  Party  in writing, at any time to visit and inspect any of its
properties  (including  but  not  limited to the Pledged Property and Collateral
described  in the Transaction Documents), corporate books and financial records,
and  to discuss its accounts, affairs and finances with any employee, officer or
director  thereof.

     Section 6.5.     Maintenance and Insurance.
                      -------------------------

          (a)     The Debtors shall maintain or cause to be maintained, at their
own  expense,  all  of  their  assets  and  properties in good working order and
condition,  making  all  necessary repairs thereto and renewals and replacements
thereof.

          (b)     The Debtors shall maintain or cause to be maintained, at their
own  expense,  insurance in form, substance and amounts (including deductibles),
which  the  Debtors  deem  reasonably  necessary  to the Company's business, (i)
adequate  to  insure  all assets and properties of the Debtors, which assets and
properties  are of a character usually insured by persons engaged in the same or
similar  business  against  loss  or  damage  resulting from fire or other risks
included in an extended coverage policy; (ii) against public liability and other
tort claims that may be incurred by the Debtors; (iii) as may be required by the
Transaction  Documents  and/or the applicable law, and (iv) as may be reasonably
requested  by  Secured Party, all with adequate, financially sound and reputable
insurers.

     Section 6.6.     Contracts and Other Collateral.
                      ------------------------------

     The Debtors shall perform all of their obligations under or with respect to
each  instrument,  receivable,  contract  and  other  intangible included in the
Pledged  Property  to  which the Debtors are now or hereafter will be party on a
timely  basis and in the manner therein required, including, without limitation,
this  Agreement.

     Section 6.7.     Defense of Collateral, Etc.
                      ---------------------------

     The Debtors shall defend and enforce their right, title and interest in and
to  any  part  of:  (a) the Pledged Property, and (b) if not included within the
Pledged  Property,  those assets and properties whose loss could have a Material
Adverse  Effect,  the  Debtors shall defend the Secured Party's right, title and
interest in and to each and every part of the Pledged Property, each against all
manner  of  claims and demands on a timely basis to the full extent permitted by
applicable  law.

     Section 6.8.     Payment of Debts, Taxes, Etc.
                      -----------------------------

     The  Debtors  shall pay, or cause to be paid, all of their indebtedness and
other  liabilities  and  perform,  or  cause  to  be  performed,  all  of  their
obligations  in  accordance  with  the  respective  terms  thereof,  and pay and
discharge,  or  cause to be paid or discharged, all taxes, assessments and other
governmental  charges and levies imposed upon them, upon any of their assets and
properties  on  or  before  the  last  day  on  which  the  same  may  be  paid

                                        7
<PAGE>
without  penalty,  as well as pay all other lawful claims (whether for services,
labor,  materials,  supplies  or  otherwise)  as  and  when  due

     Section 6.9.     Taxes and Assessments; Tax Indemnity.
                      ------------------------------------

     The  Debtors  shall  (a)  file  all  tax  returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency;  (b)  pay  and  discharge  all  taxes, assessments and governmental
charges  or  levies  imposed  upon the Debtors, upon their income and profits or
upon  any  properties  belonging  to  them, prior to the date on which penalties
attach  thereto,  and (c) pay all taxes, assessments and governmental charges or
levies  that,  if  unpaid,  might  become  a  lien  or  charge  upon  any of its
properties;  provided,  however,  that the Debtors in good faith may contest any
such  tax,  assessment,  governmental  charge or levy described in the foregoing
clauses  (b) and (c) so long as appropriate reserves are maintained with respect
thereto.

     Section 6.10.     Compliance with Law and Other Agreements.
                       ----------------------------------------

     The  Debtors shall maintain their business operations and property owned or
used  in  connection  therewith  in  compliance with (a) all applicable federal,
state  and  local  laws,  regulations  and  ordinances  governing  such business
operations  and  the use and ownership of such property, and (b) all agreements,
licenses,  franchises, indentures and mortgages to which the Debtors are a party
or  by which the Debtors or any of their properties are bound.  Without limiting
the  foregoing,  the  Debtors  shall  pay  all of their indebtedness promptly in
accordance  with  the  terms  thereof.

     Section 6.11.     Notice of Default.
                       -----------------

     The  Debtors  shall  give  written  notice  to  the  Secured  Party  of the
occurrence  of  any  default or Event of Default under this Agreement, the other
Transaction  Documents  or any other agreement of the Debtors for the payment of
money,  promptly  upon  the  occurrence  thereof.

     Section 6.12.     Notice of Litigation.
                       --------------------

     The  Debtors shall give notice, in writing, to the Secured Party of (a) any
actions,  suits  or  proceedings  wherein  the  amount  at issue is in excess of
$50,000,  instituted by any persons against the Debtors, or affecting any of the
assets  of  the  Debtors,  and (b) any dispute, not resolved within fifteen (15)
days  of  the  commencement thereof, between the Debtors on the one hand and any
governmental  or  regulatory  body  on the other hand, which might reasonably be
expected  to  have  a  Material  Adverse  Effect  on  the business operations or
financial  condition  of  the  Company.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS
                               ------------------

     The  Company  covenants  and  agrees  that,  from the date hereof until the
Obligations have been fully paid and satisfied or this Agreement shall otherwise
terminate,  the  Company  shall  not,  unless  the  Secured  Party shall consent
otherwise  in  writing:

                                        8
<PAGE>
Section  7.1.     Liens  and  Encumbrances.
                  ------------------------

     The Debtors shall not directly or indirectly make, create, incur, assume or
permit to exist any assignment, transfer, pledge, mortgage, security interest or
other  lien  or  encumbrance  of  any  nature  in, to or against any part of the
Pledged  Property  or of the Debtors' capital stock, or offer or agree to do so,
or  own  or  acquire  or agree to acquire any asset or property of any character
subject  to  any  of  the foregoing encumbrances (including any conditional sale
contract  or  other  title retention agreement), or assign, pledge or in any way
transfer  or encumber their right to receive any income or other distribution or
proceeds from any part of the Pledged Property or the Debtors' capital stock; or
enter  into  any  sale-leaseback  financing  respecting  any part of the Pledged
Property  as  lessee, or cause or assist the inception or continuation of any of
the  foregoing.

     Section  7.2.     Certificate  of  Incorporation,  By-Laws,  Mergers,
                       ---------------------------------------------------
Consolidations,  Acquisitions  and  Sales.
-----------------------------------------

     Without the prior express written consent of the Secured Party, the Debtors
shall  not:  (a)  Amend their Certificate of Incorporations or By-Laws; (b) be a
party  to  any  merger, consolidation or corporate reorganization; or (c) convey
any  of their assets to any subsidiary; provided, however, that this Section 7.2
shall  not  prohibit  the  Company  (whether through an existing or newly formed
subsidiary)  from  acquiring  the  stock  or  assets  of  another  entity.

     Section  7.3.     Management,  Ownership.
                       ----------------------

     The  Company  shall not materially change its ownership, executive staff or
management  without  the  prior  written  consent  of  the  Secured  Party.  The
ownership, executive staff and management of the Company are material factors in
the Secured Party's willingness to institute and maintain a lending relationship
with  the  Debtors.

     Section  7.4.     Dividends,  Etc.
                       ---------------

     The  Debtors  shall not declare or pay any dividend of any kind, in cash or
in  property, on any class of its capital stock, nor purchase, redeem, retire or
otherwise  acquire for value any shares of such stock (other than the redemption
rights  under  the Convertible Debenture and any other securities of the Company
in  existence  as  of the date hereof), nor make any distribution of any kind in
respect  thereof,  nor  make any return of capital to shareholders, nor make any
payments  in  respect  of any pension, profit sharing, retirement, stock option,
stock  bonus,  incentive  compensation  or  similar  plan (except as required or
permitted  hereunder),  without  the prior written consent of the Secured Party.

     Section  7.5.     Guaranties;  Loans.
                       ------------------

     The  Debtors  shall  not  guarantee  nor  be  liable in any manner, whether
directly  or  indirectly,  or  become contingently liable after the date of this
Agreement  in  connection  with the obligations or indebtedness of any person or
persons,  except  for  (i)  the  indebtedness  currently  secured  by  the liens
identified  on the Pledged Property identified on Exhibit A hereto, and (ii) the
endorsement  of  negotiable  instruments  payable  to the Debtors for deposit or
collection  in  the ordinary course of business.  The Debtors shall not make any
loan,  advance  or  extension  of  credit to any person other than in the normal
course  of  its  business.  NOTHING  CONTAINED HEREIN SHALL PROHIBIT THE COMPANY
FROM COMPLYING WITH ITS OBLIGATIONS TO REPLACE A STANDBY LETTER OF CREDIT IN THE
APPROXIMATE  AMOUNT OF $1.35M WITH CITY NATIONAL BANK, DELIVERING THE PROMISSORY
NOTES IN FAVOR OF NVH OR OTHERWISE PERFORMING ALL OBLIGATIONS TO BE PERFORMED BY
IT  UNDER  THAT  CERTAIN STOCK PURCHASE AGREEMENT DATED NOVEMBER 1, 2005 BETWEEN
THE  COMPANY  AND NVH.  IN ADDITION, NOTHING CONTAINED HEREIN SHALL PROHIBIT THE
COMPANY,  VIASYS  NETWORK SERVICES, INC. AND VIASYS SERVICES, INC. FROM ENTERING
INTO  THOSE AMENDMENTS TO CERTAIN REVOLVING CREDIT AGREEMENTS WITH MERRILL LYNCH
BUSINESS  FINANCIAL  SERVICES,  INC.  ("MERRILL"),  SPECIFICALLY,  WCMA LOAN AND
SECURITY  AGREEMENT  NOS.  2BN-07936,  2BN-07937  AND  2BN-07938  (THE  "MERRILL
AMENDMENTS"),  NOR SHALL THE COMPANY BE PROHIBITED FROM EXECUTING AND DELIVERING
AN  UNCONDITIONAL  GUARANTEE  IN  FAVOR  OF  MERRILL  WITH  RESPECT THERETO (THE
"MERRILL  GUARANTEE").

                                        9
<PAGE>
     Section  7.6.     Debt.
                       ----

     The  Debtors  shall  not  create,  incur,  assume  or  suffer  to exist any
additional  indebtedness of any description whatsoever in an aggregate amount in
excess  of  $50,000  (excluding  any  indebtedness of the Debtors to the Secured
Party,  trade  accounts  payable  and  accrued expenses incurred in the ordinary
course  of business and the endorsement of negotiable instruments payable to the
Debtors,  respectively  for  deposit  or  collection  in  the ordinary course of
business).  NOTHING  CONTAINED  HEREIN SHALL PROHIBIT THE COMPANY FROM COMPLYING
WITH  ITS  OBLIGATIONS  TO REPLACE A STANDBY LETTER OF CREDIT IN THE APPROXIMATE
AMOUNT  OF  $1.35M  WITH  CITY NATIONAL BANK, DELIVERING THE PROMISSORY NOTES IN
FAVOR OF NVH OR OTHERWISE PERFORMING ALL OBLIGATIONS TO BE PERFORMED BY IT UNDER
THAT CERTAIN STOCK PURCHASE AGREEMENT DATED NOVEMBER 1, 2005 BETWEEN THE COMPANY
AND  NVH.  IN  ADDITION,  NOTHING  CONTAINED  HEREIN SHALL PROHIBIT THE COMPANY,
VIASYS  NETWORK  SERVICES, INC. AND VIASYS SERVICES, INC. FROM ENTERING INTO THE
MERRILL  AMENDMENTS,  NOR  SHALL  THE  COMPANY  BE PROHIBITED FROM EXECUTING AND
DELIVERING  THE  MERRILL  GUARANTEE.

     Section  7.7.     Conduct  of  Business.
                       ---------------------

     The Debtors will continue to engage, in an efficient and economical manner,
in  a  business  of the same general type as conducted by it on the date of this
Agreement.

     Section  7.8.     Places  of  Business.
                       --------------------

     The  location of the Company's chief place of business is Atlanta, Georgia.
The  Company shall not change the location of its chief place of business, chief
executive office or any place of business disclosed to the Secured Party or move
any  of the Pledged Property from its current location without thirty (30) days'
prior  written  notice  to  the  Secured  Party  in  each  instance.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10
<PAGE>
                                   ARTICLE 8.

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

     Section 8.1.     Notices.
                      -------

     All  notices  or  other  communications  required  or permitted to be given
pursuant  to  this Agreement shall be in writing and shall be considered as duly
given  on:  (a)  the  date  of  delivery,  if delivered in person, by nationally
recognized  overnight  delivery  service,  or (b) five (5) days after mailing if
mailed  from  within  the  continental  United  States by certified mail, return
receipt  requested  to  the  party  entitled  to  receive  the  same:

If to the Debtors, to:                 Charys Holding Company Inc.
                                       1117 Perimeter Center West, Suite N415
                                       Atlanta, Georgia 30338
                                       Attention: Billy Ray, Jr.
                                       Telephone: (678) 443-2300
                                       Facsimile: (678) 443-2320

With a copy to:                        Michael Brenner
                                       Attorney at Law
                                       1643 North Harrison Parkway
                                       Sunrise, Florida 33323
                                       Telephone: (954) 838-6251
                                       Facsimile: (954) 838-6844

With a copy to:                        Glast, Phillips & Murray, P.C.
                                       815 Walker Street, Suite 1250
                                       Houston, Texas 77002
                                       Attention: Norman T. Reynolds, Esq.
                                       Telephone: (713) 237-3135
                                       Facsimile: (713) 237-3202
                                       Email: nreynolds@gpm-law.com

If to the Secured Party, to:           Preferred Employers Holdings, Inc.
                                       10800 Biscayne Boulevard, Miami, FL 33161
                                       attention Donald J. Bezahler, Esq.,
                                       Email: dbezahler@pegi.net,

                                       Attention:
                                       Telephone:
                                       Facsimile:

     Any  party  may  change  its  address  by  giving notice to the other party
stating its new address.  Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant  to  this  Agreement.

