REVOLVING CREDIT AND SECURITY AGREEMENT
between
AMERICA SERVICE GROUP INC.
PRISON HEALTH SERVICES, INC.
PRISON HEALTH SERVICES OF INDIANA, L.L.C.
SECURE PHARMACY PLUS, LLC
CORRECTIONAL HEALTH SERVICES, LLC
and
CAPITALSOURCE BANK
Dated as of
July 28, 2009

 

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TABLE OF CONTENTS

                      Page  
 
 
 
       
I.
 
DEFINITIONS
    1  
1.1
 
General Terms
    1  
II.
 
ADVANCES, PAYMENT AND INTEREST
    2  
2.1
 
The Revolving Facility
    2  
2.2
 
The Revolving Loans; Maturity
    2  
2.3
 
Interest on the Revolving Facility
    2  
2.4
 
Revolving Facility Disbursements; Requirement to Deliver Borrowing Certificate
    3  
2.5
 
Collections; Repayment; Borrowing Availability and Lockbox
    3  
2.6
 
Manner of Payment; Promise to Pay
    4  
2.7
 
Repayment of Excess Advances
    4  
2.8
 
Payments by Agent
    5  
2.9
 
Grant of Security Interest; Collateral
    5  
2.10
 
Collateral Administration
    6  
2.11
 
Power of Attorney
    7  
2.12
 
Letters of Credit
    8  
2.13
 
Evidence of Loans
    11  
III.
 
FEES AND OTHER CHARGES; ALLOCATION OF PURCHASE PRICE
    12  
3.1
 
Unused Line Fee
    12  
3.2
 
Collateral Management Fee
    12  
3.3
 
Early Termination Fee
    12  
3.4
 
Computation of Fees; Lawful Limits
    13  
3.5
 
Default Rate of Interest
    13  
3.6
 
Acknowledgement of Joint and Several Liability
    13  
IV.
 
CONDITIONS PRECEDENT
    14  
4.1
 
Conditions to Effectiveness of Agreement and Closing
    14  
4.2
 
Conditions to Each Advance and Issuance of Each Letter of Credit
    16  
V.
 
REPRESENTATIONS AND WARRANTIES
    16  
5.1
 
Organization and Authority
    17  
5.2
 
Loan Documents
    17  
5.3
 
Subsidiaries, Capitalization and Ownership Interests
    17  
5.4
 
Properties
    18  
5.5
 
Other Agreements
    18  
5.6
 
Litigation
    18  
5.7
 
Hazardous Materials
    18  
5.8
 
Tax Returns; Governmental Reports
    19  
5.9
 
Financial Statements and Reports
    19  
5.10
 
Compliance with Law
    19  
5.11
 
Intellectual Property
    20  
5.12
 
Licenses and Permits; Labor
    20  
5.13
 
No Default
    20  
5.14
 
Disclosure
    20  
5.15
 
Existing Indebtedness; Investments, Guarantees and Certain Contracts
    20  
5.16
 
Other Agreements
    21  

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                      Page  
 
 
 
       
5.17
 
Insurance
    21  
5.18
 
Names; Location of Offices, Records and Collateral
    21  
5.19
 
Non-Subordination
    21  
5.20
 
Accounts
    21  
5.21
 
Survival
    22  
5.22
 
Performance and Payment Bonds for Government Contracts
    22  
5.23
 
OFAC and Anti-Terrorism Regulations
    22  
VI.
 
AFFIRMATIVE COVENANTS
    22  
6.1
 
Financial Statements, Reports and Other Information
    22  
6.2
 
Payment of Obligations
    24  
6.3
 
Conduct of Business and Maintenance of Existence and Assets
    24  
6.4
 
Compliance with Legal and Other Obligations
    24  
6.5
 
Insurance
    25  
6.6
 
True Books
    25  
6.7
 
Inspection; Periodic Audits
    25  
6.8
 
Further Assurances; Post Closing
    26  
6.9
 
Payment of Indebtedness
    26  
6.10
 
Lien Terminations
    26  
6.11
 
Use of Proceeds
    26  
6.12
 
Collateral Documents; Security Interest in Collateral
    26  
6.13
 
Taxes and Other Charges
    27  
6.14
 
New Subsidiaries
    27  
6.15
 
Schedules to the Loan Agreement
    28  
6.16
 
New Government Contracts
    28  
VII.
 
NEGATIVE COVENANTS
    28  
7.1
 
Financial Covenants
    28  
7.2
 
Permitted Indebtedness
    28  
7.3
 
Permitted Liens
    29  
7.4
 
Investments; New Facilities or Collateral; Subsidiaries
    30  
7.5
 
Dividends; Redemptions; Equity
    30  
7.6
 
Transactions with Affiliates
    31  
7.7
 
Charter Documents; Fiscal Year; Dissolution; Collateral Assignment
    31  
7.8
 
Transfer of Assets
    32  
7.9
 
Contingent Obligations
    32  
7.10
 
Truth of Statements
    32  
7.11
 
Payment on Subordinated Debt
    32  
7.12
 
IRS Form 8821
    32  
VIII.
 
EVENTS OF DEFAULT
    32  
IX.
 
RIGHTS AND REMEDIES AFTER DEFAULT
    35  
9.1
 
Rights and Remedies
    35  
9.2
 
Application of Proceeds
    35  
9.3
 
Rights of Agent to Appoint Receiver
    36  
9.4
 
Rights and Remedies not Exclusive
    36  
X.
 
WAIVERS AND JUDICIAL PROCEEDINGS
    36  
10.1
 
Waivers
    36  
10.2
 
Delay; No Waiver of Defaults
    37  

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                      Page  
 
 
 
       
10.3
 
Jury Waiver
    37  
10.4
 
Cooperation in Discovery and Litigation
    38  
10.5
 
Amendment and Waivers
    38  
XI.
 
EFFECTIVE DATE AND TERMINATION
    38  
11.1
 
Effectiveness and Termination
    39  
11.2
 
Survival
    39  
XI-A.
 
AGENCY PROVISIONS
    39  
11-A.1
 
Agent
    39  
11-A.2
 
Consents
    43  
11-A.3
 
Set Off and Sharing of Payments
    43  
11-A.4
 
Disbursement of Funds
    44  
11-A.5
 
Settlements; Payments and Information
    44  
11-A.6
 
Dissemination of Information
    46  
XI-B.
 
BORROWING AGENCY
    46  
11-B.1
 
Borrowing Agency Provisions
    46  
11-B.2
 
Waiver of Subrogation
    47  
XII.
 
MISCELLANEOUS
    47  
12.1
 
Governing Law; Jurisdiction; Service of Process; Venue
    47  
12.2
 
Successors and Assigns; Assignments and Participation; New Lenders
    47  
12.3
 
Application of Payments
    49  
12.4
 
Indemnity
    50  
12.5
 
Notice
    50  
12.6
 
Severability; Captions; Counterparts; Facsimile Signatures
    51  
12.7
 
Expenses
    51  
12.8
 
Entire Agreement
    51  
12.9
 
Agent Approvals
    52  
12.10
 
Confidentiality and Publicity
    52  
12.11
 
Release of Agent and Lenders
    52  
12.12
 
Agreement Controls
    53  
12.13
 
Patriot Act
    53  

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REVOLVING CREDIT AND SECURITY AGREEMENT
     THIS REVOLVING CREDIT AND SECURITY AGREEMENT (the “Agreement”) dated as of
July 28, 2009, is entered into between AMERICA SERVICE GROUP INC., a Delaware
corporation (“ASG”), PRISON HEALTH SERVICES, INC., a Delaware corporation
(“PHS”), PRISON HEALTH SERVICES OF INDIANA, L.L.C., an Indiana limited liability
company (“PHS Indiana”), SECURE PHARMACY PLUS, LLC, a Tennessee limited
liability company (“SPP”), and CORRECTIONAL HEALTH SERVICES, LLC, a New Jersey
limited liability company (“CHS” and together with ASG, PHS, PHS Indiana, and
SPP, individually and collectively as the “Borrower”), CAPITALSOURCE BANK, a
California industrial bank (“CapitalSource”), as administrative agent and
collateral agent for Lenders (in such capacities, the “Agent”), and the Lenders
party hereto.
     WHEREAS, Borrower has requested that Lenders make available to Borrower a
revolving credit facility (the “Revolving Facility”) in a maximum principal
amount at any time outstanding of up to Forty Million Dollars ($40,000,000) (the
“Facility Cap”) and within the Facility Cap, a sublimit of Fifteen Million
Dollars ($15,000,000) (the “L/C Sublimit”), the proceeds of such Revolving
Facility shall be used by Borrower for general corporate matters and purposes,
and working capital needs in connection with its provision of medical and
related services to correctional facilities;
     WHEREAS, the parties agree that the Existing Letters of Credit (as defined
below) shall be governed by and deemed to be outstanding under the terms and
conditions of this Agreement; and
     WHEREAS, Lenders are willing to make the Revolving Facility available to
Borrower upon the terms and subject to the conditions set forth herein.
     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which hereby are
acknowledged, Borrower, Agent and Lenders hereby agree as follows:
I. DEFINITIONS
     1.1 General Terms
          For purposes of this Agreement, in addition to the definitions above
and elsewhere in this Agreement, the terms listed in Appendix A and Annex I
hereto shall have the meanings given such terms in Appendix A and Annex I, which
are incorporated herein and made a part hereof. All capitalized terms used which
are not specifically defined shall have meanings provided in Article 9 of the
UCC in effect on the date hereof to the extent the same are used or defined
therein. Unless otherwise specified herein or in Appendix A, any agreement or
contract referred to herein or in Appendix A shall mean such agreement as
modified, amended, restated or supplemented from time to time. Unless otherwise
specified, as used in the Loan Documents or in any certificate, report,
instrument or other document made or delivered pursuant to any of the Loan
Documents, all accounting terms not defined in Appendix A or elsewhere in this
Agreement shall have the meanings given to such terms in and shall be
interpreted in accordance with GAAP. References herein to “Eastern Time” shall
mean eastern standard time or eastern daylight savings time as in effect on any
date of determination in the eastern United States of America.

 

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II. ADVANCES, PAYMENT AND INTEREST
     2.1 The Revolving Facility
          (a) Subject to the provisions of this Agreement, each Lender agrees to
make available its Pro Rata Share of Advances, including Advances in connection
with the issuance or collateralization of Letters of Credit, to Borrower under
the Revolving Facility from time to time during the Term; provided, that (i) the
Pro Rata Share of the Advances of any Lender shall not at any time exceed its
separate Commitment, and (ii) the aggregate amount of all Advances at any time
outstanding under the Revolving Facility, together with the then aggregate
amount of L/C Exposure, shall not exceed the lesser of (A) the Facility Cap and
(B) the Availability. The obligations of Lenders hereunder shall be several and
not joint up to the amount of the Commitments. The Revolving Facility is a
revolving credit facility, which may be drawn, repaid and redrawn, from time to
time as permitted under this Agreement. Any determination as to whether there is
availability within the Borrowing Base for Advances shall be made by Agent in
its Permitted Discretion and is final and binding upon Borrower. Unless
otherwise permitted by Agent, each Advance shall be in an amount of at least
$100,000. Subject to the provisions of this Agreement, Borrower may request
Advances under the Revolving Facility up to and including the value, in Dollars,
of 85% of the Borrowing Base (such calculated amount being referred to herein as
the “Availability”). Advances under the Revolving Facility automatically shall
be made for the payment of interest on the Loans and other Obligations on the
date when due to the extent available and as provided for herein.
          (b) Agent has established the above-referenced advance rate for
Availability and, following an audit and review of Borrower’s financial
statements and with not less than three (3) Business Days prior notice to
Borrower (except that upon the occurrence, and during the continuance, of a
Default or Event of Default, such notice shall not be required), may further
adjust the Availability and such advance rate by applying percentages (known as
“liquidity factors”) to Eligible Receivables based upon Borrower’s actual recent
collection history all in a manner consistent with Agent’s underwriting
practices and procedures, including, without limitation, Agent’s review and
analysis of, among other things, Borrower’s historical returns, rebates,
discounts, credits and allowances (collectively, the “Dilution Items”). Such
liquidity factors and the advance rate for Availability may be adjusted by
Agent, throughout the Term, subject to prior notice to Borrower, as warranted by
Agent’s underwriting practices and procedures in its Permitted Discretion. Also,
Agent shall have the right to establish and readjust from time to time, in its
Permitted Discretion, reserves against the Borrowing Base, which reserves shall
have the effect of reducing the amounts otherwise eligible to be disbursed to
Borrower under the Revolving Facility pursuant to this Agreement.
     2.2 The Revolving Loans; Maturity
          All amounts outstanding under the Revolving Loans and other
Obligations under the Revolving Facility shall be due and payable in full, if
not earlier in accordance with this Agreement, upon the earliest of (i) any
automatic acceleration upon an Event of Default as provided for herein;
(ii) Agent’s acceleration and demand for payment following an Event of Default,
and (iii) the last day of the Term (such earlier date being the “Maturity
Date”).
     2.3 Interest on the Revolving Facility
          Interest on outstanding Advances under the Revolving Loans shall be
payable monthly in arrears on the first day of each calendar month at an annual
rate of LIBOR plus 2.0%, calculated on the basis of a 360-day year and for the
actual number of calendar days elapsed in each interest calculation period.
Notwithstanding the foregoing (and without affecting Agent’s rights under
Section 3.5 hereof),

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during the continuance of an Event of Default and at any other time when Agent
has determined that LIBOR cannot be readily determined or is otherwise
unavailable, interest on outstanding Advances under the Revolving Facility shall
be payable monthly in arrears on the first day of each calendar month at an
annual rate of the Prime Rate; provided, however, that, notwithstanding any
provision of any Loan Document, for the purpose of calculating interest at any
time hereunder, LIBOR shall be not less than 3.14%, in each case calculated on
the basis of a 360-day year and for the actual number of calendar days elapsed
in each interest calculation period. Interest accrued on each Advance under the
Revolving Loans shall be payable in accordance with the procedures provided for
in Section 2.5 and Section 2.6, commencing August 1, 2009 and continuing until
the later of the expiration of the Term and the full performance and irrevocable
payment in full in cash of the Obligations and termination of this Agreement.
Interest on outstanding Advances under the Revolving Loans shall accrue from the
respective funding dates of the Advances.
     2.4 Revolving Facility Disbursements; Requirement to Deliver Borrowing
Certificate
          So long as no Default or Event of Default shall have occurred and be
continuing, Borrower may give Agent irrevocable written notice requesting an
Advance under the Revolving Facility by notifying Agent not later than
12:00 p.m. (New York City time) at least one (1) but not more than four
(4) Business Days before the proposed borrowing date of such requested Advance
(the “Borrowing Date”), and delivering to Agent by noon (New York City time) on
the date of the proposed borrowing, a completed Borrowing Certificate and
relevant supporting documentation satisfactory to Agent in its Permitted
Discretion (which shall only include an Accounts re-aging once each month, as
specified below), which shall (a) specify the proposed Borrowing Date of such
Advance which shall be a Business Day, (b) specify the principal amount of such
requested Advance, (c) certify the matters contained in Section 4.2, and
(d) specify the amount of any known recoupments or setoffs by any third party
payor being sought, requested or claimed, or, to Borrower’s knowledge,
threatened against Borrower to the extent not otherwise reflected in the
calculation of Availability. Each time a request for an Advance is made, and, in
any event and regardless of whether an Advance is being requested, each month
during the Term until the Obligations are indefeasibly paid in cash in full and
this Agreement is terminated, Borrower shall deliver to Agent a Borrowing
Certificate accompanied by a separate detailed aging and categorization of
Borrower’s accounts receivable, and such other supporting documentation with
respect to the figures and information in the Borrowing Certificate as Agent
shall request in its Permitted Discretion from a credit or security perspective
or otherwise. On each Borrowing Date, Borrower irrevocably authorizes Agent to
disburse the proceeds of the requested Advance to the Borrower’s account(s) as
set forth on Schedule 2.4, in all cases for credit to the Borrower (or to such
other account as to which the Borrower shall instruct Agent) via Federal funds
wire transfer no later than 4:00 p.m. Eastern Time. If Borrower’s Borrowing
Certificate does not request the same dollar amount as that which Borrower
estimated in its notification to Agent, Borrower agrees to pay any interest cost
incurred by Agent in connection with such estimated funds.
     2.5 Collections; Repayment; Borrowing Availability and Lockbox
          Borrower shall maintain a lockbox together with a blocked account
(individually and collectively, the “Blocked Account”) with one or more banks
acceptable to Agent (each, a “Lockbox Bank”), and shall execute with each
Lockbox Bank one or more agreements acceptable to Agent in its Permitted
Discretion (individually and collectively, the “Lockbox Agreement”), and such
other agreements related thereto as Agent may require in its Permitted
Discretion. Borrower shall ensure that all collections of its Accounts and all
other cash payments received by Borrower are paid and delivered directly from
Account Debtors and other Persons into the Blocked Account. The Lockbox
Agreements shall provide that the Lockbox Banks on each Business Day will
promptly transfer all funds paid into the Blocked Accounts into a depository
account or accounts maintained by Agent or an Affiliate of Agent at

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such bank as Agent may communicate to Borrower from time to time (the
“Concentration Account”). Notwithstanding and without limiting any other
provision of any Loan Document, Agent shall apply to the Obligations, on a daily
basis, all funds transferred into the Concentration Account pursuant to the
Lockbox Agreement and this Section 2.5 in such order and manner as determined by
Agent. To the extent that any Accounts collections of Borrower or any other cash
payments received by Borrower are not sent directly to the Blocked Account but
are received by Borrower or any of its Affiliates, such collections and proceeds
shall be held in trust for the benefit of Agent and Lenders and promptly
remitted (and in any event within two (2) Business Days), to the Blocked Account
for transfer to the Concentration Account. Borrower acknowledges and agrees that
compliance with the terms of this Section 2.5 is an essential term of this
Agreement, and that, in addition to and notwithstanding any other rights Agent
may have hereunder, under any other Loan Document, under applicable law or at
equity, upon each material failure by Borrower to comply with any such terms
which is not promptly remedied, Agent shall be entitled to assess a
non-compliance fee which shall operate to increase the Applicable Rate by two
percent (2.0%) per annum during any period of non-compliance, whether or not a
Default or an Event of Default occurs or is declared; provided, that nothing
shall prevent Agent from considering any failure to comply with the terms of
this Section 2.5 to be a Default or an Event of Default. All funds transferred
to the Concentration Account for application to the Obligations under the
Revolving Facility shall be applied to reduce the Obligations under the
Revolving Facility, but, only for purposes of calculating interest hereunder,
shall be subject to a two (2) Business Day clearance period unless the net
Advance balance is zero or a credit at the end of the day in which case
collection swept to the Concentration Account for such day will not be subject
to the two (2) Business Day clearance period. If as the result of collections of
Accounts and/or any other cash payments received by Borrower pursuant to this
Section 2.5 a credit balance exists with respect to the Concentration Account,
such credit balance shall not accrue interest in favor of a Borrower, but shall
be available to Borrower upon Borrower’s demand therefor. If applicable, at any
time prior to the execution of all or any of the Lockbox Agreements and
operation of the Blocked Account, Borrower and its Subsidiaries shall direct all
collections or proceeds it receives on Accounts or from other Collateral to the
accounts(s) and in the manner specified by Agent in its sole discretion.
     2.6 Manner of Payment; Promise to Pay
          (a) Any payments made by Borrower (other than payments automatically
paid through Advances under the Revolving Facility as provided herein), shall be
made only by ACH or wire transfer on the date when due, without offset or
counterclaim, in Dollars, in immediately available funds to such account as may
be indicated in writing by Agent to Borrower from time to time. Any such payment
received after 4:00 p.m. Eastern Time on any date shall be deemed received on
the following Business Day. Whenever any payment hereunder shall be stated to be
due or shall become due and payable on a day other than a Business Day, the due
date thereof shall be extended to, and such payment shall be made on, the next
succeeding Business Day, and such extension of time in such case shall be
included in the computation of payment of any interest (at the interest rate
then in effect during such extension) and/or fees, as the case may be. Agent
will provide detailed monthly invoices of such charges and payments.
          (b) Borrower absolutely and unconditionally promises to pay the
Obligations hereunder in accordance with the manner and terms hereof, without
any deduction whatsoever, without setoff, recoupment or counterclaim, each of
which claim or defense hereby is waived.
     2.7 Repayment of Excess Advances
          If at any time the sum of outstanding Advances under the Revolving
Facility plus any Unfunded L/C Exposure exceeds the lesser of the Facility Cap
or the Availability, such excess amount shall be immediately due and payable by
Borrower without the necessity of any demand, at the Payment

4

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Office, whether or not a Default or Event of Default has occurred or is
continuing and shall be paid in the manner specified in Section 2.6.
     2.8 Payments by Agent
          Should any amount required to be paid under any Loan Document remain
unpaid for ten (10) Business Days from the date due, such amount may be paid by
Agent, for the account of Lenders, which payment shall be deemed a request for
an Advance under the Revolving Facility as of the date such payment is due, and
Borrower irrevocably authorizes disbursement of any such funds to Agent, for the
benefit of Lenders, by way of direct payment of the relevant amount, interest or
Obligations. No payment or prepayment of any amount by Agent, Lenders or any
other Person shall entitle any Person to be subrogated to the rights of Agent
and/or Lenders under any Loan Document unless and until the Obligations have
been fully performed and paid irrevocably in cash and this Agreement has been
terminated. Any sums expended by Agent and/or Lenders as a result of Borrower’s
or any Guarantor’s failure to pay, perform or comply with any Loan Document or
any of the Obligations may be charged to Borrower’s account as an Advance under
the Revolving Facility and added to the Obligations.
     2.9 Grant of Security Interest; Collateral
          (a) To secure the payment and performance of the Obligations, each
Borrower hereby grants to Agent, for the benefit of itself and the Lenders, a
continuing first priority security interest in and Lien upon, and pledges to
Agent, for the benefit of itself and the Lenders, all of its right, title and
interest in and to the following, together with property of a similar nature
which each such Borrower owns or in which each such Borrower hereafter acquires
any right, title or interest (collectively and each individually, the
“Collateral”):
               (i) all of such Borrower’s tangible personal property, including
without limitation all present and future Goods, Inventory and Equipment
(including items of Equipment which are or become Fixtures), now owned or
hereafter acquired, but excluding any leased or financed Equipment;
               (ii) all of such Borrower’s intangible personal property,
including without limitation all present and future Accounts, securities,
contract rights, Permits, General Intangibles, Chattel Paper, Investment
Property, Intellectual Property including goodwill, Documents, Instruments and
Deposit Accounts, Letter of Credit Rights and supporting obligations rights to
the payment of money or other forms of consideration of any kind, tax refunds,
insurance proceeds (including, without limitation, proceeds of any life
insurance policy), now owned or hereafter acquired, and all intangible and
tangible personal property relating to or arising out of any of the foregoing;
               (iii) all of such Borrower’s present and future Government
Contracts and rights thereunder and the related Government Accounts and proceeds
thereof, now or hereafter owned or acquired by such Borrower; provided, however,
that Agent shall not have a Lien in any rights under any Government Contract of
such Borrower or in the related Government Account where the taking of such
security interest would be prohibited by applicable law (for purposes of this
limitation, the fact that a Government Contract is subject to, or otherwise
refers to, Title 31, § 203 or Title 41, § 15 of the United States Code shall not
be deemed an express prohibition against assignment thereof); and
               (iv) any and all additions and accessions to any of the
foregoing, and any and all replacements, products and proceeds (including
insurance proceeds) of any of the foregoing.

