SETTLEMENT, SALE OF STOCK AND RELEASE AGREEMENT

SETTLEMENT, SALE OF STOCK AND RELEASE AGREEMENT

This Settlement, Sale of Stock and Release Agreement ("Agreement") effective as of October 1, 2007, by and among Medallion Electric, Inc., a Florida corporation ("Medallion"), Reliability Contractors of Florida, Inc. ("Reliability Contractors"), formerly known as Medallion Electric Acquisition Corporation, a Florida corporation, Reliability Incorporated, a Texas corporation ("Reliability"), and Ronald Masaracchio ("Seller").

WHEREAS, effective April 1, 2007, Seller sold all of his stock in Medallion to Reliability Contractors; and

WHEREAS, in connection with such sale, Reliability Contractors issued two notes to Seller - one for $500,000 (the "$500,000 Note") and one for $1,354,006.40 (the "$1,354,006.40 Note," and collectively with the $500,000 Note the "Notes"); and

WHEREAS, both of the Notes were secured; and

WHEREAS, in connection with the sale of the Medallion stock, Seller entered into an Employment Agreement, Noncompetition Agreement and Earnout Agreement (collectively the "Seller Agreements"); and

WHEREAS, the parties hereto now wish to sell the Medallion stock purchased back to Seller, cancel the Notes and release the security therefor and terminate the Seller Agreements;

NOW THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1. 1.  

   2. Effective as of October 1, 2007, Reliability Contractors does hereby sell to Seller the 250 shares of stock of Medallion which were the subject of the Agreement for Purchase and Sale of Capital Stock dated December 22, 2006, as amended (the "Sale Agreement"). Medallion does hereby confirm that no shares of stock were issued by Medallion between April 1, 2007 and the date hereof. Reliability Contractors and Reliability does further confirm that Medallion has not pledged, assigned, transferred or conveyed the 250 shares of stock of Medallion which Reliability Contractors purchased and that there are no liens or encumbrances on the 250 shares of stock of Medallion hereby sold to Seller.

   3.  

   4. Upon receipt of the sum of $325,000, Seller agrees to release his lien on Lots 3 and 4 (the "Property") on Industrial Drive in Durham County, North Carolina under that certain North Carolina Deed of Trust granted by Reliability to secure the $500,000 Note. No later than October 16, 2007, Seller will deliver to Peter Sarda, Esq. of Wallace, Nordan & Sarda, LLP, in escrow, with instructions to record, a Satisfaction of Security Agreement and any other documents as are required by Mr. Sarda to release Seller's lien upon payment to Seller of $325,000 out of the proceeds of the sale of the Property. Upon payment of such $325,000 to Seller, Seller shall deliver the $500,000 Note to Reliability marked CANCELLED. In the event the sum of $325,000 is not received by Seller by December 15, 2007, then Seller may proceed to declare the $500,000 Note in default and thereafter the North Carolina Deed of Trust in default and pursue his remedies at law.

   5.  

   6. Simultaneously with payment of such $325,000 by Reliability, Seller will deliver the $1,354,006.40 Note to Reliability marked CANCELLED.

   7.  

   8. Simultaneously with delivery of the $1,354,006.40 Note, Seller will release the Security Agreement dated April 1, 2007 executed by Medallion and any financing statements filed against Medallion and mark a copy of the Security Agreement RELEASED and return it to Reliability.

   9.  

   10. All parties to this Agreement acknowledge and agree that despite a Section 338(h)(10) election form executed at the closing of the purchase of the Medallion stock by Reliability Contractors, neither Reliability, Reliability Contractors, Medallion or Seller has filed such election, and from this date forward no party shall file such election. All parties acknowledge and agree that as a result of the April 1, 2007 purchase of Medallion stock by Reliability Contractors, (a) Medallion ceased to be an S corporation effective April 1, 2007, (b) Medallion became part of Reliability for federal tax purposes on April 1, 2007 and remains part of the Reliability tax group for federal purposes through the date of the Agreement. Medallion will exit the Reliability federal tax group as of the date of this Agreement, and Medallion will be responsible for all of its tax returns, federal, state or otherwise from the date of the Agreement forward.

   11.  

   12. Alex Katz has resigned from all positions with Medallion and Reliability Contractors effective September 25, 2007. Mark Spoor has resigned all positions with Medallion effective September 28, 2007 and from all positions with Reliability Contractors. Any expenses in connection with Mark Spoor's and Alex Katz's termination of employment shall be paid by Reliability other than normal salary expenses which have been paid through September 28, 2007. If Mark Spoor is or was hired by Medallion after September 28, 2007, Reliability and Reliability Contractors have no liability or obligation with respect thereto, and Medallion will be responsible for all compensation and benefits paid to Mark Spoor from and after September 28, 2007.

   13.  

   14. The parties agree that Medallion's known ordinary course of business debts and liabilities as of September 30, 2007 are as listed on Exhibit A hereto. Seller and Medallion are responsible for all of the debts and liabilities listed on Exhibit A as well as all other debts and liabilities of Medallion incurred in its ordinary course of business, whether known or unknown before or after such date that are in the nature of accounts payable, accrued expenses and other debts and liabilities related to current and future operating activities of Medallion.. As between Medallion and Seller, on the one hand, and Reliability Contractors, on the other, Reliability Contractors is responsible for all of its debts and liabilities, whenever incurred and for any debts and liabilities of Medallion outside the ordinary course of business prior to the date of this Agreement to the extent not already paid by Medallion. Nothing in this paragraph prevents the parties from contesting third party claims as to the legitimacy of any third party claim, but is merely any allocation between the parties of responsibilities for payment or objecting to any claim for payment. Without in any way limiting any of the rights an remedies otherwise available to Seller and Medallion, Reliability Contractors and Reliability will indemnify and hold Seller harmless from all claims, debts, losses, damages, liabilities and expenses (including costs of investigation and defense and reasonable attorney's fees) incurred by or arising against Medallion for payables outside the ordinary course of business which have not already been paid and for claims made by Alex Katz with respect to matters or events that occurred or arose prior to the date of his resignation. Without in any way limiting any of the rights and remedies otherwise available to Reliability and Reliability Contractors, Seller will indemnify and hold harmless Reliability and Reliability Contractors from all claims, debts, losses, damages, liabilities, and expenses (including costs of investigation and defense and reasonable attorney's fees) incurred or arising against Reliability or Reliability Contractors for any Medallion debt, liability, account payable or expense incurred in the ordinary course of business, or claim listed on Exhibit A, or incurred or arising from or after the date of this Agreement. Seller acknowledges that he is unaware of any debts or liabilities of Medallion as of October 1, 2007 or thereafter that are not ordinary course of business debts and liabilities. Reliability and Reliability Contractors represent that they are unaware of any debts or liabilities of Medallion that are not ordinary course of business debts and liabilities.

   15.  

   16. (a) Seller, on behalf of himself and each of his Affiliates, hereby releases and forever discharges Reliability and Reliability Contractors and their past, present and future employees, agents, Affiliates, stockholders, controlling persons, subsidiaries, successors and assigns (individually, a "Seller Releasee" and collectively, "Seller Releasees") from any and all claims, demands, proceedings, causes of action, orders, obligations, contracts, agreements, debts and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, which the Seller or any of his respective Affiliates now has or has ever had against the respective Seller Releasees arising prior to the Closing Date or on account of or arising out of any matter, cause or event occurring prior to the Closing Date, including, but not limited to, any rights to indemnification or reimbursement from any Seller Releasee, whether pursuant to the Sale Agreement, contract or otherwise and whether or not relating to claims pending on,