     Section 8.2.     Severability.
                      ------------

     If  any provision of this Agreement shall be held invalid or unenforceable,
such  invalidity  or  unenforceability  shall  attach only to such provision and
shall  not  in  any  manner  affect or render invalid or unenforceable any other
severable  provision  of this Agreement, and this Agreement shall be carried out
as  if  any  such  invalid or unenforceable provision were not contained herein.

                                       11
<PAGE>
     Section 8.3.     Expenses.
                      --------

     In  the  event  of an Event of Default, the Debtors will pay to the Secured
Party  the  amount  of any and all reasonable expenses, including the reasonable
fees  and  expenses  of  its  counsel,  which  the  Secured  Party  may incur in
connection  with:  (i)  the  custody or preservation of, or the sale, collection
from,  or other realization upon, any of the Pledged Property; (ii) the exercise
or enforcement of any of the rights of the Secured Party hereunder, or (iii) the
failure  by  the  Debtors  to  perform  or observe any of the provisions hereof.

     Section 8.4.     Waivers, Amendments, Etc.
                      -------------------------

     The  Secured  Party's  delay  or  failure at any time or times hereafter to
require  strict  performance  by  the Debtors of any undertakings, agreements or
covenants  shall  not  waive, affect, or diminish any right of the Secured Party
under  this Agreement to demand strict compliance and performance herewith.  Any
waiver  by  the  Secured Party of any Event of Default shall not waive or affect
any other Event of Default, whether such Event of Default is prior or subsequent
thereto  and whether of the same or a different type.  None of the undertakings,
agreements  and  covenants  of  the  Debtors contained in this Agreement, and no
Event  of Default, shall be deemed to have been waived by the Secured Party, nor
may  this  Agreement  be  amended,  changed  or  modified,  unless  such waiver,
amendment,  change  or  modification  is  evidenced  by an instrument in writing
specifying  such  waiver,  amendment,  change  or modification and signed by the
Secured  Party.

     Section 8.5.     Continuing Security Interest.
                      ----------------------------

     This  Agreement  shall create a continuing security interest in the Pledged
Property  and  shall:  (i) remain in full force and effect until the Obligations
are  paid  in full at which time this Agreement shall terminate; (ii) be binding
upon  the  Debtor and their successors and heirs, and (iii) inure to the benefit
of  the  Secured  Party  and  its  successors  and assigns.  Notwithstanding the
foregoing,  this  Agreement shall terminate immediately in the event the Company
redeems,  or  the  Secured Party shall have converted, all amounts due under the
Convertible  Debentures.  Upon  the  termination  of this Agreement, the Debtors
shall  be entitled to the return, at the Secured Party's expense, of such of the
Pledged  Property  as  shall  not  have been sold in accordance with Section 5.2
hereof  or  otherwise  applied  pursuant  to  the  terms  hereof.

     Section 8.6.     Independent Representation.
                      --------------------------

     Each  party  hereto acknowledges and agrees that it has received or has had
the  opportunity to receive independent legal counsel of its own choice and that
it has been sufficiently apprised of its rights and responsibilities with regard
to  the  substance  of  this  Agreement.

     Section 8.7.     Applicable Law:  Jurisdiction.
                      -----------------------------

     The  parties  hereto acknowledge that the transactions contemplated by this
Agreement  and  the  exhibits  hereto bear a reasonable relation to the State of
Florida.  The  parties  hereto  agree  that  the  internal  laws of the State of
Florida  shall govern this Agreement and the exhibits hereto, including, but not
limited  to,  all  issues  related to usury.  Any action to enforce the terms of
this  Agreement or any of its exhibits shall be brought exclusively in the state
and/or  federal  courts situated in the County and State of Florida.  Service of
process  in  any  action  by  the  Secured  Party  to  enforce the terms of this
Agreement  may  be  made  by  serving  a  copy  of the summons and complaint, in
addition to any other relevant documents, by commercial overnight courier to the
Debtors  at  their  principal  addresses  set  forth  in  this  Agreement.

     Section 8.8.     Waiver of Jury Trial.
                      --------------------

     AS  A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND  TO  MAKE  THE  FINANCIAL  ACCOMMODATIONS TO THE DEBTORS, THE DEBTORS HEREBY
WAIVE  ANY  RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO
THIS  AGREEMENT  AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

                                       12
<PAGE>
     Section 8.9.     Entire Agreement.
                      ----------------

     This  Agreement  constitutes  the  entire  agreement  among the parties and
supersedes  any  prior agreement or understanding among them with respect to the
subject  matter  hereof.

     IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement as of
the  date  first  above  written.

                                   COMPANY:
                                   CHARYS HOLDING COMPANY INC.

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

                                   SECURED PARTY:
                                   MEL HARRIS

                                   By
                                     ------------------------------------------
                                     MEL HARRIS

                                   By
                                     ------------------------------------------
                                     STEVE POSNER

                                   SUBSIDIARY:
                                   METHOD IQ, INC.

                                   By
                                     ------------------------------------------
                                     Billy V. Ray, Jr., President

                                       13
<PAGE>
                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY

     For  the purpose of securing prompt and complete payment and performance by
the  Debtors  of  all  of  the  Obligations,  the  Debtors  unconditionally  and
irrevocably  hereby grant to the Secured Party a continuing security interest in
and  to,  and  lien  upon,  the  following  Pledged  Property  of  the  Debtors:

          (a)     all  goods  of  Method  IQ,  including,  without  limitation,
machinery,  equipment,  furniture,  furnishings, fixtures, signs, lights, tools,
parts,  supplies  and  motor  vehicles  of  every  kind  and description, now or
hereafter  owned  by  Method  IQ or in which Method IQ may have or may hereafter
acquire any interest, and all replacements, additions, accessions, substitutions
and  proceeds  thereof,  arising from the sale or disposition thereof, and where
applicable,  the  proceeds  of insurance and of any tort claims involving any of
the  foregoing;

          (b)     all inventory of Method IQ, including, but not limited to, all
goods,  wares,  merchandise,  parts, supplies, finished products, other tangible
personal property, including such inventory as is temporarily out of Method IQ's
custody  or  possession  and  including  any  returns upon any accounts or other
proceeds,  including  insurance proceeds, resulting from the sale or disposition
of  any  of  the  foregoing;

          (c)     all  contract  rights  and  general  intangibles of Method IQ,
including,  without limitation, goodwill, trademarks, trade styles, trade names,
leasehold  interests, partnership or joint venture interests, patents and patent
applications,  copyrights,  deposit  accounts  whether  now  owned  or hereafter
created;

          (d)     all  documents,  warehouse  receipts,  instruments and chattel
paper  of  Method  IQ  whether  now  owned  or  hereafter  created;

          (e)     all accounts and other receivables, instruments or other forms
of  obligations and rights to payment of Method IQ (herein collectively referred
to  as "Accounts"), together with the proceeds thereof, all goods represented by
        --------
such  Accounts and all such goods that may be returned by Method IQ's customers,
and  all  proceeds  of any insurance thereon, and all guarantees, securities and
liens  which  Method IQ may hold for the payment of any such Accounts including,
without  limitation, all rights of stoppage in transit, replevin and reclamation
and  as  an  unpaid  vendor and/or lienor, all of which Method IQ represents and
warrants will be bona fide and existing obligations of its respective customers,
arising  out  of  the  sale  of  goods  by  Method  IQ in the ordinary course of
business;

          (f)     to  the extent assignable, all of Method IQ's rights under all
present  and  future  authorizations, permits, licenses and franchises issued or
granted  in  connection  with  the  operations  of  any  of  its facilities, and

          (g)     all  products  and  proceeds  (including,  without limitation,
insurance  proceeds)  from  the  above-described  Pledged  Property.

     Notwithstanding the foregoing, the security interest granted by the Debtors
herein  shall  expressly exclude any and all security interests held by Carolina
First Bank; provided however, that the total indebtedness held by Carolina First
Bank  shall  not  exceed  the  sum  of  One  Million Dollars ($1,000,000) unless
approved  in  advance  by  the  Secured  Party.

<PAGE>
                                    EXHIBIT C

                         ESCROW SHARES ESCROW AGREEMENT
                         ------------------------------

     THIS  ESCROW  SHARES ESCROW AGREEMENT (the "Agreement") is made and entered
                                                 ---------
into as of December __, 2005 (the "Effective Date"), by and among MEL HARRIS and
                                   --------------
STEVEN  POSNER,  or  their designees (collectively, the "Buyer"), CHARYS HOLDING
COMPANY,  INC.,  a  Delaware  corporation (the "Company"), and GLAST, PHILLIPS &
MURRAY,  P.C.,  as  escrow  agent  (the  "Escrow  Agent").
                                          -------------

                                    RECITALS:
                                    --------

     WHEREAS,  the Buyer, pursuant to that certain Securities Purchase Agreement
of  even date herewith (the "Securities Purchase Agreement") has purchased (i) a
$1,000,000  Secured  Convertible  Debenture (the "Convertible Debenture"), which
shall  be  convertible,  unless redeemed by the Company before the expiration of
120 days from the Closing Date (as defined in the Securities Purchase Agreement)
(the  "Exclusive  Redemption  Date"), into shares of the common stock, par value
$0.001  (the  "Common  Stock")  (as  converted,  the "Conversion Shares") of the
Company,  and (ii) warrants (the "Warrants") to purchase an aggregate of 250,000
shares  of the Common Stock (the "Warrant Shares") for a total purchase price of
$1,000,000  (the  "Purchase  Price");  and

     WHEREAS,  all capitalized terms not otherwise defined herein shall have the
same meaning as defined in the Securities Purchase Agreement and all Attachments
thereto;  and

     WHEREAS,  the  Securities  Purchase  Agreement  provides  for  an escrow as
therein  provided;  and

     WHEREAS,  the Securities Purchase Agreement provides that the Company shall
deposit  an  aggregate  of  1,500,000  shares  of  the Common Stock (the "Escrow
Shares")  in  a  segregated  account  to be held by the Escrow Agent in order to
effectuate  the  conversions  of the Convertible Debenture and the Warrants; and

     WHEREAS, The Escrow Agent is willing to act as escrow agent pursuant to the
terms  of  this  Agreement  with  respect  to  the  Escrow  Shares;

     NOW,  THEREFORE,  in  consideration  of  the  mutual covenants, agreements,
warranties,  and  representations  herein  contained,  and  for  other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  is  hereby
acknowledged,  the  parties  hereto  agree  as  follows:

                              TERMS AND CONDITIONS
                              --------------------

     1.     PROCEDURE  FOR  ESCROW.  The  procedures to be followed in order for
            ----------------------
the  Buyer  to convert the Convertible Debenture are set forth in the Securities
Purchase  Agreement  (which shall also govern any exercise of the Warrants), all
of  which  are  incorporated  herein  by reference as if set forth fully herein.

     2.     TERMS  OF  ESCROW.  Except  as  otherwise  provided  for  in  this
            -----------------
Agreement,  the terms of the escrow shall be governed by the Securities Purchase
Agreement and the Convertible Debenture, all of which are incorporated herein by
reference  as if set forth fully herein.  This Agreement shall terminate at such
time  as  all  of  the  Escrow  Shares  have  been  released  from  the  escrow.

     3.     CONCERNING  THE  ESCROW  AGENT.
            ------------------------------

          3.1.     The  Escrow  Agent  undertakes to perform only such duties as
are  expressly  set  forth  herein and no implied duties or obligations shall be
read  into  this  Agreement  against  the  Escrow  Agent.

          3.2.     The  Escrow  Agent  may  act  in reliance upon any writing or
instrument  or  signature  which  it, in good faith, believes to be genuine, may
assume the validity and accuracy of any statement or assertion contained in such
a  writing  or instrument, and may assume that any person purporting to give any
writing, notice, advice or instructions in connection with the provisions hereof
has  been duly authorized to do so.  The Escrow Agent shall not be liable in any
manner  for the sufficiency or correctness as to form, manner, and execution, or

<PAGE>
validity  of  any  instrument  deposited in this escrow, nor as to the identity,
authority,  or  right of any person executing the same; and its duties hereunder
shall  be  limited to the safekeeping of such certificates, monies, instruments,
or  other document received by it as such escrow holder, and for the disposition
of  the  same  in  accordance with the written instruments accepted by it in the
escrow.

          3.3.     The  Buyer  and  the  Company  hereby  agree,  to  defend and
indemnify  the  Escrow  Agent  and  hold  it  harmless  from any and all claims,
liabilities,  losses, actions, suits, or proceedings at law or in equity, or any
other  expenses,  fees, or charges of any character or nature which it may incur
or with which it may be threatened by reason of its acting as Escrow Agent under
this  Agreement;  and  in  connection  therewith,  to indemnify the Escrow Agent
against  any  and all expenses, including attorneys' fees and costs of defending
any  action,  suit, or proceeding or resisting any claim (and any costs incurred
by  the  Escrow Agent pursuant to Sections 6.4 or 6.5 hereof).  The Escrow Agent
shall  be  vested  with  a  lien  on  all  property  deposited  hereunder,  for
indemnification  of  attorneys'  fees  and  court  costs  regarding  any  suit,
proceeding  or  otherwise,  or  any  other  expenses,  fees,  or  charges of any
character  or  nature,  which  may  be incurred by the Escrow Agent by reason of
disputes  arising  between  the  makers  of  this  escrow  as  to  the  correct
interpretation  of  this  Agreement  and  instructions given to the Escrow Agent
hereunder,  or  otherwise, with the right of the Escrow Agent, regardless of the
instructions  aforesaid,  to hold said property until and unless said additional
expenses,  fees,  and  charges  shall be fully paid; provided, however, that the
Escrow  Agent  shall  not  have  a lien on any property deposited hereunder that
would  otherwise be required to be distributed or returned to the Company except
to  the extent such fees and expenses incurred by the Escrow Agent arise from an
obligation  owed to the Escrow Agent by the Company.  Any fees and costs charged
by  the  Escrow  Agent  for  serving  hereunder  shall  be  paid  by  the Buyer.

          3.4.     If  any  of  the  parties  shall be in disagreement about the
interpretation  of  this  Agreement, or about the rights and obligations, or the
propriety  of  any action contemplated by the Escrow Agent hereunder, the Escrow
Agent  may,  at  its sole discretion deposit the Escrow Shares with the Clerk of
the  United States District Court of Texas, sitting in Houston, Texas, and, upon
notifying all parties concerned of such action, all liability on the part of the
Escrow  Agent  shall  fully  cease  and  terminate.  The  Escrow  Agent shall be
indemnified  by  the  Company  and the Buyer for all costs, including reasonable
attorneys'  fees in connection with the aforesaid proceeding, and shall be fully
protected  in  suspending  all  or a part of its activities under this Agreement
until  a  final  decision  or  other  settlement  in the proceeding is received.

          3.5.     The  Escrow  Agent may consult with counsel of its own choice
(and  the  costs of such counsel shall be paid by the Company and the Buyer) and
shall  have  full and complete authorization and protection for any action taken
or  suffered by it hereunder in good faith and in accordance with the opinion of
such  counsel.  The Escrow Agent shall not be liable for any mistakes of fact or
error of judgment, or for any actions or omissions of any kind, unless caused by
its  willful  misconduct  or  gross  negligence.

          3.6.     The  Escrow Agent may resign upon ten days' written notice to
the  parties  in  this  Agreement.  If a successor Escrow Agent is not appointed
within  this  ten day period, the Escrow Agent may petition a court of competent
jurisdiction  to  name  a  successor.

          3.7.     Conflict  Waiver.  The  Buyer  hereby  acknowledges  that the
                   ----------------
Escrow  Agent  is  general  counsel  to  the  Company  in  connection  with  the
transactions  contemplated  and  referred  herein.  The Buyer agrees that in the
event  of  any dispute arising in connection with this Agreement or otherwise in
connection  with  any transaction or agreement contemplated and referred herein,
the  Escrow  Agent  shall be permitted to continue to represent the Company, and
the  Buyer will not seek to disqualify such counsel and waives any objection the
Buyer  might  have  with  respect to the Escrow Agent acting as the Escrow Agent
pursuant  to  this  Agreement.

          3.8.     Notices.  Unless  otherwise  provided  herein,  all  demands,
                   --------
notices,  consents,  service  of  process,  requests  and  other  communications
hereunder  shall  be in writing and shall be delivered in person or by overnight
courier  service,  or  mailed  by  certified  mail,  return  receipt  requested,
addressed:

                                        2
<PAGE>
<TABLE>
<CAPTION>
<S>                                             <C>
If to the Company, to:                          Charys Holding Company Inc.
                                                1117 Perimeter Center West, Suite N415
                                                Atlanta, Georgia 30338
                                                Attention: Billy V. Ray, Jr.
                                                Telephone: (678) 443-2300
                                                Facsimile: (678) 443-2320

With a copy to:                                 Michael Brenner

                                                Attorney at Law
                                                1643 North Harrison Parkway
                                                Sunrise, Florida 33323
                                                Telephone: (954) 838-6251
                                                Facsimile: (954) 838-6844

If to the Escrow Agent and with all copies      Glast, Phillips & Murray, P.C.
to:
                                                815 Walker Street, Suite 1250
                                                Houston, Texas 77002
                                                Attention: Norman T. Reynolds, Esq.
                                                Telephone: (713) 237-3135
                                                Facsimile: (713) 237-3202
                                                Email: nreynolds@gpm-law.com

If to the Buyer, to:                            Preferred Employers Holdings, Inc.
                                                10800 Biscayne Boulevard, 10th Floor
                                                Miami, Florida 33161
                                                attention Donald J. Bezahler, Esq.
                                                Email: dbezahler@pegi.net,
</TABLE>

Any  such  notice  shall  be  effective (a) when delivered, if delivered by hand
delivery or overnight courier service, or (b) five (5) days after deposit in the
United  States  mail,  as  applicable.

     4.     BINDING  EFFECT.  All  of  the  covenants  and obligations contained
            ---------------
herein  shall  be  binding upon and shall inure to the benefit of the respective
parties,  their  successors  and  assigns.

     5.     GOVERNING  LAW;  VENUE;  SERVICE  OF  PROCESS.  The  parties  hereto
            ---------------------------------------------
acknowledge  that  the  transactions  contemplated  by  this  Agreement  and the
exhibits  hereto  bear a reasonable relation to the State of Texas.  The parties
hereto  agree  that  the  internal  laws of the State of Texas shall govern this
Agreement  and  the  exhibits  hereto, including, but not limited to, all issues
related  to  usury.  Any action to enforce the terms of this Agreement or any of
its  exhibits  shall  be  brought exclusively in the state and/or federal courts
situated  in the County and State of Texas.  Service of process in any action by
the Buyer to enforce the terms of this Agreement against the Company may be made
by  serving  a  copy  of  the  summons  and  complaint, in addition to any other
relevant  documents,  by  commercial  overnight  courier  to  the Company at its
principal  address  set  forth  in  this  Agreement.

     6.     ENFORCEMENT  COSTS.  If  any  legal  action  or  other proceeding is
            ------------------
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach,  default  or misrepresentation in connection with any provisions of this
Agreement,  the  successful  or prevailing party or parties shall be entitled to
recover  reasonable  attorneys'  fees,  court costs and all expenses even if not
taxable  as court costs (including, without limitation, all such fees, costs and
expenses  incident  to  appeals),  incurred  in  that  action  or proceeding, in
addition  to  any  other  relief to which such party or parties may be entitled.

                                        3
<PAGE>
     7.     REMEDIES  CUMULATIVE.  No  remedy herein conferred upon any party is
            --------------------
intended  to  be  exclusive  of any other remedy, and each and every such remedy
shall  be  cumulative  and  shall  be  in  addition  to every other remedy given
hereunder  or  now  or  hereafter  existing  at  law,  in equity, by statute, or
otherwise.  No  single  or  partial exercise by any party of any right, power or
remedy  hereunder  shall  preclude  any  other  or  further  exercise  thereof.

     8.     COUNTERPARTS.  This  Agreement  may  be  executed  in  one  or  more
            ------------
counterparts,  each  of  which  shall  be  deemed  an original, but all of which
together  shall  constitute  the  same  instrument.

     9.     NO  PENALTIES.  No  provision of this Agreement is to be interpreted
            -------------
as  a  penalty  upon  any  party  to  this  Agreement.

     10.     JURY  TRIAL.  EACH  OF  THE BUYER AND THE COMPANY HEREBY KNOWINGLY,
             -----------
VOLUNTARILY  AND  INTENTIONALLY  WAIVE THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY
JURY  OF  ANY  CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING
OUT  OF,  UNDER  OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN THE BUYER AND
THE  COMPANY AND THIS ESCROW SHARES ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN
CONNECTION  HEREWITH,  OR  ANY  COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR THERETO IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
OR  OTHERWISE.

     IN  WITNESS  WHEREOF,  the  parties  hereto  have duly executed this Escrow
Shares  Escrow  Agreement  as  of  the  date  first  above  written.

                                     COMPANY:
                                     CHARYS HOLDING COMPANY INC.

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

                                     BUYER:

                                     ------------------------------------------
                                     MEL HARRIS

                                     ------------------------------------------
                                     STEVEN POSNER

                                     ESCROW AGENT:
                                     GLAST, PHILLIPS, & MURRAY, P.C.

                                     By
                                       ----------------------------------------
                                       Norman T. Reynolds

                                        4
<PAGE>
                                    EXHIBIT D

                          STOCK PLEDGE ESCROW AGREEMENT
                          -----------------------------

                             STOCK PLEDGE AGREEMENT

     THIS  AGREEMENT  is made this ___ day of December, 2005, by and between MEL
HARRIS and STEVEN POSNER, or their designees (collectively, the "Secured Party")
and  BILLY  V.  RAY,  JR.  (the  "Debtor").

     WHEREAS,  the  Secured  Party, pursuant to that certain Securities Purchase
Agreement  of  even  date  herewith  (the  "Securities  Purchase Agreement") has
purchased  (i)  a  $1,000,000  Secured  Convertible  Debenture (the "Convertible
Debenture"),  which  shall be convertible, unless redeemed by the Company before
the  expiration  of 120 days from the Closing Date (as defined in the Securities
Purchase Agreement) (the "Exclusive Redemption Date"), into shares of the common
stock,  par  value  $0.001  (the  "Common Stock") (as converted, the "Conversion
Shares")  of  CHARYS  HOLDING  COMPANY,  INC.,  a  Delaware  corporation  (the
"Company"),  and  (ii)  warrants  (the  "Warrants")  to purchase an aggregate of
250,000  shares  of the Common Stock (the "Warrant Shares") for a total purchase
price  of  $1,000,000  (the  "Purchase  Price");  and

     WHEREAS,  all capitalized terms not otherwise defined herein shall have the
same  meaning  as  defined  in  the  Securities  Purchase  Agreement;  and

     WHEREAS, the Debtor owns 2,185,150 shares of the Common Stock and 1,000,000
shares  of  the  Series  A  preferred stock of the Company, par value $0.001 per
share  (the  "Preferred  Stock");  and

     WHEREAS,  pursuant  to this Agreement, the Debtor has executed that certain
Escrow  Agreement (the  "Escrow  Agreement")  attached  hereto  as Attachment A;
                                                                   ------------

     NOW,  THEREFORE, in consideration of the foregoing and the following mutual
covenants  and  agreements,  the  parties  hereto  do  hereby  agree as follows:

     1.     Security  Interest.  For  good  and  valuable  consideration  and in
            ------------------
further  consideration of the execution of the Securities Purchase Agreement and
the  purchase  of  the Convertible Debenture and the Warrants, the Debtor hereby
grants to the Secured Party a security interest and agrees and acknowledges that
the  Secured  Party  has  and  shall continue to have a security interest in the
Common  Stock  and  the  Preferred  Stock and in any other shares of the capital
stock  of the Company now owned or hereafter acquired by the Debtor, all present
and future issued and outstanding shares of capital stock or other equity and/or
investment  securities  issued  by  the  Company  to the Debtor, SAVE AND EXCEPT
50,000  shares of the Preferred Stock owned by the Debtor and previously pledged
to a third party and which are not included in this Agreement, together with all
monies,  income,  proceeds,  increases,  substitutions, replacements, additions,
accessions  and  benefits  attributable or accruing to said property, including,
but  not  limited  to,  all  stock  rights,  rights  to  subscribe,  liquidating
dividends,  stock  dividends,  dividends  paid in stock, new securities or other
properties  or benefits for which the Debtor is or may hereafter become entitled
to  receive  on account of said property, and in the event that the Debtor shall
receive any of such, the Debtor shall hold same as trustee for the Secured Party
and  will  immediately deliver same to the Secured Party to be held hereunder in
the  same  manner  as  the  properties  specifically  described  above  are held
hereunder.  All  property  of  all  kinds  in  which the Secured Party is herein
granted a security interest, including, but not limited to, the Common Stock and
the  Preferred  Stock,  shall  hereinafter  be  referred to as the "Collateral."

     The  Debtor  agrees to execute such stock powers, endorse such instruments,
or  execute  such  additional  pledge  agreements  or  other documents as may be
required by the Secured Party in order to effectively grant to the Secured Party
the  security  interest in the Collateral.  The security interest granted hereby
is  to secure the payment of any and all indebtedness, liabilities, obligations,
and  duties  whatsoever  of  the  Company and/or the Debtor to the Secured Party
whether  direct  or  whether  now  existing  or hereafter arising, and howsoever
evidenced  or acquired, and whether joint or several, including, but not limited
to,  the Securities Purchase Agreement, the Convertible Debenture, the Warrants,
the  Registration  Rights  Agreement,  the Security Agreement, the Escrow Shares
Agreement,  and  the  Irrevocable  Transfer  Agent  Instructions,  and all costs
incurred  by  the  Secured  Party  to enforce this Agreement or any of the above
described  agreements  and  instruments, including but not limited to attorney's
fees  and  expenses (all of such obligations, indebtedness and liabilities being
hereinafter  collectively  referred  to  as  the  "Obligations").

     2.     Warranties  and Covenants of the Debtor.  The Debtor, for so long as
            ---------------------------------------
he  has  any duty with respect to the Obligations, hereby warrants and covenants
as  follows:

                                        1
<PAGE>
          (a)     The  security  interest  granted  hereby  will  attach  to the
Collateral  on  the  date  hereof.

          (b)     Except  for the security interest granted hereby and for taxes
not  yet  due,  the  Debtor  will  defend  the Collateral against all claims and
demands  of  all  persons at any time claiming the same or any interest therein.

          (c)     The  Debtor  authorizes  the Secured Party to file a financing
statement,  if  desired  by  the  Secured  Party in any applicable jurisdiction,
signed  only by the Secured Party covering the Collateral, and at the request of
the  Secured  Party,  the Debtor will join the Secured Party in executing one or
more  financing  statements pursuant to the Uniform Commercial Code in effect in
any  such  jurisdiction on the date hereof in a form satisfactory to the Secured
Party,  and the Secured Party will pay the cost of filing the same, or filing or
recording  the  financing  statements  in  all public offices wherever filing or
recording is deemed by the Secured Party to be necessary or desirable.  It being
further stipulated in this regard that the Secured Party may also at any time or
times sign a counterpart of this Agreement signed by the Debtor and file same as
a  financing  statement  if  the  Secured  Party  shall  elect  to  do  so.

          (d)     The  Debtor  will  not  sell  or  offer  to  sell or otherwise
transfer  or  encumber  the  Collateral  or  any  interest  therein.

          (e)     Subject  to the Securities Purchase Agreement, the Debtor will
keep  the  Collateral  free  from  any  adverse  lien,  security  interest,  or
encumbrance,  except  the security interest granted hereby and for taxes not yet
due.

          (f)     The  Debtor  will  pay  to  the  Secured  Party  all costs and
expenses,  including reasonable attorney's fees, incurred or paid by the Secured
Party  in exercising or protecting its interests, rights and remedies under this
Agreement  in  the  event  of  default  by  the  Debtor  hereunder  or under the
Securities  Purchase  Agreement,  the  Note,  the  Escrow  Agreement,  and  the
Consulting  Agreements  or  any  of  the  Attachments  referred  to  therein.

          (g)     The Debtor will pay all expenses incurred by the Secured Party
in preserving, defending, and enforcing this security interest in the Collateral
and  in  collecting or enforcing the Obligations.  Expenses for which the Debtor
is  liable  include,  but  are  not  limited  to, taxes, assessments, reasonable
attorney's  fees,  and  other legal expenses.  These expenses will bear interest
from the dates of payment at the highest rate stated in the Obligations, and the
Debtor  will  pay  the Secured Party this interest on demand at a time and place
reasonably  specified by the Secured Party.  These expenses and interest will be
part  of  the  Obligations  and  will  be  recoverable  as such in all respects.

          (h)     The  Debtor  will  immediately notify the Secured Party of any
change  in  the  Debtor's  name,  address,  or  location,  change  in any matter
warranted or represented in this Agreement, change that may affect this security
interest,  and  any  Event  of  Default.

          (i)     The  Debtor  appoints  the  Secured  Party  as  the  Debtor's
attorney-in-fact, effective if an Event of Default as hereinafter defined is not
cured  within  30  days  after  receipt  by the Debtor from the Secured Party of
notice  thereof,  to  do  any  act  that  the  Debtor is obligated to do by this
Agreement,  to  exercise all rights of the Debtor in the Collateral, to make all
collections,  to  execute any papers and instruments, and to do all other things
necessary  to preserve and protect the Collateral and to make collections and to
protect  the  Secured  Party's  security  interest  in  the  Collateral.

     3.     General Covenants.  The security interest granted hereby shall in no
            -----------------
way  be  affected  by  any  indulgence  or indulgences, extension or extensions,
change or changes in the form, evidence, maturity, rate of interest or otherwise
of  the  Obligations,  or  by  want  of  presentment,  notice, protest, suit, or
indulgence upon the Obligations, or shall any release of any security for any of
the  parties  liable  for the payment of the Obligations in any manner affect or
impair  this  Agreement,  and  same  shall  continue in full force and effect in
accordance  with  their  terms  until  the  Obligations  have  been  fully paid.

     Any  and  all securities and other properties of the Debtor heretofore, now
or  hereafter  delivered  to  the  Secured  Party  or  in  the  Secured  Party's
possession, shall also secure the Obligations and shall be held and construed to
be  a  part  of  the  Collateral hereunder to the same extent as fully described
herein.

                                        2
<PAGE>
     4.     Events  of  Default.  The  Debtor  shall  be  in  default under this
            -------------------
Agreement  upon  the  happening  of  any  of  the following events or conditions
(hereinafter  severally  referred  to  as an "Event of Default" and collectively
referred  to  as  the  "Events  of  Default"):

          (a)     Default  by the Debtor with respect to any of the Obligations.

          (b)     The levy of any attachment, execution or other process against
the  Debtor,  the  Company,  or  any  of  the  Collateral  that is not stayed or
dismissed  within  30  days.

          (c)     Dissolution,  termination of existence, insolvency or business
failure  of the Debtor, the Company, or any endorser, guarantor or surety of the
Obligations,  or commission of the act of bankruptcy by, or the appointment of a
receiver  or  other  legal  representative  for  any  part  of  the property of,
assignment  for  the benefit of creditors by, or commencement of any proceedings
under any bankruptcy or insolvency law by or against, the Debtor, the Company or
any  endorser,  guarantor,  or surety for the Obligations that are not stayed or
dismissed  within  30  days  of  filing.

          (d)     Default in the performance of any covenant or agreement of the
Debtor  or  the  Company to the Secured Party, whether under this Agreement, the
Note,  the  Escrow  Agreement, or any of the Consulting Agreements, or any other
instrument  executed  in  connection  with  said  agreements  or  otherwise.

          (e)     The  occurrence  of  any  event  which  under the terms of any
evidence  of  indebtedness,  indenture,  loan  agreement, security agreement, or
similar  instrument  permits the acceleration of maturity of any indebtedness of
the  Company  or  the  Debtor to the Secured Party, or to persons other than the
Secured  Party,  or  the Secured Party receives notification that another person
has  or  expects  to  acquire  a security interest in the Collateral or any part
thereof.

          (f)     If  any  warranty,  covenant,  or  representation  made to the
Secured  Party  by or on behalf of the Debtor or the Company proves to have been
false  in  any  material  respect  when  made.

          (g)     If  any  lien  attaches  to  any  of  the  Collateral.

     5.     Remedies.  Upon  the failure of the Debtor or the Company to cure an
            --------
Event  of  Default within 30 days after receipt of notice from the Secured Party
of such Event of Default and at any time thereafter, at the option of the holder
thereof,  any or all of the Obligations shall become immediately due and payable
without  presentment  or demand or any further notice to the Debtor, the Company
or  any  other person obligated thereon and the Secured Party shall have and may
exercise with reference to the Collateral any and all of the rights and remedies
of  a secured party under the Uniform Commercial Code as adopted in the State of
Florida,  and  as otherwise granted herein or under any other agreement executed
by  the  Debtor,  including,  without limitation, the right and power to sell at
public  or  private  sale  or  sales,  or  otherwise  dispose  of or utilize the
Collateral  and  any part or parts thereof in any manner authorized or permitted
under  this  Agreement  or  under  the Uniform Commercial Code as adopted in the
State  of  Florida  after  default by the Debtor or the Company and to apply the
proceeds  thereof  toward  the  payment of any costs and expenses and attorney's
fees  thereby  incurred  by  the  Secured  Party  and  toward  payment  of  the
Obligations,  in such order or manner as the Secured Party may elect, including,
without  limiting  the  foregoing:

          (a)     The  Secured Party is hereby granted the right, at its option,
upon the occurrence of an Event of Default hereunder, to transfer at any time to
itself  or  to  its  nominee securities or other property hereby pledged, or any
part  thereof, and to thereafter exercise all voting rights with respect to such
security so transferred and to receive the proceeds, payments, monies, income or
benefits  attributable  or accruing thereto and to hold the same as security for
the Obligations hereby secured or at the Secured Party's election, to apply such
amounts  to  the  Obligations,  whether  or  not  then due, in such order as the
Secured  Party  may  elect,  or,  the  Secured Party may, at its option, without
transferring  such  securities or properties to its nominee, exercise all voting
rights with respect to the securities pledged hereunder and vote all or any part
of  such securities at any regular or special meeting of the stockholders of the
Company,  and  the Debtor does hereby name, constitute and appoint as a proxy of
the  Debtor the Secured Party, in the Debtor's name, place and stead to vote any
and  all such securities, as said proxy may elect for and in the name, place and
stead  of  the  Debtor,  such proxy to be irrevocable and deemed coupled with an
interest.

          (b)     Sell,  lease, or otherwise dispose of any of the Collateral in
accordance  with  the  rights, remedies, and duties of a secured party under the
Florida  Uniform  Commercial  Code  after  giving  notice  as  required

                                        3
<PAGE>
by those chapters; unless the Collateral threatens to decline speedily in value,
is  perishable,  or would typically be sold on a recognized market.  The Secured
Party  will  give  the  Debtor  reasonable  notice  of  any  public  sale of the
Collateral  or  of  a  time  after which it may be otherwise disposed of without
further  notice  of the Debtor.  In such event, notice will be deemed reasonable
if it is mailed, postage prepaid, to the Debtor at the address specified in this
Agreement  at  least  30  days before any public sale or 30 days before the time
when  the  Collateral may be otherwise disposed of without further notice to the
Debtor.

          (c)     Apply  any  proceeds  from disposition of the Collateral after
default  in  the  manner  specified  in  the  Florida  Uniform  Commercial Code,
including  payment  of  the Secured Party's reasonable attorney's fees and court
expenses.

          (d)     If,  after  disposition  of  the  Collateral,  the Obligations
remain  unsatisfied,  collect  the  deficiency  from  the  Debtor.

     6.     Voting  Rights.  So  long  as  no  Event of Default has occurred and
            --------------
remains  uncured  for  the applicable grace period under the Securities Purchase
Agreement,  the  Obligations,  or any of the Attachments referred to therein, or
hereunder,  the  Debtor  shall  have  the right to vote all of the shares of the
Common  Stock and the Preferred Stock or items of the Collateral subject to this
Agreement,  and  the  Secured  Party  shall  on  demand  execute  and deliver an
effective  proxy or proxies in favor of the Debtor, whenever demand is made upon
the  Secured  Party  for  such  proxy  or  proxies  by  the  Debtor.

     7.     Termination  of  Security Interest.  Simultaneously with the payment
            ----------------------------------
in  full  or the conversion of the Convertible Debenture and the satisfaction of
all  of  the  Obligations,  the  Secured Party shall execute and file at its own
expense  any and all instruments necessary to terminate the security interest in
the shares of the Common Stock and the Preferred Stock created by this Agreement
and  also  execute  any and all other instruments deemed reasonably necessary by
the Debtor to vest in the Debtor title in the shares of the Common Stock and the
Preferred  Stock,  free  from  any  claim  by  the  Secured  Party.

     8.     No  Usury.  It is the intention of the parties hereto to comply with
            ---------
the  usury  laws  of  the  State  of  Florida.  Accordingly,  it  is agreed that
notwithstanding any provision to the contrary in this Agreement or in any of the
documents  evidencing  the  Obligations  or  otherwise relating thereto, no such
provision  shall  require  the  payment  or permit the collection of interest in
excess  of  the  maximum  permitted  by  law.  If any excess of interest in such
respect  is provided for, or shall be adjudicated to be so provided for, in this
Agreement,  or  any  of  the  documents  evidencing the Obligations or otherwise
relating  thereto,  then  in  such  event:

          (a)     The  provisions  of  this  paragraph shall govern and control;

          (b)     Neither  the  Debtor,  the  Company  nor  their  successors or
assigns,  or any other party liable for the payment of the Obligations, shall be
obligated  to pay the amount of such interest to the extent that it is in excess
of  the  maximum  amount  permitted  by  law;

          (c)     Any  such  excess interest which may have been collected shall
be,  at  the  option of the holder of the instrument evidencing the Obligations,
either  applied  as  a  credit  against  the  unpaid principal amount thereof or
refunded  to  the  maker  thereof;  and

          (d)     The  effective rate of interest shall be automatically subject
to reduction to the maximum lawful contract rate allowed under the usury laws of
the  State  of  Florida  as now or hereafter construed by any court of competent
jurisdiction.

     9.     Attorney's  Fees.  In  the event that it should become necessary for
            ----------------
any  party  entitled  hereunder  to  bring  suit against the other party to this
Agreement  for enforcement of the covenants herein contained, the parties hereby
covenant  and  agree  that  the  party  who  is found to be in violation of said
covenants  shall  also be liable for all reasonable attorney's fees and costs of
court  incurred  by  the  other  party  hereto.

     10.     Benefit.  All  the  terms and provisions of this Agreement shall be
             -------
binding  upon  and  inure  to  the  benefit of and be enforceable by the parties
hereto,  and  their  respective  heirs,  executors,  administrators,  personal
representatives,  successors  and  permitted  assigns.

                                        4
<PAGE>
     11.     Notices.  All  notices, requests, demands, and other communications
             -------
hereunder  shall be in writing and delivered personally or sent by registered or
certified  United States mail, return receipt requested with postage prepaid, by
facsimile, or by e-mail, if to the Secured Party, addressed c/o Donald Bezahler,
Esq.,  10800  Biscayne  Boulevard,  10th Floor, Miami, Florida 33161, telecopier
(____)  _______,  and e-mail dbezahler@plgi.net; and if to the Debtor, addressed
to  Mr.  Billy  V.  Ray, Jr. at 1117 Perimeter Center West, Suite N415, Atlanta,
Georgia  30338, telecopier (678) 443-2320, and email bray@charys.com.  Any party
hereto  may  change  its address upon 10 days' written notice to any other party
hereto.

     12.     Construction.  Words  of any gender used in this Agreement shall be
             ------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.  In addition, the pronouns used in this Agreement shall be understood
and  construed  to  apply  whether  the  party  referred  to  is  an individual,
partnership,  joint  venture,  corporation or an individual or individuals doing
business  under  a  firm  or  trade name, and the masculine, feminine and neuter
pronouns  shall  each include the other and may be used interchangeably with the
same  meaning.

     13.     Waiver.  No  course  of  dealing on the part of any party hereto or
             ------
its agents, or any failure or delay by any such party with respect to exercising
any  right,  power  or  privilege  of  such  party  under  this Agreement or any
instrument  referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later  exercise  thereof  or any exercise of any other right, power or privilege
hereunder  or  thereunder.

     14.     Cumulative Rights.  The rights and remedies of any party under this
             -----------------
Agreement and the instruments executed or to be executed in connection herewith,
or  any of them, shall be cumulative and the exercise or partial exercise of any
such  right  or  remedy  shall  not  preclude the exercise of any other right or
remedy.

     15.     Invalidity.  In  the  event  any  one  or  more  of  the provisions
             ----------
contained  in this Agreement or in any instrument referred to herein or executed
in  connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable  in  any respect, such invalidity, illegality, or unenforceability
shall  not  affect  the  other  provisions  of  this Agreement or any such other
instrument.

     16.     Time  of  the  Essence.  Time  is of the essence of this Agreement.
             ----------------------

     17.     Headings.  The  headings used in this Agreement are for convenience
             --------
and  reference  only and in no way define, limit, simplify or describe the scope
or  intent  of this Agreement, and in no way effect or constitute a part of this
Agreement.

     18.     Excusable  Delay.  None of the parties hereto shall be obligated to
             ----------------
perform  and none shall be deemed to be in default hereunder, if the performance
of  a  non-monetary  obligation  is  prevented  by  the occurrence of any of the
following,  other  than  as  the  result of the financial inability of the party
obligated  to  perform:  acts  of  God,  strikes,  lock-outs,  other  industrial
disturbances,  acts  of  a  public  enemy,  terrorists,  wars or war-like action
(whether  actual, impending or expected and whether de jure or de facto), arrest
or other restraint of governmental (civil or military) blockades, insurrections,
riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods,  washouts,  sink  holes,  civil  disturbances,  explosions,  breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public  authority,  nuclear  reaction or radiation, radioactive contamination or
other  causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably  within  the  control  of  the  party  claiming  the  right  to delay
performance  on  account  of  such  occurrence.

     19.     Incorporation by Reference.  The Securities Purchase Agreement, the
             --------------------------
Convertible  Debenture,  the  Warrants,  the  Registration Rights Agreement, the
Security  Agreement,  the  Escrow Shares Agreement, and the Irrevocable Transfer
Agent  Instructions,  the Escrow Agreement or any of the Attachments referred to
therein,  constitute  integral parts to this Agreement and are incorporated into
this  Agreement  by  this  reference.

     20.     Multiple  Counterparts.  This  Agreement  may be executed in one or
             ----------------------
more  counterparts,  each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  A facsimile transmission
of  an executed copy as well as a PDF copy of an executed copy of this Agreement
shall  be  deemed  to  be  an  original.

                                        5
<PAGE>
     21.     Controlling  Agreement.  In  the  event of any conflict between the
             ----------------------
terms  of  this  Agreement,  the  Securities Purchase Agreement, the Convertible
Debenture,  the  Warrants,  the  Registration  Rights  Agreement,  the  Security
Agreement,  the  Escrow  Shares  Agreement,  and  the Irrevocable Transfer Agent
Instructions,  the  Escrow  Agreement  or  any  of  the  Attachments referred to
therein,  the  terms  of  the  Securities  Purchase  Agreement  shall  control.

     22.     Law  Governing.  This  Agreement shall be construed and governed by
             --------------
the  laws of the State of Florida, and all obligations hereunder shall be deemed
performable  in  Dade  County,  Florida.

     23.     Perfection  of  Title.  The  parties hereto shall do all other acts
             ---------------------
and  things  that may be reasonably necessary or proper, fully or more fully, to
evidence,  complete  or  perfect  this Agreement, and to carry out the intent of
this  Agreement.

     24.     Entire Agreement.  This instrument contains the entire Agreement of
             ----------------
the  parties  with  respect to the subject matter hereof, and may not be changed
orally,  but  only  by an instrument in writing signed by the party against whom
enforcement  of  any  waiver,  change,  modification, extension, or discharge is
sought.

     IN  WITNESS  WHEREOF,  the parties have executed this Agreement on the date
first  written  above.

                                       THE SECURED PARTY:

                                       ----------------------------------------
                                       MEL HARRIS

                                       ----------------------------------------
                                       STEVEN POSNER

                                       THE DEBTOR:

                                       ----------------------------------------
                                       BILLY V. RAY, JR.

Attachment:
----------
Attachment A     The Escrow Agreement

                                        6
<PAGE>
                                ESCROW AGREEMENT

     THIS  ESCROW  AGREEMENT is made and entered into this ____ day of December,
2005  by  and  between  MEL  HARRIS  and  STEVEN  POSNER,  or  their  designees
(collectively,  the  "Secured  Party")  and BILLY V. RAY, JR. (the "Debtor") and
GLAST,  PHILLIPS  &  MURRAY,  P.C.  (the  "Escrow  Agent").

     WHEREAS,  the  Secured  Party, pursuant to that certain Securities Purchase
Agreement  of  even  date  herewith  (the  "Securities  Purchase Agreement") has
purchased  (i)  a  $1,000,000  Secured  Convertible  Debenture (the "Convertible
Debenture"),  which  shall be convertible, unless redeemed by the Company before
the  expiration  of 120 days from the Closing Date (as defined in the Securities
Purchase Agreement) (the "Exclusive Redemption Date"), into shares of the common
stock,  par  value  $0.001  (the  "Common Stock") (as converted, the "Conversion
Shares")  of  CHARYS  HOLDING  COMPANY,  INC.,  a  Delaware  corporation  (the
"Company"),  and  (ii)  warrants  (the  "Warrants")  to purchase an aggregate of
250,000  shares  of the Common Stock (the "Warrant Shares") for a total purchase
price  of  $1,000,000  (the  "Purchase  Price");  and

     WHEREAS,  all capitalized terms not otherwise defined herein shall have the
same meaning as defined in the Securities Purchase Agreement and all Attachments
thereto;  and

     WHEREAS, the Debtor owns 2,185,150 shares of the Common Stock and 1,000,000
shares  of  the  Series  A  preferred stock of the Company, par value $0.001 per
share  (the  "Preferred  Stock");  and

     WHEREAS,  to secure the payment of the Convertible Debenture and all of the
Obligations  described  in the Securities Purchase Agreement and all Attachments
thereto,  the  Debtor  has  executed and delivered to the Secured Party that one
certain  Stock  Pledge  Agreement  of  even  date  herewith  (the  "Stock Pledge
Agreement");  and

     WHEREAS,  the  Securities  Purchase  Agreement  provides  for  an escrow as
therein  provided;

     NOW,  THEREFORE, in consideration of the foregoing and the following mutual
covenants  and  agreements,  the  parties  hereto  agree  as  follows:

     1.     Creation  of  Escrow.  The Debtor has delivered into escrow with the
            --------------------
Escrow  Agent,  the receipt of which is hereby acknowledged by the Escrow Agent,
2,185,150  shares  of the Common Stock and 950,000 shares of the Preferred Stock
(the  "Escrowed  Shares").  The  Escrowed  Shares have been accompanied by stock
powers  duly executed by the Debtor in favor of the Secured Party, which will be
utilized  to  transfer the Escrowed Shares to the Secured Party upon an Event of
Default  as  defined  in  the  Stock  Pledge  Agreement.

     2.     Voting  Rights.  So  long  as  no  Event of Default has occurred and
            --------------
remains  uncured  for  the applicable grace period under the Securities Purchase
Agreement,  the  Convertible  Debenture,  the  Warrants, the Registration Rights
Agreement,  the  Security  Agreement,  the  Escrow  Shares  Agreement,  and  the
Irrevocable  Transfer  Agent  Instructions, the Stock Pledge Agreement or any of
the  Attachments  referred  to therein, or this Agreement, the Debtor shall have
the  right  to  vote  all of the Escrowed Shares, and the Secured Party shall on
demand execute and deliver an effective proxy or proxies in favor of the Debtor,
whenever  demand is made upon the Secured Party for such proxy or proxies by the
Debtor.  Upon  any  Event  of  Default,  all  voting  rights with respect to the
Escrowed  Shares  shall  be  vested  in  the  Secured  Party.

     3.     Duty  of the Escrow Agent.  The sole duty of the Escrow Agent, other
            -------------------------
than  as hereinafter specified, shall be to receive the Escrowed Shares and hold
them  subject  to  release,  in  accordance  with  this  Agreement.

     4.     Release  of  the  Escrowed Shares and Termination.  The Escrow Agent
            -------------------------------------------------
shall  release  the  Escrowed  Shares  upon  receipt  of  written  notice of the
satisfaction  of  all  of  the  terms  of the Securities Purchase Agreement, the
Convertible  Debenture,  the  Warrants,  the  Registration Rights Agreement, the
Security  Agreement,  the  Escrow Shares Agreement, and the Irrevocable Transfer
Agent  Instructions,  the  Stock  Pledge  Agreement  or  any  of the Attachments
referred  to  therein,  and  this  Agreement.  Upon the complete delivery of the
Escrowed  Shares  by  the

                                        1
<PAGE>
Escrow Agent to the Debtor in accordance with the distribution terms hereinabove
set  forth,  the Escrow Agent shall be relieved of all liabilities in connection
with  the  Escrow  Account  and  this  Agreement  shall  terminate.

     5.     Liability  of  the  Escrow  Agent.  The  duties  of the Escrow Agent
            ---------------------------------
hereunder  will  be  limited  to  observance  of  the express provisions of this
Agreement.  Furthermore,  the  Escrow  Agent  is  not expected or required to be
familiar  with  the provisions of any other writing, understanding or agreement,
and shall not be charged with any responsibility or liability in connection with
the  observance  or  non-observance  of  the  provisions  of such other writing,
understanding or agreement, and no implied covenant of any type whatsoever shall
be  read  into  this  Agreement.  The  Escrow  Agent  may  rely and act upon any
instrument  received  by  it  pursuant  to  this  Agreement  which it reasonably
believes  to  be  in  conformity with the requirements of this Agreement and the
Escrow  Agent  shall  not  be  responsible  for  determining  the  genuineness,
authenticity  of  authority from any such instrument or the person signing same.
The  Escrow  Agent  will  not  be liable for any action taken or not taken by it
under the terms of this Agreement in the absence of fraud or gross negligence on
its  part.

     The  further  provisions  shall  govern  the  Escrow  Agent's  liabilities
hereunder:

          (a)     In  receiving  the Escrowed Shares, the Escrow Agent acts only
as  a  depository  and thereby assumes no responsibility, except pursuant to the
terms  of  this  Agreement.

          (b)     The  Escrow Agent may act or refrain from acting in respect of
any  matter  covered by this Agreement in full reliance upon and with the advice
of  counsel  which  may  be  selected  by it, and shall be fully protected in so
acting  or  in  refraining  from  acting  upon  the  advice  of  such  counsel.
Furthermore, the Escrow Agent may rely and shall be protected in acting upon any
writing  that  may  be  submitted  to it in connection with its duties hereunder
without determining the genuineness, authenticity or due authority from any such
writing or the person signing same and shall have no liability or responsibility
with  respect  to  the  form,  content  or  validity  thereof.

          (c)     The Escrow Agent shall have no responsibility or liability for
any  act  or  omission  on its part, notwithstanding any demand or notice to the
contrary  by the Secured Party or any other person or entity, all subject to the
sole  limitation  that  the Escrow Agent exercises its best judgment.  Except as
herein  expressly  provided,  none  of  the  provisions  of this Agreement shall
require  the  Escrow  Agent  to  expend or risk its own funds or otherwise incur
financial  liability  or  expense  in  the  performance  of  any  of  its duties
hereunder.

          (d)     The  Escrow Agent is hereby authorized to comply with and obey
all  orders,  judgments, decrees or writs entered or issued by any court, and in
the  event  the  Escrow  Agent  obeys or complies with any such order, judgment,
decree or writ, in whole or in part, it shall not be liable to the Secured Party
and the Debtor or any other parties to this Agreement, or to any other person or
entity,  by  reason  or  such  compliance,  notwithstanding  that  it  shall  be
determined  that  any  such  order,  judgment, decree or writ be entered without
jurisdiction or be invalid for any reason or be subsequently reversed, modified,
annulled,  satisfied  or  vacated.

          (e)     The  Escrow Agent shall not be required to institute or defend
any action or legal process involving any matter referred to herein which in any
manner affects its duties or liabilities hereunder to take any other action with
reference  to  the  Escrowed  Shares  not specifically agreed to herein, and the
Escrow  Agent shall not be responsible for any act or failure to act on its part
except  in  the  case  of  its  own  fraud  or  gross  negligence.

          (f)     Should  any  controversy  arise  between the Escrow Agent, the
Secured  Party, or the Debtor or between any other person or entity with respect
to  this  Agreement, or with respect to the ownership of or the right to receive
the  Escrowed  Shares, the Escrow Agent shall have the right to institute a plea
of  interpleader  in any court of competent jurisdiction to determine the rights
of  the  parties.  Should  a  plea  of interpleader be instituted, or should the
Escrow  Agent  become  involved in litigation in any manner whatsoever connected
with  or  pertaining to this Agreement or the Escrowed Shares, the Secured Party
and  the  Debtor hereby agree to pay the Escrow Agent, on demand, in addition to
any charge made hereunder for acting as escrow agent, reasonable attorneys' fees
incurred  by  the  Escrow  Agent, and any other disbursements, expenses, losses,
costs,  and  damages  in  connection  with  or  resulting  from such litigation.

                                        2
<PAGE>
     6.     Indemnification.  The  Secured  Party and the Debtor hereby agree to
            ---------------
indemnify  and  hold  the  Escrow  Agent  harmless  from and against any and all
claims, loses, liabilities, costs, damages, fees charges and expenses (including
attorneys'  fees)  which  the Escrow Agent may incur or sustain by reason of its
acting  as  Escrow Agent under this Agreement, unless same shall result from the
fraud  or  gross  negligence  of  the  Escrow  Agent.

     7.     Resignation.  The  Escrow  Agent  may  resign as escrow agent at any
            -----------
time  by giving the Secured Party and the Debtor at least 10 days' prior written
notice  of such resignation.  If, on the effective date of such resignation, the
Escrow Agent has not received written instructions of appointment of a successor
escrow  agent,  the  Escrow  Agent may thereupon deposit the Escrowed Shares and
stock  powers  into  the  registry  of  a  court of competent jurisdiction.  The
parties  hereto  intend  that  a  substitute  escrow  agent will be appointed to
fulfill  the duties of the Escrow Agent hereunder for the remaining term of this
Agreement  in the event of the Escrow Agent's resignation, and the Secured Party
and  the  Debtor  will  use  their best efforts to promptly appoint a substitute
Escrow  Agent  who shall be bound by the terms and provisions of this Agreement.

     8.     Termination  and  Amendment.  This  Agreement shall remain in effect
            ---------------------------
until  the  Escrowed  Shares are delivered in accordance herewith; provided that
any escrow agent hereunder who resigns in accordance with the terms hereof shall
no longer be bound by this Agreement, but this Agreement shall remain in effect,
notwithstanding  such  resignation,  for  purposes of determining the rights and
duties  of  the Secured Party and the Debtor and any successor escrow agent.  No
amendment  or  modification to this Agreement shall be in force or effect unless
signed  by  the  parties  hereto.

     9.     No  Trusteeship.  The  Secured  Party  and the Debtor agree that the
            ---------------
Escrow  Agent is acting solely as an escrowee hereunder and not as a trustee and
that  the Escrow Agent has no fiduciary duties, obligations or liabilities under
this  Agreement.

     10.     Confidentiality.  Except  as  required  by  applicable  law,  legal
             ---------------
process  or  other legal compulsion, the Escrow Agent shall hold all information
relating to the transactions contemplated by this Agreement in strict confidence
and  under  no  circumstance  shall  any  of  the  terms  and  conditions or the
participants  involved  be  disclosed,  unless  such  disclosure  is mandated by
applicable  law.

     11.     No  Contracts,  Arrangements,  Understandings or Relationships with
             -------------------------------------------------------------------
Respect  to Securities.  Other than as described herein, there are no contracts,
----------------------
arrangements,  understandings or relationships (legal or otherwise) by any party
to  this  Agreement  or  the  Securities  Purchase  Agreement,  the  Convertible
Debenture,  the  Warrants,  the  Registration  Rights  Agreement,  the  Security
Agreement,  the  Escrow  Shares  Agreement,  and  the Irrevocable Transfer Agent
Instructions,  the  Stock Pledge Agreement or any of the Attachments referred to
therein,  or  any other person with respect to the Escrowed Shares, or any other
securities  of  the  Company, including but not limited to transfer or voting of
any  of  the  Escrowed  Shares, or any other securities of the Company, finder's
fees,  joint ventures, loan or option arrangements, puts or calls, guarantees of
profits,  division  of profits or loss, or the giving or withholding of proxies.

     12.     Attorneys'  Fees.  In the event that it should become necessary for
             ----------------
any  party  entitled  hereunder  to  bring  suit  against  any  other  party for
enforcement  of  the covenants contained herein, the parties hereby covenant and
agree  that  the  party  who is found to be in violation of this Agreement shall
also be liable to the other parties for all reasonable attorneys' fees and costs
of  court  incurred  by  such  other  parties.

     13.     Benefit.  The  terms  and  provisions  of  this  Agreement shall be
             -------
binding  upon, inure to the benefit of and be enforceable by, the parties hereto
and  their  respective  successors  and  permitted  assigns.

     14.     Notices.  All  notices, requests, demands, and other communications
             -------
hereunder  shall be in writing and delivered personally or sent by registered or
certified  United States mail, return receipt requested with postage prepaid, by
facsimile, or by e-mail, if to the Secured Party, addressed c/o Donald Bezahler,
Esq.,  10800  Biscayne  Boulevard,  10th Floor, Miami, Florida 33161, telecopier
(____)  _______,  and e-mail dbezahler@plgi.net; and if to the Debtor, addressed
to  Mr.  Billy  V.  Ray, Jr. at 1117 Perimeter Center West, Suite N415, Atlanta,
Georgia  30338, telecopier (678) 443-2320, and email bray@charys.com.; and if to
the  Escrow  Agent,  addressed  to  Norman  T. Reynolds, Esq., Glast, Phillips &
Murray, P.C., at 815 Walker Street, Suite 1250, Houston, Texas 77002, telecopier

                                        3
<PAGE>
(713)  237-3202,  and  e-mail  nreynolds@gpm-law.com.  Any  party may change its
address  for  purposes  of  receiving notices pursuant to this Agreement upon 10
days  written  notice.

     15.     Construction.  Words  of any gender used in this Agreement shall be
             ------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.  In addition, the pronouns used in this Agreement shall be understood
and  construed  to  apply  whether  the  party  referred  to  is  an individual,
partnership,  joint  venture,  corporation or an individual or individuals doing
business  under  a  firm  or  trade name, and the masculine, feminine and neuter
pronouns  shall  each include the other and may be used interchangeably with the
same  meaning.

     16.     Waiver.  No  course  of  dealing on the part of any party hereto or
             ------
its agents, or any failure or delay by any such party with respect to exercising
any  right,  power  or  privilege  of  such  party  under  this Agreement or any
instrument  referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later  exercise  thereof  or any exercise of any other right, power or privilege
hereunder  or  thereunder.

     17.     Representations,  Warranties  and  Agreements  to  Survive.  All
             ----------------------------------------------------------
indemnity  agreements  set  forth  in  this  Agreement,  as  well  as  all
representations,  warranties,  covenants  and other agreements set forth in this
Agreement shall remain operative and in full force and effect at the termination
of  this  Agreement,  and  any successor of the parties shall be entitled to the
benefit  of  the  respective  representations,  warranties  and  agreements made
herein.

     18.     Cumulative  Rights.  The  rights  and  remedies  contained  in this
             ------------------
Agreement  shall  be cumulative and the exercise or partial exercise of any such
right  or  remedy  shall not preclude the exercise of any other right or remedy.

     19.     Invalidity.  In  the  event  any  one  or  more  of  the provisions
             ----------
contained  in  this  Agreement  shall,  for  any  reason, be held to be invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect the other provisions of this Agreement or any
such  other  instrument.

     20.     Headings.  The  headings used in this Agreement are for convenience
             --------
and reference only and in no way define, limit, amplify or describe the scope or
intent  of  this  Agreement,  and  do  not  effect  or constitute a part of this
Agreement.

     21.     Excusable Delay.  The parties shall not be obligated to perform and
             ---------------
shall  not  be  deemed  to  be  in  default  hereunder,  if the performance of a
non-monetary obligation required hereunder is prevented by the occurrence of any
of  the  following,  other  than as the result of the financial inability of the
party  obligated  to  perform: acts of God, strikes, lock-outs, other industrial
disturbances,  acts  of  a public enemy, war or war-like action (whether actual,
impending  or  expected  and  whether  de jure or de facto), acts of terrorists,
arrest  or  other  restraint  of  governmental  (civil  or military), blockades,
insurrections,  riots,  epidemics,  landslides,  lightning,  earthquakes, fires,
hurricanes,  storms,  floods,  washouts,  sink  holes,  civil  disturbances,
explosions,  breakage  or  accident  to  equipment or machinery, confiscation or
seizure  by  any  government of public authority, nuclear reaction or radiation,
radioactive contamination or other causes, whether of the kind herein enumerated
or  otherwise,  that are not reasonably within the control of the party claiming
the  right  to  delay  performance  on  account  of  such  occurrence.

     22.     No Third-Party Beneficiary.  Any agreement to pay an amount and any
             --------------------------
assumption  of  liability contained in this Agreement, express or implied, shall
be  only  for  the  benefit  of  the  undersigned  parties  and their respective
successors  and assigns (as herein expressly permitted), and such agreements and
assumptions  shall  not inure to the benefit of the obligees or any other party,
whomsoever, it being the intention of the parties hereto that no one shall be or
be  deemed  to  be  a  third-party  beneficiary  of  this  Agreement.

     23.     Governing  law;  Jurisdiction.  This Agreement shall be governed by
             -----------------------------
and  construed  in accordance with the laws of the State of Texas without regard
to  any  conflicts  of  laws  provisions thereof.  Each party hereby irrevocably
submits to the personal jurisdiction of the United States District Court located
in  Houston,  Texas,  as well as of the District Courts of the State of Texas in
Houston,  Texas  over  any  suit,  action  or  proceeding  arising  out  of  or

                                        4
<PAGE>
relating  to  this  Agreement.  Each  party  hereby  irrevocably  waives, to the
fullest  extent  permitted  by  law, any objection which it may now or hereafter
have to the laying of the venue of any such mediation, arbitration, suit, action
or  proceeding brought in any such county and any claim that any such mediation,
arbitration,  suit, action or proceeding brought in such county has been brought
in  an  inconvenient  forum.

     24.     Incorporation by Reference.  The Securities Purchase Agreement, the
             --------------------------
Convertible  Debenture,  the  Warrants,  the  Registration Rights Agreement, the
Security  Agreement,  the  Escrow Shares Agreement, and the Irrevocable Transfer
Agent  Instructions,  the  Stock  Pledge  Agreement  or  any  of the Attachments
referred  to  therein,  constitute  integral  parts  to  this  Agreement and are
incorporated  into  this  Agreement  by  this  reference.

     25.     Multiple  Counterparts.  This  Agreement  may be executed in one or
             ----------------------
more  counterparts,  each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  A facsimile transmission
of  an executed copy as well as a PDF copy of an executed copy of this Agreement
shall  be  deemed  to  be  an  original.

     26.     Controlling  Agreement.  In  the  event of any conflict between the
             ----------------------
terms  of  this  Agreement,  the  Securities Purchase Agreement, the Convertible
Debenture,  the  Warrants,  the  Registration  Rights  Agreement,  the  Security
Agreement,  the  Escrow  Shares  Agreement,  and  the Irrevocable Transfer Agent
Instructions,  the  Stock Pledge Agreement or any of the Attachments referred to
therein,  the  terms  of  the  Securities  Purchase  Agreement  shall  control.

     27.     Entire  Agreement.  This  instrument  contains  the  entire
             -----------------
understanding  of the parties with respect to the subject matter hereof, and may
not  be  changed  orally, but only by an instrument in writing signed by each of
the  parties  hereto.

     IN  WITNESS  WHEREOF, the parties have caused this Agreement to be executed
as  of  the  day  and  year  first  above  written.

                                       ----------------------------------------
                                       MEL HARRIS

                                       ----------------------------------------
                                       STEVEN POSNER

                                       ----------------------------------------
                                       BILLY V. RAY, JR.

                                       GLAST, PHILLIPS & MURRAY, P.C.

                                       By
                                         --------------------------------------
                                         Norman T. Reynolds

                                        5
<PAGE>
                                    EXHIBIT E

                     IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                     ---------------------------------------

                               December ___, 2005

Fidelity Transfer Company
1800 South West Temple, Suite 301
Salt Lake City, Utah 84115

     RE:     CHARYS  HOLDING  COMPANY  INC.

Ladies  and  Gentlemen:

     Reference  is  made  to  that  certain  Securities  Purchase Agreement (the
"Securities  Purchase  Agreement"),  dated  December  ___,  2005, by and between
 -------------------------------
Charys  Holding  Company  Inc.,  a Delaware corporation (the "Company"), and Mel
                                                              -------
Harris  and  Steven  Posner,  or their designees (collectively, the "Buyer") and
                                                                     -----
that  certain  Escrow  Shares  Escrow Agreement (the "Escrow Agreement") of even
                                                      ----------------
date  herewith  among the Company, the Buyer and Glast, Phillips & Murray, P.C.,
as  escrow  agent  (the  "Escrow  Agent").  Pursuant  to the Securities Purchase
                          -------------
Agreement,  the  Company  shall  sell to the Buyer, and the Buyer shall purchase
from  the  Company, one or more convertible debentures (collectively referred to
herein as the "Debenture") in the aggregate principal amount of $1,000,000, plus
               ---------
accrued  interest,  which  are  convertible  into shares of the Company's common
stock,  par  value  $0.001  per  share  (the  "Common  Stock"),  at  the Buyer's
                                               -------------
discretion  unless  earlier redeemed in full by the Company.  These instructions
relate  to  the  following  stock  or  proposed  stock  issuances  or transfers:

     The  Company has agreed to issue to the Buyer (i) up to 1,250,000 shares of
the  Common  Stock  upon  conversion  of  the  Debenture  ("Conversion Shares"),
                                                            -----------------
including  the  shares  of  the  Common  Stock  to  be  issued to the Buyer upon
conversion  of accrued interest into Common Stock and (ii) 250,000 shares of the
Common Stock upon exercise of the Warrant (as defined in the Securities Purchase
Agreement)  (the  "Warrant  Shares")  if  and  to  the extent required under the
                   ---------------
Securities  Purchase  Agreement.

     The  Company  has  issued  1,500,000  shares  of  Common Stock (the "Escrow
                                                                          ------
Shares") in the Buyer's name that have been or are being delivered to the Escrow
------
Agent  pursuant  to  the Securities Purchase Agreement and the Escrow Agreement.

     This  letter  shall serve as our irrevocable authorization and direction to
Fidelity  Transfer  Company  (the  "Transfer  Agent")  to  do  the  following:
                                    ---------------

     1.     Conversion  Shares.
            ------------------

          (a)     Instructions  Applicable  to  Transfer Agent.  With respect to
the Conversion Shares and the Warrant Shares, the Transfer Agent shall issue the
Conversion  Shares  or  the  Warrant  Shares to the Buyer from time to time upon
delivery  to  the  Transfer  Agent  of  a  properly  completed and duly executed
Conversion  Notice  (the  "Conversion  Notice"),  in the form attached hereto as
                           ------------------
Exhibit  I,  delivered  on  behalf  of  the Company to the Transfer Agent by the
----------
Escrow  Agent  or  a  properly  completed  and  duly executed notice of exercise
substantially  in  the  form  attached  to  the Warrant (the "Exercise Notice"),
                                                              ---------------
respectively.  Unless  the Company shall have delivered in good faith its notice
of  objection  only  to the calculation of the Conversion Shares to the Transfer
Agent  and  Escrow  Agent  within  one  (1)  business  day of its receipt of the
Conversion  Notice,  upon receipt of a Conversion Notice or Exercise Notice, the
Transfer  Agent  shall  within  three  (3) Trading Days thereafter (i) issue and
surrender to a common carrier for overnight delivery to the address as specified
in  the  Conversion  Notice  or  Exercise Notice, a certificate or certificates,
registered  in  the name of the Buyer or its designees, for the number of shares
of  Common  Stock  to  which  the  Buyer  shall  be entitled as set forth in the
Conversion Notice or Exercise Notice or (ii) provided that the Transfer Agent is
participating  in The Depository Trust Company ("DTC") Fast Automated Securities
                                                 ---
Transfer Program, upon the request of the Buyer, credit such aggregate number of
shares  of  Common  Stock  to  which  the

                                        1
<PAGE>
Buyer  shall  be  entitled to the Buyer's or its designees' balance account with
DTC  through  their Deposit Withdrawal At Custodian ("DWAC") system provided the
                                                      ----
Buyer  causes  its bank or broker to initiate the DWAC transaction. For purposes
hereof,  "Trading Day" shall mean any day on which the Nasdaq National Market is
          -----------
open  for  customary  trading.

          (b)     The  Company  hereby  confirms  to  the Transfer Agent and the
Buyer  that  certificates  representing the Conversion Shares and Warrant Shares
shall  not bear any legend restricting transfer and should not be subject to any
stop-transfer  restrictions  and  shall  otherwise be freely transferable on the
books  and records of the Company; provided that counsel to the Company delivers
(i) the Notice of Effectiveness set forth in Exhibit II attached hereto and (ii)
                                             ----------
an  opinion of counsel in the form set forth in Exhibit III attached hereto, and
                                                -----------
that  if  the  Conversion  Shares  and the Warrant Shares are not registered for
resale under the Securities Act of 1933, as amended (the "Securities Act"), then
the  provisions of paragraph 1(a)(ii), above, shall not be applicable until such
shares  are  registered,  and  the  certificates  for  the Conversion Shares and
Warrant  Shares  shall  bear  a  legend  in  substantially  the  following form:

     "THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
     STATE  SECURITIES  LAWS.  THE  SECURITIES  HAVE  BEEN  ACQUIRED  FOR
     INVESTMENT  AND  MAY  NOT  BE  OFFERED  FOR SALE, SOLD, TRANSFERRED OR
     ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
     SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
     STATE  SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY
     ACCEPTABLE  TO  THE  COMPANY,  THAT REGISTRATION IS NOT REQUIRED UNDER
     SAID  ACT  OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
     TO  RULE  144  UNDER  SAID  ACT."

     In  the event such number of Conversion Shares or Warrant Shares are issued
to  the  Buyer  such  that  the  Buyer would be considered an "affiliate" of the
Company  as  defined  under  Rule  144 of the Securities Act or in the event the
Transfer  Agent  determines  that  the  Buyer  would  otherwise be considered an
affiliate  of  the  Company  under  Rule  144  of  the  Securities Act, then the
certificates for the Conversion Shares and/or Warrant Shares shall bear a legend
in  substantially  the  following  form:

     THE  REGISTERED  HOLDER  OF THE SHARES REPRESENTED BY THIS CERTIFICATE
     MAY  BE AN AFFILIATE (AS SUCH TERM IS DEFINED BY RULE 144 ("RULE 144")
     PROMULGATED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
     "SECURITIES  ACT"))  OF THE COMPANY. IF SUCH HOLDER IS AN AFFILIATE OF
     THE  COMPANY,  THESE  SHARES MAY ONLY BE SOLD, TRANSFERRED OR ASSIGNED
     PURSUANT  TO  AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
     ACT  OR  IN ACCORDANCE WITH THE TERMS OF RULE 144 OR ANOTHER EXEMPTION
     FROM  REGISTRATION  UNDER  THE  SECURITIES  ACT.

     The  Transfer  Agent herby acknowledges that the Escrow Shares are not held
by  an  affiliate, as defined under Rule 144 of the Securities Act, and that, as
such,  the  foregoing  legend  will  not  be  included  on  any  certificate  or
certificates  representing  the  Escrow Shares so long as such Escrow Shares are
held  in  escrow  by  the  Escrow  Agent  under  the  Escrow  Agreement.

          (c)     In  the  event that counsel to the Company fails or refuses to
render  an  opinion as required to issue the Conversion Shares or Warrant Shares
in  accordance  with the preceding paragraph (either with or without restrictive
legends,  as  applicable), then the Company irrevocably and expressly authorizes
counsel  to  the  Buyer to render such opinion.  The Transfer Agent shall accept
and  be  entitled  to  rely  on  such  opinion  for  the purposes of issuing the
Conversion  Shares  and  Warrant  Shares.

          (d)     Instructions  Applicable  to  Escrow  Agent.  Upon  the Escrow
Agent's  receipt  of  a properly completed Conversion Notice and/or the Exercise
Notice,  the  Escrow  Agent  shall,  within  one  (1)  Trading  Day

                                        2
<PAGE>
thereafter,  send  to the Transfer Agent a Conversion Notice and/or the Exercise
Notice  in  the  form  attached  hereto  as Exhibit I, which shall constitute an
                                            ---------
irrevocable  instruction to the Transfer Agent to process such Conversion Notice
in  accordance  with  the terms of these instructions.  The Transfer Agent shall
not  process  such  Conversion  Notice to the extent the Company has delivered a
written  objection  delivered  in  good  faith  by  the  Company  as to only the
calculation of the Conversion Shares to the Transfer Agent and the Escrow Agent.

     2.     Escrow  Shares.

          (a)     If  the  Escrow  Agent sends the Escrow Shares to the Transfer
Agent  for  removal  of the restrictive legend, the Company hereby confirms that
the  Transfer  Agent  shall  reissue to the Escrow Agent the Escrow Shares which
shall  not bear any legend restricting transfer and should not be subject to any
stop-transfer  restrictions  and  shall  otherwise be freely transferable on the
books  and records of the Company; provided that counsel to the Company delivers
(i) the Notice of Effectiveness set forth in Exhibit II attached hereto and (ii)
                                             ----------
an  opinion  of counsel in the form set forth in Exhibit III attached hereto, or
                                                 -----------
counsel  to  the  Company  shall issue a legal opinion to the Company's Transfer
Agent  that  the  legend  shall  be removed pursuant to Rule 144, Rule 144(k) or
applicable  requirements  of  the  Securities  Act.

          (b)     In  the  event that counsel to the Company fails or refuses to
render  an opinion as required to issue the Escrow Shares in accordance with the
preceding paragraph (either with or without restrictive legends, as applicable),
then  the  Company  irrevocably and expressly authorizes counsel to the Buyer to
render such opinion.  The Transfer Agent shall accept and be entitled to rely on
such  opinion  for  the  purposes of issuing the Escrow Shares without a legend.

     3.     All  Shares.

          (a)     The Transfer Agent shall reserve for issuance to the Buyer the
Conversion  Shares  and Warrant Shares.  All such shares shall remain in reserve
with the Transfer Agent until the Buyer provides the Transfer Agent instructions
that  the  shares or any part of them shall be taken out of reserve and shall no
longer  be  subject  to  the  terms  of these instructions.  Notwithstanding the
foregoing,  in  the  event the Company redeems the Convertible Debenture in full
prior  to  any  conversion  thereof by the Buyer, the Conversion Shares shall be
taken  out  of  reserve  upon  receipt  by  the  Transfer Agent of the Company's
Redemption Notice and evidence of payment of the Redemption Price, whereupon the
Conversion  Shares shall no longer be subject to the terms of these instructions
and  the Escrow Agent shall deliver the certificates therefor to the Company for
cancellation.

          (b)     Unless the Company has delivered its written objection in good
faith  as  only  to  the calculation of the Conversion Shares under Section 1(a)
above,  the  Transfer  Agent shall rely exclusively on the Conversion Notice and
Exercise  Notice  and  shall have no liability for relying on such instructions.
Any  Conversion  Notice  delivered  hereunder  shall  constitute  an irrevocable
instruction  to  the  Transfer  Agent  to  process  such  notice  or  notices in
accordance  with  the terms thereof subject only to any written objection of the
Company  delivered  to  the Transfer Agent and the Escrow Agent.  Such notice or
notices  may  be  transmitted  to  the  Transfer  Agent  by  facsimile  or  any
commercially  reasonable  method.

          (c)     The  Company  hereby  confirms  to  the Transfer Agent and the
Buyer  that  no  instructions other than as contemplated herein will be given to
Transfer  Agent  by  the  Company with respect to the matters referenced herein.
The  Company  hereby authorizes the Transfer Agent, and the Transfer Agent shall
be obligated, to disregard any contrary instructions received by or on behalf of
the  Company;  provided  that the Transfer Agent shall not disregard any written
notice  delivered  by  the Company within one (1) business day of its receipt of
the Conversion Notice objecting to only the calculation of the Conversion Shares
and  such shares shall not be issued until any dispute regarding the calculation
of  the  Conversion  Shares  is  resolved  among  the  parties.

     4.     Certain  Notice  Regarding  the  Escrow  Agent.  THE COMPANY AND THE
TRANSFER  AGENT  HEREBY  ACKNOWLEDGE THAT THE ESCROW AGENT IS GENERAL COUNSEL TO
THE  BUYER,  THE MANAGING PARTNER OF THE ESCROW AGENT IS A DIRECTOR OF THE BUYER
AND  COUNSEL  TO  THE BUYER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED AND
REFERRED  HEREIN.  The parties agree that in the event of any dispute arising in
connection  with  this Agreement or otherwise in connection with any transaction
or  agreement  contemplated  and  referred herein, the Escrow Agent shall not be
permitted  to continue to represent the Buyer in any dispute between the Company
and  the  Buyer.

                                        3
<PAGE>
     The  Company  hereby agrees that it shall not replace the Transfer Agent as
the  Company's  Transfer  Agent  without  the prior written consent of the Buyer
unless  otherwise  permitted  by  the  Securities  Purchase  Agreement.

     Any  attempt  by  Transfer  Agent to resign as the Company's transfer agent
hereunder  shall not be effective until such time as the Company provides to the
Transfer Agent written notice that a suitable replacement has agreed to serve as
transfer  agent and to be bound by the terms and conditions of these Irrevocable
Transfer  Agent  Instructions;  provided,  however,  that  if  no  such suitable
replacement  has  so  agreed  within  thirty (30) days following the date of the
Transfer  Agent's  resignation, such resignation will be considered effective at
midnight,  Eastern  Time,  on  such  thirtieth  (30th)  day.

     The  Company  and  the  Transfer  Agent hereby acknowledge and confirm that
complying  with  the terms of this Agreement does not and shall not prohibit the
Transfer Agent from satisfying any and all fiduciary responsibilities and duties
it  may  owe  to  the  Company.

     The Company and the Transfer Agent acknowledge that the Buyer is relying on
the  representations  and  covenants  made by the Company and the Transfer Agent
hereunder  and  such  representations and covenants are a material inducement to
the  Buyer  purchasing  convertible  debentures  under  the  Securities Purchase
Agreement.  The  Company and the Transfer Agent further acknowledge that without
such  representations  and  covenants of the Company and the Transfer Agent made
hereunder,  the  Buyer  would  not  purchase  the  Debenture.

     Each party hereto specifically acknowledges and agrees that in the event of
a  breach  or  threatened  breach by a party hereto of any provision hereof, the
Buyer will be irreparably damaged and that damages at law would be an inadequate
remedy  if  these  Irrevocable Transfer Agent Instructions were not specifically
enforced.  Therefore,  in  the event of a breach or threatened breach by a party
hereto,  including,  without limitation, the attempted termination of the agency
relationship  created  by  this  instrument,  the  Buyer  shall  be entitled, in
addition  to  all  other  rights  or remedies, to an injunction restraining such
breach,  without being required to show any actual damage or to post any bond or
other security, and/or to a decree for specific performance of the provisions of
these  Irrevocable  Transfer  Agent  Instructions.

     IN WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable  Transfer Agent Instructions to be duly executed and delivered as of
the  date  first  written  above.

                                       CHARYS HOLDING COMPANY INC.

                                       By
                                         --------------------------------------
                                       Name:   Raymond J. Smith
                                       Title:  Chief Financial Officer

                                       ----------------------------------------
                                       MEL HARRIS

                                       ----------------------------------------
                                       STEVEN POSNER

                                        4
<PAGE>
                                    EXHIBIT I
                                    ---------

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                   ------------------------------------------

                            FORM OF CONVERSION NOTICE
                            -------------------------

Reference is made to the Securities Purchase Agreement (the "Securities Purchase
                                                             -------------------
Agreement") between Charys Holding Company Inc., (the "Company"), and Mel Harris
---------                                              -------
and Steven Posner, dated December ___, 2005.  In accordance with and pursuant to
the  Securities  Purchase  Agreement,  the  undersigned hereby elects to convert
convertible  debentures  into shares of common stock, par value $0.001 per share
(the  "Common  Stock"),  of the Company for the amount indicated below as of the
       -------------
date  specified  below.

<TABLE>
<CAPTION>
<S>                                                        <C>
Conversion Date:
                                                           ------------------------------------

Amount to be converted:                                    $
                                                             ----------------------------------

Conversion Price (indicate the basis therefor):            $
                                                             ----------------------------------

Shares of Common Stock Issuable:
                                                           ------------------------------------

Amount of Debenture unconverted:                           $
                                                             ----------------------------------

Amount of Interest Converted:                              $
                                                             ----------------------------------

Conversion Price of Interest (using same basis as above):  $
                                                             ----------------------------------

Shares of Common Stock Issuable:
                                                           ------------------------------------

Total Number of shares of Common Stock to be issued:
                                                           ------------------------------------
</TABLE>

Please  issue  the  shares  of  Common  Stock  in  the following name and to the
following  address:

<TABLE>
<CAPTION>
<S>                                                        <C>
Issue to:
                                                           ------------------------------------

Authorized Signature:
                                                           ------------------------------------

Name:
                                                           ------------------------------------

Title:
                                                           ------------------------------------

Phone #:
                                                           ------------------------------------

Broker DTC Participant Code:
                                                           ------------------------------------

Account Number*:
                                                           ------------------------------------
</TABLE>

     * NOTE THAT RECEIVING BROKER MUST INITIATE TRANSACTION ON DWAC SYSTEM.

<PAGE>
                                   EXHIBIT II
                                   ----------

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                   ------------------------------------------

                         FORM OF NOTICE OF EFFECTIVENESS
                         -------------------------------
                            OF REGISTRATION STATEMENT
                            -------------------------

__________, 2006

RE:     CHARYS HOLDING COMPANY INC.

Ladies  and  Gentlemen:

     We  are  counsel  to Charys Holding Company Inc., (the "Company"), and have
                                                             -------
represented  the  Company  in  connection  with that certain Securities Purchase
Agreement, dated as of December ___, 2005 (the "Securities Purchase Agreement"),
                                                -----------------------------
entered  into  by  and  among  the  Company  and  Mel  Harris  and Steven Posner
(collectively,  the "Buyer") pursuant to which the Company has agreed to sell to
                     -----
the  Buyer  (i)  $1,000,000  of secured convertible debentures (the "Convertible
                                                                     -----------
Debenture"), which shall be convertible into shares (the "Conversion Shares") of
---------                                                 -----------------
the  Company's  common  stock,  par value $0.001 per share (the "Common Stock"),
                                                                 ------------
(ii)  250,000  shares  of  Common Stock pursuant to a warrant (the "Warrant") in
                                                                    -------
accordance  with  the  terms  of the Securities Purchase Agreement (the "Warrant
                                                                         -------
Shares").  The  Company  has  delivered  to  the  Escrow  Agent  an aggregate of
------
1,500,000  shares of the Common Stock to be held in escrow (the "Escrow Shares")
for purposes of effectuating the delivery of the Conversation Shares and Warrant
Shares upon conversion and/or exercise of the Convertible Debenture and Warrant,
as  the case may be.  Pursuant to the Securities Purchase Agreement, the Company
also has entered into a Registration Rights Agreement, dated as of December ___,
2005,  with the Buyer (the "Investor Registration Rights Agreement") pursuant to
                            --------------------------------------
which  the  Company  agreed, among other things, to provide certain registration
rights  with respect to the Conversion Shares, the Escrow Shares and the Warrant
Shares  under  the  Securities  Act  of  1933,  as amended (the "1933 Act").  In
                                                                 --------
connection  with  the  Company's  obligations  under  the  Securities  Purchase
Agreement  and  the Registration Rights Agreement, on _______, 2006, the Company
filed  a  Registration  Statement  (File  No.  ___-_________) (the "Registration
                                                                    ------------
Statement")  with the Securities and Exchange Commission (the "SEC") relating to
---------                                                      ---
the  sale  of  the  Conversion Shares, the Escrow Shares and the Warrant Shares.

     In  connection  with  the  foregoing,  we  advise the Transfer Agent that a
member  of  the SEC's staff has advised us by telephone that the SEC has entered
an  order  declaring  the Registration Statement effective under the 1933 Act at
____ P.M. on __________, 2006 and we have no knowledge, after telephonic inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness
has  been issued or that any proceedings for that purpose are pending before, or
threatened  by,  the  SEC  and  the Conversion Shares and the Warrant Shares are
available  for  sale  under the 1933 Act pursuant to the Registration Statement.

     The  Buyer  has  confirmed  it  shall  comply  with all securities laws and
regulations  applicable  to  it  including  applicable  prospectus  delivery
requirements  upon  sale  of  the  Conversion  Shares  and  the  Warrant Shares.

                                       Very  truly  yours,

                                       By:
                                          -------------------------------------

<PAGE>
                                   EXHIBIT III
                                   -----------

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                   ------------------------------------------

                FORM OF INSTRUCTIONS REGARDING REMOVAL OF LEGEND
                ------------------------------------------------

____________, 2006

VIA FACSIMILE AND REGULAR MAIL
------------------------------

Attention:

     RE:     CHARYS HOLDING COMPANY INC.

Ladies and Gentlemen:

We  have  acted  as  counsel  to Charys Holding Company Inc. (the "Company"), in
                                                                   -------
connection  with  the  registration  of  ___________shares (the "Shares") of its
                                                                 ------
common  stock  with the Securities and Exchange Commission (the "SEC").  We have
                                                                 ---
not acted as your counsel.  These instructions are given at the request and with
the  consent  of  the  Company.

In  rendering these instructions we have relied on the accuracy of the Company's
Registration  Statement on Form SB-2, as amended (the "Registration Statement"),
                                                       ----------------------
filed by the Company with the SEC on _________ ___, 2006.  The Company filed the
Registration  Statement  on behalf of certain selling stockholders (the "Selling
                                                                         -------
Stockholders").  These  instructions  relate  solely to the Selling Shareholders
------------
listed  on  Exhibit  "A"  hereto  and  number  of Shares set forth opposite such
            ------------
Selling  Stockholders'  names.  The  SEC  declared  the  Registration  Statement
effective  on  __________  ___,  2006.

We  understand  that  the  Selling Stockholders acquired the Shares in a private
offering  exempt from registration under the Securities Act of 1933, as amended.
Information  regarding  the  Shares  to be resold by the Selling Shareholders is
contained  under  the  heading  "Selling  Stockholders"  in  the  Registration
Statement,  which  information  is  incorporated  herein  by  reference.  These
instructions  do  not  relate  to  the  issuance  of  the  Shares to the Selling
Stockholders.  The  instructions set forth herein relate solely to the resale or
transfer  by  the  Selling  Stockholders  pursuant to the Registration Statement
under  the  Federal laws of the United States of America.  We do not express any
views  concerning  any  law  of  any  state  or  other  jurisdiction.

In  rendering  these  instructions  we  have  relied  upon  the  accuracy of the
foregoing  statements.

Based  on  the  foregoing,  you are advised that the Shares have been registered
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended,  and  that  the Transfer Agent may issue the Shares without restrictive
legends  or  the  Transfer Agent may remove the restrictive legends contained on
the  Shares.  These instructions relate solely to the number of Shares set forth
opposite  the  Selling  Stockholders  listed  on  Exhibit "A"  hereto.
                                                  -----------

These  instructions  are  furnished to Transfer Agent specifically in connection
with  the  issuance  of the Shares, and solely for your information and benefit.
This  letter  may  not be relied upon by Transfer Agent in any other connection,
and  it  may  not  be  relied upon by any other person or entity for any purpose
without  our  prior written consent.  This letter may not be assigned, quoted or
used  without  our prior written consent.  The instructions set forth herein are
rendered  as  of  the date hereof, and we will not supplement these instructions
with  respect  to  changes  in the law or factual matters subsequent to the date
hereof.

                                       Very truly yours,

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

                         (LIST OF SELLING STOCKHOLDERS)
                         ------------------------------

NAME:                                                NO. OF SHARES:
---------------------------------------------------  --------------------------

<PAGE>
                                    EXHIBIT F

                              CONVERSION PROCEDURES

     1.     At  any  time  following 120 days from the Closing, and from time to
time  thereafter  during  the  term of the Convertible Debenture, the Holder may
deliver  to  the Escrow Agent written notice (a "Conversion Notice") that it has
                                                 -----------------
elected  to  convert  the  Convertible  Debenture registered in the name of such
Holder  in  whole  or  in  part  in accordance with the terms of the Convertible
Debenture and the Conversion Notice shall be in the form annexed as Exhibit A to
                                                                    ---------
the  Convertible  Debenture.

     2.     The  Holder  shall  send  by  fax  or e-mail the executed Conversion
Notice  to  the  Escrow  Agent (with a copy to the Company) by 4:00 p.m. Eastern
Time  at  least one business day prior to the Conversion Date (as defined in the
Convertible  Debenture).  The  Escrow  Agent shall send the Conversion Notice by
facsimile or e-mail address to the Company by the end of the business day on the
day  received,  assuming received by 6:00 p.m. Eastern Time and if thereafter on
the  next  business day, at the facsimile telephone number or e-mail address, as
the  case  may  be,  of  the  principal  place of business of the Company.  Each
Company  Conversion  Notice  price adjustment under Article V of the Convertible
Debenture shall be given by facsimile addressed to the Holder of the Convertible
Debenture  at  the  facsimile  telephone  number of such Holder appearing on the
books  of  the Company as provided to the Company by such Holder for the purpose
of  such  Company  Conversion Notice price adjustment, with a copy to the Escrow
Agent.  Any  such  notice  shall  be  deemed  given  and  effective  upon  the
transmission  of  such  facsimile or e-mail at the facsimile telephone number or
e-mail  address, as the case may be, specified in this Paragraph 2 (with printed
confirmation  of transmission).  In the event that the Escrow Agent receives the
Conversion  Notice  after 4:00 p.m. Eastern Time, the Conversion Notice shall be
deemed  to  have  been received on the next business day.  In the event that the
Company receives the Conversion Notice after the end of the business day, notice
will  be  deemed  to  have  been  given  the  next  business  day.

     3.     The  Company  shall  have  one business day from transmission of the
Conversion  Notice  by the Escrow Agent to object only to the calculation of the
number  of  Conversion Shares to be released out of the Escrow Shares being held
for  such  purpose.  If  the  Company  fails to object to the calculation of the
number  of Conversion Shares to be released out of the Escrow Shares within said
time,  then  the  Company  shall be deemed to have waived any objections to said
calculation.  The  Company's  only basis for any objection hereunder shall be to
the  calculation  of  the  number of Conversion Shares to be released out of the
Escrow  Shares.  If  the  Escrow  Agent  does  not receive said objection notice
within  the  time period set forth above from the Company, and provided that the
Purchaser  does  not revoke such conversion, the Escrow Agent shall release from
escrow  and  deliver  to the Holder certificates or instruments representing the
number  of  Conversion  Shares  issuable  to  the Holder in accordance with such
conversion  on  the  second  business day from the receipt by the Company of the
Conversion Notice.  In the event that the certificates evidencing the Conversion
Shares  held  by  the Escrow Agent are not in denominations appropriate for such
delivery  to the Holder, the Escrow Agent shall request the Company to cause its
transfer  agent  and registrar to reissue certificates in smaller denominations.
The  Escrow  Agent  shall, however, immediately release to the requesting Holder
certificates  representing  such lesser number of shares as the denominations in
its  possession will allow that is closest to but no more than the actual number
to  be  released  to such Holder.  Upon receipt of the reissued shares in lesser
denominations  from the Company's transfer agent, the Escrow Agent shall release
to  such  Holder  the  balance  of  the  shares  due  to  such  Holder.

     4.     The  Holder  shall  send  the  original  Convertible  Debenture  and
Conversion  Notice  to  the Escrow Agent via FedEx or other commercial overnight
courier,  along with instructions regarding names and amount of certificates for
the  issuance  of  the  Conversion  Shares,  and,  if conversion is not in full,
instructions  as to the re-issuance of the balance of the Convertible Debenture;
provided,  however,  that  if  the  Escrow  Agent  is  holding  the  Convertible
--------   -------
Debenture,  then  the Conversion Notice may be faxed or e-mailed and the fee may
be  transmitted  via  wire transfer to the Escrow Agent.  The Escrow Agent shall
deliver  the  foregoing  to  the  Company  within one business day of the Escrow
Agent's  receipt thereof.  In the event that the Escrow Agent has custody of the
Convertible  Debenture, the Escrow Agent shall notify the Company and the Holder
in writing of the balance of the Convertible Debenture remaining and the Company
and  the Holder shall acknowledge such notice in writing, in lieu of issuance of
a  new  Convertible  Debenture  for  the  balance.

<PAGE>
     5.     If  the Company will be issuing a new Convertible Debenture, it will
send  such  new  Convertible  Debenture to the Escrow Agent by overnight courier
within  five  business days of its receipt of the original Convertible Debenture
and Conversion Notice.  The Escrow Agent shall send the Conversion Shares to the
Holder  in  accordance  with  Holder's  instructions  within one business day of
receipt of the Conversion Notice and will send the new Convertible Debenture, if
any,  to  the  Holder  upon  receipt.

     6.     The  Escrow  Agent  agrees  to  notify  the  Company  in  writing by
facsimile  or  e-mail  each  time the Escrow Agent releases Escrow Shares to the
Holder, such notice to be given at least one business day prior to such release.

     7.     Notwithstanding  any of the foregoing provisions to the contrary, in
the  event  the  Company  shall  have  redeemed  the  Convertible  Debenture  in
accordance with Section 1.04 thereof, the Escrow Agent shall release back to the
Company  all  of  the Escrow Shares otherwise held in the escrow account for the
purpose  of  effectuating  the  conversion  of  the Convertible Debenture.  Said
Escrow Shares shall be distributed to the Company within one business day of the
Escrow  Agent's  receipt  of  a  copy  of the Redemption Notice delivered by the
Company to the Holder together with evidence of payment of the Redemption Price.

     8.     The  procedures  set  forth in this Exhibit F shall be applicable to
any  exercise  by  the Holder of the Warrants and, in that regard, references to
"Conversion  Notice" shall mean "Notice of Exercise" in the form attached to the
certificate  for  such  Warrants and references to "Convertible Debenture" shall
mean  the  Warrants.

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

                                     WARRANT

<PAGE>
<TABLE>
<CAPTION>
                                   SCHEDULE I
                                   ----------

                                SCHEDULE OF BUYER
                                -----------------

                           ADDRESS/FACSIMILE          PRINCIPAL AMOUNT OF
       NAME                 NUMBER OF BUYER                DEBENTURE
---------------------  -------------------------  ---------------------------
<S>                    <C>                        <C>

Mel Harris                                                           $500,000
Steven Posner                                                        $500,000
                       Telephone: (305) 899-0404
                       Facsimile:

With a copy to:        10800 Biscayne Boulevard
Donald Bezahler, Esq.  10th Floor
                       Miami, Florida 33161

                       Telephone: ___________
                       Facsimile: ___________
                       Email: dbezahler@plgi.net
</TABLE>

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

                               SHARE DENOMINATIONS
                               -------------------

NAME OF INVESTORS

Mel Harris.
Steven Posner

Stock Certificate Denominations for the Escrow Shares in the name of Mel Harris:
625,000.
Stock Certificate Denominations for the Escrow Shares in the name of Steven
Posner: 625,000.

<PAGE>

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