Exhibit 10.1
AMENDED AND RESTATED FINANCING AGREEMENT
Dated as of September 17, 2007
by and among
PRG-SCHULTZ INTERNATIONAL, INC.,
as Parent
THE SUBSIDIARIES OF PARENT PARTY HERETO,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
ABLECO FINANCE LLC,
as Collateral Agent,
and
ABLECO FINANCE LLC,
as Administrative Agent

 

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TABLE OF CONTENTS

                      Page  
 
            ARTICLE I. DEFINITIONS; CERTAIN TERMS     1  
Section 1.01
  Definitions     1  
Section 1.02
  Terms Generally     39  
Section 1.03
  Accounting and Other Terms     39  
Section 1.04
  Time References     39  
 
            ARTICLE II. THE LOANS     40  
Section 2.01
  Commitments     40  
Section 2.02
  Making the Loans     41  
Section 2.03
  Repayment of Loans; Evidence of Debt     44  
Section 2.04
  Interest     45  
Section 2.05
  Reduction of Commitments; Prepayment of Loans     48  
Section 2.06
  Fees     53  
Section 2.07
  Securitization     54  
Section 2.08
  Taxes     54  
Section 2.09
  Conversion Election     57  
 
            ARTICLE III. LETTERS OF CREDIT     57  
Section 3.01
  Letter of Credit Guaranty     57  
Section 3.02
  Participations     59  
Section 3.03
  Letters of Credit     61  
 
            ARTICLE IV. FEES, PAYMENTS AND OTHER COMPENSATION     61  
Section 4.01
  [Intentionally Omitted]     61  
Section 4.02
  Payments; Computations and Statements     61  
Section 4.03
  Sharing of Payments, Etc.     63  
Section 4.04
  Apportionment of Payments     63  
Section 4.05
  Increased Costs and Reduced Return     64  
Section 4.06
  Joint and Several Liability of each Person Composing the Borrower     66  
 
            ARTICLE V. CONDITIONS TO LOANS     67  
Section 5.01
  Conditions Precedent     67  
Section 5.02
  Special Condition Precedent to Delayed Draw Term Loans     70  
Section 5.03
  Conditions Precedent to All Loans and Letters of Credit     70  
Section 5.04
  Conditions Subsequent to All Loans     71  
 
            ARTICLE VI. REPRESENTATIONS AND WARRANTIES     71  
Section 6.01
  Representations and Warranties     71  
 
            ARTICLE VII. COVENANTS OF THE LOAN PARTIES     80  
Section 7.01
  Affirmative Covenants     80  

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TABLE OF CONTENTS
(continued)

                      Page  
 
           
Section 7.02
  Negative Covenants     91  
Section 7.03
  Financial Covenants     96  
 
           
ARTICLE VIII.
  MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
    98  
Section 8.01
  Collection of Accounts Receivable; Management of Collateral     98  
Section 8.02
  Accounts Receivable Documentation     100  
Section 8.03
  Status of Accounts Receivable     101  
Section 8.04
  Collateral Custodian     102  
 
            ARTICLE IX. EVENTS OF DEFAULT     102  
Section 9.01
  Events of Default     102  
 
            ARTICLE X. AGENTS     106  
Section 10.01
  Appointment     106  
Section 10.02
  Nature of Duties     107  
Section 10.03
  Rights, Exculpation, Etc.     107  
Section 10.04
  Reliance     108  
Section 10.05
  Indemnification     108  
Section 10.06
  Agents Individually     108  
Section 10.07
  Successor Agent     109  
Section 10.08
  Collateral Matters     109  
Section 10.09
  Agency for Perfection     111  
 
            ARTICLE XI. GUARANTY     112  
Section 11.01
  Guaranty     112  
Section 11.02
  Guaranty Absolute     112  
Section 11.03
  Waiver     113  
Section 11.04
  Continuing Guaranty; Assignments     113  
Section 11.05
  Subrogation     114  
 
            ARTICLE XII. MISCELLANEOUS     115  
Section 12.01
  Notices, Etc.     115  
Section 12.02
  Amendments, Etc.     117  
Section 12.03
  No Waiver; Remedies, Etc.     118  
Section 12.04
  Expenses; Taxes; Attorneys Fees     118  
Section 12.05
  Right of Set-off     119  
Section 12.06
  Severability     120  
Section 12.07
  Assignments and Participations     120  
Section 12.08
  Counterparts     123  
Section 12.09
  GOVERNING LAW     124  

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TABLE OF CONTENTS
(continued)

                      Page     Section 12.10   CONSENT TO JURISDICTION; SERVICE
OF PROCESS AND VENUE     124   Section 12.11   WAIVER OF JURY TRIAL, ETC.    
125  
Section 12.12
  Consent by the Agents and Lenders     125  
Section 12.13
  No Party Deemed Drafter     125  
Section 12.14
  Reinstatement; Certain Payments     125  
Section 12.15
  Indemnification     126  
Section 12.16
  Records     126  
Section 12.17
  Binding Effect     127  
Section 12.18
  Interest     127  
Section 12.19
  Confidentiality     128  
Section 12.20
  Section Headings     128  
Section 12.21
  Integration     128  
Section 12.22
  Release of Security Interest or Guaranty     129  
Section 12.23
  Acknowledgment of Prior Obligations and Continuation Thereof     129  
Section 12.24
  No Novation     130  
Section 12.25
  Judgment Currency     130  

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SCHEDULE AND EXHIBITS

     
Schedule R-1
  Lenders and Lenders’ Commitments
Schedule 6.01(e)
  Subsidiaries
Schedule 6.01(f)
  Litigation; Commercial Tort Claims
Schedule 6.01(i)
  ERISA
Schedule 6.01(o)
  Real Property
Schedule 6.01(r)
  Environmental Matters
Schedule 6.01(s)
  Insurance
Schedule 6.01(v)
  Bank Accounts
Schedule 6.01(w)
  Intellectual Property
Schedule 6.01(x)
  Material Contracts
Schedule 6.01(dd)
  Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of
Business; Chief Executive Office; FEIN
Schedule 6.01(ff)
  Collateral Locations
Schedule 7.02(a)
  Existing Liens
Schedule 7.02(b)
  Existing Indebtedness
Schedule 7.02(d)
  Nature of Business
Schedule 7.02(e)
  Existing Investments
Schedule 7.02(k)
  Limitations on Dividends and Other Payment Restrictions
Schedule 8.01
  Lockbox Banks and Lockbox Accounts
 
   
Exhibit A-1
  Form of Assignment and Acceptance
Exhibit B-1
  Form of Borrowing Base Certificate
Exhibit F-1
  Form of Funds Flow Agreement
Exhibit L-1
  Form of LIBOR Notice
Exhibit R-1
  Form of Ratification Agreement
Exhibit S-1
  Form of Solvency Certificate
Exhibit 2.02
  Form of Notice of Borrowing
Exhibit 5.01(d)
  Forms of Opinions of Counsel

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AMENDED AND RESTATED FINANCING AGREEMENT
          Amended and Restated Financing Agreement, dated as of September 17,
2007, by and among PRG-SCHULTZ INTERNATIONAL, INC., a Georgia corporation (the
“Parent”), PRG-SCHULTZ USA, INC., a Georgia corporation (“PRG-Schultz USA” and
together with the Parent, individually and collectively, jointly and severally,
the “Borrower”), each subsidiary of the Parent listed as a “Guarantor” on the
signature pages hereto (each a “Guarantor” and collectively, jointly and
severally, the “Guarantors”), the lenders, from time to time, party hereto (each
a “Lender” and collectively, the “Lenders”), ABLECO FINANCE LLC, a Delaware
limited liability company (“Ableco”), as collateral agent for the Lenders (in
such capacity, together with any successor collateral agent, the “Collateral
Agent”), and Ableco, as administrative agent for the Lenders (in such capacity,
together with any successor administrative agent, the “Administrative Agent” and
together with the Collateral Agent, each an “Agent” and collectively, the
“Agents”).
RECITALS
          WHEREAS, the Borrower, the Guarantors, the Agents, and the Lenders
entered into that certain Financing Agreement dated as of March 17, 2006 (as in
effect immediately prior to the effectiveness of this Agreement, the “Original
Financing Agreement”);
          WHEREAS, the Borrower, the Guarantors, the Agents, and the Lenders
desire to amend and restate the Original Financing Agreement in its entirety
subject to the terms and conditions set forth herein, to among other things,
restructure the credit facilities under the Original Financing Agreement, it
being understood that no repayment of the obligations under the Original
Financing Agreement is being effected hereby, but merely an amendment and
restatement in accordance with the terms hereof.
          NOW, THEREFORE, the Borrower, the Guarantors, the Agents, and the
Lenders hereby amend and restate the Original Financing Agreement in its
entirety as follows:
ARTICLE I.
DEFINITIONS; CERTAIN TERMS
     Section 1.01 Definitions. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
          “Ableco” has the meaning specified therefor in the preamble hereto and
shall include its permitted assigns and successors.
          “Account Debtor” means any Person who is or who may become obligated
under, with respect to, or on account of, an Account Receivable, chattel paper,
or a general intangible.

 

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          “Account Receivable” means, with respect to any Person, all of such
Person’s now owned or hereafter acquired right, title, and interest with respect
to “accounts” (as that term is defined in Article 9 of the Code), and any and
all “supporting obligations” (as that term is defined in the Code) in respect
thereof.
          “Action” has the meaning specified therefor in Section 12.12.
          “additional amount” has the meaning specified therefor in
Section 2.08(a).
          “Administrative Agent” has the meaning specified therefor in the
preamble hereto.
          “Administrative Agent’s Account” means an account at a bank designated
by the Administrative Agent from time to time as the account into which the
Borrower shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.
          “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, “control” of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any Agent or any Lender be considered an “Affiliate” of any Loan Party.
          “After Acquired Property” means any fee-owned interest in real
property acquired by the Parent or any of its Subsidiaries after the date hereof
with a Current Value in excess of $200,000.
          “Agent” and “Agents” have the respective meanings specified therefor
in the preamble hereto.
          “Agent Advances” has the meaning specified therefor in
Section 10.08(a).
          “Agreement” means this Amended and Restated Financing Agreement,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to the Agreement as the same
may be in effect at the time such reference becomes operative.
          “Albertsons Receivables” means Accounts Receivable owing from
Albertsons, Inc. with a due date no later than 60 days after the invoice date.
          “Assignment and Acceptance” means an assignment and acceptance entered
into by an assigning Lender and an assignee, in accordance with Section 12.07
hereof and substantially in the form of Exhibit A-1 hereto or such other form
acceptable to the Agents.

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          “Authorized Officer” means, with respect to any Person, the chief
executive officer, chief financial officer, president or executive vice
president of such Person.
          “Availability” means, at any time, the sum of (a) the difference
between (i) the lesser of (A) the Borrowing Base, and (B) the Total Revolving
Credit Commitment, and (ii) the sum of (A) the aggregate outstanding principal
amount of all Revolving Loans, (B) all Letter of Credit Obligations, and (C) the
excess of (x) the aggregate amount, if any, of all trade payables of the
Borrower and the Domestic Guarantors which are past due by more than 30 days and
are not in dispute, over (y) 10% of trade payables of the Borrower and the
Domestic Guarantors at such time, and (b) Qualified Cash.
          “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §
101, et seq.), the Bankruptcy and Insolvency Act (Canada), and the Companies’
Creditors Arrangement Act (Canada), each as amended, and any successor statutes.
          “Base LIBOR Rate” means the rate per annum, determined by
Administrative Agent in accordance with its customary procedures, and utilizing
such electronic or other quotation sources as it considers appropriate, on the
basis of the rates at which Dollar deposits are offered to major banks in the
London interbank market on or about 11:00 a.m. (New York time) 3 Business Days
prior to the commencement of the applicable Interest Period, for a term and in
amounts comparable to the Interest Period and amount of the LIBOR Rate Loan
requested by the Borrower in accordance with this Agreement, which determination
shall be conclusive in the absence of manifest error; provided, however, that
the Base LIBOR Rate shall be subject to a minimum rate of 5.25 percentage points
per annum, and, accordingly, to the extent that the Base LIBOR Rate on any day
would be less than the foregoing minimum rate, the Base LIBOR Rate hereunder for
such day automatically shall be deemed increased to such minimum rate.
          “Board” means the Board of Governors of the Federal Reserve System of
the United States.
          “Borrower” has the meaning specified therefor in the preamble hereto.
          “Borrowing Base” means, as of any date of determination, an amount
determined by the Administrative Agent in the exercise of its Permitted
Discretion, with reference to the most recent Borrowing Base Certificate, equal
to the difference between (a) the sum of (i) up to 85% of the value of the Net
Amount of Eligible Accounts Receivable, less the amount, if any, of the Dilution
Reserve, plus (ii) the lesser of (A) up to 20% of the Eligible Backlog, and (B)
50% of the amount determined under clause (a)(i) of this definition, and
(b) such reserves as the Administrative Agent may deem appropriate in the
exercise of its Permitted Discretion.
          “Borrowing Base Certificate” means a certificate signed by an
Authorized Officer of the Borrower and setting forth the calculation of the
Borrowing Base in compliance with Section 7.01(a)(vii), substantially in the
form of Exhibit B-1.
          “Brazilian Pledge Agreement” means the Quota Pledge Agreement, dated
as of April 4, 2006, by and among PRG-Schultz USA, Profit Recovery Brasil Ltda.,
a limited liability company duly incorporated under the laws of Brazil, and the
Agents.

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          “Business Day” means any day that is not a Saturday, Sunday, or other
day on which banks are authorized or required to close in the State of New York,
except that, if a determination of a Business Day shall relate to a LIBOR Rate
Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in U.S. Dollar deposits in the London interbank market.
          “Canadian Employee Benefit Laws” shall mean the Canada Pension Plan
(Canada), the Income Tax Act (Canada), the Pension Benefits Standards Act 1985
(Canada), the Employment Insurance Act (Canada), the Pension Benefits Act (Nova
Scotia), the Workers’ Compensation Act (Nova Scotia), the Labour Standards Code
(Nova Scotia), the Occupational Health and Safety Act (Nova Scotia), the Health
and Sciences Insurance Act (Nova Scotia) and any federal, provincial or local
counterparts or equivalents, in each case, as amended from time to time.
          “Canadian Guarantee” means the General and Continuing Guarantee, dated
as of March 17, 2006, executed and delivered by the Canadian Guarantor in favor
of the Collateral Agent, for the benefit of the Agents and Lenders, in form and
substance reasonably satisfactory to the Agents.
          “Canadian Guarantor” means PRG-Schultz Canada Corp., a Nova Scotia
unlimited liability company.
          “Canadian Pledge Agreement” means the Share Pledge Agreement, dated as
of March 17, 2006, executed and delivered by PRG-Schultz Canada, Inc., a Georgia
corporation, in favor of the Collateral Agent, for the benefit of the Agents and
Lenders, in form and substance reasonably satisfactory to the Agents.
          “Canadian Security Agreement” means the General Security Agreement,
dated as of March 17, 2006, executed and delivered by the Canadian Guarantor, in
favor of the Collateral Agent, for the benefit of the Agents and Lenders, in
form and substance reasonably satisfactory to the Agents.
          “Capital Expenditures” means, with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in “property, plant and equipment” or in a similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries during such period to acquire
by purchase or otherwise the business or fixed assets of, or the Capital Stock
of, any other Person.
          “Capital Guideline” means any law, rule, regulation, policy, guideline
or directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) (i) regarding capital adequacy,
capital ratios, capital requirements, the calculation of a bank’s capital or
similar matters, or (ii) affecting the amount of capital required to be obtained
or maintained by any Lender, any Person controlling any Lender, or the L/C
Issuer or the manner in which any Lender, any Person controlling any Lender, or
the L/C Issuer allocates

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capital to any of its contingent liabilities (including letters of credit),
advances, acceptances, commitments, assets or liabilities.
          “Capitalized Lease” means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is required under GAAP
to be capitalized on the balance sheet of such Person.
          “Capitalized Lease Obligations” means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
          “Capital Stock” means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
          “Cash Equivalents” means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency or instrumentality thereof and backed by the full faith and credit of the
United States, in each case, maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody’s or A-1 by S&P; (iii) certificates
of deposit maturing not more than 270 days after the date of issue, issued by
commercial banking institutions and money market or demand deposit accounts
maintained at commercial banking institutions, each of which is a member of the
Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000; (iv) repurchase agreements having
maturities of not more than 90 days from the date of acquisition which are
entered into with banks included in the commercial banking institutions
described in clause (iii) above and which are secured by marketable direct
obligations of the United States Government or any agency thereof, (v) money
market accounts maintained with mutual funds having assets in excess of
$2,500,000,000; (vi) tax exempt securities rated A or better by Moody’s or A+ or
better by S&P, and (vii) with respect to Foreign Subsidiaries, investments which
are comparable in term and credit quality to those described in the foregoing
clauses (i) — (vi).
          “CFC” means a controlled foreign corporation (as that term is defined
in the IRC).
          “Change in Law” has the meaning specified therefor in Section 4.05(a).
          “Change of Control” means each occurrence of any of the following:
          (a) the acquisition by any person, including any syndicate or group
deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of
beneficial ownership, directly or indirectly, of shares of the Capital Stock of
the Parent entitling that person to exercise 50% or more of the total voting
power of all shares of such Capital Stock entitled to vote generally in
elections of directors,

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          (b) the Parent ceases to own and control, directly or indirectly, 100%
of the shares of the Capital Stock of PRG-Schultz USA,
          (c) during any consecutive two-year period, individuals who at the
beginning of that two-year period constituted the board of directors of the
Parent (together with any new directors whose election to the board of directors
of the Parent, or whose nomination for election by the shareholders of the
Parent, was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election were previously so approved) cease for any
reason to constitute a majority of the board of directors then in office, or
          (d) a Change of Executive Event occurs.
          “Change of Executive Event” means the failure of Jim McCurry to be
involved actively on an ongoing basis in the executive management and operations
of the Borrower and its Subsidiaries, unless within 180 days after the
aforementioned individual ceases to be actively involved in the executive
management and operations of the Borrower and its Subsidiaries, the Borrower
finds a replacement individual reasonably satisfactory to the Agents (which
approval of the Agents shall not be unreasonably withheld).
          “Claims Reporting System” means the database repository of the Parent
and its Subsidiaries which tracks all claims of clients of the Parent and its
Subsidiaries through the claim life cycle from prospective claim to
work-in-process to approved for invoicing.
          “Code” means the New York Uniform Commercial Code, as in effect from
time to time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Collateral Agent’s Liens on any Collateral is governed
by the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “Code” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority, or
remedies.
          “Collateral” means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person in favor of
the Collateral Agent as security for all or any part of the Obligations pursuant
to the Loan Documents.
          “Collateral Agent” has the meaning specified therefor in the preamble
hereto.
          “Collection Account” and “Collection Accounts” have the meanings
specified therefor in Section 8.01(a).
          “Collections” means all cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds).
          “Commitments” means, with respect to each Lender, such Lender’s
Revolving Credit Commitment, Term Loan Commitment, and Delayed Draw Term Loan
Commitment.

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          “Consolidated EBITDA” means, with respect to any Person for any
period, and all as determined on a consolidated basis and in accordance with
GAAP, the Consolidated Net Income of such Person and its Subsidiaries for such
period, minus (a) the sum of the following amounts of such Person and its
Subsidiaries for such period: (i) any non-cash extraordinary or non-recurring
gains or any non-cash gains solely to the extent that they will not result in
cash receipts in any future period, (ii) gains or income from discontinued
operations, (iii) interest income, and (iv) any tax credits, net operating
losses or other net tax benefits recognized during such period, plus (b) without
duplication, the sum of the following amounts of such Person and its
Subsidiaries for such period and to the extent deducted in determining
Consolidated Net Income of such Person and its Subsidiaries for such period:
(i) interest expense, (ii) income tax expense, (iii) depreciation expense,
(iv) amortization expense, (v) any equity based compensation expense relating to
the Borrower’s 2006 Amended and Restated Management Incentive Plan and any other
non-cash equity based compensation expense, (vi) any non-cash extraordinary or
non-recurring losses or any non-cash losses solely to the extent that they will
not result in cash charges in any future period, (vii) losses from discontinued
operations, (viii) restructuring charges in an aggregate amount not to exceed
$1,250,000 in any Fiscal Year or $5,000,000 during the term of the Agreement,
and (ix) any other non-cash charges.
          “Consolidated Net Income” means, with respect to any Person for any
period, the net income (loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis and in accordance with GAAP.
          “Consolidated Senior Debt” means, as of any date of determination, the
aggregate principal amount of all Revolving Loans, the Letter of Credit
Obligations, the principal amount of the Term Loan, and the aggregate principal
amount of all Delayed Draw Term Loans.
          “Contingent Obligation” means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations (“primary obligations”) of
any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including (i) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term “Contingent Obligation” shall not include any
product warranties extended in the ordinary course of business or any obligation
that is incurred to comply with thin capitalization rules. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable

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pursuant to the terms of the instrument evidencing such Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto (assuming such Person is required to perform thereunder),
as determined by such Person in good faith.
          “Control Agreement” means a control agreement, in form and substance
reasonably satisfactory to the Agents, executed and delivered by the Parent or
one of its Subsidiaries, Collateral Agent, Administrative Agent, and the
applicable securities intermediary or commodities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).
          “Conversion Election” has the meaning specified therefore in
Section 2.09.
          “Current Value” has the meaning specified therefor in Section 7.01(o).
          “Default” means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
          “Delayed Draw Term Loan” and “Delayed Draw Term Loans” have the
respective meanings specified therefor in Section 2.01(a)(iii).
          “Delayed Draw Term Loan Amount” means the lesser of (a) $31,000,000,
and (b) the aggregate amount of Senior Convertible Notes and Series A Preferred
Stock redeemed or to be redeemed in connection with the Redemption Transaction
and not converted to common Capital Stock of the Parent.
          “Delayed Draw Term Loan Commitment” means, with respect to each
Lender, the commitment of such Lender to make Delayed Draw Term Loans to the
Borrower in the amount set forth opposite such Lender’s name in Schedule R-1
hereto, as such amount may be terminated or reduced from time to time in
accordance with the terms of this Agreement.
          “Delayed Draw Term Loan Commitment Expiry Date” means October 31,
2007.
          “Delayed Draw Term Loan Lender” means a Lender with a Delayed Draw
Term Loan Commitment.
          “Delayed Draw Term Loan Margin” means, as of any date of
determination, the following margins based upon the aggregate principal amount
of the Delayed Draw Term Loans advanced to the Borrower (without regard to any
repayment or prepayment thereof):

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              Delayed Draw Term Loan     Aggregate Principal   Margin for
Delayed   Delayed Draw Term Loan Amount of the   Draw Term Loans that   Margin
for Delayed Delayed Draw Term   are Reference Rate   Draw Term Loans that Loans
  Loans   are LIBOR Rate Loans
< $20,000,000
  2.00 percentage points   5.00 percentage points
≥ $20,000,000 and ≤ $31,000,000
  3.00 percentage points   5.50 percentage points

          “Delayed Draw Term Loan Obligations” means any Obligations with
respect to the Delayed Draw Term Loans (including the principal thereof, the
interest thereon, and the fees and expenses specifically related thereto).
          “Deposit Account” means any deposit account (as that term is defined
in the Code).
          “Dilution” means, as of any date of determination, a percentage, based
upon the experience of the immediately prior 12 months, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to the Borrower’s and
the Domestic Guarantors’ Account Receivables during such period (excluding
Accounts Receivables of the PR Partnership), by (b) the Borrower’s and the
Domestic Guarantors’ billings with respect to Account Receivables during such
period (excluding extraordinary items and excluding Accounts Receivables of the
PR Partnership).
          “Dilution Reserve” means, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts Receivable by
one percentage point for each percentage point by which Dilution is in excess of
5%.
          “Disposition” means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person (other than the granting of a
Lien), in each case, whether or not the consideration therefor consists of cash,
securities or other assets owned by the acquiring Person.
          “Dollar,” “Dollars” and the symbol “$” each means lawful money of the
United States of America.
          “Dollar Equivalent” shall mean, as to any amount denominated in a
Judgment Currency as of any date of determination, the amount of Dollars that
would be required to purchase the amount of such Judgment Currency based upon
the spot selling rate at which major banks offer to sell such Judgment Currency
for Dollars in the London foreign exchange market at approximately 11:00 a.m.
London time on such date for delivery two Business Days later.

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          “Domestic Guarantor” means any Guarantor organized under the laws of
the United States or the District of Columbia (including the PR Partnership).
          “Domestic Loan Party” means any Loan Party that is organized under the
laws of the United States or the District of Columbia (including the PR
Partnership).
          “Domestic Subsidiary” means any Subsidiary of the Parent that is
organized under the laws of the United States or the District of Columbia
(including the PR Partnership).
          “Effective Date” means the date, on or before October 31, 2007, on
which all of the conditions precedent set forth in Section 5.01 are first
satisfied or waived.
          “Eligible Accounts Receivable” means the Accounts Receivable of the
Borrower and the Domestic Guarantors (other than the PR Partnership) which are,
and at all times continue to be, acceptable to the Administrative Agent in its
Permitted Discretion. In general, an Account Receivable may, in the Permitted
Discretion of the Administrative Agent, be deemed to be eligible if:
          (a) delivery of the merchandise or the rendition of the services has
been completed with respect to such Account Receivable and the Account
Receivable has not resulted from a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional;
          (b) no return, rejection, repossession or dispute has occurred with
respect to such Account Receivable, the Account Debtor has not asserted any
setoff, defense or counterclaim with respect to such Account Receivable, and
there has not occurred any extension of the time for payment with respect to
such Account Receivable without the consent of the Administrative Agent,
provided that, in the case of any dispute, setoff, defense or counterclaim with
respect to an Account Receivable, the portion of such Account Receivable not
subject to such dispute, setoff, defense or counterclaim will not be ineligible
solely by reason of this clause (b);
          (c) such Account Receivable is lawfully owned by the Borrower or one
of the Domestic Guarantors (other than the PR Partnership) free and clear of any
Lien other than in favor of the Collateral Agent for the benefit of the Agents
and the Lenders and otherwise continues to be in full conformity with all
representations and warranties made by the Borrower and the other Domestic
Guarantors (other than the PR Partnership) to the Agents and the Lenders with
respect thereto in the Loan Documents;
          (d) such Account Receivable is unconditionally payable in Dollars
within 30 days from the invoice date (other than with respect to Albertsons
Receivables, Meijer Receivables, Supervalu Receivables, Toys R Us Receivables,
and Wal Mart Holdback Receivables) and is not evidenced by a promissory note,
chattel paper or any other instrument or other document unless such promissory
note, chattel paper or other instrument or document, together with an
appropriate instrument of transfer executed in blank by the Borrower, has been
delivered to and is in the possession of the Collateral Agent;

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          (e) no more than 60 days have elapsed from the invoice due date and no
more than 90 days have elapsed from the invoice date with respect to such
Account Receivable; provided that (i) in the case of Albertsons Receivables, no
more than 90 days have elapsed from the invoice due date and no more than
120 days have elapsed from the invoice date with respect to such Accounts
Receivable, (ii) in the case of Meijer Receivables, no more than 75 days have
elapsed from the invoice due date and no more than 135 days have elapsed from
the invoice date with respect to such Accounts Receivable, (iii) in the case of
Supervalu Receivables, no more than 120 days have elapsed from the invoice due
date and no more than 150 days have elapsed from the invoice date with respect
to such Accounts Receivable, (iv) in the case of Toys R Us Receivables, no more
than 75 days have elapsed from the invoice due date and no more than 135 days
have elapsed from the invoice date with respect to such Accounts Receivable, and
(v) Wal Mart Holdback Receivables will not be ineligible under this clause (e);
          (f) such Account Receivable is not due from an Affiliate of the
Borrower or its Subsidiaries;
          (g) such Account Receivable does not constitute an obligation of the
United States or any other Governmental Authority (unless all steps required by
the Administrative Agent in connection therewith, including notice to the United
States Government under the Federal Assignment of Claims Act or any action under
any state statute comparable to the Federal Assignment of Claims Act, have been
duly taken in a manner satisfactory to the Administrative Agent;
          (h) the Account Debtor (or the applicable office of the Account
Debtor) with respect to such Account Receivable is located in the continental
United States, unless such Account Receivable is supported by a letter of credit
or other similar obligation satisfactory to the Administrative Agent in its
Permitted Discretion;
          (i) the Account Debtor with respect to such Account Receivable is not
a supplier to or creditor of the Borrower or the Domestic Guarantors (other than
the PR Partnership) of goods or services in excess of $50,000; provided,
however, that in the event that an Account Debtor is a supplier to or creditor
of the Borrower or one of the Domestic Guarantors (other than the PR
Partnership) such Account Receivable will be eligible under this clause if the
Account Debtor has executed a non-offset letter satisfactory to the
Administrative Agent in its Permitted Discretion; provided further, however,
that if such an Account Debtor has not executed a non-offset agreement,
Administrative Agent, in its discretion, may include as eligible the net amount
due from such Account Debtor to the Borrower or such Domestic Guarantors (other
than the PR Partnership);
          (j) not more than 50% of the aggregate amount of all Accounts
Receivable of the Account Debtor with respect to such Account Receivable have
remained unpaid 60 days past the invoice due date or 90 days past the invoice
date; provided that (i) in the case of Albertsons Receivables, not more than 50%
of the aggregate amount of all Albertsons Receivable have remained unpaid
90 days past the invoice due date or 120 days past the invoice date, (ii) in the
case of Meijer Receivables, not more than 50% of the aggregate amount of all
Meijer Receivable have remained unpaid 75 days past the invoice due date or
135 days past the invoice date, (iii) in the case of Supervalu Receivables, not
more than 50% of the aggregate amount of all Supervalu

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Receivable have remained unpaid 120 days past the invoice due date or 150 days
past the invoice date, or (iv) in the case of Toys R Us Receivables, not more
than 50% of the aggregate amount of all Toys R Us Receivables have remained
unpaid 75 days past the invoice due date or 135 days past the invoice date;
          (k) (i) the Account Debtor with respect to such Account Receivable has
not filed a petition for bankruptcy or any other relief under the Bankruptcy
Code or any other law relating to bankruptcy, insolvency, reorganization or
relief of debtors, made an assignment for the benefit of creditors, had filed
against it any petition or other application for relief under the Bankruptcy
Code or any such other law, (ii) has not failed, suspended business operations,
or called a meeting of its creditors for the purpose of obtaining any financial
concession or accommodation, or (iii) has not had or suffered to be appointed a
receiver or a trustee for all or a significant portion of its assets or affairs;
          (l) in the case of an Account Debtor who is an individual, is not an
employee of the Borrower or the Domestic Guarantors (other than the PR
Partnership) or any of their respective Affiliates and has not died or been
declared incompetent;
          (m) the Administrative Agent is, and continues to be, satisfied with
the credit standing of the Account Debtor in relation to the amount of credit
extended and the Administrative Agent believes, in its Permitted Discretion,
that the prospect of collection of such Account Receivable is not impaired for
any reason; and
          (n) the Account Receivable does not represent the right to receive
progress payments, installment billings (other than Milestone Accounts), bill
and hold invoices, retainage invoices, or other advance billings that are due
prior to the completion of performance by the Borrower or one of the Domestic
Guarantors (other than the PR Partnership) of the subject contract for goods or
services.
          “Eligible Backlog” means as of any date of determination and without
duplication, (a) the U.S. Retail Key Client WIP as of the most recent fiscal
quarter end multiplied by (b) the lesser of (i) the U.S. Retail Key Client
Effective Fee Rate and (ii) 20 percent, multiplied by (c) the U.S. Retail Key
Client Claim Retention Rate.
          “Employee Plan” means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.
          “Environmental Actions” means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other communication from any
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (i) from any assets, properties or businesses of any Loan
Party or any of its Subsidiaries or any predecessor in interest; (ii) from
adjoining properties or businesses; or (iii) onto any facilities which received
Hazardous Materials generated by any Loan Party or any of its Subsidiaries or
any predecessor in interest.

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          “Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Federal Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), as such laws
may be amended or otherwise modified from time to time, and any other present or
future applicable federal (including the federal government of Canada), state,
provincial, local or foreign statute, ordinance, rule, regulation, order,
judgment, decree, permit, license or other legally binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment or other government restrictions relating to
the protection of the environment or the release, emission, deposit, discharge,
leaching, migration or spill of any Hazardous Materials into the environment.
          “Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to the liability or potential
liability of any Loan Party with respect to any environmental condition or a
Release of Hazardous Materials from or onto (i) any property currently or
formerly owned by any Loan Party or any of its Subsidiaries or (ii) any Real
Property which received Hazardous Materials generated by any Loan Party or any
of its Subsidiaries.
          “Environmental Lien” means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
          “ERISA Affiliate” means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a “controlled group”
within the meaning of Sections 414(b), (c), (m) and (o) of the IRC.
          “Event of Default” means any of the events set forth in Section 9.01.
          “Excess Cash Flow” means, with respect to any Person for any period,
determined on a consolidated basis in accordance with GAAP, (a) Consolidated Net
Income of such Person and its Subsidiaries for such period, plus (b) without
duplication the sum of the following amounts of such Person and its Subsidiaries
for such period: (i) any non-cash extraordinary or non-recurring losses or any
non-cash losses solely to the extent that they will not result in cash charges
in any future period, (ii) losses from discontinued operations, (iii) all
non-cash items of such Person and its Subsidiaries to the extent deducted in
determining Consolidated Net Income for such period, and (iv) income tax
expense, minus (c) without duplication the sum of the

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following amounts of such Person and its Subsidiaries for such period: (i) any
non-cash extraordinary or non-recurring gains or any non-cash gains solely to
the extent that they will not result in cash receipts in any future period,
(ii) gains or income from discontinued operations, (iii) interest income,
(iv) any tax credits, net operating losses or other net tax benefits recognized
during such period on account of any prior period, (v) all cash principal
payments on Indebtedness (excluding voluntary prepayments of the Term Loan made
pursuant to Section 2.05(b)(ii) and voluntary prepayments of the Delayed Draw
Term Loans made pursuant to Section 2.05(b)(iii)) of such Person and its
Subsidiaries made during such period (but in the case of the Revolving Loans or
other revolving credit facilities, only to the extent there is an equivalent
permanent reduction of the Total Revolving Credit Commitment or the commitment
to provide such other revolving credit facility) to the extent such Indebtedness
is permitted to be incurred, and such payments are permitted to be made, under
this Agreement, (vii) cash payments of taxes by such Person and its Subsidiaries
during such period, net of refunds received by such Person and its Subsidiaries
during such period, (viii) the cash portion of Capital Expenditures made by such
Person and its Subsidiaries during such period to the extent permitted to be
made under this Agreement (net of (A) any proceeds reinvested in accordance with
Section 2.05(d)(iv), and (B) any proceeds of related financings (other than
Revolving Loans) with respect to such expenditures), (ix) the excess, if any, of
Working Investment at the end of such period over Working Investment at the
beginning of such period (or, if the difference results in an amount that is
less than zero, minus the excess, if any, of Working Investment at the beginning
of such period over Working Investment at the end of such period), (x) cash
restructuring charges of such Person and its Subsidiaries whether accrued in
such period or a prior period, and (xi) reasonable transaction related fees and
expenses incurred reasonably contemporaneously with the date hereof or the
Effective Date by such Person or its Subsidiaries in connection with the
transactions contemplated hereby.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Existing Revolving Loans” has the meaning specified therefor in
Section 2.01(b).
          “Extraordinary Receipts” means any cash received by the Parent or any
of its Subsidiaries not in the ordinary course of business (and not consisting
of proceeds of Dispositions or Indebtedness or any foreign, United States, state
or local tax refunds), including (i) pension plan reversions, (ii) proceeds of
insurance (other than the proceeds of business interruption insurance),
(iii) judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (iv) condemnation awards (and payments in
lieu thereof), (v) indemnity payments, and (vi) any purchase price adjustment
received in connection with any purchase agreement and any amounts received from
escrow arrangements in connection with any purchase agreement.
          “Federal Funds Rate” means, for any period, a fluctuating interest
rate per annum equal to, for each day during such period, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the

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quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
          “Fee Letter” means that certain fee letter, dated as of even date
herewith, among the Borrower and the Collateral Agent.
          “Final Maturity Date” means September 17, 2011, or such earlier date
on which (a) the Total Revolving Credit Commitment is terminated for any reason
or (b) all or any portion of the Obligations shall become due and payable
pursuant to the terms of Section 9.01.
          “Financial Statements” means (i) the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the Fiscal Year ended
December 31, 2006, and the related consolidated statement of operations,
shareholders’ equity and cash flows for the Fiscal Year then ended, and (ii) the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of
June 30, 2007, and the related consolidated statement of operations,
shareholder’s equity and cash flows for the 6 months then ended.
          “Fiscal Year” means the fiscal year of the Parent (or, prior to the
Effective Date, the Borrower) and its Subsidiaries ending on December 31st of
each year.
          “Fixed Charge Coverage Ratio” means, with respect to any Person for
any period, the ratio of (a) the Consolidated EBITDA of such Person and its
Subsidiaries for such period, to (b) the sum of (i) all principal of
Indebtedness for borrowed money of such Person and its Subsidiaries scheduled to
be paid or prepaid during such period, plus (ii) gross cash interest expense on
the Consolidated Senior Debt during such period, plus (iii) all income tax
liabilities of such Person and its Subsidiaries that accrued during such period,
to the extent that the amount of such liabilities is greater than zero, plus
(iv) cash dividends or distributions paid by such Person and its Subsidiaries
(other than, in the case of the Parent, dividends or distributions paid to the
Parent or its wholly-owned Subsidiaries) during such period, plus (v) Capital
Expenditures made by such Person and its Subsidiaries during such period. In
determining the Fixed Charge Coverage Ratio for a particular period, the
calculation of the income tax liabilities of such Person and its Subsidiaries
described in clause (ii)(C) of the immediately preceding sentence shall be made
without giving effect to any tax refunds, tax receivables, net operating losses
or other net tax benefits that were received or receivable during such period on
account of any prior periods.
          “Foreign Guarantor” means any Guarantor that is not a Domestic
Guarantor.
          “Foreign Subsidiary” means any Subsidiary of the Parent that is not a
Domestic Subsidiary.
          “Funding Losses” has the meaning specified therefor in
Section 2.04(f)(ii)(B).
          “Funds Flow Agreement” means a Funds Flow Agreement by and among the
Administrative Agent, the Collateral Agent, the Lenders, and the Borrower,
substantially in the form of Exhibit F-1.
          “GAAP” means generally accepted accounting principles in effect from
time to time in the United States, provided that for the purpose of Section 7.03
hereof and the definitions

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used therein, “GAAP” shall mean generally accepted accounting principles in
effect on the date hereof and consistent with those used in the preparation of
the Financial Statements, provided, further, that if there occurs after the date
of this Agreement any change in GAAP or in the methodologies used thereunder
that affects in any respect the calculation of any covenant contained in
Section 7.03 hereof, the Agents and the Borrower shall negotiate in good faith
amendments to the provisions of this Agreement that relate to the calculation of
such covenant with the intent of having the respective positions of the Lenders
and the Borrower after such change in GAAP conform as nearly as possible to
their respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 7.03 hereof shall be
calculated as if no such change in GAAP had occurred.
          “German Guarantor” means PRG-Schultz (Deutschland) GmbH, a company
incorporated under the laws of Germany registered in commercial register of
Neuss under registered number HRB 12404.
          “German Pledge Agreement” means the Share Pledge Agreement, dated as
of April 6, 2006, between The Profit Recovery Group Germany, Inc., a Georgia
corporation and the Collateral Agent.
          “German Security Agreements” means the (a) Bank Account Pledge
Agreement, dated as of April 6, 2006 between the German Guarantor and the
Collateral Agent, and (b) the Security Assignment of Receivables, dated as of
April 6, 2006, between the German Guarantor and the Collateral Agent.
          “Governmental Authority” means any nation or government, any Federal,
(including the federal government of Canada) state, province, city, town,
municipality, county, local or other political subdivision thereof or thereto
and any department, commission, board, bureau, instrumentality, agency or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
          “Guaranteed Obligations” has the meaning specified therefor in
Section 11.01.
          “Guarantor” (i) has the meaning specified therefor in the preamble to
this Agreement, and (ii) includes each other Person which guarantees, pursuant
to the requirements of Section 7.01(b) or otherwise, all or any part of the
Obligations.
          “Guaranty” means (i) the guaranty of each Guarantor party hereto
contained in Article XI hereof, and (ii) each other guaranty made by any other
Guarantor in favor of the Collateral Agent for the benefit of the Agents and the
Lenders pursuant to the requirements of Section 7.01(b) or otherwise.
          “Hazardous Materials” means (a) any element, compound or chemical that
is defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
extremely hazardous chemical, hazardous waste, or special waste under
Environmental Laws, including any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified as such
in any Environmental Law and which is present in the environment in such
quantity or state that it contravenes any Environmental Law; (b) petroleum and
its refined