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          (b) Notwithstanding the foregoing provisions of this Section 2.9, such
grant of a security interest shall not extend to, and the term “Collateral”
shall not include, any General Intangibles of Borrower to the extent that (but
only to the extent that) (i) such General Intangibles are not assignable or
capable of being encumbered as a matter of law or under the terms of any license
or other agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law) without the consent of
the licensor thereof or other applicable party thereto, and (ii) such consent
has not been obtained; provided, however, that the foregoing grant of a security
interest shall extend to, and the term “Collateral” shall include, each of the
following: (a) any General Intangible which is in the nature of an Account or a
right to the payment of money or a proceed of, or otherwise related to the
enforcement or collection of, any Account or right to the payment of money, or
goods which are the subject of any Account or right to the payment of money,
(b) any and all proceeds of any General Intangible that is otherwise excluded to
the extent that the assignment, pledge or encumbrance of such proceeds is not so
restricted, and (c) upon obtaining the consent of any such licensor or other
applicable party with respect to any such otherwise excluded General Intangible,
such General Intangible as well as any and all proceeds thereof that might
theretofor have been excluded from such grant of a security interest and from
the term “Collateral.”
          (c) In addition to the foregoing, to secure the payment and
performance of the Obligations, ASG has pledged to Agent, for the benefit of the
Lenders, all of the securities of its Subsidiaries pursuant to the Stock Pledge
Agreement.
          (d) Each Borrower has full right and power to grant to Agent a
perfected, first priority security interest and Lien in the Collateral pursuant
to this Agreement. Upon the execution and delivery of this Agreement, and upon
the filing of the necessary financing statements, which Borrower hereby
authorizes Agent to file, and delivery of any necessary stock certificates,
without any further action, Agent will have a good, valid and perfected first
priority Lien and security interest in the Collateral, subject to no transfer or
other restrictions or Liens of any kind in favor of any other Person except for
Permitted Liens. No financing statement relating to any of the Collateral will
be, on the Closing Date, on file in any public office except those (a) on behalf
of Agent, and (b) in connection with Permitted Liens. Borrower is not a party to
any agreement, document or instrument that conflicts with this Section 2.9 or
that otherwise relates to a security interest in, assignment of, or Lien upon
the Collateral.
     2.10 Collateral Administration
          (a) Except as permitted pursuant to Sections 7.8(a) and 7.8(b), all
Collateral (except Deposit Accounts and Collateral having an aggregate value of
$50,000 or less at any one location) will at all times be kept by Borrower at
the locations set forth on Schedule 5.4 hereto, which may be amended from time
to time, and shall not, without thirty (30) calendar days prior written notice
to Agent, be moved therefrom, and in any case shall not be moved outside the
continental United States. Whether or not an Event of Default has occurred, any
of the Agent’s officers, employees, representatives or agents shall have the
right, at any time during normal business hours, in the name of Agent, any
designee of Agent, or Borrower, to verify the validity, amount or any other
matter relating to the Collateral. Borrower shall cooperate fully with Agent in
an effort to facilitate and promptly conclude such verification process.
Notwithstanding anything in this subsection to the contrary, Agent shall have
the right at all times after the occurrence and during the continuation of an
Event of Default to notify Persons owing Accounts to Borrower that their
Accounts have been assigned to Agent and to collect such Accounts directly in
its own name and to charge collection costs and expenses, including reasonable
attorney’s fees, to Borrower.
          (b) As and when determined by Agent in its Permitted Discretion, Agent
will perform the searches described in clauses (i) and (ii) below against
Borrower or any Guarantor (the results

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of which are to be consistent with Borrower’s representations and warranties
under this Agreement), on a quarterly basis at Borrower’s expense, unless an
Event of Default has occurred and is continuing in which case such searches
shall be conducted as often as Agent deems reasonably appropriate at Borrower’s
expense: (i) UCC searches with the Secretary of State and local filing offices
of each jurisdiction where Borrower and/or any Guarantors are organized; and
(ii) judgment, federal tax lien and corporate and partnership tax lien searches,
in each jurisdiction searched under clause (i) above, and in any jurisdiction
where Borrower or Guarantors maintain their respective offices or place of
business or material assets to the extent that the UCC would permit a filing in
such jurisdiction to attach a security interest in or Lien upon any Collateral.
Agent will (i) upon Borrower’s request and at Borrower’s expense, provide copies
of any such searches to Borrower and (ii) will use a search service with which
Agent has a discount arrangement in an effort to minimize the expense of such
searches.
          (c) Upon Agent’s request, Borrower shall immediately deliver to Agent
all items for which Lender must receive possession to obtain a perfected Lien
and all notes, certificates, and documents of title, Chattel Paper, warehouse
receipts, Instruments, and any other similar instruments constituting
Collateral.
          (d) Borrower shall keep accurate and complete records of its Accounts
and all payments and collections thereon and shall submit such records to Agent
on such periodic bases as Agent may request in its Permitted Discretion. In
addition, if Accounts of Borrower in an aggregate face amount in excess of
$500,000 become ineligible because they fall within one of the specified
categories of ineligibility set forth in the definition of Eligible Billed
Receivables or Eligible Unbilled Receivables, Borrower shall notify Agent of
such occurrence within two (2) Business Days following its discovery of such
occurrence and the Borrowing Base shall thereupon be adjusted to reflect such
occurrence. After the occurrence and during the continuation of an Event of
Default, and upon Agent’s request, Borrower shall execute and deliver to Agent
formal written assignments of all of its Accounts weekly or daily as Agent may
request, including all Accounts created since the date of the last assignment,
together with copies of claims, invoices and/or other information related
thereto.
          (e) Borrower (i) shall provide prompt written notice to its current
bank to transfer all items, collections and remittances to the Concentration
Account, and to any Account Debtor not remitting to the Blocked Account, to do
so promptly, (ii) after the occurrence and during the continuation of an Event
of Default, and upon Agent’s request, shall provide prompt written notice to
each Account Debtor that Agent has been granted a lien and security interest in,
upon and to all Accounts applicable to such Account Debtor, and shall direct
each Account Debtor to make payments directly to Lender’s Concentration Account;
and (iii) shall do anything further that may be lawfully required by Agent to
secure Agent, for the benefit of itself and Lenders, and to effectuate the
intentions of the Loan Documents. Borrower hereby authorizes Agent, for purposes
of clause (i) hereof, upon any failure to send such notices and directions
within twenty (20) calendar days after the date of this Agreement (or twenty
(20) calendar days after the Person becomes an Account Debtor), and for purposes
of clause (ii) hereof, promptly following the occurrence and continuation of
such Event of Default, to send any and all similar notices and directions to
such Account Debtors.
     2.11 Power of Attorney
          Agent hereby is irrevocably made, constituted and appointed the true
and lawful attorney for Borrower (without requiring Borrower to act as such)
with full power of substitution, coupled with an interest, to do the following:
(i) upon the occurrence and during the continuance of an Event of Default,
endorse the name of any such Person upon any and all checks, drafts, money
orders and other instruments for the payment of money that are payable to such
Person and constitute collections on such Person’s Accounts; (ii) upon the
occurrence and during the continuance of an Event of Default, execute in the

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name of Borrower any financing statements, schedules, assignments, instruments,
documents, and statements that it is obligated to give Agent under any of the
Loan Documents; and (iii) do such other and further acts and deeds in the name
of Borrower that Agent may deem necessary or desirable to enforce or to perfect
Agent’s security interest or lien or rights in any Collateral. In addition, if
the Borrower breaches its obligation hereunder to direct payments of Accounts
within the time periods specified herein to the Blocked Account, Agent, as the
irrevocably made, constituted and appointed true and lawful attorney for the
Borrower pursuant to this paragraph, may, by the signature or other act of any
of Agent’s officers or authorized signatories (without requiring any of them to
do so), direct any federal, state or private payor or fiscal intermediary to pay
proceeds of Accounts or any other Collateral to the Blocked Account.
     2.12 Letters of Credit
          (a) Subject to the terms and conditions of this Agreement, Agent
agrees to cause an L/C Issuer at any time and from time to time after the date
hereof and prior to the Termination Date to issue standby letters of credit
which comply with the provisions of this Section 2.12 for the account of
Borrower (each such standby letter of credit, and each Existing Letter of
Credit, a “Letter of Credit”) or to purchase participations or execute
indemnities or reimbursement obligations (each such undertaking, an “L/C
Undertaking”) with respect to Letters of Credit issued by an Underlying Issuer
for the account of Borrower (in which case, Agent agrees to cause such
Underlying Issuer to issue Letters of Credit which comply with the provisions of
this Section 2.12 for the account of Borrower; provided, however, that an L/C
Issuer will not be required to issue, purchase or execute a requested Letter of
Credit, and Agent will not be required to cause same, if any of the following
would result after giving effect thereto: the L/C Exposure would (i) exceed the
L/C Sublimit or (ii) when taken together with the outstanding Advances, would
exceed the lesser of the Facility Cap or the Availability, without duplication.
As of the Closing Date, the Existing Letters of Credit will be deemed to be
outstanding under this Agreement and subject to the provisions herein.
          (b) Borrower may from time to time request L/C Issuer to assist
Borrower in establishing or opening a Letter of Credit by delivering to L/C
Issuer, with a copy to Agent, the L/C Issuer’s standard form of standby letter
of credit application (the “Letter of Credit Application”) completed to the
satisfaction of the L/C Issuer (in the exercise of its sole discretion), and
such other certificates, documents and other papers and information as Agent or
L/C Issuer may reasonably request. If requested by Agent or L/C Issuer, Borrower
also shall be an applicant under the application with respect to any Underlying
Letter of Credit that is to be the subject of an L/C Undertaking. Borrower
acknowledges that the issuance of any Letter of Credit shall occur no sooner
than five (5) Business Days following the submission of a Letter of Credit
Application to, and to the satisfaction of, the L/C Issuer (in its sole
discretion); provided, however, that Agent shall use good faith efforts to cause
the L/C Issuer to issue an Letter of Credit within ten (10) Business Days
following the submission of a Letter of Credit Application to, and to the
satisfaction of, the L/C Issuer (in its sole discretion).
          (c) Each Letter of Credit (and each corresponding Underlying Letter of
Credit) shall, among other things, (i) be for a standby letter of credit,
(ii) be in form and substance acceptable to the L/C Issuer (in the exercise of
its Permitted Discretion), including the requirement that the amounts payable
thereunder must be payable in Dollars, (iii) subject to Section 2.12(e), have an
expiry date not later than twelve (12) months after such Letter of Credit’s date
of issuance and in no event later than 30 days prior to the Termination Date and
(iv) be issued for the purpose for which the Borrower has historically obtained
letters of credit, or for such other purpose as is reasonably acceptable to
Agent, and, in all cases, for a purpose permitted for use of proceeds hereunder.
Each Letter of Credit Application and each Letter of Credit shall be subject to
the Uniform Customs and Practice for Documentary Credits (2007 Revision),
International Chamber of Commerce Publication No. 600, and any amendments or
revisions thereof (“UCP”).

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          (d) Borrower shall authorize and direct the L/C Issuer and each
Underlying Issuer to name Borrower as the “Account Party” therein and to accept
and rely upon the Agent’s instructions and agreements with respect to all
matters arising in connection with the issuance of the Letters of Credit and the
applications therefor.
          (e) If a requested Letter of Credit is to have or is for the purpose
of replacing an existing Letter of Credit that has an expiry date which is after
the Maturity Date, then Borrower shall, at least 15 days prior to the Maturity
Date, provide a “back-to-back” letter of credit to Agent in form, and substance
satisfactory to Agent in its sole discretion. Such back-to-back letter of credit
shall be issued by a bank satisfactory to Agent in its sole discretion, in an
amount equal to the Relevant Percentage of the then undrawn stated amount of all
outstanding Letters of Credit. In the alternative, Borrower may deposit cash in
the Agent Collateral Account in an amount equal to the Relevant Percentage of
the then undrawn stated amount of each such outstanding Letter of Credit with
respect to which a “back-to-back” letter of credit has not been issued to Agent.
Notwithstanding the provision of such “back-to-back letter(s) of credit and/or
the funding of such Agent Collateral Account, Borrower shall remain liable
pursuant to the terms of this Agreement for all L/C Exposure until such time as
(i) each such Letter of Credit (x) expires by its terms without any draws being
made in respect thereof or (y) has been returned to Agent undrawn and marked
“cancelled” and, (ii) all Funded L/C Exposure continued as Advances pursuant to
Section 2.12(f) has been repaid in full in cash by Borrower. For this purpose
“Relevant Percentage” means, as of the Maturity Date and each date prior to the
one-year anniversary thereof, 105%, and from and after each one-year anniversary
of the Maturity Date, two percent (2%) more than the Relevant Percentage as of
the preceding annual anniversary.
          (f) Any payment by Agent in respect of any Letter of Credit or L/C
Undertaking shall constitute for all purposes of this Agreement the making by
Agent of an Advance in the amount of such payment. All Funded L/C Exposure shall
bear interest at a per annum rate equal to the interest rate charged to other
Advances. With respect to each Advance made pursuant to this Section 2.12, the
Borrower shall be deemed to have certified the statements contained in Section V
as of the date the payment constituting such Advance was made by Agent;
provided, however, that in the event any such statement was not true and correct
as of such date, such Advance shall be repayable on demand; provided, further,
that upon any such repayment on demand, the failure of any such statement to be
true and correct as of such date shall not constitute an Event of Default
hereunder, unless the failure of any such statement to be true and correct as of
such date would have constituted an Event of Default hereunder even if such
repaid Advance had never been made.
          (g) The obligations of Borrower for Advances that arise as a result of
payments in respect of or draws under Letters of Credit or L/C Undertakings
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, to the extent
permitted by law, including without limitation, (i) any lack of validity or
enforceability of any Letter of Credit or L/C Undertaking, (ii) the existence of
any claim, setoff, defense or other right which Borrower may have at any time
against a beneficiary of any Letter of Credit or L/C Undertaking or against
Agent, any Lender, any L/C Issuer or Underlying Issuer; (iii) the fact that, or
any allegation that, any draft, demand, certificate or other document presented
under such Letter of Credit or L/C Undertaking is or was forged, fraudulent,
invalid or insufficient in any respect, or any statement therein is or was
untrue or inaccurate in any respect; (iv) any breach of contract or dispute
among or between the Borrower, Agent, any Lender, any L/C Issuer or any other
Person; (v) payment by the Agent, any Lender or L/C Issuer under any Letter of
Credit or L/C Undertaking against presentation of a demand, draft or certificate
or other document which does not comply with the terms of such Letter of Credit
or L/C Undertaking; (vi) any other circumstance or happening whatsoever, which
is similar to any of the foregoing; or (vii) the fact that any Default or Event
of Default shall have occurred and be continuing (it

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being understood that any such payment by the Borrower of its Obligations in
respect of any such Advance shall be without prejudice to, and shall not
constitute a waiver of any rights any party hereto may have or might acquire
against the beneficiary of any Letter of Credit or L/C Undertaking or against
any L/C Issuer).
          (h) On the first day of each month, commencing on the first such day
following the Closing Date and continuing thereafter until the date the Unfunded
L/C Exposure has been reduced to zero, including on the Termination Date, the
Borrower shall pay to Agent, in arrears, for the account of Agent and each other
Lender in accordance with their respective participations in each Letter of
Credit, the Letter of Credit Fee.
          (i) The aggregate stated amount available for Letters of Credit and
L/C Undertakings guaranteed or issued by any L/C Issuer from time to time
outstanding shall not exceed the L/C Sublimit.
          (j) On demand by Agent at any time following the occurrence and during
the continuance of an Event of Default, Borrower will cause to be deposited and
maintained in an account as directed by Agent, cash collateral in an amount
equal to one hundred five percent (105%) of the Unfunded L/C Exposure, and
Borrower hereby irrevocably authorizes Agent, in its discretion, on Borrower’s
behalf and in Borrower’s name, to open such an account and to make and maintain
deposits therein, or in an account opened by Borrower, in the amounts required
to be maintained by Borrower, out of the proceeds of Accounts or other
Collateral or out of any funds of Borrower coming into Agent’s possession at any
time. Borrower may not withdraw amounts credited to any such account except upon
the earlier of (i) payment and performance in full of all Obligations (other
than indemnity obligations under the Loan Documents that are not then due and
payable or for which any events or claims that would give rise thereto are not
then pending), termination of this Agreement and termination, replacement or
cash collateralization of all then outstanding Letters of Credit in accordance
with the terms of this Agreement, and (ii) at such time as such Event of Default
no longer exists.
          (k) In connection with the issuance of any Letter of Credit, Borrower
shall indemnify, save and hold Agent, each Lender and each L/C Issuer harmless
from any loss, cost, expense or liability, including, without limitation,
payments made by Agent, any Lender or any L/C Issuer, and reasonable
out-of-pocket expenses and reasonable attorneys’ fees incurred by Agent, any
Lender or any L/C Issuer arising out of, or in connection with, any Letter of
Credit to be issued for the account of Borrower, except for any such losses,
costs, expenses or liabilities arising out of Agent’s, such Lender’s or such L/C
Issuer’s gross negligence or willful misconduct. Borrower shall be bound by the
L/C Issuer’s regulations and reasonable good faith interpretations of any Letter
of Credit issued or created for Borrower’s account, although this interpretation
may be different from Borrower’s own; and neither Agent, any Lender nor any L/C
Issuer, nor any of their respective correspondents shall be liable for any
error, negligence, or mistakes, whether of omission or commission, in following
Borrower’s instructions or those contained in any Letter of Credit or any
modifications, amendments or supplements thereto or in issuing or paying any
Letter of Credit, except for, and solely to the extent of, Agent’s, such
Lender’s, such L/C Issuer’s or such correspondents’ gross negligence or willful
misconduct.
          (l) Any other lender hereafter participating in the Revolving Facility
(a “Participant”) may also participate in the issuance of Letters of Credit and
L/C Undertakings contemplated by this Section 2.12 pursuant to the terms hereof,
at such percentage interest as is acceptable to Agent and such Participant
without any consent of any other party or any further amendment hereto.

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          (m) If by reason of (i) any change in any applicable law, treaty,
rule, or regulation or any change in the interpretation or application thereof
by any Governmental Authority, or (ii) compliance by any L/C Issuer, Underlying
Issuer, Agent or any Lender with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):
     (1) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued hereunder, or
     (2) there shall be imposed on Lender, L/C Issuer or any Underlying Issuer
any other condition regarding any Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to Agent, such Lender, L/C Issuer or any Underlying Issuer of issuing, making,
guaranteeing, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof by Agent, such Lender, L/C Issuer or any
Underlying Issuer, then, and in any such case, Agent may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify Borrower, and Borrower shall pay within two Business Days
such amounts as Agent may specify to be necessary to compensate Agent, such
Lender L/C Issuer or Underlying Issuer, as the case may be, for such additional
cost or reduced receipt, together with interest on such amount from the date of
such demand until payment in full thereof at the Applicable Rate for Advances.
The determination by Agent of any amount due pursuant to this Section 2.12, as
set forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest or demonstrable error, be final and
conclusive and binding on all of the parties hereto.
     2.13 Evidence of Loans
          (a) Agent shall maintain, in accordance with its usual practice,
electronic or written records evidencing the indebtedness and obligations to
each Lender resulting from each Loan made by such Lender from time to time,
including without limitation, the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.
          (b) The entries made in the electronic or written records maintained
pursuant to this Section 2.13 (the “Register”) shall be prima facie evidence of
the existence and amounts of the obligations and indebtedness therein recorded;
provided, however, that the failure of the Agent to maintain such records or any
error therein shall not in any manner affect the obligations of the Borrower to
repay the Loans or Obligations in accordance with their terms.
          (c) Agent will account to Borrower monthly with a statement of
Advances under the Revolving Facility, and any charges and payments made
pursuant to this Agreement, and in the absence of manifest error, such
accounting rendered by Agent shall be deemed final, binding and conclusive
unless Agent is notified by Borrower in writing to the contrary within fifteen
(15) calendar days of Receipt of each accounting, which notice shall be deemed
an objection only to items specifically objected to therein.
          (d) The Borrower agrees that:
               (i) upon written notice by any Lender to the Borrower that a
promissory note or other evidence of indebtedness is requested by such Lender to
evidence the Loans and other Obligations owing or payable to, or to be made by,
such Lender, the Borrower shall promptly (and in any event within three
(3) Business Days of any such request) execute and deliver to such Lender an

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appropriate promissory note or notes in form and substance reasonably acceptable
to such Lender and Borrower, payable to the order of such Lender or in a
principal amount equal to the amount of the Loans owing or payable to such
Lender;
               (ii) all references to Notes in the Loan Documents shall mean
Notes, if any, to the extent issued (and not returned to the Borrower for
cancellation) hereunder, as the same may be amended, modified, divided,
supplemented and/or restated from time to time; and
               (iii) upon any Lender’s written request, and in any event within
three (3) Business Days of any such request, Borrower shall execute and deliver
to such Lender new Notes and/or divide the Notes in exchange for then existing
Notes in such smaller amounts or denominations as such Lender shall specify in
its sole and absolute discretion; provided, that the aggregate principal amount
of such new Notes shall not exceed the aggregate principal amount of the Notes
outstanding at the time such request is made; and provided, further, that such
Notes that are to be replaced shall then be deemed no longer outstanding
hereunder and replaced by such new Notes and returned to the Borrower within a
reasonable period of time after such Lender’s receipt of the replacement Notes.
III. FEES AND OTHER CHARGES; ALLOCATION OF PURCHASE PRICE
     3.1 Unused Line Fee
          Borrower shall pay to Agent, for the ratable benefit of Lenders, an
unused line fee (the “Unused Line Fee”) in an amount equal to 0.0375% per month
of the difference derived by subtracting (a) the daily average amount of the
balances under the Revolving Facility (including any Unfunded L/C Exposure under
the L/C Sublimit) outstanding during the preceding month, from (b) the amount of
the Facility Cap on the last day of such month. The Unused Line Fee shall be
payable monthly in arrears on the first day of each successive calendar month
(starting with August 1, 2009).
     3.2 Collateral Management Fee
          Borrower shall pay Agent a monthly collateral management fee (the
“Collateral Management Fee”) equal to 0.042% per month of the daily average
amount of the balances under the Revolving Facility outstanding during the
preceding month. The Collateral Management Fee shall be payable monthly in
arrears on the first day of each successive calendar month (starting with
August 1, 2009).
     3.3 Early Termination Fee
          If (i) Borrower terminates the Revolving Facility under Section 11.1
hereof, (ii) Agent or any Lender accelerates any Revolving Loan or Borrower is
otherwise required to make payment in full of the Obligations relating to the
Revolving Facility or Lender’s obligation to make Advances pursuant to the
Revolving Facility shall terminate in each case upon the occurrence of an Event
of Default, or (iii) a Change of Control or final payment of the Revolving
Facility pursuant to Section 11.1 occurs, any voluntary or involuntary
termination of the Revolving Facility and final prepayment of the Obligations
relating to the Revolving Facility by Borrower or any other Person occurs (other
than reductions to zero of the outstanding balance of the Revolving Facility
resulting from the ordinary course operation of the provisions of Section 2.5),
whether by virtue of Agent’s exercising its right of set off or otherwise; or
(iv) any payment in full of the principal amount of any Revolving Loan or other
satisfaction of the outstanding balance of any Revolving Loan and/or the
Revolving Facility is made during a bankruptcy, reorganization or other
proceeding or is made pursuant to any plan of reorganization or liquidation or
any Debtor Relief Law (each, a “Revolver Termination”), then, at the effective
date of any such Revolver

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Termination, Borrower shall pay Agent, for the account of Lenders (in addition
to the then outstanding principal, accrued interest and other Obligations
pursuant to the terms of this Agreement and any other Loan Document), as yield
maintenance for the loss of bargain and not as a penalty, an amount equal to the
Termination Fee. Notwithstanding any other provision hereof, no Termination Fee
shall be due if Borrower merges or enters into a business combination with
another person and the surviving person becomes the Borrower hereunder, or
enters into economically similar, financing arrangements with Agent in which
Agent remains, at least, a co-lead lender and collateral agent.
     3.4 Computation of Fees; Lawful Limits
          All fees hereunder shall be computed on the basis of a year of
360 days and for the actual number of days elapsed in each calculation period,
as applicable. In no contingency or event whatsoever, whether by reason of
acceleration or otherwise, shall the interest and other charges paid or agreed
to be paid to Agent, for the benefit of Lenders, for the use, forbearance or
detention of money hereunder exceed the maximum rate permissible under
applicable law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. If, due to any circumstance whatsoever,
fulfillment of any provision hereof, at the time performance of such provision
shall be due, shall exceed any such limit, then, the obligation to be so
fulfilled shall be reduced to such lawful limit, and, if Agent or the Lenders
shall have received interest or any other charges of any kind which might be
deemed to be interest under applicable law in excess of the maximum lawful rate,
then such excess shall be applied first to any unpaid fees and charges
hereunder, then to unpaid principal balance owed by Borrower hereunder, and if
the then remaining excess interest is greater than the previously unpaid
principal balance, Agent and the Lenders shall promptly refund such excess
amount to Borrower and the provisions hereof shall be deemed amended to provide
for such permissible rate. The terms and provisions of this Section 3.4 shall
control to the extent any other provision of any Loan Document is inconsistent
herewith.
     3.5 Default Rate of Interest
          Upon the occurrence and during the continuation of an Event of
Default, the Applicable Rate of interest in effect at such time with respect to
the Obligations shall be increased by 3.0% per annum (the “Default Rate”).
     3.6 Acknowledgement of Joint and Several Liability
          Each Borrower acknowledges that it is jointly and severally liable for
all of the Obligations under the Loan Documents. Each Borrower expressly
understands, agrees and acknowledges that (i) it is an Affiliated entity by
common ownership of each other Borrower, (ii) it desires to have the
availability of one common credit facility instead of separate credit
facilities, (iii) it has requested that Agent and Lenders extend such a common
credit facility on the terms herein provided, (iv) Agent and Lenders will be
lending against, and relying on a lien upon, all of Borrowers’ assets even
though the proceeds of any particular loan made hereunder may not be advanced
directly to a particular Borrower, (v) it will nonetheless benefit by the making
of all such loans by Agent and Lenders and the availability of a single credit
facility of a size greater than each could independently warrant, and (vi) all
of the representations, warranties, covenants, obligations, conditions,
agreements and other terms contained in the Loan Documents shall be applicable
to and shall be binding upon Borrower. Each Borrower, in the event it shall be
held or deemed to be a guarantor of the Obligations of any other Borrower hereby
expressly waives any rights and defenses that are or may become available to
such Borrower by reason of Sections 2787 to 2855, inclusive, and Sections 2899
and 3433 of the California Civil Code. As provided by Section 15.1, this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. The foregoing waivers and the provisions which pertain to
California law are

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included solely out of an abundance of caution, and shall not be construed to
mean that any of the above-referenced provisions of California law are in any
way applicable to this Agreement or the Obligations.
IV. CONDITIONS PRECEDENT
     4.1 Conditions to Effectiveness of Agreement and Closing
          This Agreement shall become effective upon the satisfaction, in the
judgment of Agent in its Permitted Discretion, of the following conditions:
          (a) Borrower shall have delivered to Agent the Loan Documents to which
it is a party, each duly executed by an authorized officer of Borrower and the
other parties thereto;
          (b) all in form and substance satisfactory to Agent in its Permitted
Discretion, Agent shall have received (i) a report of Uniform Commercial Code
financing statement, tax and judgment lien searches performed with respect to
Borrower and Guarantor in each jurisdiction determined by Agent in its Permitted
Discretion, and such report shall show no Liens on the Collateral (other than
Permitted Liens), (ii) each document (including, without limitation, any Uniform
Commercial Code financing statement) required by any Loan Document or under law
or requested by Agent to be filed, registered or recorded to create, in favor of
Agent, for the benefit of Lenders, a perfected first priority security interest
upon the Collateral;
          (c) Agent shall have received (i) the Charter and Good Standing
Documents, all in form and substance reasonably acceptable to Agent, (ii) a
certificate of the corporate secretary or assistant secretary of Borrower dated
the Closing Date, as to the incumbency and signature of the Persons executing
the Loan Documents, in form and substance acceptable to Agent, (iii) the written
legal opinion of counsel for Borrower, in form and substance satisfactory to
Agent in its Permitted Discretion, and (iv) a certificate executed by an
authorized officer of Borrower, which shall constitute a representation and
warranty by Borrower as of the Closing Date that the conditions contained in
this Section 4.1 have been satisfied;
          (d) Agent shall have received a certificate of the chief financial
officer (or, in the absence of a chief financial officer, the chief executive
officer) of Borrower, in form and substance satisfactory to Agent (each, a
“Solvency Certificate”), certifying (i) the solvency of Borrower after giving
effect to the transactions and the Indebtedness contemplated by the Loan
Documents, and (ii) as to Borrower’s financial resources and ability to meet its
obligations and liabilities as they become due, to the effect that as of the
Closing Date and after giving effect to such transactions and Indebtedness:
(A) the assets of such Person, at a Fair Valuation, exceed the total liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) of
such Person, and (B) no unreasonably small capital base with which to engage in
its anticipated business exists with respect to Borrower;
          (e) Agent shall have completed or waived examinations, the results of
which shall be satisfactory in form and substance to Agent, of the Collateral,
the financial statements and the books, records, business, obligations,
financial condition and operational state of Borrower, and Borrower shall have
demonstrated to Agent’s satisfaction that (i) its operations comply, in all
respects reasonably deemed material by Agent, in its reasonable judgment, with
all applicable federal, state, foreign and local laws, statutes and regulations,
(ii) its operations are not the subject of any governmental investigation,
evaluation or any remedial action which could reasonably result in any Material
Adverse Effect, and (iii) it has no liability (whether contingent or otherwise)
that could reasonably give rise to a Material Adverse Effect;

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          (f) Agent shall have received all fees, charges and expenses payable
to Agent and Lenders on or prior to the Closing Date pursuant to the Loan
Documents;
          (g) all in form and substance satisfactory to Agent in its Permitted
Discretion, Agent shall have received such consents, approvals and agreements,
including, without limitation, Landlord Waivers and Consents with respect to the
leases for those locations specifically identified on Schedule 5.18B where a
complete set of books and records relating to Accounts or the Borrower’s
Inventory is kept, from such third parties as Agent and its counsel shall
determine are reasonably necessary or desirable with respect to (i) the Loan
Documents and/or the transactions contemplated thereby, and/or (ii) claims
against Borrower or the Collateral;
          (h) Borrower shall be in compliance with Section 5.17 and Section 6.5,
and Agent shall have received (i) copies of all such insurance policies, and
(ii) original certificates of such insurance policies as Agent shall request in
its Permitted Discretion confirming that they are in effect and that the
premiums due and owing with respect thereto have been paid in full and naming
Agent, for the benefit of itself and Lenders, as loss payee on Borrower’s
property insurance;
          (i) all corporate and other proceedings, documents, instruments and
other legal matters in connection with the transactions contemplated by the Loan
Documents (including, but not limited to, those relating to corporate and
capital structures of Borrower) shall be reasonably satisfactory to Agent;
          (j) No default shall exist pursuant to any of Borrower’s obligations
under any material contract (including this Agreement, after giving effect to
the terms hereof); Borrower shall be in compliance with all applicable laws in
all material respects;
          (k) Borrower shall have established a Lockbox and Blocked Account
pursuant to Section 2.5;
          (l) Agent shall have received copies of all (i) material licenses and
permits required for Borrower to conduct the business in which it is currently
engaged or is contemplated pursuant to the Loan Documents, and (ii) all
intercompany agreements, management agreements, documents related to borrowed
money, capital leases and other material contracts;
          (m) Agent shall have completed or waived its legal due diligence
examinations of Borrower, the results of which shall be satisfactory in form and
substance to Agent, as evidenced by Agent’s execution of the Loan Documents;
          (n) Agent shall have received evidence, in form and substance
satisfactory to Agent, of the release and termination of any and all Liens,
security interest and/or Uniform Commercial Code financing statements in, on,
against or with respect to any of the Collateral (other than Permitted Liens);
          (o) there shall not have occurred any Material Adverse Change or
Material Adverse Effect from that which was reflected on the financial
statements dated May 31, 2009, and provided to Agent;
          (p) Borrower shall have executed and filed IRS Form 8821 with the
appropriate office of the Internal Revenue Service; and

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          (q) Agent shall have received such other documents, certificates,
information or legal opinions as Agent may reasonably request, all in form and
substance reasonably satisfactory to Agent in its Permitted Discretion.
     4.2 Conditions to Each Advance and Issuance of Each Letter of Credit
          The obligations of Lenders to make any Advance and to issue each
Letter of Credit are subject to the satisfaction, in the reasonable judgment of
Agent, of the following conditions precedent:
          (a) Borrower shall have delivered to Agent a Borrowing Certificate for
the Advance, executed by an authorized officer of Borrower, which shall
constitute a representation and warranty by Borrower as of the Borrowing Date,
that the conditions contained in this Section 4.2 have been satisfied; provided,
however, that any determination as to whether to extend credit shall be made by
Agent in its Permitted Discretion;
          (b) each of the representation and warranties made by Borrower in or
pursuant to this Agreement shall be accurate, before and after giving effect to
such Advance, and no Default or Event of Default shall have occurred or be
continuing or would exist after giving effect to the requested Advance on such
date; provided, however, that for any representation or warranty limited to the
date hereof, such limitation shall not apply, and the representation shall be
true as if made at the time of any request for an Advance or issuance of a
Letter of Credit, except with respect to representations that would be
inconsistent with Section 6.15;
          (c) immediately after giving effect to the requested Advance, the sum
of (i) the aggregate outstanding principal amount of Advances under the
Revolving Facility, including Advances in connection with the Letters of Credit,
and (ii) the Unfunded L/C Exposure, shall not exceed the lesser of the
Availability and the Facility Cap, and the Unfunded L/C Exposure shall not
exceed the L/C Sublimit;
          (d) except as disclosed in the financial information delivered to
Agent hereunder, there shall be no liabilities or obligations with respect to
Borrower of any nature whatsoever which, either individually or in the
aggregate, reasonably would be likely to have a Material Adverse Effect;
          (e) Agent shall have received all fees, charges and expenses due and
payable to Agent on or prior to such date pursuant to the Loan Documents;
          (f) there shall not have occurred any Material Adverse Change or
Material Adverse Effect; and
          (g) no default or Event of Default shall have occurred or be
continuing or would exist after giving effect to the Advance under the Revolving
Facility or the issuance of a Letter of Credit on such date.
V. REPRESENTATIONS AND WARRANTIES
     Each Borrower, jointly and severally, represents and warrants as of the
date hereof and, except for such representations and warranties that are as a
specified date, each Borrowing Date and each date of issuance of a Letter of
Credit as follows:

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     5.1 Organization and Authority
          Borrower is a corporation, limited partnership or limited liability
company duly organized, validly existing and in good standing under the laws of
its state of formation. Borrower (a) has all requisite power and authority to
own its properties and assets and to carry on its business as now being
conducted and as contemplated in the Loan Documents, (b) is duly qualified to do
business in every jurisdiction in which it is a party to a Government Contract,
and, except as set forth on Schedule 5.1, every other jurisdiction in which
failure so to qualify could reasonably be expected to have a Material Adverse
Effect, and (c) has all requisite power and authority (i) to execute, deliver
and perform the Loan Documents to which it is a party, (ii) to borrow hereunder,
(iii) to consummate the transactions contemplated under the Loan Documents, and
(iv) to grant the Liens with regard to the Collateral pursuant to the Security
Documents to which it is a party. Borrower is not an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such an “investment company.”
     5.2 Loan Documents
          The execution, delivery and performance by Borrower of the Loan
Documents to which it is a party, and the consummation of the transactions
contemplated thereby, (a) have been duly authorized by all requisite action of
Borrower and have been duly executed and delivered by or on behalf of Borrower;
(b) do not violate any provisions of (i) applicable law, statute, rule,
regulation, ordinance or tariff, (ii) any order of any Governmental Authority
binding on Borrower or any of its properties, or (iii) the certificate of
incorporation or bylaws (or any other equivalent governing agreement or
document) of Borrower, or any agreement between Borrower and its shareholders,
members, partners or equity owners or among any such shareholders, members,
partners or equity owners; (c) are not in conflict with, and do not result in a
breach or default of or constitute an event of default, or an event, fact,
condition or circumstance which, with notice or passage of time, or both, would
constitute or result in a conflict, breach, default or event of default under,
any indenture, agreement or other instrument to which Borrower is a party, or by
which the properties or assets of Borrower are bound, the effect of which could
reasonably be expected to have a Material Adverse Effect; and (d) except as set
forth therein, will not result in the creation or imposition of any Lien of any
nature upon any of the properties or assets of Borrower, and (e) except as set
forth on Schedule 5.2, do not require the consent, approval or authorization of,
or filing, registration or qualification with, any Governmental Authority or any
other Person. When executed and delivered, each of the Loan Documents to which
Borrower is a party will constitute the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of creditors’ rights generally
and to the effect of general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding at law or in
equity).
     5.3 Subsidiaries, Capitalization and Ownership Interests
          As of the date of this Agreement, Borrower has no Subsidiaries (other
than EMSA Limited Partnership) other than those Persons listed as Subsidiaries
on Schedule 5.3, each of which (other than EMSA Limited Partnership) either are
other Borrowers or Guarantors of the Obligations of Borrower herein.
Schedule 5.3 also states the authorized and issued capitalization of Borrower
and each such Subsidiary, and the number and class of equity securities and/or
ownership, voting or partnership interests (except for ASG) issued and
outstanding (including options, warrants and other rights to acquire any of the
foregoing). The ownership or partnership interests of each Borrower that is a
limited partnership or a limited liability company are not certificated, the
documents relating to such interests do not expressly state that the interests
are governed by Article 8 of the Uniform Commercial Code, and the interests are

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not held in a securities account. Schedule 5.3 also lists the directors,
members, managers and/or partners of Borrower, as well as any beneficial or
record holders of more than twenty-five percent (25%) of the equity of ASG, and
ASG owns, directly or indirectly, all of the issued and outstanding equity
securities and/or ownership or voting or partnership interests of each other
Borrower. The outstanding equity securities and/or ownership, voting or
partnership interests of each Borrower have been duly authorized and validly
issued and are fully paid and nonassessable. Except as listed on Schedule 5.3,
Borrower does not own an interest or participate or engage in any joint venture,
partnership or similar arrangements with any Person.
     5.4 Properties
          Borrower (a) is the sole owner and has good, valid and marketable
title to all of its properties and assets, including the Collateral, whether
personal or real, subject to no transfer restrictions or Liens of any kind
except for Permitted Liens, and (b) is in compliance in all material respects
with each lease to which it is a party or otherwise bound, except for such
noncompliance as would not reasonably be expected to have a Material Adverse
Effect. Schedule 5.4 lists all real properties (and their locations) owned or
leased or utilized in client owned facilities by or to Borrower, and all assets
or property that are leased pursuant to capital leases or licensed by Borrower,
and any other material leases. Borrower enjoys peaceful and undisturbed
possession under all such leases and such leases are all the leases necessary
for the operation of such properties and are valid and subsisting and are in
full force and effect.
     5.5 Other Agreements
          Except as set forth on Schedule 5.5, Borrower is not (a) a party to
any judgment, order or decree or any agreement, document or instrument, or
subject to any restriction, which would materially adversely affect its ability
to execute and deliver, or perform under, any Loan Document or to pay the
Obligations, or (b) in default in the performance, observance or fulfillment of
any obligation, covenant or condition contained in any agreement, document or
instrument to which it is a party or to which any of its properties or assets
are subject, which default, if not remedied within any applicable grace or cure
period, could reasonably be expected to have a Material Adverse Effect, nor is
there any event, fact, condition or circumstance which, with notice or passage
of time or both, would constitute or result in a conflict, breach, default or
event of default under, any of the foregoing which, if not remedied within any
applicable grace or cure period could reasonably be expected to have a Material
Adverse Effect.
     5.6 Litigation
          Except as set forth on Schedule 5.6, there is no action, suit,
proceeding or investigation pending or, to its knowledge, threatened against
Borrower that (a) questions or could prevent the validity of any of the Loan
Documents or the right of Borrower to enter into any Loan Document or to
consummate the transactions contemplated thereby, (b) would reasonably be
expected to result in an outcome that would, either individually or in the
aggregate, (i) have any material adverse effect upon or change in the validity
or enforceability of any Loan Document, (ii) be material and adverse to the
value of the Collateral taken as a whole or to the business, operations,
prospects, properties, assets, liabilities or condition of Borrower or any
Guarantors, taken as a whole, or (iii) materially impair or be reasonably
expected to materially impair the ability of Borrower or any Guarantor, taken as
a whole, to perform the Obligations or to consummate the transactions under the
Loan Documents executed by such Person, or (c) would reasonably be likely to
result in any Change of Control or other change in the current ownership,
control or management of Borrower. Except as set forth on Schedule 5.6, as of
the date hereof Borrower is not a party or subject to any order, writ,
injunction, judgment or decree of any Governmental Authority. Except as set
forth on Schedule 5.6, as of the date hereof there is no action, suit or
proceeding initiated by

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Borrower currently pending, and Borrower has no existing accrued and/or unpaid
Indebtedness to any Governmental Authority or any other governmental payor,
except for Permitted Indebtedness.
     5.7 Hazardous Materials
          Borrower is in compliance in all material respects with all applicable
Environmental Laws. Borrower has not been notified of any action, suit,
proceeding or investigation (a) relating in any way to compliance by or
liability of Borrower under any Environmental Laws, (b) which otherwise deals
with any Hazardous Substance or any Environmental Law, or (c) which seeks to
suspend, revoke or terminate any license, permit or approval necessary for the
generation, handling, storage, treatment or disposal of any Hazardous Substance
which, in any case, could have a Material Adverse Effect.
     5.8 Tax Returns; Governmental Reports
          Borrower (a) has filed all material federal, state, foreign (if
applicable) and local tax returns and other reports which are required by law to
be filed by Borrower, and (b) has paid all material taxes, assessments, fees and
other governmental charges, including, without limitation, payroll and other
employment related taxes, in each case that are due and payable, except only for
items that Borrower is currently contesting in good faith and that are
identified on Schedule 5.8.
     5.9 Financial Statements and Reports
          All financial statements relating to Borrower that have been or may
hereafter be delivered to Agent by Borrower are accurate and complete in all
material respects and have been prepared in accordance with GAAP consistently
applied with prior periods. ASG has no material obligations or liabilities of
any kind not disclosed in such financial statements that would be required to be
disclosed therein in accordance with GAAP, and since the date of the most recent
financial statements submitted to Agent, there has not occurred any Material
Adverse Change or Material Adverse Effect or, to Borrower’s knowledge, any other
event or condition that could reasonably be expected to have a Material Adverse
Effect.
     5.10 Compliance with Law
          (a) Borrower (a) is in compliance with all laws, statutes, rules,
regulations, ordinances and tariffs of any Governmental Authority applicable to
Borrower and/or Borrower’s business, assets or operations, including, without
limitation, ERISA and HIPPA, as applicable, and (b) is not in violation of any
order of any Governmental Authority or other board or tribunal, except where
such noncompliance or violation would not reasonably be likely to have a
Material Adverse Effect. There is no event, fact, condition or circumstance
known to Borrower which, with notice or passage of time, or both, would
constitute or result in any noncompliance with, or any violation of, any of the
foregoing, in each case except where noncompliance or violation could not
reasonably be expected to have a Material Adverse Effect. Borrower has not
received any notice that Borrower is not in compliance in any respect with any
of the requirements of any of the foregoing. Borrower has (i) not engaged in any
Prohibited Transactions as defined in Section 406 of ERISA and Section 4975 of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder, (ii) not failed to meet any applicable minimum funding
requirements under Section 302 of ERISA in respect of its plans and no funding
requirements have been postponed or delayed, (iii) no knowledge of any event or
occurrence which would cause the Pension Benefit Guaranty Corporation to
institute proceedings under Title IV of ERISA to terminate any of the employee
benefit plans, (iv) no fiduciary responsibility under ERISA for investments with
respect to any plan existing for the benefit of Persons other than its employees
or former employees, or (v) not withdrawn, completely or partially, from any
multi-employer pension plans so as to incur

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liability under the MultiEmployer Pension Plan Amendments of 1980. With respect
to Borrower, there exists no event described in Section 4043 of ERISA, excluding
Subsections 4043(b)(2) and 4043(b)(3) thereof, for which the thirty (30) day
notice period contained in 12 C.F.R. § 2615.3 has not been waived.
          (b) Borrower is in compliance, in all material respects, with the
Patriot Act.
     5.11 Intellectual Property
          Except as set forth on Schedule 5.11, as of the date hereof Borrower
does not own, and is not a party to, any patents, patent applications,
trademarks, trademark applications, service marks, registered copyrights,
copyright applications, copyrights, trade names, trade secrets, proprietary
software or licenses (collectively, the “Intellectual Property”).
     5.12 Licenses and Permits; Labor
          Borrower is in compliance with and has all Permits necessary or
required by applicable law or Governmental Authority for the operation of its
businesses except where the failure to be in compliance would not reasonably be
likely to have a Material Adverse Effect. All of the foregoing are in full force
and effect and not in known conflict with the rights of others, except as would
not reasonably be likely to have a Material Adverse Effect. Borrower (a) is not
in breach of or default under the provisions of any of the foregoing, nor is
there any event, fact, condition or circumstance which, with notice or passage
of time or both, would constitute or result in a conflict, breach, default or
event of default under, any of the foregoing which, if not remedied within any
applicable grace or cure period would reasonably be likely to have a Material
Adverse Effect, and (b) has not been involved in any labor dispute, strike,
walkout or union organization activity which would reasonably be likely to have
a Material Adverse Effect
     5.13 No Default
          There does not exist any Default or Event of Default or any event,
fact, condition or circumstance which, with the giving of notice or passage of
time or both, would constitute or result in a Default or Event of Default.
     5.14 Disclosure
          No Loan Document nor any other agreement, document, certificate, or
statement furnished to Agent by or on behalf of Borrower in connection with the
transactions contemplated by the Loan Documents, nor any representation or
warranty made by Borrower in any Loan Document, contains any untrue statement of
material fact or omits to state any fact necessary to make the statements
therein not materially misleading. There is no fact known to Borrower which has
not been disclosed to Agent in writing which reasonably would be likely to have
a Material Adverse Effect.
     5.15 Existing Indebtedness; Investments, Guarantees and Certain Contracts
          Except as permitted by the Loan Documents, Borrower (a) has no
outstanding Indebtedness (b) is not subject or party to any mortgage, note,
indenture, indemnity or guarantee of, with respect to or evidencing any
Indebtedness of any other Person, or (c) does not own or hold any equity or
long-term debt investments in, and does not have any outstanding advances to or
any outstanding guarantees for, the obligations of, or any outstanding
borrowings from, any Person other than with respect to a Guarantor or another
Borrower as set forth on Schedule 5.15. Borrower has performed all material
obligations required to be performed by Borrower under any document evidencing
such Indebtedness and

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there has occurred no breach, default or event of default under any document
evidencing any such items or any fact, circumstance, condition or event which,
with the giving of notice or passage of time or both, would constitute or result
in a breach, default or event of default thereunder.
     5.16 Other Agreements
          Except as described in the filings of ASG with the Securities and
Exchange Commission, as of the date hereof there are no existing or proposed
material agreements, arrangements, understandings or transactions between
Borrower and any of Borrower’s officers, members, managers, directors,
stockholders, partners, other interest holders, employees or any members of
their respective immediate families.
     5.17 Insurance
          Borrower has in full force and effect such insurance policies as are
customary in its industry and as may be required pursuant to Section 6.5 hereof.
All such insurance policies as in force on the date of this Agreement are listed
and described on Schedule 5.17.
     5.18 Names; Location of Offices, Records and Collateral
          During the preceding five years, Borrower has not conducted business
under or used any name (whether corporate, partnership or assumed) other than as
shown on Schedule 5.18A. Borrower is the sole owner of all of its names listed
on Schedule 5.18A, and any and all business done and invoices issued having a
value in excess of $50,000, in such names are Borrower’s sales, business and
invoices. Borrower maintains its places of business and chief executive offices
only at the locations set forth on Schedule 5.18B or with respect to which
notice is provided to the Agent pursuant to Section 7.4(a), and all Accounts of
Borrower arise, originate and are located, and all of the Collateral and all
books and records in connection therewith or in any way relating thereto or
evidence the Collateral are located and shall be only, in and at such locations.
All of the Collateral is located only in the United States.
     5.19 Non-Subordination
          The Obligations are not subordinated in any way to any other
obligations of Borrower or to the rights of any other Person.
     5.20 Accounts
          In determining which Accounts are Eligible Receivables, Agent may rely
on all statements and representations made by Borrower with respect to any
Account. Unless otherwise indicated in writing to Agent, each Account of
Borrower (a) is genuine and in all respects what it purports to be and is not
evidenced by a judgment, (b) arises out of a completed, bona fide sale and
delivery of goods or rendering of services by Borrower in the ordinary course of
business and in accordance with the terms and conditions of all purchase orders,
contracts, certifications, participations and other documents relating thereto
or forming a part of the contract between Borrower and the Account Debtor,
(c) is for a liquidated amount maturing as stated in a claim or invoice covering
such sale of goods or rendering of services, a copy of which has been furnished
or is available to Agent, (d) if included on a Borrowing Base Certificate, is
not, subject to any known offset, lien, deduction, defense, dispute,
counterclaim or other adverse condition, is absolutely owing to Borrower and is
not contingent in any respect or for any reason, (e) there are no known facts,
events or occurrences which in any way impair the validity or enforceability
thereof or if included on a Borrowing Base Certificate, reduce the amount
payable thereunder from the face amount of the claim or invoice and statements
delivered to Agent with respect thereto, (f) to the best

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of Borrower’s knowledge, there are no proceedings or actions which are
threatened or pending against any Account Debtor thereunder which in Borrower’s
opinion is likely to result in any Material Adverse Change in the collectability
of any such Account, and (g) Borrower has obtained and currently has all Permits
necessary in the generation thereof except for any failure to obtain a Permit
which would not be reasonably likely to have a Material Adverse Effect. Unless
otherwise indicated in writing to Agent, to the best of Borrower’s knowledge,
(i) the Account Debtor under each Account of Borrower had the capacity to
contract at the time any contract or other document giving rise thereto was
executed, and (ii) such Account Debtor is solvent.
     5.21 Survival
          Borrowers, jointly and severally, make the representations and
warranties contained herein with the knowledge and intention that Agent and
Lenders are relying and will rely thereon. All such representations and
warranties will survive the execution and delivery of this Agreement, and the
making of the Advances.
     5.22 Performance and Payment Bonds for Government Contracts
          Borrower has posted all bonds required by each Government Contract to
which it is a party, except as set forth on Schedule 5.22.
     5.23 OFAC and Anti-Terrorism Regulations
          (a) Neither Borrower nor any of its Subsidiaries (i) is a Person whose
property or interest in property is blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise
associated with any such Person in any manner violative of Section 2 of such
executive order, or (iii) is a Person on the list of Specially Designated
Nationals and Blocked Persons or is in violation of the limitations or
prohibitions under any other OFAC regulation or executive order.
          (b) No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
          (c) Borrower acknowledges by executing this Agreement that Agent has
notified Borrower that, pursuant to the requirements of the Patriot Act, Agent
is required to obtain, verify and record such information as may be necessary to
identify Borrower (including, without limitation) the name and address of each
Borrower) in accordance with the Patriot Act.
VI. AFFIRMATIVE COVENANTS
     Borrower covenants and agrees that, until full performance and
satisfaction, and indefeasible payment in full in cash, of all the Obligations
and termination of this Agreement:
     6.1 Financial Statements, Reports and Other Information

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          (a) Financial Reports. ASG shall furnish to Agent and each Lender
(i) as soon as they are prepared and in any event within ninety (90) calendar
days after the end of each fiscal year of ASG, audited annual consolidated
financial statements of ASG including the notes thereto, consisting of a
consolidated balance sheet at the end of such completed fiscal year and the
related consolidated statements of income, stockholders’ equity and cash flows
for such completed fiscal year, which financial statements shall be prepared by
ASG and certified without qualification by an independent certified public
accounting firm reasonably satisfactory to Agent (which shall include Deloitte)
and accompanied by related management letters, if available, (ii) as soon as
available and in any event within forty-five (45) days after the end of the
first three fiscal quarters of the fiscal year of ASG, unaudited consolidated
financial statements of ASG consisting of a balance sheet and statements of
income, stockholders’ equity and cash flows as of the end of the immediately
preceding fiscal quarter, and (iii) as soon as available and in any event within
thirty (30) calendar days after the end of each calendar month, unaudited
consolidated financial statements of ASG consisting of a balance sheet and a
statement of income, and cash flows as of the end of the immediately preceding
calendar month. All such financial statements shall be prepared in accordance
with GAAP consistently applied with prior periods (except that certain of the
financial statements do not have footnotes, are subject to year end adjustments
in the case of monthly and quarterly financial statements, including, without
limitation, reserves for incurred but not reported items and claims payable
consistent with past practices). With each quarterly and annual financial
statement, ASG shall also deliver a certificate of its chief financial officer
stating that (A) such person has reviewed the relevant terms of the Loan
Documents and the condition of Borrower, (B) no Default or Event of Default has
occurred or is continuing, or, if any of the foregoing has occurred or is
continuing, specifying the nature and status and period of existence thereof and
the steps taken or proposed to be taken with respect thereto, and (C) ASG (on a
consolidated basis) is in compliance with all financial covenants attached as
Annex I hereto. Such certificate shall be accompanied by the calculations
necessary to show compliance with the financial covenants in a form reasonably
satisfactory to the Agent.
          (b) Other Materials. ASG shall furnish to Agent and each Lender as
soon as available, and in any event within ten (10) calendar days after the
preparation or issuance thereof or at such other time as set forth below:
(i) copies of any pro forma financial statements and any other notes, reports
and other materials related thereto, (ii) any reports, returns, information,
notices and other materials that ASG shall send to its stockholders at any time,
(iii) within thirty (30) calendar days after the end of each calendar month for
such month, an accounts payable detailed aging and reconciliation of the
accounts receivable and accounts payable to the general ledger and financial
statements, (iv) promptly upon receipt thereof, copies of any reports submitted
to ASG by its independent accountants in connection with any interim audit of
the books of ASG or any future Guarantor and copies of each management control
letter provided by such independent accountants, (v) within forty-five (45) days
after the end each calendar month, a report detailing any outstanding surety
bonds and any letters of credit collateralizing such surety bonds, and (vi) such
additional information, documents, statements, reports and other materials as
Agent may reasonably request from a credit or security perspective from time to
time.
          (c) Notices. Borrower shall promptly, and in any event within five
(5) Business Days after Borrower or any authorized officer of Borrower obtains
knowledge thereof, notify Agent in writing of (i) any pending or threatened
litigation, suit, investigation, arbitration, dispute resolution proceeding or
administrative proceeding brought or initiated by Borrower or otherwise
affecting or involving or relating to Borrower or any of its property or assets
to the extent (A) the amount in controversy exceeds $2,000,000 (other than in
lawsuits brought by or on behalf of inmates or employees of Borrower that
Borrower reasonably believes will not go to trial), (B) any of the foregoing
seeks injunctive relief (excluding such relief sought in law suits brought by or
on behalf of inmates), or (C) if against Borrower and not covered by insurance,
(ii) any Default or Event of Default, which notice shall specify the nature and
status thereof, the period of existence thereof and what action is proposed to
be

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taken with respect thereto, (iii) any other development, event, fact,
circumstance or condition that could reasonably be expected to have a Material
Adverse Effect, in each case describing the nature and status thereof and the
action proposed to be taken with respect thereto, (iv) any notice received by
Borrower from any payor of a claim, suit or other action such payor has, claims
or has filed against Borrower in an amount of $100,000 or more, (v) any
matter(s) affecting the value, enforceability or collectability of any of the
Collateral, including, without limitation, claims or disputes in the amount of
$100,000 or more in existence at any one time, (vi) any notice given by Borrower
to any other lender of Borrower and shall furnish to Agent a copy of such
notice, (vii) receipt of any notice or request from any Governmental Authority
regarding any liability or claim of liability in an amount of $100,000 or more,
(viii) receipt of any notice by Borrower regarding termination of any real
estate lease, and/or (ix) if any Account over $100,000 becomes evidenced or
secured by an instrument or chattel paper.
          (d) Consents. Borrower shall obtain and deliver from time to time all
consents, approvals and agreements from such third parties as Agent shall
determine are necessary or desirable in its Permitted Discretion for the
protection of its Collateral and that are reasonably satisfactory to Agent with
respect to the Loan Documents and the transactions contemplated thereby, or the
Collateral, including, without limitation, Landlord Waivers and Consents for
each location set forth on Schedule 5.18B, as amended from time to time.
          (e) Operating Budget. ASG shall furnish to Agent and each Lender on or
prior to the Closing Date and for each fiscal year of ASG thereafter on the date
on which such operating budgets are approved by ASG’s Board of Directors, and in
any case no later than January 1 of each fiscal year, consolidated month by
month projected operating budgets, which shall include projected profit and loss
statements, balance sheets and cash flow reports of and for Borrower for such
upcoming fiscal year in each case prepared in accordance with GAAP consistently
applied with prior periods (except that such projections will not have footnotes
and will be subject to year-end adjustments in the case of monthly and quarterly
projections, including, without limitation, reserves for incurred but not
reported items and claims payable consistent with past practices).
     6.2 Payment of Obligations
          Borrower shall make full and timely indefeasible payment in cash of
the principal of and interest on the Loans, Advances and all other Obligations.
     6.3 Conduct of Business and Maintenance of Existence and Assets
          Borrower shall (a) conduct its business in accordance with good
business practices customary to the industry, (b) engage principally in the same
or similar lines of business substantially as heretofore conducted, (c) collect
its Accounts in the ordinary course of business, (d) maintain all of its
material properties, assets and equipment used or useful in its business in good
repair, working order and condition (normal wear and tear excepted and except as
may be disposed of in the ordinary course of business and in accordance with the
terms of the Loan Documents), (e) from time to time to make all necessary
repairs, renewals and replacements of its material properties, assets and
equipment, and (f) maintain and keep in full force and effect its existence and
all material Permits and qualifications to do business and good standing in each
jurisdiction in which the ownership or lease of property or the nature of its
business makes such Permits or qualification necessary and in which failure to
maintain such Permits or qualification could reasonably be likely to have a
Material Adverse Effect; and (g) remain in good standing and maintain operations
in all jurisdictions reasonably necessary to conduct its business.
     6.4 Compliance with Legal and Other Obligations

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          Borrower shall (a) comply with all laws, statutes, rules, regulations,
ordinances and tariffs of all Governmental Authorities applicable to it or its
business, assets or operations, (b) pay all taxes, assessments, fees,
governmental charges, claims for labor, supplies, rent and all other obligations
or liabilities of any kind, except liabilities being contested in good faith and
against which adequate reserves have been established, (c) perform in accordance
with its terms each contract, agreement or other arrangement to which it is a
party or by which it or any of the Collateral is bound, including, but not
limited to, any accreditation and survey requirements, and (d) maintain and
comply with all Permits necessary to conduct its business and comply with any
new or additional requirements that may be imposed on it or its business, except
where failure to comply, pay, maintain or perform would not reasonably be likely
to have a Material Adverse Effect. Borrower shall give Agent prompt notice and a
copy of (a) any new material Government Contract, and (b) any communication from
a Governmental Authority concerning nonperformance (including nonperformance in
connection with Hazardous Substances), default, set-off or bonding issues under
any Governmental Contract.
     6.5 Insurance
          Borrower shall (a) keep all of its insurable properties and assets
adequately insured in all material respects against losses, damages and hazards
as are customarily insured against by businesses engaging in similar activities
or owning similar assets or properties in at least the minimum amount required
by applicable law and any agreement to which Borrower is a party, including,
without limitation, property insurance, automobile insurance and professional
liability insurance, as applicable, (b) maintain (i) general public liability
insurance at all times against liability on account of damage to persons and
property having such limits, deductibles, exclusions and co-insurance and other
provisions as are customary for a business engaged in activities similar to
those of Borrower, and (ii) stop loss insurance with coverage in reasonable
amounts as are customary for a business engaged in activities similar to those
of Borrower or as required by any agreement to which Borrower is a party (i.e.,
at Closing, Borrower has coverage of 100% of exposure for amounts in excess of
$300,000 per patient with a per patient cap of $1,000,000); (c) maintain
insurance under all applicable workers’ compensation laws, and (d) require all
of its healthcare professional employees and independent contractors to maintain
on behalf of or acquire professional liability insurance; all of the foregoing
insurance policies to be satisfactory in form and substance to Agent in its
Permitted Discretion.
     6.6 True Books
          Borrower shall (a) keep true, complete and accurate books of record
and account in accordance with commercially reasonable business practices in
which true and correct entries are made of all of its and their dealings and
transactions in all material respects; and (b) set up and maintain on its books
such reserves as may be required by GAAP with respect to doubtful accounts and
all taxes, assessments, charges, levies and claims and with respect to its
business, and include such reserves in its quarterly as well as year end
financial statements.
     6.7 Inspection; Periodic Audits
          Borrower shall permit the representatives of Agent and Lenders from
time to time during normal business hours, upon reasonable notice and at the
expense of Borrower, to (a) (once each quarter at Borrower’s expense if no
Default or Event of Default shall have occurred and be continuing, and more
often, at Agent’s Permitted Discretion, after the occurrence and during the
continuance of any Default or Event of Default) visit and inspect any of its
offices or properties or any other place where Collateral is located to inspect
the Collateral and/or to examine or audit all of its books of account, records,
reports and other papers, and make copies and extracts therefrom, and (b)
discuss its business, operations, prospects, properties, assets, liabilities,
condition and/or Accounts with its officers and independent public

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accountants (and by this provision such officers and accountants are authorized
to discuss the foregoing). Notwithstanding the foregoing, Borrower shall not be
required to provide information to Agent if doing so would require Borrower to
waive any applicable attorney/client privilege or accountant/client privilege
existent in connection with any pending or threatened litigation. Agent shall
endeavor to minimize the expenses of any quarterly audits.
     6.8 Further Assurances; Post Closing
          At Borrower’s cost and expense, Borrower shall (a) within five
(5) Business Days after Agent’s demand, take such further actions, obtain such
consents and approvals and duly execute and deliver such further agreements,
assignments, instructions or documents as Agent reasonably may request with
respect to the purposes, terms and conditions of the Loan Documents and the
consummation of the transactions contemplated thereby, whether before, at or
after the performance and/or consummation of the transactions contemplated
hereby or the occurrence of a Default or Event of Default, (b) without limiting
and notwithstanding any other provision of any Loan Document, execute and
deliver, or cause to be executed and delivered, such agreements and documents,
and take or cause to be taken such actions, and otherwise perform, observe and
comply with such obligations, as are set forth on Schedule 6.8, and (c) upon the
exercise by Agent, any Lender or any of their Affiliates of any power, right,
privilege or remedy pursuant to any Loan Document or under applicable law or at
equity which requires any consent, approval, registration, qualification or
authorization of any Governmental Authority, execute and deliver, or cause the
execution and delivery of, within a reasonable time, all applications,
certificates, instruments and other documents that may be so required for such
consent, approval, registration, qualification or authorization. Without
limiting the foregoing, upon the exercise by Agent, any Lender or any of their
Affiliates of any right or remedy under any Loan Document which requires any
consent, approval or registration with, consent, qualification or authorization
by, any Person, Borrower shall execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments and other documents
that Agent, any Lender or such Affiliate may be required to obtain for such
consent, approval, registration, qualification or authorization.
     6.9 Payment of Indebtedness
          Except as otherwise prescribed in the Loan Documents, Borrower shall
pay, discharge or otherwise satisfy at or before maturity (subject to applicable
grace periods and, in the case of trade payables, to ordinary course payment
practices) all of its material obligations and liabilities, except when the
amount or validity thereof is being contested in good faith by appropriate
proceedings and such reserves as Agent may deem proper and necessary in its sole
discretion shall have been made therefor.
     6.10 Lien Terminations
          If Liens other than Permitted Liens exist, Borrower immediately shall
take, execute and deliver all actions, documents and instruments necessary to
release and terminate such Liens.
     6.11 Use of Proceeds
          Borrower shall use the proceeds from the Revolving Facility only for
the purposes set forth in the recitals to this Agreement.
     6.12 Collateral Documents; Security Interest in Collateral
          On reasonable request of Agent, Borrower shall make available to Agent
copies of any and all documents, instruments, materials and other items that
relate to, secure, evidence, give rise to or

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generate or otherwise involve Collateral, including, without limitation,
Accounts of Borrower. Borrower shall (i) execute, obtain, deliver, file,
register and/or record any and all financing statements, continuation
statements, stock powers, instruments and other documents, or cause the
execution, filing, registration, recording or delivery of any and all of the
foregoing, that are necessary or required under law or otherwise or reasonably
requested by Agent to be executed, filed, registered, obtained, delivered or
recorded to create, maintain, perfect, preserve, validate or otherwise protect
the pledge of the Collateral to Agent and Agent’s perfected first priority Lien
on the Collateral (and Borrower irrevocably grants Agent the right, at Agent’s
option, to file any or all of the foregoing), (ii) maintain, or cause to be
maintained, at all times, the pledge of the Collateral to Agent and Agent’s
perfected first priority Lien on the Collateral, (iii) promptly upon learning
thereof, report to Agent any reclamation, return or repossession of goods in
excess of $500,000 (individually or in the aggregate), and (iv) defend the
Collateral and Agent’s perfected first priority Lien thereon against all claims
and demands of all Persons at any time claiming the same or any interest therein
adverse to Agent, and pay all costs and expenses (including, without limitation,
reasonable in-house documentation, diligence fees and legal expenses and other
reasonable attorneys’ fees and expenses) in connection with such defense, which
shall be added to the Obligations.
     6.13 Taxes and Other Charges
          All payments and reimbursements to Agent, for the benefit of Lenders,
made under any Loan Document shall be free and clear of and without deduction
for all taxes, levies, imposts, deductions, assessments, charges or
withholdings, and all liabilities with respect thereto of any nature whatsoever,
excluding taxes to the extent imposed on each Lender’s net income. If Borrower
shall be required by law to deduct any such amounts from or in respect of any
sum payable under any Loan Document to Agent, for the benefit of Lenders, then
the sum payable to Agent, for the benefit of Lenders, shall be increased as may
be necessary so that, after making all required deductions, each Lender receives
an amount equal to the sum it would have received had no such deductions been
made. Notwithstanding any other provision of any Loan Document, if at any time
after the Closing (a) any change in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (b) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (c) compliance by any Lender with any request or directive (whether
or not having the force of law) from any Governmental Authority: (i) subjects
such Lender to any tax, levy, impost, deduction, assessment, charge or
withholding of any kind whatsoever with respect to any Loan Document, or changes
the basis of taxation of payments to Agent, for the benefit of Lenders, of any
amount payable thereunder (except for net income taxes, or franchise taxes
imposed in lieu of net income taxes, imposed generally by federal, state or
local taxing authorities with respect to interest or commitment fees or other
fees payable hereunder or changes in the rate of tax on the overall net income
of each Lender), or (ii) imposes on Lenders any other condition or increased
cost in connection with the transactions contemplated thereby or participations
therein; and the result of any of the foregoing is to increase the cost to
Lenders of making or continuing any Loan hereunder or to reduce any amount
receivable hereunder, then, in any such case, Borrower shall promptly pay to
Agent, for the benefit of Lenders, any additional amounts necessary to
compensate each Lender, on an after-tax basis, for such additional cost or
reduced amount as determined by such Lender. If any Lender becomes entitled to
claim any additional amounts pursuant to this Section 6.13 it shall promptly
notify Borrower of the event by reason of which such Lender has become so
entitled, and each such notice of additional amounts payable pursuant to this
Section 6.13 submitted by such Lender to Borrower shall, absent manifest error,
be final, conclusive and binding for all purposes. Without limiting or being
limited by any other provision of any Loan Document, Borrower at all times shall
retain and use a commercially known and professional payroll company to process,
manage and pay its payroll taxes.
     6.14 New Subsidiaries

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          Within thirty (30) calendar days of any Person becoming a Subsidiary
after the Closing Date, Borrower shall (a) deliver to Agent a joinder to this
Agreement and to each other Loan Document to which the Borrower is a party duly
executed by such Person, which joinder shall be in form and substance
satisfactory to the Agent in its Permitted Discretion, (b) provide Agent with
copies of such Person’s organizational documents, material contracts, financial
information, and any other information requested by Agent, on behalf of the
Lenders, in order to perform legal and financial diligence and Uniform
Commercial Code, tax and judgment lien searches, and (c) cause such Person to
duly execute and deliver such further agreements, assignments, instructions or
documents as Agent may request in its Permitted Discretion with respect to the
purposes, terms and conditions of the Loan Documents.
     6.15 Schedules to the Loan Agreement
          Notwithstanding any other provision in any Loan Document, or any date
limitation set forth in any representation or warranty referencing such
schedules, Borrower shall keep all schedules current in all material respects
and shall provide amended schedules to ensure to Agent as necessary to comply
herewith. Article VI and Article VII schedules may not be amended without
Agent’s prior consent. Notwithstanding the foregoing, the following schedules
shall be updated only to the extent specified hereby:
          (a) the disclosure of directors, members, managers and/or partners of
Borrower, as well as any beneficial or record holders of more than twenty-five
percent (25%) of the equity of ASG in Schedule 5.3 shall be updated as
reasonably requested by Agent;
          (b) the disclosure of any order, writ, injunction, judgment or decree
of any Governmental Authority to which Borrower is a party or otherwise subject
to in Schedule 5.6, and the disclosure of any action, suit, proceeding or
investigation initiated by Borrower in Schedule 5.6 shall be updated only if any
such information would be reasonably likely to result in a Material Adverse
Effect;
          (c) all disclosures in Schedule 5.8 shall be updated only if any such
information would reasonably be likely to result in a Material Adverse Effect;
and
          (d) all disclosures of property and business interruption insurance
policies in Schedule 5.17 shall be updated for any material change to the policy
or the addition of any business interruption policy, all other disclosures of
insurance in Schedule 5.17 shall be updated only if any such information would
reasonably be likely to result in a Material Adverse Effect.
     6.16 New Government Contracts
          Within thirty (30) calendar days of any Borrower entering into a
Government Contract with a Governmental Authority, Borrower shall deliver to
Agent a full copy of such Government Contract so that Agent can determine
whether such contract contains Eligible Receivables and whether it shall be
included on the Borrowing Base.
VII. NEGATIVE COVENANTS
     Borrower covenants and agrees that, until full performance and
satisfaction, and indefeasible payment in full in cash, of all the Obligations
and termination of this Agreement:
     7.1 Financial Covenants

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          Borrower shall not violate the financial covenants set forth on Annex
I to this Agreement, which annex is incorporated herein and made a part hereof.
     7.2 Permitted Indebtedness
          Borrower shall not create, incur, assume or suffer to exist any
Indebtedness, except the following (collectively, “Permitted Indebtedness”):
(a) Indebtedness under the Loan Documents, (b) any Indebtedness set forth on
Schedule 7.2 or arising after the date hereof pursuant to commitments set forth
in Schedule 7.2 and any refunding or renewals thereof which do not increase the
principal amount of such Indebtedness; (c) Capitalized Lease Obligations
incurred after the Closing Date and Indebtedness incurred pursuant to purchase
money Liens permitted by Section 7.3(e); provided, that the aggregate amount
thereof outstanding at any time shall not exceed $1,000,000, (d) current
liabilities (other than for borrowed money) to the extent (i) incurred in the
ordinary course of business consistent with past practices and (ii) discharged
or satisfied at or before the due date for payment (subject to ordinary course
payment practices), unless the same are being contested in good faith and by
appropriate and lawful proceedings and such reserves, if any, with respect
thereto as are required by GAAP and deemed adequate by Borrower’s independent
accountants shall have been reserved, (e) borrowings incurred in the ordinary
course of business, (f) other indebtedness in an amount not exceeding $1,000,000
individually or in the aggregate outstanding at any one time; (g) indemnities
under Government Contracts, (h) Subordinated Debt in an amount not to exceed
$10,000,000 at any one time outstanding, (i) Indebtedness with respect to
financed insurance premiums to the extent not past due, (j) Contingent
Obligations undertaken by any Borrower with respect to the Indebtedness of any
other Borrower, to the extent such Indebtedness is permitted hereunder as set
forth on Schedule 7.2, (k) intercompany debt between or among Borrowers hereto
and (l) reimbursement obligations with respect to letters of credit that are
secured by cash collateral accounts, provided, however, that in each case under
this Section 7.2, all such Indebtedness shall be on an unsecured basis, except
for Permitted Liens relating to money borrowed which shall be subordinated in
right of repayment and remedies to all of the Obligations and to all of the
Lenders’ rights in form and substance satisfactory to Agent. Borrower shall not
make prepayments on any existing or future Indebtedness to any Person other than
to Agent, for the benefit of Lenders, or to the extent specifically permitted by
this Agreement or any subsequent agreement between Borrower, Agent and Lenders.
     7.3 Permitted Liens
          Borrower shall not create, incur, assume or suffer to exist any Lien
upon, in or against, or pledge of, any of the Collateral or any of its
properties or assets or any of its shares, securities or other equity or
ownership or partnership interests, whether now owned or hereafter acquired,
except the following (collectively, “Permitted Liens”): (a) Liens under the Loan
Documents or otherwise arising in favor of Agent, for the benefit of itself and
Lenders, (b) Liens imposed by law for taxes, assessments or charges of any
Governmental Authority for claims not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained by such Person in
accordance with GAAP, (c) (i) statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen, and (ii) other Liens imposed by law or
that arise by operation of law in the ordinary course of business, in each case
only for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained by such Person in accordance with
GAAP to the satisfaction of Agent in its Permitted Discretion, (d) Liens
incurred or deposits made in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with workers’
compensation, unemployment insurance and other types of social security benefits
or to secure the performance of tenders, bids, leases, contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations, (e) purchase money Liens (i) securing Indebtedness

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permitted under Section 7.2(c), or (ii) in connection with the purchase by such
Person of equipment in the normal course of business; provided, that such
secured Indebtedness shall not exceed any limits on Indebtedness provided for
herein and shall otherwise be Permitted Indebtedness hereunder, (f) Liens
necessary and desirable for the operation of such Person’s business; provided,
that Agent has consented to such Liens in writing before their creation and
existence and the priority of such Liens and the debt secured thereby are both
subject and subordinate in all respects to the Liens securing the Collateral and
to the Obligations and all of the rights and remedies of Agent and each Lender,
all in form and substance satisfactory to Agent in its Permitted Discretion,
(g) Liens disclosed on Schedule 7.3, (h) easements, reservations, exceptions,
rights-of-way, covenants, conditions, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the aggregate,
are not substantial in amount and that do not in any case materially detract
from the value of the property subject thereto or interfere with the ordinary
conduct of business by the Borrower, (i) liens in respect of any writ of
execution, attachment, garnishment, judgment or award in an amount less than
$100,000, if (x) the time for appeal or petition for rehearing has not expired,
an appeal or appropriate proceeding for review is being prosecuted in good faith
and a stay of execution pending such appeal or proceeding for review has been
secured, or (y) the underlying claim is fully covered by insurance, the insurer
has acknowledged in writing its responsibility to pay such claim and no action
has been taken to enforce such execution, attachment, garnishment, judgment or
award, (j) liens of lessors (except liens on Accounts are not permitted under
any circumstances) under or in connection with operating leases, and (k) liens
on cash collateral accounts established to secure Borrower’s reimbursement
obligations with respect to letters of credit.
     7.4 Investments; New Facilities or Collateral; Subsidiaries
          (a) Except as set forth on Schedule 7.4 and except for any Borrower’s
ownership on the date of this Agreement of the equity interests of another
Borrower, Borrower, directly or indirectly, shall not (i) merge with, purchase,
own, hold, invest in or otherwise acquire obligations or stock or securities of,
or any other interest in all or substantially all of the assets of, any Person
or any joint venture unless such Person is or becomes a Borrower in the manner
provided in Section 6.14, or (ii) make or permit to exist any loans, advances or
guarantees to or for the benefit of any Person other than to or for the benefit
of a person who is or becomes a Borrower under the Loan Documents in the manner
provided in Section 6.14, except for ordinary course of business investments of
the type historically made by Borrower, or assume, guarantee, endorse,
contingently agree to purchase or otherwise become liable for or upon or incur
any obligation of any Person (other than those created by the Loan Documents,
Permitted Indebtedness, and other than (x) trade credit extended in the ordinary
course of business, (y) advances for business travel and similar temporary
advances made in the ordinary course of business to officers, directors and
employees, and (z) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business).
Borrower, directly or indirectly, shall not purchase, own, operate, hold, invest
in or otherwise acquire any property or assets or any Collateral having a value
of $50,000 or more that is not located at the locations set forth on
Schedule 5.18B, unless Borrower shall provide to Agent contemporaneous written
notice. Furthermore, Borrower shall update Schedule 5.18B any time books and
records related to Account Collateral and any Inventory are located at any place
other than the places specifically identified on Schedule 5.18B.
          (b) Borrower shall not redirect any Accounts or the proceeds thereof
to or through any subsidiary that is inactive or that is not a party to the Loan
Documents. If any inactive Subsidiary commences business activity Borrower shall
cause it to become a party to the Loan Documents.
     7.5 Dividends; Redemptions; Equity

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          Borrower shall not (a) declare, pay or make any cash dividend or
distribution on any shares of capital stock or other securities or interests, or
apply any of its funds, property or assets to the acquisition, redemption or
other retirement of any capital stock or other securities or interests or of any
options to purchase or acquire any of the foregoing (collectively, the
“Distributions”), or (b) other than ASG, issue or create any capital stock or
other equity securities; except, that (i) ASG may declare, pay or make cash
dividends on any shares of its capital stock, provided, that, no Default or
Event of Default shall have occurred and be continuing as of the effective date
of any such transaction or would result from any such transaction, (ii) Borrower
may make Distributions or issue capital stock or other equity securities to or
for the benefit of another Borrower; (iii) ASG may pay cash in lieu of issuing
fractional shares upon the exercise of options or warrants to purchase shares of
its common stock; and (iv) ASG may repurchase shares of its common stock in any
single transaction or series of transactions pursuant to a Stock Repurchase
Authorization (defined below), provided, that, (x) the aggregate dollar amount
of cash paid by ASG in connection therewith does not exceed $15,000,000, (y) no
Default or Event of Default shall have occurred and be continuing as of the
effective date of any such transaction or would result from any such
transaction, and (z) not less than three (3) Business Days prior to giving
effect to the initial stock repurchase contemplated by this clause (iv), ASG
shall have provided Agent with a copy of the resolutions duly authorized by the
board of directors of ASG to give effect to the stock repurchase contemplated by
this clause (iv) (the “Stock Repurchase Authorization”), together with an
officer’s compliance certificate demonstrating compliance with the terms of the
preceding subclauses (x) and (y).
     7.6 Transactions with Affiliates
          Borrower shall not enter into or consummate any transaction of any
kind with any of its Affiliates (except any Guarantor or another Borrower) other
than: (a) salary, bonus, employee stock option and other compensation and
employment arrangements with directors or officers in the ordinary course of
business; provided, that no payments of any bonus or otherwise (except normal
salaries, consistent with past practices) shall be permitted if a Default or
Event of Default has occurred and remains in effect or would be caused by or
result from such payment, (b) Distributions and dividends permitted pursuant to
Section 7.5, (c) transactions on overall terms at least as favorable to Borrower
as would be the case in an arm’s length transaction between unrelated parties of
equal bargaining power, (d) payments permitted under and pursuant to written
agreements entered into by and between Borrower and one or more of its
Affiliates that both (i) reflect and constitute transactions on overall terms at
least as favorable to Borrower as would be the case in an arm’s-length
transaction between unrelated parties of equal bargaining power, and (ii) are
subject to such terms and conditions as determined by Agent in its sole
discretion, provided, that notwithstanding the foregoing Borrower shall not
(Y) enter into or consummate any transaction or agreement pursuant to which it
becomes a party to any mortgage, note, indenture or guarantee evidencing any
Indebtedness of any of its Affiliates or otherwise to become responsible or
liable as a guarantor, surety or otherwise, pursuant to an agreement for any
Indebtedness of any such Affiliate in the ordinary course of business, except
that Borrower may enter into such transaction with another Borrower or Guarantor
so long as any and all material transactions are set forth on Schedule 7.6, or
(Z) make any payment to an Affiliate (except another Borrower or Guarantor in
the ordinary course of business) if a Default or Event of Default has occurred
and remains in effect or would be caused by or result from such payment, and (e)
payments by Borrower to EMSA Limited Partnership, provided that (i) such
payments do not exceed $50,000 individually or in the aggregate and (ii) no such
payments shall be permitted if a Default or Event of Default has occurred and is
continuing or would be caused by or result from such payment.
     7.7 Charter Documents; Fiscal Year; Dissolution; Collateral Assignment
          Borrower shall not (a) change its state of organization, or amend,
modify, restate or change its certificate of incorporation or bylaws or similar
charter documents in a manner that would be

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adverse to Agent or any Lender, (b) change its fiscal year, (c) amend, alter or
suspend or terminate or make provisional, any material Permit, (d) wind up,
liquidate or dissolve (except for mergers into another party hereto)
(voluntarily or involuntarily) or commence or suffer any proceedings seeking or
that would result in any of the foregoing, except that Borrower shall be
permitted to dissolve SPP and PHS Indiana, provided that (i) the dissolution of
SPP and PHS Indiana is in accordance with all applicable laws, (ii) Borrower
promptly delivers to Agent written evidence of such dissolution (including, but
not limited to, a certified copy of the articles or certificate of dissolution
and resolutions by the members and managers of SPP and PHS Indiana (as
applicable) authorizing the dissolution), (iii) the Eligible Receivables of SPP
shall have been removed from the Borrowing Base, and (iv) to the extent that
either SPP or PHS Indiana has assets, such assets shall have been contributed to
PHS prior to the dissolution, or (e) use any proceeds of any Loans for
“purchasing” or “carrying” “margin stock” as defined in Regulations U, T or X of
the Board of Governors of the Federal Reserve System.
     7.8 Transfer of Assets
          Borrower shall not sell, lease, transfer, assign or otherwise dispose
of any interest in any properties or assets, or agree to do any of the
foregoing, except that:
          (a) Borrower may lease (other than by a sale-leaseback transaction) as
lessee real or personal property or surrender all or a portion of a lease of the
same, in each case in the ordinary course of business (so long as such lease
does not create or result in and is not otherwise a Capitalized Lease Obligation
prohibited under this Agreement) provided that, if books and records regarding
Collateral or Inventory if included on any Borrowing Base Certificate, are to be
kept at any new leased location, a Landlord Waiver is executed, satisfactory in
form and substance to Agent;
          (b) Borrower may sell obsolete or replaced equipment or excess
equipment no longer needed in the ordinary course of business; and
          (c) Borrower may sell Inventory in the ordinary course of business.
     7.9 Contingent Obligations
          Borrower shall not enter into any Contingent Obligations or assume,
guarantee, endorse, contingently agree to purchase or otherwise become liable
for or upon or incur any obligation of any Person, except for
(i) indemnification obligations in the ordinary course of Borrower’s business,
(ii) Contingent Obligations permitted pursuant to Section 7.2, and (iii) such
other obligations as are set forth on Schedule 7.9 hereto.
     7.10 Truth of Statements
          Borrower shall not furnish to Agent or any Lender any certificate or
other document that contains any untrue statement of a material fact or that
omits to state a material fact necessary to make it not misleading in light of
the circumstances under which it was furnished.
     7.11 Payment on Subordinated Debt
          Borrower shall not (a) make any prepayment of any part or all of any
Subordinated Debt, (b) repurchase, redeem or retire any instrument evidencing
any such Subordinated Debt prior to maturity, or (c) enter into any agreement
(oral or written) which could in any way be construed to amend, modify, alter or
terminate any one or more instruments or agreements evidencing or relating to
any Subordinated Debt.

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     7.12 IRS Form 8821
          Borrower shall not alter, amend, restate or otherwise modify, or
withdraw, terminate or refile the IRS Form 8821 required to be filed pursuant to
Section 4.1 hereof.
VIII. EVENTS OF DEFAULT
     The occurrence of any one or more of the following shall constitute an
“Event of Default:”
          (a) Borrower shall fail to pay any amount on the Obligations,
including any Funded L/C Exposure, or otherwise provided for in any Loan
Document when due (whether on any payment date, at maturity, by reason of
acceleration, by required prepayment or otherwise);
          (b) any representation, statement or warranty made or deemed made by
Borrower or any Guarantor in any Loan Document or in any other certificate,
document, report or opinion delivered in conjunction with any Loan Document to
which it is a party, shall not be true and correct in all material respects or
shall have been false or misleading in any material respect on the date when
made or deemed to have been made (except to the extent already qualified by
materiality, in which case it shall be true and correct in all respects and
shall not be false or misleading in any respect);
          (c) Borrower or any Guarantor or other party thereto, other than Agent
or any Lender, shall be in violation, breach or default of, or shall fail to
perform, observe or comply with any covenant, obligation or agreement set forth
in, any Loan Document and such violation, breach, default or failure shall not
be cured within the applicable period set forth in the applicable Loan Document;
provided that, with respect to the affirmative covenants set forth in Article VI
(other than Sections 6.1(a), 6.2, 6.3, 6.8, and 6.11 for which there shall be no
cure period), there shall be a thirty (30) calendar day cure period commencing
from the earlier of (i) Receipt by such Person of written notice of such breach,
default, violation or failure, and (ii) the time at which such Person or any
authorized officer of such Person knew or became aware, of such failure,
violation, breach or default;
          (d) (i) any of the Loan Documents ceases to be in full force and
effect, or (ii) any Lien created thereunder ceases to constitute a valid
perfected first priority Lien on the Collateral in accordance with the terms
thereof, or Agent, for the benefit of itself and Lenders, ceases to have a valid
perfected first priority security interest in any of the Collateral or any
securities pledged to Agent, for the benefit of itself and Lenders, pursuant to
the Security Documents;
          (e) one or more judgments or decrees is rendered against Borrower or
Guarantor in an amount in excess of $500,000, which is/are not satisfied,
stayed, vacated or discharged of record within thirty (30) calendar days of
being rendered;
          (f) (i) any default occurs, which is not cured or waived, (x) in the
payment of any amount with respect to any Indebtedness (other than the
Obligations) for borrowed money of Borrower or Guarantor in excess of $500,000,
or (y) in the performance or observance of any provision in any agreement,
document or instrument pursuant to which Borrower or any Guarantor issued,
assumed or guaranteed any Indebtedness in an amount in excess of $500,000 to
which any Borrower or Guarantor is a party, or any of their assets are subject
and such default continues for more than any applicable grace period or permits
the holder of any Indebtedness to accelerate the maturity thereof, or (ii) any
Indebtedness of Borrower or Guarantor for borrowed money in an amount greater
than $500,000 individually or in the aggregate at any one time, is declared to
be due and payable or is required to be prepaid (other than by a regularly
scheduled payment) prior to the stated maturity thereof, or any obligation of
such Person for the payment of Indebtedness in an amount greater than $500,000

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individually or in the aggregate at any one time (other than the Obligations) is
not paid when due or within any applicable grace period, or any such obligation
becomes or is declared to be due and payable before the expressed maturity
thereof;
          (g) Borrower or Guarantor shall (i) be unable to pay its debts
generally as they become due, (ii) file a petition under any Debtor Relief Law,
(iii) make a general assignment for the benefit of its creditors, (iv) commence
a proceeding for the appointment of a receiver, trustee, liquidator or
conservator of itself or of the whole or any substantial part of its property,
or (v) file a petition seeking reorganization or liquidation or similar relief
under any Debtor Relief Law;
          (h) (i) a court of competent jurisdiction shall (A) enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of Borrower or Guarantor or the whole or any substantial part of any
such Person’s properties, which shall continue unstayed and in effect for a
period of sixty (60) calendar days, (B) shall approve a petition filed against
Borrower or Guarantor seeking reorganization, liquidation or similar relief
under the any Debtor Relief Law or any other applicable law or statute, which is
not dismissed within sixty (60) calendar days or, (C) under the provisions of
any Debtor Relief Law or other applicable law or statute, assume custody or
control of Borrower or Guarantor or of the whole or any substantial part of any
such Person’s properties, which is not irrevocably relinquished within sixty
(60) calendar days, or (ii) there is commenced against Borrower or Guarantor any
proceeding or petition seeking reorganization, liquidation or similar relief
under any Debtor Relief Law or any other applicable law or statute, which (A) is
not unconditionally dismissed within sixty (60) calendar days after the date of
commencement, or (B) is with respect to which Borrower or Guarantor takes any
action to indicate its approval of or consent to;
          (i) (i) any Change of Control occurs or any agreement or commitment to
cause or that may result in any such Change of Control is entered into, (ii) any
Material Adverse Effect or Material Adverse Change occurs, or is reasonably
expected to occur, or (iii) Borrower or Guarantor ceases any material portion of
its business operations as currently conducted;
          (j) an Event of Default occurs under any other Loan Document beyond
applicable cure periods;
          (k) uninsured damage to, or loss, theft or destruction of, any portion
of the Collateral occurs that exceeds $500,000 in the aggregate (excluding
deductibles);
          (l) Borrower or Guarantor or any of their respective directors or
senior officers is convicted under any law that could lead to a forfeiture of
any material portion of the Collateral;
          (m) the issuance of any process for levy, attachment or garnishment or
execution upon or prior to any judgment seeking in any one instance or in the
aggregate a recovery of $500,000 or more against Borrower or Guarantor or any of
their property or assets; or
          (n) Borrower or Guarantor does, or enters into or becomes a party to
any agreement or commitment to do, or cause to be done, any of the things
described in this Article VIII or otherwise prohibited by any Loan Document
(subject to any cure periods set forth therein);
then, and during the continuance of any such event, notwithstanding any other
provision of any Loan Document, (I) Agent may (and at the request of Requisite
Lenders, shall), by notice to Borrower (i) terminate Lenders’ obligations to
make Loans hereunder, whereupon the same shall immediately terminate, and
(ii) declare all or any of the Notes, all interest thereon and all other
Obligations to be due and payable immediately (except in the case of an Event of
Default under Section 8(d), (g) or (h), in

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which event all of the foregoing shall automatically and without further act by
Agent or any Lender be due and payable; provided, that, with respect to
non-material breaches or violations that constitute Events of Default under
clause (ii) of Section 8(d), there shall be a ten (10) Business Day cure period
commencing from the earlier of (A) Receipt by the applicable Person of written
notice of such breach or violation or of any event, fact or circumstance
constituting or resulting in any of the foregoing, and (B) the time at which
such Person or any authorized officer thereof knew or became aware, of any
event, fact or circumstance constituting or resulting in any of the foregoing),
in each case without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by Borrower, and (II) effective
immediately, without any action of Agent or Lenders, no action permitted to be
taken under Article VII hereof may be taken.
IX. RIGHTS AND REMEDIES AFTER DEFAULT
     9.1 Rights and Remedies
          (a) In addition to the acceleration provisions set forth in
Article VIII above, upon the occurrence and continuation of an Event of Default,
Agent shall have the right to (and at the request of Requisite Lenders, shall)
exercise any and all rights, options and remedies provided for in any Loan
Document, under the UCC or at law or in equity, including, without limitation,
the right to (i) apply any property of Borrower held by Agent, for the benefit
of Lenders, or Lenders to reduce the Obligations, (ii) foreclose the Liens
created under the Security Documents, (iii) realize upon, take possession of
and/or sell any Collateral or securities pledged with or without judicial
process, (iv) exercise all rights and powers with respect to the Collateral as
Borrower might exercise, (v) collect and send notices regarding the Collateral,
with or without judicial process, (vi) by its own means or with judicial
assistance, enter any premises at which Collateral and/or pledged securities are
located, or render any of the foregoing unusable or dispose of the Collateral
and/or pledged securities on such premises without any liability for rent,
storage, utilities, or other sums, and no Borrower shall resist or interfere
with such action, (vii) at Borrower’s expense, require that all or any part of
the Collateral be assembled and made available to Agent at any place designated
by Agent, (viii) reduce or otherwise change the Facility Cap and/or the Maximum
Loan Amount, and/or (ix) relinquish or abandon any Collateral or securities
pledged or any Lien thereon. Notwithstanding any provision of any Loan Document,
Agent, in its sole discretion, shall have the right, at any time that Borrower
fails to do so, and from time to time, without prior notice, to: (i) obtain
insurance covering any of the Collateral to the extent required hereunder;
(ii) pay for the performance of any of Obligations; (iii) discharge taxes or
Liens on any of the Collateral that are in violation of any Loan document unless
Borrower is in good faith with due diligence by appropriate proceedings
contesting those items; and (iv) pay for the maintenance and preservation of the
Collateral. Such expenses and advances shall be added to the Obligations until
reimbursed to Agent and shall be secured by the Collateral, and such payments by
Agent shall not be construed as a waiver by Agent or Lenders of any Event of
Default or any other rights or remedies of Agent and Lenders.
          (b) Borrower agrees that notice received by it at least ten
(10) calendar days before the time of any intended public sale, or the time
after which any private sale or other disposition of Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition. If
permitted by applicable law, any perishable Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Agent without prior notice to Borrower. At any sale or
disposition of Collateral or securities pledged, Agent may (to the extent
permitted by applicable law) purchase all or any part thereof free from any
right of redemption by Borrower which right is hereby waived and released.
Borrower covenants and agrees not to, and not to permit or cause any of its
Subsidiaries to, interfere with or impose any obstacle to Agent’s exercise of
its rights and remedies with respect to the Collateral. Agent, in dealing with
or disposing of the Collateral or

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any part thereof, shall not be required to give priority or preference to any
item of Collateral or otherwise to marshal assets or to take possession or sell
any Collateral with judicial process.
     9.2 Application of Proceeds
          In addition to any other rights, options and remedies Agent and
Lenders have under the Loan Documents, the UCC, at law or in equity, all
dividends, interest, rents, issues, profits, fees, revenues, income and other
proceeds collected or received from collecting, holding, managing, renting,
selling, or otherwise disposing of all or any part of the Collateral or any
proceeds thereof upon exercise of its remedies hereunder shall be applied in the
following order of priority: (i) first, to the payment of all costs and expenses
of such collection, storage, lease, holding, operation, management, sale,
disposition or delivery and of conducting Borrower’s business and of
maintenance, repairs, replacements, alterations, additions and improvements of
or to the Collateral, and to the payment of all sums which Agent or Lenders may
be required or may elect to pay, if any, for taxes, assessments, insurance and
other charges upon the Collateral or any part thereof, and all other payments
that Agent or Lenders may be required or authorized to make under any provision
of this Agreement (including, without limitation, in each such case, in house
documentation and diligence fees and legal expenses, search, audit, recording,
professional and filing fees and expenses and reasonable attorneys’ fees and all
expenses, liabilities and advances made or incurred in connection therewith);
(ii) second, to the payment of all Obligations as provided herein and as
determined by Requisite Lenders; (iii) third, to the satisfaction of
Indebtedness secured by any subordinate security interest of record in the
Collateral if written notification of demand therefor is received before
distribution of the proceeds is completed, provided, that, if requested by
Agent, the holder of a subordinate security interest shall furnish reasonable
proof of its interest, and unless it does so, Agent and Lenders need not address
their claims; and (iv) fourth, to the payment of any surplus then remaining to
Borrower, unless otherwise provided by law or directed by a court of competent
jurisdiction, provided that Borrower shall be liable for any deficiency if such
proceeds are insufficient to satisfy the Obligations or any of the other items
referred to in this section.
     9.3 Rights of Agent to Appoint Receiver
          Without limiting and in addition to any other rights, options and
remedies Agent has under the Loan Documents, the UCC, at law or in equity, upon
the occurrence and continuation of an Event of Default, Agent shall have the
right to apply for and have a receiver appointed by a court of competent
jurisdiction in any action taken by Agent to enforce its and Lenders’ rights and
remedies in order to manage, protect and preserve the Collateral and continue
the operation of the business of Borrower and to collect all revenues and
profits thereof and apply the same to the payment of all expenses and other
charges of such receivership including the compensation of the receiver and to
the payments as aforesaid until a sale or other disposition of such Collateral
shall be finally made and consummated.
     9.4 Rights and Remedies not Exclusive
          Agent shall have the right in its sole discretion to determine which
rights, Liens and/or remedies Agent or Lenders may at any time pursue,
relinquish, subordinate or modify, and such determination will not in any way
modify or affect any of Agent’s or Lenders’ rights, Liens or remedies under any
Loan Document, applicable law or equity. The enumeration of any rights and
remedies in any Loan Document is not intended to be exhaustive, and all rights
and remedies of Agent and Lenders described in any Loan Document are cumulative
and are not alternative to or exclusive of any other rights or remedies which
Agent or Lenders otherwise may have. The partial or complete exercise of any
right or remedy shall not preclude any other further exercise of such or any
other right or remedy.
X. WAIVERS AND JUDICIAL PROCEEDINGS

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     10.1 Waivers
          (a) Except as expressly provided for herein, Borrower hereby waives
demand, presentment, protest, all defenses with respect to any and all
instruments and all notices and demands of any description, and the pleading of
any statute of limitations as a defense to any demand under any Loan Document.
Borrower hereby waives any and all defenses and counterclaims it may have or
could interpose in any action or procedure brought by Agent or any Lender to
obtain an order of court recognizing the assignment of, or Lien of Agent, for
the benefit of itself and Lenders, in and to, any Collateral.
          (b) If it is at any time determined that any Borrower is liable as a
guarantor of any portion of the Obligations (and not as a co-obligor or
co-borrower), the liability of each Borrower hereunder shall be absolute and
unconditional irrespective of (a) the insolvency of, or the voluntary or
involuntary bankruptcy, assignment for the benefit of creditors, reorganization
or other similar proceedings affecting any Borrower or any of its assets, or
(b) any other circumstance or claim which might otherwise constitute a defense
available to, or a discharge of, any Person that is a Borrower in respect of the
Obligations. No payment made by any Borrower, or received or collected by the
Agent or any Lender from any Borrower by virtue of any action, proceeding or
set-off in reduction or in payment of the Obligations shall be deemed to modify,
release or otherwise affect the liability of any Borrower under the Loan
Documents, and each Borrower shall remain liable for the Obligations until all
Obligations are paid in full.
     10.2 Delay; No Waiver of Defaults
          No course of action or dealing, renewal, release or extension of any
provision of any Loan Document, or single or partial exercise of any such
provision, or delay, failure or omission on Agent’s or Lenders’ part in
enforcing any such provision shall affect the liability of Borrower or Guarantor
or operate as a waiver of such provision or affect the liability of Borrower or
Guarantor or preclude any other or further exercise of such provision. No waiver
by any party to any Loan Document of any one or more defaults by any other party
in the performance of any of the provisions of any Loan Document shall operate
or be construed as a waiver of any future default, whether of a like or
different nature, and each such waiver shall be limited solely to the express
terms and provisions of such waiver. Notwithstanding any other provision of any
Loan Document, by completing the Closing under this Agreement and/or by making
Advances, neither Agent nor any Lender waives any breach of any representation
or warranty under any Loan Document, and all of Agent’s and Lenders’ claims and
rights resulting from any such breach or misrepresentation are specifically
reserved.
     10.3 Jury Waiver
          (a) EACH PARTY HEREBY (i) EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING UNDER ANY
LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES WITH RESPECT TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AND (ii) AGREES AND CONSENTS THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY.

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          (b) In the event any such Claim or cause of action is brought or filed
in any United States federal court sitting in the State of California or in any
state court of the State of California, and the waiver of jury trial set forth
in Section 10.3(a) hereof is determined or held to be ineffective or
unenforceable, the parties agree that all Claims and causes of action shall be
resolved by reference to a private judge sitting without a jury, pursuant to
California Code of Civil Procedure Section 638, before a mutually acceptable
referee or, if the parties cannot agree, a referee selected by the Presiding
Judge of the Los Angeles County, California. Such proceeding shall be conducted
in Los Angeles County, California, with California rules of evidence and
discovery applicable to such proceeding. In the event Claims or causes of action
are to be resolved by judicial reference, any party may seek from any court
having jurisdiction thereover any prejudgment order, writ or other relief and
have such prejudgment order, writ or other relief enforced to the fullest extent
permitted by law notwithstanding that all Claims are otherwise subject to
resolution by judicial reference.
     10.4 Cooperation in Discovery and Litigation
          In any litigation, arbitration or other dispute resolution proceeding
relating to any Loan Document, Borrower waives any and all defenses, objections
and counterclaims it may have or could interpose with respect to (a) any of its
directors, officers, employees or agents being deemed to be employees or
managing agents of Borrower for purposes of all applicable law or court rules
regarding the production of witnesses by notice for testimony (whether in a
deposition, at trial or otherwise), (b) any discovery deposition of any of them
as if it were an evidence deposition, and/or (c) using all commercially
reasonable efforts to produce in any such dispute resolution proceeding, at the
time and in the manner requested by Agent, all Persons, documents (whether in
tangible, electronic or other form) and/or other things under its control and
relating to the dispute.
     10.5 Amendment and Waivers
          (a) Except as otherwise provided herein, no amendment, modification,
termination, or waiver of any provision of this Agreement or any Loan Document,
or consent to any departure by Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Requisite
Lenders; provided, that no amendment, modification, termination, or waiver
shall, unless in writing and signed by each Lender directly affected thereby, do
any of the following: (i) increase the Commitment of any Lender (which action
shall be deemed to directly affect all Lenders); (ii) reduce the principal of,
rate of interest on or fees payable with respect to any Loan; (iii) extend the
scheduled due date or reduce the amount due on any scheduled due date, of any
installment of principal, interest, or fees payable with respect to any Loan, or
waive, forgive, extend, defer or postpone the payment thereof; (iv) change the
percentage of the Commitments, of the aggregate unpaid principal amount of the
Loans, or of Lenders which shall be required for Lenders or any of them to take
any action hereunder (which action shall be deemed to directly affect all
Lenders); (v) except as otherwise permitted herein or in the other Loan
Documents, release any Guaranty or release any material portion of the
Collateral (which action shall be deemed to directly affect all Lenders)
(provided, that consent to such release shall not be required if such release is
made after and during the continuance of an Event of Default in connection with
the sale or disposition of the Collateral by Agent); (vi) amend, modify or waive
this Section 10.5 or the definitions of the terms used in this Section 10.5
insofar as the definitions affect the substance of this Section 10.5 (which
action shall be deemed to directly affect all Lenders); (vii) consent to the
assignment or other transfer by Borrower or any other party (other than any
Lender) to any Loan Documents of any of their rights and obligations under any
Loan Document; or (viii) increase the Advance Rate or change the definition of
Eligible Billed Receivables, Eligible Unbilled Receivables or Borrowing Base;
and, provided, further, that no amendment, modification, termination or waiver
affecting the rights or duties of Agent under any Loan Document shall in any
event be effective, unless in writing and signed by Agent, in addition to
Lenders required herein above to take such action.

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          (b) Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.
          (c) Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.5 shall be binding upon each Lender
and Borrower.
XI. EFFECTIVE DATE AND TERMINATION
     11.1 Effectiveness and Termination
          Subject to each Lender’s right to terminate and cease making Loans as
set forth in this Agreement, this Agreement shall continue in full force and
effect until the full performance and indefeasible payment in cash of all
Obligations, unless terminated sooner as provided in this Section 11.1. Borrower
may terminate the Revolving Facility or this Agreement at any time prior to the
last day of the Term, subject to Section 3.3, upon not less than thirty (30)
calendar days’ prior notice to Agent and upon full performance and indefeasible
payment in full in cash of all Obligations under the Loan Documents. Upon any
termination of the Revolving Facility or this Agreement by Borrower, the
obligation of Lenders to make Advances under the Revolving Facility shall
terminate. All of the Obligations shall be immediately due and payable upon any
such termination on the termination date stated in any notice of termination
(the “Termination Date”); provided that, notwithstanding any other provision of
any Loan Document, the Termination Date shall be effective no earlier than the
first Business Day of the month following the expiration of the thirty
(30) calendar days’ prior written notice period. Notwithstanding any other
provision of any Loan Document, no notice to terminate this Agreement shall
affect any Lender’s or Agent’s rights or any of the Obligations existing as of
the effective date of such termination, and the provisions of the Loan Documents
shall continue to be fully operative until the Obligations have been fully and
indefeasibly paid in cash in full. The Liens granted to Agent, for the benefit
of itself and Lenders, under the Security Documents and the financing statements
filed pursuant thereto and the rights and powers of Agent and Lenders shall
continue in full force and effect notwithstanding the fact that Borrower’s
borrowings hereunder may from time to time be in a zero or credit position until
all of the Obligations have been indefeasibly paid in full in cash.
     11.2 Survival
          All obligations, covenants, agreements, representations, warranties,
waivers and indemnities made by Borrower in any Loan Document shall survive the
execution and delivery of the Loan Documents, the Closing, the making of the
Loans and any termination of this Agreement until all Obligations are fully
performed and indefeasibly paid in full in cash. The obligations and provisions
of Sections 3.4, 10.1, 10.3, 11.1, 11.2, 12.4 and 12.7 and Article XI-A shall
survive termination of the Loan Documents and any payment, in full of the
Obligations.
XI-A. AGENCY PROVISIONS
     11-A.1 Agent
          (a) Appointment. Each Lender hereby designates and appoints
CapitalSource as the administrative agent and the collateral agent, under this
Agreement and the other Loan Documents, and each Lender hereby irrevocably
authorizes CapitalSource, as the administrative agent and the collateral agent
for such Lender, to take such action or to refrain from taking such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform

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such duties as are delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Agent agrees to act as such on the conditions contained in
this Article. The provisions of this Article are solely for the benefit of Agent
and Lenders, and Borrower shall have no rights as a third-party beneficiary of
any of the provisions hereof. Agent may perform any of its duties hereunder, or
under the Loan Documents, by or through its agents or employees.
          (b) Nature of Duties. In performing its functions and duties under
this Agreement, Agent is acting solely on behalf of Lenders and its duties are
administrative in nature and it does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for
Lenders, other than as expressly set forth herein and in the other Loan
Documents, or Borrower. Agent shall have no duties, obligations or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Except for information,
notices, reports, and other documents expressly required to be furnished to
Lenders by the Agent hereunder or given to the Agent for the account of or with
copies for Lenders, each Lender shall make its own independent investigation of
the financial condition and affairs of Borrower in connection with the extension
of credit hereunder and shall make its own appraisal of the creditworthiness of
Borrower, and Agent shall have no duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the Closing Date
or at any time or times thereafter. If Agent seeks the consent or approval of
any Lenders to the taking or refraining from taking any action hereunder, then
Agent shall send prior written notice thereof to each Lender. Agent shall
promptly notify (in writing) each Lender any time that the applicable percentage
of Lenders have instructed Agent to act or refrain from acting pursuant hereto.
          (c) Rights, Exculpation, Etc. Neither Agent nor any of its officers,
directors, managers, members, equity owners, employees or agents shall be liable
to any Lender for any action lawfully taken or omitted by them hereunder or
under any of the other Loan Documents, or in connection herewith or therewith.
Notwithstanding the foregoing, Agent shall be obligated on the terms set forth
herein for performance of its express duties and obligations hereunder, and
Agent shall be liable with respect to its own gross negligence or willful
misconduct. Agent shall not be liable for any apportionment or distribution of
payments made by it in good faith, and if any such apportionment or distribution
is subsequently determined to have been made in error, the sole recourse of any
Lender to whom payment was due but not made shall be to recover from other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them). In performing its functions and duties
hereunder, Agent shall exercise the same care which it would in dealing with
loans for its own account. Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties made by Borrower herein or
for the execution, effectiveness, genuineness, validity, enforceability,
collectability, or sufficiency of this Agreement or any of the other Loan
Documents or the transactions contemplated thereby, or for the financial
condition of Borrower. Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions,
or conditions of this Agreement or any of the Loan Documents or the financial
condition of Borrower, or the existence or possible existence of any Default or
Event of Default. Agent may at any time request instructions from Lenders with
respect to any actions or approvals which by the terms of this Agreement or of
any of the other Loan Documents Agent is permitted or required to take or to
grant, and Agent shall be absolutely entitled to refrain from taking any action
or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from taking any action or withholding any approval
under any of the Loan Documents until it shall have received such instructions
from the applicable percentage of Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting under this Agreement or

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any of the other Loan Documents in accordance with the instructions of the
applicable percentage of Lenders and notwithstanding the instructions of
Lenders, Agent shall have no obligation to take any action if it, in good faith
believes that such action exposes Agent or any of its officers, directors,
managers, members, equity owners, employees or agents to any personal liability
unless Agent receives an indemnification reasonably satisfactory to it from
Lenders with respect to such action.
          (d) Reliance. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel, independent accountants,
and other experts selected by Agent in its sole discretion.
          (e) Indemnification. Each Lender, severally and not jointly, agrees to
reimburse and indemnify Agent and its officers, directors, managers, members,
equity owners, employees and agents (to the extent not reimbursed by Borrower or
the Guarantors), ratably according to their respective Pro Rata Share in effect
on the date on which indemnification is sought under this subsection of the
total outstanding obligations (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Pro Rata Share immediately prior
to such date of the total outstanding obligations), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances, or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against Agent or any of its
officers, directors, managers, members, equity owners, employees or agents in
any way relating to or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by Agent under this Agreement or any of
the other Loan Documents; provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
resulting from Agent’s gross negligence or willful misconduct. The obligations
of Lenders under this Article XI-A shall survive the payment in full of the
Obligations and the termination of this Agreement.
          (f) CapitalSource Individually. With respect to the Loans made by it,
and the Notes issued to it, CapitalSource shall have and may exercise the same
rights and powers hereunder and under the other Loan Documents and is subject to
the same obligations and liabilities as and to the extent set forth herein and
the other Loan Documents as any other Lender. The terms “Lenders” or “Requisite
Lenders” or any similar terms shall, unless the context clearly otherwise
indicates, include CapitalSource in its individual capacity as a Lender or one
of the Requisite Lenders. CapitalSource may lend money to, and generally engage
in any kind of banking, trust or other business with Borrower or any subsidiary
of Borrower as if it were not acting as Agent pursuant hereto.
          (g) Successor Agent.
               (i) Resignation. Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty (30) days’
prior written notice to Borrower and Lenders. Such resignation shall take effect
upon the acceptance by a successor Agent of appointment pursuant to clause
(ii) below or as otherwise provided below.
               (ii) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (g)(i) above, Requisite Lenders shall appoint a
successor Agent. If a successor Agent shall not have been so appointed within
said thirty (30) day period, the retiring Agent, upon notice to Borrower, may,
on behalf of Lenders, then appoint a successor Agent who shall serve as Agent
until such time, as Requisite Lenders, appoint a successor Agent as provided
above. If no successor Agent has been

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appointed pursuant to the foregoing within said thirty (30) day period, the
resignation shall become effective and Requisite Lenders shall thereafter
perform all the duties of Agent hereunder, until such time, if any, as Requisite
Lenders appoint a successor Agent as provided above.
               (iii) Successor Agent. Upon the acceptance of any appointment as
Agent under the Loan Documents by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and, upon the earlier of such acceptance or
the effective date of the retiring Agent’s resignation, the retiring Agent shall
be discharged from its duties and obligations under the Loan Documents, except
that any indemnity rights or other rights in favor of such retiring Agent shall
continue. After any retiring Agent’s resignation as Agent under the Loan
Documents, the provisions of this Article XI-A shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under the Loan
Documents.
          (h) Collateral Matters.
               (i) Collateral. Each Lender agrees that any action taken by the
Agent or the Requisite Lenders (or, where required by the express terms of this
Agreement, a greater proportion of Lenders) in accordance with the provisions of
this Agreement or of the other Loan Documents relating to the Collateral, and
the exercise by the Agent or the Requisite Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of Lenders and the Agent. Without limiting the generality of
the foregoing, the Agent shall have the sole and exclusive right and authority
to (i) act as the disbursing and collecting agent for Lenders with respect to
all payments and collections arising in connection herewith and with the Loan
Documents in connection with the Collateral; (ii) execute and deliver each Loan
Document relating to the Collateral and accept delivery of each such agreement
delivered by Borrower or any of its Subsidiaries; (iii) act as collateral agent
for Lenders for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and Liens created or purported to be created by the Loan Documents
relating to the Collateral, and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to such Agent and Lenders with respect to the Collateral under
the Loan Documents relating thereto, applicable law or otherwise.
               (ii) Release of Collateral. Lenders hereby irrevocably authorize
Agent, at its option and in its discretion, to release any Lien granted to or
held by Agent for the benefit of Lenders upon any property covered by this
Agreement or the Loan Documents (A) upon termination of this Agreement and
payment and satisfaction in full of all Obligations; or (B) constituting
property being sold or disposed of outside of Borrowers’ ordinary course of
business if Borrower certifies to Agent that the sale or disposition is made in
compliance with the provisions of this Agreement (and Agent may rely in good
faith conclusively on any such certificate, without further inquiry).
               (iii) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Agent’s authority to act without any specific or further
authorization or consent by Lenders (as set forth in Section 11-A.1(h)(i) and
(ii)), each Lender agrees to confirm in writing, upon request by Borrower, the
authority to release any property covered by this Agreement or the Loan
Documents conferred upon Agent under Section 11-A.1(h)(ii). So long as no Event
of Default is then continuing, upon receipt by Agent of confirmation from the
Requisite Lenders, of its authority to release any particular item or types of
property covered by this Agreement or the Loan Documents, and upon at least five
(5) Business Days prior written request by Borrower, Agent shall (and is hereby
irrevocably authorized by Lenders to) execute such documents as may be necessary
to evidence the release of the

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Liens granted to Agent for the benefit of Lenders herein or pursuant hereto upon
such Collateral; provided, however, that (A) Agent shall not be required to
execute any such document on terms which, in Agent’s opinion, would expose Agent
to liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (B) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of Borrower or any subsidiary of Borrower, in respect of), all
interests retained by Borrower or any subsidiary of Borrower, including, without
limitation, the proceeds of any sale, all of which shall continue to constitute
part of the property covered by this Agreement or the Loan Documents.
               (iv) Absence of Duty. Agent shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered by this
Agreement or the Loan Documents exists or is owned by Borrower or is cared for,
protected or insured or has been encumbered or that the Liens granted to Agent
on behalf of Lenders herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure, or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this Section 11-A.1(h) or in any of the Loan Documents, it being
understood and agreed that in respect of the property covered by this Agreement
or the Loan Documents or any act, omission, or event related thereto, Agent may
act in any manner it may deem appropriate, in its discretion, given Agent’s own
interest in property covered by this Agreement or the Loan Documents as one of
Lenders and that Agent shall have no duty or liability whatsoever to any of the
other Lenders; provided, that Agent shall exercise the same care which it would
in dealing with loans for its own account. Notwithstanding the foregoing, Agent
shall be liable with respect to its own gross negligence or willful misconduct.
          (i) Agency for Perfection. Each Lender hereby appoints Agent as agent
for the purpose of perfecting Lenders’ security interest in Collateral which, in
accordance with Article 9 of the UCC in any applicable jurisdiction, can be
perfected only by possession. Should any Lender (other than Agent) obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent’s request therefor, shall deliver such Collateral to Agent
or in accordance with Agent’s instructions.
          (j) Exercise of Remedies. Except as set forth in Section 11-A.3, each
Lender agrees that it will not have any right individually to enforce or seek to
enforce this Agreement or any Loan Document or to realize upon any collateral
security for the Loans, it being understood and agreed that such rights and
remedies may be exercised only by Agent.
     11-A.2 Consents
          In the event Agent requests the consent of a Lender in a situation
where such Lender’s consent would be required and such consent is denied, then
Agent may, at its option, require such Lender to assign its interest in the
Loans to Agent for a price equal to the then outstanding principal amount
thereof plus accrued and unpaid interest and fees due such Lender, which
interest and fees will be paid when collected from Borrower. In the event that
Agent elects to require any Lender to assign its interest to Agent pursuant to
this Section 11-A.2, Agent will so notify such Lender in writing within
forty-five (45) days following such Lender’s denial, and such Lender will assign
its interest to Agent no later than five (5) days following receipt of such
notice.
     11-A.3 Set Off and Sharing of Payments
          In addition to any rights and remedies now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event

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of Default, each Lender is hereby authorized by Borrower at any time or from
time to time, to the fullest extent permitted by law, with reasonably prompt
subsequent notice to Borrower or to any other Person (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (a) balances (general or special, time or
demand, provisional or final) held by such Lender or such holder at any of its
offices for the account of Borrower or any of its Subsidiaries (regardless of
whether such balances are then due to Borrower or its Subsidiaries), and
(b) other property at any time held or owing by such Lender or such holder to or
for the credit or for the account of Borrower or any of its Subsidiaries,
against and on account of any of the Obligations which are not paid when due;
except that no Lender or any such holder shall exercise any such right without
the prior written notice to Agent; provided, however, that the failure to give
notice to Borrower or to any other Person shall not affect the validity of such
set-off and application. Any Lender which has exercised its right to set off or
otherwise has received any payment on account of the Obligations shall, to the
extent the amount of any such set off or payment exceeds its Pro Rata Share of
payments obtained by all of the Lenders on account of such Obligations, purchase
for cash participations in each such other Lender’s or holder’s Pro Rata Share
of Obligations as would be necessary to cause such Lender to share such excess
with each other Lender or holder in accordance with their respective Pro Rata
Shares; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such purchasing Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery. Borrower agrees, to the fullest extent permitted by law, that
(a) any Lender or holder may exercise its right to set off with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such excess to other Lenders and holders, and (b) any Lender
or holder so purchasing a participation in the Loans made or other Obligations
held by other Lenders or holders may exercise all rights of set-off, bankers’
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender or holder were a direct holder of Loans and other Obligations
in the amount of such participation.
     11-A.4 Disbursement of Funds
          Agent may, on behalf of Lenders, disburse funds to Borrower for
Advances requested. Each Lender shall reimburse Agent on demand for its Pro Rata
Share of all funds disbursed on its behalf by Agent, or if Agent so requests,
each Lender will remit to Agent its Pro Rata Share of any Advance before Agent
disburses same to Borrower. If Agent elects to require that funds be made
available prior to disbursement to Borrower, Agent shall advise each Lender by
telephone, telex or telecopy of the amount of such Lender’s Pro Rata Share of
such requested Advance no later than one (1) Business Day prior to the funding
date applicable thereto, and each such Lender shall pay Agent such Lender’s Pro
Rata Share of such requested Loan, in same day funds, by wire transfer to
Agent’s account not later than 3:00 p.m. (Eastern Time) on the day prior to the
funding date. If any Lender fails to pay the amount of its Pro Rata Share
forthwith upon Agent’s demand, Agent shall promptly notify Borrower, and
Borrower shall immediately repay such amount to Agent. Any repayment required
pursuant to this Section 11-A.4 shall be without premium or penalty. Nothing in
this Section 11-A.4 or elsewhere in this Agreement or the other Loan Documents,
including without limitation the provisions of Section 11-A.5, shall be deemed
to require Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights that Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.
     11-A.5 Settlements; Payments and Information
          (a) Advances and Payments; Interest and Fee Payments.
               (i) The amount outstanding pursuant to Advances may fluctuate
from day to day through Agent’s disbursement of funds to, and receipt of funds
from, Borrower. In order to minimize

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the frequency of transfers of funds between Agent and each Lender
notwithstanding terms to the contrary set forth in Section 11-A.4, Advances and
repayments may be settled according to the procedures described in
Sections 11-A.5(a)(ii) and 11-A.5(a)(iii) of this Agreement. Payments of
principal, interest and fees in respect of the Loans will be settled, in
accordance with each Lender’s Pro Rata Share on the first Business Day after
such payments are received. Notwithstanding these procedures, each Lender’s
obligation to fund its Pro Rata Share of any advances made by Agent to Borrower
will commence on the date such advances are made by Agent. Such payments will be
made by such Lender without set-off, counterclaim or reduction of any kind.
               (ii) Once each week, or more frequently (including daily), if
Agent so elects (each such day being a “Settlement Date”), Agent will advise
each Lender by 1 p.m. (Eastern Time) by telephone, telex, or telecopy of the
amount of each such Lender’s Pro Rata Share of the outstanding Advances. In the
event payments are necessary to adjust the amount of such Lender’s share of the
Advances to such Lender’s Pro Rata Share of the Advances, the party from which
such payment is due will pay the other, in same day funds, by wire transfer to
the other’s account not later than 3:00 p.m. (Eastern Time) on the Business Day
following the Settlement Date.
               (iii) On the first Business Day of each month (“Interest
Settlement Date”), Agent will advise each Lender by telephone, telefax or
telecopy of the amount of interest and fees charged to and collected from
Borrower for the proceeding month in respect of the Advances. Provided that such
Lender has made all payments required to be made by it under this Agreement,
Agent will pay to such Lender, by wire transfer to such Lender’s account (as
specified by such Lender on Schedule 1 of this Agreement as amended by such
Lender from time to time after the date hereof pursuant to the notice provisions
contained herein or in the applicable Lender Addition Agreement) not later than
3 p.m. (Eastern Time) on the next Business Day following the Interest Settlement
Date such Lender’s share of such interest and fees.
          (b) Availability of Lenders’ Pro Rata Share.
               (i) Unless Agent has been notified by a Lender prior to any
proposed funding date of such Lender’s intention not to fund its Pro Rata Share
of the Advance amount requested by Borrower, Agent may assume that such Lender
will make such amount available to Agent on the proposed funding date or the
Business Day following the next Settlement Date, as applicable. If such amount
is not, in fact, made available to Agent by such Lender when due, Agent will be
entitled to recover such amount on demand from such Lender without set-off,
counterclaim, or deduction of any kind.
               (ii) Nothing contained in this Section 11-A.5(b) will be deemed
to relieve a Lender of its obligation to fulfill its commitments or to prejudice
any rights Agent or Borrower may have against such Lender as a result of any
default by such Lender under this Agreement.
          (c) Return of Payments.
               (i) If Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Agent from Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender without set-off,
counterclaim or deduction of any kind.
               (ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to Borrower or paid to any other
person pursuant to any solvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement, Agent will not be

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required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
     11-A.6 Dissemination of Information
          The Agent will distribute promptly to each Lender copies of all
notices, schedules, reports, projections, financial statements, agreements and
other material and other information, including, but not limited to, Borrower’s
requests for Advances and financial and reporting information received from
Borrower or its Subsidiaries or generated by a third party (and excluding only
internal information generated by CapitalSource for its own use as a Lender or
as Agent), as provided for in this Agreement and the other Loan Documents as
received by the Agent. The Agent shall promptly give notice to Lenders of the
receipt or sending of any notice, schedule, report, projection, financial
statement or other document or information pursuant to this Agreement or any of
the other Loan Documents and shall promptly forward a copy thereof to each
Lender. Agent shall request information from Borrower or its Subsidiaries as
Lenders may request from time to time. Agent shall not be liable to Lenders for
any failure to comply with its obligations under this Section 11-A.6, except to
the extent that such failure is attributable to Agent’s gross negligence or
willful misconduct.
XI-B. BORROWING AGENCY
     11-B.1 Borrowing Agency Provisions
          (a) Each Borrower hereby irrevocably designates ASG to be its attorney
and agent and in such capacity to borrow, sign and endorse notes, and execute
and deliver all instruments, documents, writings and further assurances now or
hereafter required hereunder, on behalf of such Borrower or Borrowers, and
hereby authorizes Agent to pay over or credit all loan proceeds hereunder in
accordance with the request of ASG.
          (b) The handling of this credit facility as a co-borrowing facility
and the designation by each Borrower of ASG as its borrowing agent in the manner
set forth in this Agreement is solely as an accommodation to Borrowers and at
their request. None of Agent, any L/C Bank or any Lender shall incur liability
to Borrowers as a result thereof. To induce Agent and Lenders to do so and in
consideration thereof, each Borrower hereby indemnifies Agent, each L/C Bank and
each Lender and holds Agent, each L/C Bank and each Lender harmless from and
against any and all liabilities, expenses, losses, damages and claims of damage
or injury asserted against Agent, any L/C Bank or any Lender by any Person
arising from or incurred by reason of the handling of the financing arrangements
of Borrowers as provided herein, reliance by Agent or any Lender on any request
or instruction from ASG or any other action taken by Agent or any Lender with
respect to this Section 11-B except due to willful misconduct or gross
negligence by the indemnified party.
          (c) All Obligations shall be joint and several, and each Borrower
shall make payment upon the maturity of the Obligations by acceleration or
otherwise, and such obligation and liability on the part of each Borrower shall
in no way be affected by any extensions, renewals and forbearance granted by
Agent or any Lender to any Borrower, failure of Agent or any Lender to give any
Borrower notice of borrowing or any other notice, any failure of Agent or any
Lender to pursue or preserve its rights against any Borrower, the release by
Agent or any Lender of any Collateral now or thereafter acquired from any
Borrower, and such agreement by each Borrower to pay upon any notice issued
pursuant thereto is unconditional and unaffected by prior recourse by Agent or
any Lender to the other Borrowers or any Collateral for such Borrower’s
Obligations or the lack thereof.

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     11-B.2 Waiver of Subrogation
          Each Borrower expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution of any other claim which
such Borrower may now or hereafter have against the other Borrowers or other
Person directly or contingently liable for the Obligations hereunder, or against
or with respect to the other Borrowers’ property (including, without limitation,
any property which is Collateral for the Obligations), arising from the
existence or performance of this Agreement, until termination of this Agreement
and repayment in full of the Obligations.
XII. MISCELLANEOUS
     12.1 Governing Law; Jurisdiction; Service of Process; Venue
          (a) The Loan Documents, pursuant to New York General Obligations Law
Section 5-1401, shall be governed by and construed in accordance with the laws
of the State of New York without giving effect to its choice of law provisions
that would result in the application of the laws of a different jurisdiction.
          (b) By execution and delivery of each Loan Document to which it is a
party, each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Agent or the Lenders
may otherwise have to bring any action or proceeding relating to this Agreement
against Borrower or its properties in the courts of any jurisdiction.
          (c) Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (a) of this Section 12.1. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
          (d) Each of the parties hereto waives personal service of process and
irrevocably consents to service of process in the manner provided for notices in
Section 12.5 hereof. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
     12.2 Successors and Assigns; Assignments and Participation; New Lenders
          (a) Each Lender may at any time assign all or a portion of its rights
and delegate all or a portion of its obligations under this Agreement and the
other Loan Documents (including all its rights and obligations with respect to
the Loans) to one or more Persons (a “Transferee”); provided, that if
CapitalSource, in its capacity as Agent or Lender is the assignor of such rights
and obligations, then such Transferee shall not be known to CapitalSource to be
principally engaged in the provision of medical services to inmates at
correctional facilities (and provided, further, that such restriction is binding
upon

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CapitalSource only and is not binding on any successor Agent or Lender), and
such assigning Lender shall execute and deliver to Agent for acceptance and
recording in the Register, a Lender Addition Agreement, satisfactory to Agent.
Agent shall give Borrower notice if Agent sells or assigns its rights and
obligations hereunder. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Lender Addition
Agreement, (i) the Transferee thereunder shall be a party hereto and, to the
extent provided in such Lender Addition Agreement, shall have the same rights,
benefits and obligations as it would if it were a Lender hereunder, and (ii) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its Commitment or assigned portion thereof, as the case may be, to the extent
that such obligations shall have been expressly assumed by the Transferee
pursuant to such Lender Addition Agreement. Borrower hereby acknowledges and
agrees that any assignment will give rise to a direct obligation of Borrower to
the Transferee and that the Transferee shall be considered to be a “Lender”
hereunder. Borrower may not sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including Borrower’s rights, title, interests, remedies,
powers, and duties hereunder or thereunder.
          (b) Each Lender may at any time sell participations in all or any part
of its rights and obligations under this Agreement and the other Loan Documents
(including all its rights and obligations with respect to the Loans) to one or
more Persons (a “Participant”), provided that if Agent is the seller of any such
participation, then such Participant shall not be known to Agent to be
principally engaged in the provision of medical services to inmates at
correctional facilities (and provided, further, that such restriction is binding
upon CapitalSource Bank as Agent only and is not binding on any successor
Agent). In the event of any such sale by a Lender of a participation to a
Participant, such Lender’s obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan (and any Note evidencing such Loan) for all purposes under this
Agreement and the other Loan Documents and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and the other Loan
Documents. Any agreement pursuant to which any Lender shall sell any such
participation shall provide that such Lender shall retain the sole right and
responsibility to exercise such Lender’s rights and enforce each of the
Borrower’s obligations hereunder, including the right to consent to any
amendment, supplement, modification or waiver of any provision of this Agreement
or any of the other Loan Documents; provided, that such participation agreement
may provide that such Lender will not agree, without the consent of the
Participant, to any amendment, supplement, modification or waiver of: (i) any
reduction in the principal amount, interest rate or fees payable with respect to
any Loan in which such holder participates; (ii) any extension of the
termination date of this Agreement or the date fixed for any payment of
principal, interest or fees payable with respect to any Loan in which such
holder participates; and (iii) any release of all or substantially all of the
Collateral (other than in accordance with the terms of this Agreement or the
Loan Documents). Borrower hereby acknowledges and agrees that the Participant
under each participation shall, solely for the purposes of Sections 11-A.5 and
12.4 of this Agreement be considered to be a “Lender” hereunder.
          (c) The Agent, on behalf of the Borrower, shall maintain at its
address referred to in Section 12.5 a copy of each Lender Addition Agreement
delivered to it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitment of, and the principal amount of
the Loans owing to, and the Notes evidencing such Loans owned by, each Lender
from time to time. Notwithstanding anything in this Agreement to the contrary,
each of the Borrower, the Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loan, the Notes and the
Commitment recorded therein for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

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          (d) Notwithstanding anything in this Agreement to the contrary, no
assignment under Subsection 12.2(a) of any rights or obligations under or in
respect of the Loans or any Notes evidencing such Loans shall be effective
unless and until the Agent shall have recorded the assignment pursuant to
Subsection 12.2(c). Upon its receipt of a Lender Addition Agreement executed by
an assigning Lender and a Transferee, the Agent shall (i) promptly accept such
Lender Addition Agreement and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give prompt
notice of such acceptance and recordation to the Lenders and the Borrower. On or
prior to such effective date, the assigning Lender shall surrender any
outstanding Notes held by it all or a portion of which are being assigned, and
the Borrower, at its own expense, shall, upon the request of the Agent by the
assigning Lender or the Transferee, as applicable, execute and deliver to the
Agent new Notes to reflect the interest held by the assigning Lender and its
Transferee.
          (e) Except as otherwise provided in this Section 12.2 no Lender shall,
as between Borrower and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
granting of participation in, all or any part of the Loans or other Obligations
owed to such Lender. Each Lender may furnish any information concerning Borrower
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants);
provided, however, that prior to the disclosure by a Lender of information known
to the Lender to be confidential and proprietary information of Borrower, Lender
shall inform Borrower of such pending disclosure and shall afford Borrower, to
the extent possible under the circumstances, the opportunity to obtain a
confidentiality agreement from the Person to whom such disclosure is proposed to
be made.
          (f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement, including, without limitation, the Loans owing
to it and any Notes held by it.
          (g) Borrower agrees to use its commercially reasonable best efforts to
assist any Lender (at Lender’s expense) in assigning or selling participations
in all or any part of any Loans made by such Lender to another Person identified
by such Lender.
          (h) Borrower acknowledges and agrees that each Lender at any time and
from time to time may divide and restate any Note.
          (i) Notwithstanding anything in this Agreement to the contrary,
(i) CapitalSource and its Affiliates shall not be required to execute and
deliver a Lender Addition Agreement in connection with any transaction involving
its Affiliates or lenders, (ii) no lender to or funding source of CapitalSource
or its Affiliates shall be considered a Transferee and (iii) there shall be no
limitation or restriction on CapitalSource’s ability to assign or otherwise
transfer any Loan Document to any such Affiliate or lender; provided, however,
CapitalSource shall continue to be liable as a “Lender” under the Loan Documents
unless such Affiliate or lender executes a Lender Addition Agreement and thereby
becomes a “Lender.”
     12.3 Application of Payments
          To the extent that any payment made or received with respect to the
Obligations is subsequently invalidated, determined to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other Person under any Debtor Relief Law,
common law or equitable cause or any other law, then the Obligations intended to
be satisfied by such payment shall be revived and shall continue as if such
payment had not been received by Agent or any

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Lender. Any payments with respect to the Obligations received shall be credited
and applied in such manner and order as Agent shall decide in its sole
discretion.
     12.4 Indemnity
          Borrowers jointly and severally shall indemnify Agent and each Lender,
their Affiliates and their respective managers, members, officers, employees,
Affiliates, agents, representatives, successors, assigns, accountants and
attorneys (collectively, the “Indemnified Persons”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, reasonable fees and disbursements of counsel and reasonable
in-house documentation and diligence fees and reasonable legal expenses) which
may be imposed on, incurred by or asserted against any Indemnified Person with
respect to or arising out of, or in any litigation, proceeding or investigation
instituted or conducted by any Person with respect to any aspect of, or any
transaction contemplated by or referred to in, or any matter related to, any
Loan Document or any agreement, document or transaction contemplated thereby,
whether or not such Indemnified Person is a party thereto, except to the extent
that any of the foregoing arises out of the gross negligence or willful
misconduct of such Indemnified Person. If any Indemnified Person uses in-house
counsel for any purpose for which Borrower is responsible to pay or indemnify,
Borrower expressly agrees that its indemnification obligations include
reasonable charges for such work commensurate with the fees that would otherwise
be charged by outside legal counsel selected by such Indemnified Person in its
sole discretion for the work performed; provided, however, that Borrower shall
be provided with a copy of such records of the hours spent in connection with
such work as Lender maintains in its ordinary course of business. Agent agrees
to give Borrower reasonable notice of any event of which Agent becomes aware for
which indemnification may be required under this Section 12.4, and Agent may
elect (but is not obligated) to direct the defense thereof; provided, that the
selection of counsel shall be subject to Borrower’s consent, which consent shall
not be unreasonably withheld or delayed. Any Indemnified Person may, in its
reasonable discretion, take such actions as it deems necessary and appropriate
to investigate, defend or settle any event or take other remedial or corrective
actions with respect thereto as may be necessary for the protection of such
Indemnified Person or the Collateral. Notwithstanding the foregoing, if any
insurer agrees to undertake the defense of an event (an “Insured Event”), Agent
agrees not to exercise its right to select counsel to defend the event if that
would cause Borrower’s insurer to deny coverage; provided, however, that Agent
reserves the right to retain counsel to represent any Indemnified Person with
respect to an Insured Event at its sole cost and expense. To the extent that
Agent or any Lender obtains recovery from a third party other than an
Indemnified Person of any of the amounts that Borrower has paid to Agent or any
Lender pursuant to the indemnity set forth in this Section 12.4, then Agent
and/or Lender shall promptly pay to Borrower the amount of such recovery.
Without limiting any of the foregoing, Borrowers jointly and severally indemnify
the Indemnified Parties for all claims for brokerage fees or commissions (other
than claims of a broker with whom such Indemnified Party has directly contracted
in writing) which may be made in connection with respect to any aspect of, or
any transaction contemplated by or referred to in, or any matter related to, any
Loan Document or any agreement, document or transaction contemplated thereby.
     12.5 Notice
          Any notice or request under any Loan Document shall be given to any
party to this Agreement at such party’s address set forth beneath its signature
on the signature page to this Agreement, or at such other address as such party
may hereafter specify in a notice given in the manner required under this
Section 12.5. Any notice or request hereunder shall be given only by, and shall
be deemed to have been received upon (each, a “Receipt”): (i) registered or
certified mail, return receipt requested, on the date on which such notice was
received as indicated in such return receipt, (ii) delivery by a nationally
recognized overnight courier, one (1) Business Day after deposit with such
courier (costs prepaid), or (iii)

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facsimile or electronic transmission, in each case upon telephone or further
electronic communication from the recipient acknowledging receipt (whether
automatic or manual from recipient), as applicable.
     12.6 Severability; Captions; Counterparts; Facsimile Signatures
          If any provision of any Loan Document is adjudicated to be invalid
under applicable laws or regulations, such provision shall be inapplicable to
the extent of such invalidity without affecting the validity or enforceability
of the remainder of the Loan Documents which shall be given effect so far as
possible. The captions in the Loan Documents are intended for convenience and
reference only and shall not affect the meaning or interpretation of the Loan
Documents. The Loan Documents may be executed in one or more counterparts (which
taken together, as applicable, shall constitute one and the same instrument) and
by facsimile transmission, which facsimile signatures shall be considered
original executed counterparts. Each party to this Agreement agrees that it will
be bound by its own facsimile signature and that it accepts the facsimile
signature of each other party.
     12.7 Expenses
          Borrower shall pay, whether or not the Closing occurs, all costs and
expenses incurred by Lenders and/or their Affiliates, including, without
limitation, documentation and diligence fees and expenses, all search, audit,
appraisal, recording, reasonable professional and filing fees and expenses and
all other actual out-of-pocket charges and expenses (including, without
limitation, UCC and judgment and tax lien searches and UCC filings and fees for
post-Closing UCC and judgment and tax lien searches and wire transfer fees and
audit expenses), and reasonable attorneys’ fees and expenses, (i) in any effort
to enforce, protect or collect payment of any Obligation or to enforce any Loan
Document or any related agreement, document or instrument, (ii) in connection
with entering into, negotiating, preparing, reviewing and executing the Loan
Documents and/or any related agreements, documents or instruments, (iii) arising
in any way out of administration of the Obligations or the taking or refraining
from taking by Agent of any action requested by Borrower, (iv) in connection
with instituting, maintaining, preserving, enforcing and/or foreclosing on
Agent’s or the benefit of itself and Lenders, Liens in any of the Collateral or
securities pledged under the Loan Documents, whether through judicial
proceedings or otherwise, (v) in defending or prosecuting any actions, claims or
proceedings arising out of or relating to Agent’s and Lenders’ transactions with
Borrower, (vi) in seeking, obtaining or receiving any advice with respect to
enforcing its rights and obligations under any Loan Document and any related
agreement, document or instrument, (vii) arising out of or relating to any
Default or Event of Default, (viii) in connection with all actions, visits,
audits and inspections undertaken by Agent or its Affiliates pursuant to the
Loan Documents, and/or (ix) in connection with any modification, restatement,
supplement, amendment, waiver or extension of any Loan Document and/or any
related agreement, document or instrument. All of the foregoing shall be charged
to Borrower’s account and shall be part of the Obligations. If Agent or any
Lender uses in-house counsel for any purpose under any Loan Document which
Borrower is responsible to pay or indemnify, Borrower expressly agrees that its
Obligations include reasonable charges for such work commensurate with the
allocable costs of such in-house counsel. Without limiting the foregoing,
Borrower shall pay all taxes (other than taxes based upon or measured by each
Lender’s income or revenues or any personal property tax), if any, in connection
with the issuance of any Note and the filing and/or recording of any documents
and/or financing statements.
     12.8 Entire Agreement
          This Agreement and the other Loan Documents to which Borrower is a
party constitute the entire agreement between Borrower, Agent and Lenders with
respect to the subject matter hereof and thereof, and supersede all prior
agreements and understandings, if any, relating to the subject matter hereof or
thereof. Any promises, representations, warranties or guarantees not herein
contained and

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hereinafter made shall have no force and effect unless in writing signed by
Borrower, Agent and such Lenders. No provision of this Agreement may be changed,
modified, amended, restated, waived, supplemented, discharged, canceled or
terminated orally or by any course of dealing or in any other manner other than
by an agreement in writing signed by Borrower, Agent and Lenders (or Requisite
Lenders, as appropriate). Each party hereto acknowledges that it has been
advised by counsel in connection with the negotiation and execution of this
Agreement and is not relying upon oral representations or statements
inconsistent with the terms and provisions hereof.
     12.9 Agent Approvals
          Unless expressly provided herein to the contrary, any approval,
consent, waiver or satisfaction of Agent or Lenders with respect to any matter
that is subject of any Loan Document may be granted or withheld by Agent or
Lenders, as applicable, in their Permitted Discretion.
     12.10 Confidentiality and Publicity
          (a) Borrower agrees, and agrees to cause each of its Affiliates,
(i) not to transmit or disclose provisions of any Loan Document to any Person
(other than to Borrower’s advisors and officers on a need-to-know basis or as
otherwise may be required by law) without Lender’s prior written consent,
(ii) to inform all Persons of the confidential nature of the Loan Documents and
to direct them not to disclose the same to any other Person and to require each
of them to be bound by these provisions. Borrower agrees to submit to Agent and
Lenders, and Agent and Lenders reserve the right to review and approve all press
releases and other written materials for similar publication purposes that
Borrower or any of its Affiliates prepares that contain Agent’s or Lenders’
names or describe or refer to any Loan Document, any of the terms thereof or any
of the transactions contemplated thereby. Borrower shall not, and shall not
permit any of its Affiliates to, use Agent or Lenders’ names (or the name of any
of Agent or Lenders’ Affiliates) in connection with any of its business
operations, including without limitation, advertising, marketing or press
releases or such other similar purposes, without Agent or Lenders’ (as
applicable) prior written consent. Nothing contained in any Loan Document is
intended to permit or authorize Borrower or any of its Affiliates to contract on
behalf of Agent or Lenders.
          (b) Borrower hereby agrees that Agent and Lenders or any Affiliate of
Agent and Lenders may (i) disclose a general description of transactions arising
under the Loan Documents for advertising, marketing or other similar purposes
and (ii) use Borrower’s or Guarantor’s name, logo or other indicia germane to
such party in connection with such advertising, marketing or other similar
purposes.
     12.11 Release of Agent and Lenders
          (a) Notwithstanding any other provision of any Loan Document, Borrower
voluntarily, knowingly, unconditionally and irrevocably, with specific and
express intent, for and on behalf of itself, it managers, members, directors,
officers, employees, shareholders, Affiliates, agents, representatives,
accountants, attorneys, successors and assigns and their respective Affiliates
(collectively, the “Releasing Parties”), hereby fully and completely releases
and forever discharges the Indemnified Parties and any other Person or insurer
which may be responsible or liable for the acts or omissions of any of the
Indemnified Parties, or who may be liable for the injury or damage resulting
therefrom (collectively, with the Indemnified Parties, the “Released Parties”),
of and from any and all actions, causes of action, damages, claims, obligations,
liabilities, costs, expenses and demands of any kind whatsoever, at law or in
equity, matured or unmatured, vested or contingent, that any of the Releasing
Parties has against any of the Released Parties as of the date of the Closing.
Borrower acknowledges that the foregoing release is a material inducement to
Agent’s and each Lender’s decision to extend to

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Borrower the financial accommodations hereunder and has been relied upon by
Agent and each Lender in agreeing to make the Loans.
          (b) Borrower hereby further specifically waives any rights that it may
have under Section 1542 of the California Civil Code (to the extent applicable),
which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR,” and further waives any similar rights under
applicable laws.
     12.12 Agreement Controls
          In the event of any inconsistency between this Agreement and any of
the other Loan Documents, the terms of this Agreement shall control.
     12.13 Patriot Act
          Agent hereby notifies Borrower that pursuant to the requirements of
the Patriot Act, it may be required to obtain, verify and record information
that identifies Borrower, which information includes the name and address of
Borrower and other information that will allow Agent to identify Borrower in
accordance with the Patriot Act.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, each of the parties has duly executed this
Revolving Credit and Security Agreement as of the date first written above.

            BORROWER:

AMERICA SERVICE GROUP INC.
      By:   /s/ Michael W. Taylor         Name:   Mr. Michael Taylor       
Title:   Chief Financial Officer and Executive Vice President

105 Westpark Drive, Suite 200
Brentwood, TN 37027
Phone: 615-376-1376
Fax: 615-376-1309
E-mail: Taylor@asgr.com        PRISON HEALTH SERVICES, INC.
      By:   /s/ Michael W. Taylor         Name:   Mr. Michael Taylor       
Title:   Executive Vice President

105 Westpark Drive, Suite 200
Brentwood, TN 37027
Phone: 615-376-1376
Fax: 615-376-1309
E-mail: Taylor@asgr.com        PRISON HEALTH SERVICES OF INDIANA, LLC
      By:   PRISON HEALTH SERVICES, INC., its General
Manager             By:   /s/ Michael W. Taylor         Name:   Mr. Michael
Taylor        Title:   Executive Vice President

105 Westpark Drive, Suite 200
Brentwood, TN 37027
Phone: 615-376-1376
Fax: 615-376-1309
E-mail: Taylor@asgr.com   

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            CORRECTIONAL HEALTH SERVICES, LLC
      By:   PRISON HEALTH SERVICES, INC., its General
Manager             By:   /s/ Michael W. Taylor         Name:   Mr. Michael
Taylor        Title:   Executive Vice President

105 Westpark Drive, Suite 200
Brentwood, TN 37027
Phone: 615-376-1376
Fax: 615-376-1309
E-mail: Taylor@asgr.com        SECURE PHARMACY PLUS, LLC
      By:   PRISON HEALTH SERVICES, INC., its General
Manager             By:   /s/ Michael W. Taylor         Name:   Mr. Michael
Taylor
        Title:   Executive Vice President

105 Westpark Drive, Suite 200
Brentwood, TN 37027
Phone: 615-376-1376
Fax: 615-376-1309
E-mail: Taylor@asgr.com   

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            AGENT AND LENDER:

CAPITALSOURCE BANK
      By:   /s/ Humberto Espada         Name:   Humberto Espada        Title:  
Bank Officer

CapitalSource Bank
4445 Willard Avenue, 12th Floor
Chevy Chase, MD 20815
Attention: Credit Administration
Telephone: (301) 841-2700
FAX: (301) 841-2340
E-MAIL:   

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EXHIBITS

     
A
  Borrowing Certificate

SCHEDULES

     
1
  Lenders/Commitments
2.4
  Borrower’s Accounts for Revolving Facility
2.12
  Existing Letters of Credit
5.2
  Required Consents
5.3
  Subsidiaries; Authorized and Issued Capital Stock; Capitalization; Directors,
Members, Managers and/or Partners; Joint Venture and Partnership Arrangements
5.4
  Owned or Leased Real Properties; Other Leased or Licensed Assets
5.5
  Other Agreements
5.6
  Litigation
5.8
  Taxes Contested in Good Faith
5.11
  Intellectual Property
5.15
  Existing Indebtedness
5.17
  Insurance Policies
5.18A
  Corporate Names
5.18B
  Place of Business/Chief Executive Office
5.22
  Performance and Payment Bonds
6.8
  Post Closing Obligations
7.2
  Permitted Indebtedness
7.3
  Permitted Liens
7.4
  Investments; New Facilities or Collateral; Subsidiaries
7.6
  Transactions with Affiliates
7.9
  Contingent Obligations

 

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ANNEX I
FINANCIAL COVENANTS
1) Minimum EBITDA
     As of the end of each calendar quarter, ASG (on a consolidated basis) shall
not permit its EBITDA for the Test Period ending on the date of such
determination to be less than $8,000,000.
2) Pre-Distribution Fixed Charge Coverage Ratio (EBITDA/Adjusted Fixed Charges)
     As of the end of each calendar quarter, the Adjusted Fixed Charge Ratio as
measured for the Test Period shall not be less than 1.75 to 1.0.
3) Post-Distribution Fixed Charge Coverage Ratio (EBITDA/Fixed Charges)
     (a) If, as of the end of each calendar quarter, the average unused
Availability for such calendar quarter plus the average Net Cash for such
calendar quarter is greater than or equal to $20,000,000, then the Fixed Charge
Coverage Ratio as measured for the Test Period shall not be less than 1.25 to
1.0.
     (b) If, as of the end of each calendar quarter, the average unused
Availability for such calendar quarter plus the average Net Cash for such
calendar quarter is less than $20,000,000, then the Fixed Charge Coverage Ratio
as measured for the Test Period shall not be less than 1.50 to 1.0.
     For purposes of the covenants set forth in this Annex I, the terms listed
below shall have the following meanings:
     “Adjusted Fixed Charge Coverage Ratio” shall mean, for Borrower on a
consolidated basis, the ratio of (a) EBITDA for the Test Period, to (b) Adjusted
Fixed Charges for the Test Period.
     “Adjusted Fixed Charges” shall mean the sum of the following: (a) Total
Debt Service, (b) Capital Expenditures, and (c) cash income taxes paid or
accrued. For the avoidance of doubt, the definition of “Adjusted Fixed Charges”
shall not include cash dividends paid or accrued or declared.
     “Capital Expenditures” shall mean, for any Test Period, the sum (without
duplication) of all expenditures (whether paid in cash or accrued as
liabilities) during the Test Period that are or should be treated as capital
expenditures under GAAP.
     “EBITDA” shall mean, for any Test Period, the sum, without duplication, of
the following for Borrower, on a consolidated basis: Net Income determined in
accordance with GAAP, plus, (a) Interest Expense, (b) any provision for taxes
based on income or profit that was deducted in computing Net Income,
(c) depreciation expense, (d) amortization expense, (e) all other non-cash,
non-recurring charges and expenses, excluding accruals for cash expenses made in
the ordinary course of business, and (f) loss from any sale of assets, other
than sales in the ordinary course of business, all of the foregoing determined
in accordance with GAAP, minus (a) gains from any sale of assets, other than
sales in the ordinary course of business and (b) other extraordinary or
non-recurring gains.
     “Fixed Charge Coverage Ratio” shall mean, for Borrower on a consolidated
basis, the ratio of (a) EBITDA for the Test Period, to (b) Fixed Charges for the
Test Period.

Annex I-1

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     “Fixed Charges” shall mean, the sum of the following: (a) Total Debt
Service, (b) Capital Expenditures, (c) cash income taxes paid or accrued, and
(d) cash dividends paid or accrued or declared.
     “Interest Expense” shall mean, for any Test Period, total interest expense
(including expense attributable to Capital Leases in accordance with GAAP) with
respect to all outstanding Indebtedness including capitalized interest net of
interest income.
     “Net Cash” shall mean unrestricted cash on hand minus the outstanding
balance under the Revolving Facility.
     “Net Income” shall mean, the net income (or loss) determined in conformity
with GAAP, provided that there shall be excluded (i) the income (or loss) of any
Person in which any other Person (other than any Borrower) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to a Borrower by such Person, (ii) the income (or loss) of any Person
accrued prior to the date it becomes a Borrower or is merged into or
consolidated with a Borrower or that Person’s assets are acquired by a Borrower,
(iii) the income of any Subsidiary of Borrower to the extent that the
declaration or payment of dividends or similar distributions of that income by
that Subsidiary is not at the time permitted by operation of the terms of the
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) compensation expense
resulting from the issuance of capital stock, stock options or stock
appreciation rights issued to former or current employees, including officers,
of a Borrower, or the exercise of such options or rights, in each case to the
extent the obligation (if any) associated therewith is not expected to be
settled by the payment of cash by a Borrower or any affiliate thereof, and
(v) compensation expense resulting from the repurchase of capital stock, options
and rights described in clause (iv) of this definition of Net Income.
     “Test Period” shall mean the twelve most recent calendar months then ended
(taken as one accounting period), or such other period as specified in the
Agreement or any Annex thereto.
     “Total Debt Service” shall mean the sum of (i) scheduled or other required
payments of principal on Indebtedness, and (ii) Interest Expense (less
amortization of loan arrangement fees and all other non-cash charges to the
extent included in Interest Expense for GAAP purposes), in each case for such
period.

Annex I-2

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APPENDIX A
DEFINITIONS
     “Account Debtor” shall mean any Person who is obligated under an Account.
     “Accounts” shall mean all “accounts” (as defined in the UCC) of Borrower
(or, if referring to another Person, of such other Person), including without
limitation, accounts, accounts receivables, monies due or to become due and
obligations in any form (whether arising in connection with contracts, contract
rights, instruments, general intangibles or chattel paper), in each case whether
arising out of goods sold or services rendered or from any other transaction and
whether or not earned by performance, now or hereafter in existence, and all
documents of title or other documents representing any of the foregoing, and all
collateral security and guaranties of any kind, now or hereafter in existence,
given by any Person with respect to any of the foregoing.
     “Advances” shall mean a borrowing under the Revolving Facility, including
without limitation all Funded L/C Exposure, any other borrowings under the
Revolving Facility (including, but not limited to, Automatic Advances), or any
amounts paid by Agent or any Lender on behalf of Borrower or any Guarantor under
any Loan Document.
     “Affiliate” shall mean, as to any Person, any other Person (a) that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person, (b) who is a
director or an executive officer (i) of such Person, (ii) of any Subsidiary of
such Person, or (iii) of any Person described in clause (a) above with respect
to such Person, or (c) which directly or indirectly through one or more
intermediaries, is the beneficial or record holder of twenty-five percent (25%)
or more of any class of the outstanding voting stock, securities or other equity
or ownership interests of such Person. For purposes of this definition, the term
“control” (and the correlative term, “controlled by”) shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies, whether through ownership of securities or other
interests, by contract or otherwise.
     “Agent Collateral Account” means a general interest bearing deposit account
established at and maintained by Agent in the name of and for the benefit of the
Agent on behalf of the Lenders and under the exclusive dominion and control of
the Agent, into which Collateral in the form of cash shall be deposited for
purposes of collateralizing Letter of Credit obligations as set forth herein,
and as to which the Administrative Agent has “control” pursuant to Section 9-104
of the UCC.
     “Applicable Rate” shall mean the interest rates applicable from time to
time to Loans under the Agreement.
     “Availability” shall have the meaning assigned to it in Section 2.1(a)
hereof.
     “Borrowing Base” shall mean, as of any date of determination, the value of
Eligible Receivables, after applying liquidity factors, reserves permitted under
this Agreement, and the advance rate, as determined with reference to the most
recent Borrowing Certificate and otherwise in accordance with the Agreement;
provided, however, that if as of such date the most recent Borrowing Certificate
is of a date more than four (4) Business Days before or after such date, the
Borrowing Base shall be determined by Agent consistent with this Agreement.
     “Borrowing Certificate” shall mean a Borrowing Certificate substantially in
the form of Exhibit A hereto.

Appendix A-1

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     “Business Day” shall mean any day other than a Saturday, Sunday or other
day on which the Federal Reserve or Agent is closed.
     “Capital Lease” shall mean, as to any Person, a lease of any interest in
any kind of property or asset by that Person as lessee that is, should be or
should have been recorded as a “capital lease” in accordance with GAAP.
     “Capitalized Lease Obligations” shall mean all obligations of any Person
under Capital Leases, in each case, taken at the amount thereof accounted for as
a liability in accordance with GAAP.
     “Change of Control” shall mean, with respect to any Person, the occurrence
of any of the following: (i) a merger, consolidation, reorganization,
recapitalization or share or interest exchange, sale or transfer or any other
transaction or series of transactions (other than with another Borrower or
Guarantor) in which its stockholders, managers, partners or interest holders
immediately prior to such transaction or series of transactions receive, in
exchange for the stock or interests owned by them, cash, property or securities
of the resulting or surviving entity or any Affiliate thereof, and, as a result
thereof, Persons who, individually or in the aggregate, were holders of 50% or
more of its voting stock, securities or equity, partnership or ownership
interests immediately prior to such transaction or series of transactions hold
less than 50% of the voting stock, securities or other equity, partnership or
ownership interests of the resulting or surviving entity or such Affiliate
thereof, calculated on a fully diluted basis, or (ii) a direct or indirect sale,
transfer or other conveyance or disposition, in any single transaction or series
of transactions, of all or substantially all of its assets to any Person other
than a Borrower or Guarantor.
     “Charter and Good Standing Documents” shall mean, for each Borrower (i) a
copy of the certificate of incorporation or formation (or other charter
document) certified as of a date not more than thirty (30) Calendar Days before
the Closing Date by the applicable Governmental Authority of the jurisdiction of
incorporation or organization of Borrower, (ii) a copy of the bylaws or similar
organizational documents of Borrower certified as of a date not more than three
(3) Business Days before the Closing Date by the corporate secretary or
assistant secretary of Borrower, (iii) an original certificate of good standing
as of a date not more than 30 Calendar Days prior to the Closing Date issued by
the applicable Governmental Authority of the jurisdiction of incorporation or
organization of Borrower and of every other jurisdiction in which Borrower is
otherwise required to be in good standing, and (iv) copies of the resolutions of
the Board of Directors or managers (or other applicable governing body) and, if
required, stockholders, members or other equity owners authorizing the
execution, delivery and performance of the Loan Documents to which Borrower is a
party, certified by an authorized officer of such Person as of the Closing Date.
     “Claims” shall mean any and all liabilities, obligations, losses, damages,
penalties, claims, actions, litigation, proceedings, investigations, judgments,
suits, fees, costs, expenses, charges, advances and disbursements of any kind
(including, without limitation, fees, costs, expenses and charges of counsel
(including in-house counsel)).
     “Closing” shall mean the satisfaction, or written waiver by Agent and
Lenders, of all of the conditions precedent set forth in the Agreement required
to be satisfied prior to the consummation of the transactions contemplated
hereby.
     “Closing Date” shall mean the date hereof.
     “Collateral” shall mean, collectively and each individually, all collateral
and/or security granted to Agent, for the benefit of itself and Lenders, by
Borrower and/or Guarantors pursuant to the Loan Documents.

Appendix A-2

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     “Commitment” or “Commitments” shall mean (a) as to any Lender, the
aggregate commitment of such Lender to make Advances and draws, as set forth on
Schedule 1 or in the most recent Lender Addition Agreement executed by such
Lender, and (b) as to all Lenders, the aggregate commitment of all Lenders to
make Advances and draws.
     “Contingent Obligations” shall mean, as to any Person, any obligation of
such Person guaranteeing or intending to guaranty any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) otherwise to assure or to hold harmless the
owner of such primary obligation against loss in respect thereof, provided,
however, that the term “Contingent Obligation” shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
     “Debtor Relief Law” shall mean, collectively, the Bankruptcy Code of the
United States of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization
or similar debtor relief laws from time to time in effect affecting the rights
of creditors generally, as amended from time to time.
     “Default” shall mean any event, fact, circumstance or condition that, with
the giving of applicable notice or passage of time or both, would constitute or
be or result in an Event of Default.
     “Deposit Account” shall mean, collectively, any Lockbox Account, Blocked
Account and all bank or other depository accounts of Borrower.
     “Eligible Billed Receivables” shall mean each Account (other than Eligible
Unbilled Receivables) arising in the ordinary course of Borrower’s business from
the sale of goods or rendering of services which Agent, in its Permitted
Discretion, deems an Eligible Billed Receivable unless:
          (a) it is not subject to a valid perfected first priority security
interest in favor of Agent, for the benefit of itself and Lenders, subject to no
other Lien of equal or higher priority;
          (b) it is not evidenced by an invoice, statement or other documentary
evidence satisfactory to Agent; provided, that Agent in its Permitted Discretion
may from time to time include as Accounts that are not evidenced by an invoice,
statement or other documentary evidence satisfactory to Agent as Eligible Billed
Receivables and determine the advance rate, liquidity factors and reserves
applicable to Advances made on any such Accounts;
          (c) it arises out of services rendered or a sale made to, or out of
any other transaction between with, one or more Affiliates of Borrower;
          (d) it remains unpaid for longer than the earlier of (i) 120 calendar
days after the original invoice date, and (ii) 150 calendar days after the
applicable services were rendered;
          (e) with respect to all Accounts owed by any particular Account Debtor
or its Affiliates, if more than 50% of the aggregate balance of all such
Accounts owing from such Account

Appendix A-3

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Debtor or its Affiliates remains unpaid for longer than the earlier of (i) 120
calendar days after the original invoice date, and (ii) 150 calendar days after
the applicable services were rendered;
          (f) with respect to all Accounts owed by any particular Account Debtor
and/or its Affiliates, 50% or more of all such Accounts are not deemed Eligible
Receivables for any reason hereunder;
          (g) with respect to all Accounts owed by any particular Account Debtor
and/or its Affiliates, if such Accounts exceed 50%, (such percentage or any
other percentage hereafter established by Lender for any particular Account
Debtor, a “Concentration Limit”) of all Accounts at any one time;
          (h) any covenant, agreement, representation or warranty contained in
any Loan Document with respect to such Account has been breached and remains
uncured;
          (i) the Account Debtor for such Account has commenced a voluntary case
under any Debtor Relief Law or has made an assignment for the benefit of
creditors, or a decree or order for relief has been entered by a court having
jurisdiction in respect of such Account Debtor in an involuntary case under any
Debtor Relief Law, or any other petition or application for relief under any
Debtor Relief Law has been filed against such Account Debtor, or such Account
Debtor has failed, suspended business, ceased to be solvent, called a meeting of
its creditors, or has consented to or suffered a receiver, trustee, liquidator
or custodian to be appointed for it or for all or a significant portion of its
assets or affairs;
          (j) it arises from the sale of property or services rendered to one or
more Account Debtors outside the continental United States or Canada or that
have their principal place of business or chief executive offices outside the
continental United States or Canada;
          (k) it represents the sale of goods to an Account Debtor on a
bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase or return basis or is evidenced by chattel paper or an
instrument of any kind or has been reduced to judgment;
          (l) (A) the applicable Account Debtor for such Account is any
Governmental Authority, and the rights to payment of such Account may not be
assigned to Agent by operation of law, (B) any required consent from or notice
to the relevant Governmental Authority has not been obtained, or in the case of
notice, delivered, and (C) Agent has not otherwise agreed to its inclusion in
the Borrowing Base;
          (m) it is subject to any known offset, credit (including any resource
or other income credit or offset), deduction, defense, discount, chargeback,
freight claim, allowance, adjustment, dispute or counterclaim, or is contingent
in any respect or for any reason, but only to such extent;
          (n) there is any agreement with an Account Debtor for any deduction
from such Account, except for discounts or allowances made in the ordinary
course of business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each invoice related thereto,
such that only the discounted amount of such Account after giving effect to such
discounts and allowances shall be considered an Eligible Billed Receivable;
          (o) any return, rejection or repossession of goods or services related
to it has occurred, but only to such extent;
          (p) it is not payable to Borrower;

Appendix A-4

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          (q) Borrower has agreed to accept or has accepted any non-cash payment
for such Account;
          (r) it constitutes a re-billing of an amount previously billed, if the
amount previously billed was treated as an Eligible Billed Receivable;
          (s) the Account is subject to any known reduction, offset or
recoupment on account of staffing deficiencies under any Government Contract
(“Accrued Paybacks”) but only to such extent;
          (t) the Account is subject to known reduction, offset or recoupment on
account of lower than expected costs (“Risk Sharing Adjustment”) but only to
such extent;
          (u) the Account is subject to known reduction, offset or recoupment on
account of adjustments due to failure to earn any amounts prepaid (“Deferred
Revenue”) but only to such extent; and
          (v) it fails to meet such other specifications and requirements which
may from time to time be established by Agent or is not otherwise satisfactory
to Agent, as determined in Agent’s sole discretion, and with respect to Accounts
arising under contracts with Governmental Authorities that have enacted
anti-assignment laws, including the State of New York and the U.S. Government,
and until Borrower complies with the applicable laws of such Governmental
Authority regarding the assignment of such Government Contracts, such
determination shall be in Agent’s sole discretion.
     “Eligible Receivables” shall mean Eligible Billed Receivables plus Eligible
Unbilled Receivables plus the Rikers Receivables.
     “Eligible Unbilled Receivables” shall mean each Account meeting the
criteria of Eligible Billed Receivables, except:

  (i)   clause (b) shall not apply;     (ii)   clause (d) shall be restated as
follows: “if more than 75% of the aggregate balance of any unbilled Account
remains unbilled for longer than the thirtieth (30th) day following the latest
date services were rendered in any thirty (30) day billing cycle;”     (iii)  
clause (e) shall be restated as follows: “with respect to all Accounts owed by
any particular Account Debtor and/or its Affiliates if more than 50% of the
aggregate balance of all such Accounts owing from such Account Debtor or its
Affiliates remains unbilled for longer than the thirtieth (30th) day following
the latest date services were rendered in any thirty (30) day billing cycle;”
and

the eligible unbilled portion of any such Account shall include, with respect to
each Government Contract, revenue earned on each day prior to issuance of an
invoice in an amount equal to the amount of revenue under such Government
Contract in the month most recently closed on Borrower’s accounting system or,
in the case of a Government Contract that is in the first month of its term, the
estimated amount of revenue for such month, in each case divided by 30, provided
that, Agent in its sole discretion may from time to time determine the liquidity
factors and reserves applicable to Advances made on any such Accounts.
     “Environmental Laws” shall mean, collectively and each individually, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendment and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control

Appendix A-5

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Act, the Clean Air Act, the Clean Water Act, any other “Superfund” or
“Superlien” law and all other federal, state and local and foreign
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances, in each case, as amended, and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives of Governmental
Authorities with respect thereto.
     “Equipment” has the meaning given such term in the UCC.
     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
     “Event of Default” shall mean the occurrence of any event set forth in
Article VIII.
     “Existing Letters of Credit” shall mean the existing letters of credit
having an aggregate face value of Six Million Eight Hundred Fifty Thousand One
Hundred Forty-Five Dollars ($6,850,145.00) which were issued under the Revolving
Credit and Security Agreement dated October 31, 2005 between CapitalSource
Finance LLC and Borrower, as amended, and which are described in more detail on
Schedule 2.12.
     “Fair Valuation” shall mean the determination of the value of the
consolidated assets of a Person on the basis of the amount which may be realized
by a willing seller within a reasonable time through collection or sale of such
assets at market value on a going concern basis to an interested buyer who is
willing to purchase under ordinary selling conditions in an arm’s length
transaction.
     “Fixtures” has the meaning given such term in the UCC.
     “Funded L/C Exposure” means the aggregate principal amount, as of any date
of determination, of all payments that were made by an L/C Issuer under any
Letter of Credit or L/C Undertaking, but which have not been reimbursed to such
L/C Issuer by the Borrower.
     “GAAP” shall mean generally accepted accounting principles in the United
States of America in effect from time to time as applied by nationally
recognized accounting firms.
     “General Intangibles” has the meaning given such term in the UCC.
     “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.
     “Government Account” shall be defined to mean all Accounts arising out of
or with respect to any Government Contract.
     “Government Contracts” shall mean all contracts with the United States or
any state government or any other Governmental Authority or any agency of any of
the foregoing, and all amendments, modifications and supplements thereto.

Appendix A-6

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     “Guarantor” shall mean, collectively and each individually, all guarantors
of the Obligations or any part thereof.
     “Guaranty” shall mean, collectively and each individually, all guarantees
executed by any Guarantors.
     “Hazardous Substances” shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances or
related materials as defined in or subject to any applicable Environmental Law.
     “Indebtedness” of any Person shall mean, without duplication, (a) all items
which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of the balance sheet of such Person
as of the date as of which Indebtedness is to be determined, including any
Capital Leases, (b) all indebtedness secured by any mortgage, pledge, security,
Lien or conditional sale or other title retention agreement to which any
property or asset owned or held by such Person is subject, whether or not the
indebtedness secured thereby shall have been assumed by such Person, and (c) all
indebtedness of others which such Person has directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in respect of
which such Person has agreed to supply or advance funds (whether by way of loan,
stock, equity or other ownership interest purchase, capital contribution or
otherwise) or otherwise to become directly or indirectly liable.
     “Landlord Waiver and Consent” shall mean a waiver/consent in form and
substance reasonably satisfactory to Agent from the owner/lessor of any premises
not owned by Borrower at which any of the Collateral is now or hereafter located
for the purpose of providing Agent access to such Collateral, in each case as
such may be modified, amended or supplemented from time to time.
     “L/C Disbursement” shall mean a payment by an L/C Issuer pursuant to a
Letter of Credit.
     “L/C Exposure” means the sum, as of any date of determination, of the
Unfunded L/C Exposure and the Funded L/C Exposure.
     “L/C Fee Rate” shall mean 2.0% per annum.
     “L/C Issuer” means Agent, or any financial institution that, at the request
of Agent agrees, in such financial institution’s sole discretion, to become an
L/C Issuer for the purpose of issuing Letters of Credit or L/C Undertakings
pursuant to Section 2.12.
     “L/C Undertaking” shall have the meaning assigned to it in Section 2.12
hereof.
     “Lender Addition Agreement” shall mean an agreement among Agent, a Lender
and such Lender’s assignee regarding their respective rights and obligations
with respect to assignments of the Loans and other interests under this
Agreement.
     “Lenders” shall mean the financial institutions, from time to time named on
Schedule 1 under the heading “Lenders”, their respective successors and
permitted assigns (but not, except as expressly set forth herein, any
participant that is not otherwise a party to this Agreement).
     “Letter of Credit” shall mean (i) a letter of credit issued under
Section 2.12 hereof or (ii) an Existing Letter of Credit.

Appendix A-7

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     “Letter of Credit Fee” shall mean a fee equal to the sum of (a) the then
applicable L/C Fee Rate multiplied by the Unfunded L/C Exposure, plus (b) any
administrative charges, fees or expenses actually incurred by Agent to provide
Letters of Credit.
     “LIBOR” shall mean a variable per annum percentage rate, as of any date of
determination (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal
to (a) the rate of interest which is identified and normally published by
Bloomberg Professional Service Page BBAM 1 as the offered rate for loans in
United States dollars for the period of one (1) month under the caption British
Bankers Association LIBOR Rates as of 11:00 a.m. (London time) as adjusted on a
daily basis and effective on the second full Business Day after each such day
(unless such date is not a Business Day, in which event, the next succeeding
Business Day will be used); divided by (b) the sum of one minus the daily
average during the preceding month of the aggregate maximum reserve requirement
(expressed as a decimal) then imposed under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor thereto) for
“Eurocurrency Liabilities” (as defined therein). If Bloomberg Professional
Service (or another nationally-recognized rate reporting source acceptable to
Lender) no longer reports the LIBOR or Lender determines in good faith that the
rate so reported no longer accurately reflects the rate available to Lender in
the London Interbank Market or if such index no longer exists or if Page BBAM 1
no longer exists or accurately reflects the rate available to Lender in the
London Interbank Market, Lender may select a replacement index or replacement
page, as the case may be.
     “Lien” shall mean any mortgage, pledge, security interest, encumbrance,
restriction, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof), or any other arrangement pursuant to which title
to the property is retained by or vested in some other Person for security
purposes.
     “Loan” or “Loans” shall mean, individually and collectively, all Advances.
     “Loan Documents” shall mean, collectively and each individually, the
Agreement, the Notes, the Security Documents, the Stock Pledge Agreement, the
Guarantees, the Uniform Commercial Code Financing Statements, the Landlord
Waiver and Consents, the Borrowing Certificates, and all other agreements,
documents, instruments and certificates heretofore or hereafter executed or
delivered to Agent or Lenders in connection with any of the foregoing or the
Loans, as the same may be amended, modified or supplemented from time to time.
     “Material Adverse Effect” or “Material Adverse Change” shall mean any
event, condition or circumstance or set of events, conditions or circumstances
or any change(s) which (i) has or could reasonably be expected to have any
material adverse effect upon or change in the validity or enforceability of any
Loan Document, (ii) has been or could reasonably be expected to be material and
adverse to the value of the Collateral taken as a whole or to the business,
operations, prospects, properties, assets, liabilities or condition of Borrower
or any Guarantors, either individually or taken as a whole, or (iii) has
materially impaired or could reasonably be expected to materially impair the
ability of Borrower or Guarantor to perform the Obligations or to consummate the
transactions under the Loan Documents executed by such Person.
     “Note or Notes” shall mean Notes issued pursuant to Section 2.13.
     “Obligations” shall mean all present and future obligations, Indebtedness
and liabilities of Borrower and/or Guarantors to Agent or Lenders at any time
and from time to time of every kind, nature and description, direct or indirect,
secured or unsecured, joint and several, absolute or contingent, due or to
become due, matured or unmatured, now existing or hereafter arising, contractual
or tortious, liquidated or unliquidated, under any of the Loan Documents or
otherwise relating to Notes and/or Loans, including,

Appendix A-8

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without limitation, all applicable fees, charges and expenses and/or all amounts
paid or advanced by Agent or Lenders on behalf of or for the benefit of Borrower
and/or Guarantor for any reason at any time, including in each case obligations
of performance as well as obligations of payment and interest that accrue after
the commencement of any proceeding under any Debtor Relief Law by or against any
such Person.
     “OFAC” shall mean the U.S. Department of Treasury’s Office of Foreign
Assets Control.
     “Payment Office” shall mean initially the address set forth beneath the
Agent’s name on the signature page of the Agreement, and thereafter, such other
office of Agent, if any, which it may designate by notice to Borrower to be the
Payment Office.
     “Permit” shall mean collectively all licenses, leases, powers, permits,
franchises, certificates, authorizations, approvals, certificates of need,
provider numbers and other rights necessary to the conduct of Borrowers’
business.
     “Permitted Discretion” shall mean a determination or judgment made in good
faith in the exercise of reasonable (from the perspective of a secured lender)
credit or business judgment.
     “Person” shall mean an individual, a partnership, a corporation, a limited
liability company, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture, a Governmental Authority or any
other entity of whatever nature.
     “Prime Rate” shall mean a variable per annum percentage rate, as of any
date of determination, equal to the rate of interest which is identified and
normally published by Bloomberg Professional Service as the Bloomberg Prime
Rate, PRIMBB Index, as the “Prime Rate” (or, if more than one rate is published
as the Prime Rate, then the highest of such rates). The Prime Rate is rounded
upwards to the nearest 1/1000th of 1% (5 decimal places). Any change in Prime
Rate will become effective as of the date the rate of interest which is so
identified as the “Prime Rate” is different from that published on the preceding
Business Day. If Bloomberg Professional Service no longer reports the Prime
Rate, or if such Page Prime no longer exists, or Lender determines in good faith
that the rate so reported no longer accurately reflects an accurate
determination of the prevailing Prime Rate, Lender may select a reasonably
comparable index or source to use as the basis for the Prime Rate.
     “Pro Rata Share” shall mean with respect to matters relating to a
particular Commitment of a Lender, the percentage obtained by dividing (i) such
Commitment of that Lender by (ii) all such Commitments of all Lenders; provided,
however, that if any Commitment is terminated pursuant to the terms hereof, then
“Pro Rata Share” means the percentage obtained by dividing (x) the aggregate
amount of such Lender’s outstanding Loans related to such Commitment by (y) the
aggregate amount of all outstanding Loans related to such Commitment; in any
case as such percentage may be adjusted by assignments permitted pursuant to
Section 12.2.
     “Requisite Lenders” shall mean Lenders holding or being responsible for
(i) 100%, if there are only two Lenders, and (ii) at least 66-2/3% if there are
more than two Lenders, in each case, of the sum of (a) all outstanding Loans and
(b) all unutilized Commitments, including Unfunded L/C Exposure.
     “Rikers Receivables” shall mean each Account meeting the criteria of
Eligible Billed Receivables, provided that the following terms and conditions
are satisfied:
          (a) such Account was acquired by PHS pursuant to a receivables
purchase agreement among PHS, PHS Medical Services, PC and PHS Dental Services,
PC (the “Rikers Acquisition”) which

Appendix A-9

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Rikers Acquisition shall be on terms and conditions and otherwise in form and
substance satisfactory to Agent in its Permitted Discretion; and
          (b) Borrower shall have (i) collaterally assigned (or caused to be
assigned) to Agent the agreement evidencing the Rikers Acquisition and any other
agreements, instruments or documents in connection therewith and (ii) executed
such agreements, instruments or documents and granted such liens and security
interests as may be reasonably required by Agent and its legal counsel.
     “Security Documents” shall mean the Notes, this Agreement, Stock Pledge
Agreement, Guarantees, Lockbox Agreements, Uniform Commercial Code Financing
Statements and all other documents or instruments necessary to create or perfect
the Liens in the Collateral, as such may be modified, amended or supplemented
from time to time.
     “Stock Pledge Agreement” shall mean, collectively and each individually,
(i) that certain Stock Pledge Agreement, by and between Agent and ASG executed
in connection herewith, and (ii) if applicable, