Stock Purchase Agreement between Charys Holding Company, Inc. and New Viasys Holdings, LLC (Viasys Network Services, Inc. and Viasys Services, Inc.)

Summary

This agreement, dated November 1, 2005, is between Charys Holding Company, Inc. (the buyer) and New Viasys Holdings, LLC (the seller), for the purchase of all shares of Viasys Network Services, Inc. and Viasys Services, Inc. The buyer will pay a combination of cash, a promissory note, and shares placed in escrow, with adjustments based on post-closing audits and potential additional payments tied to future contract proceeds. The agreement outlines payment terms, price adjustments, and conditions for releasing escrowed shares.

EX-10.1 2 ex10_1.txt EXHIBIT 10.1 STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (the "Agreement"), dated as of November 1, 2005 (the "Effective Date"), by and between Charys Holding Company, Inc., a Delaware corporation located at 1117 Perimeter Center West, Suite N415, Atlanta, GA 30338 ("Purchaser") and New Viasys Holdings, LLC, a Delaware limited liability company located at c/o Preferred Employers Holdings, 10800 Biscayne Boulevard, Miami, FL 33161 ("Seller") which is the owner of Viasys Network Services, Inc. a Florida corporation whose principal executive office is located at 26 Lake Wire Drive, Lakeland, FL 33815 ("Viasys 2") and Viasys Services, Inc., a Florida corporation whose principal executive office is located at 26 Lake Wire Drive, Lakeland Florida 33815 ("Viasys 3"). Viasys 2 and Viasys 3 are hereinafter referred to as the Company. ARTICLE 1 PURCHASE OF STOCK ----------------- 1.1 Purchase and Sale. Subject to the terms and conditions of this ------------------- Agreement, Seller agrees to sell, and Purchaser agrees to purchase from Seller, all of the issued and outstanding shares of capital stock of the Company (collectively, the "Shares"). The number of Shares which are the subject of this Agreement and the stock certificates evidencing the Shares are described in Schedule 1.1 hereto. 1.2 Price. In reliance on the representations and warranties of Seller ----- contained herein, and in consideration of the sale, conveyance, transfer and delivery of the Shares and the consummation of the other agreements and transactions referred to in this Agreement, Purchaser agrees to pay to Seller the aggregate consideration calculated in accordance with the provisions of this Article 1. 1.3 Base Purchase Price. The Base Purchase Price shall be the sum of --------------------- (a) the unaudited book value of the net assets of the Company as of August 31, 2005 as reflected on Schedule 1.3 (the "Unaudited Net Assets") which is $1,866,284.00 plus (b) four million dollars ($4,000,000). The Unaudited Net Assets excludes (i) certain of the net assets associated with the Company's contract with the Commonwealth of Virginia contract number C00016042T01 (the "VA Job") described on Schedule 1.3(a), and (ii) the debt owed to Seller by the Company in the amount of $6,399,755.00. 1.3.1 The Base Purchase Price shall be paid at Closing as follows: Cash in the amount of $2,366,284.00 which represents the value of the Unaudited Net Assets as shown on Schedule 1.3, plus five hundred thousand dollars ($500,000); a subordinated secured promissory note in the original principal amount of three million five hundred thousand dollars ($3,500,000), in the form set forth in Schedule 1.3.1 (the "Note"). The Note shall bear interest at the rate of eight percent (8%) per annum and shall be payable in installments as follows: the principal amount of one million dollars ($1,000,000), plus accrued interest, shall be due six (6) months after the Closing Date; the principal amount of five hundred thousand dollars ($500,000), plus accrued interest, shall be due nine (9) months after the Closing Date; the principal amount of five hundred thousand dollars ($500,000), plus accrued interest, shall be due twelve (12) months after the Closing Date; and the principal amount of one million five hundred thousand dollars ($1,500,000), plus accrued interest, shall be due fifteen (15) months after the Closing Date. The Note shall be secured by the collateral described in Schedule 1.3.1(a) pursuant to the Security Agreement, a form of which is set forth as Schedule 1.3.1(b). 1.3.2 Escrow. Shares of common stock of Purchaser having a Market ------ Price (as defined in Section 12.3) of five hundred thousand dollars ($500,000) on the Closing Date (the "Charys Shares") shall be placed in escrow pursuant to the Escrow Agreement set forth in Schedule 1.3.2 which among other matters customary to escrow agreements shall provide for release of the Charys Shares upon payment of the final installment of principal and interest on the Note. In the event that the Charys Shares are released to Seller, Purchaser agrees to promptly register the Charys Shares under the Securities Act of 1933, as amended, for resale by Seller. 1.4 First Adjustment to Base Purchase Price. As soon as practicable ------------------------------------------ but in no event later than ninety (90) days after the Closing Date (the "Post Closing Determination Date"), Seller shall deliver to Purchaser audited balance sheets of the Company as of the close of business on October 31, 2005, which shall be certified to by Deloitte & Touche LLP, or any other accounting firm selected by Seller and reasonably acceptable to Purchaser, in accordance with GAAP (the "Post Closing Audit"). The Post Closing Audit shall be final and binding on the parties hereto and the net assets reflected on the Post Closing Audit (total assets reported on the balance sheet less total liabilities reported on the balance sheet) shall be the Audited Net Assets. Purchaser shall afford to Seller and its accountants and other authorized representatives reasonable access during business hours to the Company's facilities, properties, books and records in order to conduct the Post Closing Audit. 1.4.1 Omitted. 1.4.2 The "Settlement Amount" for the First Adjustment to Base Purchase Price shall be equal to the difference between the value of the Unaudited Net Assets and the Audited Net Assets, excluding (i) certain of the net assets associated with the VA Job and (ii) the debt owed to Seller by the Company in the amount of $6,572,103.00. 1.4.3 In the event the Audited Net Assets are greater than the Unaudited Net Assets, the cash portion of the Base Purchase Price shall be increased accordingly (the "Increased Cash Portion of the Base Purchase Price") and Purchaser shall pay to Seller the Increased Cash Portion of the Base Purchase Price in cash within ten (10) business days of the Post Closing Determination Date. In the event the Audited Net Assets are less than the Unaudited Net Assets, the Base Purchase Price shall be reduced accordingly (the "Reduced Cash Portion of the Base Purchase Price") and Seller shall pay to Purchaser the amount of the Reduced Cash Portion of the Base Purchase Price in cash within ten (10) business days of the Post Closing Determination Date or Seller shall have the right to set off the Reduced Cash Portion of the Base Purchase Price against amounts due on the Note in reverse order of maturity. 1.5 Second Adjustment to Purchase Price. Seller shall have the right ------------------------------------- to receive an additional payment (the "Earn Out") based on the formula set forth in Schedule 1.5. 1.6 Additional Consideration. The Company is party to a contract with ------------------------- the Commonwealth of Virginia Department of Transportation for the VA Job. At Closing, Seller and Purchaser shall enter into an agreement, in the form attached hereto as Exhibit 7.17 (the 2 "Management Agreement") which will provide that the first $6,572,103 of Proceeds from the VA Job, as defined in the Management Agreement to be paid to Seller in satisfaction of its note payable to Seller from the Company reflected in the Financial Statements (as defined in Section 2.9), and which will further provide Seller as additional purchase price all future payments from the VA Job, with the balance of the Proceeds from the VA Job to be applied as set forth in the Management Agreement. ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER ---------------------------------------- Seller hereby represents and warrants to Purchaser as of the date hereof and as of the Closing Date: 2.1 Organization, etc. Seller is a limited liability company duly ------------------- organized, validly existing and in good standing under the laws of its jurisdiction of organization with full power and authority to carry on its business as it is now being conducted, and to own, operate and lease its properties and assets. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation with full corporate power and authority to carry on its business as it is now being conducted, and to own, operate and lease its properties and assets. The Company is duly qualified or licensed to do business in good standing in every jurisdiction in which the conduct of its business, the ownership or lease of its properties, or the transactions contemplated by this Agreement, require it to be so qualified or licensed and the failure to be so qualified or licensed would have a Material Adverse Effect (as defined in Section 12.3). Such state jurisdictions are set forth in Schedule 2.1(a) hereto. True, complete and correct copies of the Company's charter and bylaws as presently in effect are set forth in Schedule 2.1(b) hereto. 2.2 Subsidiaries. The subsidiaries of Seller and the Company are set ------------ forth on Schedule 2.2; other than as set forth on Schedule 2.2, Seller and the Company have no subsidiaries. 2.3 Capital Stock. The stock record books of the Company have been -------------- made available to Purchaser for inspection prior to the date hereof and are complete and correct in all material respects. The authorized, issued and outstanding shares of capital stock of the Company is as set forth in Schedule 2.3 hereto. 2.4 Corporate Record Books. The corporate minute books of the Company ----------------------- have been made available to Purchaser, are complete and correct in all material respects and contain all of the written proceedings of the shareholders and directors of the Company. 2.5 Title to Stock. All of the outstanding shares of the capital stock -------------- of the Company are owned by Seller, are duly authorized, validly issued and fully paid and non-assessable, and are free of all Liens (as defined in Section 12.3) except as otherwise disclosed on Schedule 2.5. Upon payment of the Base Purchase Price to Seller at Closing, Seller will convey good and marketable title to the Shares free and clear of all Liens whatsoever, except as otherwise disclosed on Schedule 2.5. 3 2.6 Options and Rights. There are no outstanding subscriptions, -------------------- options, warrants, rights, securities, contracts, commitments, understandings, or arrangements by which the Company is bound to issue any additional shares of capital stock or rights to purchase shares of its capital stock, and there are no existing agreements between Seller and the Company or between Seller or either of the Company, on the one hand, and any other Person (as defined in Section 12.3), on the other hand, regarding the Shares. 2.7 Authorization, etc. Seller has full power and authority to enter -------------------- into this Agreement and the agreements contemplated hereby and to deliver the Shares and the certificates evidencing such Shares to Purchaser as provided for herein, free and clear of all Liens, except as otherwise disclosed on Schedule 2.5. The execution, delivery and performance of this Agreement and all other agreements and transactions contemplated hereby have been duly authorized by Seller's Board of Managers and no other proceedings on its part are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement and all other agreements contemplated hereby to be entered into by Seller constitute a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights generally and equitable principles of general application. 2.8 No Violation. Except as set forth in Schedule 2.8 hereto, the ------------- execution and delivery by Seller of this Agreement, and all other agreements contemplated hereby to be executed and delivered by Seller, and the fulfillment of and compliance with the respective terms hereof and thereof by Seller do not and will not (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default or event of default under (with due notice, lapse of time or both), (c) result in the creation of any Lien upon the Company's capital stock or assets pursuant to, (d) give any third party the right to accelerate any obligation under, (e) result in a violation of, or (f) require any authorization, consent, approval, exemption or other action by or notice to any court or Authority (as defined in Section 12.3) pursuant to, the certificate of formation or the limited liability company agreement of Seller and the charter or bylaws of the Company, or any Regulation (as defined in Section 12.3) to which Seller or the Company is subject, or any Order (as defined in Section 12.3) or Material Contract (as defined in Section 12.3) to which Seller or the Company or their respective properties are subject. Seller will comply with all applicable Regulations and Orders in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby. 2.9 Financial Statements. --------------------- (a) Attached as Schedule 2.9(a)(1) hereto are the audited financial statements of the Company as of and for the year ended October 31, 2004 and the unaudited balance sheet and statements of operations and cash flows for the Company as of and for the ten months ended August 31, 2005. The financial statements as of and for the ten months ended August 31, 2005 ("Financial Statement Date") are hereinafter referred to as the ("Financial Statements"). The financial statements, including the Financial Statements, present fairly, in all material respects, the financial position of the Company as at their respective dates, and the results of its operations and its cash flows for the respective periods then ended in accordance with GAAP (as defined in Section 12.3) applied on a consistent basis, except for (i) as disclosed on Schedule 2.9(a)(2) and 4 (ii) the absence of footnotes and normal, recurring year-end adjustments, which are consistent with past practice, in the case of the Financial Statements. The Company has no liability, whether accrued, absolute or contingent, of a type required to be reflected on a balance sheet or described in the notes thereto in accordance with GAAP (except for the absence of footnotes and normal, recurring year-end adjustments, which are consistent with past practice, in the case of the Financial Statements), other than (i) liabilities which have been reflected or reserved against in the Financial Statements, (ii) liabilities incurred since the Financial Statement Date in the ordinary course of business, (iii) liabilities covered by insurance or reinsurance, and (iv) liabilities disclosed in Schedule 2.9(a)(2) hereto. (b) Except as set forth in Schedule 2.9(b) hereto, the Company does not have any material Indebtedness (as defined in Section 12.3), obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due) arising out of transactions entered into or Occurrences (as defined in Section 12.3) that occurred at or prior to the Closing Date, other than: (i) liabilities set forth in the Financial Statements and (ii) liabilities and obligations which have arisen after the Financial Statement Date in the ordinary course of business (none of which is a liability resulting from breach of a Material Contract, breach of warranty, tort, infringement, Claim or lawsuit). 2.10 Employees. The Company has been for the past four years, and --------- currently is, in compliance in all material respects with all Federal, state and local Regulations or Orders affecting employment and employment practices of the Company (including those Regulations promulgated by the Equal Employment Opportunity Commission), including terms and conditions of employment and wages and hours. At the Effective Date, the Company will not have any liability to any of its employees, officers or directors, except as will be reflected on the Company's balance sheet as of October 31, 2005. 2.11 Absence of Certain Changes. Since the Financial Statement Date ----------------------------- and except as set forth on Schedule 2.11, to the Knowledge of Seller and the Company there has not been (a) any Material Adverse Change (as defined in Section 12.3) in the business, financial condition or in the operations of the Company's business; (b) any damage, destruction or loss, whether covered by insurance or not, having a Material Adverse Effect, with regard to the Company's properties and business; (c) any declaration, setting aside or payment of any dividend or distribution (whether in cash, stock or property) in respect of the Company's capital stock, or any redemption or other acquisition of such stock by the Company; (d) any increase in the compensation payable to or to become payable by the Company to its officers or employees or any adoption of or increase in any bonus, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with any such officers or employees or any Affiliate (as defined in Section 12.3) of the Company other than in the normal course of business; (e) any entry into any Material Contract not in the ordinary course of business, including without limitation any borrowing or capital expenditure; or (f) any change by the Company in its accounting methods or principles. 5 2.12 Contracts. --------- (a) Except as expressly contemplated by this Agreement or as set forth on Schedule 2.12(a) hereto, as of the Closing Date, the Company is not a party to any written or oral Material Contract relating to: (i) pension, profit sharing, stock options, employee stock purchase or other plan providing for deferred or other compensation to employees or any other employee benefit plan, or any Contract with any labor union; (ii) Contract for the employment of any officer, individual employee or other person on a full-time, part-time, consulting or other basis or Contract relating to loans to officers, directors or Affiliates; (iii) Contract relating to the borrowing of money or the mortgaging, pledging or otherwise placing a Lien on any asset of the Company; (iv) Guarantee, bonds, letters of credit or performance bonds of any obligation; (v) Contract under which the Company is lessee of or holds or operates any property, real or personal, owned by any other party, except for any lease of real or personal property except as described in Schedule 2.14(b); (vi) Contract under which the Company is lessor of or permits any third party to hold or operate any property, real or personal, owned or controlled by the Company; (vii) Contract the performance of which involves a consideration in excess of $1,000,000 per year; (viii) assignment, license, indemnification or Contract with respect to any intangible property (including, without limitation, any Proprietary Rights (as defined in Section 12.3)); (ix) warranty Contract with respect to its services rendered or its products sold or leased; (x) Contract under which it has granted any Person any registration rights (including piggyback rights) with respect to any securities; (xi) Contract prohibiting it from freely engaging in any business or competing anywhere in the world; (xii) Contract for the purchase, acquisition or supply of property and assets, whether for resale or otherwise, which requires the expenditure in excess of $100,000 per year; 6 (xiii) Contracts with independent agents or brokers; (xiv) consulting, sales, commissions or marketing contracts; (xv) Contracts providing for "take or pay" or similar unconditional purchase or payment obligations, which involves a consideration in excess of $100,000 per year; or (xvi) Contracts with Persons with which, directly or indirectly, Seller also has a Contract. (b) Except as to the litigation disclosed in Schedule 11.2(d) and as set forth on Schedule 2.12(b), the Company has performed in all material respects all obligations required to be performed by it and is not in default in any material respect under or in breach of nor in receipt of any written claim of default or breach under any Material Contract to which the Company is subject; to the Knowledge of Seller and the Company, no event has occurred which with the passage of time or the giving of notice or both would result in a default, breach or event of noncompliance under any Material Contract to which the Company is subject; the Company has no present expectation or intention of not fully performing all Material Contracts; the Company has no Knowledge of any breach by the other parties to any Material Contract to which it is a party. 2.13 True and Complete Copies. Copies of Contracts and documents --------------------------- delivered and to be delivered hereunder by Seller or the Company are and will be true and complete copies of such agreements, contracts and documents in all material respects. 2.14 Title and Related Matters. ---------------------------- (a) The Company has good and valid title to all of the properties and assets reflected in the Financial Statements or acquired after the date thereof (and for properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all Liens, except (i) statutory Liens not yet delinquent, (ii) Liens for Taxes (as defined in Section 2.16) not yet due and payable, (iii) such imperfections or irregularities of title, Liens or charges as do not detract from or interfere with the present use of the properties or assets subject thereto or affected thereby, otherwise impair present business operations at such properties; or do not detract from the value of such properties and assets, taken as a whole, (iv) as reflected in the Financial Statements or disclosed herein, or (v) as disclosed on Schedule 2.12(a) and Schedule 2.14(b) (collectively, "Permitted Liens"). (b) The Company owns, and will on the Closing Date, own good and valid title to all the material personal property and assets, tangible or intangible, used in the business except as to those assets leased as set forth in Schedule 2.14(b) hereto, all of which leases are in good standing and, to the Knowledge of the Company, no party is in default thereunder. Except as set forth in Schedule 2.14(b) hereto, none of the assets belonging to or held by the Company is or will be on the Closing Date subject to any (i) Contracts of sale or lease, or (ii) Liens other than Permitted Liens. 7 (c) There has not been since the Financial Statement Date and will not be prior to the Closing Date, any sale, lease, or any other disposition or distribution by the Company of any of its assets or properties and any other assets now or hereafter owned by it, except transactions in the ordinary and regular course of business or as otherwise consented to by Purchaser. After the Closing Date, Purchaser will own, or have the unrestricted right to use, all properties and assets that are currently used in connection with the business of the Company other than the Permitted Liens. 2.15 Litigation. Except as set forth on Schedule 2.12(b) and Schedule ---------- 11.2(d), there is no Claim (as defined in Section 12.3) pending or, to the Knowledge of Seller or the Company threatened against the Company which, if adversely determined, would have a Material Adverse Effect on the Company, nor is there any Order outstanding against the Company having, or which, insofar as can be reasonably foreseen, in the future may have, a Material Adverse Effect on the Company. 2.16 Tax Matters. ------------ (a) Except as disclosed on Schedule 2.16, the Company has filed all federal, state, and local tax reports, returns, information returns and other documents (collectively the "Tax Returns") required to be filed and has duly paid or accrued on the Financial Statements all relevant Taxes (as hereinafter defined). For these purposes, "Taxes" shall mean any income, premium, gross receipts, alternative or add-on minimum, ad valorem, value added, sales, use, property, personal property (tangible and intangible), stamp, excise, duty, franchise, transfer, license, withholding, payroll, employment, fuel, excess profits, occupational and other charges (including interest and penalties) that are due to any federal, state, or local authorities (collectively, the "Taxing Authorities") in connection with all taxable periods ending on or before the Effective Date. All Taxes required to be paid for all periods ending prior to or on the Effective Date have been, or will be, paid or fully accrued for in accordance with GAAP, except as provided in Schedule 2.16 hereto. All Taxes which are required to be withheld or collected by the Company have been duly withheld or collected and, to the extent required, have been paid to the proper Taxing Authority or properly segregated or deposited as required by applicable laws. There are no Liens for Taxes upon any property or assets of the Company except for liens for Taxes not yet due and payable. Neither Seller nor the Company has executed a waiver of the statute of limitations on the right of any Taxing Authority to assess additional Taxes or to contest the income or loss with respect to any Tax Return. The basis of any depreciable asset, and the method used in determining allowable depreciation (including cost recovery), of the Company is, to the Knowledge of the Company and Seller, correct and in compliance in all material respects with the Internal Revenue Code of 1986, as amended and the regulations thereunder (the "Code"). (b) Except as disclosed on Schedule 2.16, no issues have been raised that are currently pending by any Taxing Authority in connection with any Tax Returns. No material issues have been raised in any examination by any Taxing Authority with respect to the Company which, by application of similar principles, reasonably could be expected to result in a proposed deficiency for any other period not so examined. There are no unresolved issues or unpaid deficiencies relating to such examinations. 8 (c) The Company is not subject to any joint venture, partnership, or other arrangement or Contract which is treated as a partnership for federal income tax purposes. The Company is not and never has been a party to any tax sharing agreement. (d) The Company is not a "consenting corporation", within the meaning of Section 341(f)(1) of the Code, or comparable provisions of any state statutes, and none of the assets of the Company is subject to an election under Section 341(f) of the Code or comparable provisions of any state statutes. (e) The Company is not and will not be required to recognize after the Effective Date any taxable income in respect of accounting method adjustments required to be made under the Tax Reform Act of 1986 or the Revenue Act of 1987 for activities through the Effective Date. (f) None of the assets of the Company constitutes tax-exempt bond financed property or tax exempt use property within the meaning of Section 168 of the Code, and none of the assets of the Company are subject to a lease, safe harbor lease, or other arrangement as a result of which the Company is not treated as the owner for federal income tax purposes. (g) The Company has not made or will become obligated to make, and will, as a result of any event connected with the Closing become obligated to make, any "excess parachute payment" as defined in Section 280G of the Code (without regard to subsection (b)(4) thereof). (h) Returns and Reports. Seller shall cause the Company to file --------------------- all Tax Returns and reports with respect to Taxes which are required to be filed for Tax periods ending on or before the Effective Date ("Pre-Closing Tax Returns"). The Company shall pay all amounts shown to be due on such Pre-Closing Tax Returns to the appropriate Taxing Authority as shown on the Post Closing Audit. Purchaser shall cause the Company to assist Seller in filing the Pre-Closing Tax Return to effect such filings. (i) Tax Books and Records. Purchaser and Seller shall furnish or ---------------------- cause to be furnished to each other, upon request, as promptly as practicable, such information (including access of books and records) and assistance relating to the Company as is reasonably necessary for the filing of any return or report, for the preparation for any audit, and for the prosecution or defense of any claim relating to any proposed adjustment or refund Claim. 2.17 Compliance with Law and Applicable Government Regulations. The ------------------------------------------------------------ Company is presently complying in respect of its operations, practices, real property, plants, structures, and other property, and all other aspects of its business, with all applicable Regulations and Orders, including, but not limited to, all Regulations relating to the safe conduct of business, environmental protection, quality and labeling, antitrust, Taxes, consumer protection, equal opportunity, discrimination, health, sanitation, fire, zoning, building and occupational safety where such failure or failures to comply would individually or in the aggregate have a Material Adverse Effect. There are no Claims pending, nor to the Knowledge of Seller or the Company are there any Claims threatened, nor has Seller or the Company received any written notice, regarding any violations of any material Regulations and material Orders enforced by any 9 Authority claiming jurisdiction over Seller or the Company including any requirement of OSHA or any pollution and environmental control agency (including air and water). 2.18 ERISA and Related Matters. ---------------------------- (a) Benefit Plans; Obligations to Employees. Except as disclosed ---------------------------------------- in Schedule 2.12(a), the Company is not a party to or participates in or has any liability or contingent liability with respect to: (i) any "employee welfare benefit plan", "employee pension benefit plan" or "multiemployer plan" (as those terms are respectively defined in Sections 3(1), 3(2) and 3(37) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")); (ii) any retirement or deferred compensation plan, incentive compensation plan, stock plan, unemployment compensation plan, vacation pay, severance pay, bonus or benefit arrangement, insurance or hospitalization program or any other fringe benefit arrangements (referred to collectively hereinafter as "fringe benefit arrangements") for any employee, director, consultant or agent, whether pursuant to contract, arrangement, custom or informal understanding, which does not constitute an "employee benefit plan" (as defined in Section 3(3) of ERISA); or (iii) any employment agreement not terminable on 30 days' or less written notice, without further liability. 2.19 Omitted 2.20 Banks, Brokers and Proxies. Schedule 2.20 hereto sets forth (i) ---------------------------- the name of each bank, trust company, securities or other broker or other financial institution with which the Company has an account, credit line or safe deposit box or vault, or otherwise maintains relations; (ii) the name of each person authorized by the Company to draw thereon or to have access to any such safe deposit box or vault; (iii) the purpose of each such account, safe deposit box or vault; and (iv) the names of all persons authorized by proxies, powers of attorney or other instruments to act on behalf of the Company in matters concerning its business or affairs. All such accounts, credit lines, safe deposit boxes and vaults are maintained by the Company for normal business purposes, and no such proxies, powers of attorney or other like instruments are irrevocable. 2.21 Omitted 2.22 Environmental Matters. To the Knowledge of Seller and the Company --------------------- and except as disclosed on Schedule 2.22 hereto: (a) neither the Company's business or assets nor the operation thereof violates any applicable Environmental Law (as defined in Section 12.3) in effect as the date hereof and no condition or event has occurred which, with notice or the passage of time or both, would constitute a violation of any Environmental Law; (b) the Company is in possession of all environmental permits required under any applicable Environmental Law for the conduct or operation of its business (or any part thereof), and the Company is in compliance in all material respects with all of the requirements and limitations included in such 10 environmental permits; (c) the Company has not stored or used any pollutants, contaminants or hazardous or toxic wastes, substances or materials (other than petroleum products) on or at any of its property or facilities; (d) the Company has not received any written notice from any Authority or Person that the Company's business or assets or the operation of any of its facilities is in violation of any Environmental Law or any environmental permit or that it is responsible (or potentially responsible) for the cleanup of any pollutants, contaminants, or hazardous or toxic wastes, substances or materials at, on or beneath any of its property, or at, on or beneath any land adjacent thereto or in connection with any waste or contamination site; (e) the Company is not the subject of Federal, state, local, or private litigation or proceedings involving a demand for damages or other potential liability with respect to violations of Environmental Laws; (f) the Company has not buried, dumped, disposed, spilled or released any pollutants, contaminants or hazardous or toxic wastes, substances or materials under any Environmental Law nor are they currently stored or otherwise located on any of the Company's property. The Company has timely filed all reports required to be filed with respect to all of its property and facilities and has generated and maintained in all material respects all required data, documentation and records under all applicable Environmental Laws. 2.23 Omitted 2.24 Dealings with Affiliates. Schedule 2.24 hereto sets forth a -------------------------- complete list, including the parties, of all oral or written agreements and arrangements between the Company and any Affiliate of the Company, which exists on the Closing Date. 2.25 Insurance. The Company currently has, and through the Closing --------- Date will have, insurance contracts or policies (the "Policies") in full force and effect which provide for coverages that are usual and customary as to amount and scope in the business of the Company. Schedule 2.25 hereto sets forth a summary of all insurance contracts or policies that relate to liability or excess liability insurance (collectively, the "Liability Policies") and all other Policies, including the name of the insurer, the types, dates and amounts of coverages, and any material coverage exclusions. Except as set forth in Schedule 2.25 hereto all of the Policies and Liability Policies remain in full force and effect. The Company has not breached or otherwise failed to perform in any material respects its obligations under any of the Policies or the Liability Policies nor has Seller or the Company received any adverse written notice or written communication from any of the insurers party to the Policies or the Liability Policies with respect to any such alleged breach or failure in connection with any of the Policies or the Liability Policies. All Policies are sufficient for compliance in all material respects with all Regulations, Orders and all Material Contracts to which the Company is subject; are valid, outstanding, collectible and enforceable policies; and will not in any material way be affected by, or terminate or lapse by reason of, the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. Neither Seller nor the Company has ever been refused any insurance with respect to the Company's assets or operations, nor has coverage ever been limited by any insurance carrier to which the Company has applied for any Policy or with which the Company has carried a Policy. 2.26 Disclosure. Except as set forth on Schedule 2.26, to the ---------- Knowledge of Seller and the Company, neither this Agreement nor any of the exhibits, attachments, written statements, documents, certificates or other items prepared for or supplied to Purchaser by or on behalf of 11 Seller or the Company with respect to the transactions contemplated hereby taken as a whole, contains any untrue statement of a material fact or omits a material fact necessary to make each statement contained herein or therein not misleading. Except as set forth on Schedule 2.26, to the Knowledge of Seller and the Company, there is no fact which Seller or the Company have not disclosed to Purchaser in writing and of which Seller or the Company or any of their respective officers, directors or executive employees is aware and which could reasonably be anticipated to have a Material Adverse Effect on either of the Company or the ability of Purchaser to continue the business of the Company in the same manner as the Company conducted its business prior to the Closing Date. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER ------------------------------------------- Purchaser represents and warrants to Seller as follows as of the date hereof and as of the Closing Date: 3.1 Corporate Organization, etc. Purchaser is a corporation duly ----------------------------- organized, validly existing and in good standing under the laws of its jurisdiction of incorporation with full corporate power and authority to carry on its business as it is now being conducted and to own, operate and lease its properties and assets. Purchaser is duly qualified or licensed to do business in good standing in every jurisdiction in which the conduct of its business, the ownership or lease of its properties, the proposed conduct of its business or ownership or lease of its properties, or the transactions contemplated by this Agreement, require it to be so qualified or licensed and the failure to be so qualified or licensed would have a Material Adverse Effect on its business. 3.2 Authorization, etc. Purchaser has full corporate power and ------------------- authority to enter into this Agreement and to carry out the transactions contemplated hereby. The Board of Directors of Purchaser has duly authorized the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and no other corporate proceedings on its part are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligation of Purchaser enforceable against it in accordance with its terms. 3.3 No Violation. Except as set forth in Schedule 3.3 hereto, the ------------- execution, delivery and performance by Purchaser of this Agreement, and all other agreements contemplated hereby, and the fulfillment of and compliance with the respective terms hereof and thereof by Purchaser, do not and will not (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default or event of default under (with due notice, lapse of time or both), (c) give any third party the right to accelerate any obligation under, (d) result in a violation of, or (e) require any authorization, consent, approval, exemption or other action by or notice to any court or Authority pursuant to, the charter or bylaws of Purchaser, or any Regulation to which Purchaser is subject, or any Contract or Order to which Purchaser or its properties are subject. Purchaser will comply with all applicable Regulations and Orders in connection with its execution, delivery and performance of this Agreement and the transactions contemplated hereby. 12 3.4 Governmental Authorities. Purchaser has complied in all material ------------------------- respects with all applicable Regulations in connection with its execution, delivery and performance of this Agreement and the agreements and transactions contemplated hereby. Except as set forth in Schedule 3.4 hereto, Purchaser is not required to submit any notice, report, or other filing with any governmental authority in connection with its execution or delivery of this Agreement or the consummation of the transactions contemplated hereby. Except as set forth in Schedule 3.4 hereto, no authorization, consent, approval, exemption or notice is required to be obtained by Purchaser in connection with the execution, delivery, and performance of this Agreement and the agreements and transactions contemplated hereby. 3.5 Charys Shares. Purchaser owns and holds good and valid title to -------------- the Charys Shares free and clear of any Lien of any kind. The Charys Shares are, and at Closing will be, duly authorized, duly and validly issued, fully paid and non-assessable, and none were issued or will be issued in violation of any preemptive rights, rights of first refusal or any other contractual or legal restrictions of any kind. ARTICLE 4 COVENANTS OF SELLER ------------------- Until the Closing Date, except as otherwise consented to or approved by Purchaser in writing, Seller covenants and agrees that it shall act, and shall cause the Company so to act or refrain from acting where required hereinafter, to comply with the following: 4.1 Regular Course of Business. The Company shall operate its business -------------------------- diligently and in good faith, consistent with past management practices; shall maintain all of its properties in the Company's customary fashion, shall maintain (except for expiration due to lapse of time) all material leases and Material Contracts described herein in effect without change except as expressly provided herein; shall comply in all material respects with the provisions of all Regulations and Orders applicable to the Company and the conduct of its business; shall not cancel, release, waive or compromise any debt, Claim or right in its favor having a value in excess of $5,000; shall not alter the rate or basis of compensation of any of its officers, directors or employees; shall maintain insurance and reinsurance coverage up to the Closing Date with at least the coverage and in the amounts set forth in Schedule 2.25; and shall pay all Claims and accrue liabilities on their financial statements in the Company's customary fashion and in accordance with standard industry practice. 4.2 Amendments. Except as required for the transactions contemplated ---------- in this Agreement, no change or amendment shall be made in the charter or by-laws of the Company. The Company shall not merge into or consolidate with any other corporation or person, or change the character of its business. 4.3 Capital Changes; Pledges. The Company shall not issue or sell any ------------------------- shares of its capital stock of any class or issue or sell any securities convertible into, or options, warrants to purchase or rights to subscribe to, any shares of its capital stock and the Company shall not pledge or otherwise encumber any shares of its capital stock. 13 4.4 Dividends. The Company shall not declare, pay or set aside for --------- payment any dividend or other distribution in respect of its capital stock, nor shall the Company, directly or indirectly, redeem, purchase or otherwise acquire any shares of its capital stock. 4.5 Capital and Other Expenditures. The Company shall not make any --------------------------------- capital expenditures, or commitments with respect thereto, except as provided in Section 2.23. 4.6 Borrowing. The Company shall not incur, assume or guarantee any --------- Indebtedness not reflected on the Financial Statements except in the ordinary course of business or for purposes of consummation of transactions contemplated by this Agreement and in any case only after consultation with Purchaser. 4.7 Other Commitments. Except as set forth in this Agreement, incurred ----------------- or transacted in the ordinary course of business, or permitted in writing by Purchaser, the Company shall not enter into any material transaction or make any commitment or incur any material obligation (including entering into any real property leases). 4.8 Omitted. 4.9 Full Access and Disclosure. ----------------------------- (a) Seller and the Company shall afford to Purchaser and its counsel, accountants and other authorized representatives reasonable access during business hours to each of the Company's facilities, properties, books and records in order that Purchaser may have full opportunity to make such reasonable investigations as it shall desire to make of the affairs of the Company; and Seller shall cause the Company's officers, employees and auditors to furnish such additional financial and operating data and other information as Purchaser shall, from time to time, reasonably request including, without limitation, any internal control recommendations applicable to the Company made by Seller's independent auditors in connection with its audit. (b) From time to time, prior to the Closing Date, Seller shall promptly supplement or amend information previously delivered to Purchaser with respect to any matter hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to be set forth herein or disclosed. 4.10 Consents. Seller and the Company shall use their commercially -------- reasonable efforts to obtain on or prior to the Closing Date, all consents necessary to the consummation of the transactions contemplated hereby. 4.11 Breach of Agreement. The Company shall not take, and Seller shall ------------------- not take, any action or permit the Company to take any action which if taken prior to the Closing Date would constitute a breach of this Agreement. ARTICLE 5 COVENANTS OF PURCHASER ---------------------- 5.1 Confidentiality. Purchaser shall, and shall cause its principals, --------------- officers and other personnel and authorized representatives to, hold in confidence, and not disclose to any other 14 party without Seller's prior written consent, all information received by it from Seller's or the Company's officers, directors, employees, agents, counsel and auditors in connection with the transactions contemplated hereby except as may be required by applicable law or as otherwise contemplated herein. 5.2 Standby Letter of Credit. Within ninety (90) days after the --------------------------- Closing Date, Purchaser shall replace City National Bank irrevocable standby letter of credit #11171 (the "Letter of Credit"), securing an irrevocable letter of credit for the Polices in the amount of $1,350,000. Notwithstanding anything to the contrary contained herein, if on or before December 31, 2005, Purchaser has paid in full all outstanding amounts due and owing to Merrill Lynch (as defined in Section 5.5), then failure to replace the Letter of Credit within such ninety (90) day period, shall not be deemed an event of default hereunder, and Purchaser shall automatically be granted an additional thirty (30) days in order to comply with the first sentence of this Section 5.2. 5.3 Payments to Investors. Within ninety (90) days after the Closing ----------------------- Date, Purchaser shall cause the Company to pay the amount of $279,916 to Preferred Management, LLC and $120,000 to H.I.G. Capital, LLC. 5.4 Continued D & O Insurance Coverage. Purchaser shall use its best ------------------------------------ efforts to obtain and maintain for a period of six (6) years after the Closing Date, policies and contracts of insurance covering the liability of directors and officers of the Company at least at the same level maintained by Seller on the date hereof under the applicable Policies. 5.5 Payoff of Credit Agreement. On or before December 31, 2005, ----------------------------- Purchaser shall use its best efforts to pay in full all outstanding amounts of principal, interest, costs and expenses due and payable under those certain agreements with Merrill Lynch Business Financial Services ("Merrill Lynch") numbered 2BN-0736, 2BN-07937 and 2BN-0798, including the irrevocable standby letters of credit secured by any of such agreements; provided, however, that the failure to timely pay all such amounts in full shall not be deemed an event of default hereunder, unless and until (a) Merrill Lynch provides notification to any party hereto that the Company is in default thereunder and such default has not been cured within the applicable cure period therefor or (b) Merrill Lynch institutes collection efforts against Seller, and; provided, further, that, any agreement between Merrill Lynch and Purchaser and/or the Company relating to extensions of payment on any Indebtedness must release Seller from its security agreement with Merrill Lynch and remove Merrill Lynch's lien on the VA Job and all procceds derived therefrom. 5.6 Apportionment of Litigation. Purchaser shall be responsible and ----------------------------- shall pay the first $1,000,000 of Losses (as defined in Section 11.2) incurred by the Company on account of the litigation described on Schedule 11.2(d) attached hereto. 5.7 Efforts to Remove Seller as a Guarantor. Purchaser shall use its ----------------------------------------- commercially reasonable efforts to cause Merrill Lynch (and all other applicable lenders and sureties of the Company) to release Seller from its obligation as a guarantor of any and all of the Company's Indebtedness. 15 5.8 Conduct of Business. Until such time as the Note is paid in full --------------------- and Seller is removed as a guarantor of any and all of the Company's Indebtedness, Purchaser shall (a) not declare, set aside or pay any dividend or distribution (whether in cash, stock or property) in respect of the Company's capital stock, or redeem or otherwise acquire such stock by the Company; (b) deposit and use solely for the benefit of the Company the proceeds of any refinancing transaction or any new Indebtedness, which Indebtedness is secured by the assets of the Company; and (c) obtain and maintain policies and contracts of insurance covering the assets of the Company at least at the same level maintained by Seller on the date hereof under the applicable Policies. 5.9 Surety Bond. Within 180 days after the Closing Date, Purchaser ------------ shall secure the release of Seller, as principal, on Liberty Mutual Insurance Company surety bond no. 964-001-334 in the amount of $375,000. ARTICLE 6 OTHER AGREEMENTS ---------------- As a condition to the parties' obligation to consummate the transactions contemplated hereby: 6.1 Agreement to Defend. In the event any action, suit, proceeding or -------------------- investigation of the nature specified in Section 7.5 or Section 8.3 hereof is commenced, whether before or after the Closing Date, all the parties hereto agree to cooperate and use their commercially reasonable efforts to defend against and respond thereto. 6.2 Non-Competition. Seller and its managing members will, at the --------------- Closing, execute and deliver the Non-Competition Agreement in the form of Exhibit 6.2 hereto (the "Non-Competition Agreement"). 6.3 Further Assurances. Subject to the terms and conditions of this ------------------- Agreement, each of the parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Regulations to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Closing Date Purchaser shall consider or be advised that any further deeds, assignments or assurances in law or in any other things are necessary, desirable or proper to vest, perfect or confirm, of record or otherwise, in Purchaser, the title to any property or rights of the Company acquired or to be acquired by reason of, or as a result of, the acquisition, Seller agrees that Seller and its proper officers shall execute and deliver all such proper deeds, assignments and assurances in law and do all things necessary, desirable or proper to vest, perfect or confirm title to such property or rights in the Company and otherwise to carry out the purpose of this Agreement, and that the proper officers and directors of Seller, and are fully authorized in the name of Seller or otherwise to take any and all such action. 6.4 Consents. Without limiting the generality of Section 6.3, each of -------- the parties hereto shall use its commercially reasonable efforts to obtain all permits, authorizations, consents and approvals of all persons and governmental authorities necessary, proper or advisable in 16 connection with the consummation of the transactions contemplated by this Agreement prior to the Closing Date. 6.5 No Solicitation or Negotiation. Unless and until this Agreement is ------------------------------ terminated, Seller and the Company shall not, and each shall use its, commercially reasonable efforts to cause its directors, officers, employees, representatives, agents, advisors, accountants and attorneys not to, initiate or solicit, directly or indirectly, any inquiries or the making of any proposal with respect to, or engage in negotiations concerning, or provide any confidential information or data to any person with respect to, or have any discussions with any persons relating to, any acquisition, business combination or purchase of all or any significant asset of, or any equity interest in, directly or indirectly, the Company, or otherwise facilitate any effort or attempt to do or seek any of the foregoing, and shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing. 6.6 Deliveries After Closing. From time to time after the Closing, at ------------------------- Purchaser's request and without expense to Seller and without further consideration from Purchaser, Seller shall execute and deliver such other instruments of conveyance and transfer and take such other action as Purchaser reasonably may require to convey, transfer to and vest in Purchaser and to put Purchaser in possession of any rights or property to be sold, conveyed, transferred and delivered hereunder. ARTICLE 7 CONDITIONS TO THE OBLIGATIONS OF PURCHASER ------------------------------------------ Each and every obligation of Purchaser under this Agreement shall be subject to the satisfaction, on or before the Closing Date, of each of the following conditions unless waived in writing by Purchaser: 7.1 Representations and Warranties; Performance. The representations --------------------------------------------- and warranties of Seller contained in Article 2 and contained in any schedule hereto, shall be true and correct in all material respects when made and shall be true and correct in all material respects on the Closing Date as though then made, except as expressly provided herein. Seller and the Company shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed and complied with by them prior to the Closing Date. The Board of Managers of Seller, and the vice president of the Company, shall each have delivered to Purchaser, a certificate (which shall be addressed to Purchaser), dated the Closing Date, in the form of Exhibit 7.1 hereto, certifying to the foregoing. 7.2 Omitted 7.3 Opinion of Seller's Counsel. Purchaser shall have received an ------------------------------ opinion of Seller's outside counsel (which will be addressed to Purchaser), dated the Closing Date, in the form of Exhibit 7.3 hereto. 7.4 No Material Adverse Change. Other than losses incurred in the ----------------------------- ordinary course of business, there shall have been no Material Adverse Change since the date of this Agreement. Purchaser shall have received certificates (which shall be addressed to Purchaser), dated the 17 Closing Date, from the chief financial officer of the Company, in the form designated Exhibit 7.1 hereto, certifying to the foregoing. 7.5 No Proceeding or Litigation. No preliminary or permanent ------------------------------ injunction or other Order, decree or ruling issued by any Authority, or any Regulation promulgated or enacted by any Authority shall be in effect, which would prevent the consummation of the transactions contemplated hereby. 7.6 Omitted 7.7 Omitted 7.8 Non-Competition Agreement. The Non-Competition Agreement shall -------------------------- have been fully executed and delivered by Seller and certain of its Affiliates and shall be in full force and effect. 7.9 Accounting Certificates. Purchaser shall have received a ------------------------ certificate, dated the Closing Date, of the Company's chief financial officer in the form of Exhibit 7.1 hereto attesting that the Company's financial statements for the fiscal years ending October 31st, 2002, 2003, 2004 and the period ending August 31, 2005 are accurate in all material respects. 7.10 Condition of Assets. The Company's material assets and material --------------------- properties shall not have been damaged or destroyed, prior to the Closing Date, by fire or other casualty and not fully covered by insurance (except for reasonable deductibles) in an aggregate amount exceeding $100,000. 7.11 Proceedings and Documents. All corporate and other proceedings in ------------------------- connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to Purchaser and Purchaser's counsel, and Seller and the Company shall have made available to Purchaser for examination the originals or true, complete and correct copies of all records and documents relating to the business and affairs of the Company which Purchaser may reasonably request in connection with said transaction. 7.12 Secretary's Certificate. Purchaser shall have received a ------------------------ certificate, substantially in the form of Exhibit 7.12 hereto, by the secretary of the Company as to the charter and bylaws of the Company, and by the Board of Managers of Seller as to the certificate of formation and the limited liability company agreement of Seller, and the resolutions adopted by the Board of Managers of Seller in connection with this Agreement. 7.13 Certificates of Good Standing. At the Closing, the Company shall ------------------------------ have delivered to Purchaser certificates issued by the appropriate governmental authorities evidencing the good standing, with respect to both the conduct of business and the payment of all franchise taxes, of the Company as of a date not more than fifteen (15) days prior to the Closing Date as a corporation organized under the laws of the states and as a foreign corporation authorized to do business under the laws of the jurisdictions listed in the Schedules hereto. 7.14 Omitted 18 7.15 Omitted 7.16 Omitted 7.17 Management Agreement. Seller and the Company shall have entered --------------------- into the Management Agreement regarding the operation of the VA Job substantially in the form of Exhibit 7.17 hereto. 7.18 Omitted 7.19 Omitted 7.20 Other Documents. Seller and the Company shall furnish Purchaser ---------------- with such other and further documents and certificates including certificates of the Company's officers and others as Purchaser shall reasonably request to evidence compliance with the conditions set forth in this Agreement. ARTICLE 8 CONDITIONS TO THE OBLIGATIONS OF SELLER --------------------------------------- Each and every obligation of Seller under this Agreement shall be subject to the satisfaction, on or before the Closing Date, of each of the following conditions unless waived in writing by Seller: 8.1 Representations and Warranties; Performance. The representations --------------------------------------------- and warranties of Purchaser contained in Article 3 and elsewhere in this Agreement and all information contained in any exhibit, schedule or attachment hereto, Purchaser, to Seller, shall be true and correct in all material respects when made and shall be true and correct in all material respects on the Closing Date as though then made, except as expressly provided herein. Purchaser shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed and complied with by them prior to the Closing Date. The president of Purchaser shall have delivered to Seller a certificate, dated the Closing Date, in the form of Exhibit 8.1 hereto, certifying to the foregoing. 8.2 Consents and Approvals. Purchaser, Seller and the Company shall ------------------------ have obtained any and all material consents, approvals, orders, qualifications, licenses, permits or other authorizations, required by all applicable Regulations, Orders or Contracts of the Company or binding on their properties and assets, with respect to the execution, delivery and performance of the Agreement, the financing consummation of the transactions contemplated herein and the conduct by Purchaser of the business of the Company in the same manner after the Closing Date as before the Closing Date. 8.3 No Proceeding or Litigation. No preliminary or permanent ------------------------------ injunction or other Order, decree or ruling issued by any Authority, or any Regulation promulgated or enacted by any Authority shall be in effect, which would prevent the consummation of the transactions contemplated hereby. 19 ARTICLE 9 CLOSING ------- 9.1 Closing. Unless this Agreement shall have been terminated or ------- abandoned pursuant to the provisions of Article 10 hereof, a closing of the transactions contemplated by this Agreement (the "Closing") shall be held on or before November 15, 2005, or on such other mutually agreed to date (the "Closing Date"). 9.2 Intervening Litigation. If prior to the Closing Date any ----------------------- preliminary or permanent injunction or other Order issued by a court of competent jurisdiction or by any other Authority shall restrain or prohibit this Agreement or the consummation of the transactions contemplated herein for a period of fifteen days or longer, the Closing shall be adjourned at the option of either party for a period of thirty days. If at the end of such thirty day period such injunction or Order shall not have been favorably resolved, either party may, by written notice thereof to the other, terminate this Agreement, without liability or further obligation hereunder. ARTICLE 10 TERMINATION AND ABANDONMENT 10.1 Methods of Termination. This Agreement may be terminated and the ----------------------- transactions herein contemplated may be abandoned at any time: (a) by mutual consent of Purchaser and Seller; (b) by Purchaser or Seller if this Agreement is not consummated on or before November 30, 2005; provided that if any party has breached or defaulted with respect to its respective obligations under this Agreement on or before such date, such party may not terminate this Agreement pursuant to this Section 10.1(b), and each other party to this Agreement shall at its option enforce its rights against such breaching or defaulting party and seek any remedies against such party, in either case as provided hereunder and by applicable law; (c) by Purchaser if as of the Closing Date any of the conditions specified in Article 7 hereof have not been satisfied in any material respect or if Seller or the Company are otherwise in default in any material respect under this Agreement; or (d) by Seller if as of the Closing Date any of the conditions specified in Article 8 hereof have not been satisfied in any material respect or if Purchaser is otherwise in default in any material respect under this Agreement. 10.2 Procedure Upon Termination. In the event of termination and ---------------------------- abandonment pursuant to Section 10.1 hereof, and subject to the proviso contained in Section 10.1(b), this Agreement shall terminate and shall be abandoned, without further action by any of the parties hereto. If this Agreement is terminated as provided herein: (a) each party shall redeliver all documents and other material of any other party relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same; 20 (b) all information received by any party hereto with respect to the business of any other party or the Company (other than information which is a matter of public knowledge or which has heretofore been or is hereafter published in any publication for public distribution or filed as public information with any governmental authority) shall not at any time be used for the advantage of, or disclosed to third parties by, such party to the detriment of the party furnishing such information; and (c) no party hereto shall have any liability or further obligation to any other party to this Agreement except for the confidentiality provisions set forth in Section 5.1 hereof. ARTICLE 11 SURVIVAL OF TERMS; INDEMNIFICATION ---------------------------------- 11.1 Survival. All of the terms and conditions of this Agreement, -------- together with the representations, warranties and covenants contained herein or in any instrument or document delivered or to be delivered pursuant to this Agreement, shall survive the execution of this Agreement and the Closing notwithstanding any investigation heretofore or hereafter made by or on behalf of any party hereto; provided, however, that (a) the agreements and covenants (other than the indemnification provisions set forth in this Article 11, which shall survive as provided below) set forth in this Agreement shall survive and continue until all obligations set forth therein shall have been performed and satisfied; and (b) all representations and warranties, and the agreements of Seller, the Company and Purchaser to indemnify each other set forth in this Article 11, shall survive and continue for, and all Claims with respect thereto shall be made prior to the end of, the first anniversary of the Post Closing Determination Date, except for representations, warranties and indemnities for which an indemnification Claim shall be pending as of the end of the applicable period referred to above, in which event such indemnities shall survive with respect to such Claim until the final disposition thereof. The parties hereto acknowledge and agree that any matter set forth on any Schedule attached hereto shall be deemed to be set forth in all other Schedules attached hereto whether or not a specific cross reference appears therein. 11.2 Indemnification by Seller. Subject to this Article 11, Purchaser -------------------------- and its officers, directors, employees, shareholders, representatives and agents (collectively, the "Purchaser Indemnified Parties") shall be indemnified and held harmless by Seller at all times after the Effective Date, against and in respect of any and all damage, loss, deficiency, liability, obligation, commitment, cost or expense (including the reasonable fees and expenses of counsel) (collectively, "Losses") resulting from, or in respect of, any of the following: (a) Any misrepresentation, breach of warranty, or non-fulfillment of any obligation on the part of Seller or the Company under this Agreement, any document relating thereto or contained in any schedule or exhibit to this Agreement or from any misrepresentation in or omission from any certificate, schedule, other agreement or instrument by Seller or the Company hereunder; (b) Any and all liabilities of the Company of any nature whether accrued, absolute, contingent or otherwise, and whether known or unknown, existing at the Effective Date to the extent not reflected and reserved against in the Post Closing Audit or not otherwise 21 adequately disclosed in this Agreement or the schedules or exhibits thereto, including, without limitation: (i) All Tax liabilities of the Company, including federal, state and local Tax liability, together with any interest or penalties thereon or related thereto for all periods ending on or prior to the Effective Date but excluding any Taxes to the extent there is an accrual or reserve on the Post Closing Audit and any Tax liability of Seller arising in connection with the transactions contemplated hereby. Any Taxes, penalties or interest attributable to the operations of the Company payable as a result of an audit of any Tax Return for any period ending on or prior to the Effective Date shall be deemed to have accrued in the period to which such Taxes, penalties or interest are attributable; and (ii) All environmental liability relating to any of the Company's properties, including federal, state and local environmental liability, together with any interest or penalties thereon or related thereto, through the Effective Date, but excluding any amount for which there is an accrual or reserve on the Post Closing Audit. (c) All demands, assessments, judgments, costs and reasonable legal and other expenses arising from, or in connection with any Claim incident to any of the foregoing. (d) All Losses in excess of one million dollars ($1,000,000) arising from the litigation described in Schedule 11.2(d), so long as Purchaser has acted in good faith and has not interfered with Seller's ability to settle such litigation and that Seller shall have maintained control of the litigation and the conduct of any settlement discussions relating to such litigation. 11.3 Limits on Seller's Indemnification Obligations. -------------------------------------------------- (a) Seller shall have no any obligation to indemnify any of the Purchaser Indemnified Parties: (i) unless and until the aggregate amount of Losses for which such Purchaser Indemnified Parties are seeking indemnification exceeds $50,000, in which event the Purchaser Indemnified Parties shall be entitled to be indemnified for all such Losses, or (ii) to the extent that the aggregate amount of all Losses for which such Purchaser Indemnified Parties are seeking or have received indemnification exceeds $500,000 (the "Cap"). Seller acknowledges and agrees that Purchaser shall have the right of set off and reduction ("Set Off") up to the Cap against the Note (in reverse maturity order of the Note) in respect of all Losses for which the Purchaser Indemnified Parties are entitled to indemnification under Section 11.2. If Purchaser elects to exercise its right of Set Off pursuant to the provisions of the immediately preceding sentence, Purchaser shall give written notice thereof to Seller, specifying the nature and amount of such Claim and that Purchaser has exercised its right of Set Off. (b) The amounts for which Seller shall be liable hereunder shall be (i) net of any insurance proceeds received by the Purchaser Indemnified Parties in connection with the circumstances giving rise to the right of indemnification and (ii) limited to the actual and direct Losses incurred by the Purchaser Indemnified Parties and shall not include any indirect, consequential, incidental, special, exemplary or punitive Losses. Purchaser covenants and agrees on a reasonable and best efforts basis to first attempt to collect the amount of all Losses through its insurance policies, prior to pursuing its right of indemnification hereunder. 22 11.4 Omitted 11.5 Indemnification by Purchaser. Subject to this Article 11, Seller ----------------------------- and its officers, directors, employees, shareholders, representatives and agents shall be indemnified and held harmless by Purchaser at all times after the Effective Date, against and in respect of any and all Losses resulting from, or in respect of, any of the following: (a) Any misrepresentation, breach of warranty, or non-fulfillment of any obligation on the part of Purchaser under this Agreement (including, without limitation, the covenants and agreements made by Purchaser in Article 5), any document relating hereto or thereto or contained in any schedule or exhibit to this Agreement or from any misrepresentation in or omission from any certificate, other agreement or instrument by Purchaser hereunder. (b) Any and all liabilities of Seller arising out of, or in connection with, the guarantees made or granted by Seller on account of any of the Company's Indebtedness. (c) All demands, assessments, judgments, costs and reasonable legal and other expenses arising from, or in connection with, any action, suit, proceeding or claim incident to any of the foregoing. 11.6 Third-Party Claims. Except as otherwise provided in this ------------------- Agreement, the following procedures shall be applicable with respect to indemnification for third-party Claims. Promptly after receipt by the party seeking indemnification hereunder (hereinafter referred to as the "indemnitee") of notice of the commencement of any (a) Tax audit or proceeding for the assessment of Tax by any Taxing Authority or any other proceeding likely to result in the imposition of a Tax liability or obligation or (b) any action or the assertion of any Claim, liability or obligation by a third-party (whether by legal process or otherwise), against which Claim, liability or obligation the other party to this Agreement (hereinafter the "indemnitor") is, or may be, required under this Agreement to indemnify such indemnitee, the indemnitee will, if a Claim thereon is to be, or may be, made against the indemnitor, notify the indemnitor in writing of the commencement or assertion thereof and give the indemnitor a copy of such Claim, process and all legal pleadings. The indemnitor shall have the right to participate in the defense of such action with counsel of reputable standing. The indemnitor shall have the right to assume the defense of such action unless such action (i) may result in injunctions or other equitable remedies in respect of the indemnitee or its business; (ii) may result in liabilities which, taken with other then existing Claims under this Article 11, would not be fully indemnified hereunder; or (iii) may have an adverse impact on the business or financial condition of the indemnitee after the Closing Date (including an effect on the tax liabilities, earnings or ongoing business relationships of the indemnitee). The indemnitor and the indemnitee shall cooperate in the defense of such Claims. In the case that the indemnitor shall assume or participate in the defense of such audit, assessment or other proceeding as provided herein, the indemnitee shall make available to the indemnitor all relevant records and take such other action and sign such documents as are necessary to defend such audit, assessment or other proceeding in a timely manner. If the indemnitee shall be required by judgment or a settlement agreement to pay any amount in respect of any obligation or liability against which the indemnitor has agreed to indemnify the indemnitee under this Agreement, the indemnitor shall promptly reimburse the indemnitee in any amount equal to the amount of such payment plus all reasonable expenses (including legal fees 23 and expenses) incurred by such indemnitee in connection with such obligation or liability subject to this Article 11. Prior to paying or settling any Claim against which an indemnitor is, or may be, obligated under this Agreement to indemnify an indemnitee, the indemnitee must first supply the indemnitor with a copy of a final court judgment or decree holding the indemnitee liable on such claim or failing such judgment or decree, must first receive the written approval of the terms and conditions of such settlement from the indemnitor. An indemnitor shall have the right to settle any Claim against it, subject to the prior written approval of the other, which approval shall not be unreasonably withheld. An indemnitee shall have the right to employ its own counsel in any case, but the fees and expenses of such counsel shall be at the expense of the indemnitee unless (a) the employment of such counsel shall have been authorized in writing by the indemnitor in connection with the defense of such action or Claim, (b) the indemnitor shall not have employed counsel in the defense of such action or Claim, or (c) such indemnitee shall have reasonably concluded that there may be defenses available to it which are contrary to, or inconsistent with, those available to the indemnitor, in any of which events such fees and expenses of not more than one additional counsel for the indemnified parties shall be borne by the indemnitor. Any and all Claims made by Purchaser against Seller for indemnification under this Article 11 may be, but are not required to be, settled by payment from the Escrow Account. 11.7 Arbitration. Each controversy or claim arising out of or relating ----------- to indemnification pursuant to Article 11 of this Agreement, not otherwise disposed of pursuant to the provisions set forth in this Article 11 above, shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered in such arbitration shall be final and binding upon the parties and may be entered in any court having jurisdiction thereto. Notice of the demand for arbitration shall be filed in writing with the other party to this Agreement and with the Miami, Florida, office of the American Arbitration Association, which such demand shall set forth in the same degree of particularity as required for complaints under the Federal Rules of Civil Procedure the claims to be submitted to arbitration. Additionally, the demand for arbitration shall include appropriate copies of all documents on which the claims are based and a list of all persons who the party seeking arbitration will call as witnesses with respect to such claims. In no event shall the demand or arbitration be made, after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations. This Agreement to arbitrate may be specifically enforced by a court of competent jurisdiction under the applicable law of the State of Florida pertaining to arbitrations. The arbitration shall be conducted by a panel of three arbitrators at the Miami, Florida, office of the American Arbitration Association. The rules of the American Arbitration Association concerning commercial disputes shall be applicable to any such arbitration proceeding except as they may be modified by the terms of this Agreement. Each party shall select one arbitrator, and the two arbitrators so selected shall select a third arbitrator. If a party fails to select an arbitrator, then the party who has selected an arbitrator shall select a second arbitrator and the two arbitrators so selected shall act. If the two 24 arbitrators selected by the parties cannot agree on a third arbitrator, the names of three candidates (meeting all of the qualifications of an arbitrator as hereinafter provided) shall be chosen by the president of the Dade County Bar Association, or his delegate, and the name of one such candidate shall be drawn by lot by such Bar Association official, and such procedure shall be followed until a third arbitrator willing to act is selected. The arbitrators shall have the authority and jurisdiction to enter any pre-arbitration awards that would aid and assist the conduct of the arbitration or preserve the parties' rights with respect to the arbitration as the arbitrators shall deem appropriate in their discretion. The award of the arbitrators shall be in writing and it shall specify in reasonable detail the issues submitted to arbitration and the award of the arbitrators with respect to each of the issuers so submitted. The provisions of the Federal Rules of Civil Procedure relating to the right of discovery in civil actions shall be applicable to such arbitration proceedings except as modified by the terms of this Agreement. Within thirty (30) days after the commencement of any arbitration proceeding under this Agreement, each party shall file with the arbitrators its contemplated discovery plan outlining the desired documents to be produced, the depositions to be taken and any other discovery action sought in the arbitration proceeding. After a hearing, the arbitrators in an interim award shall fix the scope and content of each party's discovery plan as the arbitrators deem appropriate. The arbitrators shall have the authority to modify, amend or change such interim award fixing the discovery plans of the parties upon application by either party, if good cause appears for doing so. The prevailing party as determined by the arbitrators shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs actually incurred in connection therewith and in the enforcement or collection of any judgment or award rendered therein. The prevailing party means the party determined by the arbitrators to have most nearly prevailed, even if such party does not prevail in all matters, or is not the party in whose favor an award is rendered. Included within the cost recoverable pursuant to the terms of this Section shall be included service of process costs, filing fees, arbitration fees, arbitrators' fees, court and reporter costs, investigative costs, and expert witness fees. The award pursuant to such arbitration will be final, binding and conclusive. Upon final determination of the award, the party determined obligated to pay will pay to the party determined entitled thereto, within thirty (30) days of such final determination, the full amount, in cash, of such award (which shall include such fees and costs as awarded by the arbitrators). ARTICLE 12 MISCELLANEOUS PROVISIONS ------------------------ 12.1 Amendment and Modification. Subject to applicable law, this ---------------------------- Agreement may be amended, modified and supplemented only by written agreement of the parties hereto. 12.2 Entire Agreement. This Agreement, including the schedules and ----------------- exhibits hereto and the documents, certificates and instruments referred to herein, embodies the entire agreement and understanding of the parties hereto in respect of the transactions contemplated by this Agreement and supersedes all prior agreements, representations, warranties, promises, 25 covenants, arrangements, communications and understandings, oral or written, express or implied, between the parties with respect to such transactions. There are no agreements, representations, warranties, promises, covenants, arrangements or understandings between the parties with respect to such transactions, other than those expressly set forth or referred to herein. 12.3 Certain Definitions. -------------------- "Affiliate" means, with respect to any Person, any other Person that, --------- directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person, where "control" means, with respect to any Person the possession, directly or indirectly, of the power to direct the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "Authority" means any governmental, regulatory or administrative body, --------- agency, arbitrator or authority, any court or judicial authority, any public, private or industry regulatory agency, arbitrator authority, whether international, national, federal, state or local. "Claim" means any action, claim, obligation, liability, expense, --------- lawsuit, demand, suit, inquiry, hearing, investigation, notice of a violation, litigation, proceeding, arbitration, or other dispute, whether civil, criminal, administrative or otherwise, whether pursuant to contractual obligations or otherwise. "Contract" means any agreement, contract, commitment, instrument or --------- other binding arrangement or understanding, whether written or oral. "Environmental Law" means any Regulation, Order, consent decree, or ----------------- settlement agreement, which relates to or otherwise imposes liability or standards of conduct concerning mining or reclamation of mined land, discharges, emissions, releases or threatened releases of noises, odors or any pollutants, contaminants or hazardous or toxic wastes, substances or materials, whether as matter or energy, into ambient air, water, or land, or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of pollutants, contaminants, or hazardous wastes, substances or materials, including (but not limited to) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act of 1977, as amended, any so-called "Superlien" law, and any other similar Federal, state or local statutes. "GAAP" means generally accepted accounting principles in the United ---- States of America, applied on a consistent basis with the Financial Statements, as in existence at the date hereof. "Guarantee" means any guarantee or other contingent liability (other --------- than any endorsement for collection or deposit in the ordinary course of business), direct or 26 indirect with respect to any obligations of another Person, through an agreement or otherwise, including, without limitation, (a) any endorsement or discount with recourse or undertaking substantially equivalent to or having economic effect similar to a guarantee in respect of any such obligations and (b) any Contract (i) to purchase, or to advance or supply funds for the payment or purchase of, any such obligations, (ii) to purchase, sell or lease property, products, materials or supplies, or transportation or services, in respect of enabling such other Person to pay any such obligation or to assure the owner thereof against loss regardless of the delivery or nondelivery of the property, products, materials or supplies or transportation or services or (iii) to make any loan, advance or capital contribution to or other investment in, or to otherwise provide funds to or for, such other Person in respect of enabling such Person to satisfy an obligation (including any liability for a dividend, stock liquidation payment or expense) or to assure a minimum equity, working capital or other balance sheet condition in respect of any such obligation. "Indebtedness" with respect to any Person means any obligation of such ------------ Person for borrowed money, but in any event shall include (a) any obligation incurred for all or any part of the purchase price of property or other assets or for the cost of property or other assets constructed or of improvements thereto, other than accounts payable included in current liabilities and incurred in respect of property purchased in the ordinary course of business, (b) the face amount of all letters of credit issued for the account of such Person and all drafts drawn thereunder, (c) obligations (whether or not such Person has assumed or become liable for the payment of such obligation) secured by Liens, (d) capitalized lease obligations, and (e) all Guarantees of such Person. "Knowledge" with respect to Seller, means the actual knowledge of the --------- members of the Board of Managers of Seller, and with respect to the Company, means the actual knowledge of the officers of the Company. "Lien" means any security interest, lien, mortgage, pledge, ---- hypothecation, encumbrance, Claim, easement, restriction or interest of another Person of any kind or nature. "Market Price" means the average weighted closing bid price per share, ------------ weighted by volume, of Charys Common Stock for the twenty (20) consecutive trading days ending on the Closing Date. "Material Adverse Change" means any developments or changes which ----------------------- would have a Material Adverse Effect. "Material Adverse Effect" means any circumstances, state of facts or ----------------------- matters which might reasonably be expected to have a material adverse effect in respect of the Company's business, operations, properties, assets, condition (financial or otherwise), results, plans or strategies. "Material Contract" means, in addition to the Contracts set forth on ----------------- Schedule 2.12(a), any Contract that is not terminable without penalty within twelve (12) months and contains obligations in excess of $100,000 per year. 27 "Occurrence" means any accident, happening or event which occurs or ---------- has occurred at any time prior to the Closing Date, which results in or could result in a claim against the Company or creates or could create a liability or loss for the Company. "Order" means any decree, judgment, award, order, injunction, rule, ----- consent of or by an Authority. "Person" means any corporation, partnership, joint venture, ------ organization, entity, Authority or natural person. "Proceeds" means, with respect to the VA Job, all amounts received by -------- the Company in excess of the Estimated Costs to Complete (as such term is defined in the Management Agreement). "Proprietary Rights" means any patent, patent application, copyright, ------------------ trademark, trade name, service mark, service name, trade secret, know-how, confidential information or other intellectual property or proprietary rights. "Regulation" means any law, statute, rule, regulation, ordinance, ---------- requirement, announcement or other binding action of or by an Authority. 12.4 Notices. All notices, requests, demands and other communications ------- required when delivered by hand or mailed, first class certified mail with postage paid or by overnight receipted courier service: (a) If to Seller or the Company, to Preferred Employers Holdings, Inc., located at 10800 Biscayne Boulevard, Miami, FL 33161, attention Donald J. Bezahler, Esq., Email: ***@***, and to H.I.G. Viasys, Inc., located at 1001 Brickell Bay Drive, Suite 2708, Miami FL 33131, attention Douglas Berman or to such other person or address as Seller shall furnish by notice to Purchaser in writing. (b) If to Purchaser, to Charys Holding Company, Inc., a Delaware corporation located at 1117 Perimeter Center West, Suite N415, Atlanta, GA 30338, attention Billy V. Ray CEO with a copy to: Michael Brenner, Esq., 1643 North Harrison Parkway, Sunrise Florida 33323, Email: ***@***, Email: ***@***, (o) 954 ###-###-####, (c) 954 ###-###-####, (f) 954 ###-###-#### or to such other person or address as Purchaser shall furnish by notice to Seller in writing. 12.5 Assignment. This Agreement and all of the provisions hereof shall ---------- be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties, except that Purchaser may assign its rights, interests and obligations hereunder to an Affiliate, which to the reasonable satisfaction of Seller, has the ability to comply with the financial obligations of Purchaser hereunder, and may grant Liens or security interests in respect of its rights and interests hereunder without the prior approval of Seller or the Company. 28 12.6 Governing Law. The Agreement shall be governed by the internal -------------- laws of the State of Florida as to all matters, including but not limited to matters of validity, construction, effect and performance. 12.7 Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 12.8 Headings. The article and section headings contained in this -------- Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 12.9 Binding Effect. This Agreement shall not be construed so as to --------------- confer any right or benefit upon any Person other than the signatories to this Agreement and each of their respective successors and permitted assigns. 12.10 Injunctive Relief. The parties hereto agree that in the event of ----------------- a breach of any provision of this Agreement, the aggrieved party or parties may be without an adequate remedy at law. The parties therefore agree that in the event of a breach of any provision of this Agreement, the aggrieved party or parties may elect to institute and prosecute proceedings in any court of competent jurisdiction located in Miami-Dade County, Florida to enforce specific performance or to enjoin the continuing breach of such provision, as well as to obtain damages for breach of this Agreement. By seeking or obtaining any such relief, the aggrieved party shall not be precluded from seeking or obtaining any other relief to which it may be entitled. 12.11 Delays or Omissions. No delay or omission to exercise any right, ------------------- power or remedy accruing to any party hereto, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the party of any party hereto of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 12.12 Severability. Unless otherwise provided herein, if any provision ------------ of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be effected or impaired thereby. 12.13 Expenses. Purchaser shall bear its own expenses, including -------- without limitation, legal fees and expenses, with respect to this Agreement and the transactions contemplated hereby. The Company on behalf of Seller shall bear its own and Seller's expenses, including without limitation, legal fees and expenses, with respect to this Agreement and the transactions contemplated hereby. 29 IN WITNESS WHEREOF, the parties hereto have made and entered into this Agreement the date first hereinabove set forth. CHARYS HOLDING COMPANY, INC. - ------------------------------------------ Billy V. Ray, Jr., Chief Executive Officer AGREED AND ACCEPTED BY: New Viasys Holdings, LLC By: ----------------------------- Mel Harris, Manager By: ----------------------------- Douglas Berman, Manager Viasys Network Services, Inc. By: ----------------------------- Its (Vice) President Date: Viasys Services, Inc. By: ----------------------------- Its (Vice) President Date: 30

BRMFS1 629621v8

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SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Agreement") is made this 1st day of --------- November, 2005 among Charys Holding Company, Inc., a Delaware corporation whose principal executive office is located at 1117 Perimeter Center West, Suite N415, Atlanta, GA 30338 ("Charys"), Viasys Network Services Inc., a Florida ------ corporation whose principal executive office is located at 26 Lake Wire Drive, Lakeland, FL 33815 ("VNS"), Viasys Services Inc., a Florida corporation whose --- principal executive office is located at 26 Lake Wire Drive, Lakeland, FL 33815 ("VSI", and together with Charys and VNS, collectively, "Debtor"), and New --- ------ Viasys Holdings, LLC, a Delaware limited liability company whose principal executive office is located at c/o Preferred Employers Holdings, Inc. 10800 Biscayne Boulevard, Miami, FL 33161 ("Secured Party"). -------------- W I T N E S S E T H: - - - - - - - - - - WHEREAS, pursuant to a Stock Purchase Agreement (the "Stock Purchase -------------- Agreement") dated as of the date hereof, by and between Charys and Secured - --------- Party, Secured Party is selling, and Charys is buying from Secured Party, all of the issued and outstanding shares of capital stock of VNS and VSI; WHEREAS, the Stock Purchase Agreement contains certain obligations, representations, warranties and covenants; WHEREAS, pursuant to Section 1.3.1 of the Stock Purchase Agreement, a portion of the Base Purchase Price paid to Secured Party in consideration of the Shares is a subordinated secured promissory note in the original principal amount of THREE MILLION FIVE HUNDRED THOUSAND Dollars and 00/100 ($3,500,000) (the "Promissory Note"); ---------------- WHEREAS, Debtor has agreed to grant to Secured Party a continuing subordinated security interest in the Collateral (as defined below) as security for the Obligations (as defined below). NOW, THEREFORE, in consideration of the mutual promises and the mutual agreements and covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto covenant and agree as follows: 1. Grant of Security Interest. As collateral security for the prompt -------------------------- and complete payment and performance when due of the unpaid principal of and interest on the Promissory Note, and any liabilities for breach(es) of any representation, warranty, covenant, and/or agreement hereunder or under the Stock Purchase Agreement, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Promissory Note, the Stock Purchase Agreement, or any other document or instrument made, delivered or given in connection therewith, for the benefit of Debtor, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (collectively, the "Obligations"), Debtor hereby grants to ----------- Secured Party a continuing subordinated security interest in the Collateral described in Section 2 hereof, subordinate only to a lien in the amount of $2,200,000 being contemporaneously given to Highgate House Funds, Ltd., a Cayman Islands company ("Highgate"). -------- 2. Description of Collateral. The collateral for this Agreement ------------------------- (collectively, the "Collateral") is all of Debtor's right, title and interest in ---------- and to (i) that certain Facilities Maintenance Agreement, dated as of January 27, 1992, and as amended as of November 2, 2005, between Georgia Electric Company (n/k/a VSI) and Cooper Tire & Rubber Co.; (ii) gross revenues and receipts, money, securities and all proceeds derived from such contract; (iii) all claims of VSI against Cooper Tire & Rubber Co. relating to or arising out of such contract; (iv) all of the issued and outstanding shares of capital stock of each of VSI and VNS (the "Shares") together with the certificates, if any, ------ evidencing the Shares, and (v) all moneys, property or securities resulting from a reorganization, reclassification or other similar transaction or otherwise received in exchange for the Shares, and any warrants, rights or options issued to the holder of, or otherwise in respect of, the Shares. The items set forth in subsections (iv) and (v) hereof shall hereinafter be collectively referred to as the "Share Collateral". ---------------- 3. Subordination of Lien. Notwithstanding anything to the contrary --------------------- contained herein, Secured Party acknowledges and agrees that it (i) is holding the Share Collateral as agent, and on behalf of, Highgate; (ii) will not take any action with respect to the Share Collateral pursuant to Sections 5, 6(b), or 7 hereof, and (iii) is not entitled to apply any funds as a result of the enforcement of the Collateral, unless and until either Highgate shall have received $2,200,000 from Debtor or any guarantors, or Secured Party shall have received from Highgate reasonable written instructions as to the actions to be taken to enforce the security interest granted herein. 4. Delivery of Share Collateral. All certificates or instruments ---------------------------- representing or evidencing the Shares (or any of it) shall be delivered to and held by Brown Raysman Millstein Felder & Steiner LLP (the "Escrow Agent"), and ------------ shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Escrow Agent and Secured Party. In addition, the Escrow Agent shall have the right at any time to exchange certificates or instruments representing or evidencing the Shares for certificates or instruments of smaller or larger denominations. 5. Rights of Secured Party With Respect to the Share Collateral. ------------------------------------------------------------ Secured Party shall not be liable for failure to collect or realize upon the Obligations or any collateral security or guarantee therefor, or any part thereof, or for any delay in so doing, nor be under any obligation to take any action whatsoever with regard thereto. Any part or all of the Share Collateral held by the Escrow Agent (after disbursement by the Escrow Agent of the Share Collateral in accordance with Section 6 below), may, if an Event of Default (as defined in Section 11 below) has occurred and is continuing without notice, be transferred into the name of Secured Party or its nominee, and Secured Party or its nominee may thereafter without notice, exercise all rights in respect of the Share Collateral, including the exercise of any and all rights of conversion, exchange, subscription or any other rights, privileges or options in respect of the Share Collateral, as if it were the absolute owner thereof, all without liability except to account for property actually received by Secured Party or its nominee; provided, however, that Secured Party shall not have any duty to exercise any of the foregoing actions, or any liability for failure to do so or delay in so doing. 2 6. Voting Rights; Dividends; Etc. ----------------------------- (a) Prior to an Event of Default. So long as no Event of Default ---------------------------- or event which, with the giving of notice or the lapse of time, or both, would become an Event of Default shall have occurred and be continuing: (i) Debtor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Shares for any purpose not inconsistent with the terms of this Agreement; provided, however, that, Debtor -------- ------- shall not exercise or refrain from exercising any such right if, in the judgment of Secured Party, such action would have a material adverse effect on the value of the Collateral or any part thereof. (ii) Debtor shall be entitled to receive and retain any and all dividends made in respect of the Share Collateral, provided, however, that -------- ------- any and all: (A) dividends made or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Share Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Share Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise distributed as a return of capital in respect of, in redemption of, or in exchange for, any Share Collateral, shall be, and shall forthwith be delivered to Secured Party to hold as, Collateral and, if received by Debtor, shall be received in trust for the benefit of Secured Party, be segregated from the other property or funds of Debtor, and be forthwith delivered to Secured Party as Collateral in the same form as so received (together with any necessary endorsement). (b) After an Event of Default. Upon the occurrence and during the ------------------------- continuance of an Event of Default or an event which, with the giving of notice or the lapse of time, or both, would become an Event of Default: (i) All rights of Debtor to exercise the rights, which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) hereof shall cease. (ii) All rights of Debtor to receive the dividends, which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) hereof shall cease, and all such rights shall thereupon become vested in Secured Party, which shall thereupon have the sole right to receive and hold such distributions as Collateral. (iii) All dividends which are received by Debtor contrary to the provisions of Section 6(b)(ii) shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of Debtor and shall be forthwith paid over to Secured Party as Collateral in the same form as so received (together with any necessary endorsement). 3 7. Disbursement of Share Collateral by Escrow Agent. ------------------------------------------------- (a) Disbursement In Accordance with Instructions by Secured Party. ------------------------------------------------------------- Upon the occurrence and continuance of an Event of Default, Secured Party shall send written notice to such effect to the Escrow Agent and Debtor specifying in reasonable detail the nature of the Event of Default (the "Secured Party's Claim --------------------- Notice"). The Secured Party's Claim Notice sent to the Escrow Agent shall - ------ further include a statement that a copy of the Secured Party's Claim Notice has been sent to Debtor via the same delivery method used for the Escrow Agent. The Escrow Agent shall take no action for a period of fifteen (15) business days (the "Waiting Period") commencing on the date it receives the Secured Party's -------------- Claim Notice. Debtor may dispute the Secured Party's Claim Notice during the Waiting Period by sending written notice (the "Debtor's Dispute Notice") setting ----------------------- forth in reasonable detail the nature of its dispute with the Secured Party's Claim Notice, to both the Escrow Agent and Secured Party. The Debtor's Dispute Notice sent to the Escrow Agent shall further include a statement that a copy of the Debtor's Dispute Notice was sent to Secured Party via the same delivery method used for the Escrow Agent. If upon the expiration of the Waiting Period, the Escrow Agent has not received a Debtor's Dispute Notice, it shall promptly release the Share Collateral to Secured Party. If upon the expiration of the Waiting Period, the Escrow Agent has received a Debtor's Dispute Notice, the Escrow Agent shall continue to hold the Share Collateral until the dispute is resolved, and the Escrow Agent receives an order or instructions in accordance with subsection (c) hereof. (b) Disbursement In Accordance with Instructions by Debtor. Upon ------------------------------------------------------ the payment and performance in full of the Obligations of Debtor to Secured Party, Debtor will be entitled to the Share Collateral and shall send written notice to such effect to the Escrow Agent and to Secured Party (the "Debtor's -------- Claim Notice"). The Debtor's Claim Notice sent to the Escrow Agent shall further - ------------ include a statement that a copy of the Debtor's Claim Notice has been sent to Secured Party via the same delivery method used for the Escrow Agent. The Escrow Agent shall take no action during the Waiting Period commencing on the date it receives the Debtor's Claim Notice. Secured Party may dispute the Debtor's Claim Notice during the Waiting Period by sending written notice (the "Secured Party's Dispute Notice") setting forth in reasonable detail the nature ------------------------------ of its dispute with Debtor's Claim Notice, to both the Escrow Agent and Debtor. The Secured Party's Dispute Notice sent to the Escrow Agent shall further include a statement that a copy of the Secured Party's Dispute Notice was sent to Debtor via the same delivery method used for the Escrow Agent. If upon the expiration of the Waiting Period, the Escrow Agent has not received a Secured Party's Dispute Notice it shall promptly release the Share Collateral to Debtor. If upon the expiration of the Waiting Period, the Escrow Agent has received a Secured Party's Dispute Notice, the Escrow Agent shall continue to hold the Share Collateral until the dispute is resolved, and the Escrow Agent receives an order or instructions in accordance with subsection (c) hereof. (c) Dispute. In the event of any dispute among any of the parties ------- with respect to Sections 7 (a) or (b) above, the Escrow Agent shall not comply with any claims or demands from either Debtor or Secured Party as long as any such dispute may continue, and the Escrow Agent shall make no delivery or other disposition of any portion of the Share Collateral until (i) the Escrow Agent has received a final non-appealable court order from a court of competent jurisdiction directing disposition of the Share Collateral, (ii) the Escrow Agent has received an 4 order of an arbitrator designated in writing jointly by Debtor and Secured Party directing disposition of the Share Collateral, or (iii) the Escrow Agent has received written instructions signed by both Debtor and Secured Party directing disposition of the Share Collateral. If so requested by the Escrow Agent, any court order delivered in accordance with subsection (i) herein shall be accompanied by a legal opinion of counsel to the presenting party satisfactory to the Escrow Agent to the effect that the order is final and non-appealable. Upon receipt of the order or instructions referred to in subsections (i), (ii) or (iii) herein, the Escrow Agent shall deliver the Share Collateral, or portion thereof, as the case may be, in accordance with such order or instructions and shall comply in all respects with such order or instructions. (d) Interpleader. In the event that any dispute should arise ------------ under Sections 7 (a) or (b) above, or if a proceeding for the determination of a dispute arising under Sections 7 (a) or (b) above is not begun and diligently continued, the Escrow Agent shall be entitled, at the expense of Debtor and Secured Party, to make an ex parte application, or bring any appropriate action, for leave to deposit the Share Collateral with the clerk of any court of competent jurisdiction seeking such determination or such declaratory relief as the Escrow Agent shall deem reasonably necessary under the circumstances, and the parties each hereby irrevocably consent to the entering of an ex parte order pursuant to all applicable laws, rules and procedures of the State of Florida and such court. The Escrow Agent shall be reimbursed by Secured Party and Debtor, for all of the Escrow Agent's reasonable costs and expenses of such action or proceeding, including, without limitation, attorneys' fees and disbursements. Upon making any such ex parte application, the Escrow Agent shall promptly give notice thereof to Secured Party and Debtor. 8. Escrow Agent's Liability. It is expressly understood and agreed by ------------------------ the parties that (a) the duties of the Escrow Agent, as herein specifically provided, are purely ministerial in nature; (b) the Escrow Agent shall not be responsible or liable in any manner whatsoever for, or have any duty to inquire into, the sufficiency, correctness, genuineness or validity of the notices it receives hereunder, or the identity, authority or rights of any of the parties; (c) the Escrow Agent shall have no duties or responsibilities in connection with the Collateral, other than those specifically set forth in this Agreement and applicable law; (d) the Escrow Agent shall not incur any liability in acting upon any signature, written notice, request, waiver, consent, receipt, or any other paper or document believed by the Escrow Agent to be genuine; (e) the Escrow Agent may assume that any person purporting to have authority to give notices on behalf of any of the parties in accordance with the provisions hereof has been duly authorized to do so; (f) the Escrow Agent shall incur no liability whatsoever except for such resulting from its willful misconduct or gross negligence, as long as the Escrow Agent has acted in good faith in the performance of its duties hereunder or in accordance with the advice or opinion of any counsel retained by it; (g) upon the Escrow Agent's performance of its obligations under Section 7 hereof, the Escrow Agent shall be relieved of all liability, responsibility and obligation with respect to the Collateral or arising out of or under this Agreement; and (h) the Escrow Agent does not have any interest in the Collateral deposited hereunder but is serving as the Escrow Agent only and having only possession thereof. 9. Covenants of Debtor. Debtor hereby covenants represents, warrants ------------------- and agrees that while any Obligations are outstanding: (a) Debtor has and will have good and valid title to the Collateral from time to time owned or acquired by it, free and clear of all liens, encumbrances, pledges and security 5 interests of any kind or nature whatsoever (collectively, "Liens"); ----- (b) Debtor will not create or permit to exist any Lien upon or with respect to any of the Collateral, except for the security interest granted under this Agreement and the lien granted to Highgate; (c) Debtor shall not change its name, state of incorporation, type of entity, identity or corporate structure to such an extent that any financing statement filed by Secured Party in connection with this Agreement would become defective or materially misleading. The tax identification number of (i) VNS is 20 ###-###-####, (ii) VSI is ###-###-####, and (iii) Charys is ###-###-####. The state identification number of (i) VNS is P05000012213 (ii) VSI is G09210 and (iii) Charys is ###-###-####. (d) Debtor shall maintain the security interests created by this Agreement and, at no cost or expense to Secured Party, shall defend Debtor's right, title and interest in and to the Collateral, and defend the Collateral against all other claims or demands of any other party and all other liabilities of any nature whatsoever; (e) Debtor, at its sole cost and expense, shall execute and deliver, or cause to be duly executed and delivered, financing or continuation statements and such further instruments and documents, and do and cause to be done all such acts and things, as Secured Party may at any time reasonably request to enforce, perfect and protect Secured Party's security interest in the Collateral as herein provided and Secured Party's rights and remedies with respect to the Collateral; (f) Debtor shall keep and maintain at all times true and complete books, records and accounts in which complete, true and correct entries shall be made with respect to the Collateral and Debtor's transactions, in accordance with generally accepted accounting principles and normal business practices; Debtor shall permit Secured Party or its representatives to visit and inspect any of the properties of Debtor, to examine Debtor's books of account and other records and files and make copies thereof and to discuss the affairs, business, finances and accounts of Debtor with Debtor's representatives and employees; and Debtor shall make or permit Secured Party to make, upon request, a designation on Debtor's books of account and records of the security interest granted hereunder; (g) Debtor shall promptly furnish Secured Party with all information concerning the Collateral, the performance and payment of Debtor's obligations, liabilities and indebtedness hereunder and the business, operations and financial condition of Debtor, as Secured Party may request; (h) Debtor shall not take any other action that would have a material adverse effect on the perfection or otherwise impair the security interest created hereby; and (i) Debtor shall immediately notify Secured Party of any act, condition, or event, which with the giving of notice or lapse of time, or both, would constitute an Event of Default hereunder. 10. Financing Statements and Notice. Debtor hereby authorizes Secured ------------------------------- Party, without 6 notice to Debtor, to file any financing statements and any amendments thereto or continuations thereof, naming Debtor as grantor and Secured Party as secured party. In order to perfect, maintain or protect its security interest, Secured Party may give notice of its security interest in the Collateral and may deliver a copy of this Agreement to any person. 11. Event of Default. If any or more of the following events (each, an ---------------- "Event of Default") shall occur: ---------------- (a) any breach, failure or violation by Debtor in the payment or performance of any of Debtor's obligations, covenants or warranties under this Agreement, and such breach, failure or violation continues uncorrected for a period of three (3) days after receipt by Debtor of a written notice thereof from Secured Party to Debtor; or (b) an event of default as defined in the Promissory Note. 12. Secured Party's Rights and Remedies. ------------------------------------ (a) Upon notice to Debtor, Secured Party may at any reasonable time and from time to time enter upon the premises where the Collateral is located and inspect such Collateral, and Debtor shall assist Secured Party in any way requested by Secured Party to make any such inspection. (b) Upon the occurrence of an Event of Default, in addition to all other rights and remedies provided hereunder, Secured Party shall have and may exercise all of the rights and remedies provided by the Uniform Commercial Code in effect in the State of Florida at the date of the execution of this Agreement, and such other rights and remedies in respect thereof which it may have at law or in equity or under this Agreement, including without limitation the right to enter any premises where any Collateral is located and take possession of the same without demand or notice and without prior judicial hearing or legal proceedings, which Debtor hereby expressly waives, and to sell all or any portion of the Collateral at public or private sale without prior notice to Debtor except as otherwise required by law (and if notice is required by law, after ten days' prior written notice) at such place or places and at such time or times and in such manner and upon such terms, whether for cash or on credit, as Secured Party in its sole discretion may determine. Upon any such sale of any of the Collateral, Secured Party may purchase all or any of the Collateral being sold, free from any equity or right of redemption. Secured Party shall apply the proceeds of any such sale and any proceeds received by Secured Party to the Obligations. If such proceeds are insufficient to pay the amounts required by law, Debtor shall be liable for any deficiency in the amount so realized from the Collateral. (c) In addition, in any such event, Debtor shall promptly upon demand by Secured Party assemble its Collateral and make it available to Secured Party at the chief executive office of Debtor. The right of Secured Party under this Section to have the Collateral assembled and made available to it is of the essence of this Agreement and Secured Party may, at its election, enforce such right by an action in equity for specific performance. (d) Debtor, to the extent that it has any right, title or interest in any of the Collateral, waives and releases any right to require Secured Party to collect any of the Obligations 7 from any other of the Collateral under any theory of marshalling of assets, or otherwise, and specifically authorizes Secured Party to apply any of the Collateral against any of the Obligations in any manner that Secured Party may determine. 13. Remedies Cumulative and not Waivable. The rights and remedies of ------------------------------------ Secured Party herein expressly specified are cumulative and not exclusive of other contractual, common law or statutory rights and remedies which Secured Party may have. Secured Party shall be under no duty to exercise or withhold the exercise of any of its rights and remedies provided hereunder or otherwise. No omission or delay by Secured Party in exercising any such right or remedy fully shall operate as a waiver, or a partial waiver, of any such right or remedy; nor shall any single or partial exercise of any such right or remedy preclude other or further exercise thereof or the exercise of any other right or remedy. 14. Other Provisions. ----------------- (a) The provisions of this Agreement may from time to time be waived, modified or amended only as provided by a writing signed by each of the parties hereto. (b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. (c) The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof. (d) This Agreement, together with the Promissory Note and the Stock Purchase Agreement, constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements or understandings with respect thereto in their entirety. (e) The provisions of this Agreement shall be deemed severable, so that if any provision hereof is declared invalid under the laws of any state where it is in effect or of the United States, all other provisions of this Agreement shall continue in full force and effect. (f) The security interest granted herein shall terminate when all the Obligations have been fully paid and performed. (g) This Agreement shall be construed in accordance with, and governed by, the laws of the State of Florida as to all matters, including but not limited to matters of validity, construction, effect and performance. (h) This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto were upon the same instrument. 15. Notices. -------- (a) Unless expressly provided herein, all notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed, registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is executed or the letter refused by the 8 addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee or its agent. (b) If to Debtor, c/o Charys Holding Company, Inc., located at 1117 Perimeter Center West, Suite N415, Atlanta, GA 30338, attention Billy V. Ray, CEO, with a copy to Michael Brenner, Esq., 643 North Harrison Parkway, Sunrise, FL 33323, Email: ***@***, Email: ***@***, (office) 954 ###-###-####, (cell) 954 ###-###-####, (fax) 954 ###-###-####, or to such other person or address as Debtor shall furnish by notice to Secured Party in writing. (c) If to Secured Party, to Preferred Employers Holdings, Inc., located at 10800 Biscayne Boulevard, Miami, FL 33161, attention Donald J. Bezahler, Esq., Email: ***@***, and to H.I.G. Viasys, Inc., located at 1001 Brickell Bay Drive, Suite 2708, Miami FL 33131, attention Douglas Berman, or to such other person or address as Secured Party shall furnish by notice to Debtor in writing. (d) If to Escrow Agent, Brown Raysman Millstein Felder & Steiner LLP, 900 Third Avenue, New York, New York 10022. Attention: Anne E. Pitter, Esq., Facsimile No.: (212) 895-2900. 16. Waiver of Conflict. Notwithstanding anything contained herein to ------------------ the contrary, Secured Party and Debtor expressly acknowledge that Brown Raysman Millstein Felder & Steiner LLP is presently serving as counsel to Secured Party. Secured Party and Debtor each hereby expressly waives any conflict of interest that may arise as a result of the Escrow Agent acting as the Escrow Agent hereunder and continuing to act as counsel for Secured Party. Without limiting the foregoing waiver, Secured Party and Debtor agree that neither the Escrow Agent's services as Escrow Agent hereunder nor any provision hereof, either express or implied, shall restrict or inhibit the Escrow Agent in any way from representing Secured Party or any of its affiliates in any action, proceeding, claim, litigation, dispute, controversy, arbitration, suit or negotiation arising under this Agreement, or under any other agreement or in any manner or context whatsoever, whether or not, directly or indirectly, involving Debtor or any of its affiliates. [Signature Page Follows] 9 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Security Agreement as of the day and year first above written. DEBTOR: CHARYS HOLDING COMPANY, INC. By: -------------------------------- Name: Billy V. Ray, Jr. Title: Chief Executive Officer VIASYS NETWORK SERVICES, INC. By: ---------------------------------- Its (Vice) President VIASYS SERVICES, INC. By: ---------------------------------- Its (Vice) President SECURED PARTY: NEW VIASYS HOLDINGS, LLC By: -------------------------------- Mel Harris, Manager By: -------------------------------- Douglas Berman, Manager By its execution below, the Escrow Agent agrees to be bound by the terms of this Agreement: AGREED TO AND ACCEPTED BY: BROWN RAYSMAN MILLSTEIN FELDER & STEINER LLP By: ---------------------------------- Anne E. Pitter, Partner 10 ESCROW AGREEMENT ---------------- This ESCROW AGREEMENT (the "Agreement"), dated as of November 1, 2005, --------- is by and among CHARYS HOLDING COMPANY, INC., a Delaware corporation located at 1117 Perimeter Center West, Suite N415, Atlanta, GA 30338 ("Purchaser"), NEW --------- VIASYS HOLDINGS, LLC, a Delaware limited liability company located at c/o Preferred Employers Holdings, Inc. 10800 Biscayne Boulevard, Miami, FL 33161 ("Seller") and BROWN RAYSMAN MILLSTEIN FELDER & STEINER LLP (the "Escrow ------ ------ Agent"), pursuant to that certain Stock Purchase Agreement dated as of November - ----- 1, 2005 (the "Stock Purchase Agreement"), by and between Seller and Purchaser. ------------------------ W I T N E S S E T H: ------------------- WHEREAS, pursuant to Section 1.3.2 of the Stock Purchase Agreement, Seller and Purchaser have agreed that shares of common stock of Purchaser having a Market Price of five hundred thousand dollars ($500,000) (the "Escrow Shares") ------------- shall be retained in escrow with the Escrow Agent, as security for Purchaser's covenants and other obligations contained in the Stock Purchase Agreement, including, without limitation, the timely payment in full of the Note; and WHEREAS, the Escrow Agent has agreed to serve as escrow agent hereunder in accordance with the terms and conditions set forth herein; and WHEREAS, capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Stock Purchase Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto agree as follows: 1. ESCROW DEPOSIT -------------- 1.1 Deposit into Escrow. On the date hereof, Purchaser has ------------------- deposited with the Escrow Agent stock certificate number _________ for _________ shares of Purchaser, together with stock powers duly executed in blank sufficient to transfer all the Escrow Shares. 2. DISPOSITION OF ESCROW SHARES ---------------------------- 2.1 Disposition of Escrow Shares to Purchaser. Upon receipt ----------------------------------------- of written notice from Seller that it has received full payment of all amounts due on the Note, the Escrow Agent shall transfer the Escrow Shares and other instruments deposited in escrow to Purchaser. 2.2 Disposition of Escrow Shares to Seller. Upon receipt of --------------------------------------- written notice from Seller that Purchaser has breached any of its covenants and other obligations contained in the Stock Purchase Agreement, including, without limitation, the timely payment of any and all amounts due under the Note, Seller shall send written notice to such effect to the Escrow Agent and Purchaser specifying in reasonable detail the nature of its claim (the "Seller's Claim Notice"). The Seller's Claim Notice sent to the --------------------- Escrow Agent shall further include a statement that a copy of the Seller's Claim Notice has been sent to Purchaser via the same delivery method used for the Escrow Agent. The Escrow Agent shall take no action for a period of fifteen (15) business days (the "Waiting Period") commencing on the date it receives the -------------- Seller's Claim Notice. Purchaser may dispute the Seller's Claim Notice during the Waiting Period by sending written notice (the "Purchaser's Dispute Notice") -------------------------- setting forth in reasonable detail the nature of its dispute with the Seller's Claim Notice, to both the Escrow Agent and Seller. The Purchaser's Dispute Notice sent to the Escrow Agent shall further include a statement that a copy of the Purchaser's Dispute Notice was sent to Seller via the same delivery method used for the Escrow Agent. If upon the expiration of the Waiting Period, the Escrow Agent has not received a Purchaser's Dispute Notice, it shall promptly release to Seller the number of Escrow Shares, having a Market Price (as such term is defined in the Stock Purchase Agreement) equal to the amount set forth in the Seller's Claim Notice as determined on the day such Escrow Shares are being released to Seller. If upon the expiration of the Waiting Period, the Escrow Agent has received a Purchaser's Dispute Notice, the Escrow Agent shall continue to hold the Escrow Shares until the dispute is resolved, and the Escrow Agent receives an order or instructions in accordance with Section 2.3 hereof. ----------- 2.3 Dispute. In the event of any dispute among any of the ------- parties to this Agreement pursuant to Section 2.1 and Section 2.2 above, the ----------- ----------- Escrow Agent shall not comply with any claims or demands from either Purchaser or Seller as long as any such dispute may continue, and the Escrow Agent shall make no delivery or other disposition of any portion of the Escrow Shares until (a) the Escrow Agent has received an order of an arbitrator designated pursuant to Section 11.7 of the Stock Purchase Agreement directing disposition of the Escrow Shares, or (b) the Escrow Agent has received written instructions signed by both Purchaser and Seller directing disposition of the Escrow Shares. Upon receipt of the order or instructions referred to in subsections (a) or (b) herein, the Escrow Agent shall deliver the Escrow Shares, or portion thereof, as the case may be, in accordance with such order or instructions and shall comply in all respects with such order or instructions. 2.4 Interpleader. In the event that any dispute should arise ------------ hereunder, or if a proceeding for the determination of a dispute arising under Section 2.1 or Section 2.2 above is not begun and diligently continued, the - ----------- ----------- Escrow Agent shall be entitled, at the expense of Purchaser and Seller, to make an ex parte application, or bring any appropriate action, for leave to deposit the Escrow Shares with the clerk of any court of competent jurisdiction seeking such determination or such declaratory relief as the Escrow Agent shall deem reasonably necessary under the circumstances, and the parties each hereby irrevocably consent to the entering of an ex parte order pursuant to all applicable laws, rules and procedures of the State of New York and such court. The Escrow Agent shall be reimbursed by Seller and Purchaser, for all of the Escrow Agent's reasonable costs and expenses of such action or proceeding, including, without limitation, attorneys' fees and disbursements. Upon making any such ex parte application, the Escrow Agent shall promptly give notice thereof to Seller and Purchaser. 2.5 Disposition of the Escrow Shares in Accordance with Joint --------------------------------------------------------- Instructions or an Order. If at any time the Escrow Agent receives (a) joint - ------------------------ instructions signed by both Purchaser and Seller regarding disposition of the Escrow Shares, or (b) an order of an 2 arbitrator designated in writing jointly by Purchaser and Seller regarding disposition of the Escrow Shares, the Escrow Agent shall distribute the Escrow Shares in accordance with, and shall otherwise comply with, such instructions or order. 3. ESCROW AGENT ------------ 3.1 Appointment and Duties. Purchaser and Seller hereby ---------------------- appoint the Escrow Agent to serve hereunder, and the Escrow Agent hereby accepts such appointment and agrees to perform, in accordance with the terms and provisions of this Agreement, all duties which are expressly imposed upon the Escrow Agent by this Agreement. 3.2 Compensation. The Escrow Agent shall receive no ------------ additional compensation for serving as escrow agent hereunder, except (a) as set forth in Section 3.3 below, (b) if a dispute arises, or threatens to arise, as ----------- to the Escrow Agent's duties or obligations hereunder, or (c) if a dispute arises relating to this Agreement. In the event of the occurrence of a dispute under subsections (b) or (c) above, the Escrow Agent shall be entitled to reimbursement of all of its reasonable costs and expenses, including consulting with outside counsel. 3.3 Indemnification. Both Seller and Purchaser, jointly and --------------- severally, agree to indemnify and hold the Escrow Agent and its directors, officers, partners, agents and employees (collectively, the "Indemnitees") ----------- harmless from and against any and all claims, liabilities, obligations, losses, damages, fines, encumbrances, penalties, costs and expenses, including reasonable out-of-pocket and incidental expenses and reasonable legal fees and expenses (including, without limitation, the fees and expenses of outside counsel) ("Losses") that may be imposed on, incurred by or asserted against the ------ Indemnitees or any of them (i) for following any instructions or other directions upon which they are authorized to rely pursuant to the terms of this Agreement or (ii) in connection with or arising out of the Escrow Agent's performance under this Agreement in accordance with the terms hereof, provided, with respect to either (i) or (ii), that the Losses shall not have resulted from the Indemnitees' or any Indemnitee's gross negligence, bad faith or willful misconduct. Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. Promptly upon the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect thereof is to be made against any of the other parties hereto, notify such other party or parties in writing. Any Losses, as between Purchaser and Seller shall be borne one-half by Purchaser and one-half by Seller; provided, that any Losses incurred by the Escrow Agent as a result of participating in any proceeding brought by Purchaser against Seller, or by Seller against Purchaser, shall be paid by the substantially losing party or the party against which an order or award is rendered in such proceeding, as the case may be. Nothing in this Section 3.3 shall constitute a waiver of any claim which Purchaser, on the one hand, or Seller, on the other hand, may have against the other party hereto for contribution arising from its joint obligation with the other to hold the Escrow Agent harmless hereunder. 3.4 Resignation. The Escrow Agent may resign at any time ----------- upon giving the other parties hereto thirty (30) days' prior written notice to that effect. In such event, 3 the successor escrow agent for purposes hereof ("Successor") shall be such --------- person, firm or corporation on which Purchaser and Seller shall agree. As soon as practicable after its resignation, the Escrow Agent shall turn over to the Successor so appointed all monies, property and records held hereunder upon presentation of the document appointing the Successor and the Successor's acceptance of such appointment and of the terms and conditions of this Agreement. It is understood and agreed that no resignation by the Escrow Agent shall be effective until a Successor is appointed and expressly consents to the terms and conditions of this Agreement; provided, that if no Successor is appointed and acting hereunder within thirty (30) days after the Escrow Agent gives notice of its resignation, the Escrow Agent shall be entitled to interplead the Escrow Shares in accordance with Section 2.4 hereof. Upon the ----------- Escrow Agent's release of all monies, property and records held hereunder to a Successor or to a court of competent jurisdiction in accordance with Section 2.4 ----------- above, the Escrow Agent's duties and obligations under this Agreement shall be terminated and the Escrow Agent shall be deemed to have been released from any and all claims relating to its performance hereunder. 3.5 Waiver of Conflict. Notwithstanding anything contained ------------------ herein to the contrary, Seller and Purchaser expressly acknowledge that Brown Raysman Millstein Felder & Steiner LLP is presently serving as counsel to Seller. Seller and Purchaser each hereby expressly waives any conflict of interest that may arise as a result of the Escrow Agent acting as the Escrow Agent hereunder and continuing to act as counsel for Seller. Without limiting the foregoing waiver, Purchaser and Seller agree that neither the Escrow Agent's services as Escrow Agent hereunder nor any provision hereof, either express or implied, shall restrict or inhibit the Escrow Agent in any way from representing Seller or any of its affiliates in any action, proceeding, claim, litigation, dispute, controversy, arbitration, suit or negotiation arising under this Agreement, the Stock Purchase Agreement or the transactions contemplated thereby, or under any other agreement or in any manner or context whatsoever, whether or not, directly or indirectly, involving Purchaser or any of its affiliates. 4. LIMITED OBLIGATIONS AND LIABILITIES ----------------------------------- 4.1 Limitations. ----------- (a) It is expressly understood and agreed by the parties that (i) the duties of the Escrow Agent, as herein specifically provided, are purely ministerial in nature; (ii) the Escrow Agent shall not have any duty to deposit the Escrow Shares except as provided herein, (iii) the Escrow Agent shall not be responsible or liable in any manner whatsoever for, or have any duty to inquire into, the sufficiency, correctness, genuineness or validity of the notices it receives hereunder, or the identity, authority or rights of any of the parties; (iv) the Escrow Agent shall have no duties or responsibilities in connection with the Escrow Shares, other than those specifically set forth in this Agreement and applicable law; (v) the Escrow Agent shall not incur any liability in acting upon any signature, written notice, request, waiver, consent, receipt, or any other paper or document believed by the Escrow Agent to be genuine; (vi) the Escrow Agent may assume that any person purporting to have authority to give notices on behalf of any of the parties in accordance with the provisions hereof has been duly authorized to do so; (vii) the Escrow Agent shall incur no liability whatsoever except for such resulting from its willful misconduct or gross negligence, as long as the Escrow Agent has acted in good faith in the performance of its duties hereunder or in accordance with the advice or opinion of any counsel 4 retained by it; and (viii) upon the Escrow Agent's performance of its obligations under Article 2 hereof, the Escrow Agent shall be relieved of all --------- liability, responsibility and obligation with respect to the Escrow Shares or arising out of or under this Agreement. (b) The Escrow Agent shall have the authority to distribute the Escrow Shares in accordance with Article 2 hereof, without the --------- obligation to make any further inquiries of Purchaser and/or Seller. The Escrow Agent may consult with outside counsel, accountants and other skilled persons to be selected and retained by it (including any partner or associate of Escrow Agent if Escrow Agent is a law firm) and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel. (c) The Escrow Agent shall not be under any obligation to take any legal action in connection with this Agreement or towards its enforcement or performance, or to appear in, prosecute or defend any action or legal proceeding, or to file any return, or pay or withhold any income or other tax payable with respect to the Escrow Shares or the distribution thereof, any payment of or in respect of which shall constitute a Loss under Section 3.3 ----------- above, and the parties agree to provide to the Escrow Agent such information and documentation as the Escrow Agent may reasonably request in connection therewith. (d) The Escrow Agent does not have any interest in the Escrow Shares deposited hereunder but is serving as Escrow Agent only and having only possession thereof. (e) None of the provisions of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it. 4.2 Collateral Agreements. The Escrow Agent shall not be --------------------- bound in any way by any contract or agreement (other than any amendments to this Agreement) between the other parties hereto, regardless of whether the Escrow Agent has knowledge of any such contract or agreement or of its terms or conditions. 5. TERMINATION ----------- 5.1 Termination. This Agreement shall be terminated only (a) ----------- upon distribution of all the Escrow Shares in accordance with the terms hereof, (b) by written mutual consent signed by all of the parties hereto, (c) upon deposit of the Escrow Shares with a court of competent jurisdiction in accordance with Section 2.4 hereof, or (d) upon the Escrow Agent's release of ----------- the Escrow Shares to a Successor. The provisions of Sections 2.4, 3.3, 3.5, -------------- 4.1(d) and 6.1 shall survive any termination of this Agreement and the - -------------- resignation or removal of the Escrow Agent for any reason. 5 6. MISCELLANEOUS PROVISIONS ------------------------ 6.1 Applicable Law. This Agreement shall be governed by and -------------- construed and enforced in accordance with the laws of the State of New York, without regard to its conflicts of law rules. 6.2 Entire Agreement. This Agreement contains the entire ---------------- understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, conveyances or undertakings other than those expressly set forth herein. 6.3 Waivers and Amendments; Non-Contractual Remedies; ------------------------------------------------- Preservation of Remedies. This Agreement may be amended, superseded, cancelled, - ------------------------ renewed or extended only by a written instrument signed by Purchaser, Seller and the Escrow Agent. The provisions hereof may be waived only in writing by the party to be charged therewith. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. 6.4 Assignment. ---------- (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns; provided, however, that no party may assign its rights and obligations hereunder without the prior written consent of the others; except that in the event that a Successor is appointed pursuant to Section 3.4 hereof, ----------- upon written instructions by Seller and Purchaser, the Escrow Agent shall assign its rights, interests and obligations hereunder to such Successor. (b) Any partnership or other similar entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any partnership, corporation or other similar entity resulting from any merger, conversion or consolidation to which the Escrow Agent shall be a party, or any partnership, corporation or other similar entity succeeding to the business of the Escrow Agent shall be the successor of the Escrow Agent hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding. 6.5 Expenses. Except as otherwise expressly provided herein, -------- each party shall bear its own expenses incident to this Agreement and the transactions contemplated hereby, including without limitation, all fees of counsel, accountants and consultants. 6 6.6 Notices. ------- (a) All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be delivered personally by hand, by facsimile, by email or by nationally recognized private courier or mailed by registered or certified mail postage prepaid, as follows: (i) if to Seller to: Preferred Employers Holdings, Inc. 10800 Biscayne Boulevard Miami, FL 33161 Attn.: Donald J. Bezahler, Esq. Email: ***@*** and to: H.I.G. Viasys, Inc. 1001 Brickell Bay Drive Suite 2708 Miami, FL 33131 Attn.: Douglas Berman (ii) if to Purchaser to: Charys Holding Company, Inc. 1117 Perimeter Center West Suite N415 Atlanta, GA 30338 Attn.: Billy V. Ray, CEO with a copy to: Michael Brenner, Esq. 643 North Harrison Parkway Sunrise, FL 33323 Email: ***@*** Email: ***@*** (Office) (954) 838 6251 (Cell) (954) 294 7781 (Fax) (954) 862 6744 (iii) if to the Escrow Agent to: Brown Raysman Millstein Felder & Steiner LLP 900 Third Avenue New York, New York 10022 7 Facsimile: (212) 895-2900 Attn.: Anne E. Pitter, Esq. (b) Each such notice or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in Section 6.6(a) (with confirmation of transmission) -------------- or (ii) if given by any other means, when received or rejected at the address and/or email address specified in Section 6.6(a). Any party by notice given in -------------- accordance with this Section 6.6 to the other party may designate another ----------- address (or facsimile number) or person for receipt of notices hereunder. Notices by a party may be given by counsel to such party. 6.7 Headings. The headings of the Sections of this Agreement -------- are inserted for convenience only and shall not constitute a part hereof. 6.8 Counterparts; Facsimile Signatures. This Agreement may ---------------------------------- be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties agree that they may rely upon facsimile signatures hereto and to any amendment, documents, agreements, or instruments delivered in connection herewith. [Remainder of Page Intentionally Left Blank] 8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. Purchaser --------- CHARYS HOLDING COMPANY, INC. By: ------------------------------------- Name: Billy V. Ray, Jr. Title: Chief Executive Officer Seller ------ NEW VIASYS HOLDINGS, LLC By: ------------------------------------- Mel Harris, Manager By: ------------------------------------- Douglas Berman, Manager Escrow Agent ------------ BROWN RAYSMAN MILLSTEIN FELDER & STEINER LLP By: ----------------------------------- Anne E. Pitter, Esq. Partner 9 SCHEDULE 1.5 EARN OUT AGREEMENT --- As additional consideration for the Seller under the terms of the Stock Purchase Agreement, dated as of October 31, 2005, Seller shall receive, during the period hereafter set forth, that amount of dollars calculated as follows: The earn out will be calculated each year, during the three year period ending April 30, 2008. The maximum aggregated amount to be paid to Seller, during the three years, shall be two million dollars, calculated each year and payable thirty days after completion of the annual audit of the Companies. Companies shall be defined as and or other such company or companies as shall be performing the activities presently being conducted by the Companies. Each year a calculation shall be made, using revenue growth and targeted EBITDA. Revenue growth is targeted at 10% per annum and is weighted at 40% and EBITDA is targeted at 8% per annum and is weighted 60%. If actual revenue growth is less then the 10% target per year, the revenue growth credit shall be determined by the percentage of actual revenue growth to the targeted growth of 10%. Likewise, if actual EBITDA is less than the 8% target per year, the EBITDA credit shall be determined by the actual EBITDA percentage to the targeted 8%. As an example, if actual revenue growth in year-1 is 8%, the revenue growth credit would be 32% (8%/10% times 40%). Furthermore, if actual EBITDA is in year-1 is 6%, the EBITDA target credit would be 45% (6%/8% times 60%). The maximum amount to be paid in year one is $667,000; in year two $667,000, plus any amount not paid in year one, and in year three $667,000 plus any amounts not paid in years one and two. In the above example, the additional consideration due for year-1 would be computed by multiplying the annual maximum amount of $667,000 by the sum of the revenue growth credit (32%) and the EBITDA target credit (45%) , or $513,590 (32% + 45% times $667,000). Payments shall be in cash or stock, at the option of CHARYS. If paid in stock of CHARYS, the stock shall be valued (if fully saleable) at the average daily price for the 30 days prior to the date of determination; (if not fully saleable, the stock shall be valued at 80% of such average price. The following table sets forth an example of the assumed earn out payments. Schedule 2.1(a) Registered to do business in the following states: Viasys Services, Inc. AL AK FL GA KY LA MD MS NC OR SC TN TX VA Viasys Network Services Inc. FL Note: The Company and Seller were unable to obtain copies of the state tax returns for the year ended October 31, 2000 as well as for prior years for Transportation Safety Contractors, Inc. ("TSC"), Georgia Electric Company ("GEC") and Able Telecommunications & Power, Inc. ("ATP"). Based upon correspondence from certain states including Alabama (for GEC), Florida (for ATP and TSC) and North Carolina (for GEC), certain Company state income tax returns for years ending on October 31, 2000 and prior were not filed. Schedule 2.2 The subsidiaries of New Viasys Holdings, LLC are Viasys Services, Inc. and Viasys Network Services, Inc. Neither Viasys Services, Inc. nor Viasys Network Services, Inc. have any subsidiaries. Schedule 2.3 Authorized Issued Outstanding Shares Shares Shares ---------- ------ ----------- Viasys Services, Inc. 15,000 4,400 4,400 Viasys Network Services, Inc. 10,000 100 100 Schedule 2.5 Seller is party to a certain Security Agreement between Seller and Merrill Lynch Business Financial Services, Inc. ("MLBFS") dated August 28, 2002 which secures payment and performance of the Company's obligations to MLBFS. Collateral, as defined in the Security Agreement, is defined as: all Accounts, Chattel Paper, Contract Rights, Inventory, Equipment, Fixtures, General Intangibles, Deposit Accounts, Documents, Instruments, Financial Assets and Investment Property of Grantor, howsoever arising, whether now owned or existing or hereafter acquired or arising, and wherever located; together with all parts thereof (including spare parts), all accessories and accessions thereto, all books and records (including computer records) directly related thereto, all proceeds thereof (including, without limitation, proceeds in the form of Accounts and insurance proceeds), and the additional collateral described in Section 7 (b) hereof A true and accurate copy of the Security Agreement, along with the related agreements, has been provided by Seller to Buyer. Schedule 2.8 WCMA Loan and Security Agreement No. 2BN07-936 dated August 28, 2002 between Transportation Safety Contractors, Inc. (n/k/a Viasys Services, Inc.) and Merrill Lynch Business Financial Services, Inc. ("MLBFS") requires prior written consent of MLBFS for any change in ownership. Such written consent has not been received. Security Agreement dated August 28, 2002 between MLBFS and Seller dated August 28, 2002 requires prior written consent of MLBFS for any change in ownership. Such written consent has not been received. WCMA Reducing Revolver Loan Agreement No. 2BN07-937 dated September 26, 2002 between Transportation Safety Contractors, Inc. (n/k/a Viasys Services, Inc.) and Merrill Lynch Business Financial Services, Inc. ("MLBFS") requires prior written consent of MLBFS for any change in ownership. Such written consent has not been received. WCMA Reducing Revolver Loan Agreement No. 2BN07-938 dated September 26, 2002 between Transportation Safety Contractors, Inc. (n/k/a Viasys Services, Inc.) and Merrill Lynch Business Financial Services, Inc. ("MLBFS") requires prior written consent of MLBFS for any change in ownership. Such written consent has not been received. Master Lease Agreement No. AFI0280 between Applied Financial, Inc. and Viasys Utility Services, Inc. (n/k/a Viasys Services, Inc.) dated August 29, 2002 lists as an event of default "a substantial change in ownership of the outstanding stock of the Lessee". Qualifications with State Departments of Transportation - the change in control will require the filing of new pre-qualification packages with certain State Departments of Transportation. Certain leases to which the Company is a party, which are not Material Contracts as defined in the Purchase Agreement, may require written notification and consent upon the change in control of the Company. Viasys Services, Inc. (a wholly owned subsidiary of New Viasys Holdings, LLC) Financial Statements as of and for the Year Ended October 31, 2004 and Independent Auditors' Report DELOITTE. DELOITTE & TOUCHE LLP Certified Public Accountants Suite 1800 200 S. Orange Ave. Orlando, FL ###-###-#### USA Tel: +1 ###-###-#### Fax: +1 ###-###-#### www.deloitte.com INDEPENDENT AUDITORS' REPORT To the Board of Directors of Viasys Services, Inc.: We have audited the accompanying balance sheet of Viasys Services, Inc. ("the Company"), a wholly owned subsidiary of New Viasys Holdings, LLC, as of October 31, 2004 and the related statements of operations, changes in stockholder's equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Viasys Services, Inc., a wholly owned subsidiary of New Viasys Holdings, LLC, as of October 31, 2004, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP February 8, 2005

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- 5 - VIASYS SERVICES, INC. (A WHOLLY OWNED SUBSIDIARY OF NEW VIASYS HOLDINGS, LLC) NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2004 - -------------------------------------------------------------------------------- 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS-Viasys Services, Inc. (the "Company"), a Florida corporation, is a wholly owned subsidiary of New Viasys Holdings, LLC ("Viasys"). The Company's principal business activities include (1) furnish, design, install and maintain both wired and wireless communication networks and infrastructure (2) installation of intelligent transportation systems (ITS), (3) providing industrial maintenance services, and (4) providing underground utility construction services. Services are performed under both fixed-price construction and time and material contracts primarily in the Southeastern region of the United States. MERGERS-Viasys Utility Services, Inc. ("VUS") was merged into the Company as of June 1, 2004. Georgia Electric Company ("GEC") and Viasys Management Company, Inc. ("VMC") were merged into the Company as of October 29,2004. VUS, GEC and VMC were all sister companies of the Company. The Company accounted for the transfer of net assets as a result of the merger under the pooling method in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations, as these companies were under common ownership. The results of operations of VUS, GEC and VMC for the year are included in these financial statements. The Company's assets and liabilities include all assets and liabilities of VUS, GEC, and VMC. The Company's beginning equity was restated to include the equity accounts of these merged companies. The effects of intercompany transactions were eliminated upon consolidation of the merged companies. USE OF ESTIMATES-The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. REVENUE AND COST RECOGNITION-Revenue from fixed-price and modified fixed-price construction contracts are recognized using the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs for the contract. This method is used because management considers expended costs to be the best available measure of progress on these contracts. Revenue from time-and-material contracts is recognized as the work is performed. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, and repairs. Provisions for estimated losses on uncompleted contracts are recognized in the period that such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty and warranty provisions, and final contract settlements may result in revisions to costs and revenue and are recognized in the period in which their realization is determined. An amount equal to contract costs attributable to claims is included in revenue when realization is probable and the amount can be reliably estimated. - 6 - The asset, "Costs and estimated earnings in excess of billings on uncompleted contracts," represents revenue recognized in excess of amounts billed. The liability, "Billings in excess of costs and estimated earnings on uncompleted contracts," represents billings in excess of revenue recognized. CONTRACT RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS-Contract receivables include amounts invoiced under fixed price contracts and time-and-material contracts. In addition, revenue earned but not yet billed under time-and-material contracts is included as contract receivables. Current year income is charged in amounts sufficient to maintain the allowance for doubtful accounts at a level management considers adequate to cover potential losses. PROPERTY AND EQUIPMENT-Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets. Following are the estimated useful lives used by asset class:

Improvements to leased properties are amortized over their estimated useful lives or the remaining lease period, whichever is shorter. LONG-LIVED ASSETS-Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the excess of the asset's carrying amount over the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less costs to sell. INCOME TAXES-The provision for income taxes is based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. NEW ACCOUNTING PRONOUNCEMENTS-The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2004. The Company has carefully considered the new pronouncements that altered accounting principles generally accepted in the United States of America, and other than as disclosed in these notes to the financial statements, does not believe that any other new or modified principles will have a material impact on the reported financial position or operations of the Company in the near term. - 7 - 2. CASH AND CASH EQUIVALENTS The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. As of October 31, 2004, the Company's uninsured bank balances totaled $3,103,881. "The Company's practice is to invest its cash with financial institutions that have acceptable credit ratings to minimize its risk. 3. CONTRACT RECEIVABLES As of October 31,2004, contract receivables balances included the following:

Following is an analysis of the changes in the allowance for doubtful accounts for the year ended October 31, 2004:

4. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS As of October 31, 2004, costs and estimated earnings on uncompleted contracts consisted of the following:

- 8 - The above amounts are included in the accompanying balance sheet under the following captions:

5. PROPERTY AND EQUIPMENT Property and equipment included the following at October 31, 2004:

Assets recorded under capital leases are included in property and equipment as follows: cost -$4,140,159; accumulated depreciation - $1,502,514; net book value - $2,637,645. 6. ACCOUNTS PAYABLE Accounts payable include amounts due to subcontractors, totaling approximately $426,338 at October 31, 2004, which have been retained pending completion and customer acceptance of jobs, 7. OTHER ACCRUED LIABILITIES Other accrued liabilities consisted of the following at October 31,2004:

- 9 - 8. LONG-TERM DEBT Following is the Company's long-term debt at October 31, 2004:

Future principal payments for the years ending October 31 are as follows:

CREDIT AGREEMENTS-The Company has in place three credit agreements with a financial institution that provide for borrowings on a revolving credit basis. The first facility provided for borrowings (the "revolver") of up to $5,000,000 with a maturity of November 30, 2004. Effective December 23, 2004, the facility was modified to provide a maximum borrowing amount equal to $3,600,000. The maximum borrowing amount is reduced to the following amounts as follows: March 1, 2005 - $2,900,000, June 1, 2005 - $2,400,000 and September 1, 2005 -$1,900,000. The maturity date is November 30, 2005. Interest is calculated at one-month LIBOR plus 2.8%. Borrowings under the revolver totaled $2,101,377 as of October 31, 2004. The interest rate at October 31, 2004 was 4.73%. In addition, irrevocable letters of credit totaling $2,440,000 were issued and secured by the revolver. The revolver is coliateralized by substantially all of the assets of the Company, and is also coliateralized by the assets of, and guaranteed by, Viasys, The Company pays annual fees for this facility and is required to meet certain covenants. - 10 - The second and third facilities are reducing revolvers collateralized by the Company's real property. The initial availability of the reducing revolvers totaled $1,600,000. Interest is calculated at one-month LIBOR plus 2.8%. The available lines of credits are reduced each month by the amount that would be payable on account of principal if the reducing revolvers were a conventional term loan amortized over fifteen years. Accordingly, the maximum borrowing amount is reduced by $8,889 per month beginning in November 2002 through the facilities' expiration on November 30, 2005. The available amount and borrowings under these facilities as of October 31, 2004 totaled $1,389,553 and $1,368,652, respectively. The interest rate as of October 31, 2004 was 4.73%, The Company pays annual fees for these facilities and is required to meet certain covenants. 9. INCOME TAXES The benefit from income taxes for the year ended October 31, 2004 consists of the following:

The reported benefit from income taxes differs from that computed by multiplying the loss before provision for income taxes by the expected federal income tax rate of 34% due to state income taxes, net of federal benefit, and certain expenses that are not deductible for income tax purposes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Major components of deferred tax assets and liabilities at October 31, 2004 are as follows:

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in - 11 - which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon this analysis, management determined that no valuation allowance was required at October 31,2004. 10. EMPLOYEE BENEFIT PLANS The Company has a defined contribution retirement plan which covers employees who are at least 21 years of age and have three months of service. The Company's contributions are discretionary and, if paid, are based on a match of employee salary reduction amounts. Total plan expense was $9,916 for the year ended October 31, 2004. The Company self insures a portion of its health insurance claims. The Company has accrued the maximum exposure as a liability as of October 31, 2004. 11. COMMITMENTS AND CONTINGENCIES LEASE OBLIGATIONS Payable-The Company leases certain office and other facilities. Following is a summary of future minimum payments for operating leases that have initial or remaining noncancelable lease terms in excess of one year at October 31, 2004:

Rent expense for operating leases totaled approximately $693,000 for the year ended October 31, 2004. CAPITAL LEASES-The Company leases certain equipment under leases classified as capital leases. The following is a schedule showing the future minimum payments under capital leases by years and the present value as of October 31, 2004:

SURETY BONDS-The Company, as a condition for entering into certain construction contracts, had outstanding surety bonds approximating $125,000,000 as of October 31, 2004. The bonds are collateralized by the assets of the Company and the assets of Viasys. - 12 - GUARANTEES - VIASYS-Viasys has guaranteed substantially all of the long-term debt of the Company. In addition, Viasys is a party to certain general agreements of indemnity related to the issuance of surety bonds to the Company, whereby Viasys has guaranteed the performance of the Company under surety bonds. VARIOUS LEGAL ACTIONS-The Company is a party to various legal actions that have arisen in the normal course of business. While the outcome of these matters cannot be estimated with certainty, it is the opinion of management that the resolution of such litigation will not have a material adverse effect on the results of operations, financial position or liquidity of the Company. MANAGEMENT AGREEMENT-The Company was a party to a one-year management agreement with an affiliate, which expired on October 31, 2004 and was not renewed. The agreement requires the payment of a management fee in the amount of 0.5% of revenue. Additional consideration is due to the extent the Company exceeds its internal profit projections for any fiscal year that the agreement is in force. No additional consideration was due under the agreement. The amount expensed under this agreement for the year ended October 31, 2004 totaled $279,916. 12. CONCENTRATIONS The following is a schedule of the Company's major customers, defined by either total revenue for the year ended October 31, 2004 or total receivable outstanding at October 31,2004:

13. RELATED PARTY TRANSACTIONS As of October 31, 2004, the amount due Viasys totaled $4,160,738, including accrued interest of $67,406. The note and all accrued interest are due on December 31, 2006 with interest at 3.28% and is collateralized by substantially all of the assets of the Company. Interest expense totaled $178,603 for the year ended October 31, 2004. 14. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND NON-CASH FINANCING TRANSACTIONS

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================================================================================ Heavy Metal Partners,, LLC 7101 Creedmoor Road, Suite 126 Raleigh, North Carolina 27613 Phone ###-###-####-Fax ###-###-#### ================================================================================ October 26, 2005 Mr. Steve Palmer Viasys 26 Lakewire Drive Lakeland, FL 33815 VIA OVERNIGHT DELIVERY Re: Agreement of Lease dated April 22, 2003 (the "Lease"), between Heavy Metal Partners, LLC, as Landlord, and Georgia Electric Company, as Tenant, for premises located at 6201 Westgate Road, Suite 100, Westgate Industrial Park, Raleigh, North Carolina (the "Premises"). Dear Mr. Palmer: Please recall that Heavy Metal Partners, LLC, recently refinanced the Landlord Property (as defined in the Lease). At the request of the refinance lender, a Phase I Environmental Study was performed for the Landlord Property. This Study revealed that the area surrounding Tenant's oil drums has been stained with oil, thus indicating that the drums are leaking or have leaked in the recent past (copies of the relevant pages and photos in the Phase I are enclosed). The Study further revealed that Tenant has not consistently contained and disposed of its oil in compliance with the terms of the Lease. Accordingly, it is requested that Tenant sign and return to us a copy of this letter, thereby acknowledging and agreeing that: (a) in accordance with Section 10 of the Lease and as required by our lender, Tenant will remove the drums and completely remediate the leakage, at its cost and in accordance with all applicable laws, by no later than December 18, 2005; (b) upon completion of Tenant's remediation, submit to Landlord a clean environmental report; and (c) during the remainder of the Lease term, Landlord will conduct periodic inspections of the Premises to examine Tenant's compliance with the environmental provisions of the Lease; and if Tenant is not in compliance, Landlord will require Tenant to submit to Landlord periodic reports detailing the measures to be taken by Tenant to comply with such provisions. 1 Thank you for your anticipated cooperation. Sincerely yours, /s/ Michael G. Sandman, Manager Michael G. Sandman, Manager Enclosures cc: Mr. Phil Elmore, Viasys (via fax) Ms. Cheri Megan, Colliers Pinkard (via fax) Mr. Jeff Weatherspoon, Colliers Pinkard (via fax) ACKNOWLEDGED AND AGREED TO BY: GEORGIA ELECTRIC COMPANY/VIASYS By: Date: --------------------------- --------------------------- Name: --------------------------- Title: --------------------------- 2 [GRAPHIC OMMITED] Schedule 2.9(a)(2) The Financial Statements as of and for the ten months ended August 31, 2005 are not prepared in accordance with GAAP due to the following: 1) All required basic statements are not included (i.e. - the statement of changes in stockholder's equity). 2) Notes to the Financial Statements are not included 3) Interest expense for the ten months ended August 31, 2005 on the Note Payable to New Viasys Holdings was not recorded 4) The Financial Statements have been prepared assuming that the Company will continue as a going concern. The recurring losses, financial condition, and lack of financing of the Company create uncertainty as to the Company's ability to continue as a going concern. The Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 5) Prepaid income taxes reflected on the balance sheet represent potential tax savings related to current year losses. These amounts should be classified as deferred income tax assets (subject to a valuation allowance as noted below). 6) Due to the recurring losses of the Company, a valuation allowance for the deferred tax assets should be recorded. Such allowance will be recorded on the October 31, 2005 financial statements. 7) As part of the Company's year end closing procedures, the estimated contract amounts, including costs to complete, will be reviewed in detail and adjusted accordingly. This will affect the related amounts in the Financial Statements. 8) Liabilities recorded for the Company's large deductible casualty insurance lines (2002 - 2004) as well as liabilities related to the Company's health insurance plans will be reviewed as of October 31, 2005 and adjusted accordingly. 9) Other long term liabilities on the Financial Statements relate to certain income tax positions taken by the Company for the tax period ended October 31, 2001. Management of the Company will review the necessity of this liability as of October 31, 2005 in light of related statute of limitations and any valuation allowance for deferred tax assets that may be recorded (see 5 and 6 above). 10) The provision for income taxes has been estimated. The actual amount will change based upon the final tax calculations as well as the determination of the valuation allowance for deferred tax assets. 11) The allowance for doubtful accounts and reserve for contract losses needs to be reviewed in accordance with the year end closing procedures and adjusted accordingly. 12) The Company reviews all balances on the Financial Statements as part of its year end closing procedures. There are normally adjustments made based upon these year end closing procedures. 13) The Financial Statements do not include any liability or disclosure related to the Lumbermens Mutual Insurance Company litigation. It was determined that no disclosure was required to be made nor any liability be recorded as of the October 31, 2004 financial statements. An analysis of the appropriate accounting guidance would need to be made as of the date of the Financial Statements to determine any disclosure requirements as well as any requirement to record a liability. Schedule 2.9(b) In addition to those items disclosed on Schedule 2.9(a)(2), the following are potential liabilities not set forth in the Financial Statements: 1) Any liability related to the Lumbermens Mutual Casualty Company vs. Able Telecommunications & Power, Inc., Transportation Safety Contractors, Inc. and Georgia Electric Company. 2) The Virginia Department of Transportation previously alleged that the Company was overpaid $362,849.03 in the latter part of 1999 through January 2000 under Contract No. CMA98GRR101. The matter remains unresolved. 3) As part of a settlement agreement with S.Rock/Estabrook Corporation ("S.Rock"), S.Rock is entitled to a percentage of any delay claim recovery the Company may have under the VDOT Job as follows: (1) 50% of first $1,500,000 and (2) 10% thereafter, up to a total of $1,500,000 for (1) and (2)). Schedule 2.11 While the Company has not completed its financial statements for any months after the Financial Statement Date, it is expected that further operating losses will be recorded. Schedule 2.12(a) 2.12(a)(i) 1) Viasys 401(k) Plan 2) Oral bonus plans as follows: a. Keith Wisener - 3% of the gross profit from the Cooper Tire jobs, payable quarterly. b. John Weathers by - 2% of the gross profit from the Masterfoods project, payable quarterly c. Ralph Griffith - up to $8,000 annual based upon individual and Cooper Tire project performance d. Other bonuses have been paid to employees based upon a subjective basis. 3) The Company provides various benefit plans including: (1) health insurance, (2) voluntary dental insurance, (3) voluntary STD and LTD insurance, (4) voluntary life insurance, and (5) Company provided life insurance of $25,000 for each full time employee. 2.12(a)(ii) 4) The Company is party to two employment agreements (Lance McNeill and Steven Palmer). 2.12(a)(iii) 5) The Company was party to several General Agreements of Indemnity with sureties related to its former parent company, Able Telcom Holding Corp. Agreements were with the following sureties: (1) American International Companies ("AIG"), (2) Liberty Bond Services, (3) American Alliance Insurance Company, (4) CNA Insurance Companies, (5) Firemans Fund Insurance Company, (6) St. Paul Surety, and (7) Universal Insurance Company ("Lumbermens"). These agreements provide the sureties the ability to file liens on the assets of the Company. Both Lumbermens and AIG have filed UCC's. 6) The Company has entered into two General Agreements of Indemnity: (1) Liberty Mutual Insurance Company and Crum & Forster Surety. These agreements provide the sureties the ability to file liens on the assets of the Company. 7) Promissory Note between Georgia Electric Company, Viasys Utility Services, Inc. and Viasys Services, Inc. (collectively the "Makers") and New Viasys Holdings, LLC (the "Payee") dated November 1, 2003. 8) WCMA Loan and Security Agreement No. 2BN-07936 dated August 28, 2002 between Transportation Safety Contractors, Inc. (n/k/a Viasys Services, Inc.) and Merrill Lynch Business Financial Services, Inc. ("MLBFS"), along with related guaranty and security agreements and amendments thereto 9) WCMA Reducing Revolver Loan Agreement No. 2BN-07937 dated September 26, 2002 between Transportation Safety Contractors, Inc. (n/k/a Viasys Services, Inc.) and MLBFS, along with related agreements and amendments thereto. 10) WCMA Reducing Revolver Loan Agreement No. 2BN-07938 dated September 26, 2002 between Transportation Safety Contractors, Inc. (n/k/a Viasys Services, Inc.) and MLBFS, along with related agreements and amendments thereto. 11) Master Lease Agreement No. AFI0280 between Applied Financial, Inc. and Viasys Utility Services, Inc. (n/k/a Viasys Services, Inc.) dated August 29, 2002 and related guaranty and other documents. 12) Master Lease Agreement between Gelco Corporation (d/b/a GE Capital Fleet Services) and New Viasys Holdings, LLC, along with related agreements. 13) Master Equity Lease Agreement between Enterprise Fleet Services and New Viasys Holdings, LLC dated May 13, 2002, and related agreements. 14) Master Lease Agreement between General Electric Capital Corporation and Viasys Services, Inc. dated September 9, 2003. 15) Lease agreement between Avon Equipment Leasing, Inc. and Viasys dated July 13, 2004. 16) Capital lease with Altec starting in February 2002 and scheduled to terminate in February 2006. 17) Vehicle financing agreement with GMAC scheduled through September 2006. 18) Financing agreement between Vermeer Credit Corporation and Viasys Utility Services, Inc (n/k/a Viasys Services, Inc). 19) Lease agreement between Fleet Capital Leasing(n/k/a Banc America Leasing), and Viasys Services, Inc dated February 4, 2004. 20) Master lease agreement #618670/1071547 between American Express Business Finance and Viasys Services, Inc. dated August 2004. 21) Finance agreement between Netbank Business Finance and Viasys Services, Inc. dated October 7, 2004. 22) Lease agreement between Direct Capital Funding, Inc. (assigned to Marlin Leasing) and Viasys Services, Inc. dated May 2005. 23) Equipment Lease agreement #2171446 between Direct Capital Corporation and Viasys Services, Inc. dated June 24, 2005. 24) Lease agreements #4231201-001 and -002, between General Electric Capital Corporation and Viasys Services, Inc. 2.12(a)(iv) 25) The Company is guarantor under the agreements between lenders and New Viasys Holdings, LLC listed under 2.12(a)(iii) above. 26) The Company has the following outstanding letters of credit: a. Merrill Lynch Irrevocable Standby Letter of Credit No. 200410 in the amount of $850,000; beneficiary - National Union Fire Insurance Company of Pittsburgh, PA. b. Merrill Lynch Irrevocable Standby Letter of Credit No. 200569 in the amount of $490,000; beneficiary - Zurich American Insurance Company. 27) The Company issues payment and performance bonds on predominantly all of its projects for Departments of Transportation or other governmental entities. 28) Other than payment and performance bonds (see above), the Company is the principal on Surety Bond No. 964-001-334 for the benefit of Zurich American Insurance Company in the amount of $375,000. 2.12(a)(vi) 29) The Company subleases office space at its 26 Lake Wire Drive, Lakeland, FL leased office to two individuals. The agreements are verbal. 2.12(a)(vii) 30) The Company is party to management agreements with Preferred Management, LLC and H.I.G. Capital, LLC. All amounts due under these agreements will be accrued on the balance sheet of the Company as of October 31, 2005 (see Subsection 5.3). 31) The Company is a debtor under a promissory note to its parent company, Seller. 2.12(a)(viii) 32) The Company is party to several reseller agreements, including the reselling of software. 2.12(a)(ix) 33) All of the Company's contracts have warranty provisions in the normal course of business. 2.12(a)(xii) 34) The Company has issued purchase orders and subcontract agreements in the normal course of business to purchase items for its projects. 2.12(a)(xiii) 35) The Company entered into an agreement with FMI Corporation dated June 7, 2005. Schedule 2.12(b)

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Schedule 2.16 The Company and Seller were unable to obtain copies of the state tax returns for the year ended October 31, 2000 as well as for prior years for Transportation Safety Contractors, Inc. ("TSC"), Georgia Electric Company ("GEC") and Able Telecommunications & Power, Inc. ("ATP"). Based upon correspondence from certain states including Alabama (for GEC), Florida (for ATP and TSC) and North Carolina (for GEC), certain Company state income tax returns for years ending on October 31, 2000 and prior were not filed.

Legend: 1 - Lance McNeill 2 - Steven Palmer 3 - William Dresback 4 - Danny Trigg 5 - Mike Arroyo 6 - Dan Mauldin 7 - Phil Elmore 8 - Robert Fryer 9 - Andrea Jennings - -------------------------------------------------------------------------------- Heavy Metal Partners, LLC 7101 Creedmoor Road, Suite 126 Raleigh, North Carolina 27613 Phone ###-###-####-Fax ###-###-#### - -------------------------------------------------------------------------------- October 26, 2005 Mr. Steve Palmer Viasys 26 Lakewire Drive Lakeland, FL 33815 VIA OVERNIGHT DELIVERY Re: Agreement of Lease dated April 22, 2003 (the "Lease"), between Heavy Metal Partners, LLC, as Landlord, and Georgia Electric Company, as Tenant, for premises located at 6201 Westgate Road, Suite 100, Westgate Industrial Park, Raleigh, North Carolina (the "Premises"). Dear Mr. Palmer: Please recall that Heavy Metal Partners, LLC, recently refinanced the Landlord Property (as defined in the Lease). At the request of the refinance lender, a Phase I Environmental Study was performed for the Landlord Property. This Study revealed that the area surrounding Tenant's oil drums has been stained with oil, thus indicating that the drums are leaking or have leaked in the recent past (copies of the relevant pages and photos in the Phase I are enclosed). The Study further revealed that Tenant has not consistently contained and disposed of its oil in compliance with the terms of the Lease. Accordingly, it is requested that Tenant sign and return to us a copy of this letter, thereby acknowledging and agreeing that: (a) in accordance with Section 10 of the Lease and as required by our lender, Tenant will remove the drums and completely remediate the leakage, at its cost and in accordance with all applicable laws, by no later than December 18, 2005; (b) upon completion of Tenant's remediation, submit to Landlord a clean environmental report; and (c) during the remainder of the Lease term, Landlord will conduct periodic inspections of the Premises to examine Tenant's compliance with the environmental provisions of the Lease; and if Tenant is not in compliance, Landlord will require Tenant to submit to Landlord periodic reports detailing the measures to be taken by Tenant to comply with such provisions. 1 Thank you for your anticipated cooperation. Sincerely yours, /s/ Michael G. Sandman Michael G. Sandman, Manager Enclosures cc: Mr. Phil Elmore, Viasys (via fax) Ms. Cheri Megan, Colliers Pinkard (via fax) Mr. Jeff Weatherspoon, Colliers Pinkard (via fax) ACKNOWLEDGED AND AGREED TO BY: GEORGIA ELECTRIC COMPANY/VIASYS By: Date: --------------------------- ------------------------- Name: --------------------------- Title: --------------------------- 2 Schedule 2.24 Consulting Services Agreement between Viasys Services, Inc. and H.I.G. Capital, LLC dated November 24, 2004. Consulting Services Agreement between Preferred Management, LLC and Georgia Electric Company, Able Telecommunications & Power, Inc., Transportation Safety Contractors, Inc. and Viasys Management Company, Inc. and Viasys Network Services, Inc. dated January 28, 2002. Schedule 2.25 The Company has received notices of cancellation due to late payment of premiums from Virginia Surety Compnay, Inc. Schedule 2.26 The Company has voluntarily removed itself from the North Carolina Department of Transportation's ("NCDOT") pre-qualified bidders list. This action was in lieu of the NCDOT formally removing the Company due to the late performance for one of its projects in Durham, NC. The Company's capacity as determined by the Florida Department of Transportation ("FDOT") is currently $29 million. As the current backlog of work which is significantly greater than the FDOT assigned capacity, the Company, if it had the ability, would not be able to submit any bids for FDOT work. The Company currently has no bonding facilities in place. The Company has experienced cash flow shortages and is currently delinquent in payments to certain suppliers, vendors and subcontractors. EXHIIBIT 3.3 None other than as set forth in the Stock Purchase Agreement EXHIIBIT 3.4 None other than as required by the Securities and Exchange Act of 1934 Schedule 11.2(d) Lumbermens Mutual Casualty Company vs. Able Telecommunications & Power, Inc., Transportation Safety Contractors, Inc. and Georgia Electric Company, filed in the United States District Court for the Northern District of Georgia, Atlanta Division, styled Civil Action File No. 1:04-CV-339-WSD, MANAGEMENT AGREEMENT This Agreement ("Agreement") dated as of November 1, 2005 by and among Charys Holding Company, Inc., a Delaware corporation ("Charys"), Viasys Network Services, Inc., a Florida corporation ("VNS"), Viasys Services, Inc., a Florida corporation ("VSI" and together with Charys and VNS, the "Company") and New Viasys Holdings, LLC, a Delaware limited liability company ("Viasys"). WHEREAS, Charys and Viasys entered into a Stock Purchase Agreement with an effective date of November 1, 2005, pursuant to which, all of the issued and outstanding capital stock of VSN and VSI are being sold to Charys (the "Stock Purchase Agreement"); WHEREAS, Charys has requested, and Viasys has agreed, that the Company, will manage a certain project with the Virginia Department of Transportation ("VDOT"), contract number C00016042T01 ("VA Job"); and WHEREAS, were it not for this Agreement, Viasys would have retained the VA Job, and the assets relating thereto, prior to selling the Company to Charys. NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants hereinafter set forth, the parties hereto agree as follows: ARTICLE 1 SEGREGATION OF ASSETS AND MANAGEMENT OF THE VA JOB -------------------------------------------------- 1.1 Segregation of Assets. The Company shall segregate certain of the ----------------------- assets owned by it, and being used in, the VA Job, and will grant to Viasys a first priority security interest in and to such assets, which assets are more specifically described on Schedule 1.1(a) attached hereto and the Amended and --------------- Restated Security Agreement as set forth in Schedule 1.1(b) attached hereto (the --------------- "Security Agreement"). 1.2 Management of VA Job. The Company will remain responsible for ----------------------- managing the VA Job, and will employ Maurice Arroyo as the VA Division Manager ("Manager") until the completion of the job, including the settlement of claims to be made with respect to delays in completion of the VA Job (the "Claim"), as described in Section 1.3 below. The Manager will be responsible for the day to day operations of the VA Job, negotiations with the VDOT for change orders, employment decisions related to staffing the VA Job, as well as all other direct management functions with respect to the VA Job. 1.3 Change in Management. If the Company determines that the Manager is ---------------------- not adequately performing his duties and believes it necessary to effectuate a change in the Manager, the Company must request and receive the written approval of Viasys before consummating any such change in the Manager. Viasys shall have ultimate decision power in relation to any proposed management change. 1.4 Change Orders. No change orders will be executed by the Company -------------- without first obtaining written approval from Viasys. 1.5 Claims. All claims relating to the VA Job, including the Claim, must ------ be approved in writing by Viasys prior to submission to the VDOT. ARTICLE 2 BANK ACCOUNT 2.1 Project Proceeds. The Company has opened a new bank account (the ----------------- "Bank Account") with the Bank of America, and will execute the Security Agreement with Viasys relating to the VA Job, the assets related thereto, the proceeds derived therefrom and all claims made thereunder, including the Claim. Further, the Company will notify the VDOT that all future payments shall be electronically deposited in the Bank Account. 2.2 Payments to the Company. During the remaining term of the VA Job, on ------------------------ each of the 15th day and the last day of each and every month, the Company will submit to Viasys a written request for the reimbursement of funds (the "Reimbursement Request") for each given period, in the form attached as Schedule -------- 2.2. The amounts set forth in the Reimbursement Request must be consistent with - --- the "Estimated Costs to Complete" (as defined below). Within seven (7) days after the date of such Reimbursement Request, Viasys will cause the authorized signatories set forth in Section 2.4 below to transmit to the Company the requisition funds to the extent contained in the Bank Account. As used herein, the term "Estimated Costs to Complete" means the estimated remaining costs to complete the VA Job based upon the estimated remaining work to be performed as of October 31, 2005, as incorporated in the Post Closing Audit (as such term is defined in the Stock Purchase Agreement), as the same may be adjusted based upon the following (i) increases or decreases in quantities of work and (ii) change orders. 2.3 Disbursements to Viasys. If at the end of any month, after payment to ----------------------- the Company pursuant to Section 2.2 above, the Bank Account balance is greater than five hundred thousand dollars ($500,000), such excess amount shall be paid to Viasys. Upon final acceptance of the VA Job and all required payments to the Company consistent with the Estimated Costs to Complete, all remaining funds in the Bank Account will be disbursed to Viasys. 2.4 Signatories on Bank Account. The signatories on the Bank Account, ------------------------------ subject to change in writing by Viasys, will be any two of the following three persons: William R. Dresback, Steven E. Palmer and Alexander D. Moskovitz. 2.5 Arbitration. All disputes, claims or controversies arising out of or ----------- relating to this Agreement shall be settled by arbitration before a panel of three (3) arbitrators in Miami-Dade County, Florida administered by the American Arbitration Association under its Commercial Arbitration Rules and the Supplementary Procedures for Large, Complex Disputes, and judgment on the award rendered by such arbitrators may be entered in any court having jurisdiction thereof. 2 ARTICLE 3 ALLOCATION OF PAYMENTS 3.1 Note Payments. Payments made to Viasys under Section 2.3 will -------------- initially be treated as payments under that certain Amended and Restated Secured Promissory Note, a copy of which is attached hereto as Schedule 3.1 (the ------------ "Note"). 3.2 Earn-out. Once the Note has been paid in full, future payments under -------- Section 2.3 will be considered additional purchase consideration to Viasys under the Stock Purchase Agreement. ARTICLE 4 REPORTING 4.1 Monthly Reports. The Company will submit a monthly report to Viasys ---------------- in the form attached hereto as Schedule 4.1. ------------- 4.2 Other Reporting Requirements. The Company will submit the following ------------------------------ additional information to Viasys: 4.2.1 Commonwealth of Virginia Department of Transportation Contract Payment Voucher Summary within five days of its receipt thereof from the VDOT. 4.2.2 Accounts payable listing on and as of the last day of each month by the 5th day of the following month. 4.2.3 All change orders, both proposed and final, within five days of its receipt thereof. 4.2.4 All such other information as Viasys may reasonably request. ARTICLE 5 CLAIM PREPARATION 5.1 Claim. The Claim against the VDOT, relating to delays in completion ----- of the VA Job and other related matters, is presently being prepared by the Company and Viasys for submission to the VDOT. The Claim shall be made in the name of VSI. The Company agrees to make its employees with knowledge of the Claim available to Viasys, at no cost to Viasys, to assist in the preparation and prosecution of the Claim. All decisions relating to the form and content of the Claim, the prosecution of the Claim and the settlement thereof will rest solely with Viasys. The Company will provide access to all relevant records to permit Viasys to complete the preparation of the Claim and prosecution of the Claim to completion. 3 ARTICLE 6 AUDIT RIGHTS 6.1 Audit Rights of Viasys. At all times during the remaining term of the ---------------------- VA Job and the settlement of the Claim, Viasys shall have the right, at its cost and expense, and at reasonable times, to cause an audit to be made of the VA Job, the proceeds derived therefrom and the costs to complete and actually incurred by the Company in connection therewith. [Remainder of Page Intentionally Left Blank] 4 IN WITNESS WHEREOF, the parties hereto have made and entered into this Agreement the date first hereinabove set forth. CHARYS HOLDING COMPANY, INC. By: --------------------------------------------- Billy V. Ray, Jr., Chief Executive Officer VIASYS NETWORK SERVICES, INC. By: --------------------------------------------- Name: Title: VIASYS SERVICES, INC. By: --------------------------------------------- Name: Title: NEW VIASYS HOLDINGS, LLC By: --------------------------------------------- Name: Mel Harris Title: Manager By: --------------------------------------------- Name: Douglas Berman Title: Manager 5 EXHBIIT 8.1 CERTIFICATE REGARDING REPRESENTATIONS AND WARRANTIES IN THE STOCK PURCHASE AGREEMENT The undersigned is CEO of Charys Holding Company Inc. ("Charys") which is a party to that Stock Purchase Agreement, executed effective as of November 1st, 2005 by and between New Viasys Holdings, LLC and Charys (the "Stock Purchase Agreement") and hereby certifies as of the date hereof that: The representations and warranties made by Purchaser contained in the Stock Purchase Agreement or on any schedule, list, certificate, or document delivered pursuant to the provisions of the Stock Purchase Agreement are true and correct in all respects on and as of the date hereof as though made on and as of the date hereof and the indemnification obligations of the Parties set forth in the Stock Purchase Agreement shall apply accordingly. Purchaser has complied and performed in all material respects with all agreements, covenants and conditions required by the Agreement to be performed and complied with by Purchaser prior to Closing. IN WITNESS WHEREOF, the undersigned have signed this Certificate as of the date set forth below. Dated: November _, 2005 CHARYS HOLDING COMPANY INC. By -------------------------------- Billy Ray Title: CEO --------------------------- up covenants and conditions to be performed and complied by Purchaser prior to Closing, as required by Section 8.1 of the Agreement [GRAPHIC OMITTED] SEAL OF THE STATE OF FLORIDA FLORIDA DEPARTMENT OF STATE Glenda E. Hood Secretary of State January 25, 2005 HOLLAND & KNIGHT LLP (W-I) The Articles of Incorporation for VIASYS NETWORK SERVICES, INC, were filed on January 24, 2005 and assigned document number P05000012213. Please refer to this number whenever corresponding with this office regarding the above corporation. The certification you requested is enclosed. PLEASE NOTE: Compliance with the following procedures is essential to maintaining your corporate status. Failure to do so may result in dissolution of your corporation. A corporation annual report must be filed with this office between January 1 and May 1 of each year beginning with the calendar year following the year of the filing/effective date noted above and each year thereafter. Failure to file the annual report on time may result in administrative dissolution of your corporation. A federal employer identification (FEI) number must be shown on the annual report form prior to its filing with this office. Contact the Internal Revenue Service to insure that you receive the FEI number in time to file the annual report. To obtain a FEI number, contact the IRS at ###-###-#### and request form SS-4. Should your corporate mailing address change, you must notify this office in writing, to insure important mailings such as the annual report notices reach you. Should you have any questions regarding corporations, please contact this office at the address given below. Loria Poole, Document Specialist New Filings Section Letter Number: 405A00004991 Division of Corporations - P.O. BOX 6327 - Tallahassee, Florida 32314 State of Florida [GRAPHIC OMITTED] Department of State I certify the attached is a true and correct copy of the Articles of Incorporation of VIASYS NETWORK SERVICES, INC., a Florida corporation, filed on January 24, 2005, as shown by the records of this office. The document number of this corporation is P05000012213. [GRAPHIC Given under my hand and the OMITTED] Great Seal of the State of Florida, STATE SEAL At Tallahassee, the Capital, this the OF Twenty-fifth day of January, 2005 FLORIDA /s/ Glenda E. Hood Glenda E. Hood Secretary of State FILED 2005 JAN 24 P 12:11 SECRETARY OF STATE TALLAHASSEE, FLORIDA ARTICLES OF INCORPORATION OF VIASYS NETWORK SERVICES, INC. The undersigned, acting as incorporator of VIASYS NETWORK SERVICES, INC., under the Florida Business Corporation Act, adopts the following Articles of Incorporation. ARTICLE I. NAME ---------------- The name of the corporation is: VIASYS NETWORK SERVICES, INC. ARTICLE II. ADDRESS -------------------- The mailing address of the corporation is: 26 Lake Wire Drive Lakeland, Florida 33815 US ARTICLE III. COMMENCEMENT OF EXISTENCE --------------------------------------- The existence of the corporation will commence at 12:01 a.m. on the date of filing of these Articles of Incorporation. ARTICLE IV. PURPOSE -------------------- The corporation is organized to engage in any activity or business permitted under the laws of the United States and Florida. ARTICLE V. AUTHORIZED SHARES ----------------------------- The maximum number of shares that the corporation is authorized to have outstanding at any time is 10,000 shares of common stock having a par value of $0.01 per share. ARTICLE VI. INITIAL REGISTERED OFFICE AND AGENT ------------------------------------------------ The street address of the initial registered office of the corporation is 26 Lake Wire Drive, Lakeland, Florida 33815 and the name of the corporation's initial registered agent at that address is ANDREA S. JENNINGS. ARTICLE VII. INITIAL BOARD OF DIRECTORS ---------------------------------------- The corporation shall have two directors initially. The number of directors may be either increased or diminished from time to time, as provided in the bylaws, but shall never be less than one. The names and street addresses of the initial directors are: Name Address ---- ------- DOUGLAS BERMAN 100 Brickell Bay Drive 27th Floor Miami, FL 33131. MEL HARRIS 10800 Biscayne Blvd. 10th Floor Miami, FL 33161-7487 ARTICLE VIII. INCORPORATOR --------------------------- STEVEN E. PALMER 26 Lake Wire Drive Lakeland, FL 33815 The incorporator of the Corporation assigns to this corporation his rights under Section ###-###-####, Florida Statutes, to constitute a corporation, and he assigns to those persons designated by the board of directors any rights he may have as incorporator to acquire any of the capital stock of this corporation, this assignment becoming effective on the date corporate existence begins. ARTICLE IX. BYLAWS ------------------- The power to adopt, alter, amend, or repeal Bylaws shall be vested in the Board of Directors and the shareholders, except that the Board of Directors may not amend or repeal any bylaw adopted by the shareholders that specifically provides that the bylaw is not subject to amendment or repeal by the directors. 2 ARTICLE X. AMENDMENTS --------------------- The corporation reserves the right to amend, alter, change, or repeal any provision in these Articles of Incorporation in the manner prescribed by law, and all rights conferred on shareholders are subject to this reservation. The undersigned incorporator, for the purpose of forming a corporation under the laws of the State of Florida, has executed these Articles of Incorporation this 21st day of January, 2005. ---- /s/ Steven E. Palmer ------------------------------ Steven E. Palmer, Incorporator 3 CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM PROCESS MAY BE SERVED. Pursuant to Chapter 48.091, Florida Statutes, the following is submitted: That VIASYS NETWORK SERVICES, INC., desiring to organize under the laws of the State of Florida with, its initial registered office, as indicated in the Articles of Incorporation, at 26 Lake Wire Drive, City of Lakeland, State of Florida 33815, has named ANDREA S. JENNINGS as its agent to accept service of process within this state. ACKNOWLEDGMENT: Having been named to accept service of process for the corporation named above, at the place designated in this certificate, I agree to act in that capacity, to comply with the provisions of the Florida Business Corporation Act, and am familiar with, and accept, the obligations of that position. /s/ Andrea S. Jennings ---------------------- ANDREA S. JENNINGS, Registered Agent FILED 2005 JAN 24 P 12:11 SECRETARY OF STATE TALLAHASSEE, FLORIDA 4 ARTICLES OF INCORPORATION OF VIASYS NETWORK SERVICES, INC. The undersigned, acting as incorporator of VIASYS NETWORK SERVICES, INC., under the Florida Business Corporation Act, adopts the following Articles of Incorporation. ARTICLE I. NAME ---------------- The name of the corporation is: VIASYS NETWORK SERVICES, INC. ARTICLE II. ADDRESS -------------------- The mailing address of the corporation is: 26 Lake Wire Drive Lakeland, Florida 33815 US ARTICLE III. COMMENCEMENT OF EXISTENCE --------------------------------------- The existence of the corporation will commence at 12:01 a.m. on the date of filing of these Articles of Incorporation. ARTICLE IV. PURPOSE -------------------- The corporation is organized to engage in any activity or business permitted under the laws of the United States and Florida. ARTICLE V. AUTHORIZED SHARES ----------------------------- The maximum number of shares that the corporation is authorized to have outstanding at any time is 10,000 shares of common stock having a par value of $0.01 per share. ARTICLE VI. INITIAL REGISTERED OFFICE AND AGENT ------------------------------------------------ The street address of the initial registered office of the corporation is 26 Lake Wire Drive, Lakeland, Florida 33815 and the name of the corporation's initial registered agent at that address is ANDREA S. JENNINGS. ARTICLE VII. INITIAL BOARD OF DIRECTORS ---------------------------------------- The corporation shall have two directors initially. The number of directors may be either increased or diminished from time to time, as provided in the bylaws, but shall never be less than one. The names and street addresses of the initial directors are: Name Address ---- ------- DOUGLAS BERMAN 100 Brickell Bay Drive 7th Floor Miami, FL 33131. MEL HARRIS 10800 Biscayne Blvd. 10th Floor Miami, FL 33161-7487 ARTICLE VIII. INCORPORATOR --------------------------- STEVEN E. PALMER 26 Lake Wire Drive Lakeland, FL 33815 The incorporator of the Corporation assigns to this corporation his rights under Section ###-###-####, Florida Statutes, to constitute a corporation, and he assigns to those persons designated by the board of directors any rights he may have as incorporator to acquire any of the capital stock of this corporation, this assignment becoming effective on the date corporate existence begins. ARTICLE IX. BYLAWS ------------------- The power to adopt, alter, amend, or repeal Bylaws shall be vested in the Board of Directors and the shareholders, except that the Board of Directors may not amend or repeal any bylaw adopted by the shareholders that specifically provides that the bylaw is not subject to amendment or repeal by the directors. 2 ARTICLE X. AMENDMENTS ---------------------- The corporation reserves the right to amend, alter, change, or repeal any provision in these Articles of Incorporation in the manner prescribed by law, and all rights conferred on shareholders are subject to this reservation. The undersigned incorporator, for the purpose of forming a corporation under the laws of the State of Florida, has executed these Articles of Incorporation this 21st day of January, 2005. ---- /s/ Steven E. Palmer ------------------------------ Steven E. Palmer, Incorporator 3 CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM PROCESS MAY BE SERVED. Pursuant to Chapter 48.091, Florida Statutes, the following is submitted: That VIASYS NETWORK SERVICES, INC., desiring to organize under the laws of the State of Florida with its initial registered office, as indicated in the Articles of Incorporation, at 26 Lake Wire Drive, City of Lakeland, State of Florida 33815, has named ANDREA S. JENNINGS as its agent to accept service of process within this state. ACKNOWLEDGMENT: Having been named to accept service of process for the corporation named above, at the place designated in this certificate, I agree to act in that capacity, to comply with the provisions of the Florida Business Corporation Act, and am familiar with, and accept, the obligations of that position. /s/ Andrea S. Jennings ---------------------- ANDREA S. JENNINGS, Registered Agent 4 BYLAWS OF VIASYS NETWORK SERVICES, INC. ARTICLE I. MEETINGS OF SHAREHOLDERS Section 1. Annual Meeting. The annual meeting of the shareholders of ---------------------------- the Corporation for the election of directors and the transaction of other business shall be held during the month of May each year and on the date and at the time and place that the board of directors determines. If any annual meeting is not held, by oversight or otherwise, a special meeting shall be held as soon as practical, and any business transacted or election held at that meeting shall be as valid as if transacted or held at the annual meeting. Section 2. Special Meetings. Special meetings of the shareholders for ----------------------------- any purpose shall be held when called by the president or the board of directors, or when demanded in writing by the holders of not less than ten percent (unless a greater percentage not to exceed fifty percent is required by the articles of incorporation) of all the shares entitled to vote at the meeting. Such demand must be delivered to the Corporation's secretary. A meeting demanded by shareholders shall be called for a date not less than ten nor more than sixty days after the request is made, unless the shareholders requesting the meeting designate a later date. The secretary shall issue the call for the meeting, unless the president, the board of directors, or shareholders requesting the meeting designate another person to do so. The shareholders at a special meeting may transact only business that is related to the purposes stated in the notice of the special meeting. Section 3. Place. Meetings of shareholders may be held either within ------------------- or outside the State of Florida. Section 4. Notice. A written notice of each meeting of shareholders, -------------------- stating the place, day, and time of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered to each shareholder of record entitled to vote at the meeting, not less than ten nor more than sixty days before the date set for the meeting, either personally or by first-class mail, by or at the direction of the president, the secretary, or the officer or other persons calling the meeting. If mailed, the notice shall be considered delivered when it is deposited in the United States mail, postage prepaid, addressed to the shareholder at his address as it appears on the records of the Corporation. Section 5. Waivers of Notice. Whenever any notice is required to be -------------------------------- given to any shareholder of the Corporation under these bylaws, the articles of incorporation, or the Florida Business Corporation Act, a written waiver of notice, signed anytime by the person entitled to notice shall be equivalent to giving notice. Attendance by a shareholder entitled to vote at a meeting, in person or by proxy, shall constitute a waiver of (a) notice of the meeting, except when the shareholder attends a meeting solely for the purpose, expressed at the beginning of the meeting, of objecting to the transaction of any business because the meeting is not lawfully called or convened, and (b) an objection to consideration of a particular matter at the meeting that is not within the purpose of the meeting unless the shareholders object to considering the matter when it is presented. Section 6. Record Date. For the purpose of determining the -------------------------- shareholders for any purpose, the board of directors may either require the stock transfer books to be closed for up to seventy days or fix a record date, which shall be not more than seventy days before the date on which the action requiring the determination is to be taken. However, a record date shall not precede the date upon which the resolution fixing the record date is adopted. If the transfer books are not closed and no record date is set by the board of directors, the record date shall be determined as follows: For determining shareholders entitled to demand a special meeting, the record date is the date the first such demand is delivered to the Corporation; For determining shareholders entitled to a share dividend, the record date is the date the board of directors authorizes the dividend; If no prior action is required by the board of directors pursuant to the Florida Business Corporation Act, the record date for determining shareholders entitled to take action without a meeting is the date the first signed written consent is delivered to the Corporation; If prior action is required by the board of directors pursuant to the Florida Business Corporation Act, the record date for determining shareholders entitled to take action without a meeting is at the close of business on the day that the board of directors adopts a resolution taking such prior action; and For determining shareholders entitled to notice of and to vote at an annual or special shareholders meeting the record date is as of the close of business on the day before the first notice is delivered to the shareholders. When a determination of the shareholders entitled to vote at any meeting has been made, that determination shall apply to any adjournment of the meeting, unless the board of directors fixes a new record date. The board of directors shall fix a new record date if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. Section 7. Shareholder's List for Meeting. A complete alphabetical ---------------------------------------------- list of the names of the shareholders entitled to receive notice of and to vote at the meeting shall be prepared by the secretary or other authorized agent having charge of the stock transfer book. The list shall be arranged by voting group and include each shareholder's address, and the number, series, and class of shares held. The list must be made available at least ten days before and throughout each meeting of shareholders, or such shorter time as exists between the record date and the meeting. The list must be made available at the Corporation's principal office, registered agent's office, transfer agent's office or at a place identified in the meeting notice in the city where the meeting will be held. Any shareholder, his agent or attorney, upon written demand and at his own expense may inspect the list 2 during regular business hours. The list shall be available at the meeting and any shareholder, his agent or attorney is entitled to inspect the list at any time during the meeting or its adjournment. If the requirements of this section have not been substantially complied with, the meeting, on the demand of any shareholder in person or by proxy, shall be adjourned until the requirements of this section are met. If no demand for adjournment is made, failure to comply with the requirements of this section does not affect the validity of any action taken at the meeting. Section 8. Shareholder Quorum and Voting. A majority of the shares --------------------------------------------- entitled to vote, represented in person or by proxy, constitutes a quorum at a meeting of shareholders. If a quorum is present, the affirmative vote of a majority of the shares entitled to vote on the matter is the act of the shareholders unless otherwise provided by law. A shareholder may vote either in person or by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact. After a quorum has been established at a shareholders' meeting, a withdrawal of shareholders that reduces the number of shareholders entitled to vote at the meeting below the number required for a quorum does not affect the validity of an adjournment of the meeting or an action taken at the meeting prior to the shareholders' withdrawal. Authorized but unissued shares including those redeemed or otherwise reacquired by the corporation, and shares of stock of this Corporation owned by another corporation the majority of the voting stock of which is owned or controlled by this Corporation, directly or indirectly, at any meeting shall not be counted in determining the total number of outstanding shares at any time. The chairman of the board, the president, any vice president, the secretary, and the treasurer of a corporate shareholder are presumed to possess, in that order, authority to vote shares standing in the name of a corporate shareholder, absent a bylaw or other instrument of the corporate shareholder designating some other officer, agent, or proxy to vote the shares. Shares held by an administrator, executor, guardian, or conservator may be voted by him without a transfer of the shares into his name. A trustee may vote shares standing in his name, but no trustee may vote shares that are not transferred into his name. If he is authorized to do so by an appropriate order of the court by which he was appointed, a receiver may vote shares standing in his name or held by or under his control, without transferring the shares into his name. A shareholder whose shares are pledged may vote the shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee or his nominee shall be entitled to vote the shares unless the instrument creating the pledge provides otherwise. 3 ARTICLE II. DIRECTORS Section 1. Function. The business of this Corporation shall be managed -------------------- and its corporate powers exercised by the board of directors. Section 2. Number. The Corporation shall have two directors initially. ------------------ The number of directors may be increased or diminished from time to time by action of the board of directors or shareholders, but no decrease shall have the effect of shortening the term of any incumbent director, unless the shareholders remove the director. Section 3. Qualification. Each member of the board of directors must --------------------------- be a natural person who is eighteen years of age or older. A director need not be a resident of Florida or a shareholder of the Corporation. Section 4. Election and Term. The persons named in the articles of --------------------------------- incorporation as members of the initial board of directors shall hold office until the first annual meeting of shareholders and until their successors have been elected and qualified or until their earlier resignation, removal from office, or death. At the first annual meeting of shareholders and at each annual meeting thereafter the shareholders shall elect directors to hold office until the next succeeding annual meeting. Each director shall hold office for the term for which he is elected and until his successor is elected and qualifies or until his earlier resignation, removal from office, or death. Section 5. Compensation. The board of directors has authority to fix -------------------------- the compensation of the directors, as directors and as officers. Section 6. Duties of Directors. A director shall perform his duties as ------------------------------- a director, including his duties as a member of any committee of the board upon which he serves, in good faith, in a manner he reasonably believes to be in the best interests of the Corporation. Section 7. Presumption of Assent. A director of the Corporation who is --------------------------------- present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is presumed to have assented to the action unless he votes against it or expressly abstains from voting on the action taken, or, he objects at the beginning of the meeting to the holding of the meeting or transacting specific business at the meeting. Section 8. Vacancies. Unless filled by the shareholders, any vacancy ----------------------- occurring in the board of directors, including any vacancy created because of an increase in the number of directors, may be filled by the affirmative vote of a majority of the remaining directors, even if the number of remaining directors does not constitute a quorum of the board of directors. A director elected to fill a vacancy shall hold office only until the next election of directors by the shareholders. 4 Section 9. Removal or Resignation of Directors. At a meeting of ----------------------------------------------------- shareholders called for that purpose, the shareholders, by a vote of the holders of a majority of the shares entitled to vote at an election of directors, may remove any director, or the entire board of directors, with or without cause, and fill any vacancy or vacancies created by the removal. A director may resign at any time by delivering written notice to the board of directors or its chairman or the corporation. A resignation is effective when the notice is delivered unless the notice specifies later effective date. If a resignation is made effective at a later date, the board of directors may fill the pending vacancy before the effective date if the board of directors provided that the successor does not take office until the effective date. Section 10. Quorum and Voting. A majority of the board of directors --------------------------------- constitutes a quorum for the transaction of business. The act of the majority of the directors at a meeting at which a quorum is present is the act of the board of directors. Section 11. Place of Meetings. Regular and special meetings by the ---------------------------------- board of directors may be held within or outside the State of Florida. Section 12. Regular Meetings. A regular meeting of the board of -------------------------------- directors shall be held without notice, other than this bylaw, immediately after and at the same place as the annual meeting of shareholders. The board of directors may provide, by resolution, the time and place for the holding of additional regular meetings without notice other than the resolution. Section 13. Special Meetings. Special meetings of the board of -------------------------------- directors may be called by or at the request of the president or any directors. Section 14. Notice of Meetings. Written notice of the time and place --------------------------------- of special meetings of the board of directors shall be given to each director by either personal delivery or by first class United States mail, telegram, or cablegram at least two days before the meeting. Notice of a meeting of the board of directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting constitutes a waiver of notice of the meeting and all objections to the time and place of the meeting, or the manner in which it has been called or convened, except when the director states, at the beginning of the meeting, or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of the meeting. A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the board of directors to another time and place. 5 Notice of any adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors. ARTICLE III. OFFICERS Section 1. Officers. The officers of the Corporation shall consist of --------------------- a president, a secretary, and a treasurer, and may include one or more vice presidents, one or more assistant secretaries, and one or more assistant treasurers. The officers shall be elected initially by the board of directors at the organizational meeting of board of directors and thereafter at the first meeting of the board following the annual meeting of the shareholders in each year. The board from time to time may elect or appoint other officers, assistant officers, and agents, who shall have the authority and perform the duties prescribed by the board. An elected or duly appointed officer may, in turn, appoint one or more officers or assistant officers, unless the board of directors disapproves or rejects the appointment. All officers shall hold office until their successors have been appointed and have qualified or until their earlier resignation, removal from office, or death. One person may simultaneously hold any two or more offices. The failure to elect a president, secretary, or treasurer shall not affect the existence of the Corporation. Section 2. President. The president, subject to the directions of the ---------------------- board of directors, is responsible for the general and active management of the business and affairs of the Corporation, has the power to sign certificates of stock, bonds, deeds, and contracts for the Corporation, and shall preside at all meetings of the shareholders. Section 3. Vice Presidents. Each vice president has the power to sign ---------------------------- bonds, deeds, and contracts for the Corporation and shall have the other powers and perform the other duties prescribed by the board of directors or the president. Unless the board otherwise provides, if the president is absent or unable to act, the vice president who has served in that capacity for the longest time and who is present and able to act shall perform all the duties and may exercise any of the powers of the president. Any vice president may sign, with the secretary or assistant secretary, certificates for stock of the Corporation. Section 4. Secretary. The secretary shall have the power to sign ----------------------- contracts and other instruments for the Corporation and shall (a) keep the minutes of the proceedings of the shareholders and the board of directors in one or more books provided for that purpose, (b) see that all notices are duly given in accordance with the provisions of these bylaws or as required by law, (c) maintain custody of the corporate records and the corporate seal, attest the signatures of officers who execute documents on behalf of the Corporation, authenticate records of the Corporation, and assure that the seal is affixed to all documents of which execution 6 on behalf of the Corporation under its seal is duly authorized, (d) keep a register of the post office address of each shareholder that shall be furnished to the secretary by the shareholder, (e) sign with the president, or a vice president, certificates for shares of stock of the Corporation, the issuance of which have been authorized by resolution of the board of directors, (f) have general charge of the stock transfer books of the Corporation, and (g) in general perform all duties incident to the office of secretary and other duties as from time to time may be prescribed by the president or the board of directors. Section 5. Treasurer. The treasurer shall (a) have charge and custody ---------------------- of and be responsible for all funds and securities of the Corporation, (b) receive and give receipts for monies due and payable to the Corporation from any source whatsoever, and deposit monies in the name of the Corporation in the banks, trust companies, or other depositaries as shall be selected by the board of directors, and (c) in general perform all the duties incident to the office of treasurer and other duties as from time to time may be assigned to him by the president or the board of directors. If required by the board of directors, the treasurer shall give a bond for the faithful discharge of his duties in the sum and with the surety or sureties that the board of directors determines. Section 6. Removal of Officers. An officer or agent elected or ----------------------------------- appointed by the board of directors or appointed by another officer may be removed by the board whenever in its judgment the removal of the officer or agent will serve the best interests of the Corporation. Any officer or assistant officer, if appointed by another officer, may likewise be removed by such officer. Removal shall be without prejudice to any contract rights of the person removed. The appointment of any person as an officer, agent, or employee of the Corporation does not create any contract rights. The board of directors may fill a vacancy, however occurring, in any office. An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date, its board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date. An officer's resignation does not affect the officer's contract rights, if any, with the corporation. Section 7. Salaries. The board of directors from time to time shall ---------------------- fix the salaries of the officers, and no officer shall be prevented from receiving his salary merely because he is also a director of the Corporation. 7 ARTICLE IV. INDEMNIFICATION Any person, his heirs, or personal representative, made, or threatened to be made, a party to any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative, because he is or was a director, officer, employee, or agent of this Corporation or serves or served any other corporation or other enterprise in any capacity at the request of this Corporation, shall be indemnified by this Corporation, and this Corporation may advance his related expenses to the full extent permitted by Florida law. In discharging his duty, any director, officer, employee, or agent, when acting in good faith, may rely upon information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by (1) one or more officers or employees of the Corporation whom the director, officer, employee, or agent reasonably believes to be reliable and competent in the matters presented, (2) counsel, public accountants, or other persons as to matters that the director, officer, employee, or agent believes to be within that person's professional or expert competence, or (3) in the case of a director, a committee of the board of directors upon which he does not serve, duly designated according to law, as to matters - within its designated authority, if the director reasonably believes that the committee is competent. The foregoing right of indemnification or reimbursement shall not be exclusive of other rights to which the person, his heirs, or personal representatives may be entitled. The Corporation may, upon the affirmative vote of a majority of its board of directors, purchase insurance for the purpose of indemnifying these persons. The insurance may be for the benefit of all directors, officers, or employees. ARTICLE V. STOCK CERTIFICATES Section 1. Issuance. Shares may but need not be represented by ---------------------- certificates. The board of directors may authorize the issuance of some or all of the shares of the Corporation of any or all of its classes or series without certificates. If certificates are to be issued, the share must first be fully paid. Section 2. Form. Certificates evidencing shares in this Corporation ------------------ shall be signed by the president or a vice president and the secretary, assistant secretary or any other officer authorized by the board of directors, and may be sealed with the seal of this Corporation or a facsimile of the seal. Unless the Corporation's stock is registered pursuant to every applicable securities law, each certificate shall bear an appropriate legend restricting the transfer of the shares evidenced by that certificate. Section 3. Lost, Stolen, or Destroyed Certificates. The Corporation ------------------------------------------------------ may issue a new certificate in the place of any certificate previously issued if the shareholder of record (a) makes proof in affidavit form that the certificate has been lost, destroyed, or wrongfully taken, (b) requests the issue of a new certificate before 8 the Corporation has notice that the certificate has been acquired by the purchaser for value in good faith and without notice of any adverse claim, (c) if requested by the Corporation, gives bond in the form that the Corporation directs, to indemnify the Corporation, the transfer agent, and the registrar against any claim that may be made concerning the alleged loss, destruction, or theft of a certificate, and (d) satisfies any other reasonable requirements imposed by the Corporation. Section 4. Restrictive Legend. Every certificate evidencing shares --------------------------------- that are restricted as to sale, disposition, or other transfer shall bear a legend summarizing the restriction or stating that the Corporation will furnish to any shareholder, upon request and without charge, a full statement of the restriction, ARTICLE VI. DIVIDENDS The board of directors from time to time may declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law, ARTICLE VII. SEAL The corporate seal shall have the name of the Corporation and the word "seal" inscribed on it, and may. be a facsimile, engraved, printed, or an impression seal. ARTICLE VIII. AMENDMENT These bylaws may be repealed or amended, and additional bylaws may be adopted, by either a vote of a majority of the full board of directors or by vote of the holders of a majority of the issued and outstanding shares entitled to vote, but the board of directors may not amend or repeal any bylaw adopted by the shareholders if the shareholders specifically provide that the bylaw is not subject to amendment or repeal by the directors. In order to be effective, any amendment approved hereby must be in writing and attached to these Bylaws. 9 FILED 2003 APR 21 PM 12:24 SECRETARY OF STATE TALLAHASSEE, FLORIDA ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF TRANSPORTATION SAFETY CONTRACTORS, INC. The Articles of Incorporation of TRANSPORTATION SAFETY CONTRACTORS, INC., a Florida corporation, shall be amended as follows: The First article of the Articles of Incorporation shall be deleted in its entirety and the following shall be added in its place: "FIRST: The name of the corporation is Viasys Services, Inc. The principal office of the corporation is located at 135 Horizon Court, Lakeland, Florida 33813." The foregoing amendment was adopted to be affective on the date of filing of, these Articles of Amendment, by all of the directors and shareholders of the corporation, pursuant to Sections ###-###-####, 607.0704 and ###-###-####, Florida Statutes, as evidenced by their signatures on a Unanimous Consent manifesting their intention that the foregoing amendment to the Articles of Incorporation be adopted. The number of votes cast for the amendment was sufficient for approval by the shareholders of the corporation. IN WITNESS WHEREOF, the undersigned President of the corporation has executed this instrument effective as of the 11th. day of March, 2003. ---- /s/ Lance McNeill ---------------------------------- Lance McNeill, President State of Florida [GRAPHIC OMITTED] Department of State I certify that the attached is a true and correct copy of the Articles of Incorporation of TRANSPORTATION SAFETY CONTRACTORS, INC. a corporation organized under the Laws of the State of Florida, filed on November 22, 1982. The charter number for this corporation is G09210. [GRAPHIC Given under my hand and the OMITTED] Great Seal of the State of Florida, STATE SEAL at Tallahassee, the Capital, this the OF 22nd day of November, 1982. FLORIDA /s/ George Firestone George Firestone Secretary of State State of Florida [GRAPHIC OMITTED] Department of State I certify from the records of this office that TRANSPORTATION SAFETY CONTRACTORS, INC. is a corporation organized under the laws of the State of Florida, filed on November 22, 1982. The document number of this corporation is G09210. I further certify that said corporation has paid all fees and penalties due this office through December 31, 1998, that its most recent annual report was filed on June 9, 1998, and its status is active. I further certify that said corporation has not filed Articles of Dissolution. I further certify that this is an electronically transmitted certificate authorized by section 15.16, Florida Statutes, and authenticated by the code, 898A00032568-061098-G09210 -1/1, noted below. Given under my hand and the Great Seal of the State of Florida, at Tallahassee, the Capital, this the Tenth day of June, 1998 Authentication Code: 898A00032568-061098-G09210 -1/1 [GRAPHIC OMITTED] /s/ Sandra B. Mortham STATE SEAL Sandra B. Mortham OF Secretary of State FLORIDA FILED NOV 22 2:42 PM '82 SECRETARY OF STATE TALLAHASSEE, FLORIDA STATE OF FLORIDA ARTICLES OF INCORPORATION OF TRANSPORTATION SAFETY CONTRACTORS, INC. The undersigned, acting as incorporators of a corporation under the Florida General Corporation Act, adopt the following Articles of Incorporation: FIRST: The name of the corporation is TRANSPORTATION SAFETY CONTRACTORS, INC. SECOND: The period of its duration is perpetual. THIRD: The date and time of the commencement of the corporation existence is the time of filing of Articles by the Department of State. FOURTH: The purpose or purposes for which the corporation is organized are: To manufacture, construct, install, distribute, market and sell highway and traffic control products and to engage in the transaction of any or all lawful business for which corporations may be incorporated under the provisions of the Florida General Corporation Act. FIFTH: The aggregate number of shares which the corporation shall have authority to issue is: fifteen thousand (15,000) common shares of the par value of One Dollar ($1.00) each. SIXTH: Provisions granting preemptive rights are: No shareholder shall have any preemptive rights to subscribe for or to purchase any shares or other securities issued by the corporation. SEVENTH: The street address of the initial registered office of the corporation is c/o C T Corporation System, 8751 West Broward Blvd., City of Plantation, Florida 33324, and the name of its initial registered agent at such address is C T Corporation System. EIGHTH: The number of directors constituting the initial board of directors of the corporation is three, and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and shall qualify are: NAME ADDRESS ---- ------- William E. Barlow 8583 Gardenia Drive Largo, Florida 33543 C. Doug Hubbard 66 Country Club Rd. Zephyrhills, Florida 33599 R. Joel Tharpe 2110 Alder Way Brandon, Florida 33511 NINTH: The name and address of each incorporator is: NAME ADDRESS ---- ------- K. L. Slayman 2 Peachtree St., N. W. Atlanta, Georgia 30383 R. L. Tuttle, Jr. 2 Peachtree St., N. W. Atlanta, Ga. 30383 R. W. McEver 2 Peachtree St., N. W. Atlanta, Ga. 30383 Dated November 19, 1982. /s/ K. L. Slayman ----------------- K. L. Slayman /s/ R. L. Tuttle, Jr. --------------------- R. L. Tuttle, Jr. /s/ R. W. McEver ---------------- R. W. McEver Incorporators STATE OP GEORGIA COUNTY OF FULTON The foregoing instrument was acknowledged before me this 19th day of November, 1982, by K. L. Slayman, R. L. Tuttle, Jr. and R. W. McEver of TRANSPORTATION SAFETY CONTRACTORS, INC. EDNA B. BELL My commission expires Notary Public Georgia, State at Large My Commission Expires Aug. 7, 1983 [GRAPHIC OMITTED] NOTARY SEAL /s/ Edna B. Bell ------------------------ Notary Public C T Corporation System having been designated to act as registered agent hereby agrees to act in this capacity. C T CORPORATION SYSTEM /s/ Jerry I. Dawson --------------------- Jerry I. Dawson Assistant Secretary State of Florida [GRAPHIC OMITTED] Department of State I certify that the attached is a true and correct copy of the Articles of Incorporation of TRANSPORTATION SAFETY CONTRACTORS, INC. a corporation organized under the Laws of the State of Florida, filed on November 22, 1982. The charter number for this corporation is G09210. [GRAPHIC Given under my hand and the OMITTED] Great Seal of the State of Florida, STATE SEAL At Tallahassee, the Capital, this the OF 22nd day of November, 1982. FLORIDA /s/ George Firestone George Firestone Secretary of State FILED NOV 22 2:42 PM '82 SECRETARY OF STATE TALLAHASSEE, FLORIDA STATE OP FLORIDA ARTICLES OF INCORPORATION OF TRANSPORTATION SAFETY CONTRACTORS, INC. The undersigned, acting as incorporators of a corporation under the Florida General Corporation Act, adopt the following Articles of Incorporation: FIRST: The name of the corporation is TRANSPORTATION SAFETY CONTRACTORS, INC. SECOND: The period of its duration is perpetual. THIRD: The date and time of the commencement of the corporation existence is the time of filing of Articles by the Department of State. FOURTH: The purpose or purposes for which the corporation is organized are: To manufacture, construct, install, distribute, market and sell highway and traffic control products and to engage in the transaction of any or all lawful business for which corporations may be incorporated under the provisions of the Florida General Corporation Act. FIFTH: The aggregate number of shares which the corporation shall have authority to issue is: fifteen thousand (15,000) common shares of the par value of One Dollar ($1.00} each. SIXTH: Provisions granting preemptive rights are: No shareholder shall have any preemptive rights to subscribe for or to purchase any shares or other securities issued by the corporation. SEVENTH: The street address of the initial registered office of the corporation is c/o C T Corporation System, 8751 West Broward Blvd., City of Plantation, Florida 33324, and the name of its initial registered agent at such address is C T Corporation System. EIGHTH: The number of directors constituting the initial board of directors of the corporation is three, and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and shall qualify are: NAME ADDRESS ---- ------- William E. Barlow 8583 Gardenia Drive Largo, Florida 33543 C. Doug Hubbard 66 Country Club Rd. Zephyrhills, Florida 33599 R. Joel Tharpe 2110 Alder Way Brandon, Florida 33511 NINTH: The name and address of each incorporator is: NAME ADDRESS ---- ------- K. L. Slayman 2 Peachtree St., N. W. Atlanta, Georgia 30383 R. L. Tuttle, Jr. 2 Peachtree St., N. W. Atlanta, Ga. 30383 R. W. McEver 2 Peachtree St., N. W. Atlanta, Ga. 30383 Dated November 19, 1982. /s/ K. L. Slayman ----------------- K. L. Slayman /s/ R. L. Tuttle, Jr. --------------------- R. L. Tuttle, Jr. /s/ R. W. McEver ---------------- R. W. McEver Incorporators STATE OP GEORGIA COUNTY OF FULTON The foregoing instrument was acknowledged before me this 19th day of November, 1982, by K. L. Slayman, R. L. Tuttle, Jr. and R. W. McEver of TRANSPORTATION SAFETY CONTRACTORS, INC. EDNA B. BELL My commission expires Notary Public Georgia, State at Large My Commission Expires Aug. 7, 1983 [GRAPHIC OMITTED] NOTARY SEAL /s/ Edna B. Bell ------------------------ Notary Public C T Corporation System having been designated to act as registered agent hereby agrees to act in this capacity. C T CORPORATION SYSTEM /s/ Jerry I. Dawson --------------------- Jerry I. Dawson Assistant Secretary State of Florida [GRAPHIC OMITTED] Department of State I certify the attached is a true and correct copy of the Articles of Incorporation, as amended to date, of TRASPORATION SAFETY CONTRACTORS, INC., a corporation organized under the laws of the State of Florida, as shown by the records of this office. The document number of this corporation is G09210. [GRAPHIC Given under my hand and the OMITTED] Great Seal of the State of Florida, STATE SEAL at Tallahassee, the Capital, this the OF Ninth day of June, 1998 FLORIDA /s/ Sandra B. Mortham Sandra B. Mortham Secretary of State FILED Nov 22 2:42 PM '82 SECRETARY OF STATE TALLAHASSEE, FLORIDA STATE OF FLORIDA ARTICLES OF INCORPORATION OF TRANSPORTATION SAFETY CONTRACTORS, INC. The undersigned, acting as incorporators of a Corporation under the Florida General Corporation Act, adopt The following Articles of Incorporation: FIRST: The name of the corporation is TRANSPORTATION SAFETY CONTRACTORS, INC. SECOND: The period of its duration is perpetual. THIRD: The date and time of the commencement of the corporation existence is the time of filing of Articles by the Department of State. FOURTH: The purpose or purposes for which the corporation is organized are: To manufacture, construct, install, distribute, market and sell highway and traffic control products and to engage in the transaction of any or all lawful business for which corporations may be incorporated under the provisions of the Florida General Corporation Act. FIFTH: The aggregate number of shares which the corporation shall have authority to issue is: fifteen thousand (15,000) common shares of the par value of One Dollar ($1.00) each. SIXTH: Provisions granting preemption rights are: No shareholder shall have any preemptive rights to subscribe for or to purchase any shares or other securities issued by the corporation. SEVENTH: The street address of the initial registered office of the corporation is c/o CT Corporation System, 8751 West Broward Blvd., City of Plantation. Florida 33324, and the name of its initial registered agent as such address is CT Corporation System. EIGHT: The number of directors constituting the initial board of directors of the corporation is three and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and shall qualify are: NAME ADDRESS ---- ------- William E. Barlow 8583 Gardenia Drive Largo, Florida 33543 C. Doug Hubbard 66 Country Club Rd. Zephyrhills, Florida 33599 R. Joel Tharpe 2110 Alder Way Brandon, Florida 33511 NINTH: The name and address of each incorporator is: NAME ADDRESS ---- ------- K. L. Slayman 2 Peachtree St., N. W. Atlanta, Georgia 30383 R. L. Tuttle, Jr. 2 Peachtree St., N. W. Atlanta, Ga. 30383 R. W. McEver 2 Peachtree St., N. W. Atlanta, Ga. 30383 Dated November 19, 1982. /s/ K. L. Slayman ----------------- K. L. Slayman /s/ R. L. Tuttle, Jr. --------------------- R. L. Tuttle, Jr. /s/ R. W. McEver ---------------- R. W. McEver Incorporators STATE OF GEORGIA COUNTY OF FULTON The foregoing instrument was acknowledged before me this 19th day of November, 1982, by K. L. Slayman, R. L. Tuttle, Jr. and R. W. McEver of TRANSPORTATION SAFETY CONTRACTORS, INC. EDNA B. BELL My commission expires Notary Public, Georgia, State at Large My Commission Expires Aug. 7, 1983 /s/ Edna B. Bell -------------------------------------- Notary Public CT Corporation System having been designated to act as registered agent hereby agrees to act in this capacity. CT CORPORATION SYSTEM /s/ Jerry I. Dawson -------------------------------------- Jerry I. Dawson Assistant Secretary FILED SECRETARY OF STATE DIVISION OF CORPORATIONS 94 JUN 24 AM 9:37 ARTICLES OF MERGER NEW TSC, INC., A Florida Corporation INTO TRANSPORTATION SAFETY CONTRACTORS, INC. A Florida Corporation Pursuant to the provisions of the Florida General Corporation Act, the undersigned corporations have adopted an Agreement of Merger and hereby adopt the following Articles of Merger: 1. The names of the undersigned corporations are: New TSC, Inc., a Florida corporation and Transportation Safety Contractors, Inc., a Florida corporation. 2. Transportation Safety Contractors, Inc. shall be the surviving corporation. 3. The name of the surviving corporation shall be Transportation Safety Contractors, Inc. 4. The following plan of merger was approved by the undersigned corporations on June 21, 1994 in the manner prescribed by Florida law: (a) New TSC, Inc. will be merged into Transportation Safety Contractors, Inc., which will be the surviving corporation. The surviving corporation will retain the name, Transportation Safety Contractors, Inc., and its domicile shall remain Florida; (b) Each shareholder of New TSC, Inc., will receive one share of common stock of Transportation Safety Contractors, Inc. stock for each share of common stock owned in New TSC, Inc.; as 1:1 exchange ratio. 5. The agreement of merger of the undersigned corporations was adopted pursuant to Florida law by the unanimous vote of the Board of Directors and stockholders of the respective corporations on June 21, 1994. The merger of the undersigned corporations will become effective immediately after these articles are filed by the Department of State for the state of Florida. These Articles of Merger have been executed on this 22nd day of June 1994 ---- by the parties set forth below: NEW TSC, INC., a Florida corporation By: /s/ Gideon Taylor -------------------------- GIDEON TAYLOR, President /s/ Gideon Taylor -------------------------- GIDEON TAYLOR, Secretary TRANSPORTATION SAFETY CONTRACTORS, INC., a Florida corporation By: /s/ Clark W. Barlow -------------------------- CLARK W. BARLOW, President /s/ C. Douglas Hubbard, Secretary --------------------------------- C. DOUGLAS HUBBARD, Secretary STATE OF FLORIDA ) ) SS: COUNTY OF HILLSBOROUGH ) The foregoing instrument has been sworn and subscribed before me this 22nd ---- day of June 1994 by GIDEON TAYLOR, President and Secretary of NEW TSC, INC., a Florida corporation, on behalf of the corporation, who is personally known to me or who has produced his drivers license as identification. /s/ Pamela M. Zagorski --------------------------------- Notary Public, State of Florida at Large My commission expiries: ------------------------------------ OFFICIAL NOTARY SEAL PAMELA M ZAGORSKI NOTARY PUBLIC STATE OF FLORIDA COMMISSION NO. CC241297 MY COMMISSION EXP. NOV. 8, 1996 ------------------------------------ 2 STATE OF FLORIDA ) ) SS: COUNTY OF HILLSBOROUGH ) The foregoing instrument has been sworn and subscribed before me this 22nd ---- day of June 1994 by CLARK W. BARLOW and C. DOUGLAS HUBBARD, President and Secretary, respectively, of TRANSPORTATION SAFETY CONTACTORS, INC., a Florida corporation, on behalf of the corporation, who is personally known to me or who has produced their drivers licenses as identification. /s/ Pamela M. Zagorski --------------------------------- Notary Public, State of Florida at Large My commission expiries: ------------------------------------ OFFICIAL NOTARY SEAL PAMELA M ZAGORSKI NOTARY PUBLIC STATE OF FLORIDA COMMISSION NO. CC241297 MY COMMISSION EXP. NOV. 8, 1996 ------------------------------------ 3 BY-LAWS OF TRANSPORTATION SAFETY CONTRACTORS, INC. ARTICLE ONE CAPITAL STOCK 1.1 Share certificates shall be numbered in the order in which they are issued. They shall be signed by the President and Secretary and the seal of the Corporation shall be affixed thereto. Share certificates shall be contained in a stock book and shall be issued in consecutive order therefrom. On the stub of each certificate shall be entered the name of the person owning the shares, the number of shares, and the date of issue. Share certificates exchanged or returned shall be cancelled by the Secretary and placed in their original place in the stock book. 1.2 Transfers of shares shall be made on the stock book of the Corporation by the holder in person or by power of attorney, or surrender of the old certificate for such shares, duly assigned. 1.3 The holders of common shares shall be entitled to one vote for each share of stock standing in their name. ARTICLE TWO SHAREHOLDERS' MEETING 2.1 The annual meeting of shareholders of the Corporation shall be on the 2nd Tuesday in October of each year within or without the State of Georgia at such place as may from time to time be fixed by the Board of Directors. 2.2 Al all meetings of shareholders, the holders of common shares shall be entitled to cast their one vote for each common share, either in person or by written proxy. 2.3 Notice of any meeting of shareholders shall state the date, place and hour of the meeting and, in case of a special meeting, shall state the purpose for which the special meeting is called. 2.4 Special meetings of the shareholders may be called at any time by the President or any holder or holders of as much as twenty-five percent (25%) of the outstanding shares of the Corporation upon not less than ten nor more than sixty days' notice, either mailed to the last known address or personally given to each shareholder. Notice of a special meeting may be waived by instrument in writing. Attendance at such meeting in person or by proxy shall constitute a waiver of notice thereof. 2.5 At all meetings of shareholders a majority of the outstanding shares shall constitute a quorum for the transaction of business, and no resolution or business shall be transacted without the favorable vote of a majority of the shares represented at the meeting and entitled to vote. A lesser number may adjourn from day to day. 2.6 Any action to be taken at a meeting of the shareholders of the Corporation, or any action that may be taken at a meeting, may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. ARTICLE THREE DIRECTORS 3.1 Subject to these By-Laws, or any lawful agreement between the shareholders, the full and entire management of the affairs and business of the Corporation shall be vested in the Board of Directors, which shall have and may exercise all of the power that may be exercised or performed by the Corporation .. 3.2 The number of Directors shall not be more than seven (7) nor less than three (3) persons. The exact number of Directors within such maximum and miminum shall be fixed by resolution of the shareholders from time to time. The Directors need not be shareholders of the Corporation. The number of Directors may be changed by an amendment to the By-Laws, adopted by the shareholders. A majority of the Directors shall constitute a quorum for the transaction of business. All restrictions adopted and all business transacted by the Board of Directors shall require the affirmative vote of a majority of the Directors present at the meeting. Each person who is elected to the Board of Directors, shall hold such office until the next annual meeting of shareholders and his successor is elected and qualified, or until his earlier resignation, removal from office or death. 3.3 The Directors may fill the place of any Director which may become vacant prior to the expiration of his term, such appointment by the Directors to continue until the expiration of the term of the Director whose place has become vacant. 3.4 The Directors shall meet as soon as practicable after the adjournment of the annual meeting of the shareholders, for the appointment and election of officers and for the transaction of any other business. Special meetings of the Directors may be called at any time by the Chairman of the Board of Directors, by the President or by any two Directors, on three days' notice. Notice of any such meeting may be waived by instrument in writing. Attendance in person at such meeting shall constitute a waiver of notice thereof. The signature of any Director approving the minutes of any meeting of the Board of Directors, entered thereon, shall be effective to the same extent as if such Director had been present at such meeting. Any meeting of the Board of Directors may be held within or without the State of Georgia at such place as may be determined by the person or persons calling the meeting. 3.5 Any action to be taken at a meeting of the Directors, or any action that may be taken at a meeting of the Directors, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Directors. 3.6 Members of the Board of Directors, or any committee designated by such Board, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this subsection shall constitute presence at such meeting. 3.7 A Director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. ARTICLE POUR OFFICERS 4.1 The officers of the Corporation shall consist of a President, a Vice President, a Secretary and a Treasurer. Any officer may hold more than one position, but the same person shall not be President and Secretary. The officers shall be elected by the Directors and shall serve at the pleasure of the Board of Directors. 4.2 The President shall be the chief executive officer of the Corporation and shall have general and active management of the operation of the Corporation. He shall be responsible for the administration of the Corporation, including general supervision of the policies of the Corporation, general and active management of the financial affairs of the Corporation, and shall execute bonds, mortgages or other contracts under the seal of the Corporation. He shall only borrow money on behalf of the Corporation pursuant to authority from the Board of Directors. The President shall have the authority to institute or defend legal proceedings when the Directors are deadlocked. 4.3 The Vice President shall perform all duties incumbent upon the President during the absence or disability of the President and shall perform such other duties as these By-Laws may provide or the Board of Directors may prescribe. 4.4 The Secretary shall keep minutes of all meetings of the shareholders and Directors and have charge of the Minute Book, stock books and seal of the Corporation and shall perform such other duties and have such other powers as may from time to time be delegated to him by the President or the Board of Directors. 4.5 The Treasurer shall be charged with the management of the financial affairs of the Corporation and shall have the power to recommend action concerning the Corporation's affairs to the President. 4.6 Assistants to the Secretary and Treasurer may be appointed by and shall have such duties as shall be delegated to them by the President or the Board of Directors. 4.7 All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or other person or persons as the Board of Directors may from time to time designate. ARTICLE FIVE SEAL The seal of the Corporation shall be in such form as the Board of Directors may from time to time determine. In the event it is inconvenient to use such a seal at any time, the signature of the Corporation followed by the word "Seal" enclosed in parentheses or scroll shall be deemed to be the seal of the Corporation. The seal shall be in the custody of the Secretary and affixed by him on the certificates of stock and such other papers as may be directed by law, by these By-Laws or by the Board of Directors. ARTICLE SIX AMENDMENT These By-Laws may be altered, amended, repealed, or added to by the affirmative vote of the holders of a majority of the shares entitled to vote in the election of any Director at an annual meeting or at a special meeting called for that purpose, provided that a written notice shall have been sent to each shareholder of record entitled to vote at such meeting at his last known post office address at least ten (10) days before the date of such annual or special meeting, which notice shall state the alterations, amendments, additions, or changes which are proposed to be made in such By-Laws. Only such changes shall be made as have been specified in the notice. The By-Laws may also be altered, amended, repealed, or new By-Laws adopted by a majority of the entire Board of Directors at a regular or special meeting of the Board. However, any By-Laws adopted by the Board may be altered, amended or repealed by the shareholders, and any By-Law provisions repealed, amended, adopted or altered by the shareholders may not be repealed, amended, adopted or altered by the Board of Directors if so provided by resolution of the shareholders. ARTICLE SEVEN REIMBURSEMENT OF DISALLOWED COMPENSATION AND EXPENSE In the event any compensation paid to an officer of the Corporation or expenses paid for an officer, or any reimbursement of expense paid to an officer shall, upon audit or other examination of the income tax returns of the Corporation, be determined not to be allowable deductions from the gross income of the Corporation and such determination shall be acceded to by the Board of Directors of the Corporation, or such determination shall be made final by the appropriate State or Federal taxing authority or a final judgment of a court of competent jurisdiction, and no appeal shall be taken therefrom, or the applicable period for filing notice of appeal shall have expired, then in such event, such officer shall repay to the Corporation the amount of such disallowed compensation or expenses, or both. It shall be the duty of the Directors, as a Board, to enforce payment of such amount disallowed. In lieu of payment by such officer, subject to the determination of the Directors, proportionate amounts may be withheld from his future compensation payments until the amount owed to the Corporation has been recovered. ARTICLE EIGHT RESTRICTION ON TRANSFER OF STOCK 8.1 No transfer by a shareholder of this Corporation of any of his or her shares (other than by gift, by will or by the laws of descent and distribution) shall be made on the books of the Corporation and no unregistered transfer of any legal or equitable interest in any such shares shall be made or be effective unless all the provisions of this Article shall have been complied with. 8.2 First the shares shall be offered for sale in writing to the Corporation at a price and terms fixed in such offer. The offer shall be delivered or mailed to the Corporation. The Corporation may, within ten days after the receipt of such written offer, purchase all or any part of such shares by mailing or delivering a written acceptance to that effect to the person making such offer. The Corporation may by the affirmative vote of a majority of the Board of Directors, purchase such shares only out of unreserved and unrestricted earned surplus; and the Corporation may, with the affirmative vote of a majority of the outstanding shares entitled to vote thereon, purchase such shares out of unreserved and unrestricted capital surplus. If the Corporation shall accept such offer in whole or in part, it shall specify a settlement date not more than ten days after the date of such acceptance for the delivery to it, against payment, of the certificates representing the shares so purchased. Such certificates shall be delivered duly endorsed for transfer with signature guarantee. 8.3 If the Corporation shall not purchase all of such shares, the Corporation shall on behalf of the registered owner promptly notify its shareholders in writing by mail or personal delivery that the balance of such shares is available for purchase by shareholders at the price and terms specified in the offer. Each shareholder may elect to purchase all or any part of such shares by a written acceptance to that effect received by the Corporation within fifteen days after the date of mailing or delivery of such notification. 8.4 If shareholders shall elect to purchase in the aggregate more shares than are available, the available shares shall be divided among the accepting shareholders in proportion to their registered ownership of shares of the Corporation, rounding out fractions of shares, if any, in favor of smaller shareholders, and without allocating to any shareholder shares which he does not desire to purchase. Such apportionment shall be made by the President of the Corporation and he shall fix the earliest practicable settlement date for the completion of the purchase of such shares and shall notify all interested persons of the apportionment and the settlement date by such means as he shall deem sufficient. 8.5 Promptly after such settlement, or if no share holders elect to purchase such shares then promptly after the expiration of the time for such election, the President shall determine whether all of the provisions of this Article have been complied with and if they have, he shall declare the unpurchased shares free shares and shall notify the registered owner of such determination. 8.6 For a period of three months beginning on the first full business day following the date of such notification the shares so declared to be free may be sold by the owner thereof to any person, whether or not a shareholder, at a price not less than the price at which the shares were offered to the Corporation and its shareholders, and at terms not more favorable than the terms at which the shares were offered to the Corporation and its shareholders. After such three month period such shares shall again become subject to the restrictions imposed by this article. 8.7 The President's decision regarding the apportionment among the shareholders, the settlement and all matters relating to the interpretation of this Article shall be final. In the absence of the President, such decisions shall be made by a Vice President. This Article shall not be amended by the Board of Directors. 8.8 No transfer of any shares shall be binding upon the Corporation unless made and recorded upon its books. 8.9 The Corporation shall have the right to refuse to transfer any share as long as the shareholder demanding the transfer is in any way indebted to the Corporation, and the Corporation shall have a lien, pledge and privilege on each share to secure any indebtedness due by the shareholder to the Corporation. 8.10 A reference to this Article shall be printed upon each share certificate issued by the Corporation and the provisions of this Article shall be binding upon every person now or hereafter becoming a shareholder of this Corporation, all of whom shall take such shares subject to the provisions hereof; and all pledges, hypothecations or other encumbrances of said shares or dealings with regard thereto, shall likewise be subject to the provisions hereof. BYLAW AMENDMENT --------------- The undersigned Secretary of TRANSPORTATION SAFETY CONTRACTORS, INC., A Florida corporation (the "Corporation"), does hereby certify that the following amendment to the Bylaws was adopted as of July 31, 1997 by written consent of -- the sole shareholder as authorized by the Bylaws and the laws of the State of Florida: Article Three, paragraph 3.2 shall be changed to read as follows: ARTICLE THREE BOARD OF DIRECTORS ------------------ 3.2 The number of directors shall not be more than seven (7) or less than one (1) person. The number of directors may be increased or decreased from time to time by amendment to these bylaws or by resolution of the Board of Directors or the shareholders, but shall never be less than one (1), nor shall any decrease have the effect of shortening the term of any incumbent director. DATED as of the 31st day of July, 1997. ---- /s/ Billy V Ray Jr. --------------------------- Billy V. Ray, Jr., Secretary