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products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic, including corrosivity, ignitability, toxicity or
reactivity as well as any radioactive or explosive materials; and (e) any raw
materials or building components containing hazardous substances (including
asbestos-containing materials) listed or classified as such under Environmental
Laws.
          “Hedging Agreement” means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including any option with respect
to any of the foregoing and any combination of the foregoing agreements or
arrangements), and any confirmation executed in connection with any such
agreement or arrangement.
          “Highest Lawful Rate” means, with respect to any Agent or any Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
          “Inactive Subsidiaries” means PRG USA, Inc., a Georgia corporation,
Howard Schultz & Associates (Asia) Limited, a company organized under the laws
of Hong Kong, HS&A International PTE LTD, a company organized under the laws of
Singapore, PRG-Schultz (Thailand) Co., Limited, a company organized under the
laws of Thailand, PRGDS, LLC, a Georgia limited liability company, and Howard
Schultz de Mexico, S.A. de C.V., a company organized in Mexico, PRG - Schultz
Chile, Inc., a Georgia corporation, The Profit Recovery Group South Africa,
Inc., a Georgia Corporation, PRG - Schultz Japan, Inc., a Georgia Corporation.
          “Indebtedness” means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money; (ii) all obligations of
such Person for the deferred purchase price of property or services (other than
trade payables or other accounts payable incurred in the ordinary course of such
Person’s business and (A) not outstanding for more than 90 days after the date
the payable was created, or (B) if outstanding for more than 90 days after the
date the payable was created, being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP); (iii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments or upon which interest payments are
customarily made; (iv) all reimbursement, payment or other obligations and
liabilities of such Person created or arising under any conditional sales or
other title retention agreement with respect to property used or acquired by
such Person, even though the rights and remedies of the lessor, seller or lender
thereunder may be limited to repossession or sale of such property; (v) all
Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated in accordance with accepted practice, of such Person
under Hedging Agreements; (viii) all Contingent Obligations; (ix) all monetary
obligations under any receivables factoring, receivable sales or similar
transactions and all monetary obligations under any synthetic lease, tax

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ownership/operating lease, off-balance sheet financing or similar financing
which would give rise to a claim in an Insolvency Proceeding; and (x) all
obligations referred to in clauses (i) through (ix) of this definition of
another Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien upon property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness. The Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
          “Indemnified Matters” has the meaning specified therefor in
Section 12.15.
          “Indemnitees” has the meaning specified therefor in Section 12.15.
          “Indenture for the 10% Senior Convertible Notes” means that certain
Indenture dated as of March 17, 2006 between the Parent and U.S. Bank, National
Association, as trustee, as amended or modified in accordance with the terms
hereof and thereof.
          “Indenture for the 11% Senior Notes” means that certain Indenture
dated as of March 17, 2006 between the Parent and U.S. Bank, National
Association, as trustee, as amended or modified in accordance with the terms
hereof and thereof.
          “Insignificant Subsidiary” means, as of any date of determination, any
Subsidiary of the Parent having assets with a fair market value of less than
$500,000 and revenue for the twelve months most recently ended prior to such
date of determination of less than $500,000.
          “Insolvency Proceeding” means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
          “Intercompany Subordination Agreement” means the Intercompany
Subordination Agreement, dated as of March 17, 2006, duly executed by each of
the Loan Parties.
          “Interest Period” means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, or 3 month(s) thereafter; provided, however, that (a) if any Interest
Period would end on a day that is not a Business Day, such Interest Period shall
be extended (subject to clauses (c)-(e) below) to the next succeeding Business
Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the
day on which any Interest Period expires, (c) any Interest Period that would end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day

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of the calendar month that is 1, 2, or 3 month(s) after the date on which the
Interest Period began, and (e) Borrower may not elect an Interest Period which
will end after the Final Maturity Date.
          “IRC” means the Internal Revenue Code of 1986, as amended (or any
successor statute thereto) and the regulations thereunder.
          “Judgment Currency” has the meaning specified therefor in
Section 12.25.
          “Judgment Currency Conversion Date” has the meaning specified therefor
in Section 12.25.
          “L/C Issuer” means such bank as the Administrative Agent may select in
its sole and absolute discretion.
          “L/C Subfacility” means that portion of the Total Revolving Credit
Commitment equal to $5,000,000.
          “Lease” means any lease of real property to which any Loan Party or
any of its Subsidiaries is a party as lessor or lessee.
          “Lender” has the meaning specified therefor in the preamble hereto.
          “Letter of Credit” has the meaning specified therefor in
Section 3.01(a).
          “Letter of Credit Application” has the meaning specified therefor in
Section 3.01(a).
          “Letter of Credit Collateral Account” has the meaning specified
therefor in Section 3.01(b).
          “Letter of Credit Fees” has the meaning specified therefor in
Section 3.03(b).
          “Letter of Credit Guaranty” means one or more guaranties by the
Administrative Agent in favor of the L/C Issuer guaranteeing the Borrower’s
obligations to the L/C Issuer under a reimbursement agreement, Letter of Credit
Application or other like document in respect of any Letter of Credit.
          “Letter of Credit Obligations” means, at any time and without
duplication, the sum of (i) the Reimbursement Obligations at such time, plus
(ii) the aggregate maximum amount available for drawing under the Letters of
Credit outstanding at such time, plus (iii) all amounts for which the
Administrative Agent may be liable to the L/C Issuer pursuant to any Letter of
Credit Guaranty.
          “Liabilities” has the meaning specified therefor in Section 2.07.
          “LIBOR Deadline” has the meaning set forth in Section 2.04(f)(ii)(A).
          “LIBOR Notice” means a written notice in the form of Exhibit L-1.

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          “LIBOR Option” has the meaning specified therefor in
Section 2.04(f)(i).
          “LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan,
the rate per annum determined by Administrative Agent by dividing (a) the Base
LIBOR Rate for such Interest Period, by (b) 100% minus the Reserve Percentage.
The LIBOR Rate shall be adjusted on and as of the effective day of any change in
the Reserve Percentage.
          “LIBOR Rate Loan” means each portion of a Loan that bears interest at
a rate determined by reference to the LIBOR Rate.
          “Lien” means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including any conditional sale or title
retention arrangement, any Capitalized Lease and any assignment, deposit
arrangement or financing lease intended as, or having the effect of, security.
          “Loan” means the Term Loan, any Delayed Draw Term Loan or any
Revolving Loan made by an Agent or a Lender to the Borrower pursuant to
Article II hereof.
          “Loan Account” means an account maintained hereunder by the
Administrative Agent on its books of account at the Payment Office, and with
respect to the Borrower, in which the Borrower will be charged with all Loans
made to, all Letters of Credit issued for the benefit of or at the request of,
and all other Obligations incurred by, the Borrower.
          “Loan Document” means this Agreement, the Funds Flow Agreement, the
Intercompany Subordination Agreement, any Guaranty, any Security Agreement, any
Mortgage, any Letter of Credit Application, any Filing Authorization Letter, the
Fee Letter, the Brazilian Pledge Agreement, the Canadian Guarantee, the Canadian
Security Agreement, the Canadian Pledge Agreement, the German Security
Agreements, the German Pledge Agreement, the Meridian Pledge Agreements, the
Ratification Agreement, and any other agreement, instrument, and other document
executed and delivered pursuant hereto or thereto or otherwise evidencing or
securing any Loan, any Letter of Credit Obligation or any other Obligation;
provided that Loan Documents shall not include any Hedging Agreement.
          “Loan Party” means the Borrower or any Guarantor.
          “Lockbox Bank” has the meaning specified therefor in Section 8.01(a).
          “Lockboxes” has the meaning specified therefor in Section 8.01(a).
          “Material Adverse Effect” means a material adverse effect on any of
(i) the operations, business, assets, properties, or financial condition of the
Parent and its Subsidiaries taken as a whole, (ii) the ability of any Loan Party
to perform any of its obligations under any Loan Document to which it is a
party, (iii) the legality, validity or enforceability of this Agreement or any
other Loan Document, or (iv) the rights and remedies of any Agent or any Lender
under any Loan Document.

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          “Material Contract” means, with respect to the Parent and its
Subsidiaries, (i) the contracts or agreements involving the top 15 customers
based on revenues of the Parent and its Subsidiaries for the most recent Fiscal
Year, and (ii) all other contracts or agreements the loss of which could
reasonably be expected to result in a Material Adverse Effect to the Loan
Parties taken as a whole.
          “Meijer Receivables” means Accounts Receivable owing from Meijer Great
Lakes Limited Partnership with a due date no later than 75 days after the
invoice date.
          “Meridian” means Meridian Corporation Limited (formerly known as
Meridian VAT Corporation Limited), a company incorporated in the Isle of Jersey.
          “Meridian Pledge Agreements” means the Security Interest Agreements,
dated as of March 17, 2006, executed and delivered by each of the Parent and
HS&A Acquisition — UK, Inc., a Texas corporation, in favor of Collateral Agent,
for the benefit of the Agents and Lenders.
          “Meridian Subsidiaries” means Meridian and each of its direct and
indirect Subsidiaries.
          “Milestone Accounts” shall mean Accounts Receivable which satisfy each
of the following criteria: (i) they arise out of a contract between Borrower or
a Domestic Guarantor and a customer of Borrower or such Domestic Guarantor,
which contract provides for services to be performed by such Borrower or
Domestic Guarantor to be divided into “units” or “milestones” and such Borrower
or Domestic Guarantor shall be entitled to collect and enforce payment in full
from the customer for such Account Receivable despite other “units” or
“milestones” under the contract being not yet completed; (ii) the applicable
Borrower or Domestic Guarantor shall have delivered an invoice for such Account
Receivable and the customer shall have accepted such invoice; and (iii) such
Account Receivable shall not be subject to any offset, setoff or right of
recoupment on the part of the customer.
          “Moody’s” means Moody’s Investors Service, Inc. and any successor
thereto.
          “Mortgage” means a mortgage, deed of trust or deed to secure debt, in
form and substance reasonably satisfactory to the Agents, made by a Loan Party
in favor of the Collateral Agent for the benefit of the Agents and the Lenders,
securing the Obligations and delivered to the Collateral Agent pursuant to the
provisions hereof or otherwise.
          “Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.
          “Net Amount of Eligible Accounts Receivable” means the aggregate
unpaid invoice amount of Eligible Accounts Receivable less, without duplication,
sales, excise or similar taxes, returns, discounts, chargebacks, claims, advance
payments, credits and allowances of any nature at any time issued, owing,
granted, outstanding, available or claimed with respect to such Eligible
Accounts Receivable.

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          “Net Cash Proceeds” means, (i) with respect to any Disposition by any
Person or any of its Subsidiaries, the amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred consideration) by or on behalf of such Person
or such Subsidiary, in connection therewith after deducting therefrom only
(A) the amount of any Indebtedness secured by any Permitted Lien on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other than
Indebtedness under this Agreement), (B) reasonable expenses related thereto
incurred by such Person or such Subsidiary in connection therewith, (C) transfer
taxes paid to any taxing authorities by such Person or such Subsidiary in
connection therewith, and (D) net income taxes to be paid in connection with
such Disposition (after taking into account any tax credits or deductions and
any tax sharing arrangements) and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Person or any of its Subsidiaries, or the
sale or issuance by any Person or any of its Subsidiaries of any shares of its
Capital Stock, the aggregate amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of such Person or such
Subsidiary in connection therewith, after deducting therefrom only
(A) reasonable expenses related thereto incurred by such Person or such
Subsidiary in connection therewith, (B) transfer taxes paid by such Person or
such Subsidiary in connection therewith and (C) net income taxes to be paid in
connection therewith (after taking into account any tax credits or deductions
and any tax sharing arrangements); in each case of clause (i) and (ii) to the
extent, but only to the extent, that the amounts so deducted are (x) actually
paid to a Person that, except in the case of reasonable out-of-pocket expenses,
is not an Affiliate of such Person or any of its Subsidiaries and (y) properly
attributable to such transaction or to the asset that is the subject thereof.
          “New Lending Office” has the meaning specified therefor in
Section 2.08(d).
          “New Subsidiary” has the meaning specified therefor in
Section 7.01(b).
          “Non-Insignificant Subsidiary” means any Subsidiary of the Parent that
is not an Insignificant Subsidiary.
          “Non-U.S. Lender” has the meaning specified therefor in
Section 2.08(d).
          “North American Consolidated Net Income” means, with respect to any
Person for any period, the net income (loss) of such Person and its North
American Subsidiaries for such period, determined on a consolidated basis and in
accordance with GAAP.
          “North American Excess Cash Flow” means, with respect to any Person
for any period, determined for such Person and its North American Subsidiaries
on a consolidated basis in accordance with GAAP, (a) North American Consolidated
Net Income of such Person and its North American Subsidiaries for such period,
plus (b) without duplication the sum of the following amounts of such Person and
its North American Subsidiaries for such period: (i) any non-cash extraordinary
or non-recurring losses or any non-cash losses solely to the extent that they
will not result in cash charges in any future period, (ii) losses from
discontinued operations, (iii) all non-cash items of such Person and its North
American Subsidiaries to the extent deducted in determining North American
Consolidated Net Income for such period, and (iv)

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income tax expense, minus (c) without duplication the sum of the following
amounts of such Person and its North American Subsidiaries for such period:
(i) any non-cash extraordinary or non-recurring gains or any non-cash gains
solely to the extent that they will not result in cash receipts in any future
period, (ii) gains or income from discontinued operations, (iii) interest
income, (iv) any tax credits, net operating losses or other net tax benefits
recognized during such period on account of any prior period, (v) all cash
principal payments on Indebtedness (excluding voluntary prepayments of the Term
Loan made pursuant to Section 2.05(b)(ii) and voluntary prepayments of the
Delayed Draw Term Loans made pursuant to Section 2.05(b)(iii)) of such Person
and its North American Subsidiaries made during such period (but in the case of
the Revolving Loans or other revolving credit facilities, only to the extent
there is an equivalent permanent reduction of the Total Revolving Credit
Commitment or the commitment to provide such other revolving credit facility) to
the extent such Indebtedness is permitted to be incurred, and such payments are
permitted to be made, under this Agreement, (vii) cash payments of taxes by such
Person and its North American Subsidiaries during such period, net of refunds
received by such Person and its North American Subsidiaries during such period,
(viii) the cash portion of Capital Expenditures made by such Person and its
North American Subsidiaries during such period to the extent permitted to be
made under this Agreement (net of (A) any proceeds reinvested in accordance with
Section 2.05(d)(iv), and (B) any proceeds of related financings (other than
Revolving Loans) with respect to such expenditures), (ix) the excess, if any, of
Working Investment at the end of such period over Working Investment at the
beginning of such period (or, if the difference results in an amount that is
less than zero, minus the excess, if any, of Working Investment at the beginning
of such period over Working Investment at the end of such period), (x) cash
restructuring charges of such Person and its North American Subsidiaries whether
accrued in such period or a prior period, and (xi) reasonable transaction
related fees and expenses incurred reasonably contemporaneously with the date
hereof or the Effective Date by such Person or its North American Subsidiaries
in connection with the transactions contemplated hereby.
          “North American Subsidiary” means any Subsidiary of a Person that is
organized under the laws of the United States, the District of Columbia, or
Canada.
          “North American Working Investment” means, at any date of
determination thereof, (i) the sum, for any Person and its North American
Subsidiaries, of (A) the unpaid face amount of all Accounts Receivable of such
Person and its North American Subsidiaries as at such date of determination,
plus (B) the aggregate amount of prepaid expenses of such Person and its North
American Subsidiaries as at such date of determination, minus (ii) the sum, for
such Person and its North American Subsidiaries, of (A) the unpaid amount of all
accounts payable of such Person and its North American Subsidiaries as at such
date of determination, plus (B) the aggregate amount of all accrued expenses of
such Person and its North American Subsidiaries as at such date of determination
(including deferred compensation, but, excluding from accounts payable and
accrued expenses, the current portion of long-term debt and all accrued interest
and taxes).
          “Notice of Borrowing” has the meaning specified therefor in
Section 2.02(a).
          “Obligation Currency” has the meaning specified therefor in
Section 12.25.

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          “Obligations” means all present and future indebtedness, obligations,
and liabilities of each Loan Party to the Agents and the Lenders, or any of
them, under the Loan Documents, whether or not the right of payment in respect
of such claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured,
and whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 9.01. Without limiting the generality of the
foregoing, the Obligations of each Loan Party under the Loan Documents include
(a) the obligation (irrespective of whether a claim therefor is allowed in any
Insolvency Proceeding) to pay principal, interest, charges, expenses, fees,
reasonable attorneys fees and disbursements, indemnities and other amounts
payable by such Person under the Loan Documents, and (b) the obligation of such
Person to reimburse any amount in respect of any of the foregoing that any Agent
or any Lender (in its sole discretion) may elect to pay or advance on behalf of
such Person.
          “Original Financing Agreement” has the meaning specified therefor in
the recitals hereto.
          “Original Loan Documents” has the meaning specified therefor in
Section 12.23.
          “Other Taxes” has the meaning specified therefor in Section 2.08(b).
          “Parent” has the meaning specified therefor in the preamble hereto.
          “Participant Register” has the meaning specified therefor in
Section 12.07(g).
          “Payment Office” means the Administrative Agent’s office located at
299 Park Avenue, 22nd Floor, New York, NY 10171 or at such other office or
offices of the Administrative Agent as may be designated in writing from time to
time by the Administrative Agent to the Collateral Agent and the Borrower.
          “PBGC” means the Pension Benefit Guaranty Corporation or any successor
thereto.
          “Permits” has the meaning specified therefor in Section 6.01(n).
          “Permitted Discretion” means a determination made in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment.
          “Permitted Dispositions” means (a) Dispositions of obsolete, worn-out,
or surplus equipment in the ordinary course of business, (b) Dispositions of
other property or assets for cash in an aggregate amount not less than the fair
market value of such property or assets, provided that the Net Cash Proceeds of
such Dispositions in the case of clauses (a) and (b) do not exceed $1,000,000 in
the aggregate, (c) the use or transfer of cash and Cash Equivalents by the
Parent and its Subsidiaries in a manner that is not prohibited by the terms of
this Agreement or the other Loan Documents, (d) the licensing or sublicensing by
the Parent and its Subsidiaries, (i) on a non-exclusive basis, of patents,
trademarks, copyrights, and other intellectual property rights in the ordinary
course of business, or (ii) on a non-exclusive or exclusive basis, patents,
trademarks, copyrights, and other intellectual property rights in connection
with a Disposition permitted

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under clause (s) of this definition, (e) the granting of leases or subleases to
other Persons not materially interfering with the conduct of business of any of
the Loan Parties, (f) the abandonment or other Disposition of patents,
trademarks, copyrights or other intellectual property rights that are neither
necessary nor economically desirable in the operation of the Loan Parties’
business, (g) the Disposition of Accounts Receivable in connection with the
collection or compromise thereof in the ordinary course of business and in a
manner not inconsistent with the provisions of this Agreement (excluding any
securitization, factoring, or similar transaction), (h) the sale or issuance of
(i) the Capital Stock of any Subsidiary of the Parent to PRG-Schultz USA (so
long as such sale or issuance is made subject to Collateral Agent’s Liens on
such Capital Stock), (ii) PRG-Schultz USA’s Capital Stock to the Parent (so long
as such sale or issuance is made subject to Collateral Agent’s Liens on such
Capital Stock), or (iii) the Parent’s Capital Stock to any Person (so long as a
Change of Control would not result therefrom), (i) sales or other Dispositions
of assets from any Subsidiary of the Parent (other than a Person composing the
Borrower) to the Borrower, to any Domestic Guarantor, or to the Canadian
Guarantor, (j) sales or other Dispositions of equipment or supplies from
PRG-Schultz USA to any Domestic Loan Party, (k) sales or other Dispositions of
equipment or supplies from PRG-Schultz USA to any Foreign Subsidiary in the
ordinary course of business and consistent with historical practices of
PRG-Schultz USA, (l) sales or other Dispositions of assets from any Foreign
Subsidiary (other than the Canadian Guarantor) to any Foreign Guarantor,
(m) sales or other Dispositions of assets from any Subsidiary of the Parent that
is not a Person composing the Borrower or a Guarantor to the Parent or any of
its Subsidiaries, (n) transfers of property subject to a casualty event upon
receipt of the net cash proceeds of such casualty event and application of such
net cash proceeds to the Obligations to the extent required under
Section 2.05(c), (o) [intentionally omitted], (p) investments expressly
permitted under Section 7.02(e) to the extent constituting Dispositions,
(q) Dispositions expressly permitted under Section 7.02(c)(ii), (r) voluntary
terminations of Hedging Agreements, and (s) Dispositions set forth in that
certain letter agreement regarding Dispositions dated as of March 17, 2006
between the Agents and Borrower.
          “Permitted Indebtedness” means:
          (a) any Indebtedness owing to any Agent and any Lender under this
Agreement and the other Loan Documents;
          (b) Indebtedness listed on Schedule 7.02(b), and any Permitted
Refinancing thereof;
          (c) [intentionally omitted];
          (d) purchase money Indebtedness and Capitalized Lease Obligations
incurred to enable a Loan Party to acquire equipment in the ordinary course of
its business, and any Permitted Refinancing thereof, which Indebtedness does not
exceed $2,000,000 at any time outstanding;
          (e) Indebtedness in respect of stay, customs or appeals bonds required
(i) in the ordinary course of business of the Parent and its Subsidiaries,
(ii) in connection with the enforcement of rights or claims of the Parent or one
of its Subsidiaries, or (iii) in connection with any judgment that has not given
rise to an Event of Default;

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          (f) Indebtedness of the Parent or any of its Subsidiaries under any
Hedging Agreement so long as such Hedging Agreements are used solely as a part
of its normal business operations as a risk management strategy or hedge against
changes resulting from market operations and not as a means to speculate for
investment purposes on trends and shifts in financial or commodities markets;
          (g) Indebtedness composing Permitted Intercompany Investments;
          (h) Indebtedness in respect of surety bonds, performance bonds and
performance and completion guarantees required in the ordinary course of
business of the Parent and its Subsidiaries, which Indebtedness does not exceed
$250,000 at any time outstanding;
          (i) solely for the period from the date of this Agreement to the date
that the Term Loan is funded, Indebtedness of the Parent evidenced by the Senior
Notes in an aggregate principal amount not to exceed $52,000,000;
          (j) solely for the period from the date of this Agreement to the
Delayed Draw Term Loan Commitment Expiry Date, Indebtedness of the Parent
evidenced by the Senior Convertible Notes in an aggregate principal amount not
to exceed $60,000,000 (not including any paid-in-kind interest on such
Indebtedness pursuant to the terms of the Indenture for the 10% Senior
Convertible Notes as of the date hereof);
          (k) Subordinated Debt and any Permitted Refinancing thereof;
          (l) unsecured Indebtedness in an aggregate amount not to exceed
$1,000,000 at any time outstanding;
          (m) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument and consisting of
obligations in respect of cash management or pooling or netting services,
overdraft protections and similar arrangements in each case in connection with
cash management and deposit accounts arising in the ordinary course of business;
          (n) Indebtedness arising in connection with endorsement of instruments
for deposit in the ordinary course of business;
          (o) Indebtedness incurred in connection with the financing of
insurance premiums in the ordinary course of business in an aggregate amount not
to exceed $1,500,000 at any time outstanding;
          (p) [intentionally omitted];
          (q) Indebtedness incurred in connection with a Permitted Disposition
solely to the extent arising under agreements providing for customary
indemnification, adjustments of the purchase price, or similar adjustments;
          (r) Contingent Obligations of the Parent in respect of Indebtedness
permitted to be incurred pursuant to clauses (a), (b), (d) — (g), or (m) —
(q) of this definition, in respect of

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Indebtedness of any Subsidiary of the Parent that is permitted to be incurred
hereunder, or in respect of obligations of any Domestic Subsidiary or the
Canadian Guarantor; and
          (s) unsecured Indebtedness in an aggregate principal amount not to
exceed $2,600,000 to finance the acquisition of certain software products and
services from Microsoft Corporation, pursuant to the Loan Agreement dated as of
June 30, 2006, between De Lage Landen Financial Services, Inc. and Parent and
any Permitted Refinancing thereof.
          “Permitted Intercompany Investments” means (a) investments consisting
of loans or other cash investments among the Domestic Loan Parties or the
Canadian Guarantor so long as all parties to such transaction are party to the
Intercompany Subordination Agreement, (b) investments consisting of loans (or,
solely if required by applicable law or thin capitalization rules,
contributions) by any Domestic Loan Party or the Canadian Guarantor to any
Foreign Guarantor (other than the Canadian Guarantor) so long as (i) all parties
to such transaction are party to the Intercompany Subordination Agreement, and
(ii) the aggregate amount of such investments outstanding at any time (net of
any repayment thereof) does not exceed $3,000,000, (c) investments consisting of
loans (or, solely if required by applicable law or thin capitalization rules,
contributions) by any Loan Party to any Foreign Subsidiary (other than any
Foreign Guarantor or the Meridian Subsidiaries) so long as the aggregate amount
of such investments outstanding at any time (net of any repayment thereof) does
not exceed $3,000,000, (d) investments consisting of loans (or, solely if
required by applicable law or thin capitalization rules, contributions) by any
Loan Party to any Meridian Subsidiary so long as the aggregate amount of such
investments outstanding at any time (net of any repayment thereof) does not
exceed $3,000,000, (e) investments consisting of loans (or, solely if required
by applicable law or thin capitalization rules, contributions) by any Subsidiary
of the Parent that is not the Borrower or a Guarantor to any other Subsidiary of
the Parent that is not the Borrower or a Guarantor, and (f) Transfer Pricing
arrangements entered into in the ordinary course of business from time to time
among divisions of the Parent or any of its Subsidiaries, Parent and any of its
Subsidiaries, or any of Parent’s Subsidiaries.
          “Permitted Investments” means (a) investments in cash and Cash
Equivalents, (b) Permitted Intercompany Investments, (c) Permitted
Reorganization Transactions, (d) Hedging Agreements so long as such Hedging
Agreements are used solely as a part of normal business operations as a risk
management strategy or hedge against changes resulting from market operations
and not as a means to speculate for investment purposes on trends and shifts in
financial or commodities markets, (e) loans to one or more directors, officers
or other employees of the Parent or its Subsidiaries in connection with any such
director’s, officer’s or employee’s acquisition of shares of Capital Stock of
the Parent in an amount not greater than the purchase price paid by such
director, officer or employee for such shares of Capital Stock and in an
aggregate amount not to exceed $250,000 at any time outstanding, (f) investments
received by the Parent or any of its Subsidiaries pursuant to any plan of
reorganization or liquidation or other similar arrangement that has gone
effective in an Insolvency Proceeding of any Person, (g) the endorsement of
negotiable instruments held for collection in the ordinary course of business,
(h) deposits made in the ordinary course of business to secure the performance
of leases or to obtain utilities, (i) advances to employees of the Parent or its
Subsidiaries made in the ordinary course of business; provided that the
aggregate amount of such advances at any time outstanding shall not exceed
$250,000, (j) the acquisition by the Borrower or any Domestic Guarantor of
Accounts

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Receivable held by the Parent or any of its Subsidiaries; provided that (i) any
such acquisition is in the ordinary course of business, and (ii) the acquired
Accounts Receivable are payable or dischargeable in accordance with customary
terms, (k) Indebtedness expressly permitted by clause (g) of the definition of
“Permitted Indebtedness” (without duplication of any other clause in this
definition) or clause (r) of the definition of “Permitted Indebtedness”, in each
case, solely to the extent constituting investments, (l) Liens expressly
permitted by clause (f) of the definition of “Permitted Liens” solely to the
extent constituting investments, (m) [intentionally omitted], (n) investments
made by the Borrower or any of its Subsidiaries in the form of non-cash
consideration received in connection with a Disposition described in clauses (c)
— (r) of the definition of “Permitted Dispositions”, and (o) other investments
in an aggregate amount not to exceed $250,000 outstanding at any time.
          “Permitted Liens” means:
          (a) Liens securing the Obligations;
          (b) Liens for taxes, assessments, levies, or governmental charges the
payment of which is not overdue by more than 30 days and, if overdue by more
than 30 days (i) such taxes, assessments, levies, or governmental are being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP, or (ii) secure taxes,
assessments, levies, or governmental charges in an aggregate amount not to
exceed $50,000.
          (c) Liens such as carriers’, warehousemen’s, mechanics’, materialmen’s
and other similar Liens arising in the ordinary course of business and securing
obligations (other than Indebtedness for borrowed money) that are not overdue by
more than 30 days and, if overdue by more than 30 days (i) are being contested
in good faith and by appropriate proceedings promptly initiated and diligently
conducted, and a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor, or (ii) secure obligations in an
aggregate amount not to exceed $50,000;
          (d) Liens described on Schedule 7.02(a), and any Lien granted as a
modification, renewal, extension, replacement, or substitute therefor so long as
such modification, renewal, extension, replacement, or substitute therefor does
not extend coverage thereof to other property or assets;
          (e) Liens arising under Capitalized Leases or securing purchase money
Indebtedness permitted under the definition of Permitted Indebtedness; provided,
however, that (A) no such Lien shall extend to or cover any other property of
any Loan Party or any of its Subsidiaries (other than the proceeds and products
of the property that is the subject of the Capitalized Lease or purchase money
Indebtedness and accessions thereto), and (B) the principal amount of the
Indebtedness secured by any such Lien shall not exceed the lesser the fair
market value or the cost of the property so held or acquired and customary fees
incurred in connection therewith;
          (f) deposits and pledges of cash securing (i) obligations incurred in
respect of workers’ compensation, unemployment insurance or other forms of
governmental insurance or

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benefits, (ii) the performance of bids, tenders, leases, contracts (other than
for the payment of money) and statutory obligations, (iii) obligations on surety
or appeal bonds, but only to the extent such deposits or pledges are made or
otherwise arise in the ordinary course of business and secure obligations not
past due, or (iv) letters of credit or bank guarantees to support payment of
items set forth in this clause (f);
          (g) easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that do not (i) secure
obligations for the payment of money or (ii) materially impair the value of such
property or its use by any Loan Party or any of its Subsidiaries in the normal
conduct of such Person’s business;
          (h) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Parent or any of its
Subsidiaries;
          (i) (i) non-exclusive licenses or sub-licenses by the Parent or any of
its Subsidiaries of patents, trademarks, copyrights, or other intellectual
property rights in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of the business of the Parent or any
of its Subsidiaries, or (ii) exclusive or non-exclusive licenses or sub-licenses
by the Parent or any of its Subsidiaries of patents, trademarks, copyrights, or
other intellectual property rights in connection with a Disposition expressly
permitted by clause (s) of the definition of “Permitted Dispositions”;
          (j) precautionary financing statement filings regarding operating
leases or consignments of goods;
          (k) Liens arising out of the existence of judgments or awards not
giving rise to an Event of Default;
          (l) landlords’ liens under leases to which the Parent or any of its
Subsidiaries is a party;
          (m) Liens securing refinancing Indebtedness permitted to be incurred
under clause (d) of the definition of “Permitted Indebtedness”; provided, that
such Liens do not extend to any property or assets other than the property or
assets that served as collateral for the refinanced Indebtedness;
          (n) bankers’ Liens, rights of setoff and other similar Liens existing
solely with respect to Cash and Cash Equivalents on deposit in one or more
accounts maintained by Parent or any of its Subsidiaries, in each case granted
in the ordinary course of business of such Person in favor of the bank or banks
with which such accounts are maintained, securing amounts owing to such bank or
its affiliates with respect to cash management, letters of credit, and operating
account arrangements, including those involving pooled accounts and netting
arrangements; provided that in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness for borrowed money.
          (o) Liens (i) on advances of Cash or Cash Equivalents or Permitted
Investments in favor of the seller of any property to be acquired in an
investment permitted hereunder, (ii) on any earnest money deposits made by the
Parent or any of its Subsidiaries in

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connection with any letter of intent or purchase agreement permitted hereunder,
and (iii) consisting of any agreement to dispose of property in a Disposition
permitted under Section 7.02(c);
          (p) [intentionally omitted];
          (q) Liens securing Indebtedness in an aggregate amount not to exceed
$100,000 arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Parent or its
Subsidiaries in the ordinary course of business; and
          (r) other Liens securing Indebtedness in an aggregate amount not to
exceed $200,000.
          “Permitted Merger” means (a) the merger or consolidation of a Domestic
Subsidiary (other than a Person composing the Borrower) or the Canadian
Guarantor with and into a Person composing the Borrower, a Domestic Guarantor,
or the Canadian Guarantor, (b) the merger, consolidation or amalgamation of a
Foreign Subsidiary (other than the Canadian Guarantor) with and into a Foreign
Guarantor (other than the Canadian Guarantor), and (c) the merger of any
Subsidiary of a Person composing the Borrower that is not a Loan Party with and
into a Person composing the Borrower or another Subsidiary of such Person, in
the case of each of clauses (a), (b), and (c), so long as (i) no Event of
Default shall have occurred or be continuing either before or after giving
effect to such merger, (ii) the Borrower gives the Agents at least 15 days prior
written notice of such merger, (iii) (A) in the case of a merger involving a
Person composing the Borrower, such Person is the continuing or surviving
Person, (B) in the case of a merger involving a Domestic Guarantor (other than a
merger involving a Person composing the Borrower), the continuing or surviving
Person is, or simultaneously therewith becomes, a Domestic Guarantor, (C) in the
case of a merger involving the Canadian Guarantor (other than a merger involving
a Person composing the Borrower or a Domestic Guarantor), the continuing or
surviving Person is, or simultaneously therewith becomes, the Canadian
Guarantor, (D) in the case of a merger involving a Foreign Guarantor (other than
the Canadian Guarantor), the continuing or surviving Person is, or
simultaneously becomes, a Foreign Guarantor (other than the Canadian Guarantor),
and (v) the Agents’ and Lenders’ Lien in all or any portion of the Collateral,
including without limitation, the existence, perfection, and priority of any
Lien thereon, are not adversely affected by such merger.
          “Permitted Preferred Stock” means and refers to (a) any Preferred
Stock issued by the Parent (and not by one or more of its Subsidiaries) that is
not Prohibited Preferred Stock, and (b) prior to the Delayed Draw Term Loan
Commitment Expiry Date, the Series A Preferred Stock.
          “Permitted Refinancing” means any extension, refinancing, or
modification of any Indebtedness; provided that (a) after giving effect to such
extension, refinancing or modification, the amount of such Indebtedness is not
greater than the amount of Indebtedness outstanding immediately prior to such
extension, refinancing or modification plus accrued interest thereon and the
fees incurred in connection with the extension, refinancing, or modification,
(b) such extension, refinancing or modification does not result in an increase
in the

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interest rate with respect to the Indebtedness so extended, refinanced, or
modified, (c) such extension, refinancing or modification does not result in a
shortening of the average weighted maturity of the Indebtedness so extended,
refinanced, or modified, (d) if the Indebtedness that is extended, refinanced,
or modified was subordinated in right of payment to the Obligations, then the
terms and conditions of the extension, refinancing, or modification must include
subordination terms and conditions that are at least as favorable to the Agents
and the Lenders as those that were applicable to the extended, refinanced, or
modified Indebtedness, and (e) the Indebtedness that is extended, refinanced, or
modified is not recourse to any Person that is liable on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness that was extended, refinanced, or modified.
          “Permitted Reorganization Transaction” means (a) the dissolution,
liquidation, or winding-up of any Domestic Subsidiary (other than a Person
composing the Borrower) or the Canadian Guarantor so long as (i) the assets (if
any) of such Domestic Subsidiary or the Canadian Guarantor are transferred to a
Domestic Loan Party, (ii) no Event of Default shall have occurred and be
continuing either immediately before or after giving effect to such transaction,
(iii) the Agents’ and Lenders’ Lien in any Collateral, including, without
limitation, the existence, perfection and priority of any Lien thereon, are not
adversely affected by such dissolution or winding-up, and (vi) such Domestic
Loan Party shall have executed and delivered or authorized, as applicable, any
and all security agreements, financing statements, fixture filings, and other
documentation reasonably requested by any Agent in order to include the
transferred assets within the Collateral, or (b) the dissolution, liquidation,
or winding-up of any Foreign Subsidiary (other than the Canadian Guarantor) so
long as (i) the assets of such Foreign Subsidiary are transferred to a Foreign
Guarantor (other than the Canadian Guarantor) or its parent, (ii) no Event of
Default shall have occurred and be continuing either immediately before or after
giving effect to such transaction, (iii) the Agents’ and Lenders’ Liens in any
Collateral, including, without limitation, the existence, perfection and
priority of any Lien thereon, are not adversely affected by such dissolution or
winding-up, and (iv) the applicable Foreign Guarantor shall have executed and
delivered or authorized, as applicable, any and all security agreements,
financing statements, fixture filings, and other documentation reasonably
requested by any Agent in order to include the transferred assets within the
Collateral.
          “Person” means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
          “Post-Default Rate” means a rate of interest per annum equal to the
rate of interest otherwise in effect from time to time pursuant to the terms of
this Agreement plus 2.0 percentage points, or, if a rate of interest is not
otherwise in effect, interest at the highest rate specified herein for any Loan
(or in the case of the Letter of Credit Fee, the highest Letter of Credit Fee
specified herein) prior to the Event of Default plus 2.0 percentage points.
          “PPSA” means the Personal Property Security Act of the applicable
Canadian province or provinces in respect of the Canadian Guarantor, each as
amended from time to time.
          “PR Partnership” means PRG-Schultz Puerto Rico, a foreign partnership
organized under the laws of Puerto Rico.

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          “Preferred Stock” means, as applied to the Capital Stock of any
Person, the Capital Stock of any class or classes (however designated) that is
preferred with respect to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
          “PRG-Schultz USA” has the meaning specified therefor in the preamble
hereto.
          “Prohibited Preferred Stock” means any Preferred Stock that by its
terms is mandatorily redeemable or subject to any other payment obligation
(including any obligation to pay dividends, other than dividends of shares of
Preferred Stock of the same class and series payable in kind or dividends of
shares of common stock) on or before a date that is less than 6 months after the
Final Maturity Date, or, on or before the date that is less than 6 months after
the Final Maturity Date, is redeemable at the option of the holder thereof for
cash or assets or securities (other than distributions in kind of shares of
Preferred Stock of the same class and series or of shares of common stock).
          “property” means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
          “Pro Rata Share” means:
          (a) with respect to a Lender’s obligation to make Revolving Loans, to
participate in Letters of Credit, and to reimburse the L/C Issuer with respect
to Letters of Credit, and right to receive payments of interest, fees, and
principal with respect thereto, the percentage obtained by dividing (i) such
Lender’s Revolving Credit Commitment, by (ii) the Total Revolving Credit
Commitment, provided that if the Total Revolving Credit Commitment has been
reduced to zero, the numerator shall be the unpaid principal amount of such
Lender’s Revolving Loans and its interest in the Letter of Credit Obligations
and the denominator shall be the unpaid principal amount of all Revolving Loans
and Letter of Credit Obligations,
          (b) with respect to a Lender’s obligation to make the Term Loan and
right to receive payments of interest, fees, and principal with respect thereto,
the percentage obtained by dividing (i) such Lender’s Term Loan Commitment, by
(ii) the Total Term Loan Commitment, provided that if the Total Term Loan
Commitment has been reduced to zero, the numerator shall be the unpaid principal
amount of such Lender’s portion of the Term Loan and the denominator shall be
the unpaid principal amount of the Term Loan,
          (c) with respect to a Lender’s obligation to make the Delayed Draw
Term Loans and right to receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender’s Delayed
Draw Term Loan Commitment, by (ii) the Total Delayed Draw Term Loan Commitment,
provided that if the Total Delayed Draw Term Loan Commitment has been reduced to
zero, the numerator shall be the unpaid principal amount of such Lender’s
portion of the Delayed Draw Term Loans and the denominator shall be the unpaid
principal amount of the Delayed Draw Term Loans, and
          (d) with respect to all other matters (including the indemnification
obligations arising under Section 10.05), the percentage obtained by dividing
(i) the sum of such Lender’s

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Revolving Credit Commitment, the unpaid principal amount of such Lender’s
portion of the Term Loan, the unpaid principal amount of such Lender’s portion
of the Delayed Draw Term Loans, and such Lender’s Delayed Draw Term Loan
Commitment, by (ii) the sum of the Total Revolving Credit Commitment, the
aggregate unpaid principal amount of the Term Loan, the aggregate unpaid
principal amount of the Delayed Draw Term Loans, and the Total Delayed Draw Term
Loan Commitment; provided, that, if such Lender’s Revolving Credit Commitment
shall have been reduced to zero, such Lender’s Revolving Credit Commitment shall
be deemed to be the unpaid principal amount of such Lender’s Revolving Loans and
its interest in the Letter of Credit Obligations and if the Total Revolving
Credit Commitment shall have been reduced to zero, the Total Revolving Credit
Commitment shall be deemed to be the unpaid principal amount of all Revolving
Loans and Letter of Credit Obligations.
          “Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Borrower and its Subsidiaries that
is subject to a control agreement in favor of Collateral Agent, upon which the
Collateral Agent has a perfected first priority Lien, and that is on deposit
with banks, or in securities accounts with securities intermediaries, or any
combination thereof.
          “Ratification Agreement” means a Ratification Agreement, substantially
in the form of Exhibit R-1, among the Collateral Agent and the Loan Parties.
          “Rating Agencies” has the meaning specified therefor in Section 2.07.
          “Redemption Transaction” means (a) the repayment of 100% of the Senior
Notes, (b) the repayment or conversion to common Capital Stock of the Parent of
100% of the Senior Convertible Notes, and (c) the redemption or conversion to
common Capital Stock of the Parent of 100% of the Series A Preferred Stock.
          “Redemption Transaction Documents” means the agreements, instruments,
and documents executed in connection with the Redemption Transaction, as amended
or modified in accordance with the terms hereof and thereof.
          “Reference Bank” means JPMorgan Chase Bank, N.A. and its successors or
any other commercial bank that is a member of the Federal Reserve System with a
combined capital and surplus and undivided profits of not less than $500,000,000
designated by the Administrative Agent to the Borrower from time to time;
provided that if Wells Fargo Foothill, Inc. or one of its Affiliates is
appointed as Administrative Agent hereunder, the “Reference Bank” shall be Wells
Fargo Bank, N.A. and its successors or any other commercial bank that is a
member of the Federal Reserve System with a combined capital and surplus and
undivided profits of not less than $500,000,000 designated by the Administrative
Agent to the Borrower from time to time.
          “Reference Rate” means the rate of interest publicly announced by the
Reference Bank in New York, New York from time to time as its reference rate,
base rate or prime rate; provided, however, that the Reference Rate shall be
subject to a minimum rate of 8.25 percentage points per annum, and, accordingly,
to the extent that the Reference Rate on any day would be less than the
foregoing minimum rate, the Reference Rate hereunder for such day automatically
shall be deemed increased to such minimum rate. The reference rate, base rate or

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prime rate is determined from time to time by the Reference Bank as a means of
pricing some loans to its borrowers and neither is tied to any external rate of
interest or index nor necessarily reflects the lowest rate of interest actually
charged by the Reference Bank to any particular class or category of customers.
Subject to the minimum rate for the Reference Rate described in this definition,
each change in the Reference Rate shall be effective from and including the date
such change is publicly announced as being effective.
          “Reference Rate Loan” means each portion of a Loan that bears interest
at a rate determined by reference to the Reference Rate.
          “Register” has the meaning specified therefor in Section 12.07(d).
          “Registered Loan” has the meaning specified therefor in
Section 12.07(d).
          “Regulation T”, “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
          “Reimbursement Obligations” means the obligation of the Borrower to
reimburse the Administrative Agent or any Lender for amounts payable by the
Administrative Agent or any Lender under a Letter of Credit Guaranty in respect
of any drawing made under any Letter of Credit, together with interest thereon
as provided in Section 2.04.
          “Reinvestment Eligible Funds” means (a) Net Cash Proceeds which, but
for the application of Section 2.05(d)(iv), would be required to be used to
prepay the Loans pursuant to Section 2.05(c)(vi) or (b) Extraordinary Receipts
consisting of insurance or condemnation proceeds paid as the result of loss,
destruction, casualty, condemnation or expropriation which, but for the
application of Section 2.05(d)(iv), would be required to be used to prepay the
Loans pursuant to Section 2.05(c)(viii).
          “Reinvestment Notice” has the meaning specified therefor in
Section 2.05(d).
          “Related Fund” means a fund, money market account, investment account
or other account managed by a Lender or an Affiliate of such Lender or its
investment manager.
          “Related Party Assignment” has the meaning specified therefor in
Section 12.07(b).
          “Related Party Register” has the meaning specified therefor in Section
12.07(d).
          “Release” means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including the
movement of Hazardous Materials through or in the ambient air, soil, surface or
ground water, or property.

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          “Remedial Action” means, with respect to the presence of Hazardous
Materials at concentrations exceeding those allowed by Environmental Laws, all
actions taken to (i) clean up, remove, remediate, contain, treat, monitor,
assess, evaluate or in any other way address Hazardous Materials in the
environment; (ii) prevent or minimize a Release or threatened Release of
Hazardous Materials so they do not migrate or endanger or threaten to endanger
public health or welfare or the environment; (iii) perform pre-remedial studies
and investigations and post-remedial operation and maintenance activities; or
(iv) any other actions authorized by 42 U.S.C. § 9601.
          “Reportable Event” means an event described in Section 4043 of ERISA
(other than an event not subject to the provision for 30-day notice to the PBGC
under the regulations promulgated under such Section).
          “Required Lenders” means Lenders whose Pro Rata Shares (calculated
under clause (d) of the definition thereof) aggregate more than 50%.
          “Reserve Percentage” means, on any day, for any Lender, the maximum
percentage prescribed by the Board (or any successor Governmental Authority) for
determining the reserve requirements (including any basic, supplemental,
marginal, or emergency reserves) that are in effect on such date with respect to
eurocurrency funding (currently referred to as “eurocurrency liabilities”) of
that Lender.
          “Revolving Credit Commitment” means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans to the Borrower in the amount
set forth opposite such Lender’s name in Schedule R-1 hereto, as such amount may
be terminated or reduced from time to time in accordance with the terms of this
Agreement.
          “Revolving Loan” and “Revolving Loans” have the meaning specified
therefor in Section 2.01(a)(i).
          “Revolving Loan Lender” means a Lender with a Revolving Credit
Commitment.
          “Revolving Loan Obligations” means any Obligations with respect to the
Revolving Loans (including the principal thereof, the interest thereon, and the
fees and expenses specifically related thereto).
          “SEC” means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
          “Securities Act” means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.
          “Securities Account” means a securities account (as that term is
defined in the Code).
          “Securitization” has the meaning specified therefor in Section 2.07.

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          “Securitization Parties” has the meaning specified therefor in
Section 2.07.
          “Security Agreement” means a Security Agreement, in form and substance
reasonably satisfactory to the Agents, made by a Loan Party in favor of the
Collateral Agent for the benefit of the Agents, the L/C Issuer, and the Lenders,
securing the Obligations and delivered to the Collateral Agent.
          “Senior Convertible Notes” means the 10% Senior Convertible Notes due
2011 issued by the Parent pursuant to the Indenture for the 10% Senior
Convertible Notes.
          “Senior Notes” means the 11% Senior Notes due 2011 issued by the
Parent pursuant to the Indenture for the 11% Senior Notes.
          “Series A Preferred Stock” means the 9% senior series A convertible
participating Preferred Stock of the Parent.
          “Settlement Period” has the meaning specified therefor in
Section 2.02(d)(i) hereof.
          “Solvent” means, with respect to any Person on a particular date, that
on such date (a) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (b) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature, and (c) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
unreasonably small capital.
          “Standard & Poor’s” means Standard & Poor’s Ratings Services, a
division of The McGraw Hill Companies, Inc. and any successor thereto.
          “Subordinated Debt” means Indebtedness of the Parent that is on terms
and conditions (including payment terms, interest rates, covenants, remedies,
defaults and other material terms) reasonably satisfactory to the Agents and
which has been expressly subordinated in right of payment to all Indebtedness of
the Parent under the Loan Documents by the execution and delivery of a
subordination agreement, in form and substance reasonably satisfactory to the
Agents.
          “Subsidiary” means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company, or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of

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determination, owned or controlled directly or indirectly through one or more
intermediaries, by such Person.
          “Supervalu Receivables” means Accounts Receivables owing from
Supervalu Inc. with a due date no later than 120 days after the invoice date.
          “Taxes” has the meaning specified therefor in Section 2.08(a).
          “Term Loan” has the meaning specified therefor in Section 2.01(a)(ii).
          “Term Loan Commitment” means, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan to the Borrower
in the amount set forth in Schedule R-1 hereto, as the same may be terminated or
reduced from time to time in accordance with the terms of this Agreement.
          “Term Loan Lender” means a Lender with a Term Loan Commitment.
          “Term Loan LIBOR Margin” means 4.50 percentage points; provided that
on and after the later of (a) the date that is 12 months after the Effective
Date, and (b) the date that is the last day of the third consecutive month in
which the sum of the Revolving Loan Obligations, plus the Letter of Credit
Obligations, plus the Term Loan Obligations as of the last day of each such
month is less than TTM EBITDA for the 12 month period ended as of the last day
of the corresponding month, the “Term Loan LIBOR Margin” shall be
4.00 percentage points.
          “Term Loan Obligations” means any Obligations with respect to the Term
Loan (including the principal thereof, the interest thereon, and the fees and
expenses specifically related thereto).
          “Term Loan Reference Margin” means 1.75 percentage points; provided
that on and after the later of (a) the date that is 12 months after the
Effective Date, and (b) the date that is the last day of the third consecutive
month in which the sum of the Revolving Loan Obligations, plus the Letter of
Credit Obligations, plus the Term Loan Obligations as of the last day of each
such month is less than TTM EBITDA for the 12 month period ended as of the last
day of the corresponding month, the “Term Loan Reference Margin” shall be
1.25 percentage points.
          “Termination Event” means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes any Loan Party or any of its ERISA
Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the
IRC, (iii) the filing of a notice of intent to terminate an Employee Plan or the
treatment of an Employee Plan amendment as a termination under Section 4041 of
ERISA, (iv) the institution of proceedings by the PBGC to terminate an Employee
Plan, or (v) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Employee Plan.
          “Title Insurance Policy” means a mortgagee’s loan policy, in form and
substance satisfactory to the Collateral Agent, together with all endorsements
made from time to time thereto, issued by or on behalf of a title insurance
company satisfactory to the Collateral Agent,

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insuring the Lien created by a Mortgage in an amount and on terms satisfactory
to the Agents, delivered to the Collateral Agent.
          “Total Commitment” means the sum of the Total Revolving Credit
Commitment, the Total Term Loan Commitment, and the Total Delayed Draw Term Loan
Commitment.
          “Total Delayed Draw Term Loan Commitment” means the sum of the amounts
of the Lenders’ Delayed Draw Term Loan Commitments, which amount is equal to
$31,000,000 as of the Effective Date.
          “Total Revolving Credit Commitment” means the sum of the amounts of
the Lenders’ Revolving Credit Commitments, which amount is $20,000,000 as of the
Effective Date.
          “Total Term Loan Commitment” means the sum of the amounts of the
Lenders’ Term Loan Commitments, which amount is $45,000,000 as of the Effective
Date.
          “Toys R Us Receivables” means Accounts Receivables owing from Toys R
Us, Inc. with a due date no later than 75 days after the invoice date.
          “Transfer Pricing” means the price that is assumed to have been
charged by one segment of an organization for products and services it provides
to another segment of such organization, in order to calculate each segment’s
profit and loss separately.
          “Transferee” has the meaning specified therefor in Section 2.08(a).
          “TTM EBITDA” means, as of any date of determination and with respect
to a Person, the Consolidated EBITDA of such Person and its Subsidiaries for the
12 month period most recently ended.
          “U.S. Retail Key Client Claim Retention Rate” means the sum of (a) the
net-approved claims of U.S. Retail Key Clients that are in the Claims Reporting
System as of most recent fiscal quarter and (b) changes to work-in-process for
U.S. Retail Key Clients for such fiscal quarter, divided by the gross claims of
U.S. Retail Key Clients that are in the Claims Reporting System produced during
such fiscal quarter.
          “U.S. Retail Key Client Effective Fee Rate” means, as of any date of
determination, the revenue of the Borrower and the Domestic Guarantors (other
than the PR Partnership) from the U.S. Retail Key Clients for the most recent
fiscal quarter as determined in accordance with GAAP divided by net-approved
claims of U.S. Retail Key Clients that are in the Claims Reporting System for
such fiscal quarter.
          “U.S. Retail Key Client WIP” means the claims of U.S. Retail Key
Clients that are in the Claims Reporting System not yet approved for invoicing,
but presented to the client or vendor awaiting approval; provided that U.S.
Retail Key Client WIP shall not include any claim (a) that is more than 6 months
old (determined from the date that the payment giving rise to the claim was
made), (b) that is in an amount less than $1,000.

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          “U.S. Retail Key Clients” means, as of any date of determination, the
top 40 United States retail clients of the Borrower and the Domestic Guarantors
(other than the PR Partnership) based on revenue recognized by the Borrower and
the Domestic Guarantors (other than the PR Partnership) for the 12 months most
recently ended (not including (a) any client that has filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors, made an
assignment for the benefit of creditors, had filed again it any petition or
other application for relief under the Bankruptcy Code or any such other law, or
(b) clients that are the United States or any other Governmental Authority
(unless all steps required by the Administrative Agent in connection therewith,
including notice to the United States Government under the Federal Assignment of
Claims Act or any action under any state statute comparable to the Federal
Assignment of Claims Act, have been duly taken in a manner satisfactory to the
Administrative Agent; provided that from the Effective Date through and
including the date that is 120 days after the Effective Date, U.S. Retail Key
Client WIP of the Army & Air Force Exchange in an aggregate amount not to exceed
$250,000 (when aggregated with any Accounts Receivable of the Army & Air Force
Exchange that are not ineligible because of the proviso in clause (g) of the
definition of “Eligible Accounts Receivable”) shall not be ineligible under this
clause (b) regardless of whether all steps required by the Administrative Agent
to be taken under the Federal Assignment of Claims Act or any state statute
comparable to the Federal Assignment of Claims Act have been taken).
          “Wal Mart Holdback Receivables” means Accounts Receivable owing from
Wal-Mart Stores, Inc. equal to $217,000 due in the fiscal quarter ending
September 30, 2006 and $24,000 due in the fiscal quarter ending September 30,
2007.
          “WARN” has the meaning specified therefor in Section 6.01(z).
          “Working Investment” means, at any date of determination thereof,
(i) the sum, for any Person and its Subsidiaries, of (A) the unpaid face amount
of all Accounts Receivable of such Person and its Subsidiaries as at such date
of determination, plus (B) the aggregate amount of prepaid expenses of such
Person and its Subsidiaries as at such date of determination, minus (ii) the
sum, for such Person and its Subsidiaries, of (A) the unpaid amount of all
accounts payable of such Person and its Subsidiaries as at such date of
determination, plus (B) the aggregate amount of all accrued expenses of such
Person and its Subsidiaries as at such date of determination (including deferred
compensation, but, excluding from accounts payable and accrued expenses,
liabilities related to equity based compensation, and the current portion of
long-term debt and all accrued interest and taxes).
     Section 1.02 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation,” whether or not so
expressly stated in each such instance and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The word “will” shall be construed to have the same meaning and effect as the
word “shall.” Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document

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as from time to time amended, restated, supplemented or otherwise modified
(subject to any restrictions on such amendments, restatements, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words
“herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. References in this Agreement to “determination” by
any Agent include estimates honestly made by such Agent (in the case of
quantitative determinations) and beliefs honestly held by such Agent (in the
case of qualitative determinations).
     Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP. All terms used in this Agreement which are defined in Article 8
or Article 9 of the Code and which are not otherwise defined herein shall have
the same meanings herein as set forth therein.
     Section 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding,” provided, however, that with respect to a computation
of fees or interest payable to any Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day. When the payment of
any obligation or the performance of any covenant, duty or obligation is stated
to be due on a day that is not a Business Day or delivery of any notice,
document, certificate or other writing is stated to be required on a day that is
not a Business Day, the date of such payment (other than as described in the
definition of “Interest Period”), performance or delivery shall extend to the
immediately succeeding Business Day.
ARTICLE II.
THE LOANS
     Section 2.01 Commitments.
          (a) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth:
               (i) each Revolving Loan Lender severally agrees to make loans
(each, a “Revolving Loan” and, collectively, the “Revolving Loans”) to the
Borrower at any time and from time to time from the Effective Date to the Final
Maturity Date, or until the earlier reduction of its Revolving Credit Commitment
to zero in accordance with the terms hereof, in an aggregate principal amount of
Revolving Loans at any time outstanding not to exceed the lesser of (A) the
amount of such Lender’s Revolving Credit Commitment, and (B) the amount of such
Lender’s Pro Rata Share of the then extant Borrowing Base;

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               (ii) each Term Loan Lender severally agrees to make a term loan
(collectively, the “Term Loan”) to the Borrower on the Effective Date, in an
aggregate principal amount equal to the amount of such Lender’s Term Loan
Commitment; and
               (iii) each Delayed Draw Term Loan Lender severally agrees to make
term loans (each a “Delayed Draw Term Loan” and, collectively, the “Delayed Draw
Term Loans”) to the Borrower at any time and from time to time from the
Effective Date to the Delayed Draw Term Loan Commitment Expiry Date, or until
the earlier reduction of its Delayed Draw Term Loan Commitment to zero in
accordance with the terms hereof, in an amount requested by the Borrower not to
exceed such Delayed Draw Term Loan Lender’s Pro Rata Share of (A) the Delayed
Draw Term Loan Amount, minus (B) the aggregate amount of all Delayed Draw Term
Loans previously made hereunder (without regard to any repayment or prepayment
thereof).
          (b) Notwithstanding the foregoing, “Revolving Loans” (as defined in
the Original Financing Agreement) outstanding under the Original Financing
Agreement on the Effective Date, if any (the “Existing Revolving Loans”) shall
be converted into Revolving Loans hereunder, it being understood that no
repayment of the Existing Revolving Loans is being effected hereby, but merely
an amendment, restatement, and renewal in accordance with the terms hereof. Any
Revolving Loans made pursuant to the conversion of any Existing Revolving Loans
into Revolving Loans shall be deemed made by the Revolving Loan Lenders
proportionately to their Pro Rata Shares of the Total Revolving Credit
Commitment.
          (c) Further notwithstanding the foregoing:
               (i) The aggregate principal amount of Revolving Loans outstanding
at any time to the Borrower shall not exceed the lower of (A) the difference
between (x) the Total Revolving Credit Commitment and (y) the aggregate Letter
of Credit Obligations and (B) the difference between (x) the then current
Borrowing Base and (y) the aggregate Letter of Credit Obligations. The Revolving
Credit Commitment of each Lender shall automatically and permanently be reduced
to zero on the Final Maturity Date. Within the foregoing limits, the Borrower
may borrow, repay and reborrow the Revolving Loans, on or after the Effective
Date and prior to the Final Maturity Date, subject to the terms, provisions and
limitations set forth herein.
          (d) The aggregate principal amount of the Term Loan made on the
Effective Date shall not exceed the Total Term Loan Commitment. Any principal
amount of the Term Loan that is repaid or prepaid may not be reborrowed.
          (e) Any principal amount of the Delayed Draw Term Loans that is repaid
or prepaid may not be reborrowed.
     Section 2.02 Making the Loans.
          (a) The Borrower shall give the Administrative Agent prior telephonic
notice (immediately confirmed in writing, in substantially the form of
Exhibit 2.02 hereto (a “Notice of Borrowing”)), (i) in the case of a LIBOR Rate
Loan, not later than 12:00 noon (New York City time) on the date that is 3
Business Days prior to the date of the proposed Loan (or such shorter

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period as the Administrative Agent is willing, in its sole discretion, to
accommodate from time to time), or (ii) in the case of a Reference Rate Loan,
not later than 12:00 noon (New York City time) on the of the proposed Loan (or
such shorter period as the Administrative Agent is willing, in its sole
discretion, to accommodate from time to time). Such Notice of Borrowing shall
specify (A) the principal amount of the proposed Loan, and (B) the proposed
borrowing date, which must be a Business Day, and, with respect to the Term
Loan, must be the Effective Date, (C) whether the proposed Loan is to be a
Reference Rate Loan or a LIBOR Rate Loan, and (D) in the case of a LIBOR Rate
Loan, the initial Interest Period to be applicable thereto, which shall be a
period contemplated by the definition of the term “Interest Period”. If no
election as to the type of Loan is specified, then the requested Loan shall be a
Reference Rate Loan. If no Interest Period is specified with respect to any
requested LIBOR Rate Loan, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. The Administrative Agent and the
Lenders may act without liability upon the basis of written, telecopied or
telephonic notice believed by the Administrative Agent in good faith to be from
the Borrower (or from any Authorized Officer thereof designated in writing
purportedly from the Borrower to the Administrative Agent). The Borrower hereby
waives the right to dispute the Administrative Agent’s record of the terms of
any such telephonic Notice of Borrowing. The Administrative Agent and each
Lender shall be entitled to rely conclusively on any Authorized Officer’s
authority to request a Loan on behalf of the Borrower until the Administrative
Agent receives written notice to the contrary. The Administrative Agent and the
Lenders shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing.
          (b) Each Notice of Borrowing pursuant to this Section 2.02 shall be
irrevocable and the Borrower shall be bound to make a borrowing in accordance
therewith. Except for Revolving Loans deemed made pursuant to Section 3.01(c),
each Revolving Loan shall be made in a minimum amount of $100,000 and shall be
in integral multiples of $100,000 in excess thereof. No more than 4 Delayed Draw
Term Loans shall be made during the period of time from the Effective Date to
the Delayed Draw Term Loan Commitment Expiry Date and each Delayed Draw Term
Loan shall be made in a minimum amount of $50,000 and shall be in integral
multiples of $50,000 in excess thereof
          (c) (i) Except as otherwise provided in this Section 2.02(c), all
Loans under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Total Revolving Credit
Commitment, the Total Term Loan Commitment, and the Total Delayed Draw Term Loan
Commitment, as the case may be, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender’s
obligations to make a Loan requested hereunder, nor shall the Commitment of any
Lender be increased or decreased as a result of the default by any other Lender
in that other Lender’s obligation to make a Loan requested hereunder, and each
Lender shall be obligated to make the Loans required to be made by it by the
terms of this Agreement regardless of the failure by any other Lender.
               (ii) Notwithstanding any other provision of this Agreement, and
in order to reduce the number of fund transfers among the Borrower, the Agents
and the Lenders, the Borrower, the Agents and the Lenders agree that the
Administrative Agent may (but shall not be obligated to), and the Borrower and
the Lenders hereby irrevocably authorize the Administrative Agent to, fund, on
behalf of the Lenders with a Revolving Credit Commitment,

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Revolving Loans pursuant to Section 2.01, subject to the procedures for
settlement set forth in Section 2.02(d); provided, however, that (a) the
Administrative Agent shall in no event fund any such Revolving Loans if the
Administrative Agent shall have received written notice from the Collateral
Agent or the Required Lenders prior to the time of the proposed Revolving Loan
that one or more of the conditions precedent contained in Section 5.02 will not
be satisfied at the time of the proposed Revolving Loan, and (b) the
Administrative Agent shall not otherwise be required to determine that, or take
notice whether, the conditions precedent in Section 5.02 have been satisfied. If
the Borrower gives a Notice of Borrowing requesting a Revolving Loan and the
Administrative Agent elects not to fund such Revolving Loan on behalf of the
Revolving Loan Lenders, then promptly after receipt of the Notice of Borrowing
requesting such Revolving Loan, the Administrative Agent shall notify each
Revolving Loan Lender of the specifics of the requested Revolving Loan and that
it will not fund the requested Revolving Loan on behalf of the Revolving Loan
Lenders. If the Administrative Agent notifies the Revolving Loan Lenders that it
will not fund a requested Revolving Loan on behalf of such Revolving Loan
Lenders, each Revolving Loan Lender shall make its Pro Rata Share of the
Revolving Loan available to the Administrative Agent, in immediately available
funds, at the Payment Office no later than 3:00 p.m. (New York City time)
(provided that the Administrative Agent requests payment from such Revolving
Loan Lender not later than 1:00 p.m. (New York City time)) on the date of the
proposed Revolving Loan. The Administrative Agent will make the proceeds of such
Revolving Loans available to the Borrower on the day of the proposed Revolving
Loan by causing an amount, in immediately available funds, equal to the proceeds
of all such Revolving Loans received by the Administrative Agent at the Payment
Office or the amount funded by the Administrative Agent on behalf of the
Revolving Loan Lenders to be deposited in an account designated by the Borrower.
               (iii) If the Administrative Agent has notified the Revolving Loan
Lenders that the Administrative Agent, on behalf of such Revolving Loan Lenders,
will fund a particular Revolving Loan pursuant to Section 2.02(c)(ii), the
Administrative Agent may assume that each such Revolving Loan Lender has made
such amount available to the Administrative Agent on such day and the
Administrative Agent, in its sole discretion, may, but shall not be obligated
to, cause a corresponding amount to be made available to the Borrower on such
day. If the Administrative Agent makes such corresponding amount available to
the Borrower and such corresponding amount is not in fact made available to the
Administrative Agent by any such Revolving Loan Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for 3 Business Days and thereafter at the
Reference Rate. During the period in which such Revolving Loan Lender has not
paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Administrative Agent to the Borrower shall, for
all purposes hereof, be a Revolving Loan made by the Administrative Agent for
its own account. Upon any such failure by a Revolving Loan Lender to pay the
Administrative Agent, the Administrative Agent shall promptly thereafter notify
the Borrower of such failure and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent for its own account.

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               (iv) Nothing in this Section 2.02(c) shall be deemed to relieve
any Revolving Loan Lender from its obligations to fulfill its Revolving Credit
Commitment hereunder or to prejudice any rights that the Administrative Agent or
the Borrower may have against any Revolving Loan Lender as a result of any
default by such Revolving Loan Lender hereunder.
          (d) (i) With respect to all periods for which the Administrative Agent
has funded Revolving Loans pursuant to Section 2.02(c), on Wednesday of each
week, or if the applicable Wednesday is not a Business Day, then on the
following Business Day, or such shorter period as the Administrative Agent may
from time to time select (any such week or shorter period being herein called a
“Settlement Period”), the Administrative Agent shall notify each Revolving Loan
Lender of the unpaid principal amount of the Revolving Loans outstanding as of
the last day of each such Settlement Period. In the event that such amount is
greater than the unpaid principal amount of the Revolving Loans outstanding on
the last day of the Settlement Period immediately preceding such Settlement
Period (or, if there has been no preceding Settlement Period, the amount of the
Revolving Loans made on the date of such Revolving Loan Lender’s initial
funding), each Revolving Loan Lender shall promptly (and in any event not later
than 2:00 p.m. (New York City time) if the Administrative Agent requests payment
from such Lender not later than 12:00 noon (New York City time) on such day)
make available to the Administrative Agent its Pro Rata Share of the difference
in immediately available funds. In the event that such amount is less than such
unpaid principal amount, the Administrative Agent shall promptly pay over to
each Revolving Loan Lender its Pro Rata Share of the difference in immediately
available funds. In addition, if the Administrative Agent shall so request at
any time when a Default or an Event of Default shall have occurred and be
continuing, or any other event shall have occurred as a result of which the
Administrative Agent shall determine that it is desirable to present claims
against the Borrower for repayment, each Revolving Loan Lender shall promptly
remit to the Administrative Agent or, as the case may be, the Administrative
Agent shall promptly remit to each Revolving Loan Lender, sufficient funds to
adjust the interests of the Revolving Loan Lenders in the then outstanding
Revolving Loans to such an extent that, after giving effect to such adjustment,
each such Revolving Loan Lender’s interest in the then outstanding Revolving
Loans will be equal to its Pro Rata Share thereof. The obligations of the
Administrative Agent and each Revolving Loan Lender under this Section 2.02(d)
shall be absolute and unconditional. Each Revolving Loan Lender shall only be
entitled to receive interest on its Pro Rata Share of the Revolving Loans which
have been funded by such Revolving Loan Lender.
               (ii) In the event that any Revolving Loan Lender fails to make
any payment required to be made by it pursuant to Section 2.02(d)(i), the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Revolving Loan Lender together with interest thereon, for each
day from the date such payment was due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for 3 Business Days and
thereafter at the Reference Rate. During the period in which such Revolving Loan
Lender has not paid such corresponding amount to the Administrative Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Administrative Agent to the
Borrower shall, for all purposes hereof, be a Revolving Loan made by the
Administrative Agent for its own account. Upon any such failure by a Revolving
Loan Lender to pay the Administrative Agent, the Administrative Agent shall

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promptly thereafter notify the Borrower of such failure and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent for its
own account. Nothing in this Section 2.02(d)(ii) shall be deemed to relieve any
Revolving Loan Lender from its obligation to fulfill its Revolving Credit
Commitment hereunder or to prejudice any rights that the Administrative Agent or
the Borrower may have against any Revolving Loan Lender as a result of any
default by such Revolving Loan Lender hereunder.
     Section 2.03 Repayment of Loans; Evidence of Debt.
          (a) The outstanding principal of all Revolving Loans shall be due and
payable on the Final Maturity Date.
          (b) The outstanding principal of the Term Loan shall be repayable in
consecutive quarterly installments, each in an amount equal to $1,250,000, on
the first day of each January, April, July, and October commencing on April 1,
2008. The outstanding principal of the Term Loan shall be repaid in full on the
earlier of (i) the termination of the Total Revolving Credit Commitment and
(ii) the Final Maturity Date.
          (c) The outstanding principal of the Delayed Draw Term Loans shall be
repaid in full on the earlier of (i) the termination of the Total Revolving
Credit Commitment and (ii) the Final Maturity Date.
          (d) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
          (e) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.
          (f) The entries made in the accounts maintained pursuant to paragraphs
(d) or (e) of this Section 2.03 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
          (g) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) in a form furnished by the
Collateral Agent and reasonably satisfactory to the Borrower. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 12.07) be represented by one or
more promissory notes in such form payable to the payee named therein (or, if
such promissory note is a registered note, to such payee and its registered
assigns).

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     Section 2.04 Interest.
          (a) Revolving Loans. Each Revolving Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
making of such Loan until the date on which such principal amount is repaid in
accordance herewith, as follows: (i) if the relevant Revolving Loan is a LIBOR
Rate Loan, at a rate per annum equal to the LIBOR Rate plus 2.00 percentage
points, and (ii) otherwise, at a rate per annum equal to the Reference Rate.
          (b) Term Loan. The Term Loan shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the making of the
Term Loan until the date on which such principal amount is repaid in accordance
herewith, as follows: (i) if the relevant portion of the Term Loan is a LIBOR
Rate Loan, at a rate per annum equal to the LIBOR Rate plus the Term Loan LIBOR
Margin, and (ii) otherwise, at a rate per annum equal to the Reference Rate plus
the Term Loan Reference Margin.
          (c) Delayed Draw Term Loans. Each Delayed Draw Term Loan shall bear
interest on the principal amount thereof from time to time outstanding, from the
date of such Loan until such principal amount is repaid, as follows: (i) if the
relevant Delayed Draw Term Loan is a LIBOR Rate Loan, at a rate per annum equal
to the LIBOR Rate plus the applicable Delayed Draw Term Loan Margin, and
(ii) otherwise, at a rate per annum equal to the Reference Rate plus the
applicable Delayed Draw Term Loan Margin.
          (d) Default Interest and Fees. To the extent permitted by law, upon
the occurrence and during the continuance of an Event of Default, (i) at the
election of the Required Lenders (and written notice of such election shall be
given by such Lenders to each Agent), the principal of, and unpaid interest on,
all Loans shall bear interest, from the date such Event of Default occurred
until the date such Event of Default is cured or waived in writing in accordance
herewith, at all times during such period at a rate per annum equal to the
Post-Default Rate, and (ii) at the election of the Required Lenders (and written
notice of such election shall be given by such Lenders to each Agent), the
Letter of Credit Fees shall be increased by 2.0 percentage points above the per
annum rate otherwise applicable hereunder.
          (e) Interest Payment Dates. Interest on each Reference Rate Loan and
each LIBOR Rate Loan shall be payable monthly, in arrears, on the first day of
each month, commencing on the first day of the month following the month in
which such Loan is made and at maturity (whether upon demand, by acceleration or
otherwise). Interest at the Post-Default Rate shall be payable on demand. The
Borrower hereby authorizes the Administrative Agent to, and the Administrative
Agent may, from time to time, charge the Loan Account pursuant to Section 4.02
with the amount of any interest payment due hereunder.
          (f) General. All interest shall be computed on the basis of a year of
360 days for the actual number of days, including the first day but excluding
the last day, elapsed.
          (g) LIBOR Option.
               (i) LIBOR Election. In lieu of having interest charged at the
rate based upon the Reference Rate, the Borrower shall have the option (the
“LIBOR Option”) to

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have interest on all or a portion of the Loans be charged at a rate of interest
based upon the LIBOR Rate. On the last day of each applicable Interest Period,
unless the Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Reference Rate Loans of
the same type hereunder. At any time that an Event of Default has occurred and
is continuing, the Borrower no longer shall have the option to request that
Loans bear interest at the LIBOR Rate and Administrative Agent shall have the
right to convert the interest rate on all outstanding LIBOR Rate Loans to the
rate then applicable to Reference Rate Loans hereunder.
                    (A) The Borrower may, at any time and from time to time, so
long as no Event of Default has occurred and is continuing, elect to exercise
the LIBOR Option by notifying Administrative Agent prior to 12:00 noon (New York
time) at least 3 Business Days prior to the commencement of the proposed
Interest Period (the “LIBOR Deadline”). Notice of the Borrower’s election of the
LIBOR Option for a permitted portion of the Loans and an Interest Period
pursuant to this Section shall be made by delivery to Administrative Agent of a
LIBOR Notice received by Administrative Agent before the LIBOR Deadline.
Promptly upon its receipt of each such LIBOR Notice, Administrative Agent shall
provide a copy thereof to each of the Lenders having a Commitment of the type to
which such LIBOR Notice relates.
                    (B) Each LIBOR Notice shall be irrevocable and binding on
the Borrower. In connection with each LIBOR Rate Loan, the Borrower shall
indemnify, defend, and hold Administrative Agent and the Lenders harmless
against any loss, cost, or expense incurred by Administrative Agent or any
Lender as a result of (1) the payment of any principal of any LIBOR Rate Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (2) the conversion of any LIBOR Rate Loan
other than on the last day of the Interest Period applicable thereto, or (3) the
failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date
specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, and
expenses, collectively, “Funding Losses”). Funding Losses shall, with respect to
Administrative Agent or any Lender, be deemed to equal the amount determined by
Administrative Agent or such Lender to be the excess, if any, of (x) the amount
of interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period therefor), minus (y) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Administrative Agent
or such Lender would be offered were it to be offered, at the commencement of
such period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Administrative Agent or a Lender delivered to
the Borrower setting forth any amount or amounts that Administrative Agent or
such Lender is entitled to receive pursuant to this Section shall be conclusive
absent manifest error.

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                    (C) The Borrower shall have not more than 5 LIBOR Rate Loans
in effect at any given time. The Borrower only may exercise the LIBOR Option for
LIBOR Rate Loans of at least $500,000 and integral multiples of $100,000 in
excess thereof.
               (ii) Conversions. The Borrower may convert LIBOR Rate Loans at
any time; provided, however, that in the event that LIBOR Rate Loans are
converted or prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any automatic prepayment through
the required application by the Administrative Agent of proceeds of Collateral
in accordance with Section 4.04 or for any other reason, including early
termination of the term of this Agreement or acceleration of all or any portion
of the Obligations pursuant to the terms hereof, the Borrower shall indemnify,
defend, and hold Administrative Agent and the Lenders and their participants
harmless against any and all Funding Losses in accordance with subsection (ii)
above.
               (iii) Special Provisions Applicable to LIBOR Rate.
                    (A) The LIBOR Rate may be adjusted by Administrative Agent
with respect to any Lender on a prospective basis to take into account any
additional or increased costs to such Lender of maintaining or obtaining any
eurodollar deposits or increased costs due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements imposed by
the Board of Governors of the Federal Reserve System (or any successor),
excluding the Reserve Percentage, which additional or increased costs would
increase the cost of funding loans bearing interest at the LIBOR Rate. In any
such event, the affected Lender shall give the Borrower and Administrative Agent
notice of such a determination and adjustment and Administrative Agent promptly
shall transmit the notice to each other Lender and, upon its receipt of the
notice from the affected Lender, the Borrower may, by notice to such affected
Lender (1) require such Lender to furnish to the Borrower a statement setting
forth the basis for adjusting such LIBOR Rate and the method for determining the
amount of such adjustment, or (2) repay the LIBOR Rate Loans with respect to
which such adjustment is made (together with any amounts due under subsection
(ii)(B) above).
                    (B) In the event that any change in market conditions or any
law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Administrative Agent
and the Borrower and Administrative Agent promptly shall transmit the notice to
each other Lender and (1) in the case of any LIBOR Rate Loans of such Lender
that are outstanding, the date specified in such Lender’s notice shall be deemed
to be the last day of the

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Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Reference Rate Loans, and (2) the Borrower shall not be entitled to elect the
LIBOR Option until such Lender determines that it would no longer be unlawful or
impractical to do so.
               (iv) No Requirement of Matched Funding. Anything to the contrary
contained herein notwithstanding, neither Administrative Agent, nor any Lender,
nor any of their participants, is required actually to acquire eurodollar
deposits to fund or otherwise match fund any Obligation as to which interest
accrues at the LIBOR Rate. The provisions of this Section shall apply as if each
Lender or its participants had match funded any Obligation as to which interest
is accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
     Section 2.05 Reduction of Commitments; Prepayment of Loans.
          (a) Reduction of Commitments.
               (i) Revolving Credit Commitments. The Total Revolving Credit
Commitment shall terminate on the Final Maturity Date. The Borrower may reduce
the Total Revolving Credit Commitment to an amount (which may be zero) not less
than the sum of (A) the aggregate unpaid principal amount of all Revolving Loans
then outstanding, (B) the aggregate principal amount of all Revolving Loans not
yet made as to which a Notice of Borrowing has been given by the Borrower under
Section 2.02, (C) the Letter of Credit Obligations at such time and (D) the
stated amount of all Letters of Credit not yet issued as to which a request has
been made and not withdrawn. Each such reduction shall be in an amount which is
an integral multiple of $1,000,000 (unless the Total Revolving Credit Commitment
in effect immediately prior to such reduction is less than $1,000,000), shall be
made by providing not less than 3 Business Days prior written notice to the
Administrative Agent and shall be irrevocable; provided that, a notice of
termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the consummation of financing that will refinance the
Indebtedness under this Agreement, in which case such notice may be revoked by
the Borrower if such condition is not satisfied (by notice to the Administrative
Agent on or prior to the specified effective date), and if such notice is
revoked then, anything to the contrary contained herein notwithstanding, the
failure to terminate the Commitments on the date specified in such notice shall
not constitute an Event of Default. Once reduced, the Total Revolving Credit
Commitment may not be increased. Each such reduction of the Total Revolving
Credit Commitment shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share thereof.
               (ii) Term Loan. The Total Term Loan Commitment shall terminate
upon the making of the Term Loan on the Effective Date.
               (iii) Delayed Draw Term Loans. The Total Delayed Draw Term Loan
Commitment shall terminate on the Delayed Draw Term Loan Commitment Expiry Date.
The Delayed Draw Term Loan Commitment of each Lender shall automatically and
permanently be reduced to the extent that such Lender makes a Delayed Draw Term
Loan to the Borrower.

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          (b) Optional Prepayment.
               (i) Revolving Loans. The Borrower may prepay the principal of any
Revolving Loan, in whole or in part, without premium or penalty other than as
set forth in the Fee Letter.
               (ii) Term Loan. So long as (A) no Default or Event of Default
shall have occurred and be continuing, and (B) Availability is greater than or
equal to $10,000,000 after giving effect to such payment, the Borrower may, upon
at least 3 Business Days prior written notice to the Administrative Agent,
prepay the principal of the Term Loan, in whole or in part. Each prepayment made
pursuant to this Section 2.05(b)(ii) shall be accompanied by the payment of
accrued interest to the date of such payment on the amount prepaid. Each such
prepayment shall be applied against the remaining installments of principal due
on the Term Loan in the inverse order of maturity (for the avoidance of doubt,
any amount that is due and payable on the Final Maturity Date shall constitute
an installment).
               (iii) Delayed Draw Term Loans. So long as (A) no Default or Event
of Default shall have occurred and be continuing, (B) Availability is greater
than or equal to $10,000,000 after giving effect to such payment, and (C) the
outstanding principal amount of the Term Loan has been paid in full, the
Borrower may, upon at least 3 Business Days prior written notice to the
Administrative Agent, prepay the principal of the Delayed Draw Term Loans, in
whole or in part. Each prepayment made pursuant to this Section 2.05(b)(iii)
shall be accompanied by the payment of accrued interest to the date of such
payment on the amount prepaid.
          (c) Mandatory Prepayment.
               (i) The Borrower will immediately prepay the Revolving Loans
within 1 Business Day at any time that the aggregate principal amount of all
Revolving Loans plus the outstanding amount of all Letter of Credit Obligations
exceeds the lesser of (A) the Total Revolving Credit Commitment, and (B) the
Borrowing Base, to the full extent of any such excess. On each day that any
Revolving Loans or Letter of Credit Obligations are outstanding, the Borrower
shall hereby be deemed to represent and warrant to the Agents and the Lenders
that the Borrowing Base calculated as of such day equals or exceeds the
aggregate principal amount of all Revolving Loans and Letter of Credit
Obligations outstanding on such day. If at any time after the Borrower has
complied with the first sentence of this Section 2.05(c)(i), the aggregate
Letter of Credit Obligations is greater than the lesser of (x) the Total
Revolving Credit Commitment, and (y) the then current Borrowing Base, the
Borrower shall provide cash collateral to the Administrative Agent in an amount
equal to 105% of such excess, which cash collateral shall be deposited in the
Letter of Credit Collateral Account and, provided that no Event of Default shall
have occurred and be continuing, returned to the Borrower, at such time as the
aggregate Letter of Credit Obligations plus the aggregate principal amount of
all outstanding Revolving Loans no longer exceeds the then current Borrowing
Base.
               (ii) The Borrower will immediately prepay the outstanding
principal amount of the Term Loan and the outstanding principal amount of the
Delayed Draw Term Loans in the event that the Total Revolving Credit Commitment
is terminated for any reason.

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               (iii) The Administrative Agent shall on each Business Day apply
all funds transferred to or deposited in the Administrative Agent’s Account, to
the payment, in whole or in part, of the outstanding principal amount of the
Revolving Loans.
               (iv) Within 10 days of delivery to the Agents and the Lenders of
audited annual financial statements pursuant to Section 7.01(a)(iii), commencing
with the delivery to the Agents and the Lenders of the financial statements for
the Fiscal Year ended December 31, 2007 or, if such financial statements are not
delivered to the Agents and the Lenders on the date such statements are required
to be delivered pursuant to Section 7.01(a)(iii), 10 days after the date such
statements are required to be delivered to the Agents and the Lenders pursuant
to Section 7.01(a)(iii), the Borrower shall prepay the outstanding principal
amount of the Loans in an amount equal to (A) the greater of (x) 50% of Excess
Cash Flow of the Parent and its Subsidiaries for such Fiscal Year, and (y) 50%
of North American Excess Cash Flow of the Parent and its North American
Subsidiaries for such Fiscal Year, minus (B) the sum of (x) the amount of all
voluntary prepayments of the Term Loan made during such period pursuant to
Section 2.05(b)(ii), and (y) the amount of all voluntary prepayments of the
Delayed Draw Term Loans made during such period pursuant to
Section 2.05(b)(iii).
               (v) Within 1 Business Day of delivery to the Agents and the
Lenders of the Borrowing Base Certificate pursuant to Section 7.01(a), the
Borrower will immediately prepay the outstanding principal amount of the Loans
to the extent that the outstanding principal amount of the Term Loan, plus the
outstanding principal amount of the Delayed Draw Term Loans, plus the aggregate
outstanding principal amount of all Revolving Loans, plus the aggregate
outstanding amount of all Letter of Credit Obligations exceeds the aggregate
amount of Collections from Accounts Receivable of the Borrower and the Domestic
Guarantors during the 180 days immediately preceding such date, to the full
extent of any such excess.
               (vi) Within 1 Business Day of the receipt of any proceeds of any
Disposition by the Parent or any of its Domestic Subsidiaries and within 3
Business Days of the receipt of any proceeds of any Disposition by any Foreign
Subsidiary of the Parent, in each case other than a Permitted Disposition (other
than a Permitted Disposition of the type described in clauses (a), (b), and (s)
of the definition of “Permitted Dispositions”), the Borrower shall prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds received by such Person in connection with such Disposition to the
extent that the aggregate amount of Net Cash Proceeds received by all Loan
Parties and their Subsidiaries (and not paid to the Administrative Agent as a
prepayment of the Loans) shall exceed $250,000 for all such Dispositions in any
Fiscal Year. Nothing contained in this subsection (vi) shall permit any Loan
Party or any of its Subsidiaries to make a Disposition of any property other
than a Permitted Disposition.
               (vii) Within 1 Business Day of the receipt of any proceeds of any
issuance or incurrence by the Parent or any of its Domestic Subsidiaries of any
Indebtedness and within 3 Business Days of the receipt of any proceeds of any
issuance or incurrence by any Foreign Subsidiary of any Indebtedness (in each
case, other than Indebtedness referred to in clauses (a), (b), (d) — (j), and
(l) — (s) of the definition of “Permitted Indebtedness”), the Borrower shall
prepay the Loans in an amount equal to 100% of the Net Cash Proceeds received by
such Person in connection therewith. The provisions of this subsection (vii)
shall not be deemed to be

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implied consent to any such issuance or incurrence otherwise prohibited by the
terms and conditions of this Agreement.
               (viii) Within 1 Business Day of the sale or issuance by the
Parent or any of its Domestic Subsidiaries of any shares of its Capital Stock
and within 3 Business Days of the sale or issuance by any Foreign Subsidiary of
any shares of its Capital Stock (in each case, other than issuances of
(A) common Capital Stock by any Subsidiary of the Parent to its parent,
(B) Capital Stock issued by the Parent pursuant to a stock incentive plan for
its or its Subsidiaries’ officers, directors or employees, or (C) common Capital
Stock of the Parent issued upon conversion of the Senior Convertible Notes in
accordance with the Indenture for the 10% Senior Convertible Notes or the
Series A Preferred Stock), the Borrower shall prepay the Loans in an amount
equal to 100% of the Net Cash Proceeds received by such Person in connection
therewith. The provisions of this subsection (viii) shall not be deemed to be
implied consent to any such sale or issuance otherwise prohibited by the terms
and conditions of this Agreement.
               (ix) Within 1 Business Day of the receipt by the Parent or any of
its Domestic Subsidiaries of any Extraordinary Receipts and within 3 Business
Days of the receipt by any Foreign Subsidiary of the Parent of any Extraordinary
Receipts, the Borrower shall prepay the outstanding principal of the Loans in an
amount equal to 100% of such Extraordinary Receipts, net of any reasonable
expenses incurred in collecting such Extraordinary Receipts, to the extent that
the aggregate amount of Extraordinary Receipts received by all Loan Parties and
their Subsidiaries (and not paid to the Administrative Agent as a prepayment of
the Loans) shall exceed $250,000 for all such Extraordinary Receipts in any
Fiscal Year.
               (x) If, at any time, (A) the sum of the outstanding principal
amount of the aggregate outstanding amount of all Term Loan Obligations, plus
the aggregate outstanding amount of all Revolving Loan Obligations, plus the
aggregate outstanding amount of all Letter of Credit Obligations exceeds (B) the
product of (I) 2.00 times (II) TTM EBITDA calculated as of the last month for
which financial statements have most recently been delivered pursuant to Section
7.01(a) (such excess being referred to as the “Limiter Excess”), then the
Borrower shall immediately prepay the Loans in aggregate amount equal to the
Limiter Excess.
          (d) Application of Payments.
               (i) Except as set forth in Section 2.05(d)(iii) below, each
prepayment made pursuant to subsections (c)(iv), (c)(vi), (c)(vii), (c)(viii),
and (c)(ix) above shall be applied, first, to the Term Loan, until paid in full,
second, to the Delayed Draw Term Loans until paid in full, third, to the
Revolving Loans, until paid in full, and fourth, to cash collateralization of
the Letters of Credit in an amount up to 105% of the undrawn amount of all
outstanding Letters of Credit, until such Letters of Credit are cash
collateralized in an amount equal to 105% of the greatest amount for which such
Letters of Credit may be drawn. Each such prepayment of the Term Loan shall be
applied against the remaining installments of principal of the Term Loan in the
inverse order of their maturity (for the avoidance of doubt, any amount that is
due and payable on the Final Maturity Date shall constitute an installment).
               (ii) Each prepayment made pursuant to subsections (c)(v) and
(c)(x) above shall be applied, first, to the Revolving Loans, until paid in
full, second, to cash

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collateralization of the Letters of Credit in an amount up to 105% of the
undrawn amount of all outstanding Letters of Credit, until such Letters of
Credit are cash collateralized in an amount equal to 105% of the greatest amount
for which such Letters of Credit may be drawn, third to the Term Loan, until
paid in full, and fourth, to the Delayed Draw Term Loans until paid in full.
Each such prepayment of the Term Loan shall be applied against the remaining
installments of principal of the Term Loan in the inverse order of their
maturity (for the avoidance of doubt, any amount that is due and payable on the
Final Maturity Date shall constitute an installment).
               (iii) Each prepayment pursuant to Section 2.05(c)(vi), with
respect to proceeds resulting from the Disposition of Accounts Receivable or the
Disposition of all or substantially all of the assets or Capital Stock of any
Person, which Disposition includes Accounts Receivable and other assets, or
pursuant to Section 2.05(c)(ix), with respect to insurance proceeds,
condemnation awards, or payments in lieu thereof related to a casualty or other
loss which includes the loss of Accounts Receivable, in each case, shall be
applied as follows: (A) an amount up to the book value of such Accounts
Receivable (determined at the time of such Disposition or event resulting in
such insurance proceeds or condemnation award) shall be applied, (1) first, to
the outstanding principal amount of the Revolving Loans, until paid in full,
(2) second, to cash collateralization of the Letters of Credit in an amount up
to 105% of the undrawn amount of all outstanding Letters of Credit, until such
Letters of Credit are cash collateralized in an amount equal to 105% of the
greatest amount for which such Letters of Credit may be drawn, (3) third, to the
outstanding principal amount of the Term Loan, until paid in full, and
(4) fourth, the outstanding principal amount of the Delayed Draw Term Loans,
until paid in full, and (B) any remaining proceeds shall be applied, (1) first,
to the outstanding principal amount of the Term Loan, until paid in full,
(2) second, to the outstanding principal amount of the Delayed Draw Term Loans,
until paid in full, (3) third, to the outstanding principal amount of the
Revolving Loans, until paid in full, and (4) fourth, to cash collateralization
of the Letters of Credit in an amount up to 105% of the undrawn amount of all
outstanding Letters of Credit, until such Letters of Credit are cash
collateralized in an amount equal to 105% of the greatest amount for which such
Letters of Credit may be drawn. Each such prepayment of the Term Loan shall be
applied against the remaining installments of principal of the Term Loan in the
inverse order of their maturity (for the avoidance of doubt, any amount that is
due and payable on the Final Maturity Date shall constitute an installment).
               (iv) The foregoing to the contrary notwithstanding, Borrower
shall not be required to make a prepayment otherwise required pursuant to
Section 2.05(c)(vi) or Section 2.05(c)(ix) with Reinvestment Eligible Funds so
long as: (A) no Default or Event of Default has occurred and is continuing on
the date such Person receives such Reinvestment Eligible Funds or on the date
such amounts are to be released to Borrower pursuant to this paragraph (iv),
(B) the Borrower delivers a notice (a “Reinvestment Notice”) on or prior to the
date that the applicable Person is required to apply the monies constituting
such Reinvestment Eligible Funds notifying the Agents of the intent of the
applicable Person to use such Reinvestment Eligible Funds (1) to repair,
restore, or replace the assets that were the subject of the Disposition,
casualty or condemnation giving rise to such amounts with assets of equal or
greater fair market value which will be useful in the conduct of their business
in the ordinary course of business, (2) within the period specified in such
notice, which period shall not to exceed the earlier of (x) 180 days after the
receipt of such Reinvestment Eligible Funds by the applicable Loan Party or its
Subsidiary and (y) the Final Maturity Date, and (C) pending the

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reinvestment described in clause (B)(1) above, such Reinvestment Eligible
Amounts are deposited in a cash collateral account over which Collateral Agent
(on behalf of the Lenders) has a perfected first-priority Lien. If all or any
portion of such Reinvestment Eligible Funds are not used in accordance with the
preceding sentence within the period specified in the Reinvestment Notice, the
remaining portion shall be applied to the Loans in accordance with
Section 2.05(d) on the last day of such specified period.
          (e) Interest and Fees. Any prepayment made pursuant to this
Section 2.05 (other than prepayments made pursuant to subsections (c)(i),
(c)(ii), (c)(iii), (c)(iv), (c)(v), and (c)(x) of this Section 2.05) shall be
accompanied by the payment of accrued interest on the principal amount being
prepaid to the date of prepayment, and if such prepayment would reduce the
amount of the outstanding Loans to zero at a time when the Total Revolving
Credit Commitment has been terminated, such prepayment shall be accompanied by
the payment of all fees accrued to such date pursuant to Section 2.06.
          (f) Cumulative Prepayments. Except as otherwise expressly provided in
this Section 2.05, payments with respect to any subsection of this Section 2.05
are in addition to payments made or required to be made under any other
subsection of this Section 2.05.
     Section 2.06 Fees.
          (a) Unused Line Fee. From and after the Effective Date and until the
date that the Total Revolving Credit Commitment is terminated, the Borrower
shall pay to the Administrative Agent for the account of the Revolving Loan
Lenders, in accordance with their Pro Rata Shares, an unused line fee payable
monthly in arrears on the first day of each month for the month just ended,
commencing October 1, 2007, equal to the product obtained by multiplying (a)
(i) the Total Revolving Credit Commitment minus (ii) the sum of the average
daily principal amount of Revolving Loans and Letter of Credit Obligations
outstanding during such month, times (b) one-half of one percent (0.50%) per
annum for the number of days in said month.
          (b) Fee Letter. In addition to the fees set forth in this Agreement,
the Borrower shall pay to the Collateral Agent the fees set forth in the Fee
Letter in the amounts and on the dates set forth in the Fee Letter.
     Section 2.07 Securitization. The Borrower hereby acknowledges that the
Lenders and their Affiliates may sell or securitize the Loans (a
“Securitization”) through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Loans or the
issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests will be rated by
Moody’s, Standard & Poor’s or one or more other rating agencies (the “Rating
Agencies”). The Borrower shall cooperate with the Lenders and their Affiliates
to effect the Securitization including by (a) amending this Agreement and the
other Loan Documents, and executing such additional documents, as reasonably
requested by the Lenders in connection with the Securitization, provided that
(i) any such amendment or additional documentation does not impose material
additional costs on the Borrower and (ii) any such amendment or additional
documentation does not materially adversely affect the rights, or materially
increase the obligations, of the Borrower under the Loan

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Documents or change or affect in a manner adverse to the Borrower the financial
terms of the Loans, (b) providing such information as may be reasonably
requested by the Lenders in connection with the rating of the Loans or the
Securitization, and (c) providing in connection with any rating of the Loans a
certificate (i) agreeing to indemnify the Lenders and their Affiliates, any of
the Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the “Securitization Parties”)
for any losses, claims, damages or liabilities (the “Liabilities”) to which the
Lenders, their Affiliates or such Securitization Parties may become subject
insofar as the Liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Loan Document
or in any writing delivered by or on behalf of any Loan Party to any Agent or
Lender in connection with any Loan Document or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and such
indemnity shall survive any transfer by the Lenders or their successors or
assigns of the Loans and (ii) agreeing to reimburse the Agents, the Lenders and
their Affiliates for any legal or other expenses reasonably incurred by such
Persons in connection with defending the Liabilities.
     Section 2.08 Taxes.
          (a) Except as otherwise provided in this Section, any and all payments
by any Loan Party hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding (i) taxes imposed on (or measured by) the net income
of any Agent, any Lender or the L/C Issuer (or any transferee or assignee
thereof, including a participation holder (any such entity, a “Transferee”)) as
a result of a present or former connection between such Person and the
jurisdiction of the Governmental Authority imposing the tax (other than any such
connection arising solely from such recipient having executed, delivered or
performed its obligations or received a payment under, or enforced, any of the
Loan Documents), (ii) any branch profit taxes imposed by the United States, or
(iii) by the jurisdiction in which such Person is organized or has its principal
lending office (all such nonexcluded taxes, levies, imposts, deductions, charges
withholdings and liabilities, collectively or individually, “Taxes”). If any
Loan Party shall be required to deduct any Taxes from or in respect of any sum
payable hereunder to any Agent, any Lender or the L/C Issuer (or any
Transferee), (A) the sum payable shall be increased by the amount (an
“additional amount”) necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.08) such Agent, such Lender or the L/C Issuer (or such Transferee)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (B) such Loan Party shall make such deductions, and
(C) such Loan Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
          (b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (“Other Taxes”). Each Loan Party shall deliver to each

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Agent, each Lender and the L/C Issuer official receipts in respect of any Taxes
or Other Taxes payable hereunder promptly after payment of such Taxes or Other
Taxes.
          (c) The Loan Parties hereby jointly and severally indemnify and agree
to hold each Agent, each Lender and the L/C Issuer harmless from and against
Taxes and Other Taxes (including Taxes and Other Taxes imposed on any amounts
payable under this Section 2.08) paid by such Person, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Such indemnification shall be
paid within 10 days from the date on which any such Person makes written demand
therefore specifying in reasonable detail the nature and amount of such Taxes or
Other Taxes.
          (d) Each Lender that is organized under the laws of a jurisdiction
outside the United States (a “Non-U.S. Lender”) agrees that it shall, no later
than the Effective Date (or, in the case of a Lender which becomes a party
hereto pursuant to Section 12.07 hereof after the Effective Date, promptly after
the date upon which such Lender becomes a party hereto) deliver to the Agents
(or, in the case of an assignee of a Lender which (x) is an Affiliate of such
Lender or a Related Fund of such Lender and (y) does not deliver an Assignment
and Acceptance to the Administrative Agent pursuant to the last sentence of
Section 12.07(b) for recordation pursuant to Section 12.07(c), to the assigning
Lender only, and in the case of a participant, to the Lender granting the
participation only) a properly completed and duly executed copy of either U.S.
Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or any subsequent
versions thereof or successors thereto, in each case claiming complete exemption
from U.S. Federal withholding tax and payments of interest hereunder. In
addition, in the case of a Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code,
such Non-U.S. Lender hereby represents to the Agents and the Borrower that such
Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Internal
Revenue Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Parent and is not a
controlled foreign corporation related to the Parent (within the meaning of
Section 864(d)(4) of the Internal Revenue Code), and such Non-U.S. Lender agrees
that it shall promptly notify the Agents in the event any such representation is
no longer accurate. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of a
Lender which becomes a party hereto pursuant to Section 12.07 hereof after the
Effective Date, promptly after the date upon which such Lender becomes a party
hereto) and on or before the date, if any, such Non-U.S. Lender changes its
applicable lending office by designating a different lending office (a “New
Lending Office”). In addition, such Non-U.S. Lender shall deliver such forms
within 20 days after receipt of a written request therefor from any Agent, the
assigning Lender or the Lender granting a participation, as applicable.
Notwithstanding any other provision of this Section 2.08, a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.08(d) that
such Non-U.S. Lender is not legally able to deliver.
          (e) The Loan Parties shall not be required to indemnify any Non-U.S.
Lender, or pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to this Agreement to the extent
that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to

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payments to a New Lending Office, the date such Non-U.S. Lender designated such
New Lending Office with respect to a Loan; provided, however, that this clause
(i) shall not apply to the extent the indemnity payment or additional amounts
any Transferee, or Lender (or Transferee) through a New Lending Office, would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation, or
(ii) the obligation to pay such additional amounts would not have arisen but for
a failure by such Non-U.S. Lender to comply with the provisions of clause
(d) above.
          (f) The obligations of the Loan Parties under this Section 2.08 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
          (g) If any Loan Party is required to pay additional amounts to any
Lender or any Governmental Authority for the account of any Lender as a result
of a change of law occurring after the date hereof, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
or provide to Agent any certificate or document reasonably requested in writing
by the Agent to change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or reduce the amount
of any such indemnity payment or additional amount that may thereafter accrue,
would not require such Lender to disclose any information such Lender deems
confidential and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender; provided that the mere existence of
fees, charges, costs or expenses that such Loan Party has offered and agreed to
pay on behalf of the Lender shall not be deemed to be disadvantageous to the
Lender.
          (h) If any additional amount payable by any Loan Party is made to or
for the account of any Lender on account of Taxes then, if any Lender receives a
refund of such Taxes, such Lender shall reimburse to the Borrower such refund,
net of all out-of-pocket expenses of such Lender that are related to such
refund; provided that (i) such Lender shall not be obligated to disclose to the
Borrower any information regarding its tax affairs and computations, and
(ii) nothing herein shall be construed so as to interfere with the right of such
Lender to arrange its tax affairs as it deems appropriate; provided further that
any Loan Party, upon request of any Agent or Lender, agrees to repay the amount
paid over to the Loan Party (plus any penalties, interest, or other charges
imposed by the relevant Governmental Authority) to such Agent or Lender in the
event such Agent or Lender is required to repay such refund to the relevant
Governmental Authority.
     Section 2.09 Conversion Election. If the Delayed Draw Term Loan Amount is
less than $1,000,000, the Borrower may, so long as no Event of Default shall
have occurred and be continuing, effective as of the Delayed Draw Term Loan
Commitment Expiry Date, elect to convert the Delayed Draw Term Loans into a part
of the Term Loan (the “Conversion Election”) by providing written notice to the
Agents on or prior to the Delayed Draw Term Loan Commitment Expiry Date. If the
Borrower makes the Conversion Election, effective as of the Delayed Draw Term
Loan Commitment Expiry Date, and without any further action or agreement by any
Person, the Delayed Draw Term Loans shall, for all purposes under this

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Agreement and the Loan Documents (including the applicable interest rate
accruing from and after such date), be converted into (and be re-designated as)
a part of the Term Loan (such that the principal amount of the Term Loan shall
be increased by the aggregate principal amount of the Delayed Draw Term Loans)
and shall cease to be Delayed Draw Term Loans. Such conversion shall not
extinguish, release or discharge any Obligations (including accrued and unpaid
interest) outstanding under the Loan Documents, as in effect prior to such
conversion, but instead shall be considered, for all purposes to be a
continuation (as converted) of such Obligations.
ARTICLE III.
LETTERS OF CREDIT
     Section 3.01 Letter of Credit Guaranty.
          (a) In order to assist the Borrower in establishing or opening standby
letters of credit, which shall not have expiration dates that exceed 12 months
from the date of issuance (although, subject to the terms and conditions hereof,
any such standby letter of credit may be extendable for successive periods of up
to 12 months on terms and conditions reasonably satisfactory to the
Administrative Agent and subject to the conditions set forth in Article V) (each
a “Letter of Credit”), with the L/C Issuer, the Borrower has requested the
Administrative Agent to join in the applications for such Letters of Credit, or
guarantee payment or performance of such Letters of Credit and any drafts
thereunder through the issuance of a Letter of Credit Guaranty, thereby lending
the Administrative Agent’s credit to that of the Borrower, and the
Administrative Agent has agreed (subject to the last sentence of this
Section 3.01(a)) to do so. These arrangements shall be coordinated by the
Administrative Agent, subject to the terms and conditions set forth below. The
Administrative Agent shall not be required to be the issuer of any Letter of
Credit. The Borrower will be the account party for the application for each
Letter of Credit, which shall be on a computer transmission system approved by
the Administrative Agent and the L/C Issuer, or such other written form or
computer transmission system as may from time to time be approved by the
Administrative Agent and the L/C Issuer, and shall be duly completed in a manner
reasonably satisfactory to the Administrative Agent, together with such other
certificates, agreements, documents and other papers and information as the
Administrative Agent and the L/C Issuer may reasonably request (the “Letter of
Credit Application”). In the event of any conflict between the terms of any
Letter of Credit Application and this Agreement, for purposes of this Agreement,
the terms of this Agreement shall control. Notwithstanding anything herein to
the contrary, prior to the appointment of Wells Fargo Foothill, Inc. or another
financial institution capable of providing letters of credit as the
Administrative Agent, the Agents and the Lenders shall have no obligation
whatsoever to issue or arrange for the issuance of any Letter of Credit, even if
Borrower has fully satisfied all of the conditions precedent in Section 5.02 (it
being understood and agreed that any request by Borrower to establish or open a
Letter of Credit may be declined for any reason or no reason in the sole and
absolute discretion of the Administrative Agent).
          (b) The aggregate Letter of Credit Obligations shall not exceed the
lowest of (i) the difference between (A) the Total Revolving Credit Commitment
and (B) the aggregate principal amount of all Revolving Loans then outstanding,
(ii) the difference between (A) the

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Borrowing Base and (B) the aggregate principal amount of all Revolving Loans
then outstanding, and (iii) the L/C Subfacility. In addition, the terms and
conditions of all Letters of Credit and all changes or modifications thereof by
the Borrower or the L/C Issuer shall in all respects be subject to the prior
approval of the Administrative Agent in the reasonable exercise of its sole and
absolute discretion; provided, however, that (i) the expiry date of all Letters
of Credit shall be no later than 5 days prior to the Final Maturity Date unless,
on or prior to 5 days prior to the Final Maturity Date either (A) such Letters
of Credit shall be cash collateralized in an amount equal to 105% of the face
amount of such Letters of Credit by deposit of cash in such amount in an account
under the sole and exclusive control of the Administrative Agent for the benefit
of the Administrative Agent or the L/C Issuer (the “Letter of Credit Collateral
Account”) or (B) the Borrower shall provide the Administrative Agent and the
Revolving Loan Lenders with an indemnification, in form and substance reasonably
satisfactory to the Administrative Agent, from a commercial bank or other
financial institution acceptable to the Agents for any Letter of Credit
Obligations with respect to such Letters of Credit and (ii) the Letters of
Credit and all documentation in connection therewith shall be in form and
substance reasonably satisfactory to the Administrative Agent and the L/C
Issuer.
          (c) The Administrative Agent shall have the right, without notice to
the Borrower, to charge the Loan Account with the amount of any and all
Indebtedness, liabilities and obligations of any kind (including indemnification
for breakage costs, capital adequacy and reserve requirement charges) incurred
by the Agents or the Revolving Loan Lenders under the Letter of Credit Guaranty
or incurred by the L/C Issuer with respect to a Letter of Credit at the earlier
of (i) payment by the Administrative Agent or the Revolving Loan Lenders under
the Letter of Credit Guaranty or (ii) the occurrence of any Default or Event of
Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan
hereunder made by the Revolving Loan Lenders to the Borrower, funded by the
Administrative Agent on behalf of the Revolving Loan Lenders and subject to
Section 2.02 of this Agreement. Any charges, fees, commissions, costs and
expenses charged to the Administrative Agent for the Borrower’s account by the
L/C Issuer in connection with or arising out of Letters of Credit or
transactions relating thereto will be charged to the Loan Account in full when
charged to or paid by the Administrative Agent and, when charged, shall be
conclusive on the Borrower absent manifest error. Each of the Revolving Loan
Lenders and the Borrower agrees that the Administrative Agent shall have the
right to make such charges regardless of whether any Default or Event of Default
shall have occurred and be continuing or whether any of the conditions precedent
in Section 5.02 have been satisfied.
          (d) The Borrower unconditionally indemnifies each Agent and each
Lender and holds each Agent and each Lender harmless from any and all loss,
claim or liability incurred by any Agent or any Lender arising from any
transactions or occurrences relating to Letters of Credit, any drafts or
acceptances thereunder, the Collateral relating thereto, and all Obligations in
respect thereof, including any such loss or claim due to any action taken by the
L/C Issuer, other than for any such loss, claim or liability arising out of the
gross negligence or willful misconduct of the L/C Issuer, any Agent or any
Lender as determined by a final non-appealable judgment of a court of competent
jurisdiction. The Borrower further agrees to jointly and severally hold each
Agent and each Lender harmless from any errors or omission, negligence or
misconduct by the L/C Issuer; provided that the foregoing shall not excuse any
Agent or any Lender from any liability to the Borrower to the extent of any
direct damages suffered by the Borrower that are

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caused by such Agent’s or such Lender’s gross negligence or willful misconduct
as determined by a final non-appealable judgment of a court of competent
jurisdiction. The Borrower’s unconditional obligations to each Agent, each
Lender and the L/C Issuer with respect to Letters of Credit hereunder shall not
be modified or diminished for any reason or in any manner whatsoever, other than
as a result of such Agent’s, such Lender’s or the L/C Issuer’s gross negligence
or willful misconduct as determined by a final non-appealable judgment of a
court of competent jurisdiction. The Borrower agrees that any charges incurred
by the Administrative Agent or the L/C Issuer for the Borrower’s account
hereunder may be charged to the Loan Account.
          (e) Upon any payments made to the L/C Issuer under the Letter of
Credit Guaranty, the Agents or the Revolving Loan Lenders, as the case may be,
shall, without prejudice to their rights under this Agreement (including that
such unreimbursed amounts shall constitute Loans hereunder), acquire by
subrogation, any rights, remedies, duties or obligations granted or undertaken
by the Borrower in favor of the L/C Issuer in any application for Letters of
Credit, any standing agreement relating to Letters of Credit or otherwise, all
of which shall be deemed to have been granted to the Agents and the Revolving
Loan Lenders and apply in all respects to the Agents and the Revolving Loan
Lenders and shall be in addition to any rights, remedies, duties or obligations
contained herein.
     Section 3.02 Participations.
          (a) Purchase of Participations. Immediately upon issuance by the L/C
Issuer of any Letter of Credit pursuant to this Agreement, each Revolving Loan
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Administrative Agent, without recourse or warranty, an
undivided interest and participation, to the extent of such Revolving Loan
Lender’s Pro Rata Share, in all obligations of the Administrative Agent in such
Letter of Credit (including all Reimbursement Obligations of the Borrower with
respect thereto pursuant to the Letter of Credit Guaranty or otherwise).
          (b) Sharing of Payments. In the event that the Administrative Agent
makes any payment in respect of the Letter of Credit Guaranty and the Borrower
shall not have repaid such amount to the Administrative Agent, the
Administrative Agent shall charge the Loan Account in the amount of the
Reimbursement Obligation, in accordance with Sections 3.01(c) and 4.02 of this
Agreement.
          (c) Obligations Irrevocable. The obligations of a Revolving Loan
Lender to make payments to the Administrative Agent for the account of the
Agents, the Revolving Loan Lenders or the L/C Issuer with respect to a Letter of
Credit shall be irrevocable, without any qualification or exception whatsoever
and shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including any of the following circumstances:
               (i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;

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               (ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in such
Letter of Credit or any transferee of such Letter of Credit (or any Person for
whom any such transferee may be acting), any Agent, any Lender, or any other
Person, whether in connection with this Agreement, such Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transactions between the Borrower or any other party and the
beneficiary named in such Letter of Credit);
               (iii) any draft, certificate or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
               (iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
               (v) any failure by any Agent to provide any notices required
pursuant to this Agreement relating to such Letter of Credit;
               (vi) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit; or
               (vii) the occurrence of any Default or Event of Default.
     Section 3.03 Letters of Credit.
          (a) Request for Issuance. The Borrower may, upon notice not later than
12:00 noon, New York City time, at least 2 Business Days in advance of the
issuance thereof, request the Administrative Agent to assist the Borrower in
establishing or opening a Letter of Credit by delivering to the Administrative
Agent, with a copy to the L/C Issuer, a Letter of Credit Application, together
with any necessary related documents. The Administrative Agent shall not provide
support, pursuant to the Letter of Credit Guaranty, if the Administrative Agent
shall have received written notice from the Collateral Agent or the Required
Lenders on the Business Day immediately preceding the proposed issuance date for
such Letter of Credit that one or more of the conditions precedent in
Section 5.02 will not have been satisfied on such date, and the Administrative
Agent shall not otherwise be required to determine that, or take notice whether,
the conditions precedent set forth in Section 5.02 have been satisfied.
          (b) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of the Revolving Loan Lenders, in
accordance with the Revolving Loan Lenders’ Pro Rata Shares (x) for any Letter
of Credit issued hereunder, a non-refundable fee equal to 3.75 percentage points
per annum of the stated amount of such Letter of Credit, payable on the date
such Letter of Credit is issued or extended and (y) for any amendment to an
existing Letter of Credit that increases the stated amount of such Letter of
Credit, a non-refundable fee equal to 3.75 percentage points per annum of the
increase in the stated amount of such Letter of Credit, payable on the date of
such increase (the “Letter of Credit Fees”).

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          (c) L/C Issuer Charges. The Borrower shall pay to the Administrative
Agent the standard charges assessed by the L/C Issuer in connection with the
issuance, administration, amendment, payment or cancellation of Letters of
Credit.
          (d) Charges to the Loan Account. The Borrower hereby authorizes the
Administrative Agent to, and the Administrative Agent may, from time to time,
charge the Loan Account pursuant to Sections 3.01(c) and 4.02 of this Agreement
with the amount of any Letter of Credit Fees or charges due under this
Section 3.03.
ARTICLE IV.
FEES, PAYMENTS AND OTHER COMPENSATION
     Section 4.01 [Intentionally Omitted].
     Section 4.02 Payments; Computations and Statements.
          (a) The Borrower will make each payment under this Agreement not later
than 12:00 noon (New York City time) on the day when due, in lawful money of the
United States of America and in immediately available funds, to the
Administrative Agent’s Account. All payments received by the Administrative
Agent after 12:00 noon (New York City time) on any Business Day will be credited
to the Loan Account on the next succeeding Business Day. All payments shall be
made by the Borrower without set-off, counterclaim, deduction or other defense
to the Agents and the Lenders. Except as provided in Section 2.02, after
receipt, the Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal ratably to the
Lenders in accordance with their Pro Rata Shares and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement, provided that the
Administrative Agent will cause to be distributed all interest and fees received
from or for the account of the Borrower not less than once each month and in any
event promptly after receipt thereof. The Lenders and the Borrower hereby
authorize the Administrative Agent to, and the Administrative Agent may charge
the Loan Account of the Borrower with any amount due and payable by the Borrower
under any Loan Document. Each of the Lenders and the Borrower agrees that the
Administrative Agent shall have the right to make such charges whether or not
any Default or Event of Default shall have occurred and be continuing or whether
any of the conditions precedent in Section 5.02 have been satisfied. Any amount
charged to the Loan Account of the Borrower shall be deemed a Revolving Loan
hereunder made by the Revolving Loan Lenders to the Borrower, funded by the
Administrative Agent on behalf of the Revolving Loan Lenders and subject to
Section 2.02 of this Agreement; provided, however, that without limiting the
Administrative Agent’s obligation to charge items to the Loan Account (including
pursuant to the proviso of the next sentence), the foregoing shall not obligate
the Administrative Agent to make Revolving Loans if all of the conditions to
funding under this Agreement (including those set forth in Section 2.01 and
Article V) have not been satisfied or waived. The Lenders and the Borrowers
confirm that any charges which the Administrative Agent may so make to the Loan
Account of the Borrowers as herein provided will be made as an accommodation to
the Borrowers and solely at the Administrative Agent’s discretion, provided that
the Administrative Agent shall from time to time upon the request of the
Collateral Agent,

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charge the Loan Account of the Borrowers with any amount due and payable under
any Loan Document. Whenever any payment to be made under any such Loan Document
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day and such extension of time shall in
such case be included in the computation of interest or fees, as the case may
be. All computations of fees shall be made by the Administrative Agent on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such fees are
payable. Each determination by the Administrative Agent of an interest rate or
fees hereunder shall be conclusive and binding for all purposes in the absence
of manifest error.
          (b) The Administrative Agent shall provide the Borrower, promptly
after the end of each calendar month, a summary statement (in the form from time
to time used by the Administrative Agent) of the opening and closing daily
balances in the Loan Account of the Borrower during such month, the amounts and
dates of all Loans made to the Borrower during such month, the amounts and dates
of all payments on account of the Loans to the Borrower during such month and
the Loans to which such payments were applied, the amount of interest accrued on
the Loans to the Borrower during such month, any Letters of Credit issued by the
L/C Issuer for the account of the Borrower during such month, specifying the
face amount thereof and the amount of charges to the Loan Account or Loans made
to the Borrower during such month to reimburse the Revolving Loan Lenders for
drawings made under Letters of Credit, and the amount and nature of any charges
to the Loan Account made during such month on account of fees, commissions,
expenses and other Obligations. All entries on any such statement shall be
presumed to be correct and, 30 days after the same is sent, shall be final and
conclusive absent manifest error.
     Section 4.03 Sharing of Payments, Etc. Except as provided in Section 2.02
hereof, if any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in such similar obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender of any interest or other amount paid by
the purchasing Lender in respect of the total amount so recovered). The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 4.03 may, to the fullest extent permitted by law,
exercise all of its rights (including the Lender’s right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
     Section 4.04 Apportionment of Payments. Subject to Section 2.02 hereof and
to any written agreement among the Agents or the Lenders:

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          (a) All payments of principal and interest in respect of outstanding
Loans, all payments in respect of the Reimbursement Obligations, all payments of
fees (other than the fees with respect to Letters of Credit provided for in
Section 3.03(b)(ii) and the audit and collateral monitoring fees provided for in
Section 4.01) and all other payments in respect of any other Obligations, shall
be allocated by the Administrative Agent among such of the Lenders as are
entitled thereto, in proportion to their respective Pro Rata Shares or otherwise
as provided herein or, in respect of payments not made on account of Loans or
Letter of Credit Obligations, as designated by the Person making payment when
the payment is made.
          (b) After the occurrence and during the continuance of an Event of
Default, the Administrative Agent may, and upon the direction of the Required
Lenders shall, apply all payments in respect of any Obligations and all proceeds
of the Collateral, subject to the provisions of this Agreement, (i) first,
ratably to pay the Obligations in respect of any fees, expense reimbursements,
indemnities and other amounts then due to the Agents or the L/C Issuer until
paid in full; (ii) second, ratably to pay interest due in respect of the Agent
Advances until paid in full, (iii) third, ratably to pay principal of Agent
Advances until paid in full, (iv) fourth, ratably to pay any fees, expense
reimbursements, and indemnities then due to the Revolving Loan Lenders until
paid in full; (v) fifth, ratably to pay interest due in respect of the Revolving
Loans and Reimbursement Obligations until paid in full; (vi) sixth, ratably to
pay principal of the Revolving Loans and Letter of Credit Obligations (or, to
the extent such Obligations are contingent, to provide cash collateral in
respect of such Obligations (it being understood and agreed that with respect to
any Letter of Credit, the amount of such cash collateral must be equal to 105%
of the greatest amount for which such Letter of Credit may be drawn) until paid
in full; (vii) seventh, ratably to pay any fees, expense reimbursements, and
indemnities then due to the Term Loan Lenders until paid in full; (viii) eighth,
ratably to pay interest due in respect of the Term Loan until paid in full; (ix)
ninth, ratably to pay principal of the Term Loan until paid in full, (x) tenth,
ratably to pay any fees, expense reimbursements, and indemnities then due to the
Delayed Draw Term Loan Lenders until paid in full; (xi) eleventh, ratably to pay
interest due in respect of the Delayed Draw Term Loans until paid in full; (xii)
twelfth, ratably to pay principal of the Delayed Draw Term Loans until paid in
full; and (xiii) thirteenth, to the ratable payment of all other Obligations
then due and payable.
          (c) In each instance, so long as no Event of Default has occurred and
is continuing, Section 4.04(b) shall not be deemed to apply to any payment by
the Borrower specified by the Borrower to the Administrative Agent to be for the
payment of Term Loan Obligations or the Delayed Draw Term Loan Obligations then
due and payable under any provision of this Agreement or the prepayment of all
or part of the principal of the Term Loan or the Delayed Draw Term Loans in
accordance with the terms and conditions of Section 2.05.
          (d) For purposes of Section 4.04(b), (other than clause
(xiii) thereof) “paid in full” means with respect to any Obligations, payment in
cash of all amounts owing under the Loan Documents in respect of such
Obligations, including fees, interest, default interest, interest on interest,
expense reimbursements and indemnities, specifically including in each case any
of the foregoing which would accrue after the commencement of any Insolvency
Proceeding irrespective of whether a claim is allowable in such Insolvency
Proceeding, except to the extent that default or overdue interest (but not any
other interest) and fees, each arising from or related to a default, are
disallowed in any Insolvency Proceeding; provided, however, that for purposes

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of such clause (xiii), “paid in full” means with respect to any Obligations,
payment in cash of all amounts owing under the Loan Documents in respect of such
Obligations, including fees, interest, default interest, interest on interest,
expense reimbursements and indemnities, specifically including in each case any
of the foregoing which would accrue after the commencement of any Insolvency
Proceeding irrespective of whether a claim is allowable in such Insolvency
Proceeding.
          (e) In the event of a direct conflict between the priority provisions
of this Section 4.04 and other provisions contained in any other Loan Document,
it is the intention of the parties hereto that both such priority provisions in
such documents shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 4.04 shall control and govern.
     Section 4.05 Increased Costs and Reduced Return.
          (a) If any Lender, any Agent or the L/C Issuer shall have determined
that the adoption or implementation of, or any change in, any law, rule, treaty
or regulation, or any policy, guideline or directive of, or any change in, the
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance by any Lender, any Agent
or the L/C Issuer or any Person controlling any such Lender, any such Agent or
the L/C Issuer with any directive of, or guideline from, any central bank or
other Governmental Authority or the introduction of, or change in, any
accounting principles applicable to any Lender, any Agent or the L/C Issuer or
any Person controlling any such Lender, any such Agent or the L/C Issuer (in
each case, whether or not having the force of law) (each, a “Change in Law”),
shall (i) subject any Lender, any Agent or the L/C Issuer, or any Person
controlling any such Lender, any such Agent or the L/C Issuer to any tax, duty
or other charge with respect to this Agreement or any Loan made by such Lender
or such Agent or any Letter of Credit issued by the L/C Issuer, or change the
basis of taxation of payments to any Lender, any Agent or the L/C Issuer or any
Person controlling any such Lender, any such Agent or the L/C Issuer of any
amounts payable hereunder (except for taxes on the overall net income of any
Lender, any Agent or the L/C Issuer or any Person controlling any such Lender,
any such Agent or the L/C Issuer), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement against any Loan, any Letter of
Credit or against assets of or held by, or deposits with or for the account of,
or credit extended by, any Lender, any Agent or the L/C Issuer or any Person
controlling any such Lender, any such Agent or the L/C Issuer or (iii) impose on
any Lender, any Agent or the L/C Issuer or any Person controlling any such
Lender, any such Agent or the L/C Issuer any other condition regarding this
Agreement or any Loan or Letter of Credit, and the result of any event referred
to in clauses (i), (ii), or (iii) above shall be to increase the cost to any
Lender, any Agent or the L/C Issuer of making any Loan, issuing, guaranteeing or
participating in any Letter of Credit, or agreeing to make any Loan or issue,
guaranty or participate in any Letter of Credit, or to reduce any amount
received or receivable by any Lender, any Agent or the L/C Issuer hereunder,
then, upon demand by any such Lender, any such Agent or the L/C Issuer, the
Borrower shall pay to such Lender, such Agent or the L/C Issuer such additional
amounts as will compensate such Lender, such Agent or the L/C Issuer for such
increased costs or reductions in amount.

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          (b) If any Lender, any Agent or the L/C Issuer shall have determined
that any Change in Law either (i) affects or would affect the amount of capital
required or expected to be maintained by any Lender, any Agent or the L/C Issuer
or any Person controlling such Lender, such Agent or the L/C Issuer, and any
Lender, any Agent or the L/C Issuer determines that the amount of such capital
is increased as a direct or indirect consequence of any Loans made or
maintained, Letters of Credit issued or any guaranty or participation with
respect thereto, any Lender’s, any Agent’s or the L/C Issuer’s or any such other
controlling Person’s other obligations hereunder, or (ii) has or would have the
effect of reducing the rate of return on any Lender’s, any Agent’s or the L/C
Issuer’s any such other controlling Person’s capital to a level below that which
such Lender, such Agent or the L/C Issuer or such controlling Person could have
achieved but for such circumstances as a consequence of any Loans made or
maintained, Letters of Credit issued, or any guaranty or participation with
respect thereto or any agreement to make Loans, to issue Letters of Credit or
such Lender’s, such Agent’s or the L/C Issuer’s or such other controlling
Person’s other obligations hereunder (in each case, taking into consideration,
such Lender’s, such Agent’s or the L/C Issuer’s or such other controlling
Person’s policies with respect to capital adequacy), then, upon demand by any
Lender, any Agent or the L/C Issuer, the Borrower shall pay to such Lender, such
Agent or the L/C Issuer from time to time such additional amounts as will
compensate such Lender, such Agent or the L/C Issuer for such cost of
maintaining such increased capital or such reduction in the rate of return on
such Lender’s, such Agent’s or the L/C Issuer’s or such other controlling
Person’s capital.
          (c) All amounts payable under this Section 4.05 shall bear interest
from the date that is 10 days after the date of demand by any Lender, any Agent
or the L/C Issuer until payment in full to such Lender, such Agent or the L/C
Issuer at the Reference Rate. A certificate of such Lender, such Agent or the
L/C Issuer claiming compensation under this Section 4.05, specifying the event
herein above described and the nature of such event shall be submitted by such
Lender, such Agent or the L/C Issuer to the Borrower, setting forth the
additional amount due and an explanation of the calculation thereof, and such
Lender’s, such Agent’s or the L/C Issuer’s reasons for invoking the provisions
of this Section 4.05, and shall be final and conclusive absent manifest error.
     Section 4.06 Joint and Several Liability of each Person Composing the
Borrower.
          (a) Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, each Person composing the Borrower hereby accepts
joint and several liability hereunder and under the other Loan Documents in
consideration of the financial accommodations to be provided by the Agents and
the Lenders under this Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each of the Persons composing the Borrower
and in consideration of the undertakings of the other Persons composing the
Borrower to accept joint and several liability for the Obligations. Each of the
Persons composing the Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Persons composing the Borrower, with
respect to the payment and performance of all of the Obligations (including,
without limitation, any Obligations arising under this Section 4.06), it being
the intention of the parties hereto that all of the Obligations shall be the
joint and several obligations of each of the Persons composing the Borrower
without preferences or distinction among them. If and to the extent that any of
the Persons composing the Borrower shall fail to

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make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event, the other Persons composing the Borrower will make such payment
with respect to, or perform, such Obligation. Subject to the terms and
conditions hereof, the Obligations of each of the Persons composing the Borrower
under the provisions of this Section 4.06 constitute the absolute and
unconditional, full recourse Obligations of each of the Persons composing the
Borrower, enforceable against each such Person to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement, the other Loan Documents or any other
circumstances whatsoever.
          (b) The provisions of this Section 4.06 are made for the benefit of
the Agents, the Lenders and their successors and assigns, and may be enforced by
them from time to time against any or all of the Persons composing the Borrower
as often as occasion therefor may arise and without requirement on the part of
the Agents, the Lenders or such successors or assigns first to marshal any of
its or their claims or to exercise any of its or their rights against any of the
other Persons composing the Borrower or to exhaust any remedies available to it
or them against any of the other Persons composing the Borrower or to resort to
any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 4.06
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied.
          (c) No Person composing the Borrower will exercise any rights that it
may now or hereafter acquire against any Loan Party or any guarantor that arise
from the existence, payment, performance or enforcement of such Person’s
obligations under this Agreement, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agents and the Lenders against any
Loan Party or any guarantor or any Collateral, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, including
the right to take or receive from any Loan Party or any 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 until all
of the Obligations shall have been paid in full; provided that, anything to the
contrary contained in foregoing notwithstanding, no Person composing the
Borrower shall exercise any rights of subrogation, contribution, indemnity,
reimbursement or other similar rights against, and shall not proceed or seek
recourse against or with respect to any property or asset of, any Loan Party
(including after payment in full of the Obligations and any other amounts
payable under this Article or after termination of the Commitments) if all or
any portion of the Obligations shall have been satisfied in connection with an
exercise of remedies in respect of the Capital Stock of such Loan Party whether
pursuant to the Security Agreement or otherwise.
ARTICLE V.
CONDITIONS TO LOANS
     Section 5.01 Conditions Precedent. The obligation of any Lender to make the
initial Loans (or any other Person to otherwise to extend any credit provided
for hereunder), is subject to the fulfillment, to the satisfaction or waiver of
the Agents (the making of such initial extension

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of credit by any Lender being conclusively deemed to be its satisfaction or
waiver of the following), of each of the conditions precedent set forth below:
          (a) Payment of Fees, Etc. The Borrower shall have paid all fees,
costs, expenses and taxes then payable pursuant to Sections 2.06 or 12.04.
          (b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties
contained in Article VI and in each other Loan Document or certificate delivered
to any Agent or any Lender pursuant hereto or thereto on or prior to the
Effective Date are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) on and as of the Effective Date as though made on and as of such date
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date) and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date.
          (c) [Intentionally Omitted].
          (d) Delivery of Documents. The Collateral Agent shall have received on
or before the Effective Date the following, each in form and substance
satisfactory to the Agents and, unless indicated otherwise, dated the Effective
Date:
               (i) the Fee Letter, duly executed by the Borrower;
               (ii) the Ratification Agreement, duly executed by each Loan
Party;
               (iii) a Funds Flow Agreement, duly executed by each Loan Party;
               (iv) an amendment to, or an amendment and restatement of, the
Agreement Re: Blocked Accounts dated as of June 30, 2006 among The CIT
Group/Business Credit, Inc., as the administrative agent, Ableco, as the
collateral agent, LaSalle Bank National Association, and PRG-Schultz USA;
               (v) certified copies of all effective financing statements and
PPSA registration statements which name as debtor any Loan Party, together with
copies of such financing statements, none of which, except for Permitted Liens
and as otherwise agreed in writing by the Collateral Agent, shall cover any of
the Collateral and the results of searches for any tax Lien and judgment Lien
filed against such Person or its property, which results, except for Permitted
Liens and as otherwise agreed to in writing by the Collateral Agent, shall not
show any such Liens;
               (vi) a copy of the resolutions of each Domestic Loan Party (other
than the PR Partnership), certified as of the Effective Date by a secretary or
assistant secretary thereof, authorizing (A) the transactions contemplated by
the Loan Documents to which such Domestic Loan Party is or will be a party, and
(B) the execution, delivery and performance by such Domestic Loan Party of each
Loan Document to which such Domestic Loan Party is or will

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be a party and the execution and delivery of the other documents to be delivered
by such Person in connection herewith and therewith;
               (vii) a certificate of a secretary or assistant secretary of each
Loan Party, certifying the names and true signatures of the representatives of
such Loan Party authorized to sign each Loan Document to which such Loan Party
is or will be a party and the other documents to be executed and delivered by
such Loan Party in connection herewith and therewith, together with evidence of
the incumbency of such authorized officers;
               (viii) a certificate of the appropriate official(s) of the state
of organization and each state of foreign qualification of each Domestic Loan
Party (other than the PR Partnership) certifying as of a recent date not more
than 30 days prior to the Effective Date to the subsistence in good standing of,
and the payment of taxes by, such Domestic Loan Party in such states (except, in
the case of the states of foreign qualification, where the failure to be so
qualified or in good standing, or to pay such taxes, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect);
               (ix) a true and complete copy of the charter, certificate of
formation, certificate of limited partnership or other publicly filed
organizational document of each Domestic Loan Party (other than the PR
Partnership), certified (A) as of a recent date prior to the Effective Date by
an appropriate official of the state of organization of such Domestic Loan
Party, and (B) by a secretary or assistant secretary of such Domestic Loan Party
as being a true and complete copy of the publicly filed organizational document
for such Domestic Loan Party, which shall set forth the same complete name of
such Domestic Loan Party as is set forth herein and the organizational number of
such Domestic Loan Party, if an organized number is issued in such jurisdiction;
               (x) with respect to each Domestic Loan Party (other than the PR
Partnership, (A) a copy of the charter and by-laws, limited liability company
agreement, operating agreement, agreement of limited partnership or other
organizational document of each Domestic Loan Party, together with all
amendments thereto, certified as of the Effective Date by a secretary or
assistant secretary of such Domestic Loan Party, or (B) a certification from a
secretary or assistant secretary of such Domestic Loan Party that the charter
and by-laws, limited liability company agreement, operating agreement, agreement
of limited partnership or other organizational document has not been modified
since the date of the Original Financing Agreement;
               (xi) an opinion of Troutman Sanders LLP, counsel to the Loan
Parties, substantially in the form of Exhibit 5.01(d) and as to such other
matters as the Agents may reasonably request;
               (xii) a certificate of an Authorized Officer of the Borrower,
certifying as to the matters set forth in Section 5.01(b);
               (xiii) a copy of the Financial Statements;
               (xiv) a copy of the financial projections described in
Section 6.01(g)(ii) hereof;

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               (xv) a solvency certificate of the chief financial officer of the
Borrower in the form of Exhibit S-1;
               (xvi) evidence of the insurance coverage required by Section 7.01
and the terms of each Security Agreement, with such endorsements as to the named
insureds or lender loss payees thereunder as the Agents may request and
providing that such policy may be terminated or canceled (by the insurer or the
insured thereunder) only upon 30 days prior written notice to the Collateral
Agent and each such named insured or loss payee;
               (xvii) a certificate of an Authorized Officer of the Borrower,
certifying the names and true signatures of the persons that are authorized to
provide Notices of Borrowing, Letter of Credit Applications and all other
notices under this Agreement and the other Loan Documents;
               (xviii) the Loan Parties shall have received all material
licenses, approvals or evidence of other actions required by any Governmental
Authority in connection with the execution and delivery by the Loan Parties of
the Redemption Transaction Documents and with the consummation of the
transactions contemplated thereby; and
               (xix) a certificate of an Authorized Officer of the Parent,
certifying that attached thereto are complete and correct copies of the
Redemption Transaction Documents;
          (e) Availability. After giving effect to all Loans to be made on the
Effective Date and the Letters of Credit to be issued on the Effective Date, the
Availability shall not be less than $10,000,000 (calculated without regard to
any reserves imposed by the Administrative Agent). The Borrower shall deliver to
the Agents a certificate of the chief financial officer of the Borrower
certifying as to the calculation of Availability. No Revolving Loans shall be
made on the Effective Date.
          (f) Redemption Transaction. The Agents shall have received evidence
reasonably satisfactory to them that 100% of the Senior Notes shall be repayed
on the Effective Date. Agents shall have received and shall be reasonably
satisfied with the Redemption Transaction Documents. After giving effect to the
Redemption Transaction, the capital structure of Parent and its Subsidiaries
shall be reasonably satisfactory to Agents.
     Section 5.02 Special Condition Precedent to Delayed Draw Term Loans. The
obligation of any Agent or any Lender to make a Delayed Draw Term Loan is
subject to the fulfillment of each of the following conditions precedent:
          (a) Redemption Transaction.
               (i) If such Delayed Draw Term Loan is to be used to repay Senior
Convertible Notes, the Agents shall have received evidence reasonably
satisfactory to them that 100% of the Senior Convertible Notes shall be redeemed
on or prior to the Delayed Draw Term Loan Commitment Expiry Date or converted to
common Capital Stock of Parent.
               (ii) If such Delayed Draw Term Loan is to be used to redeem
Series A Preferred Stock, the Agents shall have received evidence reasonably
satisfactory to them that

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100% of the Series A Preferred Stock shall be redeemed on or prior to the
Delayed Draw Term Loan Commitment Expiry Date or converted to common Capital
Stock of Parent.
          (b) Funds Flow Agreement. The Collateral Agent shall have received, in
form and substance satisfactory to the Agents, a Funds Flow Agreement, duly
executed by each Loan Party.
     Section 5.03 Conditions Precedent to All Loans and Letters of Credit. The
obligation of any Agent or any Lender to make any Loan or of the Administrative
Agent to assist the Borrower in establishing or opening any Letter of Credit is
subject to the fulfillment of each of the following conditions precedent:
          (a) Representations and Warranties; No Event of Default. The following
statements shall be true and correct, and the submission by the Borrower to the
Administrative Agent of a Notice of Borrowing with respect to each such Loan,
and the Borrower’s acceptance of the proceeds of such Loan, or the submission by
the Borrower of a Letter of Credit Application with respect to a Letter of
Credit, and the issuance of such Letter of Credit, shall each be deemed to be a
representation and warranty by each Loan Party on the date of such Loan or the
date of issuance of such Letter of Credit that: (i) the representations and
warranties contained in Article VI and in each other Loan Document, certificate
or other writing delivered any Agent or any Lender pursuant hereto or thereto on
or prior to the date of such Loan or such Letter of Credit are true and correct
in all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of such date as though
made on and as of such date (except to the extent that any such representations
or warranties expressly relate solely to an earlier date), and (ii) at the time
of and after giving effect to the making of such Loan and the application of the
proceeds thereof or at the time of issuance of such Letter of Credit, no Default
or Event of Default has occurred and is continuing or would result from the
making of the Loan to be made, or the issuance of such Letter of Credit to be
issued, on such date.
          (b) Notices. The Administrative Agent shall have received (i) a Notice
of Borrowing pursuant to Section 2.02 hereof or (ii) a Letter of Credit
Application pursuant to Section 3.03 hereof, as applicable.
     Section 5.04 Conditions Subsequent to All Loans. The Loan Parties agree
that, on or before the date that is 45 days after the date of this Agreement,
they shall deliver to the Collateral Agent: (a) for each Foreign Guarantor and
the PR Partnership, each of the items set forth in Sections 5.01(d)(vi),
5.01(d)(viii), 5.01(d)(ix), and 5.01(d)(x), (b) an amendment to the Brazilian
Pledge Agreement, in form and substance reasonably satisfactory to the Agents,
together with all other documentation, including an opinion of counsel
reasonably satisfactory to the Agents and an amendment to the governing
documents of Profit Recovery Brasil Ltda., a limited liability company duly
incorporated under the laws of Brazil, that is, in the opinion of the Agents,
appropriate with respect to the execution and delivery of such amendment,
(c) amendments and restatements of the German Security Documents and the German
Pledge Agreement, in form and substance reasonably satisfactory to the Agents,
together with all other documentation, including an opinion of counsel
reasonably satisfactory to the Agents, that is, in the opinion of the Agents,
appropriate with respect to the execution and delivery of such amendments and
restatements, and

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(d) amendments to, or amendments and restatements of, the Meridian Pledge
Agreements, together with all other documentation, including an opinion of
counsel reasonably satisfactory to the Agents, that is, in the opinion of the
Agents, appropriate with respect to the execution and delivery of such amendment
or amendments and restatements (the failure by the Loan Parties to so perform or
cause to be performed the foregoing covenant to constitute an immediate Event of
Default hereunder).
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
     Section 6.01 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agents, the Lenders and the L/C Issuer as
follows:
          (a) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing (in each jurisdiction where to be so has
legal significance) under the laws of the state or jurisdiction of its
organization, (ii) has all requisite power and authority to conduct its business
as now conducted and as currently contemplated and, in the case of the Borrower,
to make the borrowings hereunder, and to execute and deliver each Loan Document
to which it is a party, and to consummate the transactions contemplated 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,
except, in the case of jurisdictions of foreign qualification, where the failure
to be so qualified or in good standing, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
          (b) Authorization, Etc. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is or will be a party,
(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, (iii) do not violate any applicable law or any contractual
restriction binding on or otherwise affecting it or any of its properties,
except where any violation could not reasonably be expected to result in a
Material Adverse Effect, (iv) do not and will not result in or require the
creation of any Lien (other than Permitted Liens) upon or with respect to any of
its properties, and (v) 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 its operations or
any of its properties, except where any such default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal could not reasonably be
expected to result in a Material Adverse Effect.
          (c) Governmental Approvals. 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 any
Loan Party of any Loan Document to which it is or will be a party except
(i) such as have been obtained or made and are in full force and effect,
(ii) filings necessary to perfect Liens created by the Loan Documents, and (iii)

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authorizations, approvals or actions the failure to obtain or perform
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
          (d) Enforceability of Loan Documents. This Agreement is, and each
other Loan Document to which any Loan Party is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
          (e) Subsidiaries. Schedule 6.01(e) is a complete and correct
description of the name, jurisdiction of incorporation and ownership of the
outstanding Capital Stock of each Subsidiary of the Parent as of the Effective
Date. All of the issued and outstanding shares of Capital Stock of such
Subsidiaries have been validly issued and are fully paid and nonassessable, and
the holders thereof are not entitled to any preemptive, first refusal or other
similar rights. Except as indicated on such Schedule, all such Capital Stock is
owned by the Parent or one or more of its wholly-owned Subsidiaries, free and
clear of all Liens, except nonconsensual Permitted Liens. Except as indicated on
Section 6.01(e) as of the Effective Date, there are no outstanding equity
securities of the Parent or any of its Subsidiaries and no outstanding
obligations of the Parent or any of its Subsidiaries convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from the Parent or any of its Subsidiaries, or other obligations of
any Subsidiary to issue, directly or indirectly, any shares of Capital Stock of
any Subsidiary of the Parent.
          (f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party before any
court or other Governmental Authority or any arbitrator that (A) could
reasonably be expected to result in a Material Adverse Effect or (B) as of the
Effective Date, calls into question the validity or enforceability of, or
otherwise seeks to invalidate, this Agreement or any other Loan Document, and
(ii) except as set forth on Schedule 6.01(f), as of the Effective Date, none of
the Loan Parties holds any commercial tort claims in respect of which a claim
has been filed in a court of law or a written notice by an attorney has been
given to a potential defendant.
          (g) Financial Condition.
               (i) The Financial Statements, copies of which have been delivered
to each Agent and each Lender, fairly present, in all material respects, the
consolidated financial condition of the Parent and its Subsidiaries as at the
respective dates thereof and the consolidated results of operations of the
Parent and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since June 30, 2007 no event or
development has occurred that has had or could reasonably be expected to result
in a Material Adverse Effect.
               (ii) The Parent has heretofore furnished to each Agent and each
Lender (A) projected quarterly balance sheets, income statements and statements
of cash flows of the Parent and its Subsidiaries for the period from July 1,
2007 through December 31, 2008, and (B) projected annual balance sheets, income
statements and statements of cash flows of the

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Parent and its Subsidiaries for the Fiscal Years ending in 2009 through 2011,
which projected financial statements shall be updated from time to time pursuant
to Section 7.01(a)(x). Such projections, as so updated, are believed by the
Parent at the time furnished to be reasonable, have been prepared on a
reasonable basis and in good faith by the Parent, and have been based on
assumptions believed by the Parent to be reasonable at the time made and upon
the best information then reasonably available to the Parent (it being
understood that actual results may vary from such projections and that such
variations may be material).
          (h) Compliance with Law, Etc. No Loan Party is in violation of its
organizational documents, any law, rule, regulation, judgment or order of any
Governmental Authority applicable to it or any of its property or assets, or any
material term of any agreement or instrument (including any Material Contract)
binding on or otherwise affecting it or any of its properties where such
violation could reasonably be expected to result in a Material Adverse Effect,
and no Default or Event of Default has occurred and is continuing.
          (i) ERISA. Except as set forth on Schedule 6.01(i), (i) each Employee
Plan is in substantial compliance with ERISA and the IRC, (ii) no Termination
Event has occurred nor is reasonably expected to occur with respect to any
Employee Plan, (iii) the most recent annual report (Form 5500 Series) with
respect to each Employee Plan, including any required Schedule B (Actuarial
Information) thereto, copies of which have been filed with the Internal Revenue
Service and delivered to the Agents, is complete and correct in all material
respects and fairly presents the funding status of such Employee Plan, and since
the date of such report there has been no material adverse change in such
funding status, (iv) copies of each agreement entered into with the PBGC, the
U.S. Department of Labor or the Internal Revenue Service with respect to any
Employee Plan have been delivered to the Agents, (v) no Employee Plan had an
accumulated or waived funding deficiency or permitted decrease which would
create a deficiency in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
IRC at any time during the previous 60 months, and (vi) no Lien imposed under
the IRC or ERISA exists or is likely to arise on account of any Employee Plan
within the meaning of Section 412 of the IRC. Except as set forth on
Schedule 6.01(i), no Loan Party or any of its ERISA Affiliates has incurred any
withdrawal liability under ERISA with respect to any Multiemployer Plan, or is
aware of any facts indicating that it or any of its ERISA Affiliates may in the
future incur any such withdrawal liability. Except as set forth on
Schedule 6.01(i), no Loan Party or any of its ERISA Affiliates nor any fiduciary
of any Employee Plan has (A) engaged in a nonexempt prohibited transaction
described in Sections 406 of ERISA or 4975 of the IRC, (B) failed to pay any
required installment or other payment required under Section 412 of the IRC on
or before the due date for such required installment or payment, (C) engaged in
a transaction within the meaning of Section 4069 of ERISA or (D) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Except as set forth on Schedule 6.01(i), there are no pending or, to the
knowledge of any Loan Party, threatened claims, actions, proceedings or lawsuits
(other than claims for benefits in the normal course) asserted or instituted
against (1) any Employee Plan or its assets, (2) any fiduciary with respect to
any Employee Plan, or (3) any Loan Party or any of its ERISA Affiliates with
respect to any Employee Plan. Except as required by Section 4980B of the
Internal Revenue Code or as set forth on Schedule 6.01(i), no Loan Party or any
of its ERISA Affiliates maintains an employee welfare benefit plan (as defined
in Section 3(1) of ERISA)

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which provides health or life insurance benefits (through the purchase of
insurance or otherwise) for any retired or former employee of any Loan Party or
any of its ERISA Affiliates or coverage after a participant’s termination of
employment.
          (j) Taxes, Etc. (i) All Federal (including the federal government of
Canada) and all material state, provincial, and local tax returns and other
reports required by applicable law to be filed by any Loan Party have been
filed, or extensions have been obtained, and (ii) all taxes, assessments and
other governmental charges imposed upon any Loan Party or any property of any
Loan Party and which have become due and payable have been paid, except
(A) taxes, assessments or other governmental charges contested in good faith by
proper proceedings which stay the enforcement of any Lien resulting from the
non-payment thereof and with respect to which adequate reserves have been set
aside for the payment thereof in accordance with GAAP, or (B) taxes, assessments
or other governmental charges in an aggregate amount not to exceed $50,000.
          (k) Regulations T, U and X. No Loan Party is or will be engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation T, U or X), and no proceeds of any Loan
will be used to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock.
          (l) [Intentionally Omitted].
          (m) [Intentionally Omitted].
          (n) Permits, Etc. Each Loan Party has, and is in compliance with, all
permits, licenses, authorizations, approvals, entitlements and accreditations
required for such Person lawfully to own, lease, manage or operate, or to
acquire, each business currently owned, leased, managed or operated, or to be
acquired, by such Person, except to the extent such failure to obtain or
noncompliance could not reasonably be expected to result in a Material Adverse
Effect. No condition exists or event has occurred which, in itself or with the
giving of notice or lapse of time or both, would result in the suspension,
revocation, impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect, except to the extent such
suspension, revocation, impairment, forfeiture or non-renewal could not
reasonably be expected to result in a Material Adverse Effect.
          (o) Properties. (i) Each Loan Party has good and marketable title to,
valid leasehold interests in, or valid licenses to use, all property and assets
material to its business, free and clear of all Liens, except Permitted Liens
and minor irregularities or deficiencies in title that, individually or in the
aggregate, do not interfere with its ability to conduct its business as
currently conducted or to utilize such property for its intended purpose. Except
as could not reasonably be expected to result in a Material Adverse Effect, all
such properties and assets are in good working order and condition, ordinary
wear and tear excepted. Schedule 6.01(o) sets forth a complete and accurate
list, as of the Effective Date, of the location, by state and street address, of
all real property that is located in the United States and owned or leased by
any Loan

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Party. As of the Effective Date, each Loan Party has valid leasehold interests
in the Leases described on Schedule 6.01(o) to which it is a party.
               (ii) Schedule 6.01(o) sets forth as of the Effective Date with
respect to each such Lease located in the United States, the commencement date
and termination date. Each such Lease is valid and enforceable in accordance
with its terms in all material respects and is in full force and effect, except
to the extent that the failure of such Lease to be valid and enforceable or in
full force and effect could not reasonably be expected to result in a Material
Adverse Change. No consent or approval of any landlord or other third party in
connection with any such Lease is necessary for any Loan Party to enter into and
execute the Loan Documents to which it is a party, except as set forth on
Schedule 6.01(o) or except to the extent that the failure to obtain any consent
or approval of any landlord could not reasonably be expected to result in a
Material Adverse Effect.
          (p) Full Disclosure. Each Loan Party has disclosed to the Agents all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the other reports, financial statements, certificates or other
information (other than to the extent comprised of projections and other forward
looking statements) furnished by or on behalf of any Loan Party to the Agents in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which it
was made, not materially misleading as of the date such information is dated or
certified; provided that, with respect to projected financial information and
other forward looking statements, each Loan Party represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time (it being understood that actual results may vary from
such projections and forward looking statements and such variances may be
material). As of the Effective Date, to the Borrower’s knowledge there is no
contingent liability or fact that could reasonably be expected to result in a
Material Adverse Effect which has not been set forth in a footnote included in
the Financial Statements or a Schedule hereto.
          (q) [Intentionally Omitted].
          (r) Environmental Matters. Except as set forth on Schedule 6.01(r),
(i) the operations of each Loan Party are in compliance with all Environmental
Laws except for any non-compliance which could not reasonably be expected to
result in a Material Adverse Effect; (ii) there has been no Release at any of
the properties owned or operated by any Loan Party or a predecessor in interest
whose liabilities the Borrower is legally responsible, or at any disposal or
treatment facility which received Hazardous Materials generated by any Loan
Party or any predecessor in interest which could reasonably be expected to
result in a Material Adverse Effect; (iii) no Environmental Action has been
asserted against any Loan Party or any predecessor in interest whose liabilities
the Borrower is legally responsible nor does any Loan Party have knowledge or
notice of any threatened or pending Environmental Action against any Loan Party
or any predecessor in interest which could reasonably be expected to result in a
Material Adverse Effect; (iv) no Environmental Actions have been asserted
against any facilities that may have received Hazardous Materials generated by
any Loan Party or any predecessor in

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interest which could reasonably be expected to result in a Material Adverse
Effect; (v) no property now or formerly owned or occupied by a Loan Party has
been used as a treatment or disposal site for any Hazardous Material; (vi) no
Loan Party has failed to report to the proper Governmental Authority the
occurrence of any Release which is required to be so reported by any
Environmental Laws which could reasonably be expected to result in a Material
Adverse Effect; (vii) each Loan Party holds all licenses, permits and approvals
required under any Environmental Laws in connection with the operation of the
business carried on by it, except for such licenses, permits and approvals as to
which a Loan Party’s failure to maintain or comply with could not reasonably be
expected to result in a Material Adverse Effect; and (viii) no Loan Party has
received any notification pursuant to any Environmental Laws that (A) any work,
repairs, construction or Capital Expenditures are required to be made as a
condition of continued compliance with any Environmental Laws, or any license,
permit or approval issued pursuant thereto or (B) any license, permit or
approval referred to above is about to be reviewed, made subject to limitations
or conditions, revoked, withdrawn or terminated, in each case, except as could
not reasonably be expected to result in a Material Adverse Effect.
          (s) Insurance. Each Loan Party keeps its property adequately insured
in accordance with the insurance requirements set forth in Section 7.01(h).
Schedule 6.01(s) sets forth a list of all insurance maintained by each Loan
Party on the Effective Date.
          (t) Use of Proceeds. The proceeds of the Revolving Loans and the Term
Loan shall be used (i) on the Effective Date, to partially finance the
redemption of the Senior Notes and to pay fees and expenses in connection with
the transactions contemplated hereby and such redemption, and (ii) thereafter,
to fund working capital of the Borrower. The proceeds of the Delayed Draw Term
Loans shall be used to finance the redemption of the Senior Convertible Notes
and the Series A Preferred Stock not converted to common Capital Stock of the
Parent and to pay fees and expenses in connection with the transactions
contemplated hereby and such redemption.
          (u) Solvency. After giving effect to the transactions contemplated by
this Agreement and before and after giving effect to each Loan and Letter of
Credit, the Loan Parties taken as a whole on a consolidated basis are Solvent.
          (v) Location of Bank Accounts. Schedule 6.01(v) sets forth a complete
and accurate list as of the Effective Date of all deposit, checking and other
bank accounts, all securities and other accounts maintained with any broker
dealer and all other similar accounts maintained by each Loan Party, together
with a description thereof (i.e., the bank or broker dealer at which such
deposit or other account is maintained and the account number and the purpose
thereof).
          (w) Intellectual Property. Except as set forth on Schedule 6.01(w),
each Loan Party owns or licenses or otherwise has the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, tradenames, copyrights, copyright applications,
franchises, authorizations, non-governmental licenses and permits and other
intellectual property rights that are necessary for the operation of its
business, without infringement upon or conflict with the rights of any other
Person with respect thereto, except, in each case, which, individually or in the
aggregate, could not reasonably be expected to result in a

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Material Adverse Effect. Set forth on Schedule 6.01(w) is a complete and
accurate list as of the Effective Date of all such material licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations,
non-governmental licenses and permits and other intellectual property rights of
each Loan Party that are registered or issued by any Governmental Authority. No
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any Loan
Party infringes upon or conflicts with any rights owned by any other Person, and
no claim or litigation regarding any of the foregoing is pending or threatened,
except for such infringements and conflicts which could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect. To the knowledge of each Loan Party, no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or proposed, which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
          (x) Material Contracts. Set forth on Schedule 6.01(x) is a complete
and accurate list as of the Effective Date of all Material Contracts, showing
the parties and subject matter thereof. Each such Material Contract (i) is in
full force and effect and is binding upon and enforceable against each Loan
Party that is a party thereto and, to the knowledge of such Loan Party, all
other parties thereto in accordance with its terms, except to the extent that
failure of such Material Contract to be in full force and effect or binding upon
and enforceable against the parties thereto could not reasonably be expected to
result in a Material Adverse Effect, (ii) has not been otherwise amended or
modified, except for amendments or modifications which could not reasonably be
expected to result in a Material Adverse Effect, and (iii) is not in default due
to the action of any Loan Party or, to the knowledge of any Loan Party, any
other party thereto, except to the extent that any such default could not
reasonably be expected to result in a Material Adverse Effect.
          (y) Investment Company Act. None of the Loan Parties is an “investment
company” or “controlled” by an “investment company”, as such terms are defined
in the Investment Company Act of 1940, as amended.
          (z) Employee and Labor Matters. Except as could not, individually or
in the aggregate, reasonably to be expected to result in a Material Adverse
Effect, there is (i) no unfair labor practice complaint pending or, to the
knowledge of any Loan Party, threatened against any Loan Party before any
Governmental Authority and no grievance or arbitration proceeding pending or
threatened against any Loan Party which arises out of or under any collective
bargaining agreement, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened against any Loan Party or
(iii) to the knowledge of any Loan Party, no union representation question
existing with respect to the employees of any Loan Party and no union organizing
activity taking place with respect to any of the employees of any Loan Party. No
Loan Party or any of its ERISA Affiliates has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act (“WARN”)
or similar state law, which remains unpaid or unsatisfied. The hours worked and
payments made to employees of any Loan Party have not been in violation of the
Fair Labor Standards Act or any other applicable legal requirements, except to
the extent such violations could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. All material
payments due from any Loan Party on account of wages and employee health and
welfare

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insurance and other benefits have been paid or accrued as a liability on the
books of such Loan Party, except where the failure to do so could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
          (aa) [Intentionally Omitted].
          (bb) No Bankruptcy Filing. No board of directors of any Loan Party has
taken any action to authorize the filing of a petition by it under any state,
provincial, federal (including the federal government of Canada) or foreign
bankruptcy or insolvency laws or the liquidation (except as expressly permitted
by Section 7.02(c)) of all or a major portion of such Loan Party’s assets or
property.
          (cc) [Intentionally Omitted].
          (dd) Name; Jurisdiction of Organization; Organizational ID Number;
Chief Place of Business; Chief Executive Office; FEIN. Schedule 6.01(dd) sets
forth a complete and accurate list as of the date hereof of (i) the exact legal
name of each Loan Party, (ii) the jurisdiction of organization of each Loan
Party, (iii) the organizational identification number of each Loan Party (or
indicates that such Loan Party has no organizational identification number),
(iv) each place of business of each Loan Party, (v) the chief executive office
of each Loan Party and (vi) the federal employer identification number of each
Loan Party (or, in the case of the Canadian Guarantor, the Canada Customs and
Revenue Agency business number).
          (ee) [Intentionally Omitted].
          (ff) Locations of Collateral. There is no location at which any Loan
Party has any Collateral other than (i) those locations listed on
Schedule 6.01(ff), (ii) warehouses or other facilities where records not
pertinent to the current business of the Loan Parties are stored; (iii) customer
locations, employee home offices or similar locations where miscellaneous office
equipment may be maintained, and (iv) any other locations approved in writing by
the Agents from time to time or otherwise permitted under Section 7.01(l).
Schedule 6.01(ff) hereto contains a true, correct and complete list, as of the
Effective Date, of the legal names and addresses of each warehouse at which
Collateral of each Loan Party is stored other than warehouses or other
facilities where records not pertinent to the current business of the Loan
Parties are stored. None of the receipts received by any Loan Party from any
warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person’s
assigns.
          (gg) Security Interests. Each Security Agreement creates in favor of
the Collateral Agent, for the benefit of the Agents and the Lenders, a legal,
valid and enforceable security interest in the Collateral covered thereby
(except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally). Upon (i) the filing of the financing statements
described in Section 5.01(d)(v), (ii) the filings in the United States Patent
and Trademark Office and United States Copyright Office, and (iii) taking of
possession or control by the Collateral Agent of the Collateral with respect to
which a security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the

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extent possession or control by the Collateral Agent is required herein or in
the Security Agreement), such security interests in and Liens on substantially
all of the Collateral granted thereby (other than assets in which the Collateral
Agent has determined in its Permitted Discretion that the cost or burden of
obtaining a security interest in such assets or perfection thereof is excessive
in relation to the practical benefit afforded thereby) shall be perfected, first
priority security interests (subject to Permitted Liens), and no further
recordings or filings are or will be required in connection with the creation,
perfection or enforcement of such security interests and Liens.
          (hh) [Intentionally Omitted].
          (ii) [Intentionally Omitted].
          (jj) Redemption Transaction Documents. As of the Effective Date, the
Borrower has delivered to the Agents a complete and correct copy of the material
Redemption Transaction Documents (including all schedules, exhibits, amendments,
supplements, modifications, and assignments). As of the Effective Date, no Loan
Party that is a party thereto is in default in the performance or compliance
with any provisions thereof. The Redemption Transaction Documents comply in all
material respects with all applicable laws. As of the Effective Date, the
Redemption Transaction Documents are in full force and effect and have not been
terminated, rescinded or withdrawn. The execution, delivery and performance of
the Redemption Transaction Documents do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority, other than consents or approvals that have
been obtained and that are still in full force and effect. To the best of the
Loan Parties’ knowledge, as of the Effective Date, none of the representations
or warranties of any other Person in any Redemption Transaction Document are
untrue.
          (kk) Canadian Withholdings and Remittances. Each applicable Loan Party
has withheld from each payment made to any of their present or former employees,
officers and directors, and to all persons who are non-residents of Canada for
the purposes of the Income Tax Act (Canada) all material amounts required by law
to be withheld, including all payroll deductions required to be withheld, and
furthermore, remitted such withheld amounts within the prescribed periods to the
appropriate Governmental Authority, except to the extent that failure to do so
could not reasonably be expected to result in a Material Adverse Effect. Each
applicable Loan Party has remitted all material contributions required pursuant
to the Canada Pension Plan (Canada), provincial pension plan contributions,
workers compensation assessments, employment insurance premiums, employer health
taxes, municipal real estate taxes and other taxes and obligations payable under
the applicable law by it and has remitted such amounts to the proper
Governmental Authority within the time required under the applicable law, except
to the extent that failure to do so could not reasonably be expected to result
in a Material Adverse Effect.
          (ll) [Intentionally Omitted].
          (mm) Inactive Subsidiaries. No Inactive Subsidiary owns any assets
(other than assets of de minimis value), has any liabilities (other than de
minimis liabilities), or engages in any business activity.

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ARTICLE VII.
COVENANTS OF THE LOAN PARTIES
     Section 7.01 Affirmative Covenants. So long as any principal of or interest
on any Loan, Reimbursement Obligation, Letter of Credit Obligation or any other
Obligation (whether or not due) (other than unasserted contingent
indemnification Obligations) shall remain unpaid or any Lender shall have any
Commitment hereunder, each Loan Party will and will cause each of its
Subsidiaries to:
          (a) Reporting Requirements. Furnish to each Agent and each Lender:
               (i) as soon as available and in any event within 47 days (or
62 days if an extension has been obtained for the filing of an equivalent
periodic report under Rule 12b-25 of the General Rules and Regulations under the
Exchange Act) after the end of the first 3 fiscal quarters of each Fiscal Year
of the Parent and its Subsidiaries, consolidated balance sheet, consolidated and
consolidating statements of operations and consolidated statements of cash flows
of the Parent and its Subsidiaries as at the end of such quarter, and for the
period commencing at the end of the immediately preceding Fiscal Year and ending
with the end of such quarter, setting forth in each case in comparative form the
figures for the corresponding date or period of the immediately preceding Fiscal
Year, all in reasonable detail and certified by an Authorized Officer of the
Parent as fairly presenting, in all material respects, the financial position of
the Parent and its Subsidiaries as of the end of such quarter and the results of
operations and cash flows of the Parent and its Subsidiaries for such quarter,
in accordance with GAAP applied in a manner consistent with that of the most
recent audited financial statements of the Parent and its Subsidiaries furnished
to the Agents and the Lenders, subject to normal year-end audit adjustments and
the absence of footnotes;
               (ii) as soon as available, and in any event within 45 days after
the end of the last fiscal quarter of each Fiscal Year of the Parent and its
Subsidiaries, internally prepared consolidated balance sheets and consolidating
statements of operations as at the end of such fiscal month, and for the period
commencing at the end of the immediately preceding Fiscal Year and ending with
the end of such fiscal month, all in reasonable detail and certified by an
Authorized Officer of the Parent as fairly presenting, in all material respects,
the financial position of the Parent and its Subsidiaries as at the end of such
fiscal month and the results of operations, of the Parent and its Subsidiaries
for such fiscal month, in accordance with GAAP applied in a manner consistent
with that of the most recent audited financial statements furnished to the
Agents and the Lenders, subject to normal year-end audit adjustments and the
absence of footnotes;
               (iii) as soon as available, and in any event within 90 days (or
105 days if an extension has been obtained for the filing of an equivalent
periodic report under Rule 12b-25 of the General Rules and Regulations under the
Exchange Act) after the end of each Fiscal Year of the Parent and its
Subsidiaries, consolidated balance sheets, consolidated and consolidating
statements of operations, a consolidated statement of retained earnings, and a
consolidated statement of cash flows of the Parent and its Subsidiaries as at
the end of such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the

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immediately preceding Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, and accompanied by a report and an opinion, prepared in
accordance with generally accepted auditing standards, of independent certified
public accountants of recognized standing selected by the Parent and reasonably
satisfactory to the Agents (which opinion shall be without (A) a “going concern”
or like qualification or exception, (B) any qualification or exception as to the
scope of such audit, or (C) any qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of Section 7.03,
together with a written statement of such accountants (1) to the effect that, in
making the examination necessary for their audit of such financial statements,
they have not obtained any knowledge of the existence of an Event of Default or
a Default under Section 7.03 and (2) if such accountants shall have obtained any
knowledge of the existence of an Event of Default or such Default under
Section 7.03, describing the nature thereof;
               (iv) as soon as available, and in any event within 30 days after
the end of the first two fiscal months in each fiscal quarter of the Parent and
its Subsidiaries, internally prepared consolidated balance sheets, consolidating
statements of operations as at the end of such fiscal month, and for the period
commencing at the end of the immediately preceding Fiscal Year and ending with
the end of such fiscal month, all in reasonable detail and certified by an
Authorized Officer of the Parent as fairly presenting, in all material respects,
the financial position of the Parent and its Subsidiaries as at the end of such
fiscal month and the results of operations of the Parent and its Subsidiaries
for such fiscal month, in accordance with GAAP applied in a manner consistent
with that of the most recent audited financial statements furnished to the
Agents and the Lenders, subject to normal year-end audit adjustments and the
absence of footnotes;
               (v) simultaneously with the delivery of the financial statements
of the Parent and its Subsidiaries required by clauses (i), (ii), and (iii) of
this Section 7.01(a), a certificate of an Authorized Officer of the Parent
(A) stating that such Authorized Officer has reviewed the provisions of this
Agreement and the other Loan Documents and has made or caused to be made under
his or her supervision a review of the condition and operations of the Parent
and its Subsidiaries during the period covered by such financial statements with
a view to determining whether the Parent and its Subsidiaries were in compliance
with all of the provisions of this Agreement and such Loan Documents at the
times such compliance is required hereby and thereby, and that such review has
not disclosed, and such Authorized Officer has no knowledge of, the existence
during such period of an Event of Default or Default or, if an Event of Default
or Default existed, describing the nature and period of existence thereof and
the action which the Parent and its Subsidiaries propose to take or have taken
with respect thereto and (B) attaching a schedule showing the calculation of the
financial covenants specified in Section 7.03;
               (vi) as soon as available and in any event within 15 days after
the end of each fiscal month of the Parent and its Subsidiaries, reports in form
and detail satisfactory to the Agents (A) listing all Accounts Receivable of the
Borrower and the Domestic Guarantors in the United States, Canada, and the
United Kingdom as of the end of such fiscal month, which shall include the
amount and age of each Account Receivable, showing separately those which are
more than 30, 60, 90 and 120 days old and a description of all Liens, set-offs,
defenses and

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counterclaims with respect thereto, and such other information as any Agent may
reasonably request, (B) setting forth the amount of the Collections from
Accounts Receivable of the Borrower and the Domestic Guarantors during such
fiscal month and during the 180 days immediately preceding the last day of such
fiscal month, and (C) detailing the 6 month U.S. Retail Key Client WIP as of the
end of such fiscal month;
               (vii) as soon as available and in any event within 15 days after
the end of each fiscal month of the Parent and its Subsidiaries, a Borrowing
Base Certificate certified by an Authorized Officer of the Borrower as being
accurate and complete, current as of the close of business as of the end of such
fiscal month, supported by schedules showing the derivation thereof and
containing such detail and other information as any Agent may reasonably request
from time to time, provided that (A) the Borrowing Base set forth in the
Borrowing Base Certificate shall be effective from and including the date such
Borrowing Base Certificate is duly received by the Agents to but not including
the date on which a subsequent Borrowing Base Certificate is received by the
Agents, unless any Agent disputes the eligibility of any property included in
the calculation of the Borrowing Base or the valuation thereof or any other
information contained therein by notice of such dispute to the Borrower, and
(B) in the event of any dispute about the eligibility of any property included
in the calculation of the Borrowing Base or the valuation thereof, such Agent’s
Permitted Discretion shall control or any other information contained therein;
               (viii) simultaneously with the delivery of the financial
statements of the Parent and its Subsidiaries required by clauses (i) and
(ii) of this Section 7.01(a), reports in form and detail reasonably satisfactory
to the Agents setting forth (A) the U.S. Retail Key Client Effective Fee Rate
for such fiscal quarter, and (B) the U.S. Retail Key Client Claim Retention Rate
for such fiscal quarter.
               (ix) as soon as available and in any event within 30 days after
the end of each fiscal month of the Parent and its Subsidiaries, reports in form
and detail reasonably satisfactory to the Agents and certified by an Authorized
Officer of the Parent setting forth (A) the intercompany receivables of the
Parent and its Subsidiaries, (B) accounts payable of the Borrower and the
Domestic Guarantors as of the end of such fiscal month which shall include the
amount and age of each account payable, and such other information as any Agent
may reasonably request, and (C) the general ledger reconciliation for the United
States;
               (x) no later than 30 days after the commencement of each Fiscal
Year, financial projections for such Fiscal Year, displayed on a month by month
basis for such Fiscal Year for the Parent and its Subsidiaries, all such
financial projections to be prepared on a reasonable basis and in good faith,
and to be based on assumptions believed by the Parent to be reasonable at the
time made and from the best information then available to the Parent;
               (xi) promptly after any Authorized Officer of any Person
composing the Borrower knows or has reason to know that any Loan Party or any of
its Subsidiaries is being investigated by a Governmental Authority (other than
routine inquiries or audits), notice of such investigation and, thereafter,
prompt reporting of any information relative to such investigation requested by
either of the Agents; provided that if such Loan Party is prohibited under
applicable

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law, rule, or regulation from disclosing such investigation to the Agents, then
it shall not be obligated to provide such notice and reporting to the Agents;
               (xii) as soon as possible, and in any event within 3 Business
Days of any Authorized Officer of any Person composing the Borrower having
knowledge of or reason to have knowledge of an Event of Default or Default or
the occurrence of any event or development that could reasonably be expected to
result in a Material Adverse Effect, the written statement of an Authorized
Officer of the Parent setting forth the details of such Event of Default or
Default or other event or development having a Material Adverse Effect and the
action which the affected Loan Party proposes to take with respect thereto;
               (xiii) (A) as soon as possible and in any event within 10 days
after any Authorized Officer of any Person composing the Borrower knows or has
reason to know that (1) any Reportable Event with respect to any Employee Plan
has occurred, (2) any Termination Event with respect to any Employee Plan has
occurred, or (3) an accumulated funding deficiency has been incurred or an
application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the IRC with
respect to an Employee Plan, a statement of an Authorized Officer of the
Borrower setting forth the details of such occurrence and the action, if any,
which such Loan Party or such ERISA Affiliate proposes to take with respect
thereto, (B) promptly and in any event within 3 days after receipt thereof, or
the obtaining of knowledge thereof, by any Authorized Officer of any Loan Party
or any ERISA Affiliate thereof from the PBGC, copies of each notice received by
any Loan Party or any ERISA Affiliate thereof of the PBGC’s intention to
terminate any Plan or to have a trustee appointed to administer any Plan,
(C) promptly and in any event within 10 days after the filing thereof with the
Internal Revenue Service if requested by any Agent, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Employee Plan and Multiemployer Plan (in the case of Multiemployer Plans,
as soon as commercially reasonably possible, but in no event later than 30 days
following such request), (D) promptly and in any event within 10 days after any
Loan Party or any ERISA Affiliate thereof knows or has reason to know that a
required installment within the meaning of Section 412 of the IRC has not been
made when due with respect to an Employee Plan, (E) promptly and in any event
within 3 days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each
notice received by any Loan Party or any ERISA Affiliate thereof concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or
indicating that such Multiemployer Plan may enter reorganization status under
Section 4241 of ERISA, and (F) promptly and in any event within 10 days after
any Loan Party or any ERISA Affiliate thereof sends notice of a plant closing or
mass layoff (as defined in WARN) to employees, copies of each such notice sent
by such Loan Party or such ERISA Affiliate thereof;
               (xiv) promptly after the commencement thereof but in any event
not later than 10 Business Days after service of process with respect thereto
on, or the obtaining of knowledge thereof by, any Authorized Officer of any Loan
Party, notice of each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator which could
reasonably be expected to result in a Material Adverse Effect;

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               (xv) as soon as possible and in any event within 5 Business Days
after execution, receipt or delivery thereof, (A) copies of any material notices
that an Authorized Officer of any Loan Party executes or receives (or obtains
knowledge of) in connection with any Material Contract, and (B) copies of any
default notices with respect to the Parent’s lease for the premises located at
600 Galleria Parkway, Atlanta, GA 30339;
               (xvi) promptly after the sending or filing thereof, copies of all
statements, reports and other information any Loan Party sends to any holders of
its Indebtedness or its securities or files with the SEC or any national
(domestic or foreign) securities exchange;
               (xvii) promptly upon receipt thereof, copies of any “final”
management letters submitted to any Loan Party by its auditors in connection
with any annual or interim audit of the books thereof; and
               (xviii) promptly upon request, such other information concerning
the condition or operations, financial or otherwise, of any Loan Party as any
Agent may from time to time may reasonably request.
          (b) Additional Guaranties and Collateral Security. Cause:
               (i) each Subsidiary of any Loan Party formed or acquired after
the date hereof (a “New Subsidiary”) to execute and deliver to the Collateral
Agent promptly and in any event within 20 days (or such longer period (which
longer period shall not exceed 15 days) as the Collateral Agent is willing, in
its Permitted Discretion, to accommodate from time to time) after the formation
or acquisition thereof (A) a Guaranty guaranteeing the Obligations, (B) a
Security Agreement, together with (x) if such New Subsidiary has any Domestic
Subsidiaries, (I) certificates (if any) evidencing all of the Capital Stock of
such Subsidiaries owned by such New Subsidiary, (II) undated stock powers
executed in blank, and (III) such opinions of counsel and such approving
certificate of such Subsidiary as either Agent may reasonably request in respect
of complying with any legend on any such certificate or any other matter
relating to such shares, and (y) if such New Subsidiary has any first-tier
Subsidiaries that are CFCs, (I) certificates (if any) evidencing all (or, 65% of
the outstanding voting Capital Stock of such Subsidiary if pledging or
hypothecating more than 65% of the total outstanding voting Capital Stock of
such Subsidiary reasonably could be expected to result in material adverse tax
consequences as determined by the Agents in consultation with the Loan Parties)
of the outstanding voting Capital Stock of such Subsidiaries, (II) undated stock
powers executed in blank with signature guaranteed, and (III) such opinions of
counsel and such approving certificate of such Subsidiary as either Agent may
reasonably request in respect of complying with any legend on any such
certificate or any other matter relating to such shares, (C) if such New
Subsidiary has a fee interest in any real property that would constitute After
Acquired Real Property if it were acquired by a Loan Party, one or more
Mortgages creating on such real property a perfected, first priority Lien on
such real property, a Title Insurance Policy covering such real property, a
current ALTA survey of such real property and a surveyor’s certificate, a Phase
I Environmental Site Assessment with respect to such real property, certified to
the Collateral Agent by a company reasonably satisfactory to the Collateral
Agent, each in form and substance reasonably satisfactory to the Agents,
together with such other agreements, instruments and documents as the either
Agent may reasonably require whether comparable to

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the documents required under Section 7.01(o) or otherwise; provided that the
Agents shall not require a Mortgage and other documents for any parcel of real
property if the mortgage recording tax associated therewith is material (in the
reasonable judgment of the Agents) in relation to the Current Value of such real
property, and (D) such other agreements, instruments, approvals, legal opinions,
or other documents reasonably requested by either Agent in order to create,
perfect, establish the first priority of or otherwise protect any Lien purported
to be covered by any such Security Agreement or Mortgage, or otherwise to effect
the intent that such New Subsidiary shall become bound by all of the terms,
covenants and agreements contained in the Loan Documents and that all property
and assets of such New Subsidiary shall become Collateral for the Obligations;
provided that the foregoing Guaranty and Security Agreement shall not be
required to be provided to the Collateral Agent (1) with respect to any New
Subsidiary of a Loan Party that is an Insignificant Subsidiary at the time of
formation or acquisition thereof (provided that if, on any date, such New
Subsidiary becomes a Non-Insignificant Subsidiary, such New Subsidiary shall
execute and deliver to the Collateral Agent such Guaranty and Security
Agreement, together with any other documents required under this
Section 7.01(b)(i), within 20 days of such date), or (2) with respect to any New
Subsidiary of a Loan Party that is a CFC if providing such documents would
result in material adverse tax consequences as determined by the Agents in
consultation with the Loan Parties; and
               (ii) each Loan Party that is the owner of the Capital Stock of
such New Subsidiary to execute and deliver promptly and in any event within
20 days (or such longer period (which longer period shall not exceed 15 days) as
the Collateral Agent is willing, in its Permitted Discretion, to accommodate
from time to time) after the formation or acquisition of such New Subsidiary a
joinder to the Security Agreement (if it is not already a party thereto),
together with (A) if such New Subsidiary is not a CFC or is a CFC and the pledge
of 100% of the voting Capital Stock of such CFC would not result in material
adverse tax consequences as determined by the Agents in consultation with the
Loan Parties, (w) certificates (if any) evidencing all of the Capital Stock of
such New Subsidiary, (x) undated stock powers or other appropriate instruments
or assignment executed in blank with signature guaranteed, (y) such opinions of
counsel and such approving certificate of such New Subsidiary as the Agents may
reasonably request in respect of complying with any legend on any such
certificate or any other matter relating to such shares, and (z) such other
agreements, instruments, approvals, legal opinions, or other documents, or
(B) if such New Subsidiary is a CFC and the granting of a pledge of more than
65% of the voting Capital Stock of such CFC would result in material adverse tax
consequences as determined by the Agents in consultation with the Loan Parties,
(w) certificates (if any) evidencing 65% of the outstanding voting Capital Stock
of such New Subsidiary, (x) undated stock powers or other appropriate
instruments or assignment executed in blank with signature guarantee, (y) such
opinions of counsel and such approving certificate of such New Subsidiary as the
Agents may reasonably request in respect of complying with any legend on any
such certificate or any other matter relating to such shares, and (z) such other
agreements, instruments, approvals, legal opinions, or other documents
reasonably requested by either Agent; provided that delivery of the foregoing
items shall not be required with respect to any New Subsidiary of a Loan Party
that is an Insignificant Subsidiary at the time of formation or acquisition
thereof (provided that if, on any date, such New Subsidiary becomes a
Non-Insignificant Subsidiary, the items required under this Section 7.01(b)(ii)
shall be delivered to the Collateral Agent within 20 days of such date).

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          (c) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations, orders, judgments and awards (including any settlement of
any claim that, if breached, could give rise to any of the foregoing) (except,
in each case, to the extent that non-compliance could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect),
such compliance to include (i) paying before the same become delinquent all
taxes, assessments and governmental charges or levies (other than those that are
in de minimis amounts) imposed upon it or upon its income or profits or upon any
of its properties, and (ii) paying all other lawful claims which if unpaid might
become a Lien or charge upon any of its properties, except, in each case, (A) to
the extent contested in good faith by proper proceedings which stay the
enforcement of any Lien resulting from the non-payment thereof and with respect
to which adequate reserves have been set aside for the payment thereof in
accordance with GAAP, or (B) taxes, assessments and governmental charges or
levies or any other such lawful claims in an aggregate amount not to exceed
$50,000.
          (d) Preservation of Existence, Etc. Other than as expressly set forth
in Section 7.02(c), maintain and preserve, and cause each of its Subsidiaries to
maintain and preserve, its existence, rights and privileges, and become or
remain, and cause each of its Subsidiaries to become or remain, duly qualified
and 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, except to the extent failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect; provided that nothing in this Section 7.01(d) shall
prevent the withdrawal by the Parent or any Subsidiary of the Parent of its
qualification as a foreign corporation in any jurisdiction where such
withdrawal, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
          (e) Keeping of Records and Books of Account. Keep, and cause each of
its Subsidiaries to keep, adequate records and books of account, with complete
entries, in all material respects, made to permit the preparation of financial
statements in accordance with GAAP.
          (f) Inspection Rights. Permit, and cause each of its Subsidiaries to
permit, the agents and representatives of any Agent at any time and from time to
time during normal business hours and, so long as no Default or Event of Default
shall have occurred and be continuing, upon reasonable advance notice to the
Borrower, at the expense of the Borrower, to examine and make copies of and
abstracts from its records and books of account, to visit and inspect its
properties, to verify leases, notes, accounts receivable, deposit accounts and
its other assets, to conduct audits, physical counts, valuations, appraisals,
Phase I Environmental Site Assessments (and, (i) if an Event of Default shall
have occurred and be continuing and if requested by the Collateral Agent based
upon the results of any such Phase I Environmental Site Assessment, or (ii) in
the event a Governmental Authority so orders and the Borrower does not timely
respond, a Phase II Environmental Site Assessment of any real property owned by
the Borrower), field examinations, or enterprise valuations and to discuss its
affairs, finances and accounts with any of its directors, officers, managerial
employees, independent accountants or any of its other representatives; provided
that the Borrower shall be given the opportunity to be present in any
discussions with the Borrower’s independent accountants. The Borrower shall pay
(i) $1,500 per day per examiner plus the examiner’s out-of-pocket costs and
reasonable

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expenses incurred in connection with all such visits, audits, inspections,
valuations, and field examinations, and (ii) the cost of all audits, appraisals
and business valuations (including enterprise valuation appraisals) conducted by
third party auditors or appraisers on behalf of the Agents; provided that so
long as no Event of Default shall have occurred and be continuing and so long as
Revolving Loans have not been outstanding for more than 30 consecutive days in
any Fiscal Year, the Borrower shall not be obligated to pay for more than 2 such
audits and examinations in such Fiscal Year.
          (g) Maintenance of Properties, Etc. (i) Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (ii) comply,
and cause each of its Subsidiaries to comply, at all times with the provisions
of all leases to which it is a party as lessee or under which it occupies
property, so as to prevent any loss or forfeiture thereof or thereunder, in each
case, except to the extent that failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect; provided that nothing in this Section 7.01(g) shall prevent Permitted
Dispositions or liquidations, dissolutions, consolidations, or mergers that are
expressly permitted by, and effected in accordance with, Section 7.02(c).
          (h) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including comprehensive general liability, hazard,
and business interruption insurance) with respect to its properties and
business, in such amounts and covering such risks as is required by any
Governmental Authority having jurisdiction with respect thereto or as is carried
generally in accordance with sound business practice by companies in similar
businesses similarly situated and in any event in amount, adequacy and scope
reasonably satisfactory to the Collateral Agent. All policies covering the
Collateral are to be made payable to the Collateral Agent for the benefit of the
Agents and the Lenders, as its interests may appear, in case of loss, under a
standard non contributory “lender” or “secured party” clause and are to contain
such other provisions as the Collateral Agent may require to fully protect the
Collateral Agent’s interest in the Collateral and to any payments to be made
under such policies. All certificates of insurance are to be delivered to the
Collateral Agent and the policies are to be premium prepaid, with the loss
payable and additional insured endorsement in favor of the Collateral Agent and
such other Persons as the Collateral Agent may designate from time to time, and
shall provide for not less than 30 days prior written notice to the Collateral
Agent of the exercise of any right of cancellation. If any Loan Party or any of
its Subsidiaries fails to maintain such insurance, the Collateral Agent may
arrange for such insurance, but at the Borrower’s expense and without any
responsibility on the Collateral Agent’s part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. Upon the occurrence and during the continuance of an Event
of Default, the Collateral Agent shall have the sole right, in the name of the
Lenders, any Loan Party and its Subsidiaries, to file claims under any insurance
policies, to receive, receipt and give acquittance for any payments that may be
payable thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.

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          (i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and
cause each of its Subsidiaries to obtain, maintain and preserve, and take all
necessary action to timely renew, all permits, licenses, authorizations,
approvals, entitlements and accreditations which are necessary or useful in the
proper conduct of its business, except to the extent failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
          (j) Environmental. (i) Keep any property either owned or operated by
it or any of its Subsidiaries free of any Environmental Liens; (ii) comply, and
cause each of its Subsidiaries to comply, with Environmental Laws except where
any failure to comply could not reasonably be expected to result in a Material
Adverse Effect; (iii) provide the Agents written notice within 10 Business Days
after any Release of a Hazardous Material in excess of any reportable quantity
under Environmental Laws from or onto property owned or operated by it or any of
its Subsidiaries and take any Remedial Actions required to abate said Release;
(iv) provide the Agents with written notice within 10 Business Days after the
receipt of any of the following: (A) notice that an Environmental Lien has been
filed against any owned property of any Loan Party or any of its Subsidiaries;
(B) commencement of an Environmental Action or notice that an Environmental
Action will be filed against any Loan Party or any of its Subsidiaries; and
(C) notice of a violation, citation or other administrative order which could
reasonably be expected to result in a Material Adverse Effect and (v) defend,
indemnify and hold harmless the Agents and the Lenders and their transferees,
and their respective employees, agents, officers and directors, from and against
any claims, demands, penalties, fines, liabilities, settlements, damages, costs
or expenses (including attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses) incurred by or asserted
against such Person to the extent arising out of (A) the presence, disposal,
release or threatened release of any Hazardous Materials on any property at any
time owned or occupied by any Loan Party or any of its Subsidiaries (or its
predecessors in interest or title), (B) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to such
Hazardous Materials, (C) any investigation, lawsuit brought or threatened,
settlement reached or government order relating to such Hazardous Materials,
(D) any violation of any Environmental Law or (E) any Environmental Action filed
against any Agent or any Lender; provided that no Loan Party shall have any
obligation under clause (v) to the extent that the condition arises out of or
relates to the gross negligence or willful misconduct of any indemnified party
or its agents or representatives or results in a violation of Environmental Laws
or the presence or release of Hazardous Materials that first occur at a
particular property after that property has been transferred to any indemnified
party or their successors or assigns.
          (k) Further Assurances.
               (i) Take such action and execute, acknowledge and deliver, and
cause each of its Subsidiaries to take such action and execute, acknowledge and
deliver, at its sole cost and expense, such agreements, instruments or other
documents as any Agent may reasonably require from time to time in order (A) to
carry out more effectively the purposes of this Agreement and the other Loan
Documents, (B) to subject to valid and perfected first priority Liens (subject
to Permitted Liens) any of the Collateral or any other property of any Loan
Party and its Subsidiaries (including commercial tort claims, deposit accounts,
securities accounts, and commodities accounts), (C) to establish and maintain
the validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created

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thereby, and (D) to better assure, convey, grant, assign, transfer and confirm
unto each Agent, each Lender and the L/C Issuer the rights now or hereafter
intended to be granted to it under this Agreement or any other Loan Document. In
furtherance of the foregoing, to the maximum extent permitted by applicable law,
each Loan Party (x) authorizes each Agent to execute any such agreements,
instruments or other documents in such Loan Party’s name and to file such
agreements, instruments or other documents in any appropriate filing office,
(y) authorizes each Agent to file any financing statement required hereunder or
under any other Loan Document, and any continuation statement or amendment with
respect thereto, in any appropriate filing office without the signature of such
Loan Party, and (z) ratifies the filing of any financing statement, and any
continuation statement or amendment with respect thereto, filed without the
signature of such Loan Party prior to the date hereof.
               (ii) Without limiting the generality of clause (i) above, at the
Agents request, take such action, and cause each of its Subsidiaries to take
such action, at its sole cost and expense to cause counsel to the PR Partnership
to execute and deliver to the Agents and Lenders an opinion substantially in the
form of Exhibit 5.01(d) and as to such other matters as the Agents may
reasonably request.
          (l) Change in Collateral; Collateral Records. (i) Give the Agents not
less than 10 days prior written notice of any change in the location of any
material portion Collateral, other than to (or in-transit between) locations set
forth on Schedule 6.01(ff) and with respect to which the Collateral Agent has
filed financing statements and otherwise fully perfected its Liens thereon, and
(ii) execute and deliver, and cause each of its Subsidiaries to execute and
deliver, to the Agents for the benefit of the Agents and the Lenders from time
to time, solely for the Agents’ convenience in maintaining a record of
Collateral, such written statements and schedules as the Agents may reasonably
request, designating, identifying or describing the Collateral.
          (m) Landlord Waivers; Collateral Access Agreements.
               (i) At any time any Collateral related to the Borrowing Base is
located on any real property of the Borrower or any other Loan Party that is
acquired after the Effective Date and which is not owned by the Borrower or any
other Loan Party (excluding temporary use of office space of customers), use
commercially reasonable efforts to obtain written subordinations or waivers, in
form and substance reasonably satisfactory to the Agents, of all present and
future Liens to which the owner or lessor of such premises may be entitled to
assert against the Collateral located at such premises; provided, that in the
event the Loan Parties are unable to obtain any such written subordination or
waiver the Administrative Agent may, in its reasonable discretion, establish
such reserves as it deems necessary with respect to any such Collateral; and
               (ii) Use commercially reasonable efforts to obtain written access
agreements, in form and substance reasonably satisfactory to the Agents,
providing access to Collateral related to the Borrowing Base located on any new
premises not owned by the Borrower or any other Loan Party (excluding temporary
use of office space of customers) in order to remove such Collateral or books
and records from such premises during an Event of Default; provided, that in the
event the Loan Parties are unable to obtain any such written access

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agreements, the Administrative Agent may, in its reasonable discretion,
establish such reserves as it deems necessary with respect to any such
Collateral.
          (n) Subordination. Cause all Indebtedness and other obligations now or
hereafter owed by any Loan Party to Parent or any of its Subsidiaries, to be
subordinated in right of payment and security to the Indebtedness and other
Obligations owing to the Agents and the Lenders in accordance with a
subordination agreement in form and substance satisfactory to the Agents.
          (o) After Acquired Property. Upon the acquisition by it or any of its
Subsidiaries of any After Acquired Property, immediately so notify the Agents,
setting forth with specificity a description of the interest acquired, the
location of the real property, any structures or improvements thereon and either
an appraisal or such Loan Party’s good-faith estimate of the current value of
such real property (for purposes of this Section, the “Current Value”). The
Collateral Agent shall notify such Loan Party whether it intends to require a
Mortgage and the other documents referred to below. Upon receipt of such notice
requesting a Mortgage, the Person which has acquired such After Acquired
Property shall as promptly as practicable furnish to the Collateral Agent the
following, each in form and substance reasonably satisfactory to the Collateral
Agent: (i) a Mortgage with respect to such real property and related assets
located at the After Acquired Property, each duly executed by such Person and in
recordable form; (ii) evidence of the recording of the Mortgage referred to in
clause (i) above in such office or offices as may be necessary or, in the
opinion of the Collateral Agent, desirable to create and perfect a valid and
enforceable first priority lien on the property purported to be covered thereby
or to otherwise protect the rights of the Agents and the Lenders thereunder,
(iii) a Title Insurance Policy, (iv) a survey of such real property, certified
to the Collateral Agent and to the issuer of the Title Insurance Policy by a
licensed professional surveyor reasonably satisfactory to the Collateral Agent,
(v) Phase I Environmental Site Assessments with respect to such real property,
certified to the Collateral Agent by a company reasonably satisfactory to the
Collateral Agent, , and (vi) such other documents or instruments (including
guarantees and opinions of counsel) as the Collateral Agent may reasonably
require. The Borrower shall pay all fees and expenses, including reasonable
attorneys fees and expenses, and all title insurance charges and premiums, in
connection with each Loan Party’s obligations under this Section 7.01(o).
Anything to the contrary contained herein notwithstanding, the Collateral Agent
shall not require (A) a Mortgage on any leased real property, or (B) a Mortgage
on any real property owned in fee if the mortgage recording tax associated
therewith is material (in the reasonable judgment of the Agents) in relation to
the Current Value
          (p) Fiscal Year. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on December 31st of each calendar year unless the Agents
consent to a change in such fiscal year of Parent and its Subsidiaries (and
appropriate related changes to this Agreement).
          (q) Intellectual Property. Notify the Agents prior to filing an
application for the registration of any copyright with the United States
Copyright Office and, upon the request of the Collateral Agent, promptly execute
such documents and do such other acts or things deemed necessary or desirable by
Collateral Agent to perfect Collateral Agent’s Liens therein.

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     Section 7.02 Negative Covenants. So long as any principal of or interest on
any Loan, Reimbursement Obligation, Letter of Credit Obligation or any other
Obligation (whether or not due) (other than unasserted contingent
indemnification Obligations) shall remain unpaid or any Lender shall have any
Commitment hereunder, each Loan Party shall not and shall not permit any of its
Subsidiaries to:
          (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
upon or with respect to any of its properties, whether now owned or hereafter
acquired; file or authorize under the Uniform Commercial Code or any similar law
or statute of any jurisdiction, a financing statement (or the equivalent
thereof) that names it or any of its Subsidiaries as debtor (other than in
connection with a potential refinancing of the Obligations); sign or suffer to
exist any security agreement authorizing any secured party thereunder to file
such financing statement (or the equivalent thereof); other than, as to all of
the above, Permitted Liens.
          (b) Indebtedness. Create, incur, assume, guarantee or suffer to exist,
or otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness.
          (c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve,
or merge, consolidate or amalgamate with any Person, or convey, sell, lease or
sublease, transfer or otherwise dispose of, whether in one transaction or a
series of related transactions, all or any part of its business, property or
assets, whether now owned or hereafter acquired, or purchase or otherwise
acquire, whether in one transaction or a series of related transactions, all or
substantially all of the assets of any Person (or any division thereof), or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that
               (i) the Parent and its Subsidiaries may enter into Permitted
Mergers;
               (ii) the Parent and its Subsidiaries may enter into Permitted
Reorganization Transactions; and
               (iii) the Parent and its Subsidiaries may make Permitted
Dispositions.
          (d) Change in Nature of Business; Change in Independent Certified
Public Accountant. Make, or permit any of its Subsidiaries to make, any change
in the nature of its business described on Schedule 7.02(d) or acquire any
properties or assets that are not reasonably related to the conduct of such
business activities or ancillary thereto. Make any change in its independent
certified public accountant without the prior written consent (which consent
shall not be unreasonably withheld) of the Agents.
          (e) Loans, Advances, Investments, Etc. Make any loan, advance, other
extension of credit or capital contributions to, or hold or invest in, or
purchase or otherwise acquire any shares of the Capital Stock, bonds, notes,
debentures or other securities of, or make any other investment in, any other
Person, or purchase or own any futures contract or otherwise become liable for
the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, or permit any of its Subsidiaries to do any of the
foregoing, except

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for: (i) investments existing on the date hereof, as set forth on
Schedule 7.02(e) hereto, but not any increase in the amount thereof as set forth
in such Schedule or any other modification of the terms thereof, and
(ii) Permitted Investments.
          (f) Lease Obligations. Create, incur or suffer to exist, or permit any
of its Subsidiaries to create, incur or suffer to exist, any obligations as
lessee for the payment of rent for any real or personal property in connection
with any sale and leaseback transaction.
          (g) [Intentionally Omitted]
          (h) Restricted Payments. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any Loan
Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make any
repurchase, redemption, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock of any Loan Party or any direct or indirect parent of any Loan Party, now
or hereafter outstanding, (iii) make any payment to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights for the purchase
or acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, or (iv) pay any management fees or any other fees or
expenses (including the reimbursement thereof by any Loan Party or any of its
Subsidiaries) pursuant to any management agreement to any Affiliate of any Loan
Party or any Subsidiary of an Affiliate of a Loan Party; provided, however, that
(A) any Subsidiary of the Parent may pay dividends to its shareholders, (B) the
Parent may pay dividends in the form of common Capital Stock, and (C) common
Capital Stock of the Parent may be issued upon the conversion of the Senior
Convertible Notes in accordance with the Indenture for the 10% Senior
Convertible Notes or the conversion of the Series A Preferred Stock into common
Capital Stock.
          (i) Federal Reserve Regulations. Permit any Loan or the proceeds of
any Loan under this Agreement to be used for any purpose that would cause such
Loan to be a margin loan under the provisions of Regulation T, U or X of the
Board.
          (j) Transactions with Affiliates. Enter into, renew, extend or be a
party to, or permit any of its Subsidiaries to enter into, renew, extend or be a
party to, any transaction or series of related transactions (including the
purchase, sale, lease, transfer or exchange of property or assets of any kind or
the rendering of services of any kind) with any Affiliate, except (i) in the
ordinary course of business and necessary or desirable for the prudent operation
of its business, for fair consideration and on terms no less favorable to it or
its Subsidiaries than would be obtainable in a comparable arm’s length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
with another Loan Party, (iii) the payment of reasonable and customary fees and
out-of-pocket expenses of the members of the board of directors or officers of
the Parent or any of its Subsidiaries, (iv) reasonable and customary director,
officer and employee compensation (including bonuses) and other benefits
(including retirement, health, stock option, severance and other benefit plans)
and, in the case of senior officers, indemnification arrangements approved in
good faith by the board of directors of the Parent, (iv) employment and
severance arrangements between the Parent and its Subsidiaries and their
respective directors, officers and employees, to the extent approved in good
faith by the board of directors of the Parent, (v) transactions permitted by
Section 7.02(e) or (h), and (vi) transactions contemplated by that certain 2007

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Amended and Restated Standstill Agreement dated as of July 16, 2007 among the
Parent and the parties identified as “Investors” on the signature pages thereof
as of the date hereof.
          (k) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Capital Stock of such Subsidiary
owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict compliance with:
                    (A) this Agreement and the other Loan Documents;
                    (B) any agreements in effect on the date of this Agreement
and described on Schedule 7.02(k);
                    (C) any applicable law, rule or regulation (including
applicable currency control laws and applicable state corporate statutes
restricting the payment of dividends in certain circumstances);
                    (D) in the case of clause (iv), any agreement setting forth
customary restrictions on the subletting, assignment or transfer of any property
or asset that is leased or licensed;
                    (E) in the case of clause (iv), any agreement, instrument or
other document evidencing a Permitted Lien that restricts, on customary terms,
the transfer of any property or assets subject thereto;
                    (F) encumbrances or restrictions imposed by any Permitted
Refinancing that is otherwise permitted by the Loan Documents; provided that the
encumbrances or restrictions in the Indebtedness as extended, refinanced or
modified are not materially more restrictive than those that existed prior to
such extension, refinancing, or modification;
                    (G) customary restrictions and conditions contained in any
agreement relating to the sale of any property permitted under Section 7.02(c)
pending consummation of such sale;
                    (H) customary restrictions related to deposits or net worth
imposed by suppliers or landlords under contracts entered into in the ordinary
course of business;
                    (I) agreements evidencing Permitted Indebtedness incurred by
a Subsidiary that is not a Loan Party; or

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                    (J) subordination of intercompany indebtedness or
restrictions on transfers, dividends or loans to the extent required by
applicable law or thin capitalization rules.
          (l) Limitation on Issuance of Preferred Stock. Except for the issuance
or sale of Permitted Preferred Stock by the Parent, issue or sell or enter into
any agreement or arrangement for the issuance and sale of, or permit any of its
Subsidiaries to issue or sell or enter into any agreement or arrangement for the
issuance and sale of, any shares of Preferred Stock, any securities convertible
into or exchangeable for Preferred Stock or any warrants, except, in each case,
to the Parent or a wholly owned Subsidiary of the Parent so long as such sale or
issuance is made subject to the Collateral Agent’s Liens on such Preferred
Stock.
          (m) Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements; Etc. (i) Amend, modify or otherwise change (or permit
the amendment, modification or other change in any manner of) its or any of its
Subsidiaries’ Subordinated Debt or of any instrument or agreement (including any
purchase agreement, indenture, loan agreement or security agreement) relating to
any such Subordinated Debt if such amendment, modification or change would
shorten the final maturity or average life to maturity of, or require any
payment to be made earlier than the date originally scheduled on, such
Subordinated Debt, would increase the interest rate applicable to such
Subordinated Debt, would change the subordination provisions of such
Subordinated Debt, or would otherwise be adverse to the Lenders or the issuer of
such Subordinated Debt in any material respect, (ii) except for the Obligations,
make any voluntary or optional payment, prepayment, redemption, defeasance,
sinking fund payment, repurchase or other acquisition for value of any of its or
its Subsidiaries’ Indebtedness described in clauses (i) — (l) of the definition
of “Permitted Indebtedness” (including by way of depositing money or securities
with the trustee therefor before the date required for the purpose of paying any
portion of such Indebtedness when due), or refund, refinance, replace or
exchange any other Indebtedness for any such Indebtedness (except to the extent
such refunded, refinanced, replaced, or exchanged Indebtedness is otherwise
expressly permitted by the definition of “Permitted Indebtedness”), or make any
payment, prepayment, redemption, defeasance, sinking fund payment or repurchase
of any such Indebtedness as a result of any asset sale, change of control,
issuance and sale of debt or equity securities or similar event, or give any
notice with respect to any of the foregoing, (iii) except as permitted by
Section 7.02(c), amend, modify or otherwise change its name, jurisdiction of
organization, organizational identification number or FEIN, or (iv) amend,
modify or otherwise change its certificate of incorporation or bylaws (or other
similar organizational documents), including by the filing or modification of
any certificate of designation, or any agreement or arrangement entered into by
it, with respect to any of its Capital Stock (including any shareholders’
agreement), or enter into any new agreement with respect to any of its Capital
Stock, except any such amendments, modifications or changes or any such new
agreements or arrangements pursuant to this clause (iv) that either individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
          (n) Investment Company Act of 1940. Engage in any business, enter into
any transaction, use any securities or take any other action or permit any of
its Subsidiaries to do any of the foregoing, that would cause it or any of its
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of

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being an “investment company” or a company “controlled” by an “investment
company” not entitled to an exemption within the meaning of such Act.
          (o) Compromise of Accounts Receivable. Compromise or adjust any
Account Receivable (or extend the time of payment thereof) or grant any
discounts, allowances or credits or permit any of its Subsidiaries to do so
other than, provided no Default or Event of Default has occurred and is
continuing, in the ordinary course of its business; provided, however, in no
event shall any such discount, allowance or credit exceed $200,000 in the
aggregate and no such extension of the time for payment extend beyond 60 days
from the original due date thereof.
          (p) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in any
transaction described in Section 4069 of ERISA; (ii) engage, or permit any ERISA
Affiliate to engage, in any prohibited transaction described in Section 406 of
ERISA or 4975 of the IRC for which a statutory or class exemption is not
available or a private exemption has not previously been obtained from the U.S.
Department of Labor; (iii) adopt or permit any ERISA Affiliate to adopt any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides health or life insurance benefits to employees after termination of
employment other than as required by Section 601 of ERISA or applicable law;
(iv) fail to make any contribution or payment to any Multiemployer Plan which it
or any ERISA Affiliate may be required to make under any agreement relating to
such Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the IRC on or before the due date for such
installment or other payment.
          (q) Environmental. Permit the use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials at any property owned or
leased by it or any of its Subsidiaries, unless such use, handling, generation,
storage, treatment, release or disposal of Hazardous Materials does not result
in a Material Adverse Effect.
          (r) Certain Agreements. Agree to any material amendment or other
material change to or material waiver of any of its rights under any Material
Contract, in each case that could reasonably be expected to result in a Material
Adverse Effect.
          (s) Canadian Employee Benefits. Incur any material liability or
obligation under the Canadian Employee Benefit Laws or establish any pension
plan, deferred compensation plan, retirement income plan, stock option or stock
purchase plan, profit sharing plan, bonus plan or policy, employee group
insurance plan, program, policy or practice, formal or informal, with respect to
their respective employees in Canada, that in any such case, is equivalent or
substantially equivalent to a “defined benefit plan” (as defined in
Section 3(35) of ERISA).
          (t) Inactive Subsidiaries. Permit any of the Inactive Subsidiaries to
own any assets (other than assets with a de minimis value), incur any
liabilities (other than de minimis liabilities), or engage in any business
activity.

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          (u) Transfer Pricing. Other than as required by applicable law,
modify, or permit any Subsidiary to modify, its Transfer Pricing arrangements in
a manner that has, or is reasonably likely to have, a Material Adverse Effect on
any Loan Party.
     Section 7.03 Financial Covenants. So long as any principal of or interest
on any Loan, Reimbursement Obligation, Letter of Credit Obligation or any other
Obligation (whether or not due) (other than unasserted contingent
indemnification Obligations) shall remain unpaid or any Lender shall have any
Commitment hereunder, each Loan Party shall not:
          (a) Leverage Ratio. Permit the ratio of Consolidated Senior Debt of
the Parent and its Subsidiaries as of the last day of each fiscal quarter set
forth below to TTM EBITDA of the Parent and its Subsidiaries for the period
ended as of the last day of such fiscal quarter to be greater than the
applicable ratio set forth opposite such period:

      Applicable Period   Leverage Ratio
For the 12 month period ending September 30, 2007
  3.70:1.00
For the 12 month period ending December 31, 2007
  1.70:1.00
For the 12 month period ending March 31, 2008
  1.90:1.00
For the 12 month period ending June 30, 2008
  1.90:1.00
For the 12 month period ending September 30, 2008
  1.70:1.00
For the 12 month period ending December 31, 2008
  1.50:1.00
For the 12 month period ending March 31, 2009
  1.40:1.00
For the 12 month period ending June 30, 2009
  1.30:1.00
For the 12 month period ending September 30, 2009
  1.20:1.00
For the 12 month period ending December 31, 2009
  1.10:1.00
For the 12 month period ending March 31, 2010
  1.00:1.00
For the 12 month period ending June 30, 2010
  1.00:1.00
For the 12 month period ending September 30, 2010
  1.00:1.00
For the 12 month period ending December 31, 2010
  1.00:1.00
For the 12 month period ending March 31, 2011
  1.00:1.00

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      Applicable Period   Leverage Ratio
For the 12 month period ending June 30, 2011
  1.00:1.00
For the 12 month period ending September 30, 2011
  1.00:1.00
For the 12 month period ending December 31, 2011
  1.00:1.00

          (b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio of the Parent and its Subsidiaries for the period of 4 consecutive fiscal
quarters ended as of the last day of each fiscal quarter set forth below to be
less than the applicable ratio set forth opposite such date:

      Fiscal Quarter End   Fixed Charge Coverage Ratio
September 30, 2007
  1.40:1.00
December 31, 2007
  1.30:1.00
March 31, 2008
  1.50:1.00
June 30, 2008
  1.30:1.00
September 30, 2008
  1.90:1.00
December 31, 2008
  1.90:1.00
March 31, 2009
  1.90:1.00
June 30, 2009
  1.90:1.00
September 30, 2009
  1.90:1.00
December 31, 2009
  1.90:1.00
March 31, 2010
  1.90:1.00
June 30, 2010
  1.90:1.00
September 30, 2010
  1.90:1.00
December 31, 2010
  1.90:1.00
March 31, 2011
  1.90:1.00
June 30, 2011
  1.90:1.00
September 30, 2011
  1.90:1.00
December 31, 2011
  1.90:1.00

          (c) Consolidated EBITDA. Permit Consolidated EBITDA of the Parent and
its Subsidiaries for the four quarter period ending on the date set forth below
to be less than the applicable amount set forth opposite such date for such four
quarter period:

          Fiscal Quarter End   Consolidated EBITDA
September 30, 2007
  $ 29,100,000  
December 31, 2007
  $ 28,400,000  
March 31, 2008
  $ 25,700,000  
June 30, 2008
  $ 25,000,000  
September 30, 2008
  $ 26,900,000  
December 31, 2008
  $ 29,300,000  
March 31, 2009
  $ 29,700,000  
June 30, 2009
  $ 30,100,000  
September 30, 2009
  $ 30,500,000  

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          Fiscal Quarter End   Consolidated EBITDA
December 31, 2009
  $ 31,000,000  
March 31, 2010
  $ 31,700,000  
June 30, 2010
  $ 32,400,000  
September 30, 2010
  $ 33,100,000  
December 31, 2010
  $ 33,800,000  
March 31, 2011
  $ 34,500,000  
June 30, 2011
  $ 35,200,000  
September 30, 2011
  $ 35,900,000  
December 31, 2011
  $ 36,400,000  

          (d) Capital Expenditures. Make Capital Expenditures in any Fiscal Year
in excess of the amount set forth in the following table for the applicable
period:

         
Fiscal Year 2007
  $ 6,700,000  
Fiscal Year 2008
  $ 7,000,000  
Fiscal Year 2009
  $ 5,900,000  
Fiscal Year 2010
  $ 5,900,000  
Fiscal Year 2011
  $ 5,900,000  

ARTICLE VIII.
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
     Section 8.01 Collection of Accounts Receivable; Management of Collateral.
          (a) On or prior to the Effective Date, the Borrower and the Domestic
Guarantors shall assist the Administrative Agent in (i) establishing, and,
during the term of this Agreement, maintaining one or more lockboxes identified
on Schedule 8.01 hereto (collectively, the “Lockboxes”) with the financial
institutions set forth on Schedule 8.01 hereto or such other financial
institutions selected by the Borrower and approved by the Administrative Agent
(which approval shall not be unreasonably withheld) (each being referred to as a
“Lockbox Bank”), and (ii) establishing, and during the term of this Agreement,
maintaining an account (the “Collection Account”) with each Lockbox Bank as set
forth on Schedule 8.01. The Borrower and the Domestic Guarantors shall
irrevocably instruct their Account Debtors, with respect to Accounts Receivable
of the Borrower and the Domestic Guarantors, to remit all payments to be made by
checks or other drafts to the Lockboxes and to remit all payments to be made by
wire transfer or by Automated Clearing House, Inc. payment as directed by the
Administrative Agent and shall instruct each Lockbox Bank to deposit all amounts
received in its Lockbox to the Collection Account at such Lockbox Bank on the
day received or, if such day is not a Business Day, on the next succeeding
Business Day. Until the Administrative Agent has advised the Borrower to the
contrary after the occurrence and during the continuance of an Event of Default,
the Borrower and the Domestic Guarantors may and will enforce, collect and
receive all amounts owing on the

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Accounts Receivable of the Borrower and such Domestic Guarantors for the
Administrative Agent’s benefit and on the Administrative Agent’s behalf, but at
the Borrower’s expense; such privilege shall terminate, at the election of any
Agent, upon the occurrence and during the continuance of an Event of Default.
All checks, drafts, notes, money orders, acceptances, cash and other evidences
of Indebtedness received directly by the Borrower or any Domestic Guarantor from
any Account Debtor, as proceeds from Accounts Receivable of the Borrower or such
Domestic Guarantor, or as proceeds of any other Collateral, shall be held by the
Borrower or such Domestic Guarantor in trust for the Agents and the Lenders and
upon receipt be deposited by the Borrower or such Domestic Guarantor in original
form and no later than the next Business Day after receipt thereof into a
Collection Account. Neither the Borrower nor any Domestic Guarantor shall
commingle such collections with the Borrower’s or such Domestic Guarantor’s (as
the case may be) own funds or the funds of any Subsidiary or Affiliate of the
Borrower or such Domestic Guarantor (as the case may be) or with the proceeds of
any assets not included in the Collateral. All funds received in the Collection
Account shall be sent by wire transfer or Automated Clearing House, Inc. payment
to the Payment Office to be credited to the Administrative Agent’s Account for
application at the end of each Business Day to reduce the then principal balance
of the Revolving Loans, conditional upon final payment to the Administrative
Agent. No checks, drafts or other instruments received by the Administrative
Agent shall constitute final payment to the Administrative Agent unless and
until such checks, drafts or instruments have actually been collected.
          (b) After the occurrence and during the continuance of an Event of
Default, the Collateral Agent may, and at the request of the Administrative
Agent or the Required Lenders, the Collateral Agent shall, send a notice of
assignment or notice of the Lenders’ security interest to any and all Account
Debtors and, thereafter, the Collateral Agent shall have the sole right to
collect the Accounts Receivable and payment intangibles of the Borrower and the
Domestic Guarantors or take possession of the Collateral and the books and
records relating thereto. After the occurrence and during the continuation of an
Event of Default, the Borrower and the Domestic Guarantors shall not, without
prior written consent of the Agents, grant any extension of time of payment of
any Account Receivable or payment intangible, compromise or settle any Account
Receivable or payment intangible for less than the full amount thereof, release,
in whole or in part, any Person or property liable for the payment thereof, or
allow any credit or discount whatsoever thereon.
          (c) The Borrower and each Domestic Guarantor hereby appoints each
Agent or its designee on behalf of such Agent as the Borrower’s and such
Domestic Guarantor’s attorney-in-fact provided that each Agent agrees not to
exercise such power except upon the occurrence and during the continuance of an
Event of Default to (i) endorse the Borrower’s or such Domestic Guarantor’s name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Accounts Receivable or payment intangibles of the
Borrower or such Domestic Guarantor, (ii) sign the Borrower’s or such Domestic
Guarantor’s name on any invoice or bill of lading relating to any of the
Accounts Receivable or payment intangibles of the Borrower or such Domestic
Guarantor, drafts against Account Debtors with respect to Accounts Receivable or
payment intangibles of the Borrower or such Domestic Guarantor, assignments and
verifications of Accounts Receivable or payment intangibles and notices to
Account Debtors with respect to Accounts Receivable or payment intangibles of
the Borrower or such Domestic Guarantor, (iii) send verification of Accounts
Receivable of the

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Borrower or such Domestic Guarantor, and (iv) notify the Postal Service
authorities to change the address for delivery of mail addressed to the Borrower
or such Domestic Guarantor to such address as such Agent may designate and to do
all other acts and things necessary to carry out this Agreement; provided that
such Agent or designees shall use reasonable efforts to simultaneously provide a
copy of such notification to the Borrower or such Domestic Guarantor (it being
understood that failure of such Agent or designee to provide such notice to the
Borrower shall not result in liability to such Agent or designee hereunder). All
acts of said attorney or designee are hereby ratified and approved, and said
attorney or designee shall not be liable for any acts of omission or commission
(other than acts of omission or commission constituting gross negligence or
willful misconduct as determined by a final non-appealable judgment of a court
of competent jurisdiction), or for any error of judgment or mistake of fact or
law; this power being coupled with an interest is irrevocable until all of the
Loans and other Obligations under the Loan Documents are paid in full and all of
the Commitments are terminated.
          (d) Nothing herein contained shall be construed to constitute any
Agent as agent of the Borrower or any Domestic Guarantor for any purpose
whatsoever, and the Agents shall not be responsible or liable for any shortage,
discrepancy, damage, loss or destruction of any part of the Collateral wherever
the same may be located and regardless of the cause thereof (other than from
acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction). The Agents shall not, under any circumstance or in any
event whatsoever, have any liability for any error or omission or delay of any
kind occurring in the settlement, collection or payment of any of the Accounts
Receivable of the Borrower or the Domestic Guarantors or any instrument received
in payment thereof or for any damage resulting therefrom (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction). The Agents, by anything herein or in any assignment or otherwise,
do not assume any of the obligations under any contract or agreement assigned to
any Agent and shall not be responsible in any way for the performance by the
Borrower or any Domestic Guarantor of any of the terms and conditions thereof.
          (e) If any Account Receivable of the Borrower or any Domestic
Guarantor includes a charge for any tax payable to any Governmental Authority,
each Agent is hereby authorized (but in no event obligated) in its discretion to
pay the amount thereof to the proper taxing authority for the Borrower’s account
and to charge the Borrower therefor. The Borrower and the Domestic Guarantors
shall notify the Agents if any Account Receivable of the Borrower or the
Domestic Guarantors includes any taxes due to any such Governmental Authority
and, in the absence of such notice, the Agents shall have the right to retain
the full proceeds of such Account Receivable and shall not be liable for any
taxes that may be due by reason of the sale and delivery creating such Account
Receivable.
          (f) Notwithstanding any other terms set forth in the Loan Documents,
the rights and remedies of the Agents and the Lenders herein provided, and the
obligations of the Loan Parties set forth herein, are cumulative of, may be
exercised singly or concurrently with, and are not exclusive of, any other
rights, remedies or obligations set forth in any other Loan Document or as
provided by law.

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     Section 8.02 Accounts Receivable Documentation. The Borrower and the
Domestic Guarantors will at such intervals as the Administrative Agent may
require, execute and deliver confirmatory written assignments of the Accounts
Receivable to the Administrative Agent and furnish such further schedules or
information as the Administrative Agent may reasonably request relating to the
Accounts Receivable, including sales invoices or the equivalent, credit memos
issued, remittance advices, reports and copies of deposit slips and copies of
original shipping or delivery receipts for all merchandise sold. In addition,
the Borrower and the Domestic Guarantors shall notify the Administrative Agent
of any non compliance in respect of the representations, warranties and
covenants contained in Section 8.03. The items to be provided under this Section
8.02 are to be in form reasonably satisfactory to the Administrative Agent and
are to be executed and delivered to the Administrative Agent from time to time
solely for their convenience in maintaining records of the Collateral. The
Borrower’s or any Domestic Guarantor’s failure to give any of such items to the
Administrative Agent shall not affect, terminate, modify or otherwise limit the
Collateral Agent’s Lien on the Collateral. Neither the Borrower nor any Domestic
Guarantor shall re-date any invoice or sale or make sales on extended dating
beyond that customary in the Borrower’s or such Domestic Guarantor’s industry,
and shall not re-bill any Accounts Receivable without promptly disclosing the
same to the Administrative Agent and providing the Administrative Agent with a
copy of such re-billing, identifying the same as such. If the Borrower or any
Domestic Guarantor becomes aware of anything materially detrimental to any of
the Borrower’s or any Domestic Guarantor’s customers’ credit, the Borrower or
such Domestic Guarantor will promptly advise the Administrative Agent thereof.
     Section 8.03 Status of Accounts Receivable. With respect to Accounts
Receivable of any Loan Party at the time the Accounts Receivable becomes subject
to the Collateral Agent’s Lien, each Loan Party covenants, represents and
warrants: (a) such Loan Party shall be the sole owner, free and clear of all
Liens (except for the Liens granted in the favor of the Collateral Agent for the
benefit of the Agents and the Lenders and Permitted Liens); (b) unless otherwise
indicated in writing to the Administrative Agent, each Account Receivable
identified by Borrower as an Eligible Account Receivable in a Borrowing Base
report submitted to either Agent shall be a good and valid account representing
a bona fide indebtedness incurred by the Account Debtor therein named, for a
fixed sum as set forth in the invoice relating thereto; (c) no Eligible Account
Receivable identified by the Borrower or a Domestic Guarantor as an Eligible
Account Receivable in a Borrowing Base report submitted to either Agent shall be
subject to any defense, offset, counterclaim, discount or allowance except as
may be stated in the invoice relating thereto, discounts and allowances as may
be customary in such Loan Party’s business and as otherwise disclosed to the
Agents; (d) none of the transactions underlying or giving rise to any Account
Receivable identified by the Borrower or a Domestic Guarantor as an Eligible
Account Receivable in a Borrowing Base report submitted to either Agent shall
violate any applicable state or federal laws or regulations, and all documents
relating thereto shall be legally sufficient under such laws or regulations and
shall be legally enforceable in accordance with their terms; (e) no agreement
under which any deduction or offset of any kind, other than normal trade
discounts, may be granted or shall have been made by such Loan Party at or
before the time any Account Receivable identified by the Borrower or a Domestic
Guarantor as an Eligible Account Receivable in a Borrowing Base report submitted
to either Agent is created; (f) all agreements, instruments and other documents
relating to any Account Receivable identified by the Borrower or a Domestic
Guarantor as an Eligible Account Receivable in a Borrowing Base

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report submitted to either Agent shall be true and correct in all material
respects and in all material respects what they purport to be; (g) to such Loan
Party’s knowledge, all signatures and endorsements that appear on all material
agreements, instruments and other documents relating to any Account Receivable
identified by the Borrower or a Domestic Guarantor as an Eligible Account
Receivable in a Borrowing Base report submitted to either Agent shall be genuine
and all signatories and endorsers shall have full capacity to contract; (h) such
Loan Party shall maintain books and records pertaining to said Collateral in
such detail, form and scope as the Agents shall reasonably require; (i) such
Loan Party shall promptly (and in any event within 5 Business Days) notify the
Agents if any Account Receivable identified by the Borrower or any Domestic
Guarantor as an Eligible Account Receivable in a Borrowing Base report submitted
to either Agent arises out of contracts with any Governmental Authority, and
will execute any instruments and take any steps required by the Agents in order
that all monies due or to become due under any such contract shall be assigned
to the Collateral Agent and notice thereof given to such Governmental Authority
under the Federal Assignment of Claims Act or any similar state or local law;
(j) such Loan Party will, immediately upon learning thereof, report to the
Agents any material loss or destruction of, or substantial damage to, any of the
Collateral, and any demand, notice, document or other information received by it
that question or calls into doubt the validity, enforceability or collectability
of any of the Eligible Accounts Receivable; (k) if any amount payable under or
in connection with any Account Receivable is evidenced by a promissory note or
other instrument, such promissory note or instrument shall be immediately
pledged, endorsed, assigned and delivered to the Collateral Agent for the
benefit of the Agents and the Lenders as additional Collateral; (l) such Loan
Party shall not re-date any invoice or sale or make sales on extended dating
beyond that which is customary in the ordinary course of its business and in the
industry; and (m) such Loan Party is not and shall not be entitled to pledge any
Agent’s or any Lender’s credit on any purchases or for any purpose whatsoever.
     Section 8.04 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may, and at the
request of the Administrative Agent or the Required Lenders, the Collateral
Agent shall, at any time and from time to time employ and maintain on the
premises of any Loan Party a custodian selected by the Collateral Agent who
shall have full authority to do all acts necessary to protect the Agents’ and
the Lenders’ interests. Each Loan Party hereby agrees to, and to cause its
Subsidiaries to, cooperate with any such custodian and to do whatever the
Collateral Agent may reasonably request to preserve the Collateral. All costs
and expenses incurred by the Collateral Agent by reason of the employment of the
custodian shall be the responsibility of the Borrower and charged to the Loan
Account in accordance with Section 4.02(a).
ARTICLE IX.
EVENTS OF DEFAULT
     Section 9.01 Events of Default. If any of the following Events of Default
shall occur and be continuing:
          (a) the Borrower shall fail to pay (i) any principal of any Loan when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), or (ii) any interest on any Loan, any Collateral Agent Advance, any
Reimbursement Obligation, or

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any fee, indemnity or other amount payable under this Agreement or any other
Loan Document when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise);
          (b) any representation or warranty made or deemed made by or on behalf
of any Loan Party or by any officer of the foregoing under or in connection with
any Loan Document or under or in connection with any report, certificate, or
other document delivered to any Agent, any Lender or the L/C Issuer pursuant to
any Loan Document shall have been incorrect in any material respect when made or
deemed made;
          (c) any Loan Party shall fail to perform or comply with any covenant
or agreement contained in Section 7.01(a), Sections 7.02(a) — (m),
Section 7.02(o), Section 7.02(r), Section 7.03, Section 8.01(a), or
Section 8.01(b);
          (d) any Loan Party shall fail to perform or comply with any other
term, covenant or agreement contained in any Loan Document to be performed or
observed by it and, except as set forth in subsections (a), (b), and (c), of
this Section 9.01, such failure, if capable of being remedied, shall remain
unremedied for 20 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by any Agent to such Loan Party;
          (e) the Parent or any of its Subsidiaries shall fail to pay any
principal of or interest or premium on any of its Indebtedness (excluding the
Obligations) to the extent that the aggregate principal amount of all such
Indebtedness exceeds $1,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness, or any other default under any
agreement or instrument relating to any such Indebtedness, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased or an offer to prepay, redeem,
purchase or defease such Indebtedness shall be required to be made, in each
case, prior to the stated maturity thereof;
          (f) the Parent or any of its Subsidiaries (i) shall institute any
proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent,
or seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any
substantial part of its property, (ii) shall be generally not paying its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally, (iii) shall make a general assignment for the benefit of
creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);

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          (g) any proceeding shall be instituted against the Parent or any of
its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other similar official for
any such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 30 days or any
of the actions sought in such proceeding (including the entry of an order for
relief against any such Person or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property) shall occur;
          (h) any provision of any Loan Document shall at any time for any
reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against any Loan Party intended to be a party thereto,
or the validity or enforceability thereof shall be contested by any party
thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document;
          (i) any Security Agreement, any Mortgage or any other security
document, after delivery thereof pursuant hereto, shall for any reason fail or
cease to create a valid and perfected and, except to the extent permitted by the
terms hereof or thereof, first priority Lien in favor of the Collateral Agent
for the benefit of the Agents and the Lenders on any Collateral purported to be
covered thereby (other than Collateral with an aggregate fair market value not
in excess of $500,000);
          (j) any bank at which any deposit account, blocked account, or lockbox
account of any Loan Party is maintained shall fail to comply with any of the
terms of any deposit account, blocked account, lockbox account or similar
agreement to which such bank is a party or any securities intermediary,
commodity intermediary or other financial institution at any time in custody,
control or possession of any investment property of any Loan Party shall fail to
comply with any of the terms of any investment property control agreement to
which such Person is a party, and such Loan Party fails to move the funds in
such deposit account, blocked account, or lockbox account or the investment
property in control of such securities intermediary, commodity intermediary or
other financial institution (as the case may be) as soon as possible (but in no
event later than 30 days) after the date that any Agent or any Lender informs
such Loan Party of such failure to comply;
          (k) one or more judgments, awards, or orders (or any settlement of any
claim that, if breached, could result in a judgment, order, or award) for the
payment of money exceeding $2,500,000 in the aggregate shall be rendered against
Parent or any of its Subsidiaries and remain unsatisfied, or the Parent or any
of its Subsidiaries shall agree to the settlement of any one or more pending or
threatened actions, suits, or proceedings affecting any Loan Party before any
court or other Governmental Authority or any arbitrator or mediator, providing
for the payment of money exceeding $2,500,000 in the aggregate, and in the case
of any such judgment, order, award or settlement either (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment,
order, award or settlement, or (ii) there shall be a period of 30 consecutive
days after entry thereof during which a stay of enforcement of any such

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judgment, order, award or settlement, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any such judgment,
order, award or settlement shall not give rise to an Event of Default under this
subsection if and for so long as (A) the amount of such judgment, order, award
or settlement is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (B) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of
such judgment, order, award or settlement;
          (l) the Parent or any of its Subsidiaries is enjoined, restrained or
in any way prevented by the order of any court or any Governmental Authority
from conducting all or any material part of the business of the Loan Parties
taken as a whole for more than 30 consecutive days;
          (m) any cessation of a substantial part of the business of any Loan
Party for a period of more than 30 consecutive days which materially and
adversely affects the ability of any Loan Party to continue its business on a
profitable basis;
          (n) the indictment of the Parent or any of its Subsidiaries under any
criminal statute, or commencement of criminal or civil proceedings against any
Loan Party, pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture to any Governmental Authority of any
material portion of the property of such Person, in each case, that could
reasonably be expected to result in a Material Adverse Effect;
          (o) any Loan Party or any of its ERISA Affiliates shall have made a
complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal, any Loan Party or any of its ERISA
Affiliates incurs a withdrawal liability in an annual amount exceeding
$1,000,000; or a Multiemployer Plan enters reorganization status under
Section 4241 of ERISA, and, as a result thereof any Loan Party’s or any of its
ERISA Affiliates’ annual contribution requirements with respect to such
Multiemployer Plan increases in an annual amount exceeding $1,000,000;
          (p) any Termination Event with respect to any Employee Plan shall have
occurred, and, 30 days after notice thereof shall have been given to any Loan
Party by any Agent, (i) such Termination Event (if correctable) shall not have
been corrected, and (ii) the then current value of such Employee Plan’s vested
benefits exceeds the then current value of assets allocable to such benefits in
such Employee Plan by more than $1,000,000 (or, in the case of a Termination
Event involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the IRC, the
liability is in excess of such amount);
          (q) the Parent or any of its Subsidiaries shall be liable for any
Environmental Liabilities and Costs the payment of which could reasonably be
expected to result in a Material Adverse Effect; or
          (r) a Change of Control shall have occurred;
then, and in any such event, the Collateral Agent may, and shall at the request
of the Required Lenders, by notice to the Borrower, (i) terminate or reduce all
Commitments, whereupon all

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Commitments shall immediately be so terminated or reduced, (ii) declare all or
any portion of the Loans and Reimbursement Obligations then outstanding to be
due and payable, whereupon all or such portion of the aggregate principal of all
Loans and Reimbursement Obligations, all accrued and unpaid interest thereon,
all fees and all other amounts payable under this Agreement and the other Loan
Documents shall become due and payable immediately, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Loan Party, and (iii) exercise any and all of its other rights and
remedies under applicable law, hereunder and under the other Loan Documents;
provided, however, that upon the occurrence of any Event of Default described in
subsection (f) or (g) of this Section 9.01, without any notice to any Loan Party
or any other Person or any act by any Agent or any Lender, all Commitments shall
automatically terminate and all Loans and Reimbursement Obligations then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall
become due and payable automatically and immediately, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by each
Loan Party. Upon demand by the Administrative Agent after the occurrence and
during the continuation of any Event of Default, the Borrower shall deposit with
the Administrative Agent with respect to each Letter of Credit then outstanding
cash in an amount equal to 105% of the greatest amount for which such Letter of
Credit may be drawn. Such deposits shall be held by the Administrative Agent in
the Letter of Credit Collateral Account as security for, and to provide for the
payment of, the Letter of Credit Obligations.
ARTICLE X.
AGENTS
     Section 10.01 Appointment. Each Lender (and each subsequent maker of any
Loan by its making thereof) hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement including: (i) to receive on behalf of each
Lender any payment of principal of or interest on the Loans outstanding
hereunder and all other amounts accrued hereunder for the account of the Lenders
and paid to such Agent, and, subject to Section 2.02 of this Agreement, to
distribute promptly to each Lender its Pro Rata Share of all payments so
received; (ii) to distribute to each Lender copies of all material notices and
agreements received by such Agent and not required to be delivered to each
Lender pursuant to the terms of this Agreement, provided that the Agents shall
not have any liability to the Lenders for any Agent’s inadvertent failure to
distribute any such notices or agreements to the Lenders; (iii) to maintain, in
accordance with its customary business practices, ledgers and records reflecting
the status of the Obligations, the Loans, and related matters and to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (iv) to execute or
file any and all financing or similar statements or notices, amendments,
renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to this Agreement or any other Loan
Document; (v) to make the Loans and Agent Advances, for such Agent or on behalf
of the applicable Lenders as provided in this Agreement or any other Loan
Document; (vi) to perform, exercise, and enforce any and all other rights and
remedies of the Lenders with respect to the Loan Parties, the Obligations, or
otherwise related to any of same to the extent reasonably incidental to the
exercise by such Agent of the rights and remedies specifically authorized to be
exercised by such Agent by the terms of this Agreement or any

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other Loan Document; (vii) to incur and pay such fees necessary or appropriate
for the performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; and (viii) subject to Section 10.03 of
this Agreement, to take such action as such Agent deems appropriate on its
behalf to administer the Loans and the Loan Documents and to exercise such other
powers delegated to such Agent by the terms hereof or the other Loan Documents
(including the power to give or to refuse to give notices, waivers, consents,
approvals and instructions and the power to make or to refuse to make
determinations and calculations) together with such powers as are reasonably
incidental thereto to carry out the purposes hereof and thereof. As to any
matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection of the Loans), the Agents shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions of the Required Lenders shall be binding upon all Lenders
and all makers of Loans; provided, however, that the L/C Issuer shall not be
required to refuse to honor a drawing under any Letter of Credit and the Agents
shall not be required to take any action which, in the reasonable opinion of any
Agent, exposes such Agent to liability or which is contrary to this Agreement or
any other Loan Document or applicable law.
     Section 10.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender. Each Agent shall promptly notify each Lender any time
that the Required Lenders have instructed such Agent to act or refrain from
acting pursuant hereto.
     Section 10.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Without limiting the generality of the foregoing, the
Agents (i) may treat the payee of any Loan as the owner thereof until the
Collateral Agent receives written notice of the assignment or transfer thereof,
pursuant to Section 12.07 hereof, signed by such payee and in form satisfactory
to the Collateral Agent; (ii) may consult with legal counsel (including counsel
to any Agent or counsel to the Loan Parties), independent public accountants,
and other experts

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selected by any of them and shall not be liable for any action taken or omitted
to be taken in good faith by any of them in accordance with the advice of such
counsel or experts; (iii) make no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, certificates,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including the books and records)
of any Person; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (vi) shall not be deemed to have made
any representation or warranty regarding the existence, value or collectability
of the Collateral, the existence, priority or perfection of the Collateral
Agent’s Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agents be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The provisions of this Section 10.03 are subject to, and shall not limit in any
respect, the provisions of Section 12.07. The Agents shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to Section
4.04, and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount which they are determined to be entitled. The Agents may at any
time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the other Loan
Documents the Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders.
     Section 10.04 Reliance. Each Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
     Section 10.05 Indemnification. To the extent that any Agent or the L/C
Issuer is not reimbursed and indemnified by any Loan Party, the Lenders will
reimburse and indemnify such Agent and the L/C Issuer from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against such Agent
or the L/C Issuer in any way relating to or arising out of this Agreement or any
of the other Loan Documents or any action taken or omitted by such Agent or the
L/C Issuer under this Agreement or any of the other Loan Documents, in
proportion to each Lender’s Pro Rata Share, including advances and disbursements
made pursuant to Section 10.08; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions,

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judgments, suits, costs, expenses, advances or disbursements for which there has
been a final judicial determination that such liability resulted from such
Agent’s or the L/C Issuer’s gross negligence or willful misconduct. The
obligations of the Lenders under this Section 10.05 shall survive the payment in
full of the Loans and the termination of this Agreement.
     Section 10.06 Agents Individually. With respect to its Pro Rata Share of
the Total Commitment hereunder and the Loans made by it, each Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms “Lenders” or “Required Lenders” or any
similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders. Each Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower as if it were not acting as an Agent pursuant hereto without any duty
to account to the other Lenders.
     Section 10.07 Successor Agent.
          (a) Each Agent may resign from the performance of all its functions
and duties hereunder and under the other Loan Documents at any time by giving at
least 30 Business Days prior written notice to the Borrower and each Lender;
provided that the Borrower and each Lender agree that Ableco may resign as the
Administrative Agent without any notice if Wells Fargo Foothill, Inc. or its
Affiliates is appointed as the successor Administrative Agent. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to clauses (b) and (c) below or as otherwise provided below.
          (b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent which successor Agent shall, so long as no Event of
Default shall have occurred and be continuing, be reasonably acceptable to the
Borrower (which consent shall not be unreasonably withheld, delayed, or
conditioned); provided that the Borrower hereby agrees that any of Wells Fargo
Foothill, Inc. or its Affiliates is an acceptable successor Administrative
Agent. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents. After any Agent’s resignation hereunder
as an Agent, the provisions of this Article X shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was an Agent under this
Agreement and the other Loan Documents.
          (c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the retiring Agent, with the consent (which
consent shall not be unreasonably withheld, delayed, or conditioned) of the
other Agent shall then appoint a successor Agent who shall serve as an Agent
until such time, if any, as the Required Lenders, with the consent of the other
Agent, appoint a successor Agent as provided above.
     Section 10.08 Collateral Matters.

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          (a) Either Agent may from time to time make such disbursements and
advances (“Agent Advances”) which such Agent, in its sole discretion, deems
necessary or desirable to preserve, protect, prepare for sale or lease or
dispose of the Collateral or any portion thereof, to enhance the likelihood or
maximize the amount of repayment by the Borrower of the Loans, reimbursement
obligations with respect to the Letters of Credit, and other Obligations or to
pay any other amount chargeable to the Borrower pursuant to the terms of this
Agreement, including costs, fees and expenses as described in Section 12.04;
provided, however, that (i) the Agents shall not make any Agent Advance that
would cause the aggregate principal amount of all Agent Advances outstanding at
such time to exceed the lesser of (A) $2,000,000, and (B) an amount equal to 10%
of the Borrowing Base then in effect, without the prior consent of the Required
Lenders, (ii) the Administrative Agent shall not make any Agent Advance that
would cause the aggregate principal amount of all Agent Advances made by the
Administrative Agent outstanding at such time to exceed the lesser of (A)
$1,000,000, and (B) an amount equal to 5% of the Borrowing Base then in effect,
without the prior consent of the Collateral Agent, (iii) the Collateral Agent
shall not make any Agent Advance that would cause the aggregate principal amount
of all Agent Advances made by the Collateral Agent outstanding at such time to
exceed the lesser of (A) $1,000,000, and (B) an amount equal to 5% of the
Borrowing Base then in effect, without the prior consent of the Administrative
Agent. The Agent Advances shall be repayable on demand and be secured by the
Collateral. The Agent Advances shall constitute Obligations hereunder which may
be charged to the Loan Account in accordance with Section 4.02. The Agent making
such Agent Advance shall notify each Lender and the Borrower in writing of each
such Agent Advance, which notice shall include a description of the purpose of
such Agent Advance.
          (b) The Administrative Agent shall not make any Revolving Loans or
provide any Letters of Credit or Letter of Credit Guaranties to the Borrower
intentionally and with actual knowledge that such Revolving Loans, Letters of
Credit, or Letter of Credit Guaranties (as the case may be) would cause the
aggregate amount of the total outstanding Revolving Loans and Letter of Credit
Obligations to exceed the Borrowing Base, without the prior consent of all
Lenders, except that the Administrative Agent may make such additional Revolving
Loans or provide such additional Letters of Credit or Letter of Credit
Guaranties, intentionally and with actual knowledge that such Revolving Loans,
Letters of Credit, or Letter of Credit Guaranties (as the case may be) will
cause the total outstanding Revolving Loans and Letter of Credit Obligations to
exceed the Borrowing Base, as the Administrative Agent may deem necessary or
advisable in its discretion; provided, however: (i) the total principal amount
of the additional Revolving Loans, Letters of Credit, or Letter of Credit
Guaranties (as the case may be) which the Administrative Agent may make or
provide after obtaining such actual knowledge that the aggregate principal
amount of the Revolving Loans and Letter of Credit Obligations equal or exceed
the Borrowing Base shall not (A) exceed, when taken together with Agent Advances
made by the Administrative Agent, the lesser of (x) $1,000,000, and (y) an
amount equal to 5% of the Borrowing Base, and (B) cause the total principal
amount of the Revolving Loans and Letter of Credit Obligations to exceed the
Total Revolving Credit Commitment, and (ii) no such additional Revolving Loans,
Letters of Credit, or Letter of Credit Guaranties (as the case may be) shall be
outstanding more than ninety (90) days from the date such additional Revolving
Loan, Letter of Credit, or Letter of Credit Guaranty was made or issued (as the
case may be), except as the Required Lenders may otherwise agree. Without
limiting its obligations under Section 10.05, each Revolving Loan Lender agrees
that it shall make available to the Administrative Agent,

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upon the Administrative Agent’s demand, in Dollars in immediately available
funds, an amount equal to such Revolving Lender’s Pro Rata Share of each such
Revolving Loan or obligation of the Administrative Agent in respect of each such
Letter of Credit or Letter of Credit Guaranty (as the case may be). If such
funds are not made available to the Administrative Agent by such Revolving Loan
Lender, the Administrative Agent shall be entitled to recover such funds on
demand from such Revolving Loan Lender, together with interest thereon for each
day from the date such payment was due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for 3 Business Days and
thereafter at the Reference Rate. For the avoidance of doubt, it is understood
that, subject to the limitation set forth in clause (i)(A) above, this Section
10.08(b) shall not restrict the Administrative Agent’s ability to make Agent
Advances.
          (c) The Lenders hereby irrevocably authorize the Collateral Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Collateral Agent upon any Collateral upon termination of the Total Commitment
and payment in full in cash of all Obligations; or constituting property being
sold or disposed of in compliance with the terms of this Agreement and the other
Loan Documents; or constituting property in which the Loan Parties owned no
interest at the time the Lien was granted or at any time thereafter; or if
approved, authorized or ratified in writing by the Lenders. Upon request by the
Collateral Agent at any time, the Lenders will confirm in writing the Collateral
Agent’s authority to release particular types or items of Collateral pursuant to
this Section 10.08(c).
          (d) Without in any manner limiting the Collateral Agent’s authority to
act without any specific or further authorization or consent by the Lenders (as
set forth in Section 10.08(c)), each Lender agrees to confirm in writing, upon
request by the Collateral Agent, the authority to release Collateral conferred
upon the Collateral Agent under Section 10.08(c). Upon receipt by the Collateral
Agent of confirmation from the Lenders of its authority to release any
particular item or types of Collateral, and upon prior written request by any
Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent for the benefit of the
Agents and the Lenders upon such Collateral; provided, however, that (i) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent’s opinion, would expose the Collateral Agent to
liability or create any obligations or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Lien upon
(or obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
          (e) The Collateral Agent shall have no obligation whatsoever to any
Lender to assure that the Collateral exists or is owned by the Loan Parties or
is cared for, protected or insured or has been encumbered or that the Lien
granted to the Collateral Agent pursuant to this Agreement or any other Loan
Document has been properly or sufficiently or lawfully created, perfected,
protected or enforced or is entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Collateral Agent in this Section 10.08 or in any
other Loan Document, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Collateral Agent
may act in any manner it may deem appropriate, in its sole discretion, given the
Collateral Agent’s own interest

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in the Collateral as one of the Lenders and that the Collateral Agent shall have
no duty or liability whatsoever to any other Lender, except as otherwise
provided herein.
     Section 10.09 Agency for Perfection. Each Lender hereby appoints each Agent
and each other Lender as agent and bailee for the purpose of perfecting the
security interests in and liens upon the Collateral in assets which, in
accordance with Article 9 of the Code, can be perfected only by possession or
control (or where the security interest of a secured party with possession or
control has priority over the security interest of another secured party) and
each Agent and each Lender hereby acknowledges that it holds possession or
control of any such Collateral for the benefit of the Collateral Agent as
secured party. Should any Lender obtain possession or control of any such
Collateral, such Lender shall notify the Collateral Agent thereof, and, promptly
upon the Collateral Agent’s request therefor shall deliver possession or control
of such Collateral to the Collateral Agent or in accordance with the Collateral
Agent’s instructions. Each Loan Party by its execution and delivery of this
Agreement hereby consents to the foregoing.
ARTICLE XI.
GUARANTY
     Section 11.01 Guaranty. Each Guarantor hereby jointly and severally
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
the Borrower now or hereafter existing under any Loan Document, whether for
principal, interest (including all interest that accrues after the commencement
of any Insolvency Proceeding irrespective of whether a claim therefor is allowed
in such case or proceeding), fees, expenses or otherwise (such obligations, to
the extent not paid by the Borrower, being the “Guaranteed Obligations”), and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses of one primary counsel and any local counsel for the Collateral Agent
and one primary counsel and any local counsel for the Administrative Agent)
incurred by the Agents, the Lenders and the L/C Issuer (or any of them) in
enforcing any rights under the guaranty set forth in this Article. Without
limiting the generality of the foregoing, each Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by the Borrower to the Agents, the Lenders and the L/C Issuer
under any Loan Document but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Loan Party.
     Section 11.02 Guaranty Absolute. Each Guarantor jointly and severally
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, 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 Agents, the Lenders or the L/C Issuer with respect thereto.
Each Guarantor agrees that this Article constitutes a guaranty of payment when
due and not of collection and waives any right to require that any resort be
made by any Agent or any Lender to any Collateral. The obligations of each
Guarantor under this Article are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against each
Guarantor to enforce such obligations, irrespective of whether any action is
brought against any Loan Party or whether any Loan Party is joined in any such
action or actions. The liability of each Guarantor under this Article shall be
irrevocable, absolute and

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unconditional irrespective of, and, to the extent permitted by law, each
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any or all of the following:
          (a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
          (b) 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 Loan Document, including any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to any Loan Party or otherwise;
          (c) 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;
          (d) the existence of any claim, set-off, defense or other right that
any Guarantor may have at any time against any Person, including, without
limitation, any Agent, any Lender or the L/C Issuer;
          (e) any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of any Loan Party; or
          (f) any other circumstance (including any statute of limitations) or
any existence of or reliance on any representation by the Agents, the Lenders or
the L/C Issuer that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.
          This Article 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 Agents, the Lenders, the L/C
Issuer or any other Person upon the insolvency, bankruptcy or reorganization of
the Borrower or otherwise, all as though such payment had not been made.
     Section 11.03 Waiver. To the extent permitted by law, each Guarantor hereby
waives (i) promptness and diligence, (ii) notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this Article and
any requirement that the Agents, the Lenders or the L/C Issuer exhaust any right
or take any action against any Loan Party or any other Person or any Collateral,
(iii) any right to compel or direct any Agent, any Lender or the L/C Issuer to
seek payment or recovery of any amounts owed under this Article from any one
particular fund or source or to exhaust any right or take any action against any
other Loan Party, any other Person or any Collateral, (iv) any requirement that
any Agent, any Lender or the L/C Issuer protect, secure, perfect or insure any
security interest or Lien on any property subject thereto or exhaust any right
to take any action against any Loan Party, any other Person or any Collateral,
and (v) any other defense available to any Guarantor. Each Guarantor agrees that
the Agents, the Lenders and the L/C Issuer shall have no obligation to marshal
any assets in favor of any Guarantor or against, or in payment of, any or all of
the Obligations. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements

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contemplated herein and that the waiver set forth in this Section 11.03 is
knowingly made in contemplation of such benefits. To the extent permitted by
law, each Guarantor hereby waives any right to revoke this Article, and
acknowledges that this Article is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
     Section 11.04 Continuing Guaranty; Assignments. This Article is a
continuing guaranty and shall (a) remain in full force and effect until the
later of (i) the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Article and (ii) the Final Maturity Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agents, the Lenders and the L/C Issuer and
their successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge, assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including all or any portion of its Commitments, its Loans, the
Reimbursement Obligations and the Letter of Credit Obligations owing to it) to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted such Lender herein or otherwise, in each
case as provided in Section 12.07.
     Section 11.05 Subrogation. No Guarantor will exercise any rights that it
may now or hereafter acquire against any Loan Party or any other guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor’s obligations under this Article, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agents and the Lenders against any
Loan Party or any other guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including the right to take or receive from any Loan 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 Article shall have been paid in full in cash and the Final
Maturity Date shall have occurred. 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 Article and the Final Maturity Date, such amount
shall be held in trust for the benefit of the Agents and the Lenders and shall
forthwith be paid to the Agents and the Lenders to be credited and applied to
the Guaranteed Obligations and all other amounts payable under this Article,
whether matured or unmatured, in accordance with the terms of this Agreement, or
to be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Article thereafter arising. If (i) any Guarantor shall make payment
to the Agents and the Lenders of all or any part of the Guaranteed Obligations,
(ii) all of the Guaranteed Obligations and all other amounts payable under this
Article shall be paid in full in cash and (iii) all Commitments have been
terminated, the Agents and the Lenders 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. Notwithstanding
anything to the contrary contained in this Section 11.05, no Guarantor shall
exercise any rights of subrogation, contribution, indemnity, reimbursement or
other similar rights against, and shall not proceed or seek recourse against or
with respect to any property or asset of, any Loan Party (including after
payment in full of the

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Guaranteed Obligations and any other amounts payable under this Article or after
termination of the Commitments) if all or any portion of the Obligations shall
have been satisfied in connection with an exercise of remedies in respect of the
Capital Stock of such Loan Party whether pursuant to the Security Agreement or
otherwise.
     Section 11.06 German Guarantor.
          (a) Each Agent and each Lender agrees to restrict the enforcement of
any guarantee or indemnity granted by a Guarantor which is organized under the
laws of Germany and constituted in the form of a German limited liability
company “Gesellschaft mit beschränkter Haftung — GmbH” (each, a “Relevant German
Guarantor”) only if and only to the extent (sofern und soweit) that (i) such
guarantee or indemnity secures the liabilities of an Affiliate other than the
liabilities of any Subsidiary of a Relevant German Guarantor and — for the
avoidance of doubt — the liabilities of such Relevant German Guarantor and
(ii) the payment under such guarantee or indemnity towards the secured
obligation would otherwise cause the Relevant German Guarantor’s net assets,
taking into account good will and other hidden reserves in its assets, to fall
not only temporarily below its registered share capital “Stammkapital”. For the
purposes of the calculation of any sums to be enforced, loans or other
liabilities incurred in violation of the provisions of the Loan Documents shall
be disregarded.
          (b) In a situation where a Relevant German Guarantor does not have
sufficient assets to maintain its registered share capital as described in
clause (a) above, such Relevant German Guarantor shall, to the extent permitted
by the applicable Insolvency Laws, dispose, in consultation with the Agents, of
all assets which are not necessary for its business “n“icht betriebsnotwendig”
on market terms where the relevant assets are shown in the balance sheet of such
Relevant German Guarantor with a book value which is lower than the market value
of such assets.
          (c) The limitation pursuant to this Section 11.06 shall not apply if
following the call of guarantee obligations “Inanspruchnahme” or the enforcement
of security interests by an Agent or a Lender, the Relevant German Guarantor
does not provide conclusive evidence to such Agent or Lender, in particular by
submitting interim financial statements for the last completed month within 10
Business Days following receipt of such call of guarantee obligations or
enforcement of security interests, or, following receipt of interim financial
statements, by submitting audited financial statements up to the same month
within 25 Business Days following a further request by an Agent or a Lender.
ARTICLE XII.
MISCELLANEOUS
     Section 12.01 Notices, Etc. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered,
if to any Loan Party, at the following address:

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PRG-SCHULTZ USA, INC.
600 Galleria Parkway, Suite 100
Atlanta, GA 30339
Attention: Peter Limeri; Vic Allums
Telephone: 770-779-3243; 770-779-6610
Telecopier: 770-779-3034

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with a copy to:

TROUTMAN SANDERS LLP
Suite 5200
600 Peachtree Street, N.E.
Atlanta, GA 30308-2216
Attention: Hazen H. Dempster
Telephone: 404-885-3126
Telecopier: 404-962-6544
if to the Administrative Agent, to it at the following address:
ABLECO FINANCE LLC
299 Park Avenue, 22nd Floor
New York, New York 10171
Attention: Eric Miller
Telephone: 212-891-1549
Telecopier: 212-891-1541
with a copy to:
PAUL, HASTINGS, JANOFSKY & WALKER LLP
515 South Flower Street
Los Angeles, CA 90071
Attention: John Francis Hilson, Esq.
Telephone: 213-683-6300
Telecopier: 213-996-3300
if to the Collateral Agent, to it at the following address:
ABLECO FINANCE LLC
299 Park Avenue, 22nd Floor
New York, New York 10171
Attention: Eric Miller
Telephone: 212-891-1549
Telecopier: 212-891-1541
with a copy to:
PAUL, HASTINGS, JANOFSKY & WALKER LLP
515 South Flower Street
Los Angeles, CA 90071
Attention: John Francis Hilson, Esq.
Telephone: 213-683-6300
Telecopier: 213-996-3300
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such

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notices and other communications shall be effective, (i) if mailed, when
received or 3 days after deposited in the mails, whichever occurs first, (ii) if
telecopied, when transmitted and confirmation received, or (iii) if delivered,
upon delivery, except that notices to any Agent or the L/C Issuer pursuant to
Articles II and III shall not be effective until received by such Agent or the
L/C Issuer, as the case may be.
     Section 12.02 Amendments, Etc.
          (a) Neither this Agreement, any other Loan Document, nor any terms
hereof or thereof may be amended, waived, or modified except in accordance with
the provisions of this Section 12.02. Subject to the additional requirements of
Sections 12.02(b), the Required Lenders and each Loan Party party to the
relevant Loan Document may (or, with the consent of the Required Lenders, the
Collateral Agent and each Loan Party party to the relevant Loan Document), from
time to time, (i) enter into written amendments, waivers, or modifications
hereto or to the other Loan Documents, or written consents to any departure
herefrom or therefrom, or (ii) enter into written waivers, on such terms and
conditions as the Required Lenders (or, with the consent of the Required
Lenders, the Collateral Agent) may specify in such waivers, of any of the terms
or provisions of this Agreement or the other Loan Documents or of any Default or
Event of Default and its consequences.
          (b) No amendment, waiver, modification, or consent shall:
               (i) increase the amount or extend the expiration date of any
Commitment of any Lender, forgive the principal amount or extend the final
scheduled date of maturity of any Loan or Reimbursement Obligation, extend the
scheduled date of any amortization payment in respect of any Loan, reduce the
stated rate of interest on any Loan or any fee payable hereunder (except (x) in
connection with the waiver of applicability of the Post-Default Rate (which
waiver shall be effective with the written consent of the Required Lenders), and
(y) that any amendment or modification of defined terms used in the financial
covenants in this Agreement shall not constitute a reduction in the stated rate
of interest or a reduction of fees for purposes of this clause (i)) or extend
the scheduled date of payment thereof, in each case without the written consent
of each Lender directly affected thereby,
               (ii) increase the Total Commitment without the written consent of
each Lender,
               (iii) eliminate or change the voting rights of any Lender under
this Section 12.02 without the written consent of such Lender,
               (iv) reduce the percentage specified in the definition of
“Required Lenders” or amend the definition of “Pro Rata Share”, without the
written consent of each Lender,
               (v) amend the definitions of “Borrowing Base”, “Eligible Accounts
Receivable”, “Eligible Backlog”, or “Net Amount of Eligible Accounts
Receivable”, in each case, in a manner that increases the borrowing availability
of the Borrower, without the written consent of each Lender,

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               (vi) release the Borrower or consent to the assignment or
transfer by the Borrower of any of its rights or duties under this Agreement or
the other Loan Documents, release all or substantially all of the Collateral,
release all or substantially all of the Guarantors from their obligations under
the Loan Documents, or subordinate any Lien granted in to the Collateral Agent
(other than in respect of Permitted Liens), in each case without the written
consent of each Lender,
               (vii) amend, modify or waive Section 4.04 or this Section 12.02
of this Agreement, without the written consent of each Lender,
               (viii) amend, modify, or waive any provision of Section 10
pertaining to the Collateral Agent, the definition of, or the terms or
provisions of, the Fee Letter, or any other rights or duties of the Collateral
Agent under this Agreement or the other Loan Documents, without the written
consent of the Collateral Agent, and
               (ix) amend, modify, or waive any provision of Section 10
pertaining to the Administrative Agent or any other rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents, without
the written consent of the Administrative Agent.
     Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent
or any Lender to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agents and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.
     Section 12.04 Expenses; Taxes; Attorneys Fees. The Borrower will pay on
demand, all reasonable out-of-pocket costs and expenses incurred by or on behalf
of each Agent (and, in the case of clauses (b) through (m) below, each Lender),
regardless of whether the transactions contemplated hereby are consummated,
including reasonable out-of-pocket fees, costs, client charges and expenses of
one primary counsel and any local counsel for the Collateral Agent and one
primary counsel and any local counsel for the Administrative Agent, accounting,
due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals, arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents
(including the preparation of any additional Loan Documents pursuant to
Section 7.01(b) or the review of any of the agreements, instruments and
documents referred to in Section 7.01(f)), (b) any requested amendments, waivers
or consents to this Agreement or the other Loan Documents whether or not such
documents become effective or are given, (c) the preservation and protection of
any of the Lenders’ rights under this Agreement or the other Loan Documents,
(d) the defense of any claim

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or action asserted or brought against any Agent or any Lender by any Person that
arises from or relates to this Agreement, any other Loan Document, the Agents’
or the Lenders’ claims against any Loan Party, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or other
pleading by any Agent or any Lender, or the taking of any action in respect of
the Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from any Loan
Party, (j) all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(k) any Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup or remediation of any Hazardous Materials
present or arising out of the operations of any facility owned or operated by
any Loan Party, (l) any Environmental Liabilities and Costs incurred in
connection with any Environmental Lien, or (m) the receipt by any Agent or any
Lender of any advice from professionals with respect to any of the foregoing.
Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrower agrees to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by any
Agent or any Lender to be payable in connection with this Agreement or any other
Loan Document, and the Borrower agrees to save each Agent and each Lender
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions, (y) the Borrower agrees to pay all broker
fees that may become due in connection with the transactions contemplated by
this Agreement and the other Loan Documents, and (z) if the Borrower fails to
perform any covenant or agreement contained herein or in any other Loan
Document, any Agent may itself perform or cause performance of such covenant or
agreement, and the expenses of such Agent incurred in connection therewith shall
be reimbursed on demand by the Borrower.
     Section 12.05 Right of Set-off.
          (a) Each of the Lenders agrees that it shall not, without the express
written consent of the Agents, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of either Agent, set off against the
Obligations, any amounts owing by such Lender to Borrower or any deposit
accounts of Borrower now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
in writing by either Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
          (b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Administrative Agent pursuant to the terms of this
Agreement, or (ii) payments from

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Administrative Agent in excess of such Lender’s ratable portion of all such
distributions by Administrative Agent, such Lender promptly shall (1) turn the
same over to Administrative Agent, in kind, and with such endorsements as may be
required to negotiate the same to Administrative Agent, or in immediately
available funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that to the extent
that such excess payment received by the purchasing party is thereafter
recovered from it, those purchases of participations shall be rescinded in whole
or in part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
     Section 12.06 Severability. Any provision of this Agreement which 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 affecting the validity or
enforceability of such provision in any other jurisdiction.
     Section 12.07 Assignments and Participations.
          (a) This Agreement and the other Loan Documents shall be binding upon
and inure to the benefit of each Loan Party and each Agent and each Lender and
their respective successors and permitted assigns; provided, however, that none
of the Loan Parties may assign or transfer any of its rights hereunder or under
the other Loan Documents without the prior written consent of each Lender and
any such assignment without the Lenders’ prior written consent shall be null and
void.
          (b) Each Lender may (x) with the written consent of the Collateral
Agent (which consent shall not be unreasonably withheld, conditioned or
delayed), assign to one or more other lenders or other entities all or a portion
of its rights and obligations under this Agreement with respect to (A) all or a
portion of its Term Loan Commitment and any Term Loan made by it, or (B) all or
a portion of its Delayed Draw Term Loan Commitment and any Delayed Draw Term
Loan made by it, and (y) with the written consent of each Agent (which consent
shall not be unreasonably withheld, conditioned or delayed), assign to one or
more other lenders or other entities all or a portion of its rights and
obligations under this Agreement with respect to all or a portion of its
Revolving Credit Commitment and the Revolving Loans made by it; provided,
however, that (i) such assignment is in an amount which is at least $5,000,000
or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender’s
Commitment) (except such minimum amount shall not apply to an assignment by a
Lender to (x) an Affiliate of such Lender or a Related Fund of such Lender or
(y) a group of new Lenders, each of whom is an Affiliate or Related Fund of each
other of each other to the extent the aggregate amount to be assigned to all
such new Lenders is at least $5,000,000 or a multiple of $1,000,000 in excess
thereof), (ii) so long as no Event of Default has occurred and is continuing,
such assignment is made in consultation with (but without the requirement of
consent of) the Borrower (except such consultation shall not be required in
connection with an assignment by a Lender to another Lender, an Affiliate of
such Lender, a Related Fund of such Lender, or Wells Fargo Foothill, Inc.

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or its Affiliates), (iii) except as provided in the last sentence of this
Section 12.07(b), the parties to each such assignment shall execute and deliver
to the Collateral Agent (and the Administrative Agent, if applicable), for its
acceptance, an Assignment and Acceptance, together with any promissory note
subject to such assignment and such parties shall deliver to the Collateral
Agent, for the benefit of the Collateral Agent, a processing and recordation fee
of $5,000 (except the payment of such fee shall not be required (y) in
connection with an assignment by a Lender to an Affiliate of such Lender or to a
Related Fund of such Lender or (z) if Collateral Agent, in its sole discretion,
waives payment of such fee), and (iv) no written consent of the Collateral Agent
or the Administrative Agent shall be required (1) in connection with any
assignment by a Lender to an Affiliate of such Lender or a Related Fund of such
Lender or (2) if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of such Lender. Upon such execution,
delivery and acceptance, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least 3 Business
Days after the delivery thereof to the Collateral Agent (or such shorter period
as shall be agreed to by the Collateral Agent and the parties to such
assignment), (A) the assignee thereunder shall become a “Lender” hereunder and,
in addition to the rights and obligations hereunder held by it immediately prior
to such effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). Notwithstanding anything to the
contrary contained in this Section 12.07(b), a Lender may assign any or all of
its rights under the Loan Documents to an Affiliate of such Lender or a Related
Fund of such Lender without delivering an Assignment and Acceptance to the
Agents or to any other Person (a “Related Party Assignment”); provided, however,
that (I) the Borrower and the Administrative Agent may continue to deal solely
and directly with such assigning Lender until an Assignment and Acceptance has
been delivered to the Administrative Agent for recordation on the Register,
(II) the Collateral Agent may continue to deal solely and directly with such
assigning Lender until receipt by the Collateral Agent of a copy of the fully
executed Assignment and Acceptance pursuant to Section 12.07(e), (III) the
failure of such assigning Lender to deliver an Assignment and Acceptance to the
Agents shall not affect the legality, validity, or binding effect of such
assignment, and (IV) an Assignment and Acceptance between the assigning Lender
and an Affiliate of such Lender or a Related Fund of such Lender shall be
effective as of the date specified in such Assignment and Acceptance and
recorded on the Related Party Register (as such term is defined in
Section 12.07(d) herein).
          (c) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any of its Subsidiaries or the performance

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or observance by any Loan Party of any of its obligations under this Agreement
or any other Loan Document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement and the other Loan
Documents, together with such other documents and information it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the assigning Lender, any Agent or any Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (v) such assignee appoints and
authorizes the Agents to take such action as agents on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agents by the terms hereof and thereof, together with such
powers as are reasonably incidental hereto and thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.
          (d) The Administrative Agent shall, acting solely for this purpose as
a non-fiduciary agent of the Borrower, maintain, or cause to be maintained at
the Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitments of, and the principal amount of
the Loans (and stated interest thereon) (the “Registered Loans”) and Letter of
Credit Obligations owing to each Lender from time to time. Subject to the last
sentence of this Section 12.07(d), the entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agents and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
any Lender at any reasonable time and from time to time upon reasonable prior
notice. In the case of an assignment pursuant to the last sentence of
Section 12.07(b) as to which an Assignment and Acceptance is not delivered to
the Administrative Agent, the assigning Lender shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register (the
“Related Party Register”) comparable to the Register on behalf of the Borrower.
Any such Related Party Register shall be available for inspection by the
Borrower, any Agent and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
          (e) Upon receipt by the Administrative Agent of an Assignment and
Acceptance, and subject to any consent required from the Administrative Agent or
the Collateral Agent pursuant to Section 12.07(b) (which consent of the
Collateral Agent must be evidenced by the Collateral Agent’s execution of an
acceptance to such Assignment and Acceptance), the Administrative Agent shall
accept such assignment, record the information contained therein in the Register
and provide to the Collateral Agent a copy of the fully executed Assignment and
Acceptance.
          (f) A Registered Loan (and the registered note, if any, evidencing the
same) may be assigned or sold in whole or in part only by registration of such
assignment or sale on the Register or the Related Party Register (and each
registered note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the registered note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
Register or the Related Party Register, together with the surrender of the
registered note, if any,

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evidencing the same duly endorsed by (or accompanied by a written instrument of
assignment or sale duly executed by) the holder of such registered note,
whereupon, at the request of the designated assignee(s) or transferee(s), one or
more new registered notes in the same aggregate principal amount shall be issued
to the designated assignee(s) or transferee(s). Prior to the registration of
assignment or sale of any Registered Loan (and the registered note, if any,
evidencing the same), the Agents shall treat the Person in whose name such
Registered Loan (and the registered note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon, notwithstanding notice to the contrary.
          (g) In the event that any Lender sells participations in a Registered
Loan, such Lender shall maintain a register for this purpose as a non-fiduciary
agent of the Borrower on which it enters the name of all participants in the
Registered Loans held by it and the principal amount (and stated interest
thereon) of the portion of the Registered Loan that is the subject of the
participation (the “Participant Register”). A Registered Loan (and the
registered note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register. Any such Participant Register shall be available for inspection by the
Borrower, any Agent and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
          (h) Any Non-U.S. Lender who is assigned an interest in any portion of
such Registered Loan pursuant to an Assignment and Acceptance shall comply with
Section 2.08(d).
          (i) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, all or a portion of its
Commitments, the Loans made by it, and its Pro Rata Share of the Letter of
Credit Obligations); provided, that (i) such Lender’s obligations under this
Agreement (including without limitation, its Commitments hereunder) and the
other Loan Documents shall remain unchanged; (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and the Borrower, the Agents and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement and the other Loan Documents; and
(iii) a participant shall not be entitled to require such Lender to take or omit
to take any action hereunder except (A) action directly effecting an extension
of the maturity dates or decrease in the principal amount of the Loans or the
Letter of Credit Obligations, (B) action directly effecting an extension of the
due dates or a decrease in the rate of interest payable on the Loans or the fees
payable under this Agreement, or (C) actions directly effecting a release of all
or a substantial portion of the Collateral or any Loan Party (except as set
forth in Section 10.08 of this Agreement or any other Loan Document). The Loan
Parties agree that each participant shall be entitled to the benefits of
Section 2.08 and Section 4.05 of this Agreement with respect to its
participation in any portion of the Commitments and the Loans as if it was a
Lender.
     Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by telefacsimile shall be

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equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement. The
foregoing shall apply to each other Loan Document mutatis mutandis.
     Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN 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 IN THE STATE OF NEW YORK.
     Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. EACH
OF THE PARTIES HERETO AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL 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 THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH PARTY HERETO HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT COLLATERAL AGENT’S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE COLLATERAL AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY
HERETO HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES, AND DOCUMENTS IN ANY SUIT, ACTION, OR PROCEEDING BROUGHT IN
THE UNITED STATES OF AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS BY THE MAILING (BY REGISTERED MAIL OR
CERTIFIED MAIL, POSTAGE PREPAID) OR DELIVERING OF A COPY OF SUCH PROCESS TO (i)
WITH RESPECT TO LOAN PARTIES, C/O THE BORROWER, AT THE BORROWER’S ADDRESS FOR
NOTICES AS SET FORTH IN SECTION 12.01, AND (ii) WITH RESPECT TO OTHER PARTIES
HERETO AT THE ADDRESS FOR NOTICES FOR SUCH PARTY SET FORTH IN SECTION 12.01. THE
PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY HERETO
IN ANY OTHER JURISDICTION. EACH PARTY HERETO 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 ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT

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FORUM. TO THE EXTENT THAT ANY PARTY HERETO 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 PARTY
HERETO HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
     Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND
EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
     Section 12.12 Consent by the Agents and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
“Action”) of any Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which any Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing (which may be by electronic mail)
and may be withheld or denied by such Agent or such Lender, in its sole
discretion, with or without any reason, and without being subject to question or
challenge on the grounds that such Action was not taken in good faith.
     Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees
that no party hereto shall be deemed to be the drafter of this Agreement.
     Section 12.14 Reinstatement; Certain Payments. If any claim is ever made
upon any Agent, any Lender or the L/C Issuer for repayment or recovery of any
amount or amounts received by such Agent, such Lender or the L/C Issuer in
payment or on account of any of the Obligations, such Agent, such Lender or the
L/C Issuer shall give prompt notice of such claim to each other Agent and Lender
and the Borrower, and if such Agent, such Lender or the L/C Issuer repays all or
part of such amount by reason of (i) any judgment, decree or order of any court
or administrative body having jurisdiction over such Agent, such Lender or the
L/C Issuer or any of its property, or (ii) any good faith settlement or
compromise of any such claim effected by such

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Agent, such Lender or the L/C Issuer with any such claimant, then and in such
event each Loan Party agrees that (A) any such judgment, decree, order,
settlement or compromise shall be binding upon it notwithstanding the
cancellation of any Indebtedness hereunder or under the other Loan Documents or
the termination of this Agreement or the other Loan Documents, and (B) it shall
be and remain liable to such Agent, such Lender or the L/C Issuer hereunder for
the amount so repaid or recovered to the same extent as if such amount had never
originally been received by such Agent, such Lender or the L/C Issuer.
     Section 12.15 Indemnification. In addition to each Loan Party’s other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless each Agent, each Lender
and the L/C Issuer and all of their respective officers, directors, employees,
attorneys, consultants and agents (collectively called the “Indemnitees”) from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable out-of-pocket costs and expenses (including reasonable
out-of-pocket attorneys fees, costs and expenses of one primary counsel and any
local counsel for the Collateral Agent and one primary counsel and any local
counsel for the Administrative Agent) incurred by such Indemnitees, whether
prior to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) any Agent’s or any Lender’s furnishing of funds to the Borrower
or the L/C Issuer’s issuing of Letters of Credit for the account of the Borrower
under this Agreement or the other Loan Documents, including the management of
any such Loans, the Reimbursement Obligations or the Letter of Credit
Obligations, (iii) any matter relating to the financing transactions
contemplated by this Agreement or the other Loan Documents or by any document
executed in connection with the transactions contemplated by this Agreement or
the other Loan Documents, or (iv) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto (collectively, the “Indemnified Matters”); provided, however, that
the Loan Parties shall not have any obligation to any Indemnitee under this
Section 12.15 for any Indemnified Matter caused by the gross negligence or
willful misconduct of such Indemnitee, as determined by a final non-appealable
judgment of a court of competent jurisdiction or caused by a breach of such
Indemnitee’s obligations hereunder or under any Loan Document. Such
indemnification for all of the foregoing losses, damages, fees, costs and
expenses of the Indemnitees are chargeable against the Loan Account. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 12.15 may be unenforceable because it is violative of any law or
public policy, each Loan Party shall, jointly and severally, contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. This Indemnity shall survive the repayment of the Obligations and
the discharge of the Liens granted under the Loan Documents.
     Section 12.16 Records. The unpaid principal of and interest on the Loans,
the interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Sections 2.06 or 3.03 hereof, shall at all times be
ascertained from the records of the Agents, which shall be conclusive and
binding absent manifest error.

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     Section 12.17 Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and
thereafter shall be binding upon and inure to the benefit of each Loan Party,
each Agent and each Lender, and their respective successors and permitted
assigns, except that the Loan Parties shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of
each Lender, and any assignment by any Lender shall be governed by Section 12.07
hereof.
     Section 12.18 Interest. It is the intention of the parties hereto that each
Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to such
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent
or any Lender that is contracted for, taken, reserved, charged or received by
such Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Agent or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Agent or such Lender, as applicable,
to the Borrower); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Agent or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Agent or such Lender, as applicable, on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by such Agent or such
Lender to the Borrower). All sums paid or agreed to be paid to any Agent or any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at an time and from time to time (i) the amount of interest payable to any Agent
or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 12.18 and
(ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Agent or such Lender would be less than the
amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such

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Lender if the total amount of interest had been computed without giving effect
to this Section 12.18.
          For purposes of this Section 12.18, the term “applicable law” shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrower, on the one hand, and the Agents and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
          The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
     Section 12.19 Confidentiality. Each Agent and each Lender agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to keep confidential, in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound practices of comparable companies, any material
non-public information supplied to it by the Loan Parties pursuant to this
Agreement or the other Loan Documents (and which at the time is not, and does
not thereafter become, publicly available or available to such Person from
another source not known to be subject to a confidentiality obligation to such
Person not to disclose such information), provided that nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for any Agent or
any Lender (it being understood that the person to whom such disclosure is made
will be informed of the confidential nature of such information and instructed
to keep such information confidential), (iii) to examiners, auditors,
accountants or Securitization Parties (it being understood that the person to
whom such disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential), (iv) in
connection with any litigation to which any Agent or any Lender is a party or
(v) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 12.19. Each Agent and each Lender agrees that, upon
receipt of a request or identification of the requirement for disclosure
pursuant to clause (iv) hereof, it will make reasonable efforts to keep the Loan
Parties informed of such request or identification; provided that each Loan
Party acknowledges that each Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that each Agent and each Lender may be subject to review by Securitization
Parties or other regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties or
agencies any such non-public information.
     Section 12.20 Section Headings. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
     Section 12.21 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated

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hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.
     Section 12.22 Release of Security Interest or Guaranty. Upon the sale or
other disposition of any Collateral that is expressly permitted by this
Agreement or which has been expressly consented to in accordance with the terms
hereof, or the sale or other disposition of all of the Capital Stock of a
Guarantor that is permitted by this Agreement or to which has been consented to
in accordance with the terms hereof, for which a Loan Party desires to obtain a
release, such Loan Party shall deliver to the Agents a certificate of an
Authorized Officer (a) stating that the Collateral or the Capital Stock subject
to such disposition is being sold or otherwise disposed of in compliance with
the terms hereof and (b) specifying the Collateral or Capital Stock being sold
or otherwise disposed of in the proposed transaction. Upon the receipt of such
certificate the Collateral Agent shall, at such Loan Party’s expense, so long as
the Collateral Agent (i) has no reason to believe that the facts stated in such
certificate are not true and correct, and (ii) shall have received evidence
satisfactory to it that arrangements reasonably satisfactory to it have been
made for delivery of the Net Cash Proceeds if and as required by
Section 2.05(c), execute and deliver such releases as may be reasonably
requested by such Loan Party. Upon payment in full in cash of the Obligations in
accordance with the provisions of this Agreement and the expiration or
termination of the Commitments, the Liens granted by any Loan Document shall
terminate and all rights to the Collateral shall revert to the Loan Parties or
any other Person entitled thereto. At such time, Collateral Agent will execute
and deliver such documents and termination statements to terminate such Liens as
any Loan Party reasonably requests to evidence such termination.
     Section 12.23 Acknowledgment of Prior Obligations and Continuation Thereof.
Each Loan Party (a) consents to the amendment and restatement of the Original
Financing Agreement by this Agreement; (b) acknowledges and agrees that (i) its
obligations owing to Agents and Lenders, and (ii) the prior grant or grants of
security interests in favor of Agents and Lenders in its properties and assets,
under each “Loan Document” as defined in the Original Financing Agreement (the
“Original Loan Documents”), and each Loan Document to which it is a party shall
be in respect of the obligations of such Loan Party under this Agreement and the
other Loan Documents; (c) reaffirms (i) all of its obligations owing to Agents
and Lenders, and (ii) all prior grants of security interests in favor of Agents
and Lenders under each Original Loan Document, each Loan Document, or any
instrument securing the obligations under the Original Loan Documents or the
Loan Documents; and (d) agrees that, except as expressly amended hereby or in
connection herewith, each of the Original Loan Documents to which it is a party
is and shall remain in full force and effect. The Borrower hereby confirms and
agrees that all outstanding principal (if any), interest (if any) and fees and
other obligations under the Original Financing Agreement immediately prior to
the Effective Date shall, to the extent not paid on the Effective Date, from and
after the Effective Date, be, without duplication, Obligations owing and payable
pursuant to this Agreement and the other Loan Documents as in effect from time
to time, shall accrue interest thereon as specified in this Agreement, and shall
be secured by this Agreement and the other Loan Documents. Although each Loan
Party has been informed of the matters set forth herein and has acknowledged and
agreed to same, it understands that Agents and Lenders shall have no obligation
to inform it of such matters in the future or to seek its acknowledgement or
agreement to future amendments or modifications, and nothing herein shall create
such a duty.

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     Section 12.24 No Novation. This Agreement does not extinguish the
obligations for the payment of money outstanding under the Original Financing
Agreement or discharge or release the obligations or the liens or priority of
any mortgage, pledge, security agreement or any other security therefor. Nothing
herein contained shall be construed as a substitution or novation of the
obligations outstanding under the Original Financing Agreement, the other
Original Loan Documents or instruments securing the same, which shall remain in
full force and effect, except as modified hereby or by instruments executed
concurrently herewith. Nothing expressed or implied in this Agreement shall be
construed as a release or other discharge of the Borrower or any Guarantor from
any of its obligations or liabilities under the Original Financing Agreement or
any of the security agreements, pledge agreements, mortgages, guaranties or
other loan documents executed in connection therewith. Each Loan Party hereby
(a) confirms and agrees that each Original Loan Document to which it is a party
that is not being amended and restated concurrently herewith is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects except that on and after the Effective Date, all references in any
such Original Loan Document to “the Financing Agreement,” “thereto,” “thereof,”
“thereunder” or words of like import referring to the Original Financing
Agreement shall mean the Original Financing Agreement as amended and restated by
this Agreement; and (b) confirms and agrees that to the extent that any such
Original Loan Document purports to assign or pledge to any Agent or Lenders or
to grant to any Agent or Lenders a security interest in or lien on, any
collateral as security for the obligations of such Loan Party from time to time
existing in respect of the Original Financing Agreement or the Original Loan
Document, such pledge or assignment or grant of the security interest or lien is
hereby ratified and confirmed in all respects with respect to this Agreement and
the Loan Documents.
     Section 12.25 Judgment Currency.
          (a) Each payment in respect of any obligation of the Borrower or any
Guarantor hereunder or any other Loan Document shall be made in Dollars (the
“Obligation Currency”) with respect to such Obligation. The specification under
this Agreement of Dollars is of the essence. The Loan Parties’ obligations
hereunder and under the other Loan Documents to make payments in the Obligation
Currency shall not be discharged or satisfied by any tender or recovery pursuant
to any judgment expressed in or converted into any currency other than the
Obligation Currency, except to the extent that such tender or recovery results
in the effective receipt by the Administrative Agent or the respective Lender of
the full amount of the Obligation Currency expressed to be payable to the
Administrative Agent or such Lender under this Agreement or the other Loan
Documents. If, for the purpose of obtaining or enforcing judgment against any
Loan Party in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in the Obligation Currency, the conversion shall be made at the Dollar
Equivalent determined as of the Business Day immediately preceding the day on
which the judgment is given (such Business Day being hereinafter referred to as
the “Judgment Currency Conversion Date”).
          (b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Loan Parties covenant and agree to pay, or cause to be paid,
such additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the

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Judgment Currency, when converted at the rate of exchange prevailing on the date
of payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.
          (c) For purposes of determining the Dollar Equivalent or any other
rate of exchange for this Section 12.25, such amounts shall include any premium
and costs payable in connection with the purchase of the Obligation Currency.
          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

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            BORROWER:

PRG-SCHULTZ INTERNATIONAL, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
USA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           GUARANTORS:

PRG-SCHULTZ CANADA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP MEXICO, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:      

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            PRG-SCHULTZ PUERTO RICO, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP COSTA RICA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
CHILE, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG
INTERNATIONAL, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRGFS,
INC.,
a Delaware corporation
      By:   /s/ Peter Limeri        Name:           Title:      

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            PRGTS, LLC,
a Georgia limited liability company
      By:   /s/ Peter Limeri        Name:           Title:           HS&A
ACQUISITION — UK, INC.,
a Texas corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
AUSTRALIA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
BELGIUM, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
EUROPE, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:      

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            THE PROFIT RECOVERY GROUP GERMANY, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
FRANCE, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP NETHERLANDS, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP NEW ZEALAND, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
SCANDINAVIA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:      

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            PRG-SCHULTZ PORTUGAL, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
SWITZERLAND, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP ITALY, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP SPAIN, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           THE PROFIT
RECOVERY GROUP ASIA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:      

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            THE PROFIT RECOVERY GROUP SOUTH AFRICA, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
JAPAN, INC.,
a Georgia corporation
      By:   /s/ Peter Limeri        Name:           Title:           PRG-SCHULTZ
PUERTO RICO,
a Puerto Rico foreign partnership
      By:   /s/ Peter Limeri        Name:           Title:      

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            COLLATERAL AGENT, ADMINISTRATIVE AGENT AND LENDER:

ABLECO FINANCE LLC,
a Delaware limited liability company, on behalf of
itself and its affiliate assign
      By:   /s/ Eric Miller        Name:   Eric Miller        Title:   Senior
Vice President     

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