Exhibit 10.27

THIS EIGHTH AMENDED AND RESTATED SECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. THIS
EIGHTH AMENDED AND RESTATED SECURED PROMISSORY NOTE HAS BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND NEITHER THIS EIGHTH
AMENDED AND RESTATED SECURED PROMISSORY NOTE NOR ANY INTEREST HEREIN MAY BE SOLD
OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION AND
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM.

THIS EIGHTH AMENDED AND RESTATED SECURED PROMISSORY NOTE IS SUBJECT TO THE TERMS
OF A JUNIOR SUBORDINATION AGREEMENT, DATED AS OF MAY 11, 2006, BETWEEN THE CIT
GROUP/BUSINESS CREDIT, INC., WORLD FOCUS AND ESSAR INFRASTRUCTURE LIMITED, F/K/A
ESSAR GLOBAL LIMITED.

EIGHTH AMENDED AND RESTATED SECURED PROMISSORY NOTE

 

$1,975,269.00

  May 11, 2006

For value received, the undersigned, Aegis Communications Group, Inc., a
Delaware corporation (the “Company”), hereby PROMISES TO PAY to the order of
World Focus, a private company limited by shares organized under the laws of
Mauritius (“World Focus”), the principal sum of $1,975,269.00 together with
interest in arrears from and including the date hereof on the unpaid principal
balance until such principal balance is paid in full. The Company agrees to make
all payments under this Eighth Amended and Restated Secured Promissory Note to
the order of World Focus, in lawful money of the United States of America and in
immediately available funds, to such account or place as World Focus may request
in writing ten (10) Business Days (as defined herein) prior to any such payment.
World Focus, together with its assignees hereunder are collectively referred to
as the “Noteholders”. Terms used and not defined in the text of this Seventh
Amended and Restated Secured Promissory Note (this “Secured Promissory Note”)
have the meaning specified in Annex II to this Secured Promissory Note or in the
Purchase Agreement referred to below.

This Secured Promissory Note amends and restates in its entirety that certain
Secured Promissory Note, dated November 5, 2003, made by the Company to the
order of Deustche Bank AG—London, acting through DB Advisors, LLC, as investment
advisor, in the amount of $14,087,352.00, restated in that certain Amended and
Restated Secured Promissory Note, dated January 28, 2004, restated in that
certain Second Amended and Restated Secured Promissory Note, dated March 30,
2004, restated in that certain Third Amended and Restated Secured Promissory
Note, dated August 23, 2004, restated in that certain Fourth Amended and
Restated Secured Note, dated November 22, 2004, restated in that certain Fifth
Amended and Restated Secured Promissory Note, dated December 15, 2004, restated
in that certain Sixth Amended and Restated Secured Promissory Note dated
January 3, 2005, restated in that certain Seventh Amended and Restated Secured
Promissory Note, dated April 20, 2005 (and subsequently assigned by Deutsche
Bank to World Focus) (the “Original Note”) and shall be deemed for purposes of
the Loan Documents (defined herein) to be the same as the Original Note.

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The Company agrees to pay interest on the unpaid principal amount of this
Secured Promissory Note until such principal amount shall be paid in full,
compounded quarterly, at a rate per annum equal to 0.50% per annum above the
rate of interest per annum (the “Eurodollar Rate”) (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at 11:00 A.M. (London time) two Business Days before the first day of
each Interest Period (as defined below) for an amount substantially equal to
such unpaid amount and for a period equal to such Interest Period (provided
that, if for any reason such rate is not available, the term “Eurodollar Rate”
shall mean, for any Interest Period, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in U.S. dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of each Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates). Each interest
period shall be a period having a duration of three months (an “Interest
Period”). The initial Interest Period shall begin on the date hereof and each
subsequent Interest Period shall begin on the last day of the immediately
preceding Interest Period. Interest shall be payable in arrears at the end of
each Interest Period as set forth in the relevant provision below and shall be
calculated on the basis of actual number of days elapsed and a year of 360 days.
Notwithstanding any other provision of this Secured Promissory Note, World Focus
does not intend to charge, and the Company shall not be required to pay, any
interest or other fees or charges in excess of the maximum permitted by
applicable law; any payments in excess of such maximum shall be credited to
reduce principal hereunder. Except as otherwise provided herein or in the
Security Agreement (as defined below), all payments received by World Focus
hereunder will be applied first to costs of collection, if any, then to accrued
but unpaid interest and the balance to principal (in each case, pro rata to each
Noteholder according to the interests of each Noteholder in and to the principal
outstanding at such time under this Secured Promissory Note).

The Company shall pay interest on the amount of any principal, interest or other
amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable on demand, at a
rate per annum equal at all times to two percent (2%) per annum above the rate
per annum of interest set forth in the immediately preceding paragraph (the
“Default Rate”).

Principal hereunder shall be payable in installments as follows:

(a) In an initial installment of $231,897.80 (the “Initial Principal Payment”)
payable from time to time on or before June 30, 2006; and

(b) the balance of the outstanding principal amount hereof shall be payable on
April 26, 2007.

Each installment of principal shall be paid to World Focus by 11:00 A.M. (New
York City time) on the date due. Interest hereunder shall be payable to World
Focus on the last day of each Interest Period in arrears commencing on May 12,
2006 (each such date being an “Interest Payment Date”) with a final payment of
all unpaid interest on the date principal is paid in full hereunder. The Company
shall have the option to pay such interest in cash or to cause such interest to
be capitalized on any such Interest Payment Date and added to the principal
amount of this Secured Promissory Note, which additional amount shall bear
interest and otherwise be payable in accordance with the terms and conditions of
this Secured Promissory Note.

 

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World Focus shall have the right at any time to request that any or all
capitalized interest added to the principal amount of this Secured Promissory
Note be evidenced by a separate promissory note or notes in substantially the
form of this Secured Promissory Note.

If any day on which a payment is due pursuant to the terms of this Secured
Promissory Note is not a Business Day, such payment shall be due on the next
Business Day following such date and interest shall accrue on the accrued and
unpaid interest during such extension of time; provided, that any such interest
accruing for such extension of time shall be due and payable on the immediately
succeeding Interest Payment Date.

This Secured Promissory Note may be prepaid at any time, without premium or
penalty, in whole or in part, together with accrued interest to the date of such
prepayment on the portion prepaid. All prepayments made shall be recorded by
World Focus and, prior to any transfer hereof, indorsed on the grid attached as
Annex I hereto, which is part of this Secured Promissory Note; provided, that
the failure of World Focus to make any such recordation shall not affect the
obligations of the Company under this Secured Promissory Note.

This Secured Promissory Note will be entitled to the benefits of and will be
secured by the pledge, liens, security, title, rights and security interests
granted under (a) the General Security Agreement, dated as of January 26, 2004
(the “Security Agreement”), made by the Company and its Subsidiaries party
thereto in favor of Wilmington Trust Company, as collateral trustee for the
Noteholders (together with its successors and assigns, the “Collateral Trustee”)
pursuant to the Collateral Trustee Agreement, dated as of January 26, 2004 (the
“Collateral Trustee Agreement”), among the Collateral Trustee, the Company, the
Guarantors, Essar Global Limited and Deutsche Bank AG London – acting through DB
Advisors, LLC, as investment advisor. This Secured Promissory Note is subject to
the terms of a Junior Subordination Agreement, dated as of May 11, 2006 (the
“Subordination Agreement”) among The CIT Group/Business Credit, Inc., Essar
Infrastructure Limited, f/k/a Essar Global Limited and World Focus. The
Subordination Agreement, together with this Secured Promissory Note, the
Collateral Documents, the Collateral Trustee Agreement and the Subsidiary
Guaranty made by each of the Subsidiaries of the Company and dated as of
November 5, 2003, as amended by the Amendment No. 1 to Subsidiary Guaranty dated
as of January 26, 2004 (the “Guaranty”), as each of the same may be amended,
supplemented or renewed from time to time, are collectively referred to as the
“Loan Documents.”

So long as any Obligation under this Secured Promissory Note or any other Loan
Document shall remain unpaid, the Company will comply with the affirmative and
negative covenants set forth in Annex II to this Secured Promissory Note in
accordance with the terms of those covenants.

Subject to the terms of the Subordination Agreement, upon the occurrence and
during the continuation of any Event of Default (as defined in Annex II hereto),
(i) World Focus, may by notice to the Company, declare this Secured Promissory
Note, all interest thereon and all other amounts payable hereunder to be
forthwith due and payable, whereupon this Secured Promissory Note, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company and (ii) World Focus may
pursue all remedies available to it under the Loan Documents and applicable law
against the Company and the personal property that secures the Obligations, from
time to time and in such order as World Focuus shall determine.

 

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The Company agrees that, upon the acceleration of this Secured Promissory Note
following the occurrence of an Event of Default that is not cured within the
applicable cure period, the Company shall pay to the World Focus, in addition to
principal and accrued interest thereon, all out-of-pocket costs of collection of
the principal and accrued interest, including, but not limited to, all
reasonable out-of-pocket attorneys’ fees, court costs, and other reasonable
out-of-pocket costs and expenses of World Focus related to the enforcement of
payment of this Secured Promissory Note. Such amounts which are not paid within
10 days after World Focus’s written demand therefor shall be added to the
principal of this Secured Promissory Note and will bear interest at the Default
Rate.

Each Noteholder Party hereby appoints and authorizes the Collateral Trustee (the
“Agent”) to take such action as agent on its behalf and to exercise such powers
and discretion under this Secured Promissory Note and the other Loan Documents
as are delegated to such Agent by the terms hereof and thereof, together with
such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of this Secured Promissory Note), no Agent
shall 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
Noteholders, in the case of the Collateral Trustee, and such instructions shall
be binding upon all Noteholder Parties; provided, however, that no Agent shall
be required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law.

Neither any Agent nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Loan Documents, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (a) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (b) makes no warranty or representation to any Noteholder Party and
shall not be responsible to any Noteholder Party for any statements, warranties
or representations (whether written or oral) made in or in connection with the
Loan Documents; (c) 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 any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (d) shall not be
responsible to any Noteholder Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (e) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

No amendment, waiver, modification or supplement of any provision of this
Secured Promissory Note, nor consent to any departure by the Company therefrom,
shall in any event be effective unless the same shall be in writing signed by
the Company and accepted and agreed to by the Required Lenders and then such
amendment, waiver, modification, supplement or consent shall be effective only
in the specific instance and for the specific purpose for which given.

This Secured Promissory Note is governed by and construed in accordance with,
the laws of the State of New York.

This Secured Promissory Note may be assigned, in whole or in part, from time to
time, by World Focus without the prior written consent of the Company.

 

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This Secured Promissory Note and the rights and obligations under this Secured
Promissory Note are not assignable or delegable, directly or indirectly, in
whole or in part, by the Company, without the prior written consent of the World
Focus; provided, however, that the Company may transfer this Secured Promissory
Note and the rights and obligations under this Secured Promissory Note to any
third party that has acquired all or substantially all of the capital stock or
ownership interest in and to the Company (including by way of merger or
consolidation) or to any third party that has acquired all or substantially all
of the assets of the Company; provided that the Collateral (as defined in the
Security Agreement) is included in any such sale. This Secured Promissory Note
shall be binding upon the Company, its permitted successors and its assigns,
and, in addition, shall inure to the benefit of and be enforceable by each
Noteholder and its successors and assigns. Whenever possible this Secured
Promissory Note and each provision hereof shall be interpreted in such manner as
to be effective, valid and enforceable under applicable law. If and to the
extent that any such provision of this Secured Promissory Note shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provisions hereof, and
any determination that the application of any provision hereof to any person or
under any circumstance is illegal and unenforceable shall not affect the
legality, validity and enforceability of such provision as it may be applied to
any other person or in any other circumstance. All rights and remedies provided
in this Secured Promissory Note, the Guarantee, the Security Agreement or any
law shall be available to the World Focus and shall be cumulative.

The Company hereby expressly waives presentment, demand, and protest, notice of
demand, dishonor and nonpayment of this Secured Promissory Note, and all other
notices or demands of any kind in connection with the delivery, acceptance,
performance, default or enforcement hereof, and hereby consents to any delays,
extensions of time, renewals, waivers or modifications that may be granted or
consented to by the Noteholders with respect to the time of payment or any other
provision hereof or of the Security Agreement.

No course of dealing between the Company and the World Focus or any other
Noteholder or Noteholder Party and no delay or failure in exercising any rights
hereunder in respect thereof shall operate as a waiver of any rights of any
Noteholder Party.

This Secured Promissory Note, and the indebtedness of the Company to the World
Focus evidenced hereby, shall not be subject to any set-off, recoupment or
counterclaim, each of which is hereby expressly waived by the Company with
respect to this Secured Promissory Note and such indebtedness.

The Company hereby irrevocably submits to the non-exclusive jurisdiction of any
United States Federal or New York State court sitting in New York City in any
action or proceeding arising out of or relating to this Secured Promissory Note
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court and irrevocably waives
any objection it may now or hereafter have as to the venue of any such suit,
action or proceeding brought in such a court or that such court is an
inconvenient forum. Nothing herein shall limit the right of the World Focus or
any other Noteholder Party to bring proceedings against the Company in the
courts of any other jurisdiction.

 

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THE COMPANY HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURED PROMISSORY
NOTE.

 

     COMPANY:  

AEGIS COMMUNICATIONS GROUP, INC.

 

By:

  

/s/ Deepak Rastogi

  Name:    Deepak Rastogi   Title:    V.P. – Business Planning & Secretary

 

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Annex I

PREPAYMENTS

 

Date   Amount Prepaid   Unpaid Balance   Notation Made By

 

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Annex II

Covenants, Events of Default and Related Definitions

1. Definitions and Interpretations

1.1 Definitions As used in this Annex II, the following terms shall have the
following definitions:

“Account” means an account (as that term is defined in the Code), and any and
all supporting obligations in respect thereof.

“Account Debtor” means any Person who is obligated under, with respect to, or on
account of, an Account, chattel paper, or a General Intangible.

“Advances” means the principal amounts outstanding and unpaid from time to time
evidenced by the Secured Promissory Note to which this Annex II is attached and
any other secured promissory note having the same terms as this secured
promissory note and issued simultaneously with the Secured Promissory Note to
which this Annex II is attached.

“Affiliate” means, as applied to any Person, any other Person who, 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” means the possession, directly or indirectly through one or more
intermediaries, of the power to direct the management and policies of a Person,
whether through the ownership of Stock, by contract, or otherwise.

“ATC” means Advanced Telemarketing Corporation, a Nevada corporation.

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

“Board of Directors” means the board of directors (or comparable managers) of
the Company or any committee thereof duly authorized to act on behalf of the
board of directors (or comparable managers).

“Books” means all of Company’s and its Subsidiaries’ now owned or hereafter
acquired books and records (including all of their Records indicating,
summarizing, or evidencing their assets (including the Collateral) or
liabilities, all of Company’s and its Subsidiaries’ Records relating to their
business operations or financial condition, and all of their goods or General
Intangibles related to such information).

“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 or for
purposes of determining the interest rate hereunder, London.

“Capital Expenditures” means, with respect to any Person for any period, the sum
of (a) the aggregate of all expenditures by such Person and its Subsidiaries
during such period that are capital expenditures as determined in accordance
with GAAP, whether such expenditures are paid in cash or financed, and (b) to
the extent not covered by clause (a), the aggregate of all expenditures by such
Person and its Subsidiaries during such period to acquire by purchase or
otherwise the business or capitalized assets of, or the Capital Stock of, any
other Person.

 

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“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) demand Deposit Accounts maintained with any
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any individual bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, and
(f) Investments in money market funds substantially all of whose assets are
invested in the types of assets described in clauses (a) through (e) above.

“Change of Control” means that (a) any “person” or “group” (within the meaning
of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders,
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 25%, or more, of the Stock of the Company having the
right to vote for the election of members of the Board of Directors, or
(b) World Focus ceases to own, directly or indirectly, and control Stock and
Warrants (as defined in the Purchase Agreement) of the Company representing (if
such warrants were exercised) in the aggregate 65% of the outstanding Stock of
the Company, or (c) a majority of the members of the Board of Directors do not
constitute Continuing Directors, or (d) the Company or its Subsidiaries cease to
own, directly or indirectly, and control 98.76 % of the outstanding Stock of ATC
and the Company or its Subsidiaries cease to own, directly or indirectly, and
control 100% of the outstanding Stock of each of their Subsidiaries (other than
ATC) extant as of the Closing Date.

“Closing Date” means the date of this Secured Promissory Note.

“Code” means the New York Uniform Commercial Code, as in effect from time to
time.

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by the Company or its Subsidiaries in or upon which
a Lien is granted under any of the Loan Documents.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in Company’s or its Subsidiaries’ Books or Equipment, in each case, in form and
substance satisfactory to Collateral Trustee.

 

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“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of the Company on the date of execution of the
Secured Promissory Notes, and (b) any individual who becomes a member of the
Board of Directors after the date of execution of the Secured Promissory Notes
if such individual was appointed or nominated for election to the Board of
Directors by a majority of the Continuing Directors, but excluding any such
individual originally proposed for election in opposition to the Board of
Directors in office on the date of execution of the Secured Promissory Notes in
an actual or threatened election contest relating to the election of the
directors (or comparable managers) of the Company and whose initial assumption
of office resulted from such contest or the settlement thereof.

“Control Agreement” means a control agreement, in form and substance
satisfactory to Collateral Trustee, executed and delivered by the Company or one
of its Subsidiaries, Collateral Trustee and, so long as the WFF Facility remains
outstanding, WFF as Collateral Trustee under the WFF Facility (in which case
such Control Agreement shall provide that the Collateral Trustee shall replace
WFF as secured party thereunder upon termination and payment in full of the WFF
Facility), and the applicable securities intermediary (with respect to a
Securities Account) or a bank (with respect to a Deposit Account).

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

“Deposit Account” means any deposit account (as that term is defined in the
Code) other than the payroll account of the Company or any of its Subsidiaries
or any account maintained by the Company or any of its Subsidiaries out of which
payroll or related taxes (but not other operating expenses) are payable.

“EBITDA” means, with respect to any fiscal period, the Company’s and its
Subsidiaries’ consolidated net earnings (or loss), minus extraordinary gains and
interest income, plus interest expense, income taxes, depreciation and
amortization and extraordinary non-cash losses for such period, as determined in
accordance with GAAP.

“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, or any third party involving violations of Environmental Laws or
releases of Hazardous Materials from (a) any assets, properties, or businesses
of the Company or any of its Subsidiaries, or any of their predecessors in
interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by the Company or any of
its Subsidiaries, or any of their predecessors in interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on the Company or any
of its Subsidiaries, relating to the environment, employee health and safety (to
the extent it regulates occupational exposure to Hazardous Materials), or
Hazardous Materials, including CERCLA; RCRA; the Federal Water Pollution Control
Act, 33 USC § 1251 et seq; the Toxic Substances Control Act, 15 USC § 2601 et
seq; the Clean Air Act, 42 USC § 7401 et seq.; the Safe Drinking Water Act, 42
USC § 3803 et seq.; the Oil Pollution Act of 1990, 33 USC § 2701 et seq.; the

 

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Emergency Planning and the Community Right-to-Know Act of 1986, 42 USC § 11001
et seq.; the Hazardous Material Transportation Act, 49 USC § 1801 et seq.; and
the Occupational Safety and Health Act, 29 USC §651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.

“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, or consultants, and costs of
investigation 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 any Environmental Action.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

“Equipment” means equipment (as that term is defined in the Code), and includes
machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles
(including motor vehicles), computer hardware, tools, parts, and goods (other
than consumer goods, farm products, or Inventory), wherever located, including
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing.

“Event of Default” has the meaning set forth in Section 4 of this Annex II.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

“Excluded Subsidiary” means any Subsidiary of the Company or a Guarantor that
(i) has an aggregate book value, for all of its assets, of less than $25,000,
(ii) owns no registered intellectual property, (iii) has annual revenues of less
than $25,000, and (iv) has been designated an “Excluded Subsidiary” by the
Company with the consent of World Focus in its Permitted Discretion. The Company
may withdraw such designation at any time in its discretion. As of the Closing
Date, EBA Direct, Inc., a Canadian corporation and wholly owned Subsidiary of
IQI, Inc., is the sole Excluded Subsidiary.

“Financed Capital Expenditures” means Capital Expenditures permitted under
Section 3.16(b)(ii) without the incorporation by reference of Section 3.16(b)(i)
set forth therein.

“FEIN” means Federal Employer Identification Number.

“Funded Capital Expenditures” means Capital Expenditures permitted under
Section 3.16(b)(i) without the incorporation by reference of Section 3.16(b)(ii)
set forth therein.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

“General Intangibles” means general intangibles (as that term is defined in the
Code), including payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, trade secrets, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights

 

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under any royalty or licensing agreements, infringement claims, computer
programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims, and any and all supporting obligations in respect thereof, and
any other personal property other than Accounts, Deposit Accounts, goods,
Investment Property, and Negotiable Collateral.

“Governmental Authority” means any federal, state, local, or other governmental
or administrative body, instrumentality, department, or agency or any court,
tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body.

“Guarantor” means each Material Subsidiary of the Company.

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

“Hedge Agreement” means any and all agreements, or documents now existing or
hereafter entered into by Company or its Subsidiaries that provide for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging Company’s or its Subsidiaries’ exposure
to fluctuations in interest or exchange rates, loan, credit exchange, security
or currency valuations or commodity prices.

“Initial Noteholders” means Deutsche Bank AG London acting through DB Advisors,
LLC and Essar Global Limited.

“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all
reimbursement or other obligations in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all
obligations as a lessee under Capital Leases, (d) all obligations or liabilities
of others secured by a Lien on any asset of a Person or its Subsidiaries,
irrespective of whether such obligation or liability is assumed, (e) all
obligations to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business and repayable in accordance
with customary trade practices), (f) all obligations owing under Hedge
Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

 

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“Interest Expense” means, for any period, the aggregate of the interest expense
of the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

“Inventory” means inventory (as that term is defined in the Code).

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, or capital contributions (excluding (a) commission, travel, and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide Accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any division or business line of such other Person), and any other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP.

“Investment Property” means investment property (as that term is defined in the
Code), and any and all supporting obligations in respect thereof.

“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, irrespective of whether
(a) such interest is based on the common law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term “Lien” includes the lien or security interest arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, security agreement, conditional sale or trust receipt, or from a
lease, consignment, or bailment for security purposes and also includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Real Property.

“Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
(b) a material impairment of the Company’s or a Subsidiary of the Company’s
ability to perform its obligations under the Loan Documents to which it is a
party or of the Noteholder Parties’ ability to enforce the Obligations or
realize upon the Collateral, or (c) a material impairment of the enforceability
or priority of the Collateral Trustee’s Liens with respect to the Collateral as
a result of an action or failure to act on the part of the Company or a
Subsidiary of the Company.

“Material Subsidiary” means any Subsidiary of the Company or a Guarantor that is
not an Excluded Subsidiary.

“Negotiable Collateral” means letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and chattel paper (including
electronic chattel paper and tangible chattel paper), and any and all supporting
obligations in respect thereof.

“Noteholder” or “Noteholders” means the World Focus and each Person that becomes
a holder of the Secured Promissory Note to which this Annex II is attached or to
the owner of an undivided interest in the Secured Promissory Note to which this
Annex II is attached pursuant to the terms hereof for so long as World Focus or
such Person, as the case may be, shall be a holder hereof.

 

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“Noteholder Party” or “Noteholder Parties” means any or all of the Noteholders
and Agents, as the case may be.

“Obligations” means all loans, Advances, debts, principal, interest (including
any interest that, but for the commencement of an Insolvency Proceeding, would
have accrued), premiums, liabilities, obligations (including indemnification
obligations), fees, charges, costs, expenses of any of the Noteholders or the
Agents payable by the Company to any Noteholder Party under the Loan Documents
and (including any fees or expenses that, but for the commencement of an
Insolvency Proceeding, would have accrued), guaranties, covenants, and duties of
any kind and description owing by the Company to any of the Noteholder Parties
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all interest not
paid when due and all costs and expenses of the Noteholder Parties payable by
the Company under the Loan Documents, by law, or otherwise. Any reference herein
to the Obligations shall include all extensions, modifications, renewals, or
alterations thereof, both prior and subsequent to any Insolvency Proceeding.

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.

“Permitted Dispositions” means (a) sales or other dispositions of Equipment that
is substantially worn, damaged, or obsolete in the ordinary course of business,
(b) sales of Inventory to buyers in the ordinary course of business, (c) the use
or transfer of money or Cash Equivalents in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents, and (d) the licensing,
on a non-exclusive basis, of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business and (d) the sale
of assets having an aggregate book value on the Books of the “Borrowers” (as
such term is defined in the WWF Facility) not exceeding $100,000 in any
twelve-month period.

“Permitted Holders” means the Initial Noteholders and the Prior Stockholders.

“Permitted Investments” means (a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) Investments received in settlement of amounts due to the Company
or any Material Subsidiary of the Company effected in the ordinary course of
business or owing to the Company or any Material Subsidiary of the Company as a
result of Insolvency Proceedings involving an Account Debtor or upon the
foreclosure or enforcement of any Lien in favor of the Company or any Material
Subsidiary of the Company, and (e) Investments in de minimis amounts in Excluded
Subsidiaries that are necessary to maintain the corporate existence of such
Excluded Subsidiaries under applicable law.

“Permitted Liens” means (a) Liens held by Collateral Trustee, (b) Liens for
unpaid taxes that either (i) are not yet delinquent, or (ii) do not constitute
an Event of Default hereunder and are the subject of Permitted Protests,
(c) Liens set forth on Schedule 3.2 to this Annex II, (d) the interests of
lessors under operating leases, (e) purchase money Liens or the interests of
lessors under Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness and so long as such Lien attaches only to
the asset purchased or acquired and the proceeds thereof, (f) Liens arising by
operation of law in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, incurred in the ordinary course of the
Company and its Subsidiaries’ business and not in connection with the borrowing
of money, and which Liens either (i) are for sums not yet delinquent, or
(ii) are the subject of Permitted Protests,

 

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(g) Liens arising from deposits made in connection with obtaining worker’s
compensation or other unemployment insurance, (h) Liens or deposits to secure
performance of bids, tenders, or leases incurred in the ordinary course of
business and not in connection with the borrowing of money, (i) Liens granted as
security for surety or appeal bonds in connection with obtaining such bonds in
the ordinary course of business, (j) Liens resulting from any judgment or award
that is not an Event of Default hereunder, (k) with respect to any Real
Property, easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof and (l) any and
all Liens granted in, created by or arising out of any WFF Loan Documents, which
Liens may be senior and prior to any Lien in favor of the Collateral Trustee or
Noteholders to secure the repayment and performance of the Obligations.

“Permitted Protest” means the right of Company or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on the Books in such amount as is required
under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Company or any of its Subsidiaries, as applicable, in good faith,
and (c) while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Collateral Trustee’s Liens.

“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the date of execution of the Secured
Promissory Notes in an aggregate amount outstanding at any one time not in
excess of $10,000,000.

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
statutory trusts, joint ventures, trusts, land trusts, business trusts,
statutory trusts or other organizations, irrespective of whether they are legal
entities, and governments and agencies and political subdivisions thereof.

“Prior Stockholders” means Questor Partners Fund II, L.P.; Questor Side-by-Side
Partners II, L.P.; Questor Side-by-Side Partners II 3(c)(1), L.P.; TC
Co-Investors, LLC; and Thayer Equity Investors III, L.P.

“Projections” means the Company’s forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a consistent
basis with the Company’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
20 days after, the acquisition of any fixed assets for the purpose of financing
all or any part of the acquisition cost thereof.

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by the Company or a Subsidiary of the Company and the
improvements thereto.

“Record” means information that is inscribed on a tangible medium or which is
stored in an electronic or other medium and is retrievable in perceivable form.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or

 

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outdoor environment, (b) 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 indoor or outdoor environment, (c) perform any
pre-remedial studies, investigations, or post-remedial operation and maintenance
activities, or (d) conduct any other actions authorized by 42 USC § 9601.

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Secured Promissory Note” means this Secured Promissory Note and each other
secured promissory note issued by the Company as of the date hereof.

“Securities Account” means a “securities account” as that term is defined in the
Code.

“Solvent” means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s
debts.

“Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

“Surviving Preferred Shares” means, collectively, the Surviving Series B Shares
and the Surviving Series F Shares.

“Surviving Series B Shares” means 29,778 shares of the Series B Preferred Stock,
par value $.01 per share, of Parent.

“Surviving Series F Shares” means 23,875 shares of the Series F Preferred Stock,
par value $.01 per share, of Parent.

“United States” means the United States of America.

“WFF” means Wells Fargo Foothill.

“WFF Facility” means the Loan and Security Agreement, dated as of January 26,
2004, by and among the Company, each of its subsidiaries signatories thereto,
each of the lenders signatories thereto and WFF as the arranger and
administrative agent thereunder.

“WFF Loan Documents” means the WFF Facility and each other “Loan Document” as
defined therein.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. When used herein, the term “financial
statements” shall

 

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include the notes and schedules thereto. Whenever the term “the Company and its
Subsidiaries” or the term “Company” is used in respect of a financial covenant
or a related definition, it shall be understood to mean the Company and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.

1.3 Code. Any terms used in this Annex II that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein.

2. Affirmative Covenants

The Company covenants and agrees that, until the payment in full of the
Obligations, the Company and its Subsidiaries shall and shall cause each of
their respective Subsidiaries to do all of the following:

2.1 Accounting System. Maintain a system of accounting that enables the Company
and its Subsidiaries to produce financial statements in accordance with GAAP and
maintain records pertaining to the Collateral that contain information as from
time to time reasonably may be requested by Collateral Trustee.

2.2 [Reserved].

2.3 Returns. Cause returns and allowances as between the Company and its
Subsidiaries and their Subsidiaries and their Account Debtors, to be on the same
basis and in accordance with the usual customary practices of the Company and
its Subsidiaries and their Subsidiaries, as they exist at the time of the
execution and delivery of this Agreement.

2.4 Maintenance of Properties. Maintain and preserve all of their properties
which are necessary or useful in the proper conduct to their business and not
obsolete in good working order and condition, ordinary wear and tear excepted,
and comply at all times with the provisions of all leases to which it is a party
as lessee, so as to prevent any loss or forfeiture thereof or thereunder.

2.5 [Reserved].

2.6 [Reserved]

2.7 Location of Inventory and Equipment. Keep the Company and its Subsidiaries’
and their Subsidiaries’ Equipment only at the locations identified on Schedule
2.7 to this Annex II and their chief executive offices only at the locations
identified on said Schedule 2.7; provided, however, that Company may amend
Schedule 2.7 so long as such amendment occurs by written notice to Collateral
Trustee not less than 30 days prior to the date on which such Equipment is moved
to such new location or such chief executive office is relocated, so long as
such new location is within the continental United States, and so long as, at
the time of such written notification, the Company or its Subsidiary provides
Collateral Trustee a Collateral Access Agreement with respect thereto.

2.8 Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, including the Fair
Labor Standards Act and the Americans With Disabilities Act, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.

 

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2.9 [Reserved].

2.10. [Reserved].

2.11 Environmental. (a) Keep any property either owned or operated by the
Company or any Subsidiary of the Company free of any Environmental Liens or post
bonds or other financial assurances sufficient to satisfy the obligations or
liability evidenced by such Environmental Liens, (b) comply, in all material
respects, with Environmental Laws and provide to World Focus documentation of
such compliance which World Focus reasonably requests, (c) promptly notify World
Focus of any release of a Hazardous Material of any reportable quantity from or
onto property owned or operated by the Company or any Subsidiary of the Company
and take any Remedial Actions required to abate said release or otherwise to
come into compliance with applicable Environmental Law, and (d) promptly, but in
any event within five days of its receipt thereof, provide World Focus with
written notice of any of the following: (i) notice that an Environmental Lien
has been filed against any of the real or personal property of the Company or
any Subsidiary of the Company, (ii) commencement of any Environmental Action or
notice that an Environmental Action will be filed against the Company or any
Subsidiary of the Company, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.

2.12 [Reserved].

2.13 Formation of Subsidiaries. At the time that the Company or any Subsidiary
of the Company forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date, the Company or such existing
Subsidiary shall, subject to the terms of the Subordination Agreement, (a) if
such new Subsidiary is a Material Subsidiary, cause such new Subsidiary to
provide to World Focus a Guaranty Supplement (as defined in the Guaranty) and
joinder to the Security Agreement, together with such other security documents
as well as appropriate UCC-1 financing statements, all in form and substance
satisfactory to Collateral Trustee (including being sufficient to grant
Collateral Trustee a first priority Lien (subject to Permitted Liens) in and to
the assets of such newly formed or acquired Subsidiary), (b) provide to
Collateral Trustee a pledge agreement and appropriate certificates and powers or
UCC-1 financing statements, hypothecating all of the direct or beneficial
ownership interest in such new Subsidiary, in form and substance satisfactory to
Collateral Trustee, and (c) provide to Collateral Trustee all other
documentation, including one or more opinions of counsel satisfactory to
Collateral Trustee, which in its opinion is appropriate with respect to the
execution and delivery of the applicable documentation referred to above
(including policies of title insurance or other documentation with respect to
all property subject to a Mortgage). Any document, agreement, or instrument
executed or issued pursuant to this Section 2.13 shall be a Loan Document.

Notwithstanding anything to the contrary in this Section 2 of this Annex II, in
no event shall the Company or any Subsidiary of the Company be required to make
any disclosure of information or provide any information, including any
financial statements, to World Focus, pursuant to Regulation FD promulgated
under the Securities Act of 1933, as amended, the Company would be required to
make any disclosure of that information in a circumstance in which, or at a time
at which, the Company reasonably determines such disclosure would be adverse to
the best interest of the Company and its Subsidiaries or the best interest of
its stockholders or if the disclosure of that information would include the
disclosure of non-GAAP financial measures as contemplated by Regulation G of the
SEC.

 

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2.14 Conversion of Excluded Subsidiaries. At the time that any Excluded
Subsidiary becomes a Material Subsidiary, the Company shall, subject to the
terms of the Subordination Agreement, (a) cause such Subsidiary to provide to
Collateral Trustee a Guaranty Supplement and joinder to the Security Agreement,
together with such other security documents (including Mortgages with respect to
any Real Property of such Subsidiary), as well as appropriate UCC-1 financing
statements (and with respect to all property subject to a Mortgage, fixture
filings), all in form and substance satisfactory to Collateral Trustee
(including being sufficient to grant Collateral Trustee a second priority Lien
(subject to Permitted Liens) in and to the assets of such Subsidiary), and
(b) provide to Collateral Trustee all other documentation, including one or more
opinions of counsel satisfactory to Collateral Trustee, which in its opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above (including policies of title insurance or other
documentation with respect to all property subject to a Mortgage). Any document,
agreement, or instrument executed or issued pursuant to this Section 2.14 shall
be a Loan Document.

2.15 [Reserved]

3. Negative Covenants.

The Company covenants and agrees that, until the payment in full of the
Obligations, but subject to the terms of the Subordination Agreement and to the
obligation and rights of the Company to perform its obligations and covenants
and discharge its obligations under the WFF Loan Documents, the Company and its
Subsidiaries will not and will not permit any of their respective Material
Subsidiaries to do any of the following:

3.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness without the written consent of World Focus, except:

(a) Indebtedness evidenced by the Secured Promissory Notes;

(b) Indebtedness set forth on Schedule 3.1 to this Annex II;

(c) Permitted Purchase Money Indebtedness;

(d) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b) and (c) of this Section 3.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not, in World Focus’s judgment,
materially impair the prospects of repayment of the Obligations by the Company
and its Subsidiaries or materially impair the Company and its Subsidiaries’
creditworthiness, (ii) such refinancings, renewals, or extensions do not result
in an increase in the then extant principal amount of, or interest rate with
respect to, the Indebtedness so refinanced, renewed, or extended or add one or
more borrowers as liable with respect thereto if such additional borrowers were
not liable with respect to the original Indebtedness, (iii) such refinancings,
renewals, or extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions, that, taken as a whole, are materially more burdensome
or restrictive to the Company or any of its Subsidiaries, (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Obligations, then the terms and conditions of the refinancing,
renewal, or extension Indebtedness must be include subordination terms and
conditions that are at least as favorable to World Focus as those that were
applicable to the refinanced, renewed, or extended

 

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Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or extended
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 refinanced, renewed, or extended;

(e) endorsement of instruments or other payment items for deposit; and

(g) Indebtedness composing Permitted Investments.

3.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind (expressly
including, without limitation, Real Property), whether now owned or hereafter
acquired, or any income or profits therefrom, except for Permitted Liens
(including Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is refinanced, renewed, or extended under Section 3.1(d)
of this Annex II and so long as the replacement Liens only encumber those assets
that secured the refinanced, renewed, or extended Indebtedness).

3.3 Restrictions on Fundamental Changes.

(a) Enter into any merger, consolidation, reorganization or recapitalization, or
reclassify its Stock; provided, that (i) the Company may be merged with or into
or consolidated into a wholly-owned direct or indirect Subsidiary of the Company
if the Company is the surviving entity; (ii) any Guarantor may be merged with or
into or consolidated into a wholly-owned direct or indirect Subsidiary of the
Company if the surviving entity is a Guarantor; (iii) any Material Subsidiary
may be merged with or into or consolidated into an Excluded Subsidiary if the
surviving entity is a Material Subsidiary; and (iv) any Subsidiary may be merged
into the Company.

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).

(c) Other than in Permitted Dispositions, convey, sell, lease, license, assign,
transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its assets.

3.4 [Reserved].

3.5 Change Name. Change the Company’s or any Subsidiary of the Company’s name,
FEIN, organizational identification number, state of organization, or
organizational identity; provided, however, that the Company or a Subsidiary of
the Company may change its name upon at least 30 days prior written notice by
Company to Collateral Trustee of such change and so long as, at the time of such
written notification, such Borrower or such Subsidiary provides any financing
statements necessary to perfect and continue perfected Collateral Trustee’s
Liens.

3.6 Nature of Business. Make any change in the principal nature of their
business.

3.7 Reserved.

3.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.

3.9 Distributions. Other than distributions or declaration and payment of
dividends by the Company to another Borrower or by a Subsidiary of the Company
to the Company, make any

 

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distribution or declare or pay any dividends (in cash or other property, other
than common Stock) on, or purchase, acquire, redeem, or retire any of the
Company’s Stock, of any class, whether now or hereafter outstanding.

3.10 Accounting Methods. Modify or change their fiscal year or their method of
accounting (other than as may be required to conform to GAAP or to conform to
more commonly used principles that are a part of GAAP) or as required by
applicable law or enter into, modify, or terminate any agreement currently
existing, or at any time hereafter entered into with any third party accounting
firm or service bureau for the preparation or storage of the Company and its
Subsidiaries’ or their Subsidiaries’ accounting records without said accounting
firm or service bureau agreeing to provide World Focus information regarding the
Company and its Subsidiaries’ and their Subsidiaries’ financial condition.

3.11 [Reserved]

3.12 [Reserved].

3.13 Suspension. Suspend or go out of a substantial portion of their business.

3.14 Compensation. Increase the annual fee or per-meeting fees paid to the
members of its Board of Directors during any year by more than 15% over the
prior year; pay or accrue total cash compensation, during any year, to its
officers and senior management employees in an aggregate amount in excess of
115% of that paid or accrued in the prior year.

3.15 Equipment with Bailees. Store the Equipment of the Company and its
Subsidiaries or their Subsidiaries at any time now or hereafter with a bailee,
warehouseman, or similar party without Collateral Trustee’s prior written
consent.

3.16 [Reserved].

3.17 Billing Practices. Modify or change their billing practices.

3.18 Change of Officers. Permit any change in the holders of the offices of
President and Chief Executive Officer and Chief Financial Officer unless the
individual named to any such office is satisfactory to World Focus in its
Permitted Discretion.

3.19 [Reserved].

3.20 Excluded Subsidiaries. Except as permitted under Section 3.12, transfer any
capital or assets to an Excluded Subsidiary or incur any Indebtedness to an
Excluded Subsidiary

4. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under the Secured Promissory Notes:

4.1 If the Company and its Subsidiaries fail to pay within 5 calendar days of
the date when due and payable or when declared due and payable, all or any
portion of the Obligations other than the principal amount payable under the
Secured Promissory Notes (whether of interest (including any interest which, but
for the provisions of the Bankruptcy Code, would have accrued on such amounts),
fees, charges and expense reimbursements due the Noteholders or other amounts
constituting Obligations);

 

16

--------------------------------------------------------------------------------

4.2 If the Company and its Subsidiaries fail to pay when due and payable or when
declared due and payable, all or any portion of the principal amount payable
under the Secured Promissory Notes;

4.3[Reserved].

4.4 If any material portion of the Company’s or any Subsidiary of the Company’s
assets is attached, seized, subjected to a writ or distress warrant, levied
upon, or comes into the possession and control of any third Person;

4.5 If an Insolvency Proceeding is commenced by the Company or any Subsidiary of
the Company;

4.6 If an Insolvency Proceeding is commenced against the Company or any
Subsidiary of the Company, and any of the following events occur: (a) the
applicable Borrower or Subsidiary consents to the institution of the Insolvency
Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 60 calendar days of the date of the filing thereof,
(d) an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, the Company or any Subsidiary of the Company, or
(e) an order for relief shall have been entered therein;

4.7 If the Company or any Subsidiary of the Company is enjoined, restrained, or
in any way prevented by court order from continuing to conduct all or any
material part of its business affairs;

4.8 If a notice of Lien, levy, or assessment is filed of record with respect to
the Company’s or any Subsidiary of the Company’s assets by the United States, or
any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien, whether choate or
otherwise, upon the Company’s or any Subsidiary of the Company’s assets and the
same is not paid before such payment is delinquent or the same is not subject to
a Permitted Protest;

4.9 [Reserved];

4.10 [Reserved]

4.11 If the Company or any Subsidiary of the Company makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent such payment is
permitted by the terms of the subordination provisions applicable to such
Indebtedness;

4.12 If any representation, warranty, statement or Record fails to be true and
accurate in all material respects on the date as of which such information is
dated or certified and or omits to state any fact necessary to make such
representation, warranty, statement or Record (taken as a whole) not misleading
in any material respect at such time in light of the circumstances in which it
was made to the Noteholders or any Agent by the Company, any Subsidiary of the
Company, or any officer, employee, agent, or director of the Company or any
Subsidiary of the Company;

 

17

--------------------------------------------------------------------------------

4.13 If any of the Loan Documents that purports to create a Lien, 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 on or security
interest in the Collateral covered hereby or thereby; or

4.14 Any material provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by the Company or any Subsidiary of the Company, or a
proceeding shall be commenced by the Company or any Subsidiary of the Company,
or by any Governmental Authority having jurisdiction over the Company or any
Subsidiary of the Company, seeking to establish the invalidity or
unenforceability thereof, or the Company or any Subsidiary of the Company shall
deny that it has any liability or obligation purported to be created under any
Loan Document.

 

18

--------------------------------------------------------------------------------

Schedule 2.7

Locations of Equipment

The Equipment is located at the offices and facilities of the Company located in
the following cities.

 

1. Sierra Vista, Arizona

2. Port St. Lucie, Florida

3. Joplin, Missouri

4. Irving, Texas

5. Elkins, West Virginia

6. Fairmont, West Virginia

7. New York City, New York

8. Fort Lauderdale, Florida

Address of Chief Executive Office of the Company

8001 Bent Branch Drive

Irving, Texas 75063

 

19

--------------------------------------------------------------------------------

Schedule 3.1

Scheduled Indebtedness

1.    Promissory Note, dated May 11, 2006, in the original principal amount of
$1,440,837.97, made by Aegis Communications Group, Inc. in favor of Essar Global
Limited.

2.    Networking Equipment Lease Agreement, dated August 18, 2005, among Aegis
BPO Services Limited, Aegis Communications Group, Inc., and SREI Infrastructure
Finance Limited. (capital lease obligation in the approximate amount of $4.0
million)

3.    Indemnity Agreement (in respect of obligations under two separate letters
of credit in the maximum amounts of $2,489,667 and $390,000, respectively),
dated as of March 30, 2005, between Export-Import Bank of India and Aegis
Communications Group, Inc.

4.    Credit Facility Agreement, dated May 11, 2006, relating to borrowing
availability of $1,500,000 under a stand-by letter of credit, between Aegis
Communications Group, Inc. and UTI Bank Limited, a company incorporated under
the Companies Act 1956 of India.

5.    Financing Agreement, dated as of May 11, 2006, among the CIT
Group/Business Credit, Inc., the Lenders that are parties thereto, Aegis
Communications Group, Inc., Advanced Telemarketing Corporation, IQI, Inc., Lexi
International, Inc. and InterServ Services Corporation.

 

20

--------------------------------------------------------------------------------

Schedule 3.2

Permitted Liens

The following table describes the existing Liens to which assets of the Company
and its Subsidiaries are subject.

 

Debtor

  

Secured Party

   Delaware UCC file number
and date of filing    Collateral Aegis Communications Group, Inc.    SREI
Infrastructure Finance, Limited    N/A    equipment Aegis Communications Group,
Inc., Lexi International, Inc., Advanced Telemarketing Corporation, IQI, Inc.,
Interserv Services Corporation    CIT Group/Business Credit, Inc.    N/A    all
assets

Ontario Personal Property Security Registration System

  

EBA Direct, Inc.

   none      

 

21

--------------------------------------------------------------------------------

INTELLECTUAL PROPERTY SECURITY AGREEMENT

INTELLECTUAL PROPERTY SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT, dated as of
May 11, 2006 (this “Agreement”), made by and among each of AEGIS COMMUNICATIONS
GROUP, INC., a Delaware corporation (“Parent”) ADVANCED TELEMARKETING
CORPORATION, a Nevada corporation (“ATC”), IQI, INC., a New York corporation
(“IQI”), LEXI INTERNATIONAL, INC., a California corporation (“Lexi”), and
INTERSERV SERVICES CORPORATION, a Delaware corporation (“InterServ” and together
with Parent, ATC, IQI and Lexi, each individually a “Company” and collectively,
the “Companies”), each with a principal place of business at 8001 Bent Branch
Drive, Irving, Texas 75063, in favor of THE CIT GROUP/BUSINESS CREDIT, INC., a
New York corporation, as agent (“Agent”) for itself and certain other Lenders
(defined below).

W I T N E S S E T H:

WHEREAS, pursuant to the Financing Agreement, dated as of the date hereof, by
and among the Companies, Agent and the lenders party thereto (collectively, the
“Lenders”) (as amended, supplemented or otherwise modified from time to time,
the “Financing Agreement”), (i) the Lenders have agreed to make certain loans to
the Companies and (ii) the Companies have granted a security interest to Agent,
for the benefit of itself and the Lenders, in, among other things, all right,
title and interest of the Companies in, to and under all of the Companies’
Intellectual Property (as defined below), whether now existing or hereafter
arising or acquired as security for the Obligations from time to time owing by
the Companies under the Financing Agreement; and

WHEREAS, each Company is the owner of the entire right, title and interest in,
to and under such Company’s respective Intellectual Property listed on Schedule
I hereto; and

NOW, THEREFORE, in consideration of the premises and to induce Agent and Lenders
to enter into the Financing Agreement, the Companies hereby agree with Agent as
follows:

 

1. Defined Terms.

 

  (a) Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided in the Financing Agreement.

 

  (b) Definitions of Certain Terms Used Herein. As used herein, the following
terms shall have the following meanings:

“Copyrights” shall mean, with respect to any Company, all of such Company’s now
existing or hereafter acquired right, title, and interest in and to:
(i) copyrights, rights and interests in copyrights, works protectable by
copyright, all applications, registrations and recordings relating to the
foregoing as may at any time be filed in the United States Copyright Office or
in any similar office or agency of the United States, any state thereof, any
political subdivision thereof or in any other country, and all research and
development relating to the foregoing; and (ii) all renewals of any of the
foregoing.

“Copyright Licenses” shall mean all agreements, whether written or oral,
providing for the grant by or to any Company of any right to use any Copyright.

--------------------------------------------------------------------------------

“Governmental Authority” shall mean any federal, state, municipal, national,
local or other governmental department, court, commission, board, bureau, agency
or instrumentality or political subdivision thereof, or any entity or officer
exercising executive, legislative or judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case, whether
of the United States or a state, territory or possession thereof, a foreign
sovereign entity or country or jurisdiction or the District of Columbia.

“Financing Agreement” shall have the meaning assigned to such term in the
preliminary statement of this Agreement.

“Intellectual Property” shall mean all: (i) Trademarks and Trademark Licenses;
(ii) Patents and Patent Licenses; (iii) Copyrights and Copyright Licenses;
(iv) all customer lists and customer information; (v) books, records, writings,
computer tapes or disks, flow diagrams, specification sheets, computer software
(but excluding in all cases any agreements for the licensing of commercially
available off-the-shelf software), source codes, object codes, executable code,
data, databases and other physical manifestations, embodiments or incorporations
of any Trademark, Trademark License, Patent, Patent License, Copyright or
Copyright License; (vi) all other intellectual property; and (vii) all
common-law and other rights throughout the world in and to all of the foregoing.

“IP Collateral” shall have the meaning assigned to such term in Section 2
hereof.

“Licenses” shall mean, collectively, the Trademark Licenses, the Patent
Licenses, and the Copyright Licenses.

“Patents” shall mean, with respect to any Company, all of such Company’s now
existing or hereafter acquired right, title and interest in and to: (i) all
patents, patent applications, inventions, invention disclosures and
improvements, and all applications, registrations and recordings relating to the
foregoing as may at any time be filed in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state
thereof, any political subdivision thereof or in any other country, and all
research and development relating to the foregoing; and (ii) the reissues,
divisions, continuations, renewals, extensions and continuations-in-part of any
of the foregoing.

“Patent Licenses” shall mean all agreements, whether written or oral, providing
for the grant by or to any Company of any right to manufacture, use or sell any
invention covered by a Patent.

“Trademarks” shall mean, with respect to any Company, all of such Company’s now
existing or hereafter acquired right, title, and interest in and to: (i) all of
such Company’s trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos, other
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, all applications (but excluding in all cases all
intent-to-use United States trademark applications for which an amendment to
allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or
15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in
conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by
the United States Patent and Trademark Office, provided, that, upon such filing
and acceptance, such intent-to-use applications shall be included in the
definition of Trademarks), registrations and recordings relating to the
foregoing as may at any time be filed in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof, any political subdivision thereof or in any other country, and all
research and development relating to the foregoing; (ii) all renewals thereof;
(iii)

--------------------------------------------------------------------------------

the entire goodwill of the such Company’s business connected with and symbolized
by the foregoing or the use thereof; and (iv) all designs and general
intangibles of a like nature.

“Trademark Licenses” shall mean all agreements, whether written or oral,
providing for the grant by or to any Company of any right to use any Trademark.

 

  (c) Other Definitional Provisions.

 

  i. The words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and section and paragraph references
are to this Agreement unless otherwise specified.

 

  ii. The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

2.        Grant of Security Interest. To secure the payment and performance of
the Obligations, each Company hereby confirms and acknowledges that it has
granted, assigned and conveyed (and, to the extent not previously granted under
the Financing Agreement, does hereby grant, assign and convey) to Agent, for the
benefit of itself and the Lenders, a first priority lien and security interest
in such Company’s entire right, title and interest in its respective
Intellectual Property (except to the extent any Intellectual Property License
prohibits such grant, assignment or conveyance or requires the consent of any
third party) and all proprietary rights relating to or arising from such
Intellectual Property, in each case whether now owned or hereafter acquired by
such Company, and including, without limitation, each Company’s right, title and
interest in and to each Intellectual Property and proprietary rights identified
on Schedule I attached hereto and made a part hereof, and the right to sue for
past, present and future infringements and dilutions, and all rights
corresponding thereto throughout the world, and the entire goodwill of such
Company’s business connected with and symbolized by the Intellectual Property
and all income, fees, royalties, proceeds and other payments at any time due or
payable with respect to any of the foregoing (referred to collectively as the
“IP Collateral”).

3.        Protection of Intellectual Property by Companies. The Companies shall,
at their sole cost, expense and risk, to the extent the Companies deem necessary
in their good faith business judgment, in connection with the operation of their
business, undertake the following with respect to the Intellectual Property,
except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect:

 

  (a) Pay all renewal fees and other fees and costs associated with maintaining
the Intellectual Property and with the processing of the Intellectual Property
and take all other reasonable and necessary steps to maintain each registration
of the Intellectual Property.

 

  (b) Take all actions reasonably necessary to prevent any of the Intellectual
Property from becoming forfeited, abandoned, dedicated to the public,
invalidated or impaired in any way.

 

  (c) Pursue the prompt, diligent processing of each application for
registration, which is the subject of the security interest created herein, and
not abandon or delay any such efforts.

 

  (d) Take any and all action that the Companies reasonably deem appropriate
under the circumstances to protect the Intellectual Property from infringement,
misappropriation or dilution, including, without limitation, the prosecution and
defense of infringement actions.

--------------------------------------------------------------------------------

4. Representations and Warranties. Each Company represents and warrants that:

 

  (a) Schedule I is a true, correct and complete list of all registered or
applied for Intellectual Property owned by the Companies as of the date hereof.

 

  (b) Except as set forth in Schedule I, none of the Intellectual Property
identified on Schedule I is the subject of any licensing or franchise agreement
pursuant to which any Company is the licensor or franchisor.

 

  (c) Except as could not be reasonably expected to have a Material Adverse
Effect, the Intellectual Property identified on Schedule I hereto, is valid and
enforceable, and to the Companies’ knowledge: (i) no claim has been made that
the use of any of the Intellectual Property does or may violate the rights of
any third person; and (ii) no material claim has been asserted and is pending by
any Person challenging or questioning the use by any Company of any of the
Intellectual Property owned by any Company or the validity or effectiveness of
any of the Intellectual Property owned by any Company, nor does any Company know
of any valid basis for any such claim.

 

  (d) Except as could not be reasonably expected to have a Material Adverse
Effect, each Company owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, and such
Company is the sole and exclusive owner of the entire right, title and interest
in, under and to, free and clear of any liens, charges and encumbrances, other
than any Intellectual Property listed on Schedule I that is purported to be
owned by each of the Companies and Permitted Encumbrances.

 

  (e) To the knowledge of each of the Companies, no holding, decision or
judgment has been rendered by any Governmental Authority which would limit,
cancel or question the validity of, or any Company’s rights in, any Intellectual
Property set forth on Schedule I in any respect that could reasonably be
expected to have a Material Adverse Effect on the business or the property of
any Company.

 

  (f) Each Company has the legal right and authority to enter into this
Agreement and perform its terms.

 

  (g) The Companies shall give Agent written notice (with reasonable detail) on
a quarterly basis in the event any of the following occur:

 

  i. The Companies’ (or any of them) obtaining rights to, and filing
applications for registration of, any new Intellectual Property, or otherwise
acquiring ownership of any newly registered Intellectual Property, which is
material to the business, operations, performance or prospects of any Company,
or has had a worth, in the aggregate of $25,000 or more.

 

  ii. The Companies’ (or any of them) becoming entitled to the benefit of any
registered Intellectual Property whether as licensee or licensor which is
material to the business, operations, performance or prospects of any Company,
or has had a worth, in the aggregate of $25,000 or more.

 

  iii. The Companies’ (or any of them) entering into any new Licenses as
licensor thereunder.

--------------------------------------------------------------------------------

  iv. Unless where the failure to do so would not reasonably be expected to have
a Material Adverse Effect, the Companies’ shall give Agent written notice (with
reasonable detail) following the occurrence of the Companies’ knowing or having
reason to know, that any application or registration relating to any material
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or any court or
tribunal) regarding the Companies’ ownership of, or the validity of, any
material Intellectual Property or the Companies’ right to register the same or
to own and maintain the same.

 

  (h) If any Company amends its name, such Company shall provide copies of such
amendment documentation to Agent and shall re-register such Company’s
Intellectual Property with the appropriate Governmental Authority and shall
execute and deliver such agreements or documentation as Agent shall request to
maintain a perfected first priority security interest in such Intellectual
Property, to the extent such security interest can be perfected by such filing.

5.        No Violation of Financing Agreement. The representations, warranties
or covenants contained herein are supplemental to those representations,
warranties and covenants contained in the Financing Agreement, and shall not be
deemed to modify any such representation, warranty or covenant contained in the
Financing Agreement.

 

6. Agreement Applies to Future Intellectual Property.

 

  (a) The provisions of this Agreement shall automatically apply to any such
additional property or rights described in Section 4 above, all of which shall
be deemed to be and treated as “Intellectual Property” within the meaning of
this Agreement.

 

  (b) Upon the reasonable request of Agent, the Companies shall execute and
deliver, and have recorded, any and all agreements, instruments, documents and
papers as Agent may request to evidence Agent’s security interest in any
Intellectual Property and the goodwill of the Companies relating thereto or
represented thereby (including, without limitation, filings with the United
States Patent and Trademark Office or any similar office), and the Companies
hereby constitute Agent as their attorney-in-fact to execute and file all such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; provided, however, Agent’s taking of such action shall
not be a condition to the creation or perfection of the security interest
created hereby.

7.        Companies’ Rights To Enforce Intellectual Property. Prior to Agent’s
giving of notice to the Companies following the occurrence and during the
continuance of an Event of Default the Companies shall have the exclusive right
to sue for past, present and future infringement of the Intellectual Property
including the right to seek injunctions and/or money damages, in an effort by
the Companies to protect the Intellectual Property against encroachment by third
parties, provided, however:

 

  (a) Any money damages awarded or received by the Companies on account of such
suit (or the threat of such suit) shall constitute IP Collateral.

--------------------------------------------------------------------------------

  (b) Any damages recovered in any action pursuant to this Section, net of costs
and attorneys’ fees reasonably incurred, to be applied as provided in the
Financing Agreement.

 

  (c) Following the occurrence of any Event of Default, Agent, by notice to the
Companies may terminate or limit the Companies’ rights under this Section 7.

8.        Rights Upon Default. Upon the occurrence of any Event of Default,
Agent may exercise all rights and remedies as provided for in the Financing
Agreement.

9.        Agent’s Rights. Upon an Event of Default any use by Agent of the
Intellectual Property, as authorized hereunder in connection with the exercise
of Agent’s rights and remedies under this Agreement and under the Financing
Agreement shall be coextensive with the Companies’ rights thereunder and with
respect thereto and without any liability for royalties or other related
charges.

10.        No Limitation; Financing Agreement. This Agreement has been executed
and delivered by the Companies for the purpose of recording the security
interest granted to Agent with respect to the IP Collateral with the United
States Patent and Trademark Office and the United States Copyright Office. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to Agent, for the benefit of itself
and the Lenders, under the Financing Agreement and the other Loan Documents. The
Financing Agreement (and all rights and remedies of the Companies, Agent, and
the Lenders thereunder) shall remain in full force and effect in accordance with
its terms. In the event of a conflict between this Agreement and the Financing
Agreement, the terms of this Agreement shall control with respect to the IP
Collateral and the Financing Agreement shall control with respect to all other
Collateral.

11.        Termination; Release of Trademark Collateral. This Agreement and all
obligations of the Companies and Agent hereunder shall terminate on the date
upon which the Obligations are performed in full and indefeasibly paid in full
in cash and the Financing Agreement and other Loan Documents are terminated in
accordance with the terms of the Financing Agreement. Upon termination of this
Agreement, Agent shall, at the expense of the Companies, take such actions
required by the Financing Agreement to release its security interest in the IP
Collateral.

12.        Binding Effect; Benefits. This Agreement shall be binding upon the
Companies and their respective successors and assigns, and shall inure to the
benefit of Agent, the Lenders and their respective successors and assigns.

13.        GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

[Remainder of Page Intentionally Left Blank]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Intellectual Property Security
Agreement to be executed by its duly authorized representatives as of the date
first above written.

 

AEGIS COMMUNICATIONS GROUP, INC. By:  

/s/ Kannan Ramasamy

Title:   President & CEO ADVANCED TELEMARKETING CORPORATION By:  

/s/ Kannan Ramasamy

Title:   President & CEO IQI, INC. By:  

/s/ Kannan Ramasamy

Title:   President & CEO LEXI INTERNATIONAL, INC. By:  

/s/ Kannan Ramasamy

Title:   President & CEO INTERSERV SERVICES CORPORATION By:  

/s/ Steven Alred Hough Marshall

Title:   President & CEO

Signature Page to Intellectual Property Security Agreement

--------------------------------------------------------------------------------

SCHEDULE I

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

LIST OF PATENTS AND PATENT APPLICATIONS

None.

LIST OF TRADEMARKS AND TRADEMARK APPLICATIONS

 

A. AEGIS COMMUNICATIONS GROUP, INC.

 

Trademark

 

Registration

Number

 

Registration

Date

 

Expiration

Date

 

LOGO [g97543logo_1.jpg]

 

AEGIS (Design only)

  2347271   May 2, 2000   N/A

 

LOGO [g97543logo_1.jpg]

(Design plus words, letters and/or numbers)

  2347270   May 2, 2000   N/A

 

TRADEMARK APPLICATIONS:    None.

 

B. ADVANCED TELEMARKETING CORPORATION

 

Trademark

 

Registration

Number

 

Registration

Date

 

Expiration

Date

 

LOGO [g97543logo_2.jpg]

  1461348   October 13, 1987   N/A

 

TRADEMARK APPLICATIONS: None

 

C. INTERSERV SERVICES CORPORATION

 

Trademark

 

Registration

Number

 

Registration

Date

 

Expiration

Date

InterServ

  1926943   October 17, 1995   N/A

IS

  1929003   October 24, 1995   N/A

 

TRADEMARK APPLICATIONS:    None

--------------------------------------------------------------------------------

LIST OF COPYRIGHTS AND COPYRIGHT APPLICATIONS

 

A. AEGIS COMMUNICATIONS GROUP, INC.

 

Copyright

 

Registration Number

 

Registration Date

aDialer

 

None

 

None

Aegis Tags

 

None

 

None

Client Interface Suite

 

None

 

None

CTI

 

None

 

None

VTC

 

None

 

None

VTC Lite

 

None

 

None

 

COPYRIGHT APPLICATIONS:    None