8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) November 23, 2004

GLOBAL POWER EQUIPMENT GROUP INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-16501	73-1541378
(Commission File Number)	(IRS Employer Identification No.)
6120 S. Yale, Suite 1480, Tulsa, Oklahoma	74136
(Address of Principal Executive Offices)	(Zip Code)

(918) 488-0828

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Agreement to Acquire Williams Industrial Services Group

On November 23, 2004, Global Power Equipment Group Inc. (“GEG”) entered into a Purchase Agreement (the “WISG Purchase Agreement”) with Williams Group International LLC, a Georgia limited liability company (“Seller”), to purchase all of the outstanding limited liability company interests of Williams Specialty Services, LLC (“Specialty Services”), Williams Plant Services, LLC (“Plant Services”) and Williams Industrial Services, LLC (“Industrial Services”), all Georgia limited liability companies. Specialty Services, Plant Services and Industrial Services are collectively referred to as Williams Industrial Services Group, or “WISG.”

The purchase price will consist of an “Equity Purchase Price” payable at closing and a “Deferred Purchase Price.” The Equity Purchase Price is $65.0 million, subject to certain customary adjustments. Of the total Equity Purchase Price, $59.5 million will be paid in cash to Seller at closing, $5.0 million will be deposited by GEG with an escrow agent as an “Indemnity Escrow Amount” and held and released pursuant to the terms and provisions of the WISG Purchase Agreement and an escrow agreement to be entered into at closing, and an additional $0.5 million will be placed into escrow and released upon a final determination of the Equity Purchase Price. Payment of the Deferred Purchase Price is contingent on the attainment by WISG of certain gross profit targets for 2005. The Deferred Purchase Price payable to Seller will range from zero to $0.9 million and will be payable by GEG in cash in 2006.

The WISG Purchase Agreement contains customary representations and warranties and indemnification provisions which terminate at varying times unless the indemnified party has, before the expiration of the right to indemnification, asserted a claim for indemnification to the indemnifying party.

The WISG Purchase Agreement is subject to customary closing conditions. GEG expects to close the acquisition in April of 2005.

Other than in respect of this transaction, there are no material relationships between GEG, the Seller and WISG, or their respective affiliates.

A copy of the WISG Purchase Agreement is attached to this Current Report on Form 8-K as Exhibit 2 and is incorporated by reference as though fully set forth herein. The foregoing summary description of the WISG Purchase Agreement and the transactions contemplated therein is not intended to be complete and is qualified in its entirety by the complete text of the WISG Purchase Agreement.

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Securities Purchase Agreement

On November 23, 2004, GEG completed a private placement of $69.0 million aggregate principal amount of its 4.25% Convertible Senior Subordinated Notes due 2011 (the “Notes”). GEG intends to use the net proceeds of the offering, together with borrowings under its credit facility and cash on hand, to fund the purchase of WISG described above under “Agreement to Acquire Williams Industrial Services Group.”

The Notes were issued under a Securities Purchase Agreement (the “Securities Purchase Agreement”), among GEG and Kings Road Investments Ltd., Steelhead Investments Ltd., D.B. Zwirn and Co., LP, D.B. Zwirn Special Opportunities Fund Ltd. and HCM/Z Special Opportunities LLC (including any transferees or assignees thereof, the “Investors”). The Securities Purchase Agreement and form of note, which is attached as an exhibit to the Securities Purchase Agreement, provide, among other things, that the Notes will bear interest at a rate of 4.25% per year, which interest is payable semi-annually on May 23 and November 23 of each year, beginning on May 23, 2005. During the occurrence of an “Event of Default” under the Notes, the Notes will bear interest at a rate of 9.25% per year. The Notes are convertible into shares of GEG common stock at an initial conversion price of $10.61 per share of common stock, which is equal to approximately 122% of the volume weighted average price of GEG’s common stock on November 22, 2004. The conversion price is subject to adjustment in certain circumstances.

The Notes will be subordinate in right of payment to GEG’s existing and future “Senior Indebtedness,” including all secured indebtedness of GEG under its credit facility and certain “Indebtedness” permitted under its credit facility, pari passu with certain other Indebtedness permitted under its credit facility and senior in right of payment to any of GEG’s other indebtedness. GEG’s obligations under the Securities Purchase Agreement, Notes and other transaction documents will be guaranteed by all of GEG’s domestic subsidiaries which are borrowers under or guarantors of its credit facility. As long as the Notes are outstanding, GEG and its subsidiaries will not be permitted to incur any indebtedness other than “Permitted Indebtedness,” which includes “Senior Bank Indebtedness” not exceeding the greater of (i) the sum of $100 million plus “Available Cash” or (ii) three times consolidated EBITDA of GEG for the four prior calendar quarters, and “Indebtedness” permitted under the credit facility. A “Triggering Event” will be deemed to occur if GEG incurs any indebtedness in addition to “Permitted Indebtedness,” and at the time of such incurrence, GEG’s trailing 12 months “Consolidated EBITDA” does not equal or exceed $30.0 million or, as a result of the incurrence, GEG’s “Consolidated Leverage Ratio” exceeds 4.75 to 1.0. Within 30 days of the occurrence of a Triggering Event, GEG will be required to offer to redeem all or any portion of the Notes then outstanding at a redemption price equal to the principal balance of the Notes plus all accrued and unpaid interest. If at any time prior to the incurrence of a Triggering Event, the weighted average price of GEG’s common stock equals or exceeds 150% of the conversion price then in effect for a period of 15 out of 30 consecutive trading days, the restrictions on “Permitted Indebtedness” will be removed.

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GEG may redeem all or any portion of the Notes, at its option, at any time on or after November 23, 2007 if the weighted average price of GEG’s common stock exceeds 165% of the conversion price then in effect for a period of 20 out of 30 consecutive trading days. At any time beginning on May 23, 2005 and continuing until the date that is the six month anniversary of the date on which a resale registration statement filed by GEG for the common stock issuable upon conversion of the Notes is declared effective, the Investors may, at their option, require GEG to redeem up to $9.0 million of the Notes. Beginning on November 23, 2009, the Investors may, at their option, require GEG to redeem all or any portion of the Notes. In such event, GEG may elect, at its option and subject to certain conditions, to pay up to 50% of the redemption price in shares of GEG common stock valued at 94% of the weighted average price of the Common Stock for the 20-day trading period immediately preceding the redemption date.

GEG will be required to escrow $9.0 million of the proceeds from the sale of the Notes to meet its obligation to redeem up to $9.0 million of the Notes at the option of the Investors. This obligation and the related escrow will survive until the six month anniversary of the date on which the resale registration statement is declared effective. If on or prior to April 30, 2005, the contemplated acquisition of WISG has not been consummated, GEG will be required to escrow an additional $7.65 million of the proceeds from the sale of the Notes for the benefit of the Investors until the WISG acquisition is consummated. The Investors have a right of redemption at a premium to principal and unpaid interest upon the occurrence of an event of default under the Notes or a change of control of GEG. In addition, the terms of the Notes provide certain anti-dilution protection for the Investors.

Pursuant to the Securities Purchase Agreement, GEG has agreed to indemnify the Investors, their affiliates and agents, against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Other than in respect of this transaction, there are no material relationships between GEG, the Investors or their respective affiliates.

Copies of the Securities Purchase Agreement, including the form of Note attached thereto as an exhibit, and the Subsidiary Guaranty Agreement are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.4, respectively, and are incorporated by reference as though fully set forth herein. The foregoing summary description of the Securities Purchase Agreement and the transactions contemplated therein is not intended to be complete and is qualified in its entirety by the complete text of the Securities Purchase Agreement and related exhibits.

A copy of the press release announcing the completion of the private placement is attached to this report as Exhibit 99.2 and is incorporated by reference herein.

Registration Rights Agreement

In connection with the private placement of the Notes, on November 23, 2004, GEG entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors. The Registration Rights Agreement requires GEG to file a registration statement with

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respect to the shares of GEG common stock issuable upon conversion of the Notes within 30 days of the issuance of the Notes and to use its commercially reasonable efforts to cause the registration statement to be declared effective by the Securities and Exchange Commission within 120 days of closing. The Registration Rights Agreement also requires GEG to keep the registration statement effective until the earlier of (i) the date on which the Investors have sold all of the shares covered by the registration statement or (ii) the date on which the shares become freely tradeable under Rule 144(k) of the Securities Act. If GEG fails to satisfy its obligations as set forth in the Registration Rights Agreement, GEG will owe the note holders an additional amount in cash at a rate of 0.25% of the principal amount of the Notes for the first 90-day period, 0.50% of the principal amount of the Notes for the following 60-day period and 0.75% of the principal amount of the Notes for each 30-day period thereafter.

Other than in respect of this transaction, there are no material relationships between GEG, the Investors or their respective affiliates.

A copy of the Registration Rights Agreement is attached to this Current Report on Form 8-K as Exhibit 10.2 and is incorporated by reference as though fully set forth herein. The foregoing summary description of the Registration Rights Agreement and the transactions contemplated therein is not intended to be complete and is qualified in its entirety by the complete text of the Registration Rights Agreement.

Credit Agreement Amendment

On November 23, 2004, GEG entered into an amendment (the “First Amendment”) to the Credit Agreement, dated as of October 1, 2004, by and among GEG, certain of its subsidiaries, the lenders from time to time party thereto (the “Lenders”), Bank of America, N.A. (“Bank of America”), as Administrative Agent, Swing Line Lender and L/C Issuer, US Bank National Association, as Syndication Agent, and Bank of Oklahoma, N.A, as Managing Agent (the “Credit Agreement”).

Among other things, the First Amendment:

• modifies the definition of the term “Permitted Acquisition” to include the acquisition of WISG;

• excludes borrowings under the Notes from the prohibition on the creation of additional indebtedness;

• modifies the definition of the term “Available Cash” for the period ending on the earlier to occur of June 30, 2005 or the closing of the acquisition of WISG, to include the net proceeds from the sale of the Notes;

• modifies the definition of the term “Available Cash” for the remainder of the loan term to include the amount, if any, in the escrow account maintained by GEG to redeem up to

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$9.0 million in Notes at the option of Investors prior to the expiration of six months from the effective date of the resale registration statement for the Common Stock issuable upon conversion of the Notes;

• modifies the definition of the term “Restricted Payment” to exclude the issuance of GEG common stock and the payment of cash in lieu of fractional shares upon conversion of the Notes;

• modifies the definition of the term “Permitted Lien” to include amounts deposited into escrow under the Securities Purchase Agreement;

• requires GEG to repay certain outstanding loans under the Credit Agreement with the net proceeds from the sale of the Notes if the acquisition of WISG is not completed prior to June 30, 2005;

• modifies the “Maximum Consolidated Leverage Ratio,” the “Minimum Consolidated Fixed Charge Coverage Ratio” and the “Minimum Consolidated Asset Coverage Ratio,” which GEG is required to maintain;

• adds a new financial covenant requiring GEG to maintain a designated “Maximum Consolidated Senior Leverage Ratio”;

• excludes the Note documents from the “Limitations on Restricted Actions” covenant;

• limits the redemption, repayment, purchase, acquisition or defeasance of the Notes for cash, other than mandatory redemptions, prepayments, or puts in accordance with the Note documents;

• prohibits amendments, supplements or replacements of the Note documents that are materially adverse to the Lenders; and

• provides that a default by any party with respect to the subordination provisions of, or rights of repayment under, the Securities Purchase Agreement, Note and related documents, which could reasonably be expected to have a material and adverse effect on the rights, remedies or interests of the Lenders, will constitute an “Event of Default” under the cross default provisions of the Credit Agreement.

Other than in respect of the Credit Agreement and First Amendment, there are no material relationships between GEG, GEG’s subsidiaries, the Lenders and their respective affiliates, except that:

• an affiliate of Bank of America acted as exclusive placement agent in connection with the private placement of the Notes referred to above under “Securities Purchase Agreement”

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and sole financial advisor to GEG with respect to the acquisition of WISG described above under “Agreement to Acquire Williams Industrial Services Group”; and

• some of the Lenders and their affiliates have engaged and may engage in commercial and investment banking transactions with GEG in the ordinary course of business, and also provide or have provided advisory and financial services to GEG.

The Lenders and their affiliates will receive customary fees and commissions for these transactions.

A copy of the First Amendment is attached to this Current Report on Form 8-K as Exhibit 10.3 and is incorporated by reference as though fully set forth herein. The foregoing summary description of the First Amendment and the transactions contemplated therein is not intended to be complete and is qualified in its entirety by the complete text of the First Amendment.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The description of the Securities Purchase Agreement, Notes and subsidiary guarantees set forth under “Securities Purchase Agreement” and the description of the First Amendment set forth under “Credit Agreement Amendment” in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

Item 3.02 Unregistered Sales of Equity Securities.

On November 23, 2004, GEG concluded a private placement offering of $69.0 million of Convertible Senior Subordinated Notes (the “Notes”), at a price equal to $1.00 for each $1.00 of Notes purchased. The Notes are convertible into shares of GEG common stock at an initial conversion price of $10.61 per share of common stock, which is equal to approximately 122% of the volume weighted average price of GEG’s common stock on November 22, 2004. The conversion price is subject to adjustment in certain circumstances.

A total of $69.0 million in principal amount of Notes were sold resulting in gross proceeds of $69.0 million. After payment of cash selling commission fees in the amount of $2.4 million, GEG received net proceeds of $66.6 million.

The securities were offered pursuant to exemptions from registration under Section 4(2) of the Securities Act and Rule 506 of Regulation D. There were a total of five purchasers, all of whom were accredited. A legend was placed on each certificate indicating that the Notes have not been registered and are restricted from resale.

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Item 7.01 Regulation FD Disclosure.

On November 23, 2004, GEG issued a press release announcing that it has agreed to acquire WISG. A copy of the press release is attached as Exhibit 99.1 to this Report on Form 8-K. This information is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

The following exhibits are furnished or filed herewith:

2	Purchase Agreement dated November 23, 2004, between GEG and Williams Group International LLC.
10.1	Securities Purchase Agreement dated November 23, 2004, among GEG and the Investors, including form of Note.
10.2	Registration Rights Agreement dated November 23, 2004, among GEG and the Investors.
10.3	First Amendment dated as of November 23, 2004, to Credit Agreement, among GEG, certain borrowing subsidiaries of GEG, each of the subsidiary guarantors party thereto, the Lenders, and Bank of America, as Administrative Agent.
10.4	Subsidiary Guaranty Agreement dated November 23, 2004 among each of the subsidiaries of GEG party thereto and the Investors.
99.1	Press Release dated November 23, 2004, issued by GEG.
99.2	Press Release dated November 23, 2004, issued by GEG.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GLOBAL POWER EQUIPMENT GROUP INC.
Date: November 30, 2004	By:	/s/ Candice L. Cheeseman
		Candice L. Cheeseman General Counsel and Secretary

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Exhibit Index

Exhibit Number	Description
2	Purchase Agreement dated November 23, 2004, between GEG and Williams Group International LLC.
10.1	Securities Purchase Agreement dated November 23, 2004, among GEG and the Investors, including form of Note.
10.2	Registration Rights Agreement dated November 23, 2004, among GEG and the Investors.
10.3	First Amendment dated as of November 23, 2004, to Credit Agreement, among GEG, certain borrowing subsidiaries of GEG, each of the subsidiary guarantors party thereto, the Lenders, and Bank of America, as Administrative Agent.
10.4	Subsidiary Guaranty Agreement dated November 23, 2004, among each of the subsidiaries of GEG party thereto and the Investors.
99.1	Press Release dated November 23, 2004, issued by GEG.
99.2	Press Release dated November 23, 2004, issued by GEG.

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EX-2

Exhibit 2

PURCHASE AGREEMENT

Dated as of November 23, 2004

By and Between

GLOBAL POWER EQUIPMENT GROUP INC.

and

WILLIAMS GROUP INTERNATIONAL, LLC

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		1
§ 1.	Definitions	1
§ 1.1	Defined Terms	1
§ 1.2	Additional Defined Terms	6
§ 1.3	Construction	8
§ 1.4	Schedules and Exhibits	8
§ 1.5	Knowledge	8
ARTICLE II SALE OF LLC INTERESTS		8
§ 2.1	Sale of LLC Interests;	8
§ 2.2	Determination and Payment of Closing Payment	9
§ 2.3	Purchase Price Adjustment	9
§ 2.4	Closing	12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER		13
§ 3.	Representations and Warranties of Seller	13
§ 3.1	Ownership of LLC Interests; Existence, Good Standing and Capitalization of Seller	13
§ 3.2	Authority and Enforceability	13
§ 3.3	Consents and Approvals; No Violations	13
§ 3.4	Existence and Good Standing of the Companies	14
§ 3.5	Capitalization of the Companies; Restructurings	14
§ 3.6	Subsidiaries and Investments	15
§ 3.7	Financial Statements	15
§ 3.8	Liabilities	16
§ 3.9	Books and Records	16
§ 3.10	Title to Personal Properties	16
§ 3.11	Owned Real Property	17
§ 3.12	Leased Real Property	17
§ 3.13	Material Contracts	17
§ 3.14	Litigation	19
§ 3.15	Taxes	19
§ 3.16	Insurance	21
§ 3.17	Intellectual Property	21
§ 3.18	Compliance with Laws	23
§ 3.19	Accounts Receivable	23
§ 3.20	Inventories	23
§ 3.21	Suppliers and Customers	23
§ 3.22	Employment Relations	23
§ 3.23	Employee Benefit Plans	25
§ 3.24	Environmental Laws and Regulations	27

(i)

		Page
§ 3.25	Interests in Clients, Suppliers, Etc.; Affiliate Transactions	28
§ 3.26	Bank Accounts and Powers of Attorney	28
§ 3.27	Permits	28
§ 3.28	No Changes Since Reference Balance Sheet Date	29
§ 3.29	Brokers’ or Finders’ Fees	30
§ 3.30	Government Contracts	31
§ 3.31	Warranty Claims	32
§ 3.32	Solvency	32
§ 3.33	Disclosure	32
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER		32
§ 4.	Representations and Warranties of Purchaser	32
§ 4.1	Existence and Good Standing of Purchaser; Power and Authority	32
§ 4.2	Consents and Approvals; No Violations	33
§ 4.3	Purchase for Investment	33
§ 4.4	Brokers’ or Finders’ Fees	33
§ 4.5	Reliance	34
§ 4.6	Contact with Seller’s Customers	34
ARTICLE V COVENANTS		34
§ 5.1	Conduct of Business of the Company	34
§ 5.2	Exclusive Dealing	37
§ 5.3	Review of the Company	37
§ 5.4	Financial Information	38
§ 5.5	Books and Records; Access to Employees	39
§ 5.6	Commercially Reasonable Efforts	40
§ 5.7	Financing-Related Cooperation	40
§ 5.8	Public Announcements	40
§ 5.9	Notification of Certain Matters	40
§ 5.10	Intercompany Accounts	41
§ 5.11	Non-Competition; Non-Interference; Non-Disparagement	41
§ 5.12	Non-Solicitation of Employees	42
§ 5.13	Performance Bonds and Letters of Credit	43
§ 5.14	Certain Employee Benefit Plan Matters	44
§ 5.15	Use of Name	46
§ 5.16	Pre-Closing Transfers	46
§ 5.17	Release of Company Guarantees	46
§ 5.18	Release of Seller Guarantees	46
§ 5.19	Release of Liens	47
§ 5.20	Resignation of Managers and Officers	47
§ 5.21	Management Presentations	47
§ 5.22	Network	47
§ 5.23	Cooperation	47
§ 5.24	Shared Services	47

(ii)

		Page
ARTICLE VI CONDITIONS TO PURCHASER’S OBLIGATIONS		48
§ 6.	Conditions to Purchaser’s Obligations	48
§ 6.1	Truth of Representations and Warranties	48
§ 6.2	Performance of Agreements	48
§ 6.3	Good Standing and Other Certificates	48
§ 6.4	No Injunctions	49
§ 6.5	Other Consents and Approvals	49
§ 6.6	Resignation of Managers and Officers	49
§ 6.7	Intra-Company Debt	49
§ 6.8	Statutes; Orders	49
§ 6.9	Proceedings	49
§ 6.10	Other Transaction Documents	49
§ 6.11	Pay-off Letters	50
§ 6.12	FIRPTA Compliance	50
§ 6.13	Audited Financials; Auditor Assurances	50
ARTICLE VII CONDITIONS TO SELLER’S OBLIGATIONS		50
§ 7.	Conditions to Seller’s Obligations	50
§ 7.1	Truth of Representations and Warranties	50
§ 7.2	Performance of Agreements	50
§ 7.3	No Injunctions	51
§ 7.4	Governmental Approvals	51
§ 7.5	Statutes; Orders	51
§ 7.6	Proceedings	51
§ 7.7	Other Transaction Documents	51
§ 7.8	Collateral	51
ARTICLE VIII TAX MATTERS		51
§ 8.1	Tax Returns	51
§ 8.2	Payment of Taxes	52
§ 8.3	Transfer Taxes	52
§ 8.4	Amended Returns	53
§ 8.5	Indemnification	53
§ 8.6	Allocation of Purchase Price	53
§ 8.7	Books and Records	54
ARTICLE IX SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION		54
§ 9.1	Survival Periods	54
§ 9.2	Indemnification	54
§ 9.3	Indemnification Procedure	56
§ 9.4	Third Party Claims	56
§ 9.5	Tax Benefits Realized by Indemnified Party	59
§ 9.6	Exclusive Remedy	59
§ 9.7	Liability Limitation	60
§ 9.8	Escrow	60

(iii)

		Page
ARTICLE X TERMINATION AND ABANDONMENT		60
§ 10.1	Termination	60
§ 10.2	Effect of Termination	61
ARTICLE XI MISCELLANEOUS		62
§ 11.1	Expenses	62
§ 11.2	Governing Law	62
§ 11.3	Jurisdiction; Agents for Service of Process	62
§ 11.4	Table of Contents; Captions	63
§ 11.5	Notices	63
§ 11.6	Assignment; Parties in Interest	64
§ 11.7	Counterparts	64
§ 11.8	Entire Agreement	64
§ 11.9	Amendments	64
§ 11.10	Severability	64
§ 11.11	Third Party Beneficiaries	65
§ 11.12	No Strict Construction	65
§ 11.13	Waiver of Jury Trial	65

(iv)

EXHIBIT A	Working Capital Calculation
EXHIBIT B	Deferred Purchase Price Payments
EXHIBIT C*	Company Operating Procedures
EXHIBIT D*	Seller Record Retention Policy
EXHIBIT E*	Form of Bill of Sale
EXHIBIT F*	Form of Escrow Agreement
EXHIBIT G*	Form of Transition Services Agreement
EXHIBIT H*	Form of Headquarters Lease
EXHIBIT I	Form of Indemnification Certificate

* Omitted. The Registrant agrees to furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon its request.

(i)

PURCHASE AGREEMENT

This PURCHASE AGREEMENT (this “Agreement”), dated as of November 23, 2004, is entered into by and between Global Power Equipment Group Inc., a Delaware corporation (“Purchaser”) and Williams Group International, LLC a Georgia limited liability company (“Seller” and, together with Purchaser, the “Parties”).

W I T N E S S E T H:

WHEREAS, Seller owns all of the outstanding limited liability company interests (the “LLC Interests”) in each of (i) Williams Specialty Services, LLC, a Georgia limited liability company (“Specialty Services”), (ii) Williams Plant Services, LLC, a Georgia limited liability company (“Plant Services”) and (iii) Williams Industrial Services, LLC, a Georgia limited liability company (“Industrial Services” and, collectively with Specialty Services and Plant Services, the “Companies” and each a “Company”); and

WHEREAS, upon the terms and subject to the conditions contained in this Agreement, Seller desires to sell the LLC Interests to Purchaser and Purchaser desires to purchase the LLC Interests from Seller.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE I

DEFINITIONS

§ 1. Definitions.

§ 1.1 Defined Terms. When used in this Agreement, the following terms shall have the respective meanings specified therefor below.

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person; provided, that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise and provided, further, that an Affiliate of any Person shall also include (i) any Person that directly or indirectly owns more than five percent (5%) of any class of capital stock or other equity interest of such Person, (ii) any officer, director, trustee or beneficiary of such Person, (iii) any spouse, parent, sibling or descendant of any Person described in clauses (i) or (ii) above, and (iv) any trust for the benefit of any Person described in clauses (i) through (iii)

above or for any spouse, issue or lineal descendant of any Person described in clauses (i) through (iii) above.

“Bid” shall mean any quotation, bid or proposal by any Company which, if accepted or awarded, would result in a Contract that would constitute a Government Contract.

“Bond” shall mean any performance collateral, including without limitation, collateral in the form of cashiers checks in lieu of bid bonds, certificates of deposit, letters of credit, license/permit bonds, performance bonds, payment bonds, bid bonds, wage or payroll bonds and prepaid union stamps.

“Books and Records” shall mean all of the records, systems, controls, data or information of the Companies created since the date of the consummation of the Restructuring and all documents, records, data or information relating to executory Contracts of the Companies.

“Business Day” shall mean any day, other than a Saturday, Sunday or a day on which banks located in New York, New York shall be authorized or required by law to close.

“Cash” shall mean all cash on deposit in any bank account disclosed on Schedule 3.26, all cleared checks naming any Company as payee and all other immediately available funds in the possession or control of any Company.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated and the rulings issued thereunder. Section references to the Code are to the Code, as in effect on the date of this Agreement.

“Collateral” shall mean any combination of (i) unconditional, irrevocable standby letters of credit in favor of Seller issued by any national banking institution(s) having a net worth of not less than $500,000,000 and/or (ii) payment bonds in favor of Seller issued by any surety (or sureties) having an A.M. Best Co. financial strength rating of A or better securing the performance by Purchaser of its indemnification obligations pursuant to Section 5.13(b).

“Company Property” shall mean any real property and improvements owned or leased by any of the Companies.

“Convertible Debt Offering” shall mean an offering of debt securities of Purchaser that are convertible into Purchaser’s common stock.

“Contract” shall mean any note, bond, mortgage, indenture, guarantee, license, franchise, agreement, understanding, arrangement, contract, commitment, lease, franchise, agreement or other instrument or obligation (in each case whether written or oral), including all amendments thereto.

“Employee” shall mean salaried employees of any Company, but shall not mean hourly employees (union or non-union).

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“Environmental Law” any Law, Order or other requirement of Law, including any principle of common law, relating to the protection of human health or the environment, or to the manufacture, use, transport, treatment, storage, disposal, release or threatened release of petroleum products, asbestos, urea formaldehyde insulation, polychlorinated biphenyls or any substance listed, classified or regulated as hazardous or toxic, or any similar term, under such Environmental Law.

“Equity Purchase Price” shall mean an amount equal to the Purchase Price (a) minus (i) the amount of the Estimated Indebtedness and (ii) the excess, if any of the Working Capital Target over the Estimated Working Capital and (b) plus (i) the amount of the Estimated Cash, (ii) the excess, if any, of Estimated Working Capital over the Working Capital Target and (iii) the lesser of the Estimated Excluded Liabilities Amount and $3,450,000.

“Escrow Account” shall mean the account established by the Escrow Agent, pursuant to the Escrow Agreement, for the deposit of the Purchase Price Escrow Amount and the Indemnity Escrow Amount.

“Excluded Liabilities” shall mean liabilities and obligations for all worker’s compensation, general liability and commercial automobile claims attributable to events occurring prior to the Closing Date, including currently filed claims, pending claims and incurred but not reported claims for which the accident, injury or other event giving rise to the claim occurred prior to the Closing Date.

“GAAP” shall mean generally accepted accounting principles in the United States of America.

“GAAP Practices” shall mean generally accepted accounting principles in the United States of America applied on a basis consistent with the past practices of the Companies.

“Government Contract” shall mean: (i) any Contract between, on the one hand, any Company and, on the other hand (A) any Governmental or Regulatory Authority, (B) any prime contractor to any Governmental or Regulatory Authority in respect of such Contract or (C) any contractor with respect to any Contract described in clause (A) or (B); and (ii) any Contract that to the knowledge of Seller is wholly or partially funded, directly or indirectly, by or through any Governmental Authority.

“Governmental or Regulatory Authority” shall mean any court, administrative agency or other authority of the United States or any state, municipality or other government or political subdivision thereof exercising any regulatory, taxing, importing or other governmental authority.

“Indebtedness” of any Person shall mean and include (i) indebtedness for borrowed money or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money, (ii) amounts owing as deferred purchase price for property or services, including all seller notes and “earn-out” payments, (iii) indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security, (iv) commitments or obligations by which such Person assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit), (v) indebtedness secured by a Lien

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on assets or properties of such Person, (vi) obligations or commitments to repay deposits or other amounts advanced by and owing to third parties, (vii) obligations under any interest rate, currency or other hedging agreement, (viii) that portion of obligations with respect to any capital leases that is properly classified as a liability on a balance sheet in accordance with GAAP (but not any operating leases that become capital leases solely because of the transactions contemplated herein), (ix) any obligation or liability in respect of any “change of control,” “stay-put,” transaction bonus, severance arrangement or any similar obligation that is or will become payable as a result of the transactions contemplated by this Agreement, or (x) guarantees or other contingent liabilities (including so called take-or-pay or keep-well agreements) with respect to any indebtedness, obligation, claim or liability of any other Person of a type described in clauses (i) through (ix) above and (xi) with respect to clauses (i) through (x) above, all accrued interest thereon and any fees, prepayment penalties or “breakage” costs associated with the repayment of any such Indebtedness on the Closing Date. For the avoidance of doubt, Indebtedness of the Companies shall include (x) any Indebtedness of any Company owed to Seller or any of its Affiliates (other than any Company), to the extent not settled at or prior to the Closing pursuant to Section 5.10 and (y) any allowance or liability in respect of uncleared checks. Indebtedness shall not, however, include (i) accounts payable to trade creditors and accrued expenses arising in the ordinary course of business consistent with past practice, (ii) the endorsement of negotiable instruments for collection in the ordinary course of business consistent with past practice or (iii) obligations under Bonds.

“Indemnity Escrow Amount” means Six Million Five-Hundred Thousand Dollars ($6,500,000.00), which amount is to be deposited by Purchaser with the Escrow Agent in accordance with the terms of this Agreement and held and released pursuant to the terms and subject to the conditions set forth in this Agreement and in the Escrow Agreement.

“Law” shall mean any statute, law, ordinance, rule or regulation of any Governmental or Regulatory Authority.

“Liens” shall mean liens, security interests, options, rights of first refusal, claims, easements, mortgages, charges, indentures, deeds of trust, rights of way, restrictions on the use of real property, encroachments, security agreements, or any other encumbrances and other restrictions or limitations on use of real or personal property or irregularities in title thereto.

“Material Adverse Effect” shall mean (i) when used with respect to the Companies, any effect, change or circumstance that has, or would reasonably be expected to have, a material adverse change in or effect on the business, assets, liabilities, results of operation or condition (financial or otherwise) of the Companies taken as a whole or (ii) when used with respect to Seller, any effect, change or circumstance that materially impedes the ability of Seller to perform its obligations hereunder (including any material delay of such performance); provided, that “Material Adverse Effect”, for purposes of clause (i), shall exclude any effect, change or circumstance that (a) results from or is related to changes or developments generally applicable to the United States economy, including changes in interest rates, (b) is attributable to Seller’s compliance with its obligations under clause (i) through (xxii) of Section 5.1(a), or (c) results from or is related to the occurrence of any military or terrorist activity.

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“Monthly Shared Salary Payment” shall mean the amount obtained when 4566.92 is multiplied by the quotient obtained when (i) the amount by which twenty four (24) exceeds the number of Shared Salary Payments previously made by Seller to Purchaser pursuant to Section 5.24 is divided by (ii) twenty four (24).

“Offering Amount” shall mean the aggregate amount, if any, net of underwriting commissions, received by Purchaser from proceeds of the Convertible Debt Offering.

“Order” shall mean any judgment, order, injunction, decree or writ of any Governmental or Regulatory Authority or any arbitrator.

“Permitted Liens” shall mean (i) Liens reflected in the Reference Balance Sheet, (ii) Liens consisting of zoning or planning restrictions or regulations, easements, Permits, restrictive covenants, encroachments and other restrictions or limitations on the use of real or personal property or irregularities in, or exceptions to, title thereto which, individually or in the aggregate, do not materially detract from the value of, or materially impair the use of, such property by the Companies as such property is used by the Companies in the ordinary course of business consistent with past practice and (iii) Liens for current taxes, assessments or governmental charges or levies not yet due and payable.

“Person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a limited liability partnership, a trust, an incorporated organization and a Governmental or Regulatory Authority.

“Purchase Price” shall mean Sixty-Five Million Dollars ($65,000,000.00).

“Purchase Price Escrow Amount” means Five Hundred Thousand Dollars ($500,000.00), which amount is to be deposited by Purchaser with the Escrow Agent in accordance with the terms of this Agreement and held and released pursuant to the terms and subject to the conditions set forth in this Agreement and in the Escrow Agreement.

“Purchaser Designees” shall mean Larry Edwards, John Matheson and Jim Wilson.

“Regulation S-K” shall mean Regulation S-K promulgated under the Securities Act of 1933, as amended.

“Reference Balance Sheet” shall mean the unaudited combined balance sheet of the Companies as at March 31, 2004 forming part of the Unaudited Financial Statements.

“Reference Balance Sheet Date” shall mean March 31, 2004.

“Solvent” shall mean, with respect to any Person, that (a) the property of such Person, at a present fair saleable valuation, exceeds the sum of its debts (including contingent and unliquidated debts); (b) the present fair saleable value of the property of such Person exceeds the amount that will be required to pay such Person’s probable liability on its existing debts as they become absolute and matured; (c) such Person has reasonably adequate capital to carry on its business; and (d) such Person does not intend or believe it will incur debts beyond its ability

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to pay as such debts mature. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become actual or matured liabilities.

“Stored Books and Records” shall mean all of the records, systems, controls, data or information of the Companies not under the exclusive ownership and direct control of the Companies.

“Subsidiary” shall mean, with respect to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is owned by such Person directly or indirectly through one or more Subsidiaries of such Person and (ii) any partnership, association, joint venture or other entity in which such Person directly or indirectly through one or more Subsidiaries of such Person has more than a 50% equity interest.

“Third Party” shall mean any Person other than a Party.

“Transaction Documents” shall mean each of (i) this Agreement, (ii) the Escrow Agreement, (iii) the Transition Services Agreement (ii) the Headquarters Lease and (iv) each other agreement, instrument or document contemplated by any of the foregoing.

“Transaction Expenses” shall mean all fees, costs, charges, expenses and obligations that are incurred by Seller or the Companies in connection with or relating to the preparation for and consummation of the transactions contemplated by this Agreement, including, without limitation, the fees, costs, charges, expenses and obligations relating to or arising out of (a) the preparation, negotiation and execution of this Agreement and the other agreements and instruments contemplated hereby and the consummation of the transactions contemplated hereby and thereby by the Company, (b) the preparation of the Audited Financial Statements and the other financial statements contemplated by Section 5.4(b) and (c) and all fees and expenses of Smith & Howard and BDO Seidman, LLP in connection therewith and (c) professional services provided by (i) FMI Capital and (ii) Arnall Golden Gregory LLP.

“Working Capital” shall mean the aggregate current assets of the Companies less the aggregate current liabilities of the Companies, determined in accordance with the GAAP Practices and in the manner set forth on Exhibit A using the account captions set forth on Exhibit A. Current assets shall not include Cash, security deposits posted in favor of any of the Companies or amounts receivable from any employee of Seller or any of the Companies. Current liabilities shall not include the current portion of any long-term Indebtedness of the Companies, any Transaction Expenses, Transfer Taxes or the Excluded Liabilities.

“Working Capital Target” shall mean $7,500,000.

§ 1.2 Additional Defined Terms. In addition to the terms defined in §1.1, the following terms shall have the respective meanings assigned thereto in the sections indicated below.

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Defined Term	Section
Agreed Claims	§ 9.3(c)
Agreement	Preamble
Arbitrator	§ 2.3(c)
AUB	§ 5.11(a)
Audited Financial Statements	§ 5.4(b)
Basket Amount	§ 9.2(d)
Cap	§ 9.2(d)
Cash Statement	§ 2.3(a)
Certificate	§ 9.3(a)
Closing	§ 2.4
Closing Balance Sheet	§ 2.3(a)
Closing Cash	§2.3(c)
Closing Date	§ 2.4
Closing Excluded Liabilities	§ 2.3(d)
Closing Indebtedness	§2.3(c)
Closing Statements	§2.3(a)
Closing Working Capital	§ 2.3(c)
Companies	First Recital
Company Intellectual Property	§ 3.17(a)
Confidentiality Agreement	§ 5.3(b)
Deferred Purchase Price Payments	§ 2.2(b)
Employee Benefit Plans	§ 3.23(a)
ERISA	§ 3.23(a)
Escrow Agent	§ 6.10(a)
Escrow Agreement	§ 6.10(a)
Estimated Cash	§ 2.2(a)
Estimated Excluded Liabilities Amount	§ 2.2(a)
Estimated Indebtedness	§ 2.2(a)
Estimated Working Capital	§ 2.2(a)
Excluded Liabilities Determination Date	§ 2.3(d)
Excluded Liabilities Statement	§ 2.3(a)
Excluded Services	§ 5.11(a)
Exclusive Period	§ 5.2
Existing LLC Agreements	§ 3.5(a)
Financial Statements	§ 5.4(b)
Headquarters Lease	§ 6.10(b)
HSR Act	§ 3.3(b)
Indebtedness Statement	§ 2.3(a)
Indemnified Party	§ 9.3(a)
Indemnifying Party	§ 9.3(a)
Independent Actuary	§ 2.3(b)
Industrial Services	First Recital
Intellectual Property	§ 3.17(a)
LLC Interests	First Recital
Losses	§ 9.2(a)
Management Presentations	§ 5.21
Material Contract	§ 3.13(a)
Monthly Financial Statements	§ 5.4(a)
Multiemployer Pension Plan	§ 3.23(i)
Multiemployer Plans	§ 3.23(a)
Network Assets	§ 5.22
Overlap Period	§ 8.1(b)
Parties	Preamble
Permit	§ 3.27
Plant Services	First Recital
Post-Closing Periods	§ 8.5
Pre-Closing Periods	§ 3.15(b)
Purchaser	Preamble
Purchaser Indemnitee	§ 9.2(a)
Record Retention Period	§ 5.5(b)
Restructuring	§ 3.5(b)
Returns	§ 3.15(a)
Secured Bonds	§ 5.13(b)
Seller	Preamble
Seller 401(k) Plan	§ 5.14(c)
Seller Indemnitee	§ 9.2(b)
Seller Termination Fee	§ 10.2(c)
Specialty Services	First Recital
Tax Benefit	§ 9.5(a)
Taxes	§ 3.15(d)
Termination Fee	§ 10.2(b)
Total Excluded Liabilities	§ 2.3(b)
Amount
Transfer Taxes	§ 8.3
Transferor	§ 3.5(b)
Transition Services Agreement	§ 6.10(b)
Unaudited Financial Statements	§ 3.7(a)
VEBAs	§ 3.23(a)
WARN	§ 3.22(k)
Warranty Claims	§ 3.31
Working Capital Determination Date	§ 2.3(c)
Working Capital Statement	§ 2.3(a)

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§ 1.3 Construction. In this Agreement, unless the context otherwise requires:

(a) any reference in this Agreement to “writing” or comparable expressions includes a reference to facsimile transmission or comparable means of communication;

(b) words expressed in the singular number shall include the plural and vice versa, words expressed in the masculine shall include the feminine and neuter gender and vice versa;

(c) references to Articles, Sections, Exhibits, Schedules and Recitals are references to articles, sections, exhibits, schedules and recitals of this Agreement;

(d) reference to “day” or “days” are to calendar days;

(e) this “Agreement” or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented; and

(f) “include,” “includes,” and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import.

§ 1.4 Schedules and Exhibits. The Schedules and Exhibits to this Agreement are incorporated into and form an integral part of this Agreement; provided, however, that no representation or warranty contained in this Agreement shall be deemed qualified or modified by any disclosure in any Schedule hereto, and no such disclosure shall be deemed an exception to any representation or warranty contained herein, unless such disclosure is made in a Schedule hereto that specifically corresponds to the numbered Section of this Agreement in which such representation or warranty is contained, and such disclosure shall not be deemed an exception to or qualification of any other representation or warranty contained herein, whether or not the applicability of such disclosure to such other representation or warranty is reasonably apparent or otherwise. If an Exhibit is a form of agreement, such agreement, when executed and delivered by the parties thereto, shall constitute a document independent of this Agreement.

§ 1.5 Knowledge. Where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge of Seller, “knowledge” means the actual knowledge of the following Persons: Virgil Williams, Jim Williams, Luther “Dan” Daniels, Doug Page, Dave Harley, Tina Robinson, Joe Mason or Dave Baxter.

ARTICLE II

SALE OF LLC INTERESTS

§ 2.1 Sale of LLC Interests;. On the terms, and subject to the conditions, set forth in this Agreement, Seller agrees to sell, assign, transfer and deliver the LLC Interests to Purchaser at the Closing, and Purchaser agrees to purchase the LLC Interests from Seller at the Closing. The certificates representing the LLC Interests shall be duly endorsed in blank, or accompanied by either membership interest powers duly executed in blank by Seller or such other instruments of transfer as are reasonably acceptable to Purchaser, in each case with all

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necessary transfer tax and other revenue stamps affixed and canceled. Seller agrees to cure any deficiencies with respect to the endorsement of the certificates representing the LLC Interests or with respect to the membership interest power accompanying any such certificates. Seller agrees to take such action as is reasonably necessary to reflect the sale, assignment, transfer and delivery of the LLC Interests on the books and records of the Companies and to provide to Purchaser such evidence of the same as Purchaser shall reasonably request.

§ 2.2 Determination and Payment of Closing Payment. (a) At least two (2) Business Days but not more than five (5) Business Days prior to the Closing Date, Seller shall deliver to Purchaser (i) a good faith estimate of the combined Working Capital of the Companies (the “Estimated Working Capital”), (ii) a good faith estimate of the aggregate amount of the liabilities that would be required to be set forth as current liabilities on a combined balance sheet of the Companies with respect to the Excluded Liabilities (the “Estimated Excluded Liabilities Amount”), (iii) a good faith estimate of the aggregate Indebtedness of the Companies (the “Estimated Indebtedness”) and (iv) a good faith estimate of the aggregate Cash of the Companies (the “Estimated Cash”), in each case as of the Closing Date, which shall quantify in reasonable detail the items constituting such Working Capital, Excluded Liabilities, Indebtedness and Cash, and in the case of (A) Excluded Liabilities (with respect to the determination of the portion of the aggregate amount of Excluded Liabilities that are current liabilities), Working Capital, Indebtedness and Cash, prepared in accordance with the GAAP Practices and (B) in the case of the Estimated Excluded Liabilities Amount, prepared (without prejudice to the determination of such amount by the Independent Actuary pursuant to Section 2.3(d)) in accordance with the GAAP Practices.

(b) In full consideration for the sale and transfer of the LLC Interests to Purchaser, Purchaser shall:

(i) pay, at the Closing, subject to adjustment as provided in Section 2.3, (A) to Seller, an amount equal to the Equity Purchase Price minus the Purchase Price Escrow Amount and the Indemnity Escrow Amount, by wire transfer of immediately available funds to an account of Seller designated in writing to Purchaser not later than two (2) Business Days prior to the Closing Date, and (B) to the Escrow Agent, subject to the terms and conditions of the Escrow Agreement, an amount equal to the Purchase Price Escrow Amount and the Indemnity Escrow Amount, by wire transfer of immediately available funds to the Escrow Account; and

(ii) pay the amounts (the “Deferred Purchase Price Payments”), if any, determined in the manner and subject to the terms and conditions set forth on Exhibit B.

§ 2.3 Purchase Price Adjustment. (a) Promptly after the Closing Date, but in any event not later than sixty (60) days following the Closing Date, Purchaser shall prepare and deliver to Seller (i) a statement setting forth a computation as of the close of business on the Closing Date of the aggregate amount of the liabilities that would be required to be set forth as current liabilities on a combined balance sheet of the Companies with respect to the Excluded Liabilities (the “Excluded Liabilities Statement”) and (ii) a combined balance sheet of the

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Companies as of the close of business on the Closing Date (the “Closing Balance Sheet”), and statements derived from the Closing Balance Sheet setting forth a computation as of the close of business on the Closing Date of (A) the combined Working Capital of the Companies (the “Working Capital Statement”), (B) the aggregate Indebtedness of the Companies (the “Indebtedness Statement”) and (C) the aggregate Cash of the Companies (the “Cash Statement” and, together with the Working Capital Statement and the Indebtedness Statement, the “Closing Statements”). The Excluded Liabilities Statement (with respect to the determination of the portion of the aggregate amount of Excluded Liabilities that are current liabilities), the Closing Balance Sheet and the Closing Statements shall be prepared in accordance with the GAAP Practices and the Excluded Liabilities Statement (other than with respect to the determination of the portion of the aggregate amount of Excluded Liabilities that are current liabilities) shall be prepared in accordance with standard actuarial methods.

(b) Upon delivery of the Excluded Liabilities Statement to Seller, Purchaser shall provide Seller and its representatives with reasonable access during business hours to the books and records of the Companies in order to allow Seller and its representatives to verify the accuracy of the Excluded Liabilities Statement. Seller shall complete its review of the Excluded Liabilities Statement within thirty (30) days of the delivery of the Excluded Liabilities Statement. Promptly after completion of its review, Seller shall either inform Purchaser in writing that the Excluded Liabilities Statement is acceptable or object thereto in writing, setting forth a specific description of each of Seller’s objections. If Seller so objects and the Parties do not resolve such objections on a mutually agreeable basis within thirty (30) calendar days after Purchaser’s receipt of Seller’s objection, then the aggregate amount of the liabilities (both current and long-term) that would be required to be set forth on a combined balance sheet of the Companies with respect to the Excluded Liabilities shall be determined within an additional thirty (30) calendar days by an actuary mutually agreed upon by the Parties or, in the event that the Parties cannot reach agreement on the selection of an actuary by the thirty fifth (35^th) calendar day after Purchaser’s receipt of Seller’s objection, by an actuary of national standing selected by Deloitte Touche Tohmatsu (Atlanta office), other than Deloitte Touche Tohmatsu (the “Independent Actuary”). In determining the aggregate amount of the liabilities (both current and long-term) that would be required to be set forth on a combined balance sheet of the Companies with respect to the Excluded Liabilities, the Independent Actuary shall apply standard actuarial methods. The amount that is determined by either (i) any mutual agreement of the Parties with respect to the aggregate amount of the liabilities (both current and long-term) that would be required to be set forth on a combined balance sheet of the Companies with respect to the Excluded Liabilities or (ii) the decision of the Independent Actuary is referred to as the “Total Excluded Liabilities Amount”.

(c) Upon delivery of the Closing Balance Sheet and the Closing Statements to Seller, Purchaser shall provide Seller and its representatives with reasonable access during business hours to the books and records of the Companies in order to allow Seller and its representatives to verify the accuracy of the Closing Balance Sheet and the Closing Statements. Seller shall complete its review of the Closing Balance Sheet and the Closing Statements within thirty (30) days of the delivery of the Closing Balance Sheet and the Closing Statements. Promptly after completion of its review, Seller shall either inform Purchaser in writing that the Closing Balance Sheet and the Closing Statements are acceptable or object thereto in writing, setting forth a specific description of each of Seller’s objections. If Seller so objects and the

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Parties do not resolve such objections on a mutually agreeable basis within thirty (30) calendar days after Purchaser’s receipt of Seller’s objection, (i) the remaining disputed items with respect to the Closing Balance Sheet and the Closing Statements shall be resolved within an additional thirty (30) calendar days by Deloitte Touche Tohmatsu (Atlanta office) or another accounting firm mutually agreed upon by the Parties (the “Arbitrator”). In resolving any disputed item with respect to the Closing Balance Sheet or the Closing Statements, the Arbitrator (w) shall be bound by the provisions of this Section 2.3, (x) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value claimed for such item by either Party, (y) shall apply the GAAP Practices and (z) shall limit its decision to such items as are in dispute. Upon the date (the “Working Capital Determination Date”) of the first to occur of (i) any mutual agreement of the Parties with respect to the Closing Balance Sheet and the Closing Statements, (ii) a decision of the Arbitrator or (iii) the failure of Seller to deliver to Purchaser, within the first 30-day period referred to above, an objection to the Closing Balance Sheet or the Closing Statements prepared by Purchaser, the Closing Balance Sheet and the Closing Statements as so adjusted by any mutual agreement of the Parties or decision of the Arbitrator, as applicable, shall become conclusive and binding on the Parties and shall constitute an arbitral award that is final and non-appealable and upon which a judgment may be entered by any court of competent jurisdiction. The combined Working Capital of the Companies as finally determined in accordance with this Section 2.3 shall be referred to as the “Closing Working Capital”; the aggregate Indebtedness of the Companies as finally determined in accordance with this Section 2.3 shall be referred to as “Closing Indebtedness”; and the aggregate Cash of the Companies as finally determined in accordance with this Section 2.3(c) shall be referred to as “Closing Cash”.

(d) If Seller delivered a written objection to Purchaser with respect to the Excluded Liabilities Statement, then upon determination of the Total Excluded Liabilities Amount pursuant to Section 2.3(b), unless the Parties have agreed on the portion of the Total Excluded Liabilities Amount that would be required to be reflected as current liabilities on a combined balance sheet of the Companies within fifteen (15) Business Days of the determination of the Total Excluded Liabilities, determination of the portion of the Total Excluded Liabilities that would be required to be reflected as current liabilities on a combined balance sheet of the Companies, shall be submitted by the Parties to the Arbitrator, who shall make such determination within an additional fifteen (15) calendar days. Upon the date of the first (the “Excluded Liabilities Determination Date”) to occur of (i) any mutual agreement of the Parties with respect to the portion of the Total Excluded Liabilities that would be required to be reflected as current liabilities on a combined balance sheet of the Companies or (ii) a decision of the Arbitrator, the portion of the Total Excluded Liabilities that would be required to be reflected as current liabilities on a combined balance sheet of the Companies as so determined by any mutual agreement of the Parties or determination of the Arbitrator, as applicable, shall become conclusive and binding on the Parties and shall constitute an arbitral award that is final and non-appealable and upon which a judgment may be entered by any court of competent jurisdiction. The portion of the Total Excluded Liabilities that would be required to be reflected as current liabilities on a combined balance sheet of the Companies, as finally determined in accordance with this Section 2.3(d) shall be referred to as “Closing Excluded Liabilities”;

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(e) The following amounts shall be payable in accordance with the following terms within (i) two (2) Business Days of the later of the Working Capital Determination Date and the Excluded Liabilities Determination Date:

(i) if the sum of Closing Cash plus Closing Working Capital plus the lesser of (i) Closing Excluded Liabilities and (ii) $3,450,000 minus Closing Indebtedness exceeds the sum of Estimated Cash plus Estimated Working Capital plus the lesser of (i) the Estimated Excluded Liabilities Amount and (ii) $3,450,000 minus Estimated Indebtedness, Purchaser shall pay to Seller, by wire transfer of immediately available funds to an account designated in writing by Seller on or before the Final Determination Date, an amount equal to the amount of such excess and the Parties shall cause the Escrow Agent to immediately release the Purchase Price Escrow Amount to Seller; or

(ii) if the sum of Estimated Cash plus Estimated Working Capital plus the lesser of (i) the Estimated Excluded Liabilities Amount and (ii) $3,450,000 minus Estimated Indebtedness exceeds the sum of Closing Cash plus Closing Working Capital plus the lesser of (i) Closing Excluded Liabilities and (ii) $3,450,000 minus Closing Indebtedness, the Parties shall cause the Escrow Agent to immediately release to Purchaser from the Purchase Price Escrow Amount held in the Escrow Account an amount equal to the amount of such excess and to immediately release to Seller the balance, if any, of the Purchase Price Escrow Amount; provided, however, that if the Purchase Price Escrow Amount is less than the amount of such excess, Seller shall pay the amount by which such excess exceeds the Purchase Price Escrow Amount to Purchaser, by wire transfer of immediately available funds to an account designated in writing by Purchaser on or before the Final Determination Date.

(f) The fees, costs and expenses of the Arbitrator and the Independent Actuary shall be shared equally by the Parties.

§ 2.4 Closing. Unless this Agreement shall have been terminated and the transactions contemplated hereby shall have been abandoned pursuant to Article X, and subject to the satisfaction or waiver of all of the conditions set forth in Articles VI and VII, the closing of the transactions described in Section 2.1 (the “Closing”) shall take place at 10:00 A.M. at the offices of Arnall Golden Gregory LLP, 171 17^th Street Suite 2100, Atlanta, Georgia 30363, as soon as practicable (but in any event within five (5) Business Days) after the later to occur of April 4, 2005 and the last of the conditions set forth in Articles VI and VII is satisfied or waived, other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions, or at such other date, time or place as the Parties shall agree in writing. The date on which the Closing occurs is referred to herein as the “Closing Date”.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

§ 3. Representations and Warranties of Seller. Seller represents, warrants and agrees as follows:

§ 3.1 Ownership of LLC Interests; Existence, Good Standing and Capitalization of Seller. Seller is the lawful owner, beneficially and of record, of all of the LLC Interests, free and clear of all Liens, except for Liens described on Schedule 3.1(a). Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Georgia. The actions taken pursuant to Section 2.1 of this Agreement will transfer to Purchaser good and valid title to all of the outstanding limited liability company interests in each of the Companies, free and clear of all Liens.

§ 3.2 Authority and Enforceability. Seller has the limited liability company power and authority to execute and deliver this Agreement and the other Transaction Documents to be executed and delivered by Seller. Seller has the limited liability company power and authority to consummate the transactions contemplated hereby and by the other Transaction Documents to be executed and delivered by Seller, including the sale, assignment, transfer and conveyance of the LLC Interests pursuant to this Agreement and the Existing LLC Agreements. The execution, delivery and performance of this Agreement, and all other Transaction Documents to be executed and delivered by Seller, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by Seller and no other action on the part of Seller is necessary to authorize the execution, delivery and performance by Seller of this Agreement and such other Transaction Documents and the consummation of the transactions contemplated hereby and thereby. This Agreement and all other Transaction Documents to be executed and delivered by Seller, when delivered in accordance with the terms hereof, assuming the due execution and delivery of this Agreement and each such other Transaction Document by the other parties hereto and thereto, shall have been duly executed and delivered by Seller and shall be valid and binding obligations of Seller, enforceable against Seller in accordance with their terms, except to the extent that their enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and to general equitable principles.

§ 3.3 Consents and Approvals; No Violations. (a) Except as set forth on Schedule 3.3(a), the execution and delivery of this Agreement by Seller does not and the execution and delivery by Seller of the other Transaction Documents to be executed and delivered by Seller shall not and the consummation by Seller of the transactions contemplated hereby and thereby shall not result in a violation or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, payment or acceleration) under, or result in the creation of any Lien on any of the properties or assets of Seller or any of the Companies under: (i) any provision of the certificate of formation or limited liability company agreement of Seller or the certificate of formation or Existing LLC Agreement of any of the Companies; (ii) subject to obtaining and making any of the approvals, consents, notices and filings referred to in paragraph (b) below, any Law or Order applicable to Seller or any of the Companies or by which any of their respective properties or assets may be bound; (iii) any of the terms, conditions or provisions of any Contract to which Seller or any of the Companies is a party, or by which they or any of their respective properties or assets are bound, except, in each case under subsection (a)(ii) and (a)(iii) above, where such violation, breach, conflict, default or Lien does not have a Material Adverse Effect.

(b) Except for such filings and approvals as may be required pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and

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regulations thereunder (the “HSR Act”) and as set forth on Schedule 3.3(b), no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other third party is necessary or required under any of the terms, conditions or provisions of any Law or Order (i) applicable to Seller or any of the Companies or (ii) by which any of Seller’s or the Companies’ properties or assets may be bound, for the execution and delivery of this Agreement by Seller, the performance by Seller of its obligations hereunder or the consummation of the transactions contemplated hereby.

§ 3.4 Existence and Good Standing of the Companies. Each Company is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Georgia. Each Company has all requisite limited liability company power and authority to own its property and to carry on its business as now being conducted. Each Company is duly qualified to do business and is in good standing in each jurisdiction in which the character or location of the properties owned, leased or operated by such Company or the nature of the business conducted by such Company makes such qualification necessary, except for such jurisdictions where the failure to be so qualified or licensed and in good standing does not have a Material Adverse Effect with respect to the Companies.

§ 3.5 Capitalization of the Companies; Restructurings. (a) Prior to the date hereof, Seller has delivered to Purchaser true and complete copies of the limited liability company agreements (the “Existing LLC Agreements”) and certificates of formation of each Company, in each case together with any amendments thereto, as in effect as of the date hereof. None of the Companies is in violation or breach of any term of its Existing LLC Agreement or certificate of formation, and no amendments to its Existing LLC Agreement or certificate of formation are pending (except as specifically contemplated by this Agreement). Seller is the sole member of each Company and the capitalization of each Company (with respect to limited liability company interest ownership percentages, classes and capital accounts) is as set forth on Schedule 3.5(a) to this Agreement. There are no outstanding or authorized options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments contingent or otherwise, relating to the limited liability company interests of, or other equity or voting interest in, any Company, pursuant to which Seller or any Company may become obligated to issue, deliver or sell or cause to be issued, delivered or sold, limited liability company interests of or other equity or voting interest in, any Company or any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any limited liability company interests of or other equity or voting interest in, any Company. Neither the members of any Company nor any Company has any authorized or outstanding bonds, debentures, notes or other Indebtedness the holders of which have the right to vote (or convertible into, exchangeable for, or evidencing the right to subscribe for or acquire securities having the right to vote) with Seller or any Company on any matter. There are no Contracts to which Seller or any Company is a party or by which they are bound to (i) repurchase, redeem or otherwise acquire any limited liability company interests of, or other equity or voting interest in, any Company or any other Person or (ii) vote or dispose of any limited liability company interests of, or other equity or voting interest in, any Company. There are no irrevocable proxies and no voting agreements with respect to any membership interests of, or other equity or voting interest in, any Company.

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(b) Seller has delivered to Purchaser true and complete copies of all material agreements and documents relating to each of the following transactions (such transactions being collectively referred to herein as the “Restructuring”): (i) the formation of Plant Services and Specialty Services, (ii) the conversion of Industrial Services from a Georgia corporation into a Georgia limited liability company, (iii) the conveyance by Williams Services Group, Inc., a Georgia corporation and a wholly owned subsidiary of Seller (the “Transferor”) to each of Plant Services and Specialty Services of the “Assets” (as such term is defined in the applicable Bill of Sale, each dated as of January 1, 2004, between Transferor and the applicable Company) and (iv) the sale and transfer by Transferor to Seller of all of the issued and outstanding limited liability company interests in each of Plant Services and Specialty Services. The consummation of the Restructuring did not result in a violation or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, payment or acceleration) under, or result in the creation of any Lien on any of the Assets under: (1) any provision of the organizational or operating documents of Seller, Transferor or any Company, (2) any Law or Order applicable to Seller, Transferor or any Company or by which any of their assets are bound or (3) any of the terms, conditions or provisions of any Contract to which Seller, Transferor or any Company is or was a party, or by which they or any of their respective properties or assets are bound, except, in each case under subsection (2) and (3) above, where such violation, breach, conflict, default or Lien does not have a Material Adverse Effect.

(c) The Restructuring was not entered into by any of Seller, Transferor or any Company with the intent to hinder, delay or defraud creditors of any of them. Immediately after giving effect to the Restructuring each of Seller, Transferor and each Company was Solvent.

§ 3.6 Subsidiaries and Investments. (a) Except as set forth on Schedule 3.6(a) attached hereto, none of the Companies owns, directly or indirectly, any capital stock of, or other equity, ownership, membership, proprietary or voting interest in, any Person.

(b) Except as set forth on Schedule 3.6(b), there are no restrictions of any kind which prevent or restrict the payment of dividends or other distributions by any of the Companies other than those imposed by the Laws of general applicability of their respective jurisdictions of organization.

§ 3.7 Financial Statements. (a) Prior to the date hereof, Seller has delivered to Purchaser (i) an unaudited combined balance sheet of the Companies as at March 31, 2004 and the related unaudited combined statement of income for the fiscal year then ended (the “Unaudited Financial Statements”) and (ii) unaudited combined summary information about the Companies for the three months ended June 30, 2004 and for the twelve months ended December 31, 2003.

(b) The Unaudited Financial Statements have been, and the Audited Financial Statements (when delivered to Purchaser pursuant to Section 5.4(b)) shall be, prepared in conformity with the books and records of the Companies and in accordance with the GAAP Practices, subject in the case of the Unaudited Financial Statements, to any adjustment to overhead (including any accrual for workers’ compensation obligations, general liability and

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commercial automobile claims) allocated by Seller to the Companies that may be required to comply with the requirements of Regulation S-K.

(c) The Unaudited Financial Statements do, and the Audited Financial Statements (when delivered to Purchaser pursuant to Section 5.4(b)) shall, fairly present in all material respects the financial condition of the Companies as at the dates thereof and the results of operations and changes in financial position of the Companies for the periods indicated therein, subject, in the case of the Unaudited Financial Statements, to any adjustment to overhead (including any accrual for workers’ compensation obligations, general liability and commercial automobile claims) allocated by Seller to the Companies that may be required to comply with the requirements of Regulation S-K.

§ 3.8 Liabilities. Except as set forth on Schedule 3.8 attached hereto, none of the Companies has any claims, obligations or liabilities, whether absolute, accrued, contingent or otherwise, except for (i) claims, obligations, liabilities or Indebtedness set forth in the Reference Balance Sheet or specifically disclosed in the footnotes thereto, (ii) claims, obligations, liabilities or Indebtedness (including, without limitation, accounts payable to trade creditors and accrued expenses) incurred subsequent to the date of the Reference Balance Sheet in the ordinary course of business consistent (in amount and kind) with past practice and that, individually and in the aggregate, are not material and adverse and (iii) liabilities not required to be accrued for or disclosed by GAAP. None of the Companies is a party to any “off balance sheet arrangements” as such term is defined in Item 303(a)(4)(ii) of Regulation S-K.

§ 3.9 Books and Records. (a) The respective minute books of the Companies, and of Seller with respect to the Companies, copies of each of which have been delivered to Purchaser and its representatives, contain materially accurate records of all meetings of, and limited liability company action taken by, the Companies (including action taken by written consent of the member(s) thereof and Seller (including action taken by written consent of the members thereof) with respect to the Companies, and have been prepared and maintained in accordance with applicable accounting requirements and Law. At the Closing, all of the Books and Records shall be under the exclusive ownership and direct control of the Companies or Purchaser.

(b) Each Company and Seller (with respect to the Companies or their predecessors) has at all times during the previous three (3) years maintained books and records which accurately reflect all its material transactions in reasonable detail, and has at all times followed Seller’s policy and procedures manual and applied the GAAP Practices.

§ 3.10 Title to Personal Properties.

(a) Except as set forth on Schedule 3.10(a), the Companies have good title to or, in the case of leased assets, a valid leasehold interest in, free and clear of all Liens, except for Permitted Liens, all of the tangible and intangible personal property and assets reflected in the Reference Balance Sheet or thereafter acquired, except for properties and assets disposed of in the ordinary course of business, consistent with past practice, since the date of the Reference Balance Sheet. Except in respect of the services to be provided pursuant to the Transition Services Agreement and except as set forth on Schedule 3.10(a), the Companies own or have the

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exclusive right to use all of the tangible personal properties and assets necessary for the conduct of their business as currently conducted. All of the tangible personal property used in the business of the Companies is, to the knowledge of Seller, in good operating condition and repair, ordinary wear and tear excepted and except for property under repair in the ordinary course of business consistent with past practice and, in the aggregate, is adequate and suitable for the purposes for which it is presently being used.

(b) Schedule 3.10(b) sets forth an accurate and complete list of each lease pursuant to which Seller has a leasehold interest in the tangible personal properties and assets set forth on Schedule 3.10(a).

§ 3.11 Owned Real Property. None of the Companies owns any real property.

§ 3.12 Leased Real Property. Except as set forth on Schedule 3.12, none of the Companies is a party to any lease or sublease of real property other than those which are either month-to-month or may be cancelled by Seller or the Company on less than 90 days notice without penalty.

§ 3.13 Material Contracts. (a) Schedule 3.13(a) sets forth an accurate and complete list of the following described types of Contracts to which any of the Companies is a party or by which any of them are bound (each a “Material Contract” and collectively, “Material Contracts”):

(i) all Contracts which contain restrictions with respect to payment of dividends or any other distribution in respect of the LLC Interests or other equity interests of the Companies;

(ii) all Contracts relating to capital expenditures or other purchases of material, supplies, equipment or other assets or properties (other than purchase orders for inventory or supplies in the ordinary course of business consistent with past practice) in excess of $150,000 individually, or $500,000 in the aggregate;

(iii) all Contracts involving a loan (other than accounts receivable from trade debtors in the ordinary course of business consistent with past practice) or advance to (other than travel and entertainment allowances to the employees of any of the Companies extended in the ordinary course of business consistent with past practice), or investment in, any Person in each case in excess of $5,000 or any Contract relating to the making of any such loan, advance or investment;

(iv) all Contracts involving Indebtedness of any of the Companies (other than loan documentation evidencing Seller’s credit facility with Bank of America, N.A.);

(v) all Contracts (including so called take-or-pay or keep-well agreements) under which any Person (other than any Company) has directly or indirectly guaranteed Indebtedness of any Company;

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(vi) all Contracts granting or evidencing a Lien on any properties or assets of any of the Companies in each case securing an obligation greater than $25,000, other than (A) Permitted Liens or (B) those relating to Seller’s credit facility with Bank of America, N.A.;

(vii) any management service, consulting, financial advisory or any other similar type Contract and any Contracts with any investment or commercial bank except (A) in the case of consulting agreements and management service agreements only, those agreements that do not by their terms require payments in excess of $5,000 individually, or $150,000 in the aggregate and (B) in the case of Contracts with commercial banks, those Contracts relating to Seller’s credit facility with Bank of America, N.A.;

(viii) all Contracts limiting the ability of any of the Companies to engage in any line of business or to compete with any Person;

(ix) all Contracts which are not cancelable without penalty on thirty (30) days or less notice (other than this Agreement and any agreement or instrument entered into pursuant to this Agreement) with (A) Seller, any other Affiliate of any Company or any Affiliate of Seller (other than any Company) or (B) any current or former officer or director of any Company (other than Contracts set forth on Schedule 3.25);

(x) all Contracts (including letters of intent), other than any relating to the transactions contemplated hereby, involving the future disposition or acquisition of material assets or properties, or any merger, consolidation or similar business combination transaction, whether or not enforceable;

(xi) all Contracts involving any joint venture, license of Intellectual Property, partnership, strategic alliance, shareholders’ agreement, co-marketing, co-promotion, co-packaging, joint development or similar arrangement except, in the case of licenses of Intellectual Property and co-packaging agreements only, those agreements that do not by their terms involve an annual payment in excess of $50,000;

(xii) all Contracts involving any resolution or settlement of any actual or threatened material litigation, arbitration, claim or other dispute, except for workers compensation claim settlements, settlements in respect of which no action remains to be taken and no payment is due and resolutions and settlements involving in the aggregate less than $150,000;

(xiii) all Contracts, other than any relating to the transactions contemplated hereby, involving a confidentiality, standstill or similar arrangement;

(xiv) all Contracts involving leases or subleases of personal property to which any Company is a party (as lessee or lessor) and involving an annual base rental payment in excess of $150,000 unless month-to-month or cancelable on less than ninety (90) days notice by a Company without penalty;

(xv) notwithstanding anything contained in any other clause of this Section 3.13(a), all Contracts relating to projects for customers, as follows: (A) in respect of cost plus contracts, those with anticipated annual revenues in excess of $4,000,000; (B) in respect of lump

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sum contracts, those with anticipated revenues in excess of $1,000,000; and (C) in respect of fixed unit price contracts, those with anticipated revenues in excess of $1,000,000; or

(xvi) all other Contracts that involve $150,000 or more and which are not cancelable by the applicable Company without penalty on thirty (30) days or less notice; provided, however, that no Contract excluded from the definition of “Material Contract” by any other clause in this Section 3.13(a) shall be included in the definition of “Material Contract” by virtue of this clause (xvi).

(b) Each Material Contract set forth on Schedule 3.13(a) (or required to be set forth on Schedule 3.13(a)) is in full force and effect and there exists no (i) material default or material event of default by any of the Companies or, to the knowledge of Seller, any other party to any such Material Contract or (ii) event, occurrence, condition or act (including the consummation of the transactions contemplated hereby) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a material default or material event of default by any of the Companies or, to the knowledge of Seller, any other party thereto. None of the Companies has violated any of the material terms or conditions of any Material Contract set forth on Schedule 3.13(a) (or required to be set forth on Schedule 3.13(a)) and, to the knowledge of Seller all of the covenants to be performed by any other party thereto have been fully performed in all material respects. Except as described on Schedule 3.13(a), Seller has delivered to Purchaser true and complete copies, including all amendments, of each Material Contract set forth on Schedule 3.13(a).

§ 3.14 Litigation. Except as set forth on Schedule 3.14, there is no action, suit, proceeding at law or in equity, arbitration or administrative or other proceeding by (or to the knowledge of Seller any investigation by) any Governmental or Regulatory Authority or any other Person, pending or, to the knowledge of Seller, threatened, against or affecting any of the Companies, or any of their properties, assets or rights, other than any such action, suit, proceeding, arbitration or administrative or other proceeding which, individually or in the aggregate, does not have a Material Adverse Effect with respect to the Companies. None of the Companies is subject to any Order other than any such Order which, individually or in the aggregate, does not have a Material Adverse Effect with respect to the Companies.

§ 3.15 Taxes.

(a) Tax Returns. Seller and the Companies have timely filed or caused to be timely filed with the appropriate taxing authorities all material tax returns, statements, forms and reports (including, elections, declarations, disclosures, schedules, estimates and informational tax returns) for Taxes (“Returns”) that are required to be filed by, or with respect to, the income, operations or property of the Companies on or prior to the Closing Date. The Returns have accurately reflected and shall accurately reflect all material liability for Taxes of, or with respect to, the income, operations or property of the Companies for the periods covered thereby.

(b) Payment of Taxes. All material Taxes and material Tax liabilities with respect to the Companies for all taxable years or periods that end on or before the Closing Date and, with respect to any taxable year or period beginning on or before and ending after the Closing Date, the portion of such taxable year or period ending on and including the Closing

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Date (“Pre-Closing Periods”) have been timely paid in full or accrued in accordance with the GAAP Practices on the Reference Balance Sheet, or, for periods or portions thereof after the date of the Reference Balance Sheet, on the books and records of the Companies which books and records have been made available to Purchaser.

(c) Other Tax Matters. (i) Except as set forth on Schedule 3.15(c)(i), since January 1, 2001, (A) none of Seller or the Companies has been the subject of an audit or other examination of Taxes by the tax authorities of any nation, state or locality and there is currently no such audit pending or, to the knowledge of Seller, contemplated and (B) none of Seller or the Companies has received any written notices of adjustment or requests for examination from any taxing authority.

(ii) Except as set forth on Schedule 3.15(c)(ii), none of Seller or the Companies has, as of the Closing Date, (A) entered into an agreement or waiver or requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes of, or with respect to, any of the Companies or (B) is presently contesting the Tax liability of, or with respect to, any of the Companies before any court, tribunal or agency.

(iii) All material Taxes which any of the Companies are (or were) required by law to withhold or collect in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party have been duly withheld or collected, and have been timely paid over to the proper authorities to the extent due and payable.

(iv) Since January 1, 2001, no written claim has been made by any taxing authority in a jurisdiction where Seller, with respect to the income, operations or property of the Companies, or any of the Companies, does not file Returns that Seller with respect to the income, operations or property of the Companies or any of the Companies, as the case may be, is or may by subject to taxation by that jurisdiction.

(v) There will be as of the Closing no tax sharing, allocation, indemnification or similar agreements in effect as between any Company or any predecessor or Affiliate thereof and any other Person under which Purchaser or the Companies could be liable for any Taxes or other claims of such Person from and after the Closing Date.

(vi) Seller is not a “foreign person” within the meaning of Section 1445 of the Code.

(vii) There are no Liens or security interests on any of the assets of any of the Companies that arose in connection with any failure (or alleged failure) to pay any Taxes.

(viii) Each of the Companies is treated as a disregarded entity for U.S. federal income tax purposes.

(d) Taxes Defined. For purposes of this Agreement, “Taxes” shall mean all taxes, assessments, charges, duties, fees, levies or other governmental charges, including, without limitation, all U.S. and non-U.S. federal, state, local and other income, franchise, profits, capital gains, capital stock, transfer, sales, use, value-added, occupation, property, excise, severance, windfall profits, stamp, license, payroll, social security, withholding and other taxes,

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assessments, charges, duties, fees, levies or other governmental charges of any kind whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a Return), all estimated taxes, deficiency assessments, additions to tax, penalties and interest and shall include any liability for such amounts as a result either of being a member of a combined, consolidated, unitary or affiliated group or of a contractual obligation to indemnify any Person or other entity.

§ 3.16 Insurance. Set forth on Schedule 3.16 is an accurate and complete list of each insurance policy which covers any of the Companies or their businesses, properties, assets or employees (including self-insurance, but excluding Employee Benefit Plans). Such policies are in full force and effect, all premiums thereon have been paid, and the Companies are otherwise in compliance in all material respects with the terms and provisions of such policies. None of the Companies is in material default under any of the insurance policies set forth on Schedule 3.16 (or required to be set forth on Schedule 3.16) and to the knowledge of Seller there exists no event, occurrence, condition or act (including the purchase of the LLC Interests hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a material default thereunder. Except as set forth on Schedule 3.16, neither Seller nor any of the Companies has received any written notice of cancellation or non-renewal of any such policy or arrangement nor has the termination of any such policies or arrangements been, to the knowledge of Seller, threatened. Schedule 3.16 also sets forth a list of all pending insurable claims and the claims history for each Company during the past three (3) years (including with respect to insurance obtained but not currently maintained).

§ 3.17 Intellectual Property.

(a) Except as set forth on Schedule 3.17(a), the Companies own and/or have the right to use all foreign and domestic patents, trademarks, service marks, trade names, copyrights, internet domain names, uniform resource locators and corresponding internet site, trade secrets and proprietary information not otherwise listed above, including, without limitation, unpatented inventions, invention disclosures, moral and economic rights of authors and inventors (however denominated), confidential information, technical data, customer lists, corporate and business names, trade names, trade dress, brand names, know-how, show-how, mask works, formulae, methods (whether or not patentable), designs, processes, procedures, technology, source codes, object codes, computer software programs, databases, data collections and other proprietary information or material of any type, and all derivatives, improvements and refinements thereof, howsoever recorded, or unrecorded, registrations, applications and reservations for any of the foregoing and any goodwill associated with any of the foregoing (collectively, “Intellectual Property”) used by the Companies in the operation of their business (collectively, the “Company Intellectual Property”), free and clear of any Liens other than Permitted Liens, without obligation to pay any royalty or any other fees with respect thereto. Schedule 3.17(a) lists all registrations and applications for any Company Intellectual Property as well as material unregistered trademarks and software used by the Companies in their business. Upon the consummation of the transactions contemplated hereby and compliance with applicable laws as to the assignment of such Company Intellectual Property, other than in respect of services to be provided pursuant to the Transition Services Agreement and except as set forth on Schedule 3.17(a) attached hereto, the Companies will own exclusively or have the exclusive right to use the Company Intellectual Property. No claim challenging the right of any Company to own or

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use any of the Company Intellectual Property, no claim of a violation, infringement, misuse or misappropriation by any Company of Intellectual Property and no claim challenging or questioning the validity or effectiveness of any state or federal registration of the Company Intellectual Property is pending or, to the knowledge of Seller, threatened by any Person except in each case for claims that individually or in the aggregate do not have a Material Adverse Effect and Seller does not know of any valid basis for such claim. Neither Seller nor any of the Companies has made (i) any claim challenging the right of any Person to use any Intellectual Property, (ii) any claim of a violation, infringement, misuse or misappropriation of any Person of Intellectual Property or (iii) any claim challenging or questioning the validity or effectiveness of any state or federal registration of Intellectual Property; and Seller does not know of any valid basis for any such claim.

(b) Except as set forth on Schedule 3.17(b), the Company Intellectual Property constitutes all Intellectual Property rights necessary for the Companies to conduct their respective business(es) as and where conducted on the Closing Date and none of the Companies uses any Intellectual Property which is not Company Intellectual Property or Intellectual Property licensed pursuant to the Transition Services Agreement. None of the Companies’ business operations infringes or misappropriates any Person’s rights in or to Intellectual Property.

(c) Each item of Company Intellectual Property owned by a Company and registered, filed, issued or applied for, has been duly and validly registered in, filed in or issued by, the appropriate official governmental registrars and/or issuers (or officially recognized issuers) of patents, trademarks, copyrights or Internet domain names and except as set forth on Schedule 3.17(c), each such registration, filing and/or issuance (i) has not been abandoned, canceled or otherwise compromised, (ii) has been maintained effective by all requisite filings, renewals and payments, and (iii) remains in full force and effect as of the Closing Date. Except as set forth on Schedule 3.17(c), there are no actions that must be taken or payments that must be made by any of the Companies within one hundred and eighty (180) days following the Closing Date that, if not taken, will materially and adversely affect the Company Intellectual Property or the right of any Company to use same as and where used as of the Closing Date.

(d) To the extent any Company Intellectual Property is or has been used under license in the business of any of the Companies, no written notice of a material default of such license has been sent or received by any of the Companies which default remains uncured, and the execution, delivery or performance of the Company’s obligations hereunder and under the other instruments and agreements to be executed and delivered as contemplated hereby will not result in such a default. Each such license agreement is a legal, valid and binding obligation of the applicable Company and, to the knowledge of Seller, the relevant other parties thereto, enforceable in accordance with the terms thereof and the transactions contemplated by this Agreement will not breach the terms thereof, subject to bankruptcy, insolvency, reorganization and other laws affecting creditors rights generally and by general principles of equity (whether in a proceeding at Law or in equity).

(e) Each of the Companies has taken reasonable steps to protect and preserve the confidentiality of all of its trade secrets and other proprietary and confidential information.

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§ 3.18 Compliance with Laws. Except as set forth on Schedule 3.18, each of the Companies has complied in all material respects and is in compliance in all material respects with all applicable Laws and Orders. Neither Seller nor any of the Companies has received any written notice that any violation of the foregoing is being or may be alleged and to the knowledge of Seller there is no such violation or allegation of violation.

§ 3.19 Accounts Receivable. All of the accounts receivable, costs in excess of billings and other debts due or recorded in the respective records and books of account of each Company as being due to such Company as at the Closing Date (less the amount of any provision or reserve therefor made in the respective records and books of account of such Company) represent amounts receivable for merchandise actually delivered or services actually provided (or, in the case of non-trade accounts or notes, represent amounts receivable in respect of other bona fide business transactions), have arisen in the ordinary course of business and none is or at the Closing Date will be, to the knowledge of Seller, subject to any set-off or counterclaim, except to the extent of any such provision or reserve.

§ 3.20 Inventories. The aggregate book value of the inventories of all Companies as of August 31, 2004 determined in accordance with the GAAP Practices, and as of the Closing will be, less than $500,000.

§ 3.21 Suppliers and Customers. Schedule 3.21 sets forth the top ten (10) customers and the top ten (10) suppliers of the Companies, listed in order of aggregate sales or purchases, as the case may be, for the twelve month period preceding September 30, 2004. The relationships of each Company with each such supplier and customer are, to the knowledge of Seller, good commercial working relationships in all material respects and, except as set forth on Schedule 3.21, no such supplier or customer has canceled or otherwise terminated in writing or, to the knowledge of Seller, orally terminated or threatened to cancel or otherwise terminate, its relationship with such Company. Neither Seller nor any of the Companies has received any written notice that any such supplier or customer may cancel or otherwise materially and adversely modify its relationship with any Company or limit its services, supplies or materials to any Company, or its usage or purchase of the services and products of any Company, either as a result of the transactions contemplated hereby or otherwise and to the knowledge of Seller no such supplier or customer intends to effect any such cancellation, modification, limitation or change in usage or purchase.

§ 3.22 Employment Relations. (a) Except as set forth on Schedule 3.22(a), each of the Companies has been and is in material compliance with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and has not within the last three years and is not engaged in any unfair labor practice.

(b) No unfair labor practice complaint against any of the Companies is pending before the National Labor Relations Board.

(c) There is no labor strike, dispute, slowdown or stoppage actually pending or, to the knowledge of Seller, threatened against or involving any of the Companies.

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(d) Except as set forth on Schedule 3.22(d), no grievance exists, no arbitration proceeding arising out of or under any collective bargaining agreement is pending and no claim in writing therefor has been asserted and, to the knowledge of Seller, no claim therefor exists.

(e) The Companies are subject to, bound by or currently negotiating, the collective bargaining or labor union agreements applicable to Persons employed by the Companies set forth on Schedule 3.22(e).

(f) Except as set forth on Schedule 3.22(f), none of the Companies have experienced any material labor difficulty or work stoppage during the last three years.

(g) Except as set forth on Schedule 3.22(g), there has not been, and to the knowledge of Seller without inquiry, there will not be, any Material Adverse Effect in relations with employees of any of the Companies as a result of any announcement of the transactions contemplated by this Agreement.

(h) Except as set forth on Schedule 3.22(h), none of the Companies has any Equal Employment Opportunity Commission charges or other claims of employment discrimination pending or, to the knowledge of Seller, threatened against it.

(i) Except as set forth on Schedule 3.22(i), during the last three years, the Companies have not received written notice of any wage and hour department investigation of any of the Companies and to the knowledge of Seller no wage and hour department investigation of any of the Companies exists.

(j) Except as set forth on Schedule 3.22(j), there are no occupational health and safety claims by any Governmental or Regulatory Authority asserted in writing against any of the Companies and, to the knowledge of Seller, no claim therefor exists .

(k) Since the enactment of the Worker Adjustment and Retraining Notification Act (“WARN”), neither Seller (with respect to any Company) nor any of the Companies has effectuated either (i) a “plant closing” (as defined in WARN) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of any of the Companies or (ii) a “mass layoff” (as defined in WARN) affecting any site of employment or facility of any of the Companies. Neither Seller (with respect to any Company) nor any of the Companies has been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar Law and none of the employees of any of the Companies has suffered an “employment loss” (as defined in WARN) during the six months prior to the date hereof.

(l) Seller (with respect to any Company) and each of the Companies is in compliance with the terms and provisions of the Immigration Reform and Control Act of 1996, as amended, and all related regulations promulgated thereunder, except for such non-compliance which, individually and in the aggregate, does not have a Material Adverse Effect with respect to the Companies.

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(m) Set forth on Schedule 3.22(m) is an accurate and complete list showing the names of all Employees employed by the Companies as of October 14, 2004 whose aggregate annualized base salary exceeds $50,000.

§ 3.23 Employee Benefit Plans. (a) List of Plans. Set forth on Schedule 3.23(a) is an accurate and complete list of the “Employee Benefit Plans,” which term means all U.S. and non-U.S. (i) “employee benefit plans,” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations thereunder (“ERISA”); (ii) bonus, stock option, stock purchase, restricted stock, incentive, fringe benefit, “voluntary employees’ beneficiary associations” (“VEBAs”) under Section 501(c)(9) of the Code, profit-sharing, pension, or retirement, deferred compensation, medical, life insurance, disability, accident, salary continuation, severance, accrued leave, vacation, sick pay, sick leave, supplemental retirement and unemployment benefit plans, programs, arrangements, commitments and/or practices (whether or not insured); and (iii) employment, consulting, termination, and severance contracts or agreements for active, retired or former employees or directors, whether or not any such plans, programs, arrangements, commitments, contracts, agreements and/or practices (referred to in (i), (ii) or (iii) above) are in writing or are otherwise exempt from the provisions of ERISA that have been established, maintained or contributed to (or with respect to which an obligation to contribute has been undertaken) within the previous two (2) years or with respect to which any liability is borne by any of the Companies, but the term Employee Benefit Plans excludes any such plans, programs, arrangements, commitments, contracts, agreements and/or practices that are either “multiemployer plans” within the meaning of Section 3(37) of ERISA or that are plans or programs sponsored by a union and to which any of the Companies contribute, or have an obligation to contribute, or with respect to which any liability is borne by any of the Companies (collectively, “Multiemployer Plans”).

(b) Status of Plans. Each Employee Benefit Plan (including any related trust) substantially complies in form with the requirements of all applicable laws, including ERISA and the Code, and has at all times been maintained and operated in substantial compliance with its terms and the requirements of all applicable laws, including ERISA and the Code. None of the Companies has any commitment, intention or understanding to create any Employee Benefit Plan. To the knowledge of Seller, no event has occurred and no condition or circumstance has existed that would result in a material increase in the benefits under or the expense of maintaining any Employee Benefit Plan or Multiemployer Plan from the level of benefits or expense incurred for the most recent fiscal year ended thereof. No Company sponsors any Employee Benefit Plan. Except for certain of the Multiemployer Plans, none of Seller, the Companies nor any employer (whether or not incorporated) that would together with Seller or any Company be treated as a single employer within the meaning of Section 414 of the Code maintains or contributes to, or has ever maintained or contributed to (or has any potential liability with respect to) (i) any employee pension benefit plan that is or was the subject of 412 or 418B of the Code or Section 302 or Title IV of ERISA, (ii) any VEBA or (iii) any “multiple employer plan” (within the meaning of the Code or ERISA).

(c) No Post-Employment Welfare Benefits. None of the Companies has any obligation to provide post-employment or retiree health, life insurance and/or other welfare benefits to any retired or former employees or active employees following such employees’

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retirement or termination of service, other than continuation coverage mandated by applicable Law.

(d) Liabilities. Except to the extent that a breach of the representations contained in this Section 3.23(d) would not result in a liability of any Company (i) there are no actions, suits, claims or disputes pending, or, to the knowledge of Seller, threatened, anticipated or expected to be asserted against or with respect to any Employee Benefit Plan or, to the knowledge of Seller, a Multiemployer Plan or the assets of any such plan (other than routine claims for benefits and appeals of denied routine claims); (ii) no civil or criminal action brought pursuant to the provisions of Title I, Subtitle B, Part 5 of ERISA is pending or, to the knowledge of Seller, threatened, anticipated, or expected to be asserted against any of the Companies with respect to any Employee Benefit Plan or, to the knowledge of Seller, a Multiemployer Plan; and (iii) to the knowledge of Seller, no Employee Benefit Plan or any fiduciary thereof is the subject of an audit, investigation or examination by any governmental or quasi-governmental agency.

(e) Contributions. Full payment has been timely made of all amounts which any of the Companies are required, under applicable Law or under any Employee Benefit Plan or Multiemployer Plan or any agreement relating to any Employee Benefit Plan or Multiemployer Plan to which any of the Companies is a party, to have paid as contributions or premiums thereto as of the last day of the most recent fiscal year of such Employee Benefit Plan or Multiemployer Plan ended prior to the date hereof and such contributions or premiums have been timely deposited into the appropriate trusts or accounts, if applicable. All such contributions and/or premiums have been fully deducted for income tax purposes and no such deduction has been challenged or disallowed by any governmental entity, and to the knowledge of Seller no event has occurred and no condition or circumstance has existed that would give rise to any such challenge or disallowance. The Companies have made adequate provision for reserves to meet contributions and premiums and any other liabilities that have not been paid or satisfied because they are not yet due under the terms of any Employee Benefit Plan, applicable law or related agreements. Benefits under all Employee Benefit Plans are as represented to Purchaser pursuant to Section 3.23(j) and have not been increased subsequent to the date as of which documents have been provided to Purchaser, except for any such increases as would not, individually or in the aggregate, result in a material liability of Purchaser or any Affiliate thereof on or after the Closing.

(f) Tax Qualification. Each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code has, as currently in effect, been determined to be so qualified by the IRS. Each trust established in connection with any Employee Benefit Plan which is intended to be exempt from Federal income taxation under Section 501(a) of the Code has, as currently in effect, been determined to be so exempt by the IRS. Since the date of each most recent determination referred to in this paragraph (f), to the knowledge of Seller, no event has occurred and no condition or circumstance has existed that resulted or is likely to result in the revocation of any such determination or that would adversely affect the qualified status of any such Employee Benefit Plan.

(g) Transactions. Neither the Companies nor any of their respective directors, officers or employees has engaged in any transaction with respect to any Employee Benefit Plan or breached any applicable fiduciary responsibilities or obligations under Title I of ERISA that

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would subject any Company to a material tax, penalty or liability for prohibited transactions or breach of any obligations under ERISA or the Code.

(h) Triggering Events. Except as set forth on Schedule 3.23(h), the execution of this Agreement and the consummation of the transactions contemplated hereby, do not constitute a triggering event under any Employee Benefit Plan, policy, arrangement, statement, commitment or agreement, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (whether of severance pay or otherwise), “parachute payment” (as such term is defined in Section 280G of the Code), acceleration, vesting (except under Seller’s 401(k) plan) or increase in benefits to any employee or former employee or director of any of the Companies.

(i) Multiemployer Plans. As of the date of this Agreement, neither Seller nor any of the Companies is liable for any withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA with respect to any Multiemployer Plan that is a pension plan under ERISA (“Multiemployer Pension Plan”). As of the date of this Agreement, neither Seller nor any of the Companies is liable for any withdrawal liability with respect to any Multiemployer Plan that is not a Multiemployer Pension Plan. To the knowledge of Seller, no Multiemployer Plan is in “reorganization” (within the meaning of Section 4241 of ERISA) or is “insolvent” (within the meaning of Section 4245 of ERISA). Substantially all of the union employees employed by the Companies, including any union employees hired on an ad hoc, temporary basis, are engaged in building and construction and are represented by various unions who are members of the Building & Construction Trades Department, AFL-CIO. Substantially all of the contributions made by the Companies to Multiemployer Pension Plans are made with respect to labor performed in connection with the building and construction industry. From January 1, 2003 through October 31, 2004, the Companies (or Williams Service Group, Inc., the predecessor to the Companies) utilized approximately 13,500 hours of labor by employees subject to collectively bargained agreements with certain divisions of the International Brotherhood of Teamsters.

(j) Documents. Seller has delivered or caused to be delivered to Purchaser and its counsel true and complete copies of all material documents in connection with each Employee Benefit Plan, including (where applicable): (i) all Employee Benefit Plans as in effect on the date hereof, together with all amendments thereto, including, in the case of any Employee Benefit Plan not set forth in writing, a written description thereof; (ii) all current summary plan descriptions, summaries of material modifications, and material communications; and (iii) the most recent IRS determination letter, if any, obtained with respect to each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code or exempt under Section 501(a) of the Code.

§ 3.24 Environmental Laws and Regulations. Except as set forth on Schedule 3.24, (a) each of the Companies is in compliance in all material respects with all applicable Environmental Laws, and has obtained, and is in compliance in all material respects with, all Permits required of it under applicable Environmental Laws; (b) there are no claims, proceedings, investigations or actions by any Governmental or Regulatory Authority or other Person or entity pending, or to the knowledge of Seller threatened, against any of the Companies under any Environmental Law; and (c) there are no facts, circumstances or conditions relating to

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the past or present business or operations of any of the Companies (including the disposal of any wastes, hazardous substances or other materials), or to any past or present Company Property, that could reasonably be expected to give rise to any claim, proceeding or action, or to any liability, under any Environmental Law.

§ 3.25 Interests in Clients, Suppliers, Etc.; Affiliate Transactions. Except as set forth on Schedule 3.25,

(a) neither Seller or any of its Affiliates (other than the Companies) nor any of their respective members, officers, directors or employees (i) has any direct or indirect financial interest in, or is a director, officer or employee of, (x) any Person that is a client, supplier, customer, lessor, lessee, competitor or potential competitor or other Person who transacts business with any Company or (y) any property, asset or right that is used by any Company in the conduct of its business (as presently conducted) or is owned by any Company; or (ii) has any contractual relationship with any Company other than such relationship as attaches to being a stockholder, member, officer, director or employee of a Company, including, without limitation, any contractual relationship arising under any employment, consulting or similar agreement or any other document executed in connection therewith or pursuant to the terms thereof;

(b) neither Seller or any of its Affiliates (other than the Companies) or any of their respective members, officers, directors or employees provides any products or services (including, without limitation, any sales or marketing, back-office, administrative, accounting book-keeping or record-keeping services), whether or not for compensation, to any the Companies.

(c) Except as set forth on Schedule 3.25(c), there are no outstanding notes payable to or accounts receivable from, or advances by any Company to, and no Company is otherwise a creditor of Seller, any of Seller’s Affiliates (other than the Companies) or any of their respective members, officers, director or employees.

§ 3.26 Bank Accounts and Powers of Attorney. Set forth on Schedule 3.26 is an accurate and complete list showing (a) the name of each bank in which any of the Companies has an account or safe deposit box, the number of any such account or any such box and the names of all Persons authorized to draw thereon or to have access thereto and (b) the names of all Persons, if any, holding powers of attorney from any of the Companies and a summary statement of the terms thereof.

§ 3.27 Permits. Seller has delivered or made available to Purchaser for inspection a true and complete copy of each material permit (including occupancy permit), certificate, license, consent or authorization of any Governmental or Regulatory Authority (each, a “Permit”) that any of the Companies has obtained or possesses as of the date hereof. Except as set forth on Schedule 3.27, each of the Companies has obtained and possesses all Permits and has made all registrations or filings with or notices to any Governmental or Regulatory Authority necessary for the lawful conduct of its business as presently conducted, or necessary for the lawful ownership of their properties and assets or the operation of their businesses as presently conducted, except where the failure to obtain and possess any such Permit or to make any such registration, filing or notice does not have a Material Adverse Effect with respect to the

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Companies. Except as set forth on Schedule 3.27, all such Permits are in full force and effect. Each of the Companies is in compliance in all material respects with all such Permits. Except as set forth on Schedule 3.27, any applications for the renewal of any such Permit which are due prior to the Closing Date shall be timely made or filed by the applicable Company prior to the Closing Date. No proceeding to modify, suspend, revoke, withdraw, terminate or otherwise limit any such Permit is pending or to the knowledge of Seller threatened. No administrative or governmental proceeding has been taken or, to the knowledge of Seller, threatened, in connection with the expiration, continuance or renewal of any such Permit and Seller does not know of any valid basis for any such proceeding.

§ 3.28 No Changes Since Reference Balance Sheet Date. Except as set forth on Schedule 3.28, since the Reference Balance Sheet Date until the date hereof, there has not been a Material Adverse Effect with respect to the Companies and neither Seller with respect to the Companies nor any of the Companies has:

(i) authorized for issuance, issued, sold, delivered or agreed or committed to issue, sell or deliver (A) any limited liability company interests or other equity or voting interest or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire either (1) any limited liability company interest or other equity or voting interest or (2) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any limited liability company interest or other equity or voting interest;

(ii) increased the compensation payable (including, but not limited to, wages, salaries, bonuses or any other remuneration) or to become payable to any (x) officer, employee or agent being paid an annual base salary of $50,000 or more, or any director of any Company, except for such increases that were required in accordance with the terms of any Employee Benefit Plan set forth on Schedule 3.23(a) or (y) other employee except for increases in the ordinary course of business consistent with past practice;

(iii) made any bonus, profit sharing, pension, retirement or insurance payment, distribution or arrangement to or with any officer, employee or agent being paid an annual base salary of $50,000 or more, or any director of any of the Companies, except for payments that were already accrued prior to the Reference Balance Sheet Date or were required by the terms of any Employee Benefit Plan set forth on Schedule 3.23(a);

(iv) permitted any of its properties or assets to be subject to any Lien (other than Permitted Liens);

(v) sold, transferred, leased, licensed or otherwise disposed of any assets or properties with a value in excess of $150,000 except for (A) sales of inventory in the ordinary course of business consistent with past practice and (B) leases or licenses entered into in the ordinary course of business consistent with past practice with annual lease or royalty payments that are not reasonably expected to exceed $150,000;

(vi) acquired any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of

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related transactions, or entered into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;

(vii) made any capital expenditure or commitment therefor in excess of $150,000, individually, or $500,000, in the aggregate, or otherwise acquired any assets or properties (other than inventory in the ordinary course of business consistent with practice) for more than $100,000, individually, or $500,000, in the aggregate, or entered into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;

(viii) entered into, materially amended or become subject to any joint venture, partnership, strategic alliance, members’ agreement, co-marketing, co-promotion, co-packaging, joint development or similar arrangement;

(ix) written-off as uncollectible any notes or accounts receivable, except write-offs in the ordinary course of business consistent with past practice charged to applicable reserves;

(x) canceled or waived any claims or rights involving payments in excess of $150,000;

(xi) made any change in any method of accounting or auditing practice;

(xii) made any tax election or settled and/or compromised any tax liability with respect to the income, operations or property of any of the Companies; prepared any Returns in a manner which is inconsistent with the past practices of the Companies, with respect to the treatment of items on such Returns; incurred any liability for Taxes other than in the ordinary course of business consistent with past practice of the Companies; or filed an amended Return or a claim for refund of Taxes with respect to the income, operations, or property of any of the Companies;

(xiii) paid, discharged, settled or satisfied any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $150,000 other than payments, discharges or satisfactions in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the Reference Balance Sheet;

(xiv) established, adopted, entered into, materially amended or terminated any Employee Benefit Plan or any collective bargaining, thrift, compensation or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees, except as required by Law; or

(xv) entered into any Contract or letter of intent with respect to (whether or not binding), or otherwise committed or agreed, whether or not in writing, to do any of the foregoing.

§ 3.29 Brokers’ or Finders’ Fees. Except with respect to the fees payable to FMI Capital (whose fees and expenses shall be paid by Seller), no agent, broker, person or firm acting on behalf of either Seller or any of the Companies is, or will be, entitled to any commission or

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brokers’ or finders’ fees from any of the Companies or Purchaser, or from any of their Affiliates, in connection with any of the transactions contemplated by this Agreement.

§ 3.30 Government Contracts. (a) Except as set forth on Schedule 3.30, none of the Companies:

(i) has any contracts with any Governmental Authority involving any information, technology or data which is classified under Executive Order 12356 of April 2, 1982;

(ii) has any products or services (including research and development) with respect to which it (a) is a supplier, direct or, to the knowledge of Seller, indirect, to any of the military services of the United States or the Department of Defense, or (b) to the knowledge of Seller, has technology which has or could have military applications;

(iii) exports (a) products or technical data under validated licenses or technical data under General License GTDR pursuant to the U.S. Export Administration Regulations (15 CFR Parts 768 through 799) or (b) defense articles and defense services under the International Traffic in Arms Regulations (22 CFR Subchapter M);

(iv) has a Facility Security Clearance under the Department of Defense Industrial Security Program; or

(v) to the knowledge of Seller, is party to any Contract pursuant to which such Company is providing products or services to any Governmental or Regulatory Authority.

(b) Except as set forth on Schedule 3.30(b),

(i) (x) none of Seller, any of the Companies or, to the knowledge of Seller, any of their respective directors or officers, employees, agents or consultants, is (or for the last three years has been) under administrative, civil or criminal investigation, indictment or audit, with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Bid or is (or for the last three years has been) in violation of any statutes or regulations relating to prohibited practices, including but not limited to cost accounting standards, prohibitions against conflict of interest and anti-trust laws or any governmental accounting regulations; and (y) neither Seller nor the Companies have made a voluntary disclosure to any Governmental or Regulatory Authority with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Bid that has led or would reasonably be expected to lead, either before or after the Closing Date, to any of the consequences set forth in clause (x) above or any other material damage, penalty assessment, recoupment of payment or disallowance of cost;

(ii) none of Seller, any of the Companies or any of their respective directors or officers and, to the knowledge of Seller, no Employee of Seller or any of the Companies is (or for the last three years has been) suspended or debarred from doing business with any Governmental or Regulatory Authority or has been declared nonresponsible or ineligible for U.S. government contracting. To the knowledge of Seller, there are no facts or circumstances that would warrant the institution of suspension or debarment proceedings or the finding of

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nonresponsibility or ineligibility on the part of any Company or any of their respective officers or directors in the future;

(c) Sellers (with respect to the Companies), each of the Companies, each of their respective officers and directors and, to the knowledge of Seller, each employee of Seller and Employee of any Company is in compliance in all material respects with all laws, rules, regulations and other requirements relating to facility security clearances or the safeguarding of classified information, and to the knowledge of Seller there are no facts or circumstances that would result in the revocation of such facility security clearances; and

(d) Each Company’s cost accounting and procurement systems with respect to Government Contracts are in compliance in all material respects with all applicable governmental regulations and rules.

§ 3.31 Warranty Claims. There are no pending or, to the knowledge of Seller, threatened Warranty Claims against any of the Companies in excess of $150,000 in the aggregate which are not fully covered by insurance. “Warranty Claims” means written claims by Third Parties for defects in products sold, work performed or services provided by any of the Companies which the customer claims do not meet the product warranty.

§ 3.32 Solvency. Immediately prior to, and immediately subsequent to the consummation of the sale of the LLC Interests pursuant to the provisions of this Agreement, Seller shall be Solvent.

§ 3.33 Disclosure. No representation or warranty made by Seller in this Agreement in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact, or omits any statement of a material fact necessary to make the statements contained herein, in light of the circumstances in which they were made, not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

§ 4. Representations and Warranties of Purchaser. Purchaser represents, warrants and agrees as follows:

§ 4.1 Existence and Good Standing of Purchaser; Power and Authority. Purchaser is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser has the corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to be executed and delivered by Purchaser as contemplated hereby. Purchaser has the corporate power and authority to consummate the transactions contemplated hereby and thereby, including the purchase of the LLC Interests pursuant to this Agreement. The execution, delivery and performance of this Agreement, and all other Transaction Documents to be executed and delivered by Purchaser as contemplated hereby, and the consummation of the transactions

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contemplated hereby and thereby, have been duly authorized by Purchaser and no other corporate action on the part of Purchaser is necessary to authorize the execution, delivery and performance of this Agreement and such other Transaction Documents by Purchaser and the consummation of the transactions contemplated hereby and thereby. This Agreement and all other Transaction Documents to be executed and delivered by Purchaser as contemplated hereby, when delivered in accordance with the terms hereof, assuming the due execution and delivery of this Agreement and each such Transaction Documents by the other parties hereto and thereto, shall have been duly executed and delivered by Purchaser and shall be valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their terms, except to the extent that their enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and to general equitable principles.

§ 4.2 Consents and Approvals; No Violations. (a) Other than as set forth on Schedule 4.2(a), the execution and delivery of this Agreement by Purchaser do not, the execution and delivery by Purchaser of the other Transaction Documents to be executed and delivered by Purchaser as contemplated hereby shall not and the consummation by Purchaser of the transactions contemplated hereby and thereby will not result in a violation or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, payment or acceleration) under, or result in the creation of any Lien upon any of the properties or assets of Purchaser under: (i) any provision of the certificate of formation or limited liability company agreement of Purchaser; (ii) subject to obtaining and making any of the approvals, consents, notices and filings referred to in paragraph (b) below, any Law or Order applicable to Purchaser or by which any of its properties or assets may be bound; (iii) any Contract to which Purchaser is a party, or by which any of its properties or assets is bound.

(b) Except for such filings and approvals as may be required pursuant to the HSR Act and as set forth on Schedule 4.2(b) no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority or other third party is necessary or required under any of the terms, conditions or provisions of any Law or Order, any Contract to which Purchaser is a party or by which any of its properties or assets is bound, for the execution and delivery of this Agreement by Purchaser, the performance by Purchaser of its obligations hereunder or the consummation of the transactions contemplated hereby.

§ 4.3 Purchase for Investment. Purchaser (a) is an “accredited investor” as that term is defined under Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended, and (b) shall acquire the LLC Interests for its own account for investment and not with a view toward any resale or distribution thereof; provided, however, that the disposition of Purchaser’s property shall at all times remain within the sole control of Purchaser.

§ 4.4 Brokers’ or Finders’ Fees. No agent, broker, person or firm acting on behalf of Purchaser is, or will be, entitled to any commission or brokers’ or finders’ fees from Seller or from any Affiliate of Seller, in connection with any of the transactions contemplated by this Agreement.

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§ 4.5 Reliance. In connection with Purchaser’s decision to enter into this Agreement and except as expressly contained in this Agreement, (a) Purchaser has not relied upon any verbal or written representation as to fact or otherwise (including, without limitation, any information, financial or otherwise, contained in any offering memorandum or similar document prepared by Seller, the Companies or their respective representatives or made available to Purchaser in connection with its due diligence review of the Companies) made by Seller, the Companies or any of their respective Affiliates, directors, officers, employees, agents or representatives (including FMI), and (b) Purchaser’s decision to enter into this Agreement is based entirely upon Seller’s representations and warranties contained in this Agreement, together with the Schedules.

§ 4.6 Contact with Seller’s Customers. Purchaser has not, prior to the date hereof, contacted any of Seller’s customers in regard to the transactions contemplated by this Agreement without Virgil Williams’ prior written consent.

ARTICLE V

COVENANTS

§ 5.1 Conduct of Business of the Company. (a) During the period from the date of this Agreement to the Closing Date, Seller shall cause each of the Companies to conduct its respective operations (including its working capital and cash management practices) only according to its ordinary and usual course of business and to use its commercially reasonable efforts to preserve substantially intact its respective business organizations, keep available the services of its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients and others having significant business relationships with them. Notwithstanding the immediately preceding sentence, prior to the Closing Date, except as set forth on Schedule 5.1 attached hereto or as may be first approved in writing by any of the Purchaser Designees, which approval shall not be unreasonably withheld or delayed, Seller shall refrain (in respect of any of the Companies) and cause each of the Companies to refrain from the following:

(i) amending or restating its certificate of formation or Existing LLC Agreement;

(ii) authorizing for issuance, issuing, selling or delivering (A) any limited liability company interests or other equity or voting interest in any of the Companies or (B) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire either (1) any limited liability company interests or other equity or voting interest in any of the Companies or (2) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any limited liability company interests or other equity or voting interest in any of the Companies;

(iii) declaring, paying or setting aside any dividend or making any distribution with respect to, or splitting, combining, redeeming, reclassifying, purchasing or otherwise

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acquiring directly, or indirectly, any limited liability company interests or other equity or voting interest in any of the Companies or making any other change in the capital structure of any of the Companies; provided, however, that Seller may cause the Companies to dividend or otherwise distribute to Seller all Cash of Companies prior to the Closing;

(iv) except for year end bonuses and spot bonuses based on performance in each case in the ordinary course of business consistent with past practice and in an aggregate amount not to exceed $250,000, making any bonus, profit sharing, pension, retirement or insurance payment, distribution or arrangement to or with any officer, employee or agent being paid an annual base salary of $50,000 or more or any director of any of the Companies except for payments that were already accrued prior to the date hereof or are required by the terms of any Employee Benefit Plan set forth on Schedule 3.23(a);

(v) except as contemplated by Section 5.14(c) establishing, adopting, entering into, materially amending or terminating any Employee Benefit Plan or any collective bargaining, thrift, compensation or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees except as may be required by law;

(vi) incurring, assuming or modifying any Indebtedness, except Indebtedness incurred pursuant to existing credit agreements disclosed on Schedule 3.1(a) in the ordinary course of business consistent with past practice and which incurrence, individually and in the aggregate, does not have a Material Adverse Effect with respect to the Companies or prepaying any Indebtedness, except for prepayments required by the terms of any Contract disclosed on Schedule 3.13(a);

(vii) subjecting any of the Companies’ properties or assets or any equity or voting interests to any Lien (other than Permitted Liens);

(viii) acquiring any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;

(ix) entering into, materially amending, becoming subject to or terminating any joint venture, partnership, strategic alliance, stockholders’ agreement, co-marketing, co-promotion, co-packaging, joint development or similar arrangement;

(x) writing-off as uncollectible any notes or accounts receivable, except write-offs in the ordinary course of business consistent with past practice charged to applicable reserves which individually and in the aggregate are not material to the Companies, taken as a whole;

(xi) canceling or waiving any claims or rights involving payments in excess of $150,000;

(xii) making any change in any method of accounting or auditing practice other than those required by GAAP;

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(xiii) making any tax election or settling and/or compromising any tax liability with respect to the income, operations or property of any of the Companies; preparing any Returns in a manner which is inconsistent with the past practices of the Companies with respect to the treatment of items on such Returns; incurring any liability for Taxes other than in the ordinary course of business of the Companies; or filing an amended Return or a claim for refund of Taxes with respect to the income, operations or property of any of the Companies;

(xiv) paying, discharging, settling or satisfying any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than payments, discharges or satisfactions in the ordinary course of business and consistent with past practice;

(xv) except for normal layoffs upon completion of a job or at the end of an outage, planning, announcing, implementing or effecting any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of any of the Companies (other than routine employee terminations for cause);

(xvi) making any loans, advances or capital contributions to, or investments in, any other Person except to an officer, employee or agent of any of the Companies in connection with reasonable business expenses, including travel costs, to be actually incurred by such officer, employee or agent in connection with the performance of his or her duties to the applicable Company as an officer, employee or agent of such Company;

(xvii) entering into any Contract or letter of intent (whether or not binding) with respect to, or committing or agreeing to do, whether or not in writing, any of the foregoing;

(xviii) except for actions taken in compliance with clauses (i) through (xvii) above or (xix) through (xxii) below, taking any action that, if taken subsequent to the execution of this Agreement and on or prior to the Closing Date, would constitute a breach in any material respect of the representations set forth in Article III;

(xix) except for actions taken in compliance with clauses (i) through (xviii) above or (xx) through (xxii) below, entering into any Contract involving $150,000 or more which is not cancelable by the applicable Company without penalty on ninety (90) days or less notice;

(xx) entering into any Contract or taking any action which requires a Bond;

(xxi) notwithstanding anything contained in any other clause in this Section 5.1(a) or Exhibit B, entering into any Contract relating to projects for customers, as follows: (A) in respect of cost plus contracts, those with anticipated annual revenues in excess of $8,000,000; (B) in respect of lump sum contracts, those with anticipated revenues in excess of $4,000,000; and (C) in respect of fixed unit price contracts, those with anticipated revenues in excess of $1,000,000; or

(xxii) taking any action that would require “Level 1” approval pursuant to Exhibit C attached hereto.

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(b) Seller shall keep, or cause the Companies to keep, all insurance policies currently maintained with respect to the Companies and their respective assets and properties, or suitable replacements or renewals, in full force and effect through the close of business on the Closing Date. Purchaser acknowledges that immediately after the close of business on the Closing Date, none of the insurance policies set forth on Schedule 3.16 will cover any of the Companies or their businesses, properties, assets or employees.

§ 5.2 Exclusive Dealing. During the period from the date of this Agreement to the earlier of (i) the Closing Date and (ii) the date this Agreement is terminated in accordance with its terms (the “Exclusive Period”), Seller shall not, and shall cause the Companies and the respective Affiliates, officers, directors, employees, agents, representatives, consultants, financial advisors, attorneys, accountants and other agents of the Companies and Seller to refrain from taking any action to, directly or indirectly, encourage, initiate, solicit or engage in discussions or negotiations with, or provide any information to, any Person other than Purchaser (and its Affiliates and representatives), concerning any purchase of any limited liability company interests or other equity interests in any of the Companies or any merger, asset sale, recapitalization or similar transaction involving any of the Companies. During the Exclusive Period, Seller shall not vote its limited liability company interests or other equity interests in any of the Companies in favor of any purchase of any limited liability company interests or other equity interests in any of the Companies, or any merger, asset sale, recapitalization or similar transaction involving any of the Companies. During the Exclusive Period, Seller and/or the Companies shall notify Purchaser as soon as practicable if any Person makes any proposal, offer, inquiry to, or contact with, Seller or any of the Companies, as the case may be, with respect to the foregoing and shall describe in reasonable detail the substance and material terms of any such contact and the material terms of any such proposal.

§ 5.3 Review of the Company. (a) Purchaser and its financing sources may, prior to the Closing, directly or through their respective representatives, including, their accountants, actuaries and attorneys, review the properties, books and records of the Companies and their financial and legal condition to the extent it reasonably believes necessary or advisable to familiarize itself with such properties and other matters and, to the extent related to the Excluded Liabilities, the books and records of Seller. Such review shall not, however, affect the representations and warranties made by Seller in this Agreement or the remedies of Purchaser for breaches of those representations and warranties. Seller shall cause each of the Companies to permit Purchaser and its representatives to have, after the date of execution of this Agreement, reasonable access during normal business hours to the premises and to all the books and records of the Companies provided that such access shall not unreasonably interfere with any of the business or operations of Seller or the Companies, and Seller shall cause the officers, employees, counsel, accountants, consultants and other representatives of the Companies and/or Seller to furnish Purchaser with such financial and operating data and other information with respect to the business and properties of the Companies as Purchaser shall from time to time reasonably request. Purchaser agrees not to contact any of the Companies’ customers prior to the Closing in regard to the transactions contemplated by this Agreement without Virgil Williams’ prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

(b) (i) Any information obtained by Purchaser pursuant to paragraph (a) above shall be subject to that certain Confidentiality Agreement, dated June 3, 2004 between Global

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Power Equipment Group and Seller, the terms of which are incorporated herein by reference (the “Confidentiality Agreement”). Effective upon, and only upon, the Closing, Purchaser’s obligations under the Confidentiality Agreement shall terminate with respect to information relating to the Companies.

(ii) Seller acknowledges that it is in possession of Material (as defined in the Confidentiality Agreement) concerning the Companies and their respective businesses and operations. Seller agrees that it, in each case, shall, and that it shall cause its representatives (as defined in the Confidentiality Agreement) to keep all such Material strictly confidential; provided, that Seller may (A) use the Material for the purpose of performing its obligations hereunder (including its obligations in retaining the Excluded Liabilities) and under the Transition Services Agreement, complying with Laws and regulations, preparing its financial statements, communicating with or making any filing with any Governmental or Regulatory Authority (including any Tax authority) or in evaluating, initiating or responding to any claim, action, suit or proceeding at law or in equity, arbitration, or administrative or other proceeding or investigation by any Governmental or Regulatory Authority or any other Person and (B) prior to the Closing, use the Material for the purpose of operating its business and the business of the Companies. Seller acknowledges and agrees that the Material is proprietary and confidential in nature and may be disclosed to its representatives (as defined in the Confidentiality Agreement) only to the extent necessary to take the actions described in clauses (A) and (B) above; provided, that Seller shall be responsible for any breach of these confidentiality provisions by its representatives (as defined in the Confidentiality Agreement) other than the Companies for breaches following the Closing. If Seller or any of its representatives (as defined in the Confidentiality Agreement) are legally required to disclose (after Seller has used its commercially reasonable efforts to avoid such disclosure and after promptly advising and consulting with Purchaser about its intention to make, and the proposed contents of such, disclosure) any of the Material (whether by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process), Seller shall, or shall cause such representative, to provide Purchaser with prompt written notice of such request so that Purchaser may seek an appropriate protective order or other appropriate remedy. If such protective order or remedy is not obtained, Seller or such representative, may disclose only that portion of the Material which such Person is legally required to disclose, and Seller shall exercise its commercially reasonable efforts to obtain assurance that confidential treatment will be accorded to such Material so disclosed.

§ 5.4 Financial Information.

(a) For each calendar month beginning with the month of December 2004 through Closing, Seller shall provide Purchaser with an unaudited combined balance sheet and related unaudited combined statement of operations of the Companies for the month then ended when and as such statements are made available to Seller’s senior management (the “Monthly Financial Statements”). The Monthly Financial Statements, except as indicated therein, shall be prepared in accordance with the GAAP Practices except that they need not contain footnotes and will be subject to year-end audit adjustments.

(b) (i) Seller shall use its commercially reasonable efforts to cause Smith & Howard and BDO Seidman, LLP to prepare and deliver to Purchaser as soon as practicable after

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the date hereof, but in any event not later than February 1, 2005, an audited combined balance sheet of the Companies as at March 31, 2004 and the related audited combined statements of income, cash flow and equity for the fiscal year then ended (the financial statements described in this clause (i) being referred to herein as the “Audited Financial Statements” and, together with the Unaudited Financial Statements, the “Financial Statements”).

(ii) Seller shall use its commercially reasonable efforts to cause Smith & Howard and BDO Seidman, LLP to prepare and deliver to Purchaser as soon as practicable after the date hereof, but in any event not later than March 31, 2005, an audited combined balance sheet of the Companies as at March 31, 2003 and the related audited combined statements of income, cash flow and equity for the fiscal year then ended.

(iii) Seller shall use its commercially reasonable efforts to cause Smith & Howard and BDO Seidman, LLP to prepare and deliver to Purchaser as soon as practicable but in any event not later than fifty (50) days after the Closing Date (which date is currently anticipated to be May 24, 2005), an audited combined balance sheet of the Companies as at March 31, 2005 and the related combined statements of income, cash flow and equity for the fiscal year then ended.

§ 5.5 Books and Records; Access to Employees.

(a) Purchaser agrees that, during the Record Retention Period (as defined below), it shall preserve and keep all books and records relating to the Companies acquired in connection with the transactions contemplated herein. After the Record Retention Period, Purchaser shall, in respect of any books and records which Purchaser would otherwise dispose at any such time in accordance with the Record Retention Policy (as defined below, with reference to Seller or its Affiliates to be read as references to Purchaser for purposes of this Section 5.5(a)), deliver sole possession and control to Seller, at Seller’s cost and expense, of all such books and records, and Seller may retain and dispose of them in its discretion. During the Record Retention Period, duly authorized representatives of Seller shall, upon reasonable notice and at Seller’s cost and expense, have reasonable access thereto during normal business hours to examine, inspect and copy such books and records.

(b) Seller agrees to take any and all actions necessary to ensure that at the Closing all of the Books and Records are under the exclusive ownership and direct control of Purchaser or the Companies. Upon Purchaser’s reasonable request, Seller shall provide Purchaser and its employees, representatives and agents access to, and the right to photocopy (all at Purchaser’s expense), during normal business hours on reasonable advance notice, any Stored Books and Records. Seller agrees that it shall preserve and keep any Stored Books and Records for the period (the “Record Retention Period”) determined in accordance with Seller’s record retention policy as set forth on Exhibit D (the “Record Retention Policy”). After the Record Retention Period, Seller shall, in respect of any Stored Books and Records which Seller would otherwise dispose at any such time in accordance with the Record Retention Policy, deliver sole possession and control to Purchaser, at Purchaser’s cost and expense, of all such Stored Books and Records, and Purchaser may retain and dispose of them in its discretion. During the Record Retention Period, duly authorized representatives of Purchaser shall, upon reasonable notice and

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at Purchaser’s cost and expense, have reasonable access thereto during normal business hours to examine, inspect and copy such books and records.

§ 5.6 Commercially Reasonable Efforts. Subject to the terms and conditions contained herein, Seller and Purchaser shall, and Seller shall cause each of the Companies to, cooperate and use their respective commercially reasonable efforts to take, or cause to be taken, all appropriate action, and to make, or cause to be made, all filings necessary, proper or advisable under applicable Laws and to consummate and make effective the transactions contemplated by this Agreement, including their respective commercially reasonable efforts to obtain, prior to the Closing Date, all Permits, consents, approvals, authorizations, qualifications and Orders and parties to Material Contracts with any of the Companies (including landlords) as are necessary for consummation of the transactions contemplated by this Agreement and to fulfill the conditions to consummation of the transactions contemplated hereby set forth in Articles VI and VII of this Agreement; provided, that no Material Contract shall be amended to increase the amount payable thereunder or otherwise to be materially more burdensome to any Company in order to obtain any such consent, approval or authorization, without first obtaining the written approval of Purchaser.

§ 5.7 Financing-Related Cooperation. Seller shall use its commercially reasonable efforts to cause BDO Seidman, LLP to provide any consents of BDO Seidman, LLP necessary for the inclusion or incorporation by reference of BDO Seidman, LLP’s reports on the Audited Financial Statements (and the other audited financial statements contemplated in Section 5.4(b)) and the Audited Financial Statements (and the other audited financial statements contemplated in Section 5.4(b)) into any documents that are furnished to or filed with the SEC by Purchaser; provided, however, that Seller shall not be obligated to pay any consideration or make any other financial accomodation to obtain the consents contemplated by this Section 5.7.

§ 5.8 Public Announcements. Neither Seller nor Purchaser shall, nor shall any of their respective Affiliates, without the approval of the other Party, issue any press releases or otherwise make any public statements with respect to the transactions contemplated by this Agreement, except as may be required by applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.

§ 5.9 Notification of Certain Matters. Seller shall give prompt notice to Purchaser of any written notice of, or other written communication relating to, a default or event that, with notice or lapse of time or both, would become a material default under any Contract disclosed (or required to be disclosed) on Schedule 3.13(a). Each party shall give prompt notice to the other party of any of the following which occurs and of which it becomes aware, following the date hereof: (i) the occurrence or existence of any fact, circumstance or event which would reasonably be expected to result in (A) any representation or warranty made by such party in this Agreement or in any Schedule, Exhibit or certificate or delivered herewith, to be untrue or inaccurate in any material respect or (B) the failure of any condition precedent to either party’s obligations; and (iii) any written notice or other written communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement.

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§ 5.10 Intercompany Accounts. Seller shall cause all intercompany accounts (except for trade accounts receivable and payable in the ordinary course of business consistent with past practice) between Seller or any Affiliate of Seller (other than any Company), on the one hand, and any Company, on the other hand, to be settled at or prior to the Closing.

§ 5.11 Non-Competition; Non-Interference; Non-Disparagement. (a) In consideration of the purchase of the LLC Interests by Purchaser, Seller agrees that, from and after the Closing until the third anniversary of the Closing Date, Seller shall not, subject to clause (iv) below, and shall cause its Affiliates, so long as they are Affiliates, not to:

(i) within any traditional trade or marketing area in which any of the Companies or their Affiliates is doing business or is qualified to do business, directly or indirectly own, manage, operate, control, be employed by or participate in the ownership, management, operation or control of, or be connected in any manner with, any business of the type and character engaged in and competitive with that conducted by any of the Companies on the Closing Date. For these purposes, ownership of securities of 1% or less of any class of securities of a Person shall not be considered to be competition with the Companies;

(ii) persuade or attempt to persuade any potential customer or client to which any of the Companies has made a presentation, or with which any of the Companies has had discussions, not to hire any Company, or to hire another Person; or

(iii) solicit for Seller or any Person other than any of the Companies the business of any Person which is a customer or client of any of the Companies, or was its customer or client within two years prior to the date of this Agreement or in any way interfere with the relationship between any of the Companies and any such Person or business relationship (including making any negative or disparaging statements or communications about any of the Companies).

(iv) Notwithstanding the foregoing, Purchaser acknowledges that Seller owns and will continue to operate a heavy mechanical/maintenance and electrical contractor known as American Union Boiler Company LLC and Nitro Electric Company LLC (collectively, “AUB”) from its office in Scott Depot, West Virginia. AUB provides heavy mechanical, maintenance, modification and electrical services and heat tracing and electrical instrumentation services directly or indirectly (“Excluded Services”). Purchaser agrees that so long as Seller controls AUB, Excluded Services rendered by AUB to customers other than Southern Nuclear Operating Company, FPL Energy, Jacksonville Electrical Authority, Kaiser-Hill and Consolidated Edison shall not be deemed to constitute a violation of this Section 5.11; ; provided, however, that this clause (iv) shall not apply to any work performed by AUB directly for TVA if GUBMK was a bidder for such work. For the avoidance of doubt, (a) nothing contained herein shall prevent AUB from performing work as a subcontractor to any non-Affiliated, third-party general contractor, even if GUBMK was a bidder for such work and (b) the covenants contained in Section 5.11 will not apply in respect of AUB when AUB ceases to be an Affiliate of Seller.

(b) From and after the Closing, Seller shall not, and shall cause each of its Affiliates and each of Seller’s and its Affiliate’s respective members, officers, directors, employees and agents not to, directly or indirectly, make any oral or written statement

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disparaging any of the Companies, any member, officer, director or employee of any of the Companies, or the performance, products, services or capabilities of any of the Companies in any manner intended, or which could reasonably be expected to, result in any liability, loss (including loss of opportunities) or damage (including damage to reputation) to any of the Companies.

(c) It is the desire and intent of the Parties to this Agreement that the provisions of this Section 5.11 shall be enforced to the fullest extent permissible under the Laws and public policies applied in each jurisdiction in which enforcement is sought. If any particular provisions or portion of this Section 5.11 shall be adjudicated to be invalid or unenforceable, this Section shall be deemed amended to delete therefrom such provision or portion adjudicated to be invalid or unenforceable, such amendment to apply only with respect to the operation of such Section in the particular jurisdiction in which such adjudication is made.

(d) The Parties recognize that the performance of the obligations under this Section 5.11 by Seller is special, unique and extraordinary in character, and that in the event of the breach by Seller of the terms and conditions of this Section 5.11 to be performed by Seller, Purchaser and the Companies shall be entitled, if they so elect, to seek damages for any breach of this Section 5.11, or to enforce the specific performance thereof by Seller or to enjoin Seller and/or its Affiliates from performing services for any Person.

§ 5.12 Non-Solicitation of Employees.

(a) From and after the Closing, Seller shall not, and shall cause its Affiliates not to, for a period of one year after the Closing Date, knowingly solicit for employment any employee of any of the Companies; provided, that this paragraph shall not preclude Seller or its Affiliates from soliciting for employment or hiring any such employee (i) who responds to a general solicitation through a public medium or general or mass mailing by or on behalf of Seller or any of its Affiliates that is not targeted at employees of any of the Companies, (ii) who contacts Seller or its Affiliates directly on such individual’s own initiative or (iii) whose employment has been terminated by the Companies, Purchaser or their Affiliates .

(b) Notwithstanding Section 5.12(a) or any other provision of this Agreement to the contrary, Seller shall not, and shall cause its Affiliates not to, for a period of two (2) years after the Closing Date, employ any of the following individuals: Tina Robinson, Darrell Holliday, Scott Walters, Luther “Dan” Daniels, Doug Page, Dave Harley and Brian Hart; provided, however, that this Section 5.12(b) shall not restrict Seller from employing any of the Persons specified above if such Person is not an employee of Purchaser or the Companies immediately following the Closing; provided, further, however, that this paragraph shall not preclude Seller from hiring any such employee whose employment has been terminated for any reason by the Companies, Purchaser or their Affiliates.

(c) From and after the Closing, Purchaser shall not, and shall cause its Affiliates (including the Companies) not to, for a period of one year after the Closing Date, knowingly solicit for employment any employee of Seller or its Affiliates; provided, that this paragraph shall not preclude Purchaser or its Affiliates from soliciting for employment or hiring any such employee (i) who responds to a general solicitation through a public medium or general

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or mass mailing by or on behalf of Purchaser or any of its Affiliates that is not targeted at employees of Seller or its Affiliates, (ii) who contacts Purchaser or its Affiliates directly on such individual’s own initiative or (iii) whose employment has been terminated by Seller or its Affiliates.

§ 5.13 Performance Bonds and Letters of Credit. (a) Purchaser may obtain (i) prior to the Closing, from reputable bonding, surety, financial institutions or insurance companies, substitute financial assurances, in such amounts as are necessary, to replace the Bonds (A) set forth on Schedule 5.13(a) in connection with work or activities to be performed by the Companies or (B) resulting from actions by Seller in compliance with clause (xx) of Section 5.1(a) and (ii) consents to the substitution of such financial assurances as of the Closing Date, and for the Bonds (A) set forth on Schedule 5.13(a) or (B) resulting from actions taken by Seller in compliance with clause (xx) of Section 5.1(a), if such consents are required under the terms of any Material Contract.

(b) To the extent Purchaser does not replace any Bond (i) set forth on Schedule 5.13(a) or (ii) resulting from actions taken by Seller in compliance with clause (xx) of Section 5.1(a), or obtain any required consent to the replacement thereof at or prior to Closing (any such Bonds that remain outstanding after the Closing from time to time are collectively referred to as the “Secured Bonds”, provided, however, that the term “Secured Bonds” shall not include any Bonds that have expired in accordance with their terms or otherwise), Seller agrees to use its commercially reasonable efforts to maintain such Secured Bonds in place and permit Purchaser to maintain such Secured Bonds from the Closing Date until their date of expiration. In connection with the foregoing, Purchaser shall (i) indemnify and hold harmless Seller for any and all Losses incurred by Seller or any of its Affiliates in respect of the Secured Bonds, (ii) agree to provide, to the extent required by the project owner or other obligee, an indemnity to the respective bonding, surety, financial institutions or insurance companies which shall have issued any such Bond maintained in place after the Closing Date and (iii) at all times after the Closing, provide Seller with Collateral having an aggregate amount available thereunder equal to the aggregate principal amount of the Secured Bonds. It is understood and agreed that, as between Seller and Purchaser, neither Seller nor any of its Affiliates shall have any liability for any Bonds that are arranged by or issued for Purchaser after the Closing Date nor guarantee any Bonds issued for Purchaser after the Closing Date. Purchaser further agrees that Purchaser shall reimburse Seller and its Affiliates if Seller or any of its Affiliates are required to pay any fees incurred prior to or after the Closing Date in connection with any of the Bonds set forth on Schedule 5.13(a) that become payable after the Closing Date. Purchaser shall indemnify and hold harmless Seller and its Affiliates for any and all Losses incurred by Seller or any of its Affiliates in connection with any payment, indemnity, guarantee or other credit support provided to the surety or letter of credit issuer in connection with the issuance of any of the Bonds set forth on Schedule 5.13(a).

(c) In the event any Bond set forth on Schedule 5.13(a) expires in accordance with its terms, Purchaser shall use its commercially reasonable efforts to retrieve such Bond from the party holding such Bond (i.e., the obligee) and promptly return it to Seller. Purchaser shall take all actions reasonably requested by Seller in connection with its obligations under this Section 5.13(c).

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§ 5.14 Certain Employee Benefit Plan Matters.

(a) Employee Liabilities. Seller shall take such action as is necessary such that, as of the Closing Date, the Companies cease participation in each Employee Benefit Plan. Seller and its Affiliates (other than the Companies) shall retain all liabilities for claims under the Employee Benefit Plans, whether such claims are asserted before, on or after the Closing Date. Seller shall be solely responsible for paying and providing (and shall indemnify and hold Purchaser, the Companies and their respective Affiliates harmless from all Losses related to) long-term disability and life insurance benefits with respect to any employee of a Company (and any individual formerly employed by a Company) who is on long-term disability as of the Closing Date. Seller shall indemnify and hold harmless Purchaser, the Companies and their respective Affiliates from and against any and all Losses arising out of, or relating to, any Employee Benefit Plan or any other employee benefit plan, employee plan, program, policy, arrangement or agreement, sponsored or maintained, or entered into, by Seller or any of its Affiliates (other than the Companies), including, without limitation, long-term disability, life insurance, severance and retention pay or other benefits thereunder.

(b) COBRA. Except as otherwise set forth herein, Seller and its Affiliates (other than the Companies) shall be solely responsible for, and shall indemnify and hold Purchaser and its Affiliates harmless from and against, any obligations or Losses relating to provision of continuation coverage, and all related notices, under any group health plan maintained or formerly maintained by Seller or its Affiliates to or in respect of all current and former employees of the Companies, and their beneficiaries for whom a qualifying event occurs prior to the Closing, and Seller or its Affiliates shall continue to maintain a group health plan following the Closing Date to provide such coverage. Purchaser or its Affiliates shall be solely responsible for and shall indemnify and hold Seller and its Affiliates harmless from and against any Losses relating to the provision of continuation coverage, and all related notices, with respect to any Employees (as defined in Section 5.14(e) below) or other “qualified beneficiaries” who become covered by Purchaser’s group health plan and who experience a qualifying event with respect to such plan after the Closing. The terms “group health plan,” “continuation coverage,” “qualified beneficiaries,” and “qualifying event” are used herein with the meanings ascribed to them in Section 4980B of the Code and Sections 601 - 609 of ERISA.

(c) Vesting and Contributions. Seller shall take such action as is necessary to provide that all employees of the Companies who are participants in the Williams Group International, Inc. Savings and Retirement Plan (the “Seller 401(k) Plan”) have a fully vested and nonforfeitable interest in their entire respective account balances under such plan as of the Closing Date (regardless of their years of vesting credit under the Seller 401(k) Plan). Prior to, or as soon as administratively feasible following the Closing Date, with respect to all Company employees, Seller shall contribute all contributions to the Seller 401(k) Plan (i) which are required to be made on or before the Closing Date under the Seller 401(k) Plan, and (ii) which relate to service or employee salary deferral contributions on or prior to the Closing Date, whether or not required to be made on or prior to the Closing Date under the Seller 401(k) Plan.

(d) No Third Party Rights. Notwithstanding the foregoing, nothing in this Section 5.14 shall be deemed or construed to (i) give rise to any rights, claims, benefits or causes of action to any employee of the Companies or third party whatsoever (including any

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governmental entity), (ii) limit Purchaser’s or the Companies’, or their respective Affiliates’, rights to amend or terminate any of their respective employee benefit plans or arrangements at any time after the Closing or (iii) subject to Section 5.14(f), prevent or restrict Purchaser or any Company, or their respective Affiliates, from modifying or terminating the employment or terms of employment of any Employee, including, without limitation, the amendment or termination of any employee benefit or compensation plan, program or arrangement.

(e) Employees. For purposes of this Section 5.14, the term “Employee” shall include any individual who, immediately prior to the Closing Date, is actively employed by the Companies or is an inactive employee of the Companies by reason of being either on an authorized leave of absence or leave due to military service, regardless of whether such individual is an hourly or salaried employee or union or non-union employee. At-will employment of the Employees shall continue with the applicable Company following the Closing Date at the same salary or wage level that Companies have in effect as of the Closing Date and shall include benefits corresponding to those in effect by Seller immediately prior to the Closing Date under the Employee Benefit Plans that are employee benefit plans within the meaning of Section 3(3) of ERISA; provided, however, that to the extent any Employees are covered by a collective bargaining agreement, the terms of their employment shall be determined under the applicable provisions of such collective bargaining agreement. It is Purchaser’s current intent to give credit under Purchaser’s medical plan following the Closing Date for the amount paid by each Employee for the plan year in which the Closing occurs towards any annual deductible and out-of-pocket expense limit under Seller’s medical plan as of the Closing Date, and it is Purchaser’s current intent to provide benefits that are not within the meaning of Section 3(3) of ERISA that are substantially similar in the aggregate to those provided to Employees by Seller as of the Closing Date under Employee Benefit Plans that are not within the meaning of Section 3(3) of ERISA. As of the Closing Date, Purchaser or its Affiliates shall assume all collective bargaining agreements to which the Companies subscribe and which are set forth on Schedule 3.23(e).

(f) Employee Matters. Effective as of the Closing Date, Purchaser shall take all commercially reasonable actions necessary to permit each Employee to be eligible to participate in the employee benefit plans, programs, policies or arrangements of Purchaser, subject to the terms and conditions thereof; provided, however, that the employment of Employees subject to a collective bargaining agreement to which a Company subscribes shall be governed by the terms of such agreement. Purchaser will cause each of its employee benefit plans, programs, policies or arrangements and its vacation, sick leave and all other leave of absence policies to take into account, for purposes of eligibility and vesting, the length of service of such Employees with the Companies prior to the Closing Date as if such service were with Purchaser, to the same extent that such service was credited under the comparable Seller’s plan or policy; provided, however, that Seller shall provide Purchaser, no later than 30 days after the Closing, a list of the length of service of each of the Employees under each corresponding Seller’s plan and policy. No Employee (or any eligible dependent) who was, immediately prior to the Closing Date, covered under any life or disability insurance plan of Seller will be excluded from coverage under the corresponding plan of Purchaser on the basis of a pre-existing condition except to the extent that coverage was limited or excluded under the corresponding life or disability insurance of Seller’s plan; provided, however, that coverage under any life or disability insurance plan of Purchaser shall only be provided to an Employee as of the first date on or

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following the Closing on which such Employee is “actively at work”, within the meaning of such life or disability insurance plan of Purchaser. Each Employee who participated immediately before the Closing Date in Seller’s group health plan(s) shall be entitled to participate in a comparable group health plans of Purchaser, subject to the terms and conditions thereof. Purchaser shall cause its 401(k) plan to accept a rollover, at the Employee’s request, of such Employee’s entire account balance and loan, if any, from the Seller 401(k) Plan; provided, however, that the obligation of Purchaser’s 401(k) plan to accept rollovers which include loans shall be limited as follows: (A) only loans to Employees who elect to roll over the entire account balance and who are not in default with respect to the loan at the time of the rollover, are required to be accepted; (B) Purchaser may impose such reasonable procedural requests as it deems necessary or appropriate to facilitate such rollovers (including, for example, requiring that such rollovers occur at not more than two specified times acceptable to Purchaser), and (C) Seller shall amend the Seller 401(k) Plan to ensure that such rollovers are permitted in accordance with this Section 5.14(f) and furnish Purchaser with a copy of such amendment prior to the Closing.

§ 5.15 Use of Name. Seller hereby grants to each Company and each Third Party authorized by any Company, effective upon the occurrence of the Closing, a five (5) year, non-exclusive fully-paid, royalty-free license to use the name “Williams” and derivatives thereof in connection with the business operations, products and services of any Company or any such Third Party.

§ 5.16 Pre-Closing Transfers. Notwithstanding anything to the contrary contained herein, Seller hereby covenants and agrees that, except in respect of the services to be provided pursuant to the Transition Services Agreement, it shall transfer or assign, by appropriate documents of transfer or assignment, to the Company designated by any of the Purchaser Designees, prior to the Closing, any and all ownership of leasehold interest that Seller has in and to those assets and rights relating to the business of the Companies which any of the Companies use to conduct their business as described on Schedule 3.10(b) attached hereto, so that at the Closing all such assets and rights shall be owned by the appropriate Company.

§ 5.17 Release of Company Guarantees. Seller agrees to take any and all actions necessary to ensure that the Companies are released concurrently with the Closing from any guarantees by the Companies of the performance or payment obligations of Seller, including any guarantees with respect to Seller’s credit facility with Bank of America, N.A.

§ 5.18 Release of Seller Guarantees. Purchaser agrees to use its commercially reasonable efforts to procure the release of each of Seller, Virgil Williams and/or Jim Williams from their obligations in respect of each of the Licenses, Permits, Bonds and guarantees identified on Schedule 5.18 and, to the extent Purchaser does not procure each such release, Purchaser shall indemnify and hold harmless Seller, Virgil Williams, and/or Jim Williams, as applicable, for any and all Losses incurred by Seller, Virgil Williams or Jim Williams in respect of any such obligations that would not have been so incurred had such obligations been terminated at the Closing.

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§ 5.19 Release of Liens. Seller agrees to take any and all actions necessary to ensure that the Liens described on Schedule 3.1(a) are released prior to or concurrently with Closing.

§ 5.20 Resignation of Managers and Officers. Seller shall cause each of Virgil R. Williams, James M. Williams, Jr., David K. Baxter, G. Scott Walters and David A. Lucas to resign from all of his or her positions as a member of the Board of Managers and as an officer of each of the Companies prior to or concurrently with Closing.

§ 5.21 Management Presentations. Seller agrees that until the Closing it shall continue to cause the executive personnel of the Companies to hold their regular monthly management presentations to Seller’s Executive Committee (the “Management Presentations”) that include information with respect to all material financial and operating issues of the Companies and such other information as Purchaser may reasonably request. Seller agrees to notify the Purchaser Designees at least ten (10) Business Days prior to each monthly management presentation and to invite one or more representatives of Purchaser (to be selected by Purchaser) to attend each meeting. In the event that Purchaser disagrees with or has recommendations with respect to the operation of the business of the Companies prior to the Closing (as detailed in the Management Presentations), Seller agrees to discuss and consider such disagreement or recommendations in good faith and take such actions as Seller determines in good faith are reasonable to address Purchaser’s concerns.

§ 5.22 Network. Seller agrees that at the Closing, pursuant to a Bill of Sale substantially in the form attached hereto as Exhibit E, it will sell, convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase, acquire and accept, all of Seller’s right, title and interest, free and clear of all Liens, in the computer file servers, routers, mainframes, and data storage units set forth on Schedule 5.22 (the “Network Assets”).

§ 5.23 Cooperation. Purchaser and Seller each acknowledge that after the Closing each party will employ certain persons who have detailed and unique knowledge of aspects of the other party’s business including general accounting issues with respect to pre-Closing periods, Closing matters and past, current and future claims relating to workers’ compensation, other insured claims, litigation described on Schedule 3.14, and other litigation, arbitrations or mediations in which such party or its Affiliates are now or hereafter will be engaged. Each party shall cooperate with the other party in all reasonable respects in connection with pre-Closing general accounting issues, Closing matters and the prosecution, defense and resolution of any claim retained by such party, including making records available relating to such claim and furnishing, to such party and/or its counsel, such employees (without expense to the party to whom such employee is being furnished except as provided in Section 5.24 below); provided, however that any such cooperation shall not unduly or unreasonably interrupt the operation of the business of either Purchaser or Seller, as the case may be.

§ 5.24 Shared Services. Purchaser agrees that it shall use its commercially reasonable efforts to cause Darrell Holliday to continue to provide services to Seller with respect to the Excluded Liabilities that are consistent with the nature and scope of the services that he provided prior to the Closing and Seller agrees that for the first twenty four (24) months after the Closing it shall pay by wire transfer of immediately available funds to a bank account designated

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in writing by Purchaser an amount equal to the Monthly Shared Salary Payment on the first day of each calendar month during such period; provided, however, that this Section 5.24 shall have no further force or effect if Darrell Holliday ceases to be an employee of one or more of the Companies and provided, further, that after the second anniversary of the Closing, any services Darrell Holliday provides to Seller under this Section 5.24 shall not unduly or unreasonably interrupt the operation of the business of Purchaser or Seller, as the case may be.

ARTICLE VI

CONDITIONS TO PURCHASER’S OBLIGATIONS

§ 6. Conditions to Purchaser’s Obligations. The purchase of the LLC Interests by Purchaser on the Closing Date is conditioned on satisfaction or waiver by Purchaser, at or prior to the Closing, of the following conditions:

§ 6.1 Truth of Representations and Warranties. The representations and warranties of Seller contained in this Agreement or in any Schedule, Exhibit or certificate delivered pursuant to this Agreement shall be true and correct in all material respects at and as of the Closing with the same effect as though such representations and warranties had been made at and as of the Closing (other than any failure to be true and correct that directly and solely resulted from any actions by Seller in compliance with clauses (i) through (xxii) of Section 5.1(a)), and except (i) to the extent such representations and warranties expressly relate to an earlier date (with references to “the date of this Agreement”, “the date hereof” or any comparable expression being deemed to expressly relate to an earlier date) (in which case such representations and warranties shall be true and correct in all material respects, on and as of such earlier date) and (ii) to the extent that such representations and warranties (whether or not expressly relating to an earlier date) contain a materiality qualifier, in which case they shall be true and correct in all respects) and Seller shall have delivered to Purchaser a certificate of a duly authorized officer of Seller, dated the Closing Date, to such effect; provided, however, that this condition shall be deemed satisfied if the aggregate amount of reasonably foreseeable Losses, if quantifiable in money, arising from all such breaches of representations and warranties at Closing is not more than $5,000,000, and further provided that Purchaser shall retain its right under Article IX in respect of all such Losses subject to the terms of Article IX and the Indemnity Escrow Amount and the Cap shall be increased by the amount of such claims.

§ 6.2 Performance of Agreements. All of the agreements and covenants of Seller to be performed prior to the Closing pursuant to this Agreement shall have been duly performed in all material respects, and Seller shall have delivered to Purchaser a certificate of a duly authorized officer of Seller, dated the Closing Date, to such effect.

§ 6.3 Good Standing and Other Certificates. Seller shall have delivered to Purchaser (a) copies of each Company’s certificate of formation as in effect on the Closing Date, including all amendments thereto, in each case certified by the Secretary of State of the State of Georgia, (b) a certificate of the Secretary of State of the State of Georgia to the effect that the Companies are in good standing or subsisting in such jurisdiction, (c) a certificate from the

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Secretary of State or other appropriate official in each State in which any of the Companies is qualified to do business to the effect that the applicable Companies are in good standing in such State(s) (d) a certificate as to the tax status of the Companies from the appropriate official in its jurisdiction of formation and (e) a copy of the Existing LLC Agreement of each Company, certified by a duly authorized officer of Seller as being true and correct and in effect at the Closing.

§ 6.4 No Injunctions. No action or proceeding shall have been instituted or threatened before a Governmental or Regulatory Authority seeking the issuance of a preliminary or permanent injunction, decree or other Order which prohibits the consummation of the transactions contemplated by this Agreement and which is pending or in effect at the Closing; provided, that in the case of any such injunction, decree or Order, Purchaser shall have used its commercially reasonable efforts to prevent the entry of any such injunction, decree or Order and appeal any such injunction, decree or Order that may be entered to the extent Purchaser has a legal basis to do so.

§ 6.5 Other Consents and Approvals. All (i) consents and approvals, if any, of any Governmental or Regulatory Authority and (ii) third party consents and approvals disclosed on Schedule 3.3(b), necessary to permit the consummation of the transactions contemplated by this Agreement shall have been received.

§ 6.6 Resignation of Managers and Officers. Each of Virgil R. Williams, James M. Williams, Jr., David K. Baxter, G. Scott Walters and David A. Lucas shall have resigned from all of his or her positions as a member of the Board of Managers and as an officer of each of the Companies effective as of the Closing.

§ 6.7 Intra-Company Debt. All Indebtedness of Seller, its Affiliates (other than any Company), or their respective directors, officers or employees that is owed to any of the Companies shall have been repaid in full.

§ 6.8 Statutes; Orders. No Law or Order of any kind shall have been enacted, entered, promulgated or enforced by any Governmental or Regulatory Authority which prohibits the consummation of the transactions contemplated by this Agreement or has the effect of making them illegal.

§ 6.9 Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be reasonably satisfactory in form and substance to Purchaser and its counsel, and Purchaser shall have received copies of all such documents and other evidences as it or its counsel may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

§ 6.10 Other Transaction Documents. (a) The Escrow Agreement substantially in the form attached hereto as Exhibit F (the “Escrow Agreement”), shall have been duly executed and delivered by Seller and the Wilmington Trust Company (the “Escrow Agent”), (b) the Transition Services Agreement, substantially in the form attached hereto as Exhibit G (the “Transition Services Agreement”) shall have been duly executed and delivered by Seller and

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(c) a Lease Agreement relating to the premises occupied by the Companies’ headquarters (the “Headquarters Lease”) substantially in the form attached hereto as Exhibit H shall have been duly executed and delivered by Seller.

§ 6.11 Pay-off Letters. All Indebtedness of the Companies as of the Closing Date shall have been repaid (as evidenced by customary pay-off letters from the holders of such Indebtedness) delivered to Purchaser by Seller. All arrangements reasonably satisfactory to Purchaser providing for mortgage and Lien releases, canceled notes, trademark and patent assignments and other documents reasonably requested by Purchaser prior to Closing shall have been made.

§ 6.12 FIRPTA Compliance. Purchaser shall have received a non-foreign person affidavit of Seller dated the Closing Date as required by Section 1445 of the Code.

§ 6.13 Audited Financials; Auditor Assurances. Purchaser shall have received from BDO Seidman, LLP (i) assurances that allow Purchaser to conclude, in its reasonable discretion, that the combined balance sheet of the Companies and the related combined statements of income, cash flow and equity for the fiscal year ended March 31, 2005 shall be prepared and delivered to Purchaser within fifty (50) days of the Closing and (ii) the audited combined balance sheet of the Companies and the related audited combined statements of income, cash flow and equity for each of the fiscal years ended March 31, 2003 and March 31, 2004 respectively.

ARTICLE VII

CONDITIONS TO SELLER’S OBLIGATIONS

§ 7. Conditions to Seller’s Obligations. The sale of the LLC Interests by Seller on the Closing Date is conditioned upon satisfaction or waiver by Seller, at or prior to the Closing, of the following conditions:

§ 7.1 Truth of Representations and Warranties. The representations and warranties of Purchaser contained in this Agreement or in any Schedule, Exhibit or certificate delivered pursuant to this Agreement shall be true and correct in all material respects at and as of the Closing with the same effect as though such representations and warranties had been made at and as of the Closing, except (i) to the extent such representations and warranties expressly relate to an earlier date (with references to “the date of this Agreement”, “the date hereof” or any comparable expression being deemed to expressly relate to an earlier date) (in which case such representations and warranties shall be true and correct in all material respects, on and as of such earlier date) and (ii) to the extent that such representations and warranties (whether or not expressly relating to an earlier date) contain a materiality qualifier, in which case they shall be true and correct in all respects and Purchaser shall have delivered to Seller a certificate of a duly authorized officer of Purchaser, dated the Closing Date, to such effect.

§ 7.2 Performance of Agreements. All of the agreements and covenants of Purchaser to be performed prior to the Closing pursuant to this Agreement shall have been duly

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performed in all material respects, and Purchaser shall have delivered to Seller a certificate of a duly authorized officer of Purchaser, dated the Closing Date, to such effect.

§ 7.3 No Injunctions. No action or proceeding shall have been instituted or threatened before a Governmental or Regulatory Authority seeking the issuance of a preliminary or permanent injunction, decree or other Order which prohibits the consummation of the transactions contemplated by this Agreement and which is pending or in effect at the Closing; provided, that in the case of any such injunction, decree or Order, Seller shall have used its commercially reasonable efforts to prevent the entry of any such injunction, decree or Order and appeal any such injunction, decree or Order that may be entered to the extent Seller has a legal basis to do so.

§ 7.4 Governmental Approvals. All other consents and approvals, if any, of any Governmental or Regulatory Authority or third party, disclosed on Schedule 4.2(b) or otherwise, necessary to permit the consummation of the transactions contemplated by this Agreement shall have been received.

§ 7.5 Statutes; Orders. No Law or Order of any kind shall have been enacted, entered, promulgated or enforced by any Governmental or Regulatory Authority which prohibits the consummation of the transactions contemplated by this Agreement or has the effect of making them illegal.

§ 7.6 Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be reasonably satisfactory in form and substance to Seller and its counsel, and Seller shall have received copies of all such documents and other evidences as they or their counsel may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

§ 7.7 Other Transaction Documents. (a) The Escrow Agreement shall have been duly executed and delivered by Purchaser and the Escrow Agent, (b) the Transition Services Agreement shall have been duly executed and delivered by Purchaser and (c) the Headquarters Lease shall have been duly executed and delivered by Purchaser.

§ 7.8 Collateral. Purchaser shall have delivered to Seller Collateral having an aggregate amount available thereunder equal to the aggregate principal amount of the Secured Bonds.

ARTICLE VIII

TAX MATTERS

§ 8.1 Tax Returns. (a) Seller shall have the exclusive authority and obligation to prepare, execute and timely file, or cause to be prepared and timely filed, (i) all Returns of Seller, including federal, state and local income Tax Returns on which the income and operations of the Companies are reported for any Pre-Closing Period and (ii) all Returns of the Companies

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that are due with respect to any taxable year or other taxable period ending prior to or ending on and including the Closing Date. Such authority shall include, but not be limited to, the determination of the manner in which any items of income, gain, deduction, loss or credit arising out of the income, properties and operations of the Companies shall be reported or disclosed in such Returns; provided, that such Returns shall be prepared by treating items on such Returns in a manner consistent with past practices of Seller and the Companies with respect to such items and Returns described in clause (ii) of this paragraph shall not be filed without the prior written consent of Purchaser, which consent shall not be unreasonably withheld or delayed.

(b) Except as provided in Section 8.1(a), Purchaser shall have the exclusive authority and obligation to prepare and timely file, or cause to be prepared and timely filed, all Returns of, or with respect to, income, operations and property of the Companies; provided, that with respect to Returns to be filed by Purchaser pursuant to this Section 8.1 for taxable periods beginning before the Closing Date and ending after the Closing Date (the “Overlap Period”), such Returns shall be prepared in accordance with past practice of the Companies and shall not be filed without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed. Such authority shall include, but not be limited to, the determination of the manner in which any items of income, gain, deduction, loss or credit arising out of the income, properties and operations of the Companies shall be reported or disclosed on such Returns.

§ 8.2 Payment of Taxes. (a) Seller shall be responsible and liable for the timely payment of any and all Taxes imposed on or with respect to the properties, income and operations of the Companies for all Pre-Closing Periods, including the portion of the Overlap Period up to and including the Closing Date. In addition, Seller shall pay to Purchaser the amount of any Taxes allocated to Seller pursuant to Section 8.2(b) below (to the extent that Seller is liable therefor and to the extent (x) such Taxes have not already been paid by Seller on or before the Closing Date and (y) have not been reserved for as a liability on the Working Capital Statement and resulted in a reduction to the Purchase Price under Section 2.3) on or prior to the earlier of (i) the due date of such Taxes (provided that Seller shall have received a draft of the relevant Return pursuant to Section 8.1(b) above and shall have had reasonable opportunity to review and comment on such Return on or prior to the due date of such Taxes) or (ii)ten (10) days after giving its written consent to the filing of such Return.

(b) All Taxes and Tax liabilities with respect to the income, property or operations of the Companies that relate to the Overlap Period shall be apportioned between Seller and Purchaser as follows: (i) in the case of Taxes other than income, sales and use and withholding Taxes, on a per diem basis, and (ii) in the case of income, sales and use and withholding Taxes, as determined from the books and records of Seller and the Companies as though the taxable year of the Companies terminated at the close of business on the Closing Date. Seller shall be liable for Taxes of, or with respect to, the Companies which are attributable to the portion of the Overlap Period ending on and including the Closing Date and Purchaser shall be liable for Taxes of the Companies which are attributable to the portion of the Overlap Period beginning on the day following the Closing Date.

§ 8.3 Transfer Taxes. All stamp, transfer, documentary, sales and use, value added, registration, and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement or any transaction contemplated hereby (collectively, the

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“Transfer Taxes”) shall be paid by Seller and Purchaser on a 50:50 basis, and the party having the responsibility therefor under applicable Law shall, at its own expense, properly file on a timely basis all necessary Returns, reports, forms, and other documentation with respect to any Transfer Tax and provide to the other party evidence of payment of such Transfer Taxes.

§ 8.4 Amended Returns. Neither Seller nor Purchaser shall file or cause to be filed any amended Return or claims for refund with respect to the income, operations or property of any of the Companies for any Pre-Closing Period without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed.

§ 8.5 Indemnification. Seller agrees to indemnify, defend and hold Purchaser and its Affiliates (including any Company after the Closing) and their respective members, officers, directors, employees agents, successors and assigns, harmless from and against: (i) all Taxes, losses, claims and expenses resulting from, arising out of, or incurred with respect to, any claims that may be asserted by any party based on, attributable to, or resulting from the failure of any representation or warranty made pursuant to Section 3.15 to be true and correct in all respects as of the date of this Agreement and as of the Closing Date (without giving effect to any “materiality”, “Material Adverse Effect” or similar qualification); (ii) all Taxes imposed on, or asserted against, the income, operations or property of the Companies for all Pre-Closing Periods; provided, however, that the amount of any indemnity arising under this clause (ii) shall be reduced by the amount of such Taxes, with respect to which an indemnity claim is made, that (A) have been reserved for as a liability on the Working Capital Statement and (B) resulted in a reduction of the Purchase Price under Section 2.3 hereof; and (iii) all Taxes imposed on Seller or any corporation in which Seller or its Affiliates have a direct or indirect equity interest, for any taxable year or period. Purchaser agrees to indemnify, defend and hold Seller and its Affiliates and their respective members, officers, directors, employees, agents, successors and assigns, harmless from and against all Taxes imposed on, or asserted against, the income, operations or property of the Companies with respect to any taxable years or periods beginning the day after the Closing Date and, with respect to any taxable year or period beginning on or before and ending after the Closing Date, the portion of such taxable year or period beginning the day after the Closing Date (“Post-Closing Periods”). Claims for indemnification pursuant to this Section 8.5 shall be made and determined pursuant to indemnification procedures set forth in Section 9.3

§ 8.6 Allocation of Purchase Price. Seller and Purchaser agree to allocate the aggregate purchase price to be paid for the LLC Interests in accordance with Section 1060 of the Code. If Seller and Purchaser are not able to reduce such allocation to writing prior to the Closing Date, Seller and Purchaser agree that Purchaser shall prepare and provide to Seller a draft allocation of the purchase price among the assets of the Companies within ninety (90) days after the Closing Date. Seller shall notify Purchaser within thirty (30) days of receipt of such draft allocation of any objection Seller may have thereto. Seller and Purchaser agree to resolve any disagreement with respect to such allocation in good faith. In addition, Seller and Purchaser hereby undertake and agree to file timely any information that may be required to be filed pursuant to Treasury Regulations promulgated under Section 1060(b) of the Code, and shall use the allocation determined pursuant to this Section 8.6 in connection with the preparation of Internal Revenue Service Form 8594 as such form relates to the transactions contemplated by this Agreement. Neither Seller nor Purchaser shall file any Return or other document or otherwise take any position which is inconsistent with the allocation determined pursuant to this

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Section 8.6 except as may be adjusted by subsequent agreement following an audit by the IRS or by court decision.

§ 8.7 Books and Records. Until the seventh anniversary of the Closing Date, Seller will, to the extent necessary in connection with any Taxes or other matter relating to the Companies for any period ending at or prior to the Closing, and without charge to Purchaser, (i) retain and, as Purchaser may reasonably request, permit Purchaser and its agents to inspect (during normal business hours) and copy all original books, records and other documents and all electronically archived data not deliverable to Purchaser at Closing related to the Companies and (ii) make reasonably available (during normal business hours) to Purchaser the officers, directors, employees and agents of Seller and its affiliates.

ARTICLE IX

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

§ 9.1 Survival Periods. (a) Except as set forth in paragraph (b) below, the respective representations and warranties of the Parties contained in this Agreement or in any Schedule, Exhibit or certificate delivered pursuant to this Agreement shall survive the Closing Date for a period of eighteen (18) months after the Closing Date.

(b) The representations and warranties contained in Sections 3.1 (Ownership of LLC Interests; Existence and Good Standing of Seller), 3.2 (Authority and Enforceability), 3.5 (Capitalization of the Companies; Restructuring), 3.29 (Brokers’ or Finders’ Fees), 4.1 (Existence and Good Standing of Purchaser; Power and Authority) and 4.4 (Brokers’ or Finders’ Fees) shall survive indefinitely. The representations and warranties contained in Sections 3.15 (Taxes) shall survive until sixty (60) days after the expiration of the applicable statute of limitations period (after giving effect to any waivers and extensions thereof). The representations and warranties contained in Section 3.7 (Financial Statements) shall survive until the date that is thirty (30) days after Purchaser shall have received from Purchaser’s independent accountants the audited consolidated financial statements of Purchaser and its Subsidiaries (including the Companies) for the fiscal year ended December 31, 2005; provided, however, that Seller’s representations and warranties contained in Section 3.7 (Financial Statements), solely with respect to the Unaudited Financial Statements (and, for the avoidance of doubt, not with respect to the Audited Financial Statements), shall expire on the date that is 10 Business Days after Seller shall have delivered the Audited Financial Statements to Purchaser pursuant to Section 5.4(b).

(c) Covenants shall survive in accordance with their terms.

§ 9.2 Indemnification. (a) Seller agrees to indemnify and hold Purchaser and its Affiliates (including each Company after the Closing) and their respective members, officers, directors, employees, agents, successors and assigns (each a “Purchaser Indemnitee”), harmless from and against any damages, losses, liabilities, obligations, claims of any kind, interest or expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively, “Losses”), suffered, incurred or paid, directly or indirectly, through application of a Purchaser Indemnitee’s assets or otherwise, as a result of, in connection with or arising out of (i) the failure

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of any representation or warranty made by Seller in this Agreement or in any Schedule, Exhibit or certificate or delivered pursuant to this Agreement (other than pursuant to Section 3.15 (Taxes)) to be true and correct in all respects as of the date of this Agreement and as of the Closing (without giving effect to any “materiality,” “Material Adverse Effect” or similar qualification) unless such failure results from actions taken by Seller in compliance with clauses (i) through (xxii) of Section 5.1(a), (ii) any breach by Seller of any of its covenants or agreements contained herein, (iii) any Transaction Expenses payable or alleged to be payable by Purchaser or any of its Affiliates (including any Company) and (iv) Excluded Liabilities.

(b) Purchaser agrees to indemnify and hold Seller and its Affiliates and their respective members, officers, directors, employees, agents, successors and assigns (each a “Seller Indemnitee”), harmless from and against any Losses, suffered, incurred or paid, directly or indirectly, through application of a Seller Indemnitee’s assets or otherwise, as a result of, in connection with or arising out of (i) the failure of any representation or warranty made by Purchaser in this Agreement or in any Schedule, Exhibit or certificate or delivered pursuant to this Agreement to be true and correct in all respects as of the date of this Agreement and as of the Closing (without giving effect to any “materiality,” “Material Adverse Effect” or similar qualification) and (ii) any breach by Purchaser of any of its covenants or agreements contained herein.

(c) The obligations to indemnify and hold harmless pursuant to Section 8.5 and Section 9.2(a) and 9.2(b) shall survive the consummation of the transactions contemplated by this Agreement for the time periods set forth in Section 9.1, except for claims for indemnification properly asserted in accordance with this Agreement prior to the end of such periods, which claims shall survive until final resolution thereof.

(d) The obligations to indemnify and hold harmless pursuant to Section 9.2(a)(i) and Section 9.2(b)(i) shall be limited to an aggregate amount equal to $6,500,000 (the “Cap”) and no Person shall be entitled to recovery for Losses pursuant to such sections until the total amount of Losses exceeds an amount equal to $500,000 (the “Basket Amount”); provided, that to the extent the amount of Losses exceeds the Basket Amount, the Indemnified Party shall be entitled to recover the amount of Losses in excess of the Basket Amount; provided, that the limitation on indemnification contained in this Section 9.2(d) shall not apply to Losses which arise from a breach of representations and warranties contained in Section 3.1 (Ownership of LLC Interests; Existence, Good Standing and Capitalization of the Companies), Section 3.2 (Authority and Enforceability), Section 3.4 (Existence and Good Standing of the Companies), Section 3.5 (Capitalization of the Companies; Restructurings), Section 3.15 (Taxes) and Section 3.29 (Brokers or Finders’ Fees).

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§ 9.3 Indemnification Procedure. (a) As soon as practicable after the incurrence of any Losses by any Person entitled to indemnification pursuant to Section 9.2 hereof (an “Indemnified Party”), including, any claim by a Third Party described in Section 9.4, which might give rise to indemnification hereunder, the Indemnified Party shall deliver to the Party from which indemnification is sought (the “Indemnifying Party”) a certificate in the form of Exhibit I (the “Certificate”), which Certificate shall:

(i) state that the Indemnified Party has paid or properly accrued Losses or reasonably anticipates in good faith that it will incur liability for Losses for which such Indemnified Party is entitled to indemnification pursuant to this Agreement;

(ii) specify in reasonable detail each individual item of Loss included in the amount so stated, the date such item was paid or properly accrued, the basis for any anticipated liability and the nature of the misrepresentation, breach of warranty, breach of covenant or claim to which each such item is related and the computation of the amount to which such Indemnified Party claims to be entitled hereunder; and

(iii) be delivered to the Indemnified Party and, if applicable, the Escrow Agent.

(b) In the event that the Indemnifying Party shall object to the indemnification of an Indemnified Party in respect of any claim or claims specified in any Certificate, the Indemnifying Party shall, within twenty (20) days after receipt by the Indemnifying Party of such Certificate, deliver to the Indemnified Party a notice to such effect and the Indemnifying Party and the Indemnified Party shall, within the thirty (30) day period beginning on the date of receipt by the Indemnified Party of such objection, attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims to which the Indemnifying Party shall have so objected. If the Indemnified Party and the Indemnifying Party shall succeed in reaching agreement on their respective rights with respect to any of such claims, the Indemnified Party and the Indemnifying Party shall promptly prepare and sign a memorandum setting forth such agreement. Should the Indemnified Party and the Indemnifying Party be unable to agree as to any particular item or items or amount or amounts, then the Indemnified Party and the Indemnifying Party shall submit such dispute to a court of competent jurisdiction. The Party which receives a final judgment in such dispute shall be indemnified and held harmless for all reasonable attorney and consultant’s fees or expenses by the other Party.

(c) Claims for Losses specified in any Certificate to which an Indemnifying Party shall not object in writing within twenty (20) days of receipt of such Certificate, claims for Losses covered by a memorandum of agreement of the nature described in Section 9.3(b), claims for Losses the validity and amount of which have been the subject of judicial determination as described in Section 9.3(b) and claims for Losses the validity and amount of which shall have been the subject of a final judicial determination, or shall have been settled with the consent of the Indemnifying Party, as described in Section 9.4, are hereinafter referred to, collectively, as “Agreed Claims.” Within ten (10) days of the determination of the amount of any Agreed Claims, the Indemnifying Party shall pay to the Indemnified Party (except in the case where a payment has been already effected pursuant to the Escrow Agreement) an amount equal to the Agreed Claim, subject to the limitations in Section 9.2(d), by wire transfer in immediately available funds to the bank account or accounts designated by the Indemnified Party in a notice to the Indemnifying Party not less than two (2) Business Days prior to such payment.

§ 9.4 Third Party Claims. (a) If a claim by a Third Party is made against any Indemnified Party, and if such Party intends to seek indemnity with respect thereto under this Article IX, such Indemnified Party shall promptly notify the Indemnifying Party of such claim; provided, that the failure to so notify shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent that the Indemnifying Party is actually and materially prejudiced

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thereby. Thereafter, the Indemnified Party shall deliver to the indemnifying party, as promptly as practicable following the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party claim that are not separately addressed to the Indemnifying Party.

(b) The Indemnifying Party shall have thirty (30) days after receipt of such notice to assume the conduct and control, through counsel reasonably acceptable to the Indemnified Party at the expense of the Indemnifying Party, of the settlement or defense thereof;

(i) provided, that

(A) the Indemnifying Party shall permit the Indemnified Party to participate in, but not control, such settlement or defense through counsel chosen by such Indemnified Party, provided that the fees and expenses of such counsel shall be borne by such Indemnified Party, subject to Section 9.4(iii) below; and

(B) the Indemnifying Party shall promptly be entitled to assume the defense of such action only to the extent the Indemnifying Party first acknowledges in writing, solely as between the Indemnifying Party and the Indemnified Party, (1) its indemnity obligation in accordance herewith to the extent that there is any Loss and (2) that it assumes and holds such Indemnified Party harmless from and against the full amount of the Loss subject to Section 9.2(d), if any, resulting therefrom;

(ii) provided, further, that the Indemnifying Party shall not be entitled to assume control of such defense and shall pay the fees and expenses of counsel retained by the Indemnified Party if

(A) the third party claim would reasonably be expected to give rise to Losses which are more than twice the amount indemnifiable by such Indemnifying Party pursuant to this Article IX;

(B) the claim for indemnification relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation against the Indemnified Party or any of its affiliates;

(C) the claim seeks an injunction or equitable relief against the Indemnified Party;

(D) the Indemnified Party has been advised in writing by counsel reasonably acceptable to the Indemnifying Party that a reasonable likelihood exists of a conflict of interest between the Indemnifying Party and the Indemnified Party;

(E) the Indemnified Party reasonably believes an adverse determination with respect to the action, lawsuit, investigation, proceeding or other claim giving rise to such claim for indemnification would be materially injurious to the Indemnified Party’s reputation or future business prospects and not recoverable through indemnification by the Indemnified Party pursuant to this Article IX; or

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(F) upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or defend such claim.

(iii) Any Indemnified Party shall have the right to employ separate counsel in any such action or claim and to participate in, but not control, the defense thereof in accordance with Section 9.4(b)(i)(A) above, but the fees and expenses of such counsel shall not be at the expense of the Indemnifying Party unless

(A) the Indemnifying Party shall have failed, within a reasonable time after having been notified in writing by the Indemnified Party of the existence of a claim, to assume the defense of such claim;

(B) the employment of such counsel has been specifically authorized in writing by the Indemnifying Party; or

(C) the named parties to any such action (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party and such Indemnified Party shall have been advised in writing by such counsel that there may be one or more legal defenses available to the Indemnified Party which are not available to the Indemnifying Party, or available to the Indemnifying Party the assertion of which would be adverse to the interests of the Indemnified Party.

In the event that any of (iii)(A), (B) and (C) above apply, the fees and expenses of such counsel engaged by the Indemnified Party shall be borne by such Indemnifying Party.

(iv) So long as the Indemnifying Party is reasonably contesting any such claim in good faith, the Indemnified Party shall not pay or settle any such claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to pay or settle any such claim, provided, that in such event it shall waive any right to indemnity therefor by the Indemnifying Party for such claim unless the Indemnifying Party shall have consented to such payment or settlement.

(v) If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days after the receipt of the Indemnified Party’s notice of a claim of indemnity hereunder that it elects to undertake the defense thereof, the Indemnified Party shall have the right to contest, settle or compromise the claim but shall not thereby waive any right to indemnity therefor pursuant to this Agreement.

(vi) The Indemnifying Party shall not, except with the consent of the Indemnified Party, enter into any settlement that is not entirely indemnifiable by the Indemnifying Party pursuant to this Article IX and does not include as an unconditional term thereof the giving by the Person or Persons asserting such claim to all Indemnified Parties of an unconditional release from all liability with respect to such claim or consent to entry of any judgment.

(vii) The Indemnifying Party and the Indemnified Party shall cooperate with each other in all reasonable respects in connection with the defense of any claim, including making available records relating to such claim and furnishing, without expense to the Indemnifying Party and/or its counsel, such employees of the Indemnified Party as may be

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reasonably necessary for the preparation of the defense of any such claim or for testimony as witnesses in any proceeding relating to such claim.

§ 9.5 Tax Benefits Realized by Indemnified Party.

(a) In the event that Purchaser is entitled to indemnification of Losses pursuant to a claim for indemnification under Section 8.5 and 9.2(a) and Purchaser reasonably determines in its good faith judgment that it or any of its Affiliates has actually received or realized in connection therewith any refund or any reduction of, or credit against, its Tax liabilities (calculated on the basis of the actual reduction in cash payments for Taxes) in or prior to the taxable year in which the indemnification amount is paid (a “Tax Benefit”), the indemnification amount that Purchaser is entitled to recover shall be reduced, on a dollar for dollar basis, by the amount of such Tax Benefit; provided, however, that (i) Purchaser shall not be obligated to file amended Tax Returns for such purpose; (ii) any Taxes that are imposed on Purchaser or any of its Affiliates as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of Purchaser or such Affiliate that otherwise would not have expired) of any Tax Benefit with respect to which Purchaser has made a payment to Seller pursuant to this Section 9.5(a) shall be treated as a Tax for which Seller is obligated to indemnify Purchaser to the extent of the amount of such Tax Benefit pursuant to Section 8.5 hereof without any exclusions or defenses; and (iii) nothing in this Section 9.5(a) shall require Purchaser to disclose any confidential information to Seller (including, without limitation, its Tax Returns).

(b) In the event that Seller is entitled to indemnification of Losses pursuant to a claim for indemnification under Section 8.5 and 9.2(b) and Seller reasonably determines in good faith that it or any of its Affiliates has actually received or realized in connection therewith a Tax Benefit, the indemnification amount that Seller is entitled to recover shall be reduced on a dollar for dollar basis, by the amount of such Tax Benefit; provided, however, that (i) Seller shall not be obligated to file amended Tax Returns for such purpose; (ii) any Taxes that are imposed on Seller or any of its Affiliates as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of Seller or such Affiliate that otherwise would not have expired) of any Tax Benefit with respect to which Seller has made a payment to Purchaser pursuant to this Section 9.5(b) shall be treated as a Tax for which Purchaser is obligated to indemnify Seller to the extent of the amount of such Tax Benefit pursuant to Section 8.5 hereof without any exclusions or defenses; and (iii) nothing in this Section 9.5(b) shall require Seller to disclose any confidential information to Purchaser (including, without limitation, its Tax Returns).

§ 9.6 Exclusive Remedy. Notwithstanding anything in this Agreement to the contrary, except in the case of fraud and except in accordance with Section 10.2(d), the sole and exclusive basis on which any Party may recover monetary damages under this Agreement from any other Party, whether based upon breach of representations and warranties, breach of any covenant, or otherwise, shall be in accordance with the indemnification provisions set forth in Articles VIII and IX, and subject to the limitations, exclusions, caps and basket amounts set forth in this Article IX, provided, however, that such exclusive remedies for monetary damages shall not preclude any party from pursuing the remedies of specific performance, injunctive relief, non-monetary declaratory judgment or any other non-monetary equitable remedies available to

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such party under applicable Law. The Parties waive all rights under statutory or common law for contribution, restitution or indemnification except in the case of fraud.

§ 9.7 Liability Limitation. Notwithstanding anything to the contrary contained herein (other than the provisions of Section 10.2(d)), in no event shall any party be liable for any punitive, special, incidental or consequential damages, including lost profits, arising out of any breach of the representations, warranties, covenants or other provisions of this Agreement (except for punitive damages arising out of or with respect to a claim by a Third Party that is otherwise subject to the indemnification provisions of this Article IX); For the avoidance of doubt, without limiting the foregoing, in the event of a breach of representations in Section 3.7(c), Purchaser shall have the right to prove actual damages caused by the breach based upon the difference between the sum of (i) the Equity Purchase Price (as adjusted pursuant to Section 2.3) plus (ii) the Deferred Purchase Price Payments, if any, and the value of the business of the Companies taking into consideration such breach.

§ 9.8 Escrow. Anything contained in this Agreement to the contrary notwithstanding, any amounts payable by Seller pursuant to Section 9.2(a)(i), shall, to the extent available, be satisfied from the Indemnity Escrow Amount held pursuant to the Escrow Agreement.

ARTICLE X

TERMINATION AND ABANDONMENT

§ 10.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned, at any time prior to the Closing:

(a) by mutual consent of the Parties;

(b) by Purchaser at any time, for any or no reason in its sole discretion (and regardless of whether Purchaser has breached or is then in breach in any respect of this Agreement) subject to Section 10.2(b).

(c) by either Party, if the Closing shall not have occurred by April 30, 2005; provided, that the right to terminate this Agreement under this Section 10.1(c) shall not be available to any Party whose failure to fulfill any obligation or other act or failure to act under this Agreement shall be the cause of the failure of the Closing to occur on or before such date; provided, further, that the right to terminate this Agreement under this Section 10.1(c) shall not be available to either party until June 30, 2005 if the condition set forth in Section 6.13 is not satisfied.

(d) by either Party if there has been a breach of any covenant or a breach of any representation or warranty of the other Party, which breach would cause the failure of any condition precedent set forth in Article VI or VII, as the case may be; provided, that any such breach of a covenant or representation or warranty has not been cured within ten (10) Business Days following receipt by the breaching Party of written notice of such breach;

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(e) by either Party, if there shall be any Law of any competent authority that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if any Order of any competent authority prohibiting such transactions is entered and such Order shall become final and not subject to appeal or reconsideration;

(f) by Purchaser within ten (10) Business Days after the delivery to Purchaser of the Audited Financial Statements, if the balance sheet or income statement contained in the Audited Financial Statements reveal that any representation or warranty contained in Section 3.7(c) with respect to the Unaudited Financial Statements for the fiscal year ended March 31, 2004 was not true and correct in all respects when made; or

§ 10.2 Effect of Termination.

(a) If this Agreement is terminated pursuant to Section 10.1 by either Party, the terminating Party shall give the other Party written notice thereof specifying the provision of Section 10.1 pursuant to which such termination is made, and, except as set forth in paragraphs (b), (c) and (d) below, this Agreement shall be terminated and there shall be no liability hereunder on the part of any Party, except that the provisions of Section 5.3(b) (Review of the Companies), Section 5.8 (Public Announcements), Section 10.1 (Termination), this Section 10.2, Section 11.1 (Expenses), Section 11.2 (Governing Law) and Section 11.3 (Jurisdiction) shall survive any termination of this Agreement. Nothing in this Section 10.2 shall relieve any Party of liability for any intentional or bad faith breach of this Agreement, except (i) in the event Purchaser pays to Seller the Termination Fee pursuant to Section 10.2(b), in which case Purchaser shall be relieved of any and all liability it may have under this Agreement (whether such liability arises under contract, tort or otherwise) for any reason, except with respect to the provisions of Section 5.3(b) (Review of the Companies), Section 5.8 (Public Announcements), Section 10.1 (Termination), this Section 10.2, Section 11.1 (Expenses) and Section 11.2 (Governing Law) and Section 11.3 (Jurisdiction), (ii) in the event Seller pays to Purchaser the Seller Termination Fee pursuant to Section 10.2(c), in which case Seller shall be relieved of any and all liability it may have under this Agreement (whether such liability arises under contract, tort or otherwise) for any reason, except with respect to the provisions of Section 5.3(b) (Review of the Companies), Section 5.8 (Public Announcements), Section 10.1 (Termination), this Section 10.2, Section 11.1 (Expenses) and Section 11.2 (Governing Law) and Section 11.3 (Jurisdiction) and (iii) as provided in Section 10.2(d).

(b) If this Agreement is terminated pursuant to Section 10.1(b) then Purchaser shall pay to Seller, as liquidated damages and not as a penalty, an amount equal to Five Million Dollars ($5,000,000) (the “Termination Fee”) in immediately available funds concurrently with the notice of termination and, upon such payment, neither Purchaser nor any of its directors, officers, employees, agents or representatives nor any of their Affiliates shall have any further liability or obligation hereunder (whether such liability arises under contract, tort or otherwise) including for any breach of this Agreement or otherwise in respect of the transactions contemplated hereby. Seller and Purchaser hereby acknowledge and agree that the actual amount of damages that may be sustained by Seller in the event this Agreement is terminated pursuant to Section 10.1(b) are impossible to quantify and the amount payable pursuant to this Section 10.2(b) constitutes a mutually agreed fair and reasonable estimate thereof.

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(c) If this Agreement is terminated by Purchaser pursuant to (i) Section 10.1(c) and on the date of such termination (x) Section 6.1 is not satisfied and (y) all of the conditions set forth in Article VII have been satisfied or (ii) Section 10.1(d) (other than as a result of an intentional or bad faith breach by Seller), Seller shall pay to Purchaser, as liquidated damages and not as a penalty, an amount equal to One Million Dollars ($1,000,000) (“Seller Termination Fee”) and, upon such payment, neither Seller nor any of its directors, officers, employees, agents or representatives shall have any further liability or obligation hereunder (whether such liability arises under contract, tort or otherwise) including for any breach of this Agreement or otherwise in respect of the transactions contemplated hereby. Purchaser and Seller hereby acknowledge and agree that the actual amount of damages that may be sustained by Purchaser in the event this Agreement is terminated pursuant to Section 10.1(c) are impossible to quantify and the amount payable pursuant to this Section 10.2(c) constitutes a mutually agreed fair and reasonable estimate thereof.

(d) If this Agreement is terminated by Purchaser pursuant to Section 10.1(d) as a result of an intentional or bad faith breach by Seller, then Purchaser shall in the first instance (without prejudicing Purchaser’s right to monetary damages) pursue a remedy for the breach or breaches giving rise to Purchaser’s right to terminate pursuant to this Section 10.2(d) of specific performance; provided, however, that in the event specific performance is not available to Purchaser as a remedy for any reason within ninety (90) days of the commencement of proceedings to seek such remedy, Purchaser shall be entitled to seek any and all damages arising out of the breach or breaches giving rise to Purchaser’s right to terminate pursuant to Section 10.1(d) without giving effect to Section 9.7.

ARTICLE XI

MISCELLANEOUS

§ 11.1 Expenses. Each of the Parties shall pay all of its own expenses relating to the transactions contemplated by this Agreement, including the fees and expenses of its counsel and financial advisers.

§ 11.2 Governing Law. The interpretation and construction of this Agreement, and all matters relating hereto, shall be governed by the laws of the State of Delaware applicable to agreements executed and to be performed solely within such State.

§ 11.3 Jurisdiction; Agents for Service of Process. Any judicial proceeding brought against any of the Parties to this Agreement on any dispute arising out of this Agreement or any matter related hereto may be brought in the United States District Court for the District of Delaware, and, by execution and delivery of this Agreement, each of the Parties accepts the exclusive jurisdiction of such court, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. The foregoing consents to jurisdiction shall not constitute general consents to jurisdiction in the State of Delaware for any purpose except as provided above and shall not be deemed to confer rights on any Third Party. The prevailing Party or Parties in any such litigation shall be entitled to receive from the losing Party or Parties

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all costs and expenses, including reasonable counsel fees, incurred by the prevailing Party or Parties. Each Party agrees that service of any process, summons, notice or document by U.S. registered mail to such Party’s address set forth in Section 11.5 shall be effective service of process for any action, suit or proceeding in Delaware with respect to any matters for which it has submitted to jurisdiction pursuant to this Section 11.3.

§ 11.4 Table of Contents; Captions. The table of contents and the Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

§ 11.5 Notices. Any notice or other communication required or permitted under this Agreement shall be deemed to have been duly given (i) five Business Days following deposit in the mails if sent by registered or certified mail, postage prepaid, (ii) when sent, if sent by facsimile transmission, if receipt thereof is confirmed by telephone, (iii) when delivered, if delivered personally to the intended recipient and (iv) two Business Days following deposit with a nationally recognized overnight courier service, in each case addressed as follows:

if to Seller, to

Williams Group International, LLC

2076 West Park Place

Stone Mountain, Georgia 30087-3530

Telephone: 770-879-4000

Facsimile: 770-498-6258

Attn: Virgil R. Williams and David K. Baxter

with a copy (which shall not constitute notice) to

Arnall Golden Gregory LLP

171 17^th Street Suite 2100

Atlanta, Georgia 30363

Telephone: 404-873-8642

Facsimile: 404-873-8643

Attn: Eva P. Cederholm, Esq.

and if to Purchaser, to

c/o Global Power Equipment Group Inc.

6120 South Yale

Suite 1480

Tulsa, OK 74136

Telephone: 918-488-0828

Facsimile: 918-274-2367

Attn: Candice L. Cheeseman

with a copy (which shall not constitute notice) to

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White & Case LLP

1155 Avenue of the Americas

New York, NY 10036

Telephone: 212-819-8200

Facsimile: 212-354-8113

Attn:    John M. Reiss, Esq.

            Oliver C. Brahmst, Esq.

or such other address or number as shall be furnished in writing by any such party.

§ 11.6 Assignment; Parties in Interest. This Agreement may not be transferred, assigned, pledged or hypothecated by any Party without the express written consent of the other Party, other than by operation of Law; provided, that Purchaser may without the consent of Seller, but with not less than ten Business Days advance notice to Seller, assign its rights, interests and obligations hereunder (i) to any direct or indirect wholly owned Subsidiary of Purchaser and (ii) for the purpose of securing any financing of the transactions contemplated hereby; provided, further, that if Purchaser makes any assignment referred to in (i) or (ii) above, Purchaser shall remain liable under this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, successors and permitted assigns.

§ 11.7 Counterparts. This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument.

§ 11.8 Entire Agreement. This Agreement, including the other documents referred to herein which form a part hereof, contains the entire understanding of the Parties with respect to the subject matter contained herein and therein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to such subject matter.

§ 11.9 Amendments. This Agreement may not be changed, and any of the terms, covenants, representations, warranties and conditions cannot be waived, except pursuant to an instrument in writing signed by the Parties or, in the case of a waiver, by the Party waiving compliance.

§ 11.10 Severability. If any term, provision, agreement, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, agreements, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.

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§ 11.11 Third Party Beneficiaries. Each Party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Third Party.

§ 11.12 No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

§ 11.13 Waiver of Jury Trial. Each Party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect of any litigation as between the Parties directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby or disputes relating hereto. Each Party (i) certifies that no representative, agent or attorney of the other Party has represented, expressly or otherwise that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other Party have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 11.13.

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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its respective officers thereunto duly authorized as of the date first above written.

GLOBAL POWER EQUIPMENT GROUP INC.
By:	/s/ John M. Matheson
	Name: John M. Matheson Title:   Senior Vice President

WILLIAMS GROUP INTERNATIONAL, LLC
By:	/s/ Virgil R. Williams
	Name: Virgil R. Williams Title:   Chairman of the Board of Managers

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EXHIBIT A to

Purchase Agreement

CURRENT ASSETS

RECEIVABLES

ACCOUNTS RECEIVABLE - TRADE

RETENTION RECEIVABLES - TRADE

ALLOWANCE FOR DOUBTFUL ACCOUNTS

EMPLOYEE RECEIVABLES

OTHER RECEIVABLES

OTHER CURRENT ASSETS

NET OVER/UNDER BILLING

INVENTORIES

SECURITY DEPOSITS

OTHER CURRENT ASSETS

CLAIMS RECEIVABLE

TOTAL CURRENT ASSETS

CURRENT LIABILTIES

NOTES PAYABLE - CURRENT

ACCOUNTS PAYABLE

TRADE PAYABLES

ACCRUED TRADE PAYABLES

ACCRUED LIABILITIES

INSURANCE*

SALES, USE, & PROPERTY TAX

ACCRUED PAYROLL

ACCRUED PAYROLL TAXES

EMPLOYEE BENEFITS

TOTAL CURRENT LIABILITIES

WORKING CAPITAL

* Does not include Excluded Liabilities

EXHIBIT B to

Purchase Agreement

CALCULATION AND PAYMENT OF DEFERRED PURCHASE PRICE

§ 1. Definitions.

§ 1.1 Defined Terms. When used in this Exhibit B, the following terms shall have the meanings specified therefor below:

“Actual Gross Profit” shall mean the actual Gross Profit of the Companies for calendar year 2005.

“Base Gross Profit Target Amount” shall mean EIGHTEEN MILLION SEVEN HUNDRED AND TWENTY-THREE THOUSAND DOLLARS ($18,723,000).

“Earnout Amount” shall mean the amount, if any, determined pursuant to Section 2.1 below.

“Earnout Period” shall mean the period beginning on the day after the Closing Date and ending on December 31, 2005.

“Exchange Rate” shall mean the average closing price of GPEG Common Stock on the New York Stock Exchange for the ten (10) day trading period ending immediately prior to the Final Determination Date.

“Executive” shall mean each of Luther “Dan” Daniels, Douglas Page, David Harley, Thomas McDowell, Thomas McNamara, Michael Foster, Clyde Hames, Tina Robinson and Scott Walters.

“Final Determination Date” shall mean the date on which the final Earnout Amount is determined pursuant to Section 3 below.

“Forfeiture Amount” shall mean, with respect to each Executive who is employed by one or more of the Companies immediately after the Closing but is not employed by one or more of the Companies on January 1, 2006, the result obtained when (i) the quotient obtained when the number of calendar days during the Earnout Period that such Executive was employed by one or more of the Companies is divided by the total number of calendar days in the Earnout Period is multiplied by (ii) the amount obtained when the number of Restricted Shares that such Executive would have been awarded by GPEG pursuant to the applicable Restricted Stock Award Agreement if such Executive had been employed by one or more of the Companies on the Award Date (as defined in the applicable Restricted Stock Award Agreement) is divided by the Exchange Rate; provided, however, that the Forfeiture Amount shall be deemed to be zero dollars ($0) with respect to any Executive who does not execute a Restricted Stock Award Agreement.

“Forfeiture Sum” shall mean the aggregate amount, if any, equal to the sum of the Forfeiture Amount with respect to each of the Executives.

“Low Multiplier” shall mean 0.05341 (which the Parties agree was calculated by dividing TWO HUNDRED FIFTY THOUSAND (250,000) by the amount by which (i) the Base Gross Profit Target Amount exceeds (ii) the Minimum Gross Profit Target Amount).

“GPEG Common Stock” shall mean shares of Global Power Equipment Group Inc. common stock, par value $0.01 per share.

“Gross Profit” shall mean all revenue recognized in accordance with the GAAP Practices on lump-sum, fixed unit price, time and materials or cost plus a fee, and all other jobs or projects performed by the Companies for customers less all expenses customarily recorded under the GAAP Practices directly associated with the completion of such jobs and projects including all actual costs of craft, supervisory and administrative payroll incurred for work performed at the jobs or projects and related benefit programs in existence at the Closing, all actual costs for work properly performed by sub-contractors (on a competitive-bid basis) at jobs and projects, all costs for materials, supplies and small tools (acquired on a competitive-bid basis and) used or installed at the jobs or projects less any accruals for recoveries of such costs, all periodic depreciation expense (computed at the Companies’ pre-Closing historical cost) related to equipment owned by the Companies and actual, third-party charges for equipment rented (on a competitive-bid basis) for the time actually used at the jobs or projects, all actual costs incurred for workers compensation (determined at the Companies’ pre-Closing modifier rates) and general liability insurance (determined at the Companies’ pre-Closing experience rates) less any accruals for recoveries of such costs for better-than-expected, actual claim experience, and all actual costs of third-party performance bonding acquired (on a competitive-bid basis after the Closing) to meet the customers’ criteria for qualification to perform the jobs or projects. For purposes of clarity, “gross profit” will be calculated using the GAAP Practices as if the Closing had not occurred and without any corporate and indirect overhead charges but will include all direct overhead incurred at the job or project locations.

“High Multiplier” shall mean 0.13887 (which the Parties agree was calculated by dividing SIX HUNDRED FIFTY THOUSAND (650,000) by the amount by which (i) the Maximum Gross Profit Target Amount exceeds (ii) the Base Gross Profit Target Amount).

“Minimum Gross Profit Target Amount” shall mean FOURTEEN MILLION FORTY TWO THOUSAND TWO HUNDRED FIFTY DOLLARS ($14,042,250).

“Maximum Gross Profit Target Amount” shall mean TWENTY THREE MILLION FOUR HUNDRED THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($23,403,750).

“Restricted Shares” shall mean those restricted shares of Global Power Equipment Group Inc. common stock, par value $0.01, if any, awarded to the Executives pursuant to the Restricted Stock Award Agreements.

“Restricted Stock Award Agreement” shall mean each of the Restricted Stock Award Agreements under Purchaser’s 2004 Incentive Stock Plan to be entered into between

GPEG and each the Executives (collectively, the “Restricted Stock Award Agreements”), the form of which has been provided to Seller prior to the date hereof.

§ 1.2 Other Defined Terms. Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in this Agreement.

§ 2. Amount of Deferred Purchase Price Payment.

§ 2.1 Calculation of Earnout Amount.

(a) In the event that the Actual Gross Profit Amount is less than or equal to the Minimum Gross Profit Target Amount, the Earnout Amount shall equal ZERO DOLLARS ($0.00).

(b) In the event that the Actual Gross Profit exceeds the Minimum Gross Profit Target Amount but is equal to or less than the Base Gross Profit Target Amount, the Earnout Amount shall be the product of (i) the amount by which (1) the Actual Gross Profit exceeds (2) the Minimum Gross Profit Target Amount multiplied by (ii) the Low Multiplier.

(c) In the event that the Actual Gross Profit exceeds the Base Gross Profit Target Amount but is less than the Maximum Gross Profit Target Amount, the Earnout Amount shall be the sum of (i) TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) and (ii) the product of (A) the amount by which (1) the Actual Gross Profit exceeds (2) the Base Gross Profit Target Amount multiplied by (B) the High Multiplier.

(d) In the event that the Actual Gross Profit exceeds the Maximum Gross Profit Target Amount, the Earnout Amount shall be NINE HUNDRED THOUSAND DOLLARS ($900,000).

§ 3. Determination of Deferred Purchase Price Payment.

§ 3.1 (a) No later than twenty (20) days after completion of the financial audit of the Companies for calendar year 2005, Purchaser shall prepare and deliver to Seller a statement (the “Purchaser’s Statement”) which shall set forth in reasonable detail Purchaser’s determination of the Earnout Amount. At all reasonable times during the thirty (30) days immediately following Seller’s receipt of the Purchaser’s Statement, Purchaser shall (i) provide Seller and its representatives reasonable access during business hours to the books and records of the Companies relating to such statement and to Purchaser’s working papers relating to such statement and (ii) make available to representatives of Seller at reasonable times and on reasonable advance notice the individuals responsible for the preparation of such statement in order to respond to the reasonable inquiries of Seller.

(b) Seller shall notify Purchaser in writing within thirty (30) days after receiving Purchaser’s Statement if Seller disagrees with any amounts reflected on Purchaser’s Statement. The notice of disagreement shall set forth in reasonable detail the reason for such dispute, the dollar amounts involved and Seller’s good faith estimate of the Earnout Amount. If Seller delivers notice of its agreement with Purchaser’s Statement to Purchaser, then Purchaser’s

Statement shall become final and binding upon Purchaser’s receipt of Seller’s notice of agreement. If Seller does not deliver a notice of disagreement to Purchaser within such thirty (30) day period, then Purchaser’s Statement shall be deemed to have been accepted by Seller upon the expiration of the thirty (30) day period after Seller receives Purchaser’s Statement and shall become final and binding. If Seller does deliver a notice of disagreement, only those matters that are specified in reasonable detail in such notice of disagreement shall be deemed to be in dispute, and all other matters shall be final and binding.

(c) During the fifteen (15) days immediately following the delivery of a notice of disagreement, Seller and Purchaser, in good faith, shall seek to resolve any differences that they may have with respect to any matter specified in such notice of disagreement, and any resolution by them as to any such matter shall be final and binding. If at the end of such fifteen (15) day period Seller and Purchaser have been unable to agree upon all matters specified in such notice of disagreement, then Seller and Purchaser shall submit to Deloitte Touche Tohmatsu (Atlanta Office) (“Deloitte”) for review and resolution any and all matters specified in the notice of disagreement that remain in dispute. Purchaser and Seller shall cause Deloitte to make a final determination (which determination shall be binding on the Parties hereto) of the Earnout Amount within thirty (30) days from such submission. In resolving any disputed item, Deloitte shall apply the GAAP Practices and shall limit its decision to such items as are in dispute. The fees, costs, and expenses of Deloitte shall be paid by the party whose submission differs the most from the Purchaser’s Statement. During the thirty (30) day review by Deloitte, Purchaser and Seller shall each make available to Deloitte such individuals and such information, books and records as may be reasonably required by Deloitte to make its final determination.

§ 4. Payment.

§ 4.1 Payment of the Earnout Amount. Upon the first to occur of (i) any mutual agreement of the Parties, (ii) a decision of Deloitte or (iii) the failure of Seller to deliver to Purchaser an objection in writing to Purchaser’s Statement within the first 30-day period referred to in Section 3(b) above, then Purchaser’s Statement, as so adjusted by any mutual agreement of the Parties or the decision of Deloitte, as applicable, shall become conclusive and binding on the Parties and the Earnout Amount thereunder shall be referred to as the “Final Earnout Amount.” Within five (5) Business Days after the Final Determination Date, Purchaser shall pay to Seller the Final Earnout Amount, if any, by wire transfer of immediately available funds to a bank account designated in writing by Seller.

§ 4.2 Payment of Forfeited Amounts. If as of January 1, 2006, one or more of the Executives is or are not employed by the Companies, then within five (5) Business Days after the Final Determination Date, Purchaser shall pay to Seller the Forfeiture Sum, if any, by wire transfer of immediately available funds to a bank account designated in writing by Seller.

EXHIBIT I to

Purchase Agreement

Letterhead of [Indemnified Party]

                         ,         

[Indemnifying Party]

[insert address]

Attention:

With reference to the Purchase Agreement, dated as of July [·], 2004, by and between [Purchaser] and [Seller] (the “Purchase Agreement”), we hereby claim the following Losses (as defined in the Purchase Agreement):

[Insert the nature of the claim including the following:

• any amount due and owing to the Indemnified Party under Section 9.2 of the Stock Purchase Agreement]

Such Losses [have been paid] [have been properly accrued for] [are anticipated].

Very truly yours,
[Indemnified Party]
By
	Title:

cc: [Escrow Agent]

EX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 23, 2004, by and among Global Power Equipment Group Inc., a Delaware corporation, with headquarters located at 6120 South Yale Street, Suite 1480, Tulsa, Oklahoma 74136 (the “Company”), the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer”, and collectively, the “Buyers”), and Kings Road Investments Ltd., a Cayman Islands organized limited company, in its capacity as Collateral Agent for the Buyers.

WHEREAS:

A. The Company and each Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) and as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act;

B. The Company has authorized the subordinated convertible notes of the Company in the form attached hereto as Exhibit A (together with any subordinated convertible notes issued in replacement thereof in accordance with the terms thereof, the “Notes”), which Notes shall be convertible into shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”) (as converted, the “Conversion Shares”), in accordance with the terms of the Notes;

C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate principal amount of Notes set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers (which aggregate principal amount for all Buyers shall be $69,000,000);

D. Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration rights with respect to the Conversion Shares under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws;

E. The Notes are to be secured by any balances contained in the Redemption Collateral Account and the Williams Acquisition Collateral Account (as such terms are defined in Section 4(p) below); and

F. The Notes and the Conversion Shares collectively are referred to herein as the “Securities”.

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF NOTES.

(a) Purchase of Notes.

(i) Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below), a principal amount of Notes, as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers (the “Closing”).

(ii) Closing. The Closing shall occur on the Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022.

(iii) Purchase Price. The purchase price for each Buyer (the “Purchase Price”) of the Notes to be purchased by each such Buyer at the Closing shall be equal to $1.00 for each $1.00 of principal amount of Notes being purchased by such Buyer at the Closing.

(b) Closing Date. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York Time, November 23, 2004, subject to notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 6 and 7 below (or such later date as is mutually agreed to by the Company and each Buyer).

(c) Form of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for the Notes to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and (ii) the Company shall deliver to each Buyer the Notes (in the principal amounts as such Buyer shall request or, if no such request is made, a single Note with a principal amount equal to the aggregate principal amount of Notes to be purchased by such Buyer) which such Buyer is then purchasing, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

Each Buyer represents and warrants with respect to only itself that:

(a) No Public Sale or Distribution. Such Buyer is (i) acquiring the Notes and (ii) upon conversion of the Notes will acquire the Conversion Shares issuable upon conversion of the Notes, in the ordinary course of business for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof; provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption from the registration requirements of the 1933 Act and applicable state securities laws. Such Buyer is acquiring the

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Securities hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

(b) Accredited Investor Status. Such Buyer is an institutional “accredited investor” as that term is defined in Rule 501(a) (1), (2), (3) or (7) of Regulation D.

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

(d) Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Each Buyer is able to bear the risk of an investment in the Securities including, without limitation, the risk of total loss of its investment. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

(e) No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

(f) Transfer or Resale. Such Buyer understands that except as provided in this Agreement and the Registration Rights Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company an opinion of counsel of recognized standing, in form and substance reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with assurance reasonably acceptable to the Company (which may, at the Company’s option include an opinion of counsel of recognized standing in form and substance reasonably acceptable to the Company) that such Securities can

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be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person (as defined in Section 3(s)) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Each Buyer represents that it understands that the Notes (but not the Conversion Shares) are subject to certain restrictions on transfer set forth in Section 19 of the Notes. Subject to Section 19 of the Notes, the Securities may be pledged in connection with a bona fide margin account or other loan secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, this Section 2(f); provided, that in order to make any sale, transfer or assignment of Securities, such Buyer and its pledgee makes such disposition in accordance with Section 19 of the Notes and in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

(g) Legends.

(i) Until the expiration of the holding period applicable to sales thereof under Rule 144(k) under the 1933 Act (or any successor provision), any certificate evidencing such Note (and all securities issued in exchange therefor or substitution thereof, other than Conversion Shares, if any, issued upon conversion thereof, which shall bear the legend set forth in (ii) below, if applicable) shall bear a legend in substantially the following form, unless such Note has been sold pursuant to a registration statement that has been declared effective under the 1933 Act (and which continues to be effective at the time of such transfer) or pursuant to Rule 144 under the 1933 Act or any similar provision then in force, or unless otherwise agreed by the Company in writing, with written notice thereof to the transfer agent:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY AGREES FOR THE BENEFIT OF GLOBAL POWER EQUIPMENT GROUP INC. THAT THIS SECURITY MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED OTHER THAN (1) TO GLOBAL POWER EQUIPMENT GROUP INC. OR ANY AFFILIATE THEREOF, (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER

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REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (4) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, SUBJECT, IN THE CASE OF CLAUSES (2) OR (4), TO THE RECEIPT BY GLOBAL POWER EQUIPMENT GROUP INC. OF AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR SUCH OTHER EVIDENCE REASONABLY ACCEPTABLE TO GLOBAL POWER EQUIPMENT GROUP INC. THAT SUCH RESALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (5) ABOVE OR UPON SATISFACTION OF THE HOLDING PERIOD UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

THE NOTE REPRESENTED BY THIS CERTIFICATE (BUT NOT THE COMMON STOCK INTO WHICH THIS NOTE MAY BE CONVERTED) IS ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 19 OF THIS NOTE.

THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THIS SECURITY; PROVIDED, HOWEVER, THAT IN ORDER TO MAKE ANY SALE, TRANSFER OR ASSIGNMENT OF THIS SECURITY, THE HOLDER AND ITS PLEDGEE MUST MAKE SUCH DISPOSITION IN ACCORDANCE WITH SECTION 19 OF THIS NOTE, IF APPLICABLE, AND IN ACCORDANCE WITH THE CONDITIONS SET FORTH ABOVE.

ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3 AND 19 HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT DATED NOVEMBER 23, 2004 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

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(ii) Until the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), any stock certificate representing Conversion Shares issued upon conversion of any Note shall bear a legend in substantially the following form, unless such Conversion Shares have been sold pursuant to a registration statement that has been declared effective under the 1933 Act (and which continues to be effective at the time of such transfer) or pursuant to Rule 144 under the 1933 Act or any similar provision then in force, or unless otherwise agreed by the Company in writing, with written notice thereof to the transfer agent:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY AGREES FOR THE BENEFIT OF GLOBAL POWER EQUIPMENT GROUP INC. THAT THIS SECURITY MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED OTHER THAN (1) TO GLOBAL POWER EQUIPMENT GROUP INC. OR ANY AFFILIATE THEREOF, (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (4) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, SUBJECT, IN THE CASE OF CLAUSES (2) OR (4), TO THE RECEIPT BY GLOBAL POWER EQUIPMENT GROUP INC. OF AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR SUCH OTHER EVIDENCE REASONABLY ACCEPTABLE TO GLOBAL POWER EQUIPMENT GROUP INC. THAT SUCH RESALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE (5) ABOVE OR UPON SATISFACTION OF THE HOLDING PERIOD UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT DATED NOVEMBER 23, 2004

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AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

BECAUSE OF THE FOREGOING RESTRICTIONS, PURCHASERS ARE ADVISED TO CONSULT LEGAL COUNSEL PRIOR TO MAKING ANY RESALE, PLEDGE OR TRANSFER OF ANY OF THE SECURITIES.

(j) Organization; Authorization. Such Buyer is duly organized, validly existing and in good standing (to the extent such concept is applicable) under the laws of the jurisdiction in which it is organized and has the requisite organizational power and authority to carry on its business as now being conducted. Such Buyer has the requisite organizational power and authority to enter into and perform its obligations under this Agreement and the Transaction Documents (as defined in Section 3(b)) to which it is a party.

(k) Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity and subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(l) No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

(m) Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

(n) Certain Trading Activities. Such Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined below) involving the Company’s securities) since the date that such Buyer has executed a confidentiality agreement with Banc of America Securities LLC regarding an investment in the Company. For purposes of this Section, “Short Sales” include, without

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limitation, all “short sales” as defined in Rule 200 of Regulation SHO adopted under the Exchange Act (as defined in Section 3(f) below) and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker-dealers or foreign regulated brokers having the effect of hedging the securities of the Company or the investment contemplated under this Agreement. Such Buyer covenants that neither it, nor any person acting on its behalf or pursuant to any understanding with it, will engage in any transactions in the securities of the Company (including Short Sales) (a) prior to the time that the transactions contemplated by this Agreement are publicly disclosed, or (b) in violation of any laws or any rules or regulations of the SEC.

(o) Source of Funds. Either (i) the funds to be used by such Buyer to purchase or hold the Notes to be acquired and held by such Buyer do not constitute assets of any employee benefit plan which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or any “plan” which is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or (ii) the purchase and holdings of the Notes by such Buyer are exempt from the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code pursuant to one or more applicable statutory or administrative exemptions. Such Buyer, and each subsequent holder of any Note, covenants that it will not dispose of the Notes to be purchased by it or any interest therein (including, without limitation, any transfer by a change in the capacity in which such Buyer holds in its investment in such Notes) to any person unless such person shall (1) make all warranties and representations of such Buyer contained in this Section 2(o) and (2) assume all covenants of such Buyer contained in this Section 2(o).

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that:

(a) Organization and Qualification. The Company and its “Subsidiaries” (which for purposes of this Agreement means any entity in which the Company, directly or indirectly, owns a majority of the equity interests entitled to vote in the election of directors in the ordinary course without the occurrence of any contingency) are duly organized, validly existing and in good standing (to the extent such concept is applicable) under the laws of the jurisdiction in which they are organized, and have the requisite organizational power and authority to own their properties and to carry on their business as now being conducted. Each of the Company and its Subsidiaries which is a corporation is duly qualified as a foreign corporation to do business and is in good standing (to the extent such concept is applicable) in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, (ii) on the transactions contemplated hereby or by the other

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Transaction Documents or (iii) on the authority or ability of the Company to perform its obligations under the Transaction Documents (as defined below). The Company has no Subsidiaries except as set forth on Schedule 3(a).

(b) Authorization; Enforcement; Validity. The Company has the requisite organizational power and authority to enter into and perform its obligations under this Agreement, the Notes, the Registration Rights Agreement, the Account Control Agreements (as defined in Section 4(n)), the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)) and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes and the reservation for issuance and the issuance of the Conversion Shares issuable upon conversion thereof, have been duly authorized by the Company’s Board of Directors and, except for such filings as may be required after the closing date pursuant to the Registration Rights Agreement, required under any “Blue Sky” laws or by the requirements of the Principal Market (as defined below), no further filing, consent or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement and the other Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity and subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(c) Issuance of Securities. The issuance of the Notes is duly authorized and, upon issuance in accordance with the terms hereof, the Notes shall be free from all taxes, liens and charges with respect to the issue thereof. As of the Closing, a number of shares of Common Stock shall have been duly authorized and reserved for issuance which equals 120% of the maximum number of shares of Common Stock issuable upon conversion of the Notes to be issued at such Closing. Upon conversion or issuance in accordance with the Notes, the Conversion Shares will be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations and warranties of each of the Buyers contained in Section 2, the issuance by the Company of the Securities is exempt from registration under the 1933 Act.

(d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and reservation for issuance and issuance of the Conversion Shares) will not (i) result in a violation of the certificate of incorporation, any certificate of designations, preferences and rights of any outstanding series of preferred stock or bylaws of the Company or any of its Subsidiaries or (ii)

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conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party except which are the subject of written waivers or consents which have been obtained or effected on or prior to the Closing Date or would not have a Material Adverse Effect or (iii) except as would not have a Material Adverse Effect result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of The New York Stock Exchange, Inc. (the “Principal Market”)) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.

(e) Consents. Except for (i) a supplemental listing application with the Principal Market with respect to the Conversion Shares, (ii) the 8-K Filing (as defined in Section 4(i)) and (iii) the registration statement, the reports required under Regulation D and any related state “Blue Sky” filings required to be filed with respect to the Conversion Shares pursuant to the Registration Rights Agreement and the receipt of a declaration of the effectiveness thereof, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under the Transaction Documents, in each case in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain or effect pursuant to the preceding sentence have been obtained or effected on or prior to the Closing Date (except for (x) the 8-K Filing (as defined in Section 4(i)) and (y) the registration statement, the reports required under Regulation D and any related state “Blue Sky” filings required to be filed with respect to the Conversion Shares pursuant to the Registration Rights Agreement and the receipt of a declaration of the effectiveness thereof), and the Company and its Subsidiaries are unaware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence required to be obtained or effected. The Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts which would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

(f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer is (i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144) (an “Affiliate”) or (iii) to the knowledge of the Company based solely on a review of available public filings on Schedule 13D or Schedule 13G, a “beneficial owner” of more than 10% of the Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions

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contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on an independent evaluation by the Company and its representatives.

(g) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than fees or commissions of persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim for fees or commissions. The Company acknowledges that is has engaged Banc of America Securities LLC as placement agent (the “Agent”) in connection with the sale of the Notes. Other than the Agent, the Company has not engaged any placement agent or other agent in connection with the sale of the Notes.

(h) No Integrated Offering. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the 1933 Act or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings.

(i) Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Notes will increase in certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Notes is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.

(j) Application of Takeover Protections; Rights Agreement. Except as disclosed on Schedule 3(j), the Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation (as defined in Section 3(r)) or the laws of the jurisdiction of its formation which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the

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Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.

(k) SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing filed prior to the date hereof, and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates, the SEC Documents complied as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes, may be subject to customary year-end adjustments or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

(l) Absence of Certain Changes. Except as disclosed in Schedule 3(l), since December 27, 2003, there has been no material adverse change and no material adverse development in the business, properties, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole. Except as disclosed in Schedule 3(l), since December 27, 2003, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, in excess of $3,000,000 outside of the ordinary course of business or (iii) had capital expenditures, individually or in the aggregate, in excess of $3,000,000. The Company has not taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company is not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent” means (i) the present fair saleable value of the Company’s assets is less than the amount required to pay the Company’s total Indebtedness (as defined in Section 3(s)), (ii) the Company is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) the Company intends to incur or believes that it will incur debts that would be

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beyond its ability to pay as such debts mature or (iv) the Company has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

(m) No Undisclosed Events, Liabilities, Developments or Circumstances. Except for (i) the offering and sale of the Securities and (ii) the Williams Acquisition (as defined in Section 4(p)), no event, liability, development or circumstance has occurred or exists, or is expected to occur with respect to the Company or its Subsidiaries or their respective business, properties, results of operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-3 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.

(n) Conduct of Business; Regulatory Permits. Except as would not have a Material Adverse Effect, neither the Company nor its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or Bylaws or their organizational charter or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or its Subsidiaries, except for violations which would not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances which would reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. Except as disclosed on Schedule 3(n), since January 1, 2003 (i) the Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and except as would not reasonably be expected to have a Material Adverse Effect, neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

(o) Foreign Corrupt Practices. Except as would not reasonably be expected to have a Material Adverse Effect, neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation

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of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

(p) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect.

(q) Transactions With Affiliates. Except as set forth on Schedule 3(q) and in the SEC Documents filed at least ten days prior to the date hereof and other than the grant of stock options disclosed on Schedule 3(r), none of the officers, directors or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as employees, officers or directors) which is, taken individually or in the aggregate with other unreported transactions, material, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.

(r) Equity Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (x) 100,000,000 shares of Common Stock, of which as of the date hereof, 46,366,148 shares of Common Stock are issued and outstanding, 2,527,449 shares of Common Stock are reserved for issuance pursuant to the Company’s stock option and purchase plans and 0 shares of Common Stock are reserved for issuance pursuant to securities (other than the Notes) exercisable or exchangeable for, or convertible into, shares of Common Stock, and (y) 0 shares of preferred stock, of which as of the date hereof, none are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in Schedule 3(r): (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries; (iii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement); (iv) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any

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redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (v) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; and (vi) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. The Company has filed as exhibits to the SEC Documents true, correct and complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for, Common Stock and the material rights of the holders thereof in respect thereto.

(s) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(s), neither the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined herein), (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument would result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” shall have the meaning ascribed to such term in the Notes, a form of which is included as Exhibit A hereto, and (y) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(t) Absence of Litigation. Except as would not reasonably be expected to have a Material Adverse Effect, there is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, except as set forth in Schedule 3(t).

(u) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(v) Employee Relations. Except as disclosed in Schedule 3(v), neither the

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Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are generally good. No executive officer of the Company (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company or otherwise terminate such officer’s employment with the Company. To the knowledge of the Company, no executive officer of the Company is (i) in violation of any material term of any employment contract, non-competition agreement, or any other agreement containing restrictive covenants with respect to his or her employment and (ii) the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the matters in clause (i) above.

(w) Title. Except as would not reasonably be expected to have a Material Adverse Effect, the Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(w) or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

(x) Intellectual Property Rights. Except as set forth on Schedule 3(x) or as would not reasonably be expected to have a Material Adverse Effect, the Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, service marks, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted. Except as set forth on Schedule 3(x) or as would not reasonably be expected to have a Material Adverse Effect, none of the Company’s Intellectual Property Rights have expired or terminated or have been abandoned. Except as set forth on Schedule 3(x), the Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others. Except as set forth on Schedule 3(x) or as would not reasonably be expected to have a Material Adverse Effect, the Company has not received notice of any claim being made or brought, or to the knowledge of the Company, being threatened, against the Company or its Subsidiaries regarding its Intellectual Property Rights. The Company is unaware of any facts or circumstances which might give rise to any of the foregoing claims. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their trade secrets.

(y) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to

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conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

(z) Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its material Subsidiaries as owned by the Company or such Subsidiary.

(aa) Tax Status. The Company and each of its Subsidiaries (i) has made or filed all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

(bb) Internal Accounting Controls. Except as would not reasonably be expected to have a Material Adverse Effect, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference.

(cc) Ranking of Notes. Except as contemplated in Section 16 of the Note or as set forth on Schedule 3(cc), no Indebtedness of the Company is senior to or ranks pari passu with the notes in right of payment, whether with respect of payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.

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(dd) Disclosure. The Company confirms that neither it nor any Person acting on its behalf has provided any of the Buyers or their respective agents or counsel with any information that constitutes material, nonpublic information. The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company when taken as whole, together with all other information provided or available in the SEC Documents, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

(ee) Form S-3 Eligibility. The Company is eligible to register the Conversion Shares for resale by the Buyers using Form S-3 promulgated under the 1933 Act.

(ff) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

(gg) Collateral. The Company is and will be at all times the owner of the Collateral (as defined in Section 4(p)) free and clear of any lien, except for the security interest created by this Agreement and the subordinated lien of the Company’s creditors under its Senior Credit Agreement and the related security agreement. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office, except such as may have been filed in favor of the Collateral Agent relating to this Agreement or under the Senior Credit Agreement and the related security agreement.

(hh) Security Interest. This Agreement creates a valid security interest in favor of the Collateral Agent (as defined in Section 4(o)) in the Collateral, as security for the Obligations (as defined in Section 4(p)). Assuming the Collateral Agent is at all times in control (as such term is defined in the New York Uniform Commercial Code) of the Collateral, such security interest is, or in the case of Collateral in which the Company obtain rights after the date hereof, will be, a perfected, first priority security interest.

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4. COVENANTS.

(a) Commercially Reasonable Efforts. Each party shall use its commercially reasonable efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement.

(b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

(c) Reporting Status. Until the date on which the Investors (as defined in the Registration Rights Agreement) shall have sold all the Conversion Shares and none of the Notes are outstanding (the “Reporting Period”), the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not voluntarily terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination.

(d) Use of Proceeds. The Company will use the proceeds from the sale of the Securities for working capital purposes and/or to fund the Williams Acquisition and not for the redemption or repurchase of any of its equity securities; provided, however, that if the Williams Acquisition is not consummated on or before June 30, 2005, proceeds from the sale of the Securities may be used for mandatory prepayment as provided under the terms of Section 2.06(b) of the Senior Credit Agreement (as defined in the Notes).

(e) Financial Information. The Company agrees to send the following to each Investor during the Reporting Period unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, (i) within three (3) Business Days after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) within three (3) Business Days after the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given to the stockholders of the Company generally, substantially contemporaneously with the making available or giving thereof to the stockholders.

(f) Listing. The Company shall use commercially reasonable efforts to promptly secure the listing of all of the Registrable Securities (as defined in the Registration

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Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain, such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents. The Company shall use commercially reasonable efforts to maintain the Common Stock’s authorization for listing on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).

(g) Fees. The Company shall reimburse the Buyers in the aggregate amount of $100,000 for the Buyers’ reasonable expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereunder, which amount will be net funded from the Purchase Price payable by Kings Road Investments Ltd. at the Closing. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions (other than fees or commissions of persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, any fees or commissions payable to the Agent. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim for fees or commissions. Except as otherwise set forth or in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.

(h) Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged by an Investor (as defined in the Registration Rights Agreement) in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section 2(f) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(f) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor.

(i) Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York Time, on the fourth Business Day following the date hereof, the Company shall file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act, and attaching the material Transaction Documents (including, without limitation, this Agreement, the form of Note, and the Registration Rights Agreement) as exhibits to such filing (including all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing with the SEC, no Buyer shall be in

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possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express written consent of such Buyer. In the event of a breach of the foregoing covenant by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents, in addition to any other remedy provided herein or in the Transaction Documents, a Buyer shall have the right to require the Company to make prompt public disclosure of such material non-public information and, if the Company fails to do so within one (1) Business Day of such request to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents for any such disclosure. Subject to the foregoing, neither the Company nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Buyer, or include the name of any Buyer in any filing with the SEC or any regulatory agency or the Principal Market, without the prior written consent of such Buyer, except to the extent such disclosure (but not any disclosure as to the controlling Persons thereof) is required by law or the Principal Market regulations, in which case the Company shall provide the Buyers with prior notice of such disclosure.

(j) Additional Notes; Variable Securities; Dilutive Issuances. For so long as any Buyer beneficially owns any Securities, the Company will not issue any securities that would cause a breach or default under the Notes. For so long as any Notes remain outstanding, the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for Common Stock (other than Excluded Securities (as defined in the Notes)) at a price which varies or may vary with the market price of the Common Stock, including by way of one or more reset(s) to any fixed price unless the conversion, exchange or exercise price of any such security cannot be less than the then applicable Conversion Price (as defined in the Notes) with respect to the Common Stock under any into which any Note is convertible. For so long as any Notes remain outstanding, the Company shall not, in any manner, enter into or affect any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required to issued upon conversion of any Note any shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue upon conversion of the Notes without breaching the Company’s obligations under the rules or regulations of the Principal Market.

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(k) Corporate Existence. So long as any Buyer beneficially owns any Notes, the Company shall maintain its corporate existence.

(l) Reservation of Shares. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, 120% of the number of shares of Common Stock issuable upon conversion of the Notes being issued at the Closing.

(m) Redemption Collateral Account.

(i) On or prior to the Closing, the Company shall establish with Banc of America Securities LLC (the “Collateral Bank”) the Redemption Collateral Account (as defined in Section 4(p)) and deposit in the Redemption Collateral Account the amount of $9,000,000 (the “Redemption Collateral”). On or prior to the Closing, the Company shall also cause the Collateral Bank to enter to an account control agreement with the Collateral Agent with respect to the Redemption Collateral Account, substantially in the form of Exhibit G (the “Closing Account Control Agreement”). Upon the reasonable request of the Collateral Agent, the Company shall also execute and deliver such other customary agreements and instruments necessary to grant the Buyers a first priority perfected security interest in the Redemption Collateral Account to secure the Notes. The Company agrees that it shall not permit the Redemption Collateral Account to be subject to any lien, pledge, charge, security interest or other encumbrance other than as provided in Section 4(p) and the immediately preceding sentence or the subordinated lien of the Company’s creditors under its Senior Credit Agreement.

(ii) The funds in the Redemption Collateral Account shall be distributed as follows: (A) upon delivery by any holder or holders of Notes (each a “Redeeming Holder”) of one or more Holder Collateral Redemption Notices (as defined in the Notes), the Collateral Agent shall deliver written notice to the Collateral Bank to disburse to such Redeeming Holders funds in an aggregate amount equal to the aggregate principal amount of Notes that are the subject of such Holder Collateral Redemption Notices; and (B) on the date (the “Permitted Termination Notice Date”) which is six (6) months after the date on which a registration statement under the 1933 Act with respect to the Common Stock underlying the Notes is declared effective, the Collateral Agent shall serve the Collateral Bank a notice (a “Redemption Collateral Termination Notice”) terminating its security interest in the Redemption Collateral Account, provided that (i) the Collateral Agent is reasonably satisfied that the Company has redeemed all Notes which are the subject of validly delivered Holder Collateral Redemption Notices and (ii) the Collateral Agent has not delivered to the Collateral Bank prior to such date a “Notice of Exclusive Control” as defined in the Closing Account Control Agreement, and such notice is then in effect and has not been waived, rescinded or otherwise terminated. Upon delivery of the Redemption Collateral Termination Notice to the Collateral Bank, the Closing Account Control Agreement and any Lien created hereby and thereby shall terminate.

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(n) Williams Acquisition Collateral Account; Sufficient Cash Balance.

(i) On or prior to the Closing, the Company shall establish with the Collateral Bank the Williams Acquisition Collateral Account (as defined in Section 4(p)). If on or prior to April 30, 2005, the contemplated acquisition by the Company of Williams Industries Services Group (the “Williams Acquisition”) has not been consummated, then the Company shall deposit in the Williams Acquisition Collateral Account the amount of $7,650,000 (the “Williams Acquisition Collateral”). On or prior to the Closing, the Company shall cause the Collateral Bank to enter into an account control agreement with the Collateral Agent with respect to the Williams Acquisition Collateral Account, substantially in the form of Exhibit H (the “Williams Acquisition Account Control Agreement”, together with the Redemption Account Control Agreement, the “Account Control Agreements”). Upon the reasonable request of the Collateral Agent, the Company shall also execute and deliver such other customary agreements and instruments necessary to grant the Buyers a first priority perfected security interest in the Williams Acquisition Collateral Account to secure the Notes. The Company agrees that it shall not permit the Williams Acquisition Collateral Account to be subject to any lien, pledge, charge, security interest or other encumbrance other than as provided in Section 4(p) and in the immediately preceding sentence or the unperfected lien of the Company’s creditors under the Senior Credit Agreement.

(ii) The funds in the Williams Acquisition Collateral Account shall be disbursed as follows: (A) on each Interest Date (as defined in the Notes) the Collateral Agent shall deliver written notice to the Collateral Bank to disburse to each holder of Notes from the Williams Acquisition Collateral held in the Williams Acquisition Collateral Account an amount equal to the accrued and unpaid interest on such Notes; and (B) two Business Days prior to the date (the “Williams Acquisition Date”) on which the Company intends to consummate the acquisition of Williams Industrial Services Group (the “Williams Acquisition”), the Collateral Agent upon the written instructions of the Company, shall direct the Collateral Bank to disburse any funds remaining in the Williams Acquisition Collateral Account on the Williams Acquisition Date in accordance with the written instructions of the Company to pay a portion of the purchase price of the Williams Acquisition or any related fees and expenses an (“Acquisition Notice”). Upon the receipt by the Collateral Bank and the disbursement of the funds in the Williams Acquisition Collateral Account on the Williams Acquisition Date in accordance with the Acquisition Notice, the Williams Account Control Agreement and any Lien created hereby or thereby shall terminate.

(iii) From the date of this Agreement until the earlier of (A) the date the Williams Acquisition is consummated or (B) the first business day of May 2005, the Company shall at all times keep available unrestricted cash sufficient to ensure that it has the funds necessary for deposit of the Williams Acquisition Collateral into the Williams Acquisition Collateral Account in accordance with the provisions of this Section 4(n).

(o) Collateral Agent. Kings Road Investments Ltd. (the “Collateral Agent”) is hereby appointed as the collateral agent for the Buyers hereunder, and each Buyer hereby

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authorizes the Collateral Agent (and its officers, directors, employees and agents) to take any and all such actions on behalf of the Buyers with respect to the Collateral and the Obligations in accordance with the terms of this Agreement. The Collateral Agent shall not have, by reason hereof or any of the other Transaction Documents, a fiduciary relationship in respect of any Buyer. Neither the Collateral Agent nor any of its officers, directors, employees and agents shall have any liability to any Buyer for any action taken or omitted to be taken in connection hereof except to the extent caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents (collectively, the “Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Indemnitee of the duties and obligations of Collateral Agent pursuant hereto.

(p) Security Interests Relating to Redemption Collateral Account and Williams Acquisition Collateral Account.

(i) Grant of Security Interest. As collateral for the prompt payment and performance of all of the Obligations (as hereinafter defined), the Company hereby pledges and assigns to the Collateral Agent, and grants to the Collateral Agent a continuing security interest in, the following, whether now existing or hereafter acquired or arising (collectively, the “Collateral”): (A) all of the Company’s rights, titles, interests, remedies, powers and privileges relating to (1) Account Nos. BAS 24900382 and BANA 279368, established and maintained by the Company with the Collateral Bank (the “Redemption Collateral Account”), and (2) Account Nos. BAS 24900383 and BANA 279370, established and maintained by the Company with the Collateral Bank (the “Williams Acquisition Collateral Account”, and together with the Redemption Collateral Account, and all financial assets, investment property, securities, cash and other property held in each such account, and the proceeds thereof, and all certificates and instruments, if any, representing or evidencing each such account, the “Collateral Accounts”), together with all of the Company’s right, title and interest in and to the Collateral Accounts, all financial assets, investment property, securities, cash and other property, now or at any time thereafter held therein, credited thereto or payable thereon, and all instruments, documents and other writings evidencing the Collateral Accounts; and (B) any and all cash and non-cash proceeds and products of any of the foregoing, including without limitation, any and all dividends payable in cash or stock or other proceeds of conversions or splits of any securities held in the Collateral Accounts or proceeds of any insurance, indemnity, instruments, warranty or guaranty payable to the Company from time to time with respect to the Collateral and any and all other amounts from time to time paid or payable under or in connection with any of the Collateral, whether any of the foregoing take the form of investment property, accounts, inventory, chattel paper, instruments, documents, general intangibles, equipment or any other form.

(ii) Security for Obligations. The security interest created hereby in

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the Collateral constitutes continuing collateral security for all of the following obligations, whether now existing or hereafter incurred (collectively, the “Obligations”): the obligation of the Company to pay, as and when due and payable (at scheduled maturity or by required prepayment or redemption, acceleration, demand or otherwise), all amounts from time to time owing by it in respect of the Notes, whether for principal, interest, fees or otherwise (including, without limitation, amounts that but for the operation of Section 362(a) of the Bankruptcy Code would become due). Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts that constitute part of the Obligations and would be owed by the Company to the Collateral Agent under any of the Notes but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company.

(iii) Collateral Covenants. The Company shall: (A) at the expense of the Company, take all action that may be necessary in the reasonable judgment of the Collateral Agent, in order to (1) perfect and protect any security interest created or purported to be created hereby, (2) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to the Collateral, or (3) otherwise effect the purposes of this Agreement, including, without limitation, (x) authorizing the Collateral Agent to file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Collateral Agent may request, in order to perfect and preserve the security interests created or purported to be created hereby, and (y) furnishing to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail; (B) not sell, assign, exchange or otherwise dispose of any of the Collateral except as permitted hereby; (C) not create or suffer to exist any lien upon or with respect to any of the Collateral except for the security interests created hereunder and the subordinated lien of the Company’s creditors under its Senior Credit Agreement; and (D) not take or fail to take any action which would in any manner impair the amount or value of the Collateral.

(iv) Additional Provisions Concerning the Collateral; Power of Attorney.

(A) The Company hereby authorizes the Collateral Agent to file, without the signature of the Company where permitted by law, one or more financing or continuation statements, and amendments thereto, relating to the Collateral.

(B) The Company hereby irrevocably appoints the Collateral Agent the Company’s attorney-in-fact and proxy, with full authority in the place and stead of the Company and in the name of the Company or otherwise, from time to time in the Collateral Agent’s reasonable discretion, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation: (1) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or

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in respect of any of the Collateral; (2) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper in connection with clause (1) above; and (3) to file any claims or take any action or institute any proceedings which the Collateral Agent may reasonably deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Collateral Agent with respect to any of the Collateral; provided, however, that so long as no Event of Default shall have occurred and be continuing, the Collateral Agent will not exercise its power as the Company’s attorney-in-fact or proxy. This power is coupled with an interest and is irrevocable until all of the Obligations are paid in full or the security interest granted hereby terminates in accordance with its terms.

(C) If the Company fails to perform any agreement contained herein, the Collateral Agent may itself perform, or cause performance of, such agreement or obligation, and the reasonable out-of-pocket expenses of the Collateral Agent incurred in connection therewith shall be payable by the Company under Section 9(k) hereof.

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

(iv) Remedies. If any Event of Default shall have occurred and be continuing, the Collateral Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party on default under the Uniform Commercial Code (the “UCC”) currently in effect in the State of New York (whether or not the UCC applies to the affected Collateral). Any cash held by the Collateral Agent as Collateral and all cash proceeds received by the Collateral Agent in respect of any collection from, or other realization upon, all or any part of the Collateral may, in the discretion of the Collateral Agent, be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent pursuant to Section 9(k) hereof) in whole or in part by the Collateral Agent against, all or any part of the Obligations. Any surplus of such cash or cash proceeds held by the Collateral Agent and remaining after payment in full of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

(v) Termination. The security interest created hereby will automatically terminate at such time as (i) all funds in the Collateral Accounts are disbursed in accordance with Section 4(m) or Section 4(n), as the case may be, or (ii), in the case of the Williams Acquisition Collateral, upon consummation of the Williams Acquisition, if earlier.

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5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Notes), a register for the Notes, in which the Company shall record the name and address of the Person in whose name the Notes have been issued (including the name and address of each transferee), the principal amount of Notes held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes in the form of Exhibit C attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent and subject to the limitations provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(f) and Section 19 of the Note, if applicable, the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates, or credit shares to the applicable balance accounts at DTC, in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive legend. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

Closing Date. The obligation of the Company hereunder to issue and sell the Notes to each Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

(a) Each Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

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(b) Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of Kings Road Investment Ltd., the amount to be withheld pursuant to Section 4(g)) for the Notes being purchased by such Buyer and each other Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

(c) The representations and warranties of each Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and each Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by each Buyer at or prior to the Closing Date.

(d) No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement or the other Transaction Documents.

(e) The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Notes.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

Closing Date. The obligation of each Buyer hereunder to purchase the Notes at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

(a) The Company shall have executed and delivered to such Buyer (i) each of the Transaction Documents and (ii) the Notes (in such principal amounts as such Buyer shall request or, if no such request is made, a single Note with a principal amount equal to the aggregate principal amount of Notes to be purchased by such Buyer) being purchased by such Buyer at the Closing pursuant to this Agreement.

(b) Such Buyer shall have received the opinion of White & Case LLP, the Company’s counsel, dated as of the Closing Date, in substantially the form of Exhibit D-1 attached hereto, and the opinion of Connors & Winters P.C., the Company’s special securities counsel, dated as of the Closing Date in substantially the form of Exhibit D-2.

(c) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit C attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.

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(d) The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company and each of its domestic Subsidiaries in such corporation’s state of incorporation issued by the Secretary of State (or comparable office) of such state of incorporation, as of a date within 10 days of the Closing Date.

(e) The Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Secretary of State of the State of Delaware within 10 days of the Closing Date.

(f) The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s Board of Directors in a form reasonably acceptable to such Buyer (the “Resolutions”), (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the form attached hereto as Exhibit E.

(g) The representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect in the form attached hereto as Exhibit F.

(h) The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common Stock outstanding as of a date within five days of the Closing Date.

(i) The Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by falling below the minimum listing maintenance requirements of the Principal Market.

(j) The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Notes.

(k) No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement or the other Transaction Documents.

(l) Such Buyer shall have received a guaranty, in the form attached hereto as Exhibit I, executed by all domestic Subsidiaries that are borrowers or guarantors under the Senior Credit Agreement.

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(m) The lenders under the Senior Credit Agreement shall have validly consented to (i) the creation of the Redemption Collateral Account and the Williams Acquisition Collateral Account, (ii) the transfer of the Redemption Collateral into the Redemption Collateral Account and the Williams Acquisition Collateral into the Williams Acquisition Collateral Account and (iii) the creation of a first priority security interest in such accounts as provided herein.

8. TERMINATION. In the event that the Closing shall not have occurred with respect to a Buyer on or before five (5) Business Days from the date hereof due to the Company’s or such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other party; provided, however, this if this Agreement is terminated by Buyers pursuant to this Section 8, the Company shall remain obligated to reimburse the non-breaching Buyers for the expenses described in Section 4(g) above.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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(b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

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

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

(e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders, and any amendment to this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Notes, as applicable; provided, however, that no such amendment shall (i) extend the maturity of the Note, reduce the interest rate, extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or repurchase thereof or affect any amounts due to any holder or (ii) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any such amendment, without the consent of the holders of all Notes then outstanding. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Notes then outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also is offered on identical terms to all of the parties to the Transaction Documents that are holders of Notes. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents.

(f) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically

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generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Global Power Equipment Group Inc.
6120 South Yale Street
Suite 1480
Tulsa, Oklahoma 74136
Telephone:	(918) 488-0828
Facsimile:	(918) 274-2367
Attention:	General Counsel
with a copy (which shall not constitute notice) to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Telephone:	(212) 819-8331
Facsimile:	(212) 354-8113
Attention:	S. Ward Atterbury, Esq.
For notices sent to all Buyers, a copy (for informational purposes only) shall be sent to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Tel:	(212) 756-2000
Fax:	(212) 593-5955
Attention:	Christian H. Mittweg, Esq.

If to the Transfer Agent:

EquiServe Trust Company, N.A.
250 Royall Street
Canton, Massachusetts 02021
Telephone:	(781) 575-2000
Facsimile:	(781) 575-4812
Attention:	Monique Hughes
	Account Manager

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If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding, including by way of a Fundamental Transaction (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

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

(i) Survival. Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained in Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

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

(k) Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect

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investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement.

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

(m) Remedies. Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security.

(n) Payment Set Aside. To the extent that the Company makes a payment or

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payments to the Buyers hereunder or pursuant to any of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

(o) Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.

[Signature Page Follows]

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IN WITNESS WHEREOF, each Buyer, the Company and the Collateral Agent have caused their respective signature pages to this Securities Purchase Agreement to be duly executed as of the date first written above.

COMPANY: GLOBAL POWER EQUIPMENT GROUP INC.
By:	/s/ James P. Wilson
Name:	James P. Wilson
Title:	CFO and V.P. of Finance

[Signature Page to Securities Purchase Agreement]

BUYERS:
KINGS ROAD INVESTMENTS LTD., in its capacity, as Buyer and Collateral Agent
By:	/s/ Alexander E. Jackson
Name:	Alexander E. Jackson
Title:	Principal

[Signature Page to Securities Purchase Agreement]

STEELHEAD INVESTMENTS LTD. By: HBK Investments L.P. Title: Investment Advisor
By:	/s/ David C. Haley
Name:	David C. Haley
Title:	Authorized Signatory

[Signature Page to Securities Purchase Agreement]

D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.
By:	D.B. Zwirn and Co., LP
By:	/s/ Perry A. Gruss
Name:	Perry A. Gruss
Title:	Chief Financial Officer

[Signature Page to Securities Purchase Agreement]

D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, LTD.
By:	D.B. Zwirn and Co., LP
By:	/s/ Perry A. Gruss
Name:	Perry A. Gruss
Title:	Chief Financial Officer

[Signature Page to Securities Purchase Agreement]

HCM/Z SPECIAL OPPORTUNITIES LLC
By:	D.B. Zwirn and Co., LP
By:	/s/ Perry A. Gruss
Name:	Perry A. Gruss
Title:	Authorized Signatory

[Signature Page to Securities Purchase Agreement]

EXHIBITS

Exhibit A	Form of Note
Exhibit B	Form of Registration Rights Agreement*
Exhibit C	Form of Irrevocable Transfer Agent Instructions**
Exhibit D	Form of Company Counsel Opinion**
Exhibit E	Form of Secretary’s Certificate**
Exhibit F	Form of Officer’s Certificate**
Exhibit G	Form of Redemption Account Control Agreement**
Exhibit H	Form of Williams Acquisition Account Control Agreement**
Exhibit I	Form of Subsidiary Guaranty***

SCHEDULES**

Schedule of Buyers
Schedule 3(a)	Subsidiaries
Schedule 3(j)	Application of Takeover Protections; Rights Agreement
Schedule 3(l)	Absence of Certain Changes
Schedule 3(n)	Conduct of Business; Regulatory Permits
Schedule 3(q)	Transactions with Affiliates
Schedule 3(r)	Equity Capitalization
Schedule 3(s)	Indebtedness and Other Contracts
Schedule 3(t)	Litigation
Schedule 3(v)	Employee Relations
Schedule 3(w)	Title
Schedule 3(x)	Intellectual Property
Schedule 3(cc)	Ranking of Notes

* See Exhibit 10.2 to this Current Report on Form 8-K

** Omitted. The Registrant agrees to furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon its request.

*** See Exhibit 10.4 to this Current Report on Form 8-K

Exhibit A

to

Securities Purchase Agreement

FORM OF CONVERTIBLE SENIOR SUBORDINATED NOTE

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY AGREES FOR THE BENEFIT OF GLOBAL POWER EQUIPMENT GROUP INC. THAT THIS SECURITY MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED OTHER THAN (1) TO GLOBAL POWER EQUIPMENT GROUP INC. OR ANY AFFILIATE THEREOF, (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (4) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, SUBJECT, IN THE CASE OF CLAUSES (2) OR (4), TO THE RECEIPT BY GLOBAL POWER EQUIPMENT GROUP INC. OF AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR SUCH OTHER EVIDENCE REASONABLY ACCEPTABLE TO GLOBAL POWER EQUIPMENT GROUP INC. THAT SUCH RESALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (5) ABOVE OR UPON SATISFACTION OF THE HOLDING PERIOD UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

THE NOTE REPRESENTED BY THIS CERTIFICATE (BUT NOT THE COMMON STOCK INTO WHICH THIS NOTE MAY BE CONVERTED) IS ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 19 OF THIS NOTE.

THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THIS SECURITY; PROVIDED, HOWEVER, THAT IN ORDER TO MAKE ANY SALE, TRANSFER OR ASSIGNMENT OF THIS SECURITY, THE

HOLDER AND ITS PLEDGEE MUST MAKE SUCH DISPOSITION IN ACCORDANCE WITH SECTION 19 OF THIS NOTE, IF APPLICABLE, AND IN ACCORDANCE WITH THE CONDITIONS SET FORTH ABOVE.

ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3 AND 19 HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT DATED NOVEMBER 23, 2004 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

2

GLOBAL POWER EQUIPMENT GROUP INC.

CONVERTIBLE SENIOR SUBORDINATED NOTE

Issuance Date: November 23, 2004 Principal: U.S. $[            ]

FOR VALUE RECEIVED, GLOBAL POWER EQUIPMENT GROUP INC., a Delaware corporation (the “Company”), hereby promises to pay to the order of [            ] or registered assigns (“Holder”) the amount set out above as the Principal (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the rate of 4.25% per annum, subject to periodic adjustment pursuant to Section 2 (the “Interest Rate”), from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon an Interest Date (as defined below), the Maturity Date, acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This Convertible Senior Subordinated Note (including all Convertible Senior Subordinated Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of Convertible Senior Subordinated Notes (collectively, the “Notes” and such other Convertible Senior Subordinated Notes, the “Other Notes”) issued on the Issuance Date pursuant to the Securities Purchase Agreement (as defined below). Certain capitalized terms are defined in Section 30.

(1) MATURITY. On the Maturity Date, the Holder shall surrender this Note to the Company and the Company shall pay to the Holder an amount in cash representing all outstanding Principal and accrued and unpaid Interest, if any. The “Original Maturity Date” shall be November 23, 2011, as may be adjusted at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing or any event shall have occurred and be continuing which with the passage of time and the failure to cure would result in a Conversion Failure, (ii) through the date that is ten days after the consummation of a Change of Control (as defined in Section 5(a)) in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(a)) is delivered prior to the Maturity Date and (iii) in the event that a Payment Blockage Notice (as defined in Section 14(c)) is received from the Agent, until the Payment Blockage Termination Date (as defined in Section 14(c)) (the Original Maturity Date as may be adjusted, the “Maturity Date”).

(2) INTEREST; INTEREST RATE. Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 365-day year and actual days elapsed and shall be payable in arrears semi-annually and on the Maturity Date during the period beginning on the Issuance Date and ending on, and including, the Maturity Date (each, an “Interest Date”) with the first Interest Date being May 23, 2005. Interest shall be payable on each Interest Date in cash. Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate. From and after the occurrence of an Event of Default, the Interest Rate shall be increased to 9.25%. In the event that such Event of Default is subsequently

3

cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided that the Interest as calculated at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of cure of such Event of Default.

(3) CONVERSION OF NOTES. This Note shall be convertible into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), on the terms and conditions set forth in this Section 3.

(a) Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall pay to the Holder an amount in cash equal to the value of such fractional share. The Company shall pay any and all documentary, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount. The Company shall not, however, be required to pay any such tax which may be payable in respect of any transfer of Securities involved in the issue and delivery of the Common Stock in any name other than that of the Holder. Upon conversion, the Company shall pay all accrued and unpaid Interest on the Conversion Amount being converted.

(b) Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

(i) “Conversion Amount” means the Principal to be converted, redeemed or otherwise with respect to which this determination is being made.

(ii) “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, and subject to adjustment as provided herein, $10.61.

(c) Mechanics of Conversion.

(i) Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company and (B) if required by Section 3(c)(iii), deliver this Note to a common carrier for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking with respect to this Note

4

in the case of its loss, theft or destruction). On or before the close of the business on first Business Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile a confirmation of receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the second Business Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with Depository Trust Company (“DTC”) through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically surrendered for conversion as required by Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three Business Days after receipt of this Note and at its own expense, issue and deliver to the holder a new Note (in accordance with Section 20(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

(ii) Company’s Failure to Timely Convert. If the Company shall fail (other then by operation of Section 3(d)) to issue a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon conversion of any Conversion Amount on or prior to the date which is five (5) Business Days after the Conversion Date (a “Conversion Failure”), then (A) the Company shall pay damages to the Holder for each date of such Conversion Failure in an amount equal to 1.5% of the product of (I) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (II) the Closing Sale Price of the Common Stock on the Share Delivery Date and (B) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such Conversion Notice; provided that the voiding of any conversion notice shall halt the accrual of any claims for damages pursuant to this Section 3(c)(ii); provided, further, that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise.

(iii) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is

5

being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting physical surrender and reissue of this Note. The Holder and the Company shall maintain records showing the Principal converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion.

(iv) Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company, subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount of such holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 25.

(d) Limitations on Conversions.

(i) Beneficial Ownership. The Company shall not effect any conversion of this Note, and the Holder of this Note shall not have the right to convert any portion of this Note pursuant to Section 3(a), to the extent that after giving effect to such conversion, the Holder (together with the Holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any Other Notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 3(d)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Section 3(d)(i), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or

6

the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.

(ii) Principal Market Regulation. The Company shall not be obligated to issue any shares of Common Stock upon conversion of this Note if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Notes without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of the Notes representing at least a majority of the principal amounts of the Notes then outstanding. Until such approval or written opinion is obtained, no purchaser of the Notes pursuant to the Securities Purchase Agreement (the “Purchasers”) shall be issued, upon conversion of Notes, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the principal amount of Notes issued to such Purchaser pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of which is the aggregate principal amount of all Notes issued to the Purchasers pursuant to the Securities Purchase Agreement on the Issuance Date (with respect to each Purchaser, the “Exchange Cap Allocation”). In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser’s Notes, the transferee shall be allocated a pro rata portion of such Purchaser’s Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of Notes shall convert all of such holder’s Notes into a number of shares of Common Stock which, in the aggregate, is less than such holder’s Exchange Cap Allocation, then the difference between such holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders of Notes on a pro rata basis in proportion to the aggregate principal amount of the Notes then held by each such holder.

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(4) RIGHTS UPON EVENT OF DEFAULT.

(a) Event of Default. Each of the following events shall constitute an “Event of Default”:

(i) the failure of the applicable Registration Statement required to be filed pursuant to the Registration Rights Agreement to be declared effective by the SEC on or prior to the date that is 60 days (or in the event the SEC determines to review the Registration Statement, 150 days) after the Effectiveness Deadline (as defined in the Registration Rights Agreement), or, while the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement, the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop order) or is unavailable to any holder of the Notes for sale of all of such holder’s Registrable Securities (as defined in the Registration Rights Agreement) in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of 10 consecutive Trading Days or for more than an aggregate of 30 Trading Days in any 365-day period (other than days during an Allowable Grace Period (as defined in the Registration Rights Agreement));

(ii) the suspension from trading or failure of the Common Stock to be listed on the Principal Market or an Eligible Market for a period of five consecutive Trading Days or for more than an aggregate of seven Trading Days in any 365-day period;

(iii) the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within ten (10) Business Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Notes, including by way of public announcement or through any of its agents, at any time, of its intention not to comply with a request for conversion of any Notes into shares of Common Stock that is tendered in accordance with the provisions of the Notes;

(iv) at any time following the twentieth consecutive Business Day that the Holder’s Authorized Share Allocation (as defined in Section 12) is less than the number of shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard to any limitations on conversion set forth in Section 3(d) or otherwise);

(v) the Company’s failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due under this Note or any other Transaction Document (as defined in the Securities Purchase Agreement) to which the Holder is a party, except, in the case of a failure to pay Interest when and as due, in which case only if such failure continues for a period of at least five days;

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(vi) any payment default or non-payment default, provided such non-payment default continues for a period of at least thirty (30) consecutive days after the earlier to occur of (i) any executive officer of the Company becoming aware of such default and (ii) the receipt of written notice from the Holder of such default, under or acceleration prior to maturity of any Indebtedness (as defined below) of the Company or any of its Subsidiaries (as defined in Section 3(a) of the Securities Purchase Agreement) with an unpaid principal amount in excess of $5,000,000 at the time of such default or acceleration other than with respect to any Other Notes;

(vii) the Company or any of its Subsidiaries (other than an “Immaterial Subsidiary” as defined in the Senior Credit Agreement), pursuant to or within the meaning of Title 11, U.S. Code (the “Bankruptcy Code”), or any similar Federal or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee, assignee, liquidator or similar official (a “Custodian”) for all or a material portion of its property, (D) makes a general assignment for the benefit of its creditors or (E) admits in writing that it is generally unable to pay its debts as they become due;

(viii) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or any of its Subsidiaries in an involuntary case which remains undischarged and unstayed for sixty (60) calendar days, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C) orders the liquidation of the Company or any of its Subsidiaries;

(ix) a final judgment or judgments for the payment of money aggregating in excess of $5,000,000 are rendered against the Company or any of its Subsidiaries (other than any Immaterial Subsidiary) and which judgments are not, within 60 days after the entry thereof, bonded, discharged, vacated or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $5,000,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within 30 days of the issuance of such judgment;

(x) the Company materially breaches any representation, warranty, covenant or other term or condition of this Note, the Other Notes, or any other Transaction Document to which the Holder is a party, except, in the case of a breach of a covenant or other term or condition which is curable, only if such breach continues for a period of at least thirty (30) consecutive days after the

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earlier to occur of (i) any executive officer of the Company becoming aware of such breach and (ii) the receipt of written notice from the Holder of such breach;

(xi) any breach or failure in any respect to comply with Section 16 of this Note; or

(xii) any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.

(b) Redemption Right Upon Event of Default. Promptly after the occurrence of an Event of Default with respect to this Note or any Other Note, the Company shall deliver written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the Holder and the holders of the Other Notes. At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Required Holders may require the Company to redeem all or any portion of the Notes by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Company, which Event of Default Redemption Notice shall indicate the portion of the Notes that the Required Holders are electing to cause to be redeemed. The portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (x) the Conversion Amount to be redeemed plus accrued and unpaid interest and (y) the Event of Default Redemption Premium and (ii) the product of (A) the Conversion Rate with respect to such Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice and (B) the Closing Sale Price of the Common Stock on the date immediately preceding such Event of Default (the “Event of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 13.

(5) RIGHTS UPON CHANGE OF CONTROL.

(a) Change of Control. Each of the following events shall constitute a “Change of Control”:

(i) any sale of all or substantially all of the assets of the Company to a third party;

(ii) any merger of the Company with or into another corporation in which holders of Common Stock immediately prior to the consummation of the merger do not control 50% of the common stock of the surviving corporation; or

(iii) the acquisition by any “person” or “group” of persons (as such terms are used in Section 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended, and the related regulations) who have an expressed intent to control the affairs of the Company of more than 50% of the outstanding Common Stock of the Company.

No sooner than 15 days nor later than 10 days prior to the consummation of a Change of Control of which the Company is aware, but not prior to the public announcement of such Change of

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Control, the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder (a “Change of Control Notice”); provided that the Company shall not at any time be obligated to deliver a Change of Control Notice if the delivery of such notice would, in the Company’s reasonable judgment, require the premature disclosure of a potential Change of Control transaction or material non-public information with respect to such Change of Control; and provided further that the Company shall deliver a Change of Control Notice no later than three Business Days after it becomes aware of the occurrence of a Change of Control.

(b) Assumption. On or prior to the consummation of any Change of Control, the Company will secure from any Person purchasing the Company’s assets or Common Stock or any successor resulting from such Change of Control (in each case, an “Acquiring Entity”) a written agreement to guaranty the obligations of the Company under the Notes and the Other Notes or assume the obligations of the Company under this Note and the Other Notes. In addition if the common stock of the Acquiring Entity is not listed or traded on an Eligible Market (a “Public Acquiring Entity”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon a conversion of this Note, in lieu of the shares of Common Stock which would have been otherwise receivable upon such conversion, such securities or other assets received by the holders of Common Stock in connection with the consummation of such Change of Control in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate as in effect immediately prior to the Change of Control. In the event that the Acquiring Entity is a Public Acquiring Entity, then in addition to the guaranty provided for in the first sentence of this Section 5(b), the Company will ensure that such Public Acquiring Entity delivers to each holder of Notes in exchange for such Notes, a security of the Public Acquiring Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount, interest rate, rank, security interest, conversion price and conversion rights equivalent to those governing the Notes held by such holder, such that this Note shall thereafter be convertible into such common stock at an initial conversion rate equal to the product of (x) the Conversion Rate then in effect and (y) a fraction the numerator of which is the closing price of the Common Stock on the day immediately preceding the consummation of the Change of Control and the denominator of which is the closing price of such Public Acquiring Entity’s common stock on the day immediately prior to the consummation of the Change of Control. In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common stock is listed, designated or quoted on a securities exchange or trading market, then such Person shall be deemed to be the Public Acquiring Entity for all purposes hereof. The provisions of this Section shall apply similarly and equally to successive Changes of Control and shall be applied without regard to any limitations on the conversion or redemption of this Note.

(c) Redemption Right Upon Change of Control. At any time during the period beginning after the Holder’s receipt of a Change of Control Notice and ending on the date of the consummation of such Change of Control (or, in the event a Change of Control Notice is not delivered at least 10 days prior to the occurrence of a Change of Control, at any time on or after the date on which such Change of Control Notice is delivered and ending 10 days after the delivery of such Change of Control Notice), the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Change of

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Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to redeem; provided, however, that the Company shall not be under any obligation to redeem all or any portion of this Note or to deliver the applicable Change of Control Redemption Price unless and until the applicable Change of Control is consummated; provided, further, that the Company will effect any redemption in compliance with applicable securities laws, including, without limitation, Section 14(e) of the Securities Exchange Act of 1934, as amended. If the Change of Control transaction is terminated prior to its effective date, the surrender for redemption and the right to redeem pursuant to this Section 5(c) will be revoked and the Notes tendered pursuant to this Section 5(c) and Section 13 will be returned to the Holder. The portion of this Note subject to redemption pursuant to this Section 5(c) shall be redeemed by the Company at a price equal to the greater of (i) the product of (x) the Change of Control Amount and (y) the quotient determined by dividing (A) the Closing Sale Price of the Common Stock immediately following the public announcement of such proposed Change of Control by (B) the Conversion Price and (ii) the product of (A) the Change of Control Redemption Premium and (B) the Conversion Amount being redeemed, in the case of each of clause (i) and clause (ii) plus accrued and unpaid interest (the “Change of Control Redemption Price”). Redemptions required by this Section 5(c) shall be made in accordance with the provisions of Section 13 and shall have priority to payments to stockholders in connection with a Change of Control. “Change of Control Amount” means (x) in the case that the common stock of the Acquiring Entity is not listed or traded on an Eligible Market, the product of (A) the Conversion Amount being redeemed and (B) the Change of Control Redemption Premium and (y) in all other cases, the Conversion Amount being redeemed. “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the Nasdaq National Market, The Nasdaq SmallCap Market, the American Stock Exchange, Inc., the London Stock Exchange plc or the Tokyo Stock Exchange.

(6) RIGHTS UPON TRIGGERING EVENT.

(a) Triggering Event. If the Company incurs any indebtedness for borrowed money other than Permitted Indebtedness and (a) at the time of such incurrence, the trailing twelve months’ Consolidated EBITDA is not greater than or equal to $30,000,000, or (b) as a result of such incurrence, the Consolidated Leverage Ratio exceeds 4.75 to 1.0, then a “Triggering Event” shall be deemed to have occurred.

(b) Removal of Restriction. If at any time after the Issuance Date and prior to the occurrence of a Triggering Event, the Weighted Average Price of the Common Stock equals or exceeds 150% of the Conversion Price as adjusted from time to time hereunder for each of 15 out of 30 consecutive Trading Days, then the provisions of this Section 6, will cease to be applicable and have no further effect.

(c) Holder’s Redemption Right Upon Triggering Event. Promptly after the occurrence of a Triggering Event, but in no event later than 30 days thereafter, the Company shall deliver written notice thereof via facsimile and overnight courier (a “Triggering Event Notice”) to the Holder. At any time during the 30 days following receipt of a Triggering Event Notice, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof (a “Triggering Event Redemption Notice”) to the Company, which Triggering Event Redemption Notice shall indicate the portion of this Note the Holder is

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electing to redeem. The portion of this Note subject to redemption by the Company pursuant to this Section 6(c) shall be redeemed by the Company at a price equal to the Conversion Amount plus accrued and unpaid interest (“Triggering Event Redemption Price”). Redemptions required by this Section 6(c) shall be made in accordance with the provisions of Section 13.

(7) RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

(a) Purchase Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate securities or other property which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(b) Other Corporate Events. Prior to the consummation of any recapitalization, reorganization, consolidation, merger, spin-off or other business combination (other than a Change of Control) pursuant to which holders of Common Stock are entitled to receive securities or other assets with respect to or in exchange for Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon a conversion of this Note, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.

(8) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

(a) Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever prior to the first anniversary of the Issuance Date, the Company issues or sells, or in accordance with this Section 8(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have been issued or sold by the Company in connection with any Excluded Security) for a consideration per share

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(the “New Securities Issuance Price”) less than a price (the “Applicable Price”) equal to the Conversion Price in effect immediately prior to such issue or sale (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount (rounded to the nearest cent) equal to the product of (A) the Conversion Price in effect immediately prior to such Dilutive Issuance and (B) the quotient determined by dividing (1) the sum of (I) the product derived by multiplying the Conversion Price in effect immediately prior to such Dilutive Issuance and the number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus (II) the consideration, if any, received or deemed received by the Company upon such Dilutive Issuance, by (2) the product derived by multiplying (I) the Conversion Price in effect immediately prior to such Dilutive Issuance by (II) the number of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance. For purposes of determining the adjusted Conversion Price under this Section 8(a), the following shall be applicable:

(i) Issuance of Options. If the Company in any manner grants or sells any Option and the lowest price per share for which one share of Common Stock is issuable upon the exercise of such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion or exchange or exercise of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities.

(ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance of sale of such Convertible Securities for such price per share. For the purposes of this Section 8(a)(ii), the “price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Securities and upon the conversion or exchange or exercise of such Convertible Securities. No further adjustment of the Conversion Price shall be

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made upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price had been or are to be made pursuant to other provisions of this Section 8(a), no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

(iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Conversion Price in effect at the time of such change shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 8(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Issuance Date are changed in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment shall be made if such adjustment would result in an increase of the Conversion Price then in effect.

(iv) Calculation of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $.01. If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the gross amount received by the Company therefor. If any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such securities on the date of receipt. If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Required Holders. If such parties are unable to reach agreement within ten days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five Business Days after the tenth day following the

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Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

(v) Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be; provided that if, after the occurrence of the record date, the Company increases or reduces the number of shares of Common Stock issued or deemed issued or fails to consummate the actual or deemed issuance that was the subject of the record date, the Conversion Price will thereafter be readjusted up or down to reflect the actual number of shares of Common Stock issued or deemed issued in connection with such record date.

(b) Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

(c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder under this Note; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 8.

(9) COMPANY’S RIGHT OF OPTIONAL REDEMPTION.

(a) Company Optional Redemption. If at any time from and after the 3^rd anniversary of the Issuance Date, the Weighted Average Price of the Common Stock exceeds 165% of the Conversion Price then in effect for each of 20 out of 30 consecutive Trading Days (the “Company Optional Redemption Measuring Period”), the Company shall have the right to redeem for cash any portion of the Notes then outstanding (a “Company Optional Redemption”). The Company may exercise its right of redemption under this Section 9 by delivering a written notice thereof by facsimile and overnight courier to all of the holders of

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Notes and the Transfer Agent (the “Company Optional Redemption Notice”). The Company Optional Redemption Notice shall be irrevocable; provided, that, a Company Optional Redemption Notice which conditions the Company Optional Redemption upon the consummation of a related transaction or refinancing may be revoked at the discretion of the Company if such transaction is not consummated within the time period provided by such notice. This Note shall be redeemed by the Company pursuant to this Section 9 at a price equal to the Conversion Amount plus accrued and unpaid interest (the “Company Optional Redemption Price”). Notwithstanding the foregoing, the Holder may continue to convert this Note or portion thereof that is called for redemption into Common Stock pursuant to Section 3(a) on or prior to the Business Day immediately preceding the Company Optional Redemption Date (as defined below).

(b) Company Optional Redemption Notice. If the Company elects to cause a redemption of all or any portion of this Note pursuant to Section 9(a), then it must make simultaneously a pro rata redemption in respect of all Other Notes. The Company Optional Redemption Notice shall state (A) the Trading Day selected for the Company Optional Redemption in accordance with this Section 9, which Trading Day shall be at least 20 Business Days but not more than 60 Business Days following receipt of the Company Optional Redemption Notice (the “Company Optional Redemption Date”), (B) that all or a portion of the outstanding Notes have been called for optional redemption pursuant to this Section 9 (and analogous provisions under the Other Notes), and (C) the Company Optional Redemption Price to be paid to such Holder as of the Company Optional Redemption Date. All Conversion Amounts converted by the Holder after delivery of the Company Optional Redemption Notice Date shall reduce the Conversion Amount of this Note required to be redeemed on the Company Optional Redemption Date.

(10) HOLDER’S RIGHT OF OPTIONAL REDEMPTION.

(a) Holder Redemption Option. From and after the 5^th anniversary of the Issuance Date, the Holder shall have the right, in its sole discretion, to require that the Company redeem all or any portion of this Note (a “Holder Optional Redemption”) by delivering written notice thereof (a “Holder Optional Redemption Notice”). The Holder Optional Redemption Notice shall indicate the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 10(a) shall be redeemed by the Company at a price equal to the Conversion Amount being redeemed plus accrued and unpaid interest (the “Holder Optional Redemption Price”). The Holder Optional Redemption Price shall be paid on the twenty-fifth (25th) Business Day after the date of the Holder Optional Redemption Notice (the “Holder Optional Redemption Date”). Within one business Day of receipt of a Holder Optional Redemption Notice, the Company shall inform in writing all holders of Other Notes that such a Holder Optional Redemption Notice has been received by the Company. The Company may elect, by written notice (the “Company Redemption Share Notice”) delivered to the Holder, to pay up to 50% of the Holder Optional Redemption Price in shares of Common Stock (the “Optional Redemption Shares”) by dividing the amount to be paid in shares of Common Stock set forth in the Company Redemption Share Notice by the product of 94% and the Weighted Average Price of the Common Stock for the 20 Trading Day period immediately preceding the Holder Optional Redemption Date. The Company Redemption Share Notice must be delivered to the Holder within three (3) Business

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Days of receipt of a Holder Optional Redemption Notice. If the Company receives Holder Optional Redemption Notices from one or more holders of Other Notes under analogous provisions of the Other Notes, the Company shall redeem the same percentage of the Holder Optional Redemption Price in Optional Redemption Shares with respect to such Other Notes as designated in any Company Redemption Share Notice delivered under this Note. If any of the Holder Optional Redemption Price is to be paid in Optional Redemption Shares, then, on the Holder Optional Redemption Date, the Company shall (X) credit such aggregate number of Optional Redemption Shares to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to such address of the Holder as is set forth in the Securities Purchase Agreement or such other address as specified by the Holder in writing to the Company at least two (2) Business Days prior to the Holder Optional Redemption Date, a certificate, registered in the name of the Holder or its designee, for the number of Optional Redemption Shares to which the Holder shall be entitled hereunder. Notwithstanding the foregoing, the Company shall not be entitled to pay any of the Holder Optional Redemption Price in Optional Redemption Shares and shall be required to pay such Holder Optional Redemption Price entirely in cash if the Equity Conditions (as defined in Section 30) are not satisfied (or waived by the Holder). Redemptions required by this Section 10(a) shall be made in accordance with the provisions of Section 13.

(b) Holder Collateral Redemption Option. At any time during the period beginning six months after the Issuance Date and until the date that is the six month anniversary of the Effective Date (as defined in the Registration Rights Agreement), the Holder shall have the right to require that the Company redeem up to that portion of the Conversion Amount equal to the product of (x) $9,000,000 and (y) (1) the Conversion Amount divided by (2) the sum of the Conversion Amount of this Note on the Issuance Date and the aggregate of all Conversion Amounts (as defined in the Other Notes) of all Other Notes on their respective Issuance Dates (as defined in the Other Notes) plus accrued and unpaid interest on this Note (the “Holder Collateral Redemption Price”) by delivering written notice of such election (the “Holder Collateral Redemption Notice”) to the Company. Within five (5) Business Days after the date of the Holders Collateral Redemption Notice (the “Holder Collateral Redemption Date”), the Company shall deliver by wire transfer of immediately available funds to the account of the Holder the Holder Collateral Redemption Price. Redemptions required by this Section 10(b) shall be made in accordance with the provisions of Section 13.

(11) NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note.

(12) RESERVATION OF AUTHORIZED SHARES.

(a) Reservation. The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for each of the Notes equal to 120% of the Conversion Rate with respect to the Conversion Amount of each

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such Note as of the Issuance Date. Thereafter, the Company, so long as any of the Notes are outstanding, shall take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Notes, 105% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Notes then outstanding; provided that at no time shall the number of shares of Common Stock so reserved be less than the number of shares required to be reserved by the previous sentence (without regard to any limitations on conversions) (the “Required Reserve Amount”). The initial number of shares of Common Stock reserved for conversion of the Notes and each increase in the number of shares of Common Stock so reserved shall be allocated pro rata among the holders of the Notes based on the principal amount of the Notes held by each holder at the time of the Issuance Date or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then held by such holders.

(b) Insufficient Authorized Shares. If at any time while any of the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately use commercially reasonable efforts take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than 60 days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its commercially reasonable efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve such proposal.

(13) HOLDER’S REDEMPTIONS.

(a) Mechanics. In the event that the Holder has sent an Event of Default Redemption Notice, a Change of Control Redemption Notice, a Triggering Event Redemption Notice, a Holder Optional Redemption Notice or a Holder Collateral Redemption Notice to the Company pursuant to Section 4(b), Section 5(c), Section 6(c), Section 10(a) or Section 10(b), respectively (each, a “Redemption Notice”), the Holder shall promptly submit this Note to the Company. The Company shall deliver the applicable Event of Default Redemption Price, Change of Control Redemption Price, Triggering Event Redemption Price, Holder Optional Redemption Price or Holder Collateral Redemption Price to the Holder within ten (10) Business Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice, Change of Control Redemption Notice, Triggering Event Redemption Notice, Holder Optional Redemption Notice or Holder Collateral Redemption Notice. If the Holder has

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submitted a Change of Control Redemption Notice in accordance with Section 5(c), the Company shall deliver the applicable Change of Control Redemption Price to the Holder concurrently with the consummation of such Change of Control if such notice is received prior to the consummation of such Change of Control and within five Business Days after the Company’s receipt of such notice otherwise. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 20(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the Event of Default Redemption Price, the Change of Control Redemption Price, Triggering Event Redemption Price, Holder Optional Redemption Price or Holder Collateral Redemption Price (each, a “Redemption Price”), as applicable, to the Holder (or deliver any Common Stock to be issued pursuant to a Redemption Notice) within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price (and issues any Common Stock required pursuant to a Redemption Notice) in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price (or any Common Stock required to be issued pursuant to a Redemption Notice) has not been paid. Upon the Company’s receipt of such notice, (x) the Redemption Notice shall be null and void with respect to such Conversion Amount and (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 20(d)) to the Holder representing such Conversion Amount.

(b) Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b), Section 5(c), Section 6(c), Section 10(a) or Section 10(b) (each, an “Other Redemption Notice”), the Company shall immediately forward to the Holder by facsimile a copy of such notice. If the Company receives a Redemption Notice and one or more Other Redemption Notices during the seven Business Day period beginning on and including the date which is three Business Days prior to the Company’s receipt of the Holder’s Redemption Notice and ending on and including the date which is three Business Days after the Company’s receipt of the Holder’s Redemption Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such seven Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including the Holder) based on the aggregate principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such seven Business Day period.

(14) SUBORDINATION TO SENIOR BANK INDEBTEDNESS.

(a) Agreement to Subordinate. By issuing this Note, the Company for itself and its successors and assigns, and for its Subsidiaries and the successors and assigns of such Subsidiaries, agrees, and the Holder, by its acceptance of this Note, shall be deemed to have agreed, that this Note shall be subject to the provisions of this Section 14 and, to the extent and in the manner hereinafter set forth in this Section 14, (i) the indebtedness represented by this Note and the payment of the Principal and Interest, any redemption amount, liquidated damages, fees, expenses or any other amounts in respect of this Note and (ii) the obligations, including the

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Guaranteed Obligations (as defined in the Subsidiary Guaranty Agreement), of certain Subsidiaries of the Company under the Subsidiary Guaranty Agreement (collectively, the “Subordinated Indebtedness”) are subordinate in right of payment to the prior payment in full in cash of all Senior Bank Indebtedness now outstanding or hereinafter incurred. The Holder agrees not to initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, validity, perfection or priority of the Senior Bank Indebtedness or any liens and security interests securing the Senior Bank Indebtedness.

(b) Liquidation; Dissolution; Bankruptcy.

(i) The holders of Senior Bank Indebtedness shall be entitled to receive payment in full in cash of all Senior Bank Indebtedness (including interest after the commencement of any proceeding under any Bankruptcy Law at the rate specified in the documentation for the applicable Senior Bank Indebtedness) before the Holder shall be entitled to receive any payment with respect to the Subordinated Indebtedness (other than a distribution of Reorganization Subordinated Securities), in the event of any distribution to creditors of any of the Company or its subsidiaries which are parties to the Subsidiary Guaranty (as defined in the Securities Purchase Agreement) (each, a “Credit Party”) in (A) any sale, liquidation, winding-up or dissolution of such Credit Party; (B) any bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to such Credit Party or its property; (C) any assignment by such Credit Party for the benefit of its creditors; or (D) any marshaling of any Credit Party’s assets and liabilities (each a “Bankruptcy Event”).

(ii) In the event of any distribution, division or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the assets of any Credit Party or the proceeds thereof to creditors of any Credit Party upon any Indebtedness of such Credit Party, by reason of any Bankruptcy Event, then and in any such event, any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable to the Holder upon or with respect to any or all Subordinated Indebtedness (other than a distribution of Reorganization Subordinated Securities) shall be paid or delivered directly to the Agent for application against the Senior Bank Indebtedness, whether due or not due, in a manner which the Agent, in its sole discretion, shall determine, until such Senior Bank Indebtedness shall have been fully paid in cash and all commitments thereunder have terminated. The Holder hereby irrevocably authorizes and empowers the Agent to ask for, demand, sue for, collect, and receive for every such payment or distribution and give acquittance therefor, and to file claims (and proofs of claims) and take such other actions in the Agent’s own name or in the name of the Holder as the Agent may deem necessary or advisable for the enforcement of the terms of this Section 14.

(iii) Each Holder agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Indebtedness requested by the

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Agent in connection with any Bankruptcy Event and hereby irrevocably authorizes, empowers and appoints Agent as its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of the Holder promptly to do so prior to 5 days before the expiration of the time to file any such proof of claim and (ii) vote such claim in any such Bankruptcy Event upon the failure of the Holder to do so prior to 5 days before the expiration of the time to vote any such claim; provided the Agent shall have no obligation to execute, verify, deliver, file and/or vote any such proof of claim. In the event that the Agent votes any claim in accordance with the authority granted hereby, the Holder shall not be entitled to change or withdraw such vote.

(c) Default on Senior Bank Indebtedness.

(i) No Credit Party shall make, nor shall the Holder ask for, demand or accept, any direct or indirect payment in respect of the Subordinated Indebtedness, including in respect of any sinking fund therefore, or redemption, retirement or repurchase thereof, if:

(A) a default in payment of any principal and, interest due and payable on any Senior Bank Indebtedness of the Company (a “Senior Payment Default”) occurs and is continuing past any grace or cure period, if any, applicable thereto; or

(B) any other default (a “Senior Non-Payment Default”) occurs and is continuing past any grace or cure period, if any, applicable thereto with respect to the Senior Bank Indebtedness that permits holders of such Senior Bank Indebtedness to accelerate its maturity and the Holder receives a notice of such default (a “Payment Blockage Notice”) from the Agent.

(ii) Payments in respect of the Subordinated Indebtedness may and shall be resumed (the “Payment Blockage Termination Date”), including any payments not made as a result of such payment blockage;

(A) in the case of a Senior Payment Default, upon the date on which such default is waived; and

(B) in case of a Senior Non-Payment Default, upon the earliest of (x) the date on which such default is waived, (y) 179 days after the date on which the applicable Payment Blockage Notice is received or (z) the date the Holder receives notice from the Agent rescinding the Payment Blockage Notice.

(iii) No new Payment Blockage Notice may be delivered unless and until:

(A) 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice; and

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(B) all scheduled payments of the Subordinated Indebtedness that have come due have been paid in full in cash.

(iv) No Senior Non-Payment Default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Buyer Agent shall be the basis for a subsequent Payment Blockage Notice.

(v) If the Holder receives a payment in respect of the Subordinated Indebtedness when (i) the payment is prohibited by this Section 14(c) and (ii) the Holder has actual knowledge that the payment is prohibited, provided that such actual knowledge shall not be required in the case of any payment default, the Holder shall hold the payment in trust for the benefit of the holders of Senior Bank Indebtedness. Upon the proper written request of the Agent or if any Senior Payment Default has occurred and is continuing, the Holder shall deliver the amounts in trust to the Agent.

(d) Standstill.

(i) After the occurrence and during the continuance of any Senior Payment Default or if a Payment Blockage Notice has been delivered to the Holder, no action may be taken by the Holder to accelerate or redeem the Subordinated Indebtedness or to enforce or collect payment on the Subordinated Indebtedness or to commence, or join with any other creditor (other than the Agent and, at the direction of the Agent, the Lenders and the holders of the Other Notes) in commencing, any bankruptcy, receivership, reorganization, liquidation or insolvency proceeding, until the earlier to occur of any of the following (a “Standstill Termination Date”):

(A) the date of termination of the Senior Credit Agreement and payment in full of all Senior Bank Indebtedness;

(B) the date on which the Senior Bank Indebtedness is accelerated and due and payable in full;

(C) the Payment Blockage Termination Date; or

(D) the date on which the standstill imposed by this Section 14(d) has been continuously in effect for a period of 360 days by reason of one or more Senior Payment Defaults, provided that any amounts recovered as a result of the exercise of any remedy shall be subject to any applicable provisions of Sections 14(b) and 14(c) above; or

(E) the commencement of any proceeding against the Company under the Bankruptcy Code by any Person other than the Holder or the holders of the Other Notes.

(ii) Following the occurrence of the Standstill Termination Date, the Holder may take any action available to it under the terms of the

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Securities Purchase Documents or otherwise available under applicable law to enforce any Credit Party’s obligations of payment with respect to the Subordinated Indebtedness that shall then exist under the terms of the Securities Purchase Documents.

(e) Redemption upon Event of Default. The Holder shall give the Agent at least 3 Business Days’ prior notice of its intention to exercise its redemption rights upon the occurrence of an Event of Default, a Change of Control or a Triggering Event.

(f) No Amendment of Subordinated Indebtedness. Neither the Holder nor any Credit Party will, without the prior written consent of the Agent, amend or modify (i) this Section 14 or the definition of any capitalized term used in this Section 14 or (ii) any provision of the Securities Purchase Agreement or the other Securities Purchase Documents if such amendment or modification would (A) move forward the date of any redemption or payment or increase the principal amount of or the rate of interest applicable to the Subordinated Indebtedness or (B) result in the covenants contained therein being materially more restrictive in the aggregate on any Credit Party prior to the effectiveness of such amendment or modification.

(g) No Impairment of Subordination. No right of the Agent, any Lender or any future holder of any Senior Bank Indebtedness to enforce the subordination as provided in this Section 14 shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Credit Party or any act or failure to act by the Agent, any Lender or any such holder, or by any noncompliance by any Credit Party with the terms of this Section 14, regardless of any knowledge thereof which the Agent or any Lender may have or with which it may otherwise be charged.

(h) Subrogation. Subject to payment in full in cash of all Senior Bank Indebtedness and the termination of all commitments thereunder, the rights of the Holder shall be subrogated to the rights of the holders of Senior Bank Indebtedness to receive payments or distributions of the assets of any Credit Party made on such Senior Bank Indebtedness until all principal and interest on this Note shall be paid in full in cash; and for purposes of such subrogation, no payments or distributions to the holders of Senior Bank Indebtedness of any cash, property or securities to which the Holder would be entitled except for the subordination provisions of this Section 14 shall, as between the Holder and the Company and/or its creditors other than the holders of the Senior Bank Indebtedness, be deemed to be a payment on account of the Senior Bank Indebtedness.

(i) Conversion Rights. Nothing contained in this Section 14 or elsewhere in this Note is intended to or shall impair, as among the Company, its creditors, including the holders of Senior Bank Indebtedness, and the Holder, the right, which is absolute and unconditional, of the Holder to convert this Note into shares of Common Stock or rights to acquire shares of Common Stock in accordance with the terms hereof.

(j) Rights of Holder Unimpaired. The provisions of this Section 14 are and are intended solely for the purposes of defining the relative rights of the Holder and the holders of Senior Bank Indebtedness and nothing in this Section 14 shall impair, as between the Company and the Holder, the obligation of the Company, which is unconditional and absolute, to

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pay to the Holder the Principal (and premium, if any) and Interest, in accordance with the terms of this Note.

(k) Subordination May Not Be Impaired by any Credit Party. No right of any holder of Permitted Indebtedness to enforce the subordination of the Subordinated Indebtedness shall be impaired by any act or failure to act by any Credit Party or the Holder or by the failure of any Credit Party or the Holder to comply with the terms of this Section 14.

(l) Reliance by Holder. Upon any payment or distribution of assets of any Credit Party referred to in this Section 14, the Holder shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of the Agent or of the liquidating trustee or agent or other Person making any distribution to the Holder for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Permitted Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 14.

(m) Reliance by Holders of Senior Debt. The Holder acknowledges and agrees that (i) each holder of Senior Bank Indebtedness is an intended third-party beneficiary of the terms of the Section 14 and (ii) the foregoing provisions of this Section 14 are, and are intended to be, an inducement and consideration to each holder of Senior Debt, whether such Senior Debt was created or acquired before or after the date hereof, to acquire or continue to hold such Senior Debt and such holder of Senior Debt shall be deemed conclusively to have relied on such provisions in acquiring or continuing to hold such Senior Debt.

(n) Exception to Subordination. Notwithstanding any provision in this Section 14 to the contrary, the rights of the Holder with respect to payments from the Closing Cash Collateral Account (as such term is defined in the Securities Purchase Agreement) and, if established, the Williams Acquisition Cash Collateral Account (as such term is defined in the Securities Purchase Agreement) shall not be subordinated in right of payment to the prior payment of Senior Bank Indebtedness.

(o) Applicability. The terms of this Section 14 shall be applicable both before and after the filing of any petition by or against any Credit Party under any Bankruptcy Law, and all allocations of payments between the holders of the Senior Bank Indebtedness, on the one hand, and the Holder, on the other hand, shall continue to be made after the filing thereof in accordance with this Section 14.

(15) VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law, including but not limited to the General Corporation Law of the State of Delaware, and as expressly provided in this Note.

(16) RANK; ADDITIONAL INDEBTEDNESS; LIENS.

(a) Rank. All payments due under this Note (i) shall rank pari passu with all Other Notes and Indebtedness described in Section 7.03(b), (c) (except with respect to Guarantees of Senior Indebtedness, to which the Guarantees the Notes will be subordinated), (f), (h), (i), (j), (k), (m), and (o), of the Senior Credit Agreement, (ii) shall be subordinate in right of

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payment to the prior payment of all existing and future Senior Indebtedness and, without duplication, Indebtedness described in Sections 7.03(a), (c) (to the extent constituting Guarantees of Senior Indebtedness), (d), (e), (g) and (n) of the Senior Credit Agreement and (iii) shall be senior to all other Indebtedness of the Company and its Subsidiaries, other than Senior Indebtedness; provided that any Indebtedness incurred to any Affiliate (as defined in Section 30) (other than a direct or indirect Subsidiary) of the Company after the date hereof shall be subordinate in right of payment to the Notes. The Holder acknowledges and agrees that (i) all Indebtedness of the Subsidiaries of the Company which are not guarantors of the Notes may be structurally senior in right of payment to the Notes and (ii) that certain Indebtedness which ranks pari passu with the Notes may be secured by Permitted Liens and, to the extent so secured, may effectively rank senior to the Notes to the extent of any security for such Indebtedness.

(b) Incurrence of Senior Indebtedness. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness which shall rank senior to the Notes other than Senior Indebtedness.

(c) Existence of Liens. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property and any financing lease having substantially the same economic effect as any of the foregoing) (collectively, “Liens”) other than Permitted Liens.

(d) Restricted Payments. The Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness, other than Senior Indebtedness or Indebtedness that ranks pari passu with this Note, whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at the time such payment is due or is otherwise made, after giving effect to such payment, an event constituting, or that with the passage of time and without being cured would constitute, an Event of Default has occurred and is continuing.

(17) PARTICIPATION. The Holder, as the holder of this Note, shall be entitled to such dividends paid and distributions made to the holders of Common Stock to the same extent as if the Holder had converted this Note into Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments (if any) under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of Common Stock.

(18) VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative vote at a meeting duly called for such purpose or the written consent without a

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meeting, of the Required Holders, shall be required for any change or amendment to this Note or the Other Notes; provided, however, that no such amendment, as applied to any particular holder of Notes, shall, without the consent of that particular holder, (i) extend the maturity of the Note, reduce the interest rate, extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or repurchase thereof or affect any amounts due to any holder or (ii) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any such amendment, without the consent of the holders of all Notes then outstanding.

(19) TRANSFER. This Note may be offered, sold, assigned or transferred by the Holder in minimum denominations of $1,000,000 without the consent of the Company, subject only to the provisions of Section 2(f) of the Securities Purchase Agreement; provided however that this Note may not be transferred to any person who (a) is a competitor of the Company or (b) is engaged in or has threatened material litigation against the Company, in each case as determined by the Board of Directors of the Company in good faith. Notwithstanding the foregoing, in case of an Event of Default, this Note may be transferred without regard to any of the foregoing limitations.

(20) REISSUANCE OF THIS NOTE.

(a) Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 20(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less then the entire outstanding Principal is being transferred, a new Note (in accordance with Section 20(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) and this Section 20(a), following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note. The Company shall not be obligated to pay any documentary, stamp or similar taxes that may be payable with respect to any transfer under this Section 20(a).

(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 20(d)) representing the outstanding Principal.

(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 20(d) and in principal amounts of at least $100,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

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(d) Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 20(a) or Section 20(c), the Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued Interest on the Principal and Interest of this Note, from the Issuance Date.

(21) REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, the Securities Purchase Agreement and the Registration Rights Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

(22) PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

(23) CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and all the Buyers (as defined in the Securities Purchase Agreement) and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

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(24) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

(25) DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Closing Bid Price, the Closing Sale Price or the Weighted Average Price or the arithmetic calculation of the Conversion Rate or the Redemption Price, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within one Business Day of receipt of the Conversion Notice or Redemption Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within one Business Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within one Business Day submit via facsimile (a) the disputed determination of the Closing Bid Price, the Closing Sale Price or the Weighted Average Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate or the Redemption Price an independent, outside accountant mutually acceptable to the Company and the Required Holders. The Company, at the Company’s expense, shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

(26) NOTICES; PAYMENTS.

(a) Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least twenty days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Change of Control, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. Notwithstanding the foregoing, Section 9(f) of the Securities Purchase Agreement shall apply to all notices given pursuant to this Note.

(b) Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address, in the case of each of the Buyers, shall initially be as set forth on the

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Schedule of Buyers attached to the Securities Purchase Agreement); provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of Interest due on such date.

(27) CANCELLATION. After all Principal, accrued Interest and other amounts at any time owed on this Note has been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

(28) WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.

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

(30) CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

(a) “Affiliate” has the meaning ascribed to such term in the Securities Purchase Agreement.

(b) “Agent” has the meaning ascribed to such term in the Senior Credit Agreement.

(c) “Approved Stock Plan” means any employee benefit, option or incentive plan (including, without limitation, any stock appreciation rights plan or phantom stock plan) which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, consultant, officer or director for services provided to the Company.

(d) “Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Off-Balance Sheet Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capitalized Lease.

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(e) “Available Cash” means (a) for the period from the Closing Date (as defined in the Senior Credit Agreement) of the Senior Credit Agreement until the first to occur of (x) the closing of the Williams Acquisition and (y) June 30, 2005, without duplication, the sum of (i) the lesser of (A) the sum of (1) cash and Cash Equivalents (as defined in the Senior Credit Agreement) of the Domestic Loan Parties (as defined in the Senior Credit Agreement) and (2) Available Foreign Subsidiary Cash (as defined in the Senior Credit Agreement), all to the extent such cash and Cash Equivalents are not subject to any Lien (other than Liens in favor of the Administrative Agent under the Senior Credit Agreement granted pursuant to the Loan Documents (as defined in the Senior Credit Agreement)) or any restriction as to its use or disposition and are included in “cash and cash equivalents” and not “restricted cash” on the consolidated balance sheet of the Company and its Consolidated Subsidiaries (as defined in the Senior Credit Agreement), and (B) $25,000,000, and (ii) proceeds from the issuance of the Notes (including, without limitation, the reserve and/or escrow account for up to $9,000,000 established in accordance with the terms of the Securities Purchase Agreement), and (b) thereafter, the lesser of (i) the amount, if any, of the reserve and/or escrow account established for the redemption of up to $9,000,000 in securities established in accordance with the Securities Purchase Agreement plus the sum of (x) cash and Cash Equivalents of the Domestic Loan Parties and (y) Available Foreign Subsidiary Cash, all to the extent such cash and Cash Equivalents are not subject to any Lien (other than Liens in favor of the Administrative Agent under the Senior Credit Agreement granted pursuant to the Loan Documents) or any restriction as to its use or disposition and are included in “cash and cash equivalents” and not “restricted cash” on the consolidated balance sheet of the Company and its Consolidated Subsidiaries (as defined in the Senior Credit Agreement), and (ii) the amount, if any, of the reserve and/or escrow account established for the redemption of up to $9,000,000 in securities established in accordance with the Securities Purchase Agreement plus $25,000,000; provided, however, that for purposes of Section 30(bbb), Available Cash shall exclude (i) the amount of the reserve and/or escrow account established for the redemption of up to $9,000,000 in principal amount of the Notes and (ii), without duplication of any other deduction from Available Cash, the amount of the reserve and/or escrow account established for the payment of interest of up to $7,650,000, each established in accordance with the Securities Purchase Agreement.

(f) “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. 101 et seq.), as amended from time to time (including any successor statute) and all rules and regulations promulgated thereunder.

(g) “Bankruptcy Law” means the Bankruptcy Code of the United States and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, fraudulent conveyance or transfer, reorganization, or similar state or Federal debtor relief laws, statutes, rules, regulations, orders, or ordinances of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

(h) “Bloomberg” means Bloomberg Financial Markets.

(i) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

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(j) “Capitalized Lease” means, as applied to any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of such Person.

(k) “Change of Control Redemption Premium” means during each of the first, second and third years after the Issuance Date, 120%, 116% and 112%, respectively, and thereafter 110%.

(l) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 25. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

(m) “Common Stock Deemed Outstanding” means, at any given time, the number of shares of Common Stock actually outstanding at such time, plus (i) the number of shares of Common Stock deemed to be outstanding pursuant to Sections 8(a)(i) and 8(a)(ii) hereof regardless of whether the Options or Convertible Securities are actually exercisable at such time and (ii) plus the number of shares of Common Stock underlying Options or Convertible Securities issued pursuant to the Approved Stock Plans that are actually exercisable or convertible at such time at an exercise price or conversion price that is less than or equal to the per share fair market value of such underlying shares of Common Stock, but excluding any shares of Common Stock owned or held by or for the account of the Company or issuable upon conversion of the Notes or the Other Notes.

(n) “Consolidated EBITDA” means, for any period for any Person and its Subsidiaries determined on a consolidated basis, an amount equal to Consolidated Net Income for such period, plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period; (ii) the provision for federal, state, local and foreign income taxes for such period; (iii) depreciation and

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amortization expense; (iv) certain restructuring expenses and estimated transaction expenses in the amounts and as described on Schedule 1.03 in the Senior Credit Agreement, (v) other transaction expenses in an aggregate amount of up to $1,250,000 to the extent such expenses are not capitalized due to the failure of the Company to consummate the Williams Acquisition, (vi) other non-recurring non-cash expenses, (vii) any other non-cash write-downs or non-cash write-offs including, but not limited to, fixed asset impairments or write-downs, intangible asset impairments, deferred tax asset write-offs or reserves, variable stock option expenses and debt issuance cost write-offs, (viii) any non-cash losses or deductions arising from the cumulative effect of a change in accounting principles, and (ix) non-cash losses relating to foreign currency and hedging transactions, and minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax benefits recorded by the Company and its Subsidiaries for such period and (ii) all extraordinary, non-recurring, non-cash items increasing Consolidated Net Income for such period.

(o) “Consolidated Funded Indebtedness” means, for any Person and its Subsidiaries determined on a consolidated basis, as of any date of determination, without duplication, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness (except as provided in clause (d) below), (c) all direct obligations arising under unreimbursed amounts of drawings under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) Attributable Indebtedness in respect of Capitalized Leases and Off-Balance Sheet Obligations, (f) all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to such Person or any such Subsidiary.

(p) “Consolidated Interest Charges” means, for any period, for any Person and its Subsidiaries determined on a consolidated basis, the sum of all interest, premium payments, debt discount, fees, charges and related expenses in connection with Indebtedness (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, including the portion of rent expense with respect to such period under Capitalized Leases that is treated as interest in accordance with GAAP.

(q) “Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date less Available Cash as of such date to (b) Consolidated EBITDA for the Four-Quarter Period most recently ended.

(r) “Consolidated Net Income” means, for any period, for any Person and its Subsidiaries determined on a consolidated basis, the Net Income of such Person for that period.

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(s) “Consolidated Subsidiary” means with respect to any Person at any date any Subsidiary of such person or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date in accordance with GAAP.

(t) “Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Stock.

(u) “Credit Party” means the Company and each Subsidiary party to the Subsidiary Guaranty Agreement.

(v) “Designated Borrower” has the meaning ascribed to such term in the Senior Credit Agreement.

(w) “Eligible Market” means the Principal Market, the American Stock Exchange, the Nasdaq National Market or the Nasdaq Small Cap Market.

(x) “Equity Conditions” means (i) on each day during the period beginning six months prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), either (x) the Registration Statement filed pursuant to the Registration Rights Agreement shall be effective and available for the resale of all remaining Registrable Securities (as defined in the Registration Rights Agreement) in accordance with the terms of the Registration Rights Agreement and there shall not have been any Grace Periods (as defined in the Registration Rights Agreement) (other than a Grace Period in connection with a Fundamental Transaction) during the Equity Conditions Measuring Period or (y) all shares of Common Stock issuable upon conversion of the Notes shall be eligible for sale without restriction and without the need for registration under any applicable federal or state securities laws; (ii) on each day during the Equity Conditions Measuring Period, the Common Stock is designated for quotation on the Principal Market and shall not have been suspended from trading on such exchange or market (other than suspensions of not more than two days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by such exchange or market been threatened or pending either (A) in writing by such exchange or market or (B) by falling below the minimum listing maintenance requirements of such exchange or market; (iii) any applicable shares of Common Stock to be issued in connection with such issuance may be issued in full without violating Section 3(d) hereof and the rules or regulations of the Principal Market; (iv) during the Equity Conditions Measuring Period, the Company shall not have failed to timely make any payments within ten (10) Business Days of when such payment is due pursuant to any Transaction Document; (v) there shall not have occurred since the date of the Holder Optional Redemption Notice either (A) the public announcement of a pending, proposed or intended Change of Control which has not been abandoned, terminated or consummated or (B) an Event of Default or an event that with the passage of time or giving of notice would constitute an Event of Default; and (vi) the Company shall have no knowledge of any fact that would cause (x) the Registration Statements required pursuant to the Registration Rights Agreement not to be effective and available for the resale of all remaining Registrable Securities in accordance with the terms of the Registration Rights Agreement or (y) any shares of Common Stock issuable

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upon conversion of the Notes not to be eligible for sale without restriction pursuant to Rule 144(k) and any applicable state securities laws.

(y) “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

(z) “Eligible Market” means the Principal Market, the American Stock Exchange, the Nasdaq National Market or the Nasdaq Small Cap Market.

(aa) “Event of Default Redemption Premium” means 110%.

(bb) “Excluded Securities” means any shares of Common Stock issued or issuable: (i) in connection with any Approved Stock Plan or any dividend reinvestment plan; (ii) upon conversion, redemption or exchange of the Notes and the Other Notes; (iii) pursuant to a bona fide firm commitment underwritten public offering with a nationally recognized underwriter which generates gross proceeds to the Company in excess of $25,000,000 (iv) in connection with a Strategic Acquisition and (v) in connection with any adjustment of any outstanding security (including without limitation the Notes) pursuant to any antidilution or similar adjustment.

(cc) “Four-Quarter Period” means a period of four consecutive fiscal quarters of the Company and its Consolidated Subsidiaries taken as one accounting period.

(dd) “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or (v) reorganize, recapitalize or reclassify its Common Stock, or (vi) any offering of debt or equity securities of the Company or any Subsidiary.

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(ee) “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

(ff) “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

(gg) “Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(i) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(ii) all direct or contingent obligations of such Person arising under letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(iii) net obligations of such Person under any Swap Contract;

(iv) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

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(v) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(vi) Capitalized Leases and Off-Balance Sheet Obligations;

(vii) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(viii) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer in an amount proportionate to such Person’s interest therein, unless such Indebtedness is expressly made non-recourse to such Person or except to the extent such Indebtedness is owed by such partnership or joint venture to such Person; provided that the pledge of any Equity Interest in such joint venture shall not constitute recourse to such Person for the purposes of this definition. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capitalized Lease or Off-Balance Sheet Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

(hh) “Issuance Date” means November 23, 2004.

(ii) “Lender” has the meaning ascribed to such term in the Senior Credit Agreement.

(jj) “Net Income” means, for any period, net income of any Person and its Subsidiaries (excluding extraordinary gains and extraordinary losses) for that period.

(kk) “Off-Balance Sheet Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment). No monetary obligations under true operating leases shall be included in Off-Balance Sheet Obligations.

(ll) “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

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(mm) “Permitted Acquisitions” means (a) the Williams Acquisition, (b) any other acquisition by any Loan Party (as defined in the Senior Credit Agreement) permitted by the Senior Credit Agreement.

(nn) “Permitted Indebtedness” means (i) this Note and the Other Notes, (ii) the Senior Bank Indebtedness and (iii) without duplication, Indebtedness permitted pursuant to Section 7.03 of the Senior Credit Agreement.

(oo) “Permitted Lien” means:

(i) Liens pursuant to any Loan Document (as defined in the Senior Credit Agreement);

(ii) Liens existing on the date of the Senior Credit Agreement and listed on Schedule 7.01 thereto and any renewals or extensions thereof in connection with any refunding, refinancing or renewal of the obligations secured thereby; provided that (i) the property covered thereby is not broadened, (ii) the amount secured or benefited thereby is not increased, (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b) of the Senior Credit Agreement;

(iii) Liens for taxes, fees, assessments or other governmental charges, not yet due or which are not delinquent or remain payable without penalty, or to the extent non-payment thereof is permitted by Section 6.04 of the Senior Credit Agreement; provided, that a stay of enforcement of any such Lien is in effect;

(iv) Liens securing the rights or claims of carriers, warehousemen, mechanics, materialmen, repairmen, landlords or other like Liens in favor of similar Persons arising in the ordinary course of business which are not delinquent or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto and for which adequate reserves with respect thereto are maintained on the books of the applicable person in accordance with GAAP; provided, that a stay of enforcement of any such Lien is in effect;

(v) Liens consisting of pledges or deposits made by the Company or any of its Subsidiaries in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation or public liability laws or similar legislation, other than any Lien imposed by the Employee Retirement Income Security Act of 1974;

(vi) easements, rights-of-way, restrictions and other similar encumbrances affecting real property of the Company or any of its Subsidiaries which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

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(vii) Liens securing judgments for the payment of money not constituting an Event of Default under this Note or securing appeal or other surety bonds related to such judgments; provided that enforcement of such Liens is effectively stayed;

(viii) Liens securing purchase money Indebtedness, Indebtedness of foreign Subsidiaries and assumed Indebtedness of an acquired Person permitted under Section 7.03(e), (g) or (h) of the Senior Credit Agreement, respectively, provided such Liens attach only to the property specified therein;

(ix) Liens incurred or deposits made to secure performance of tenders, statutory obligations, bids, leases or other similar obligations (other than for borrowed money) entered into in the ordinary course of business;

(x) restrictions imposed in the ordinary course of business on the sale or distribution of designated inventory that arise from the sale of such inventory to one or more customers;

(xi) deposits in escrow accounts for customary purchase price adjustments, earn-outs and indemnities in connection with Permitted Acquisitions;

(xii) licenses, leases or subleases granted in the ordinary course of business not interfering in any material respect with the business of the Company or any of its Subsidiaries;

(xiii) restrictions imposed in the ordinary course of business on the sale or distribution of designated inventory that arise from the sale of such inventory to one or more customers;

(xiv) Liens in favor of customs or revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation of goods;

(xv) deposits in escrow accounts for customary purchase price adjustments, earn-outs and indemnities in connection with Permitted Acquisitions; and

(xvi) Liens on the assets of any Designated Borrower organized in the Netherlands arising under clause 18 of the general terms and conditions (algemene voorwaarden) of any member of the Dutch Bankers’ Association (Nederlandse Vereniging van Banken) or any similar term applied by a financial institution in the Netherlands pursuant to its general terms and conditions.

(pp) “Permitted Refinancing” means any amendment, modification, restatement, refinancing, extension, refunding, renewal or replacement of the Senior Indebtedness which amendment, modification, restatement, refinancing, extension, refunding,

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renewal or replacement does not cause the Senior Indebtedness to exceed the Senior Indebtedness Cap.

(qq) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

(rr) “Principal Market” means The New York Stock Exchange, Inc.

(ss) “Registration Rights Agreement” means that certain registration rights agreement between the Company and the initial holders of the Notes relating to the registration of the resale of the shares of Common Stock issuable upon conversion of the Notes.

(tt) “Reorganization Subordinated Securities” shall mean any debt or equity securities of any of the Credit Parties or any other Person that are distributed to the Holder in respect of the Subordinated Indebtedness pursuant to a confirmed plan of reorganization or adjustment that (a) are subordinated, including in right of payment, to the Senior Bank Indebtedness (or any debt or equity securities issued in substitution of all or any portion of the Senior Bank Indebtedness) to at least the same extent as the Subordinated Indebtedness is subordinated to the Senior Bank Indebtedness and (b) do not have terms better for the holders thereof than the terms of the Subordinated Indebtedness.

(uu) “Required Holders” means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding; provided however that if and for so long as one of the Buyers (as defined in the Securities Purchase Agreement) together with its Affiliates holds more than 50% of the aggregate principal amount of Notes outstanding then “Required Holders” shall mean holders of Notes representing at least 66  ²/3% of the principal amount of Notes outstanding. For purposes of determining the principal amount of Notes outstanding, any Notes purchased or held for the account of the Company or any of its Affiliates will be excluded.

(vv) “SEC” means the United States Securities and Exchange Commission.

(ww) “Securities Purchase Agreement” means that certain securities purchase agreement between the Company and the initial holders of the Notes pursuant to which the Company issued the Notes.

(xx) “Securities Purchase Documents” means that the Securities Purchase Agreement, this Note, the Registration Rights Agreement, the Subsidiary Guaranty Agreement and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, restated, supplemented or otherwise modified from time to time.

(yy) “Senior Credit Agreement” means (a) that certain Credit Agreement, dated as of October 1, 2004 by and among the Company, certain subsidiaries of the Company party thereto, as borrowers, the Agent, the Lenders, US Bank National Association, as Syndication Agent, and Bank of Oklahoma, N.A., as Managing Agent, as amended by the First

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Amendment to Credit Agreement, dated as of November 23, 2004 as in effect on the date hereof and as may be further amended, restated, modified or supplemented from time to time with the written consent of the Required Holders pursuant to the terms hereof and (b) any Permitted Refinancing thereof; provided, that for the purpose of Section 16 hereof and the related definitions, all references to the Senior Credit Agreement shall mean the Senior Credit Agreement in effect as of the date hereof.

(zz) “Senior Bank Indebtedness Documents” means the Senior Credit Agreement and all other Loan Documents (as such term is defined in the Senior Credit Agreement), as the same may be amended, restated, supplemented or otherwise modified from time to time and any replacement thereof in connection with a Permitted Refinancing.

(aaa) “Senior Bank Indebtedness” means all obligations, liabilities and indebtedness of every nature of the Company from time to time owed to the Agent or any Lender under the Senior Bank Indebtedness Documents, including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a bankruptcy, reorganization, insolvency, receivership or similar proceeding under the Bankruptcy Code together with any interest accruing thereon after the commencement of such proceeding, without regard to whether or not such interest is an allowed claim; provided, however, that at no time shall the principal amount of the Senior Bank Indebtedness exceed the greater of (i) the sum of $100,000,000 plus Available Cash and (ii) the product of (x) 3.0 and (y) Consolidated EBITDA for the prior four calendar quarters.

(bbb) “Senior Indebtedness” means all obligations, liabilities and indebtedness of every nature of the Company from time to time owed to the Agent or any Lender under (i) the Senior Bank Indebtedness Documents, including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a bankruptcy, reorganization, insolvency, receivership or similar proceeding under the Bankruptcy Code together with any interest accruing thereon after the commencement of such proceeding, without regard to whether or not such interest is an allowed claim and (ii) Indebtedness permitted under Section 7.03(a), (c) (to the extent constituting Guarantees of Senior Indebtedness), (d), (e), (g) and (n) of the Senior Credit Agreement (and any Permitted Refinancing thereof); provided, however, that at no time shall the principal amount of the Senior Indebtedness exceed the greater of (i) the sum of (x) $100,000,000 plus Available Cash and (y) Indebtedness permitted under the terms of Section 7.03(a), (c) (to the extent constituting Guarantees of Senior Indebtedness), (d), (e), (g) and (n) of the Senior Credit Agreement (and any Permitted Refinancing thereof) and (ii) the product of (x) 3.0 and (y) Consolidated EBITDA for the prior four calendar quarters (the “Senior Indebtedness Cap”). Senior Indebtedness under the Senor Credit Agreement shall be considered to be outstanding whenever any loan commitment under the Senior Bank Indebtedness Documents is outstanding.

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(ccc) “Strategic Acquisition” means any acquisition by the Company, whether through an acquisition of stock or merger of any business, assets or technologies the primary purpose of which is not to raise equity capital.

(ddd) “Subscription Date” means November 23, 2004.

(eee) “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned by such Person.

(fff) “Subsidiary Guaranty Agreement” means the Subsidiary Guaranty Agreement, dated as of November 23, 2004, by the parties signatory thereto in favor of the Buyers.

(ggg) “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, rate hedging agreements, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any Master Agreement.

(hhh) “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any affiliate of a Lender).

(iii) “Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the

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closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).

(jjj) “Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York Time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other time as the Principal Market publicly announces is the official close of trading) as reported by Bloomberg through its “Volume at Price” functions, or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York Time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other time as such market publicly announces is the official close of trading) as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as determined by a written resolution of the Board of Directors of the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 25. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

(kkk) “Williams Acquisition” means the acquisition of the membership interests in each of Williams Specialty Services LLC, Williams Plan Services LLC and Williams Industrial Services LLC for an aggregate consideration not in excess of $65,900,000 pursuant to the Acquisition Agreement (as defined in the Senior Credit Agreement).

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.

GLOBAL POWER EQUIPMENT GROUP INC.

By:

Name:

Title:

EXHIBIT I to

Form of Note

GLOBAL POWER EQUIPMENT GROUP INC.

CONVERSION NOTICE

Reference is made to the Convertible Senior Subordinated Note (the “Note”) issued to the undersigned by Global Power Equipment Group Inc. (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, par value $0.01 per share (the “Common Stock”), of the Company as of the date specified below.

Date of Conversion:

Aggregate Conversion Amount to be converted:

Please confirm the following information:

Conversion Price:

Number of shares of Common Stock to be issued:

Please issue the Common Stock into which the Note is being converted in the following name and to the following address:

Issue to:

Facsimile Number:

Authorization:

By:

Title:

Dated:

DTC Participant Number:

Account Number:

(if electronic book entry transfer)

Transaction Code Number:

(if electronic book entry transfer)

ACKNOWLEDGMENT

The Company hereby acknowledges this Conversion Notice and hereby directs EquiServe Trust Company, N.A. to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions, dated November 23, 2004, from the Company and acknowledged and agreed to by EquiServe Trust Company, N.A.

GLOBAL POWER EQUIPMENT GROUP INC.
By:
	Name:
	Title:

EX-10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 23, 2004, by and among Global Power Equipment Group Inc., a Delaware corporation, with headquarters located at 6120 South Yale, Suite 1480, Tulsa, Oklahoma 74136 (the “Company”), and the undersigned buyers (individually, a “Buyer”, and collectively, the “Buyers”).

WHEREAS:

A. In connection with the Securities Purchase Agreement, by and among the parties hereto of even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement, to issue and sell to each Buyer convertible senior subordinated notes of the Company (the “Notes”), which will be convertible into the Company’s common stock, par value $.01 per share (the “Common Stock”) (as converted, the “Conversion Shares”), in accordance with the terms of the Notes.

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

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

1. Definitions.

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

a. “Affiliate” has the meaning ascribed to such term in the Securities Purchase Agreement.

b. “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

c. “Effective Date” means the date the Registration Statement has been declared effective by the SEC.

d. “Investor” means a Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

e. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

f. “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

g. “Registrable Securities” means (i) the Conversion Shares issued or issuable upon conversion of the Notes and (ii) any share capital of the Company issued or issuable with respect to the Conversion Shares or the Notes as a result of any share split, share dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of the Notes.

h. “Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities.

i. “Required Holders” means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then outstanding; provided however that if and for so long as one of the Buyers (as defined in the Securities Purchase Agreement) together with its Affiliates holds more than 50% of the aggregate principal amount of Notes outstanding then “Required Holders” shall mean holders of Notes representing at least 66  ²/3% of the principal amount of Notes outstanding.

j. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

k. “SEC” means the United States Securities and Exchange Commission.

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

2. Registration.

a. Mandatory Registration. The Company shall prepare, and, as soon as practicable but in no event later than 30 days after the Closing Date (as defined in the Securities Purchase Agreement) (the “Filing Deadline”), file with the SEC the Registration Statement on Form S-3 covering the resale of all of the Registrable Securities. In the event that

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Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration, subject to the provisions of Section 2(e). The Registration Statement prepared pursuant hereto shall register for resale at least the number of Common Stock equal to 120% of the maximum number of Registrable Securities issued or issuable as of the trading day immediately preceding the date the Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(e). The Registration Statement shall contain (except if otherwise directed by the Required Holders) the “Selling Shareholders” section in substantially the form attached hereto as Exhibit B and the “Plan of Distribution” attached hereto as Exhibit B. The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective by the SEC as promptly as reasonably practicable, but in no event later than the date which is 120 days after the Closing Date (the “Effectiveness Deadline”).

b. Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and each increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor. Any Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders, other than any Registration Statement on behalf of the Buyers that relates to an underwritten offering.

c. Legal Counsel. Subject to Section 5 hereof, the Buyers holding at least a majority of the Registrable Securities shall have the right to select one legal counsel to review and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Schulte Roth & Zabel LLP or such other counsel as thereafter designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.

d. Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

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e. Sufficient Number of Shares Registered. In the event the number of shares available under a Registration Statement filed pursuant to Section 2(a) is insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated portion of the Registrable Securities pursuant to Section 2(b), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least 120% of the number of such Registrable Securities as of the trading day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than thirty (30) days after the necessity therefor arises. The Company shall use its reasonable best efforts to cause such amendment and/or new Registration Statement to become effective as promptly as reasonably practicable following the filing thereof. For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number of Registrable Securities issued or issuable upon conversion of the Notes covered by such Registration Statement is greater than 105% of Common Stock available for resale under the Registration Statement. The calculation set forth in the foregoing sentence shall be made without regard to any limitations on the conversion of the Notes and such calculation shall assume that the Notes are then convertible into Common Stock at the then prevailing Conversion Rate (as defined in the Notes).

f. Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. If (i) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline (a “Filing Failure”) or (B) not declared effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any day after the Effective Date sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register a sufficient number of shares of Common Stock) (a “Maintenance Failure”) then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount (the “Liquidated Damages Amount”) in cash equal to (A) one-quarter of one percent (0.25%) of the aggregate Purchase Price (as such term is defined in the Securities Purchase Agreement) of the Notes relating to such Investor’s Registrable Securities included in such Registration Statement for the first 90 day period following a Filing Failure, Effectiveness Failure or Maintenance Failure, (B) one-half of one percent (0.50%) of the aggregate Purchase Price of the Notes relating to such Investor’s Registrable Securities included in such Registration Statement for the following 60 day period, and (C) three-quarters of one percent (0.75%) of the aggregate Purchase Price of the Notes relating to such Investor’s Registrable Securities included in such Registration Statement for each subsequent 30 day period. Liquidated Damages Amounts will accrue for each of the following dates: (i) the day of a Filing Failure and on every thirtieth day (pro rated

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for periods totaling less than thirty days) thereafter until such Filing Failure is cured; (ii) the day of an Effectiveness Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until such Effectiveness Failure is cured; (iii) the initial day of a Maintenance Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until such Maintenance Failure is cured. The rate of accrual of the Liquidated Damages Amount with respect to any period will not exceed the rate provided in this paragraph notwithstanding the occurrence of multiple concurrent events giving rise to the Liquidated Damages Amount. The payments to which a holder shall be entitled pursuant to this Section 2(f) are referred to herein as “Registration Delay Payments.” Registration Delay Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Registration Delay Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at a rate per annum equal to the default rate under the Notes until paid in full. Notwithstanding anything to the foregoing, Liquidated Damages Amounts will not be payable by the Company pursuant to the terms hereof to the extent that such delays are caused by an Investor’s failure to provide the information required by Section 4(a).

3. Related Obligations.

At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

a. The Company shall submit to the SEC, within three (3) Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request. The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under the 1933 Act or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to

5

be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be reasonably necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-Q, Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

c. The Company shall permit Legal Counsel to review and comment upon (i) a Registration Statement at least three (3) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K, Reports on Form 10-Q and Reports on Form 8-K and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC. The Company shall furnish to Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to this Section 3(c).

d. The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

e. The Company shall use its commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be reasonably necessary to maintain

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the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

f. The Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile on the as promptly as practicable of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

g. The Company shall use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest as promptly as reasonably practicable and to notify Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

h. At the reasonable request of any Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as the Required Holders may reasonably request (but

7

not more than once in any twelve month period) (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

i. Solely in connection with the need to establish a due diligence defense, the Company shall make available for inspection by (i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Records or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (b) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement or obligation of which the Inspector has knowledge. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

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

k. The Company shall use its reasonable best efforts to cause all shares of Common Stock issuable upon conversion of the Notes to be reserved for listing on each securities exchange or quotation system on which the Common Stock is then listed no later than

8

the date the applicable Registration Statement is declared effective and, shall cause all Common Stock to be so listed when issued, and, in connection therewith, to make such filings as may be required under the 1934 Act and to have such filings declared effective as and when required thereunder.

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

m. If requested by an Investor and required by applicable securities laws, the Company shall (i) as soon as reasonably practicable incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as reasonably practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as reasonably practicable, supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

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

o. The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective date of a Registration Statement.

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

q. Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the SEC, the Company may delay the

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disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed thirty (30) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of sixty (60) days and the first day of any Grace Period must be at least two (2) trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”); provided that in the case of a Grace Period caused by an acquisition or probable acquisition or financing, recapitalization, business combination with similar transaction, the Company may upon a second notice to Investors extend the Grace Period by an additional thirty (30) days without incurring liquidated damages pursuant to Section 2(f). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the latter of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part of the applicable Registration Statement, prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.

4. Obligations of the Investors.

a. At least ten (10) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company at least two (2) Business Days prior to the filing of a Regulation Statement (or any amendment or supplement thereto) such information regarding itself, the Registrable Securities held by it and to be sold and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

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b. Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

c. Each Investor agrees promptly to furnish to the Company, to the extent required by applicable law, all information required to be disclosed in order to make the information previously furnished to the Company by such Investor not misleading and any other information regarding such Investor and the distribution of such Registrable Securities as the Company may from time to time reasonably request.

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

5. Expenses of Registration.

All reasonable expenses, other than as set forth below, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, (i) all registration and filing fees, (ii) printing expenses, (iii) fees and disbursements of counsel for the Company and Legal Counsel in accordance with the provisions of Section 2(c) hereof (plus up to one local counsel agreed upon by a majority in amount of the Registrable Securities), (iv) fees and disbursements of the Company’s independent certified public accountants, (v) fees and expenses incurred in connection with the listing of the securities on the New York Stock Exchange, and (vi) fees and expenses of all other persons retained by the Company. Notwithstanding the foregoing or anything in this Agreement to the contrary, each holder of the Registrable Securities being registered shall pay all commissions, placement agent fees and underwriting discounts and commissions with respect to any Registrable Securities sold by it and the fees and disbursements of any counsel or other advisors or experts retained by such holders, other than fees of Legal Counsel set forth in the preceding sentence.

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6. Indemnification.

In the event any Registrable Securities are included in a Registration Statement under this Agreement:

a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”) and each Affiliate of any Holder, against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) caused by: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any material violation of this Agreement (the matters in the foregoing clauses (i) through (iv) (together, the “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees of one counsel for all Indemnified Persons or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such Person from whom the Person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of

12

any Person controlling such Person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(d), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it or failed to deliver the correct prospectus as required by the 1933 Act and such correct prospectus was timely made available pursuant to Section 3(d); (iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section 3(d); and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

b. In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, its officers and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act and each Affiliate of the Company (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any legal fees of one counsel for all Indemnified Persons or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented.

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

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

e. The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the

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indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

7. Contribution.

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

8. Reports Under the 1934 Act.

With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to:

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

b. file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

c. furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights.

The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor notifies the Company after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or

15

assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement.

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

11. Miscellaneous.

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

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

If to the Company:

Global Power Equipment Group Inc.
6120 South Yale, Suite 1480
Tulsa, Oklahoma 74136
Telephone:	(918) 488-0828
Facsimile:	(918) 274-2367
Attention:	General Counsel

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If to Legal Counsel:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone:	(212) 756-2000
Facsimile:	(212) 593-5955
Attention:	Christian H. Mittweg, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached hereto, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

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

d. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION

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HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

e. This Agreement, the other Transaction Documents (as defined in the Securities Purchase Agreement) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

f. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

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

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

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

j. All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by Investors holding at least a majority of the Registrable Securities, determined as if all of the Notes held by Investors then outstanding have been converted into Registrable Securities without regard to any limitations on conversion of the Notes.

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

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

* * * * * *

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

COMPANY:
GLOBAL POWER EQUIPMENT GROUP INC.
By:	/s/ James P. Wilson
	Name: James P. Wilson
	Title: CFO and V.P. of Finance

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

BUYERS:
KINGS ROAD INVESTMENTS LTD.
By:	/s/ Alexander E. Jackson

Name: Alexander E. Jackson

Title: Principal

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

BUYERS:
STEELHEAD INVESTMENTS LTD.
By:	HBK Investments L.P.

Title:	Investment Advisor
By:	/s/ David C. Haley
Name:	David C. Haley
Title:	Authorized Signatory

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

BUYERS:
D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.
By: D.B. Zwirn and Co., LP
By:	/s/ Perry A. Gruss
Name:	Perry A. Gruss
Title:	Chief Financial Officer

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

BUYERS:
D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, LTD.
By: D.B. Zwirn and Co., LP
By:	/s/ Perry A. Gruss
Name:	Perry A. Gruss
Title:	Chief Financial Officer

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

BUYERS:
HCM/Z SPECIAL OPPORTUNITIES LLC
By: D.B. Zwirn and Co., LP
By:	/s/ Perry A. Gruss
Name:	Perry A. Gruss
Title:	Authorized Signatory

SCHEDULE OF BUYERS*

* Omitted. The Registrant agrees to furnish supplementally a copy of such omitted schedule to the Securities and Exchange Commission upon its request.

EXHIBIT A to

Registration Rights Agreement

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

EquiServe Trust Company, N.A.

250 Royall Street

Canton, MA 02021

Attention: Monique Hughes

Facsimile: 781-575-4812

Re: Global Power Equipment Group Inc.

Ladies and Gentlemen:

[We are][I am] counsel to Global Power Equipment Group Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders convertible notes (the “Notes”) convertible into the Company’s common stock, par value $.01 per share (the “Common Stock”). Pursuant to the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the Common Stock issuable upon conversion of the Notes, under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on                     ,     200  , the Company filed a Registration Statement on Form S-3 (File No. 333-                    ) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each of the Holders as a selling shareholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

This letter shall serve as our standing opinion to you that the Common Stock are freely transferable by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated November 23, 2004. This letter shall serve as our standing opinion with regard to this matter.

Very truly yours,

[ISSUER’S COUNSEL]

By:

CC: [LIST NAMES OF HOLDERS]

EXHIBIT B to

Registration Rights Agreement

SELLING SHAREHOLDERS

The shares of Common Stock being offered by the selling shareholders are issuable upon conversion of the convertible notes. For additional information regarding the convertible notes, see “Private Placement of Convertible Notes “ above. We are registering the shares of Common Stock in order to permit the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the convertible notes, the selling shareholders have not had any material relationship with us within the past three years.

The table below lists the selling shareholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the selling shareholders. The second column lists the number of shares of Common Stock beneficially owned by each selling shareholder, based on its ownership of the convertible notes, as of                     , 200  , assuming conversion of all convertible notes held by the selling shareholders on that date, without regard to any limitations on conversions or exercise.

The third column lists the shares of Common Stock being offered by this prospectus by the selling shareholders.

In accordance with the terms of registration rights agreements with the holders of the convertible notes, this prospectus generally covers the resale of at least 120% of that number of shares of Common Stock equal to the number of shares of Common Stock issuable upon conversion of the convertible notes, determined as if the outstanding convertible notes were converted or exercised, as applicable, in full, in each case, as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion price of the convertible notes may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.

Under the terms of the convertible notes, a selling shareholder may not convert the convertible notes, to the extent such conversion or exercise would cause such selling shareholder, together with its Affiliates, to beneficially own a number of shares of Common Stock which would exceed 4.99% of our then outstanding shares of Common Stock following such conversion or exercise, excluding for purposes of such determination shares of Common Stock issuable upon conversion of the convertible notes which have not been converted. The number of shares in the second column does not reflect this limitation. The selling shareholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

Name of Selling Shareholder	Number of Shares Owned Prior to Offering	Maximum Number of Shares to be Sold Pursuant to this Prospectus	Number of Shares Owned After Offering
Kings Road Investments Ltd. (1)	[___]	[___]	[0]
Steelhead Investments Ltd. (2)	[___]	[___]	[0]
D.B. Zwirn Special Opportunities Fund, L.P. (3)
D.B. Zwirn Special Opportunities Fund, Ltd. (4)
HCM/Z Special Opportunities LLC (5)

⁽¹⁾

⁽²⁾

⁽³⁾

⁽⁴⁾

⁽⁵⁾

PLAN OF DISTRIBUTION

We are registering the shares of Common Stock issuable upon conversion of the convertible notes to permit the resale of these shares of Common Stock by the holders of the convertible notes from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the shares of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock.

The selling shareholders may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,

• on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

• in the over-the-counter market;

• in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

• through the writing of options, whether such options are listed on an options exchange or otherwise;

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• short sales;

• broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share;

• a combination of any such methods of sale; and

• any other method permitted pursuant to applicable law.

If the selling shareholders effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of Common Stock short and deliver shares of Common Stock covered by this prospectus to close out short positions. The selling shareholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may sell such shares.

The selling shareholders may pledge or grant a security interest in some or all of the convertible notes or shares of Common Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling shareholders and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of Common Stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of Common Stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling shareholder will sell any or all of the shares of Common Stock registered pursuant to the shelf registration statement, of which this prospectus forms a part.

The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of Common Stock by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making activities with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making activities with respect to the shares of Common Stock.

We will pay all expenses of the registration of the shares of Common Stock pursuant to the registration rights agreement, estimated to be $[            ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

Once sold under the shelf registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable in the hands of persons other than our affiliates.

EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of November 23, 2004, is by and among GLOBAL POWER EQUIPMENT GROUP INC., a Delaware corporation (the “Company”), certain borrowing subsidiaries of the Company party hereto (each a “Designated Borrower” and, together with the Company, the “Borrowers”), each subsidiary of the Company party to the Subsidiary Guaranty (as defined below), each Lender (as defined below) party hereto, and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the “Administrative Agent”). Capitalized terms used herein and not otherwise defined shall have the meaning assigned such term in the Credit Agreement (as defined below).

RECITALS:

A. The Borrowers, the lenders from time to time party thereto (the “Lenders”), the Administrative Agent, US Bank National Association, as Syndication Agent, and Bank of Oklahoma, N.A., as Managing Agent, are parties to that certain Credit Agreement, dated as of October 1, 2004, as amended by and together with this Amendment and as otherwise amended or modified to the date hereof (the “Credit Agreement”).

B. The Subsidiary Guarantors and the Administrative Agent are parties to that certain Subsidiary Guaranty Agreement, dated as of October 1, 2004 (as amended to the date hereof, the “Subsidiary Guaranty”), and the Company and the Administrative Agent are parties to that certain Company Guaranty Agreement, dated as of October 1, 2004 (as amended to the date hereof, the “Company Guaranty”).

C. The parties hereto have agreed to amend the Credit Agreement as set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto agree as follows:

SECTION 1.01 Amendments to Credit Agreement.

(a) Amendments to Section 1.01.

(i) Section 1.01 of the Credit Agreement is hereby amended by inserting the following new defined terms in alphabetical position therein:

“Acquisition Agreement” means, as the context requires, either (a) the draft copy of the agreement with respect to the Williams Acquisition attached as Exhibit A hereto, or (b) the final agreement with respect to the Williams Acquisition, dated as of the date of the Williams Acquisition, by and between the Company and Williams Group International, LLC (provided that such final Acquisition Agreement shall not have been amended in any material respect from the draft Acquisition Agreement attached as Exhibit A hereto without the prior consent of the Administrative Agent and the Required Lenders) .

“Consolidated Senior Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date less the outstanding principal amount of Convertible Subordinated Debt as of such date and less Available Cash as of such date (provided that for so long as any amounts are held in escrow or reserve in accordance with the Convertible Subordinated Debt Documents, calculation of Available Cash for purposes of determining the Consolidated Senior Leverage Ratio shall exclude such amounts) to (b) Consolidated EBITDA for the Four-Quarter Period most recently ended.

“Convertible Subordinated Debt” means that certain indebtedness in an aggregate original principal amount of up to $69,000,000 incurred by the Company through the issuance of the Convertible Subordinated Notes.

“Convertible Subordinated Debt Documents” means Convertible Subordinated Notes, the Securities Purchase Agreement, the Subordinated Subsidiary Guaranty Agreement and the Registration Rights Agreement.

“Convertible Subordinated Debt Proceeds” means the cash proceeds (net of underwriting discounts and commissions and other reasonable costs (including without limitation reasonable fees and expenses of attorneys and accountants) arising in connection therewith) received by the Borrower from the issuance of Convertible Subordinated Notes prior to the application of such proceeds as consideration paid in connection with the Williams Acquisition.

“Convertible Subordinated Notes” means those certain 4.25% Convertible Senior Subordinated Notes in an aggregate original principal amount of up to $69,000,000 issued under Securities Purchase Agreement on or about November 23, 2004.

“Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of November 23, 2004, among the Company and certain buyers party thereto.

“Securities Purchase Agreement” means that certain Securities Purchase Agreement, dated as of November 23, 2004, among the Company and certain investors party thereto, as amended, supplemented or restated from time to time in accordance with the terms of this Agreement.

“Subordinated Subsidiary Guaranty Agreement” means that certain Subsidiary Guaranty Agreement, dated as of November 23, 2004, by the Subsidiary Guarantors in favor of the holders of the Convertible Subordinated Notes.

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“Williams Acquisition” means the acquisition of the membership interests in each of Williams Specialty Services, LLC, Williams Plant Services, LLC and Williams Industrial Services, LLC for aggregate consideration not in excess of $65,900,000 pursuant to the Acquisition Agreement.

(ii) Each of the definitions of “Available Cash” and “Permitted Acquisition” in Section 1.01 of the Credit Agreement is hereby deleted in its entirety and the following new definition is inserted in replacement thereof:

“Available Cash” means (a) for the period from the Closing Date until the first to occur of (x) the closing of the Williams Acquisition and (y) June 30, 2005, without duplication, the sum of (i) the lesser of (A) the sum of (1) cash and Cash Equivalents of the Domestic Loan Parties and (2) Available Foreign Subsidiary Cash, all to the extent such cash and Cash Equivalents are not subject to any Lien (other than Liens in favor of the Administrative Agent granted pursuant to the Loan Documents) or any restriction as to its use or disposition and are included in “cash and cash equivalents” and not “restricted cash” on the consolidated balance sheet of the Company and its Consolidated Subsidiaries, and (B) $25,000,000, and (ii) the Convertible Subordinated Debt Proceeds (including, without limitation, the reserve and/or escrow account for up to $9,000,000 established under the Convertible Subordinated Debt Documents), and (b) thereafter, the lesser of (i) the amount, if any, of the reserve and/or escrow account established for the redemption of up to $9,000,000 in securities established in accordance with the Convertible Subordinated Debt Documents plus the sum of (x) cash and Cash Equivalents of the Domestic Loan Parties and (y) Available Foreign Subsidiary Cash, all to the extent such cash and Cash Equivalents are not subject to any Lien (other than Liens in favor of the Administrative Agent granted pursuant to the Loan Documents) or any restriction as to its use or disposition and are included in “cash and cash equivalents” and not “restricted cash” on the consolidated balance sheet of the Company and its Consolidated Subsidiaries, and (ii) the amount, if any, of the reserve and/or escrow account established for the redemption of up to $9,000,000 in securities established in accordance with the Convertible Subordinated Debt Documents plus $25,000,000.

“Permitted Acquisitions” means (a) the Williams Acquisition and (b) any other Acquisition by any Loan Party; provided that with respect to any Acquisition described in clause (b) of this definition, (i) the Property acquired (or the Property of the Person acquired) in such Acquisition shall be used or useful in the same or similar line of business as the Loan Parties on the Closing Date, (ii) in the case of an Acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such

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Acquisition, (iii) no Default shall exist immediately after giving effect to such Acquisition on a Pro Forma Basis, (iv) the Acquisition shall not involve an interest in a partnership or have a requirement that any Loan Party be a general partner, (v) (A) for each Acquisition (or a series of related Acquisitions) the aggregate consideration (including cash and non-cash consideration and including, without limitation, earnouts, purchase price adjustments and similar payments) is less than or equal to $5,000,000, (B) for all Acquisitions, the aggregate consideration (including cash and non-cash consideration) in a fiscal year is less than or equal to $5,000,000, and (vi) the Company shall have delivered to the Administrative Agent (A) a Compliance Certificate signed by Responsible Officers of the Company demonstrating compliance with the financial covenants hereunder after giving effect to the subject Acquisition on a Pro Forma Basis, and reaffirming that the representations are true and correct in all material respects as of such date, except those representations and warranties made as of a date certain, which shall remain true and correct in all material respects as of such date and providing supplements to the Schedules as required by the Compliance Certificate and (B) a certificate of a Responsible Officer of the Company describing the Person to be acquired, including, without limitation, the location and type of operations and key management.

(iii) The Definition of “Restricted Payment” is hereby amended by inserting the following at the end thereof:

; provided, however, the term “Restricted Payment” shall not include any distribution of common stock or cash payment in lieu of fractional shares made in connection with the conversion of the Convertible Subordinated Notes in accordance with the Convertible Subordinated Debt Documents.

(b) Amendment to Section 2.06(b). Clause (iii) of Section 2.06(b) of the Credit Agreement is hereby deleted in its entirety and the following clauses (iii) and (iv) are inserted in Section 2.06(b):

(iii) Convertible Subordinated Debt Proceeds. If the Williams Acquisition is not consummated upon the terms set forth in the Acquisition Agreement on or before June 30, 2005, the Borrowers shall immediately prepay the Loans in an amount equal to the lesser of (A) Total Outstandings (other than Alternative Currency Loans and L/C Obligations) and (B) Convertible Subordinated Debt Proceeds, which prepayments shall be governed by this Section and the applicable requirements of Section 2.06(c)(iii); provided, that any prepayment of Revolving Loans pursuant to this clause (iii) shall not result in any reduction in the Revolving Commitments.

(iv) Other Mandatory Prepayments. In addition to the voluntary prepayment described in Section 2.06(a) and the mandatory prepayments

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described in clauses (i), (ii) and (iii) immediately above, the Borrowers may otherwise be required to prepay the Loans pursuant to the terms of this Agreement from time to time which prepayments shall be governed by this Section and the application requirements of Section 2.06(c)(iv).

(c) Amendment of Section 2.06(c). The “and” at the end of clause (i) is hereby deleted, the period at the end of clause (ii) is hereby deleted and replaced with a semicolon, clause (iii) of Section 2.06(c) of the Credit Agreement is hereby converted to clause (iv) of Section 2.06(c) and the following new clause (iii) is hereby inserted in Section 2.06(c):

(iii) with respect to all amounts paid pursuant to Section 2.06(b)(iii), first to the Term Loans ratably to the remaining scheduled principal amortized payments thereof, as such amortization is set forth in Section 2.08, second to Swing Line Loans, and third to Revolving Loans; and

(d) Amendment to Section 6.03. Section 6.03 of the Credit Agreement is hereby amended by inserting after the words “accompanied by” in the first line of the last paragraph thereof the words “(i) a copy of any notice delivered by any third-party creditor, trustee, governmental agency or other Person of any event giving rise to any notice under clause (a) above and (ii)”.

(e) Amendment to Section 7.01. Section 7.01(k) of the Credit Agreement is hereby amended by inserting the following at the end of the clause:

and amounts deposited in escrow accounts for application to (i) up to $7,650,000 in future interest or (ii) possible redemption of up to $9,000,000 of securities, in each case, in accordance with the Convertible Subordinated Debt Documents;

(f) Amendment to Section 7.03. Section 7.03 of the Credit Agreement is hereby amended by inserting at the end of clause (a) thereof the words “and the Convertible Subordinated Debt;”.

(g) Amendment to Section 7.10. Section 7.10 of the Credit Agreement is hereby amended by inserting after the words “other than the Loan Documents” and before the words “that (a) limits” the words “or the Convertible Subordinated Note Documents”.

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(h) Amendment to Section 7.17. Section 7.17 of the Credit Agreement is hereby deleted in its entirety and the following new Section 7.17 in inserted in replacement thereof:

SECTION 7.17 Financial Covenants.

(a) Maximum Consolidated Senior Leverage Ratio. Permit the Consolidated Senior Leverage Ratio of the Company and its Consolidated Subsidiaries at any time during (but measured on the last day of) any Four-Quarter Period ending during the periods set forth below to be greater than the ratios for such periods set forth below.

From the Closing Date through September 30, 2005	2.00 to 1.00
From October 1, 2005 through December 31, 2005	1.75 to 1.00
From January 1, 2006 and thereafter	1.50 to 1.00

(b) Maximum Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio of the Company and its Consolidated Subsidiaries at any time during (but measured on the last day of) any Four-Quarter Period ending during the periods set forth below to be greater than the ratios for such periods set forth below; provided, however, that for the period from the Closing Date through December 31, 2005, the Consolidated Leverage Ratio of the Company and its Consolidated Subsidiaries may be up to 4.00 to 1.00 for no more than two consecutive fiscal quarters during such period.

From the Closing Date through December 31, 2005	3.50 to 1.00
From January 1, 2006 through June 30 2006	3.25 to 1.00
From July 1, 2006 through December 31, 2006	3.00 to 1.00
From January 1, 2007 and thereafter	2.75 to 1.00

(c) Minimum Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio of the Company and its Consolidated Subsidiaries at any time during (but measured on the last day of) any Four-Quarter Period to be less than 1.00 to 1.00 for the period from the Closing Date through March 31, 2005, and 1.35 to 1.00 thereafter.

(d) Minimum Consolidated Asset Coverage Ratio. Permit the Consolidated Asset Coverage Ratio of the Company and its Consolidated Subsidiaries as of the last day of any fiscal quarter occurring during the periods indicated below, beginning with the fiscal quarter ended December 31, 2005, to be less than the ratio indicated below.

December 31, 2005 through March 31, 2007	1.00 to 1.00
June 30, 2007 and thereafter	1.25 to 1.00

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(i) New Section 7.18. There is hereby inserted after Section 7.17 of the Credit Agreement a new Section 7.18 which shall read as follows:

7.18 Convertible Subordinated Debt. (a) Redeem, repay, purchase, acquire or defease the Convertible Subordinated Debt for cash consideration (other than (x) mandatory redemptions, prepayments or puts pursuant to and in accordance with the Convertible Subordinated Debt Documents and (y) application of escrowed funds under the Convertible Subordinated Debt Documents to the repurchase of up to $9,000,000 of Convertible Subordinated Notes in accordance with the Convertible Subordinated Debt Documents), unless immediately before and immediately after the consummation of such redemption, repayment, purchase, acquisition or defeasance (i) no Event of Default shall have occurred and be continuing and (ii) availability under the Revolving Credit Facility shall be at least $10,000,000 or (b) amend, supplement or replace the Convertible Subordinated Debt Documents or any term or provision thereof (including terms of subordination) in any manner materially adverse to the Lenders or (c) permit the Convertible Subordinated Debt Proceeds (except for the portion of such proceeds to be deposited in escrow accounts in accordance with the Convertible Subordinated Debt Documents) to be held other than in a deposit account with the Administrative Agent subject to an effective Account Control Agreement; provided, however that such Account Control Agreement shall cease to be effective upon the earlier of (i) the date in which the Williams Acquisition is consummated and (ii) June 30, 2005, and in each case, the proceeds held in such Account Control Agreement shall be permitted to be used in any manner permitted under the Credit Agreement.

(j) Amendment to Section 8.01. Section 8.01(e) of the Credit Agreement is hereby amended by inserting after the words “Material Adverse Effect” in the last line thereof the following:

; or (iii) any party to the Convertible Subordinated Debt Documents defaults in the observance or performance of any term or provision relating to subordination or rights of repayment under the Convertible Subordinated Debt Documents and such default has or could reasonably be expected to have a material and adverse effect on the rights, remedies or interests of the Administrative Agent or the Lenders.

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Section 1.02 Representations and Warranties. Each Borrower hereby represents and warrants to each Lender and the Administrative Agent, on the Amendment Effective Date (as hereinafter defined), as follows:

(a) After giving effect to this Amendment, the representations and warranties set forth in Article V of the Credit Agreement and in each other Loan Document, are true and correct in all material respects on and as of the date hereof and on and as of the Amendment Effective Date with the same effect as if made on and as of the date hereof or the Amendment Effective Date, as the case may be, except to the extent such representations and warranties expressly relate solely to an early date.

(b) No Default or Event of Default has occurred and is continuing.

(c) The execution, delivery and performance by the Borrowers and each other Loan Party of this Amendment has been duly authorized by the Borrowers and each other Loan Party, as applicable and there is no action pending or any judgment, order or decree in effect which is likely to restrain, prevent or impose materially adverse conditions upon the performance by each Borrower or any other Loan Party of its obligations under the Credit Agreement or the other Loan Documents.

(d) This Amendment constitutes the legal, valid and binding obligation of each Loan Party, enforceable against each such Loan Party in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights or by the effect of general equitable principles.

(e) The execution, delivery and performance by each Loan Party of this Amendment do not and will not conflict with, or constitute a violation or breach of, or result in the imposition of any Lien upon the property of each Loan Party or any of its Subsidiaries, by reason of the terms of (i) any contract, mortgage, lease, agreement, indenture, or instrument to which such Loan Party is a party or which is binding upon it, (ii) any Requirement of Law applicable to any Loan Party or any of its Subsidiaries, or (iii) the certificate or articles of incorporation or by-laws or the limited liability company or limited partnership agreement, or analogous organizational document, of any Loan Party or any of its Subsidiaries.

Section 1.03 Effectiveness. This Amendment shall become effective only upon satisfaction of the following conditions precedent (the first date upon which each such condition has been satisfied being herein called the “Amendment Effective Date”):

(a) The Administrative Agent shall have received (i) duly executed counterparts of this Amendment which, when taken together, bear the authorized signatures of the Borrowers, the Subsidiary Guarantors, the Administrative Agent and the Required Lenders and (ii) a draft copy of the Acquisition Agreement, and together with all schedules and exhibits thereto, relating to the Williams Acquisition in form and substance reasonably acceptable to the Administrative Agent and the Required Lenders (it being understood that the draft Acquisition Agreement attached as Exhibit A hereto is satisfactory in form and substance to the Administrative Agent and the Required Lenders).

(b) The Administrative Agent and the Required Lenders shall be satisfied that the representations and warranties set forth in Section 1.02 of this Amendment are true and correct

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on and as of the Amendment Effective Date and that no Default or Event of Default has occurred and is continuing on and as of the Amendment Effective Date.

(c) The Administrative Agent shall have received all fees and expenses to be paid by the Borrower pursuant to Section 1.04 of this Amendment.

(d) The Administrative Agent shall have received such other documents, legal opinions, instruments and certificates relating to this Amendment as it shall reasonably request and such other documents, legal opinions, instruments and certificates that shall be reasonably satisfactory in form and substance to the Administrative Agent and the Lenders. All corporate proceedings taken or to be taken in connection with this Amendment and documents incidental thereto whether or not referred to herein shall be reasonably satisfactory in form and substance to the Administrative Agent and the Lenders.

Section 1.04 Fees and Expenses.

(a) The Company shall pay to the Administrative Agent for its own account a fee in connection with this arrangement of this Amendment as set forth in that certain letter agreement dated as of the date hereof among the Company, the Administrative Agent and Banc of America Securities LLC.

(b) The Company shall pay to the Administrative Agent for the ratable benefit of each Lender that executes and delivers this Amendment as of the date hereof a fee equal to .15% of the sum of (x) such Lender’s Revolving Commitment and (y) such Lender’s outstanding Term Loans, such fee to be paid within two Business Days of the Amendment Effective Date.

(c) The Borrower shall pay all reasonable out-of-pocket expenses incurred by Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment, including, but not limited to, the reasonable fees and disbursements of counsel to the Administrative Agent.

Section 1.05 Cross-References. References in this Amendment to any Section are, unless otherwise specified, to such Section of this Amendment.

Section 1.06 Instrument Pursuant to Credit Agreement. This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

Section 1.07 Further Acts. Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.

Section 1.08 Governing Law. THIS AMENDMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO

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DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

Section 1.09 Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

Section 1.10 Severability. In case any provision in or obligation under this Amendment or the other Loan Documents shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 1.11 Benefit of Agreement. This Amendment shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that the Borrower may not assign or transfer any of its interest hereunder without the prior written consent of the Lenders.

Section 1.12 Integration. This Amendment represents the agreement of the Borrowers, the Subsidiary Guarantors, the Administrative Agent and each of the Lenders signatory hereto with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

Section 1.13 Confirmation. Except as expressly amended by the terms hereof, all of the terms of the Credit Agreement and the other Loan Documents shall continue in full force and effect and are hereby ratified and confirmed in all respects. Each Subsidiary Guarantor ratifies and confirms the Subsidiary Guaranty as in full force and effect after giving effect to this Amendment. The Company ratifies and confirms the Company Guaranty as in full force and effect after giving effect to this Amendment.

Section 1.14 Loan Documents. Except as expressly set forth herein, the amendments provided herein shall not by implication or otherwise limit, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, nor shall they constitute a waiver of any Event of Default, nor shall they alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document. Each of the amendments provided herein shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to by such amendments. Except as expressly amended herein, the Credit Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof. As used in the Credit Agreement, the terms “Agreement”, “herein”, “hereinafter”, “hereunder”, “hereto” and words of similar import shall mean, from and after the date hereof, the Credit Agreement.

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(Signature Pages Follow)

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.

BORROWERS AND GUARANTORS:
GLOBAL POWER EQUIPMENT GROUP INC., a Delaware corporation
By:	/s/ James P. Wilson
Name:	James P. Wilson
Title:	CFO and V.P. of Finance

DELTAK, L.L.C., a Delaware limited liability company
By:	/s/ Candice L. Cheeseman
Name:	Candice L. Cheeseman
Title:	Secretary

BRADEN MANUFACTURING, L.L.C., a Delaware limited liability company
By:	/s/ Candice L. Cheeseman
Name:	Candice L. Cheeseman
Title:	Secretary

DELTAK CONSTRUCTION SERVICES, INC., a Wisconsin corporation
By:	/s/ Candice L. Cheeseman
Name:	Candice L. Cheeseman
Title:	Secretary

BRADEN CONSTRUCTION SERVICES, INC., a Delaware corporation
By:	/s/ Candice L. Cheeseman
Name:	Candice L. Cheeseman
Title:	Secretary

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ADMINISTRATIVE AGENT AND LENDERS:
BANK OF AMERICA, N.A., as Administrative Agent and as a Lender
By:	/s/ David G. Lamb
Name:	David G. Lamb
Title:	Vice President - MMB

US BANK NATIONAL ASSOCIATION, as a Lender
By:	/s/ Peter I. Bystol
Name:	Peter I. Bystol
Title:	Assistant Vice President

BANK OF OKLAHOMA, N.A., as a Lender
By:	/s/ Jamey C. Webb
Name:	Jamey C. Webb
Title:	Assistant Vice President

CITICORP NORTH AMERICA INC., as a Lender

By:

Name:

Title:

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M&I MARSHALL & ILSLEY BANK, as a

 Lender

By:

Name:

Title:

By:

Name:

Title:

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EX-10.4

Exhibit 10.4

SUBSIDIARY GUARANTY AGREEMENT

GUARANTY, dated as of November 23, 2004, is made by EACH OF THE PARTIES SIGNATORY HERETO (each, a “Guarantor” and, collectively, the “Guarantors”), in favor of the “Buyers” (as defined below) party to the Securities Purchase Agreement, dated as of even date herewith (as amended, restated or otherwise modified from time to time, the “Securities Purchase Agreement”).

W I T N E S S E T H :

WHEREAS, Global Power Equipment Group Inc., a Delaware corporation (the “Parent”) and each party listed as a “Buyer” on the Schedule of Buyers attached thereto are parties to the Securities Purchase Agreement;

WHEREAS, it is a condition precedent to the Buyers’ obligation under the Securities Purchase Agreement that each Guarantor execute and deliver a guaranty guaranteeing all of the obligations of the Parent thereunder; and

WHEREAS, each Guarantor has determined that its execution, delivery and performance of this Guaranty directly benefit, and are within the corporate purposes and in the best interests of, such Guarantor;

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Guarantor hereby agrees with the Buyers as follows:

SECTION 1. Definitions. Reference is hereby made to the Securities Purchase Agreement and the “Notes” (as defined therein) issued pursuant thereto (as such Notes may be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, collectively, the “Notes”) for a statement of the terms thereof. All terms used in this Guaranty, which are defined in the Securities Purchase Agreement or the Notes and not otherwise defined herein, shall have the same meanings herein as set forth therein.

SECTION 2. Guaranty. Each Guarantor hereby unconditionally and irrevocably, jointly and severally, guarantees the punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations of the Parent from time to time owing by it in respect of the Securities Purchase Agreement, the Notes and the other “Transaction Documents” (as defined in the Securities Purchase Agreement), including, without limitation, all interest that accrues after the commencement of any action or proceeding under any Bankruptcy Law of the Parent or any Guarantor, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such proceeding), and all fees, expense reimbursements, indemnifications and all other amounts due or to become due under the Note (such obligations, to the extent not paid by the Parent, being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses of one counsel for all Buyers) reasonably incurred by the Buyers in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, each Guarantor’s liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Parent to the Buyers under the Securities Purchase Agreement and the Notes but for the

fact that they are unenforceable or not allowable due to the existence of an action or proceeding under any Bankruptcy Law involving any Guarantor or the Parent (each, a “Transaction Party”).

SECTION 3. Guaranty Absolute; Limitations on Guaranty; Continuing Guaranty; Assignments.

(a) Each Guarantor, jointly and severally, guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Note, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Buyers with respect thereto. The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:

(i) any lack of validity or enforceability of any Transaction Document or any agreement or instrument (other than this Guaranty) relating thereto;

(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or otherwise;

(iii) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;

(iv) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party; or

(v) any other circumstance (including any statute of limitations) or any existence of or reliance on any representation by the Buyers that might otherwise constitute a defense available to, or a discharge of, any Transaction Party.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Buyers or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.

(b) Each Guarantor, and by its acceptance of Securities, each Holder, hereby confirms that it is the intention of all such parties that the guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Title 11, U.S. Code or any similar federal or state law for the relief of debtors (“Bankruptcy Law”), the Uniform Fraudulent

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Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor, result in the obligations of such Guarantor under its guarantee not constituting a fraudulent transfer or conveyance.

(c) This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until the cash payment in full of the Guaranteed Obligations and all other amounts payable under this Guaranty and shall not terminate for any reason prior to the Maturity Date and (ii) be binding upon each Guarantor and its respective successors and assigns. This Guaranty shall inure to the benefit of and be enforceable by the Buyers and their successors, pledgees, transferees and assigns. Without limiting the generality of the foregoing sentence, any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations under any Note to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Buyer herein or otherwise, in each case as provided in such Note and the Securities Purchase Agreement.

SECTION 4. Waivers. Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Buyers exhaust any right or take any action against any Transaction Party or any other Person or any Collateral (as defined in the Securities Purchase Agreement). Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits. Each Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

SECTION 5. Subrogation. No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Buyers against any Transaction Party or any other Guarantor, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Transaction Party or any other Guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have indefeasibly been paid in full in cash. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Buyers and shall forthwith be paid to the Buyers to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured,

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in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (a) any Guarantor shall make payment to the Buyers of all or any part of the Guaranteed Obligations, and (b) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall indefeasibly be paid in full in cash, the Buyers will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

SECTION 6. Representations, Warranties and Covenants. Each Guarantor hereby represents and warrants as follows:

(a) Such Guarantor (i) is duly organized, validly existing and in good standing (to the extent such concept is applicable) under the laws of the jurisdiction of its organization as set forth on the first page hereof, except to the extent that the failure to be in good standing would not have a Material Adverse Effect (as defined in the Securities Purchase Agreement), (ii) has all requisite power and authority to conduct its business as now conducted and to execute and deliver this Guaranty, and to consummate the transactions contemplated hereby and thereby and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

(b) The execution, delivery and performance by such Guarantor of this Guaranty (i) have been duly authorized by all necessary action, (ii) do not and will not contravene its charter or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on or otherwise affecting such Guarantor or its properties, (iii) do not and will not result in or require the creation of any lien (other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to it or its operations or any of its properties.

(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority is required in connection with the due execution, delivery and performance by such Guarantor of this Guaranty.

(d) This Guaranty, when delivered, will be, a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, suretyship or other similar laws.

(e) There is no pending or, to the best knowledge of such Guarantor, threatened action, suit or proceeding affecting such Guarantor or to which any of the properties of such Guarantor is subject, before any court or other governmental authority or any arbitrator

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that (i) if adversely determined, could have a Material Adverse Effect or (ii) relates to this Guaranty or any transaction contemplated hereby.

(f) Such Guarantor (i) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction Documents, and (ii) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Parent and the other Transaction Parties, and has no need of, or right to obtain from any Buyer, any credit or other information concerning the affairs, financial condition or business of the Parent or the other Transaction Parties that may come under the control of any Buyer.

(g) Such Guarantor covenants and agrees that until indefeasible full and final payment of the Guaranteed Obligations, it will comply with each of the covenants (except to the extent applicable only to a public company) which are set forth in Section 4 of the Securities Purchase Agreement as if such Guarantor were a party thereto.

SECTION 7. Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, any Buyer may, and is hereby authorized to, at any time and from time to time, without notice to any Guarantor (any such notice being expressly waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by any Buyer to or for the credit or the account of any Guarantor against any and all obligations of any Guarantor now or hereafter existing under this Guaranty, irrespective of whether or not any Collateral Agent (as defined in the Securities Purchase Agreement) or any Buyer shall have made any demand under this Guaranty and although such obligations may be contingent or unmatured. Each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made by such Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Buyers under this Section 7 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Buyers may have under this Guaranty in law or otherwise.

SECTION 8. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to any Guarantor, to it at its address set forth on the signature page hereto, or if to any Buyer, to it at its address set forth in the Securities Purchase Agreement; or as to either such Person at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 8. All such notices and other communications shall be effective (i) if mailed (by certified mail, postage prepaid and return receipt requested), when received or three Business Days after deposited in the mails, whichever occurs first; (ii) if telecopied, when transmitted and confirmation is received, provided same is on a Business Day and, if not, on the next Business Day; or (iii) if delivered, upon delivery, provided same is on a Business Day and, if not, on the next Business Day.

SECTION 9. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR

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THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GUARANTOR HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE PAGE HERETO AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BUYERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.

SECTION 10. WAIVER OF JURY TRIAL, ETC. EACH GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH EACH GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BUYER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY BUYER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BUYERS ENTERING INTO THIS AGREEMENT.

SECTION 11. Subordination; Release of Guarantors.

(a) Notwithstanding anything herein to the contrary, each Guarantor hereby agrees for itself and its successors and assigns, and each Buyer, by acceptance of this Guaranty,

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shall be deemed to have agreed, that this Guaranty shall be subject to the provisions of Section 14 of the Notes, and to the extent and in the manner set forth in such Section 14 of the Notes, all the obligations, including the Guaranteed Obligations, represented by this Guaranty are subordinate in right of payment to the prior payment in full in cash of all Senior Indebtedness now outstanding or hereafter incurred, all as more fully set forth in Section 14 of the Notes.

(b) Notwithstanding anything herein to the contrary, each Guarantor hereby agrees for itself and its successors and assigns, and each Buyer, by acceptance of this Guaranty, shall be deemed to have agreed, that if any Guarantor is released as a guarantor under and in accordance with the “Subsidiary Guaranty” as defined in the Senior Credit Agreement, such Guarantor automatically shall be released as a guarantor hereunder without consent of the Buyers or any further action by any party hereto or to the Securities Purchase Documents.

SECTION 12. Miscellaneous.

(a) Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to the Buyers, at such address specified by the Buyers from time to time by notice to such Guarantor.

(b) No amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by such Guarantor and the Buyers, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(c) No failure on the part of any Buyer to exercise, and no delay in exercising, any right hereunder shall operate as a waiver hereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Buyers provided herein are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.

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

(e) This Guaranty shall (i) be binding on each Guarantor and its respective successors and assigns, and (ii) inure to the benefit of the Buyers and their respective successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, any Buyer may assign or otherwise transfer its rights and obligations under the Securities Purchase Agreement or any other Transaction Document to any other Person, and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Buyers herein or otherwise. None of the rights or obligations of any Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of the Buyers.

(f) This Guaranty represent the entire agreement of each Guarantor and the Buyers with respect to the subject matter hereof, and there are no promises, undertakings,

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representations or warranties by any Buyer relative to the subject matter thereof not expressly set forth or referred to herein.

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

(h) THIS GUARANTY (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER TRANSACTION DOCUMENT) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by an officer thereunto duly authorized, as of the date first above written.

DELTAK, L.L.C.
By:	/s/ Larry Edwards
Name:	Larry Edwards
Title:	Chief Executive Officer
Address:	6120 S. Yale, Suite 1480 Tulsa, OK 74136

BRADEN MANUFACTURING, L.L.C.
By:	/s/ Larry Edwards
Name:	Larry Edwards
Title:	Chief Executive Officer
Address:	6120 S. Yale, Suite 1480 Tulsa, OK 74136

DELTAK CONSTRUCTION SERVICES, INC.
By:	/s/ Larry Edwards
Name:	Larry Edwards
Title:	Chief Executive Officer
Address:	6120 S. Yale, Suite 1480 Tulsa, OK 74136

BRADEN CONSTRUCTION SERVICES, INC.
By:	/s/ Larry Edwards
Name:	Larry Edwards
Title:	Chief Executive Officer
Address:	6120 S. Yale, Suite 1480 Tulsa, OK 74136

EX-99.1

Exhibit 99.1

Global Power Equipment Group Inc.

to Purchase Williams Industrial Services Group

Move Expected to Add Recurring Revenue Stream and

Diversify Company’s Base in Power Generation

TULSA, Oklahoma, November 23, 2004 – Global Power Equipment Group Inc. (NYSE: GEG), a leading design, engineering and fabrication firm providing a broad array of equipment and services to diversified global companies engaged in the power and process industries, today announced that it has signed a definitive agreement with Georgia based Williams Group International to purchase Williams Industrial Services Group (WISG) for approximately $65 million in cash at closing. The Company intends to fund the purchase of WISG through the proceeds received from a private placement of convertible senior subordinated notes announced separately today, borrowings under the Company’s $100 million credit facility, or cash on hand. WISG has no outstanding debt.

Founded in 1958, Williams Industrial Services Group is a private firm that provides routine and specialty maintenance services to firms engaged in power generation, pulp and paper manufacturing and to government agencies, primarily the Department of Energy. Approximately 80 percent of WISG’s annual revenue is derived from services provided to firms in power generation and includes work at nuclear power plants, coal-fired power plants and other fossil fuel plants as well as hydro-based generating facilities. WISG is a recognized leader in providing the following services: electrical and mechanical maintenance services during outages, shutdowns and turnarounds at power generating facilities, along with welding and scaffolding services; applying paint and protective coatings, specialized floor coatings, specialized rigging and enclosures, abatement services, decontamination work, roofing systems and structural restoration, insulation work, fire protection, assessment surveys, security modifications, installation of dry cask storage units at nuclear facilities, boiler tube replacement, installation of reduced emission (SCR) units at fossil plants, along with other services its customers require.

Larry Edwards, Global Power Equipment Group’s chairman, president and chief executive officer stated, “Williams Industrial Services Group is the precise business that we have been searching for over the past few years to strengthen and diversify Global Power Equipment Group. WISG has outstanding service offerings, an experienced and knowledgeable management team and an excellent reputation in the marketplace. WISG also has long-standing sales relationships with some of the most recognizable names in the power generation industry. In addition to these key factors, we like WISG for its business model – excellent revenue visibility with a significant backlog, recurring revenue tied to evergreen contracts, low fixed costs, a variable cost outsourcing component, minimal CAPEX and strong EBITDA. Moreover, WISG reaches into all segments of the power business and will allow us to expand our reach beyond gas turbine components. More importantly, we believe the addition of WISG will help us deepen our relationships with our US-based customers, especially in the area of retrofit possibilities. We believe the addition of Williams Industrial Services Group will be a tremendous benefit to Global Power Equipment Group, our customers and the customers of WISG, as well as our shareholders given the accretive nature of the transaction.”

The transaction is expected to close after April 1, 2005 and is subject to customary closing conditions. Assuming an early-April closing date, and the issuance of $69 million of convertible senior subordinated notes in November, 2004, the Company is revising estimated fiscal year 2005 earnings based upon nine months of WISG ownership as shown below. Although not anticipated, but as shown below, the Company is also providing earnings on a pro forma basis as if the acquisition occurred as of January 1, 2005.

Table 1.

Estimated FY 2005	Incorporating WISG for 9 Months				Pro Forma Incorporating WISG for 12 Months(2)
	Low		High		Low		High
Revenue ($millions)	$	420.0	$	470.0	$	455.0	$	505.0
Earnings per diluted share (1)	$	0.20	$	0.29	$	0.24	$	0.34
EBITDA ($millions)	$	23.0	$	31.0	$	27.0	$	35.0

(1) Based upon approximately 47.5 million fully diluted shares as if the convertible notes were not fully converted.

(2) Pro forma as if adjusted for 12 months of ownership during 2005

Non-GAAP Financial Measures

This release contains disclosure of EBITDA for estimated fiscal 2005 and pro forma fiscal year 2005, which are non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of estimated EBITDA to estimated net income available to common stockholders is included as an exhibit in this release.

About Global Power

Oklahoma based Global Power Equipment Group Inc. is a leading designer, engineer and fabricator of a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, with over 30 years of power generation industry experience. The Company’s equipment is installed in power plants and in industrial operations in more than 40 countries on six continents and believes, in its product lines, it has one of the largest installed bases of equipment for power generation in the world. In addition, the Company provides its customers with value-added services including engineering, retrofit, maintenance and repair. Additional information about Global Power Equipment Group may be found at www.globalpower.com.

This press release includes “forward-looking statements” within the meaning of federal securities laws. Forward-looking statements give the Company’s current expectations or forecasts of future events. They include expectations regarding the closing of the announced acquisition, the accretive nature of the transaction, planned capital expenditure and statements concerning anticipated cash flow and liquidity, business strategy and other plans and objectives for future operations. These statements are subject to a number of risks, assumptions and uncertainties that could cause the Company’s actual results to differ materially from those projected. These factors include any delay in consummating the purchase of WISG due to either party’s failure to satisfy one or more conditions to closing or for any other reason, the curtailment of major maintenance projects by one or more of WISG’s major customers or unanticipated difficulties or delays in integrating the operations of WISG and the Company. Information concerning some of the other factors that could cause actual results to differ materially from those in, or implied by, the forward looking statements are set forth under “Risk Factors” in the Company’s Form 10-K for the period ended December 27, 2003, and other reports on

Global Power Equipment Group Inc., 6120 S. Yale, Suite 1480, Tulsa, OK 74136 U.S.A.

Phone: 1-918 488-0828    FAX:  1-918 488-8389

file with the U.S. Securities and Exchange Commission. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future event or otherwise.

Company Contact:

Bob Zwerneman

Director of Investor Relations

(918) 274-2398

Table 2.

GLOBAL POWER EQUIPMENT GROUP INC.

SUPPLEMENTAL STATISTICAL INFORMATION

(in thousands)

Estimated FY 2005	Incorporating WISG for 9 Months				Pro Forma Incorporating WISG for 12 Months
	Low		High		Low		High
Net income	$	9.3	$	14.0	$	11.5	$	16.4
Add back:
Income tax provision	$	5.6	$	8.7	$	7.2	$	10.2
Interest expense	$	4.4	$	4.4	$	4.4	$	4.4
Depreciation and amortization	$	3.9	$	3.9	$	3.9	$	3.9
EBITDA (a)	$	23.0	$	31.0	$	27.0	$	35.0

(a) EBITDA represents net income plus income taxes, interest, depreciation and amortization. While considered the most common definition used by investors and financial analysts, the EBITDA presented above may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA, while providing useful information, should not be considered in isolation or as an alternative to other financial measures determined under GAAP.

Global Power Equipment Group Inc., 6120 S. Yale, Suite 1480, Tulsa, OK 74136 U.S.A.

Phone: 1-918 488-0828    FAX:  1-918 488-8389

EX-99.2

Exhibit 99.2

Global Power Equipment Group Inc.

Announces Private Offering of Convertible Notes

TULSA, Oklahoma, November 23, 2004 – Global Power Equipment Group Inc. (NYSE: GEG), a leading design, engineering and fabrication firm providing a broad array of equipment and services to diversified global companies engaged in the power and process industries, today announced that it has entered into definitive agreements to sell $69 million of convertible senior subordinated notes that are due in 2011 in a private placement exempt from registration under the Securities Act of 1933. The notes carry a 4.25 percent coupon, payable semi-annually, and are convertible into shares of Global Power Equipment Group’s common stock at $10.61 per share, a 22 percent premium over the prior day’s weighted average price. The Company expects to close the transaction today and intends to use the net proceeds of the offering to fund its previously announced purchase of Williams Industrial Services Group and for other general corporate purposes. For a period ending six months after the date a registration statement covering the common stock underlying the convertible notes is declared effective, purchasers of the notes will have the right to require the Company to redeem up to $9 million of the principal amount of the notes issued in the transaction.

The announcement of this placement of convertible senior subordinated notes as detailed in this press release shall not constitute an offer to sell or a solicitation of an offer to buy the notes or the shares of common stock issuable upon conversion of the notes. The convertible senior subordinated notes and the shares of common stock issuable upon conversion of the notes have not been registered under the Securities Act of 1933 or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and state securities laws.

About Global Power

Oklahoma based Global Power Equipment Group Inc. is a leading designer, engineer and fabricator of a comprehensive portfolio of equipment for gas turbine power plants and power-related equipment for industrial operations, with over 30 years of power generation industry experience. The Company’s equipment is installed in power plants and in industrial operations in more than 40 countries on six continents and believes, in its product lines, it has one of the largest installed bases of equipment for power generation in the world. In addition, the Company provides its customers with value-added services including engineering, retrofit, maintenance and repair.

This press release includes “forward-looking statements” within the meaning of federal securities laws. Forward-looking statements give the Company’s current expectations or forecasts of future events. Information concerning some of the factors that could cause actual results to differ materially from those in, or implied by, the forward looking statements are set forth under “Risk Factors” in the Company’s Form 10-K for the period ended December 27, 2003, and other reports on file with the U.S. Securities and Exchange Commission. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future event or otherwise.

Company Contact:

Bob Zwerneman

Director of Investor Relations

(918) 274-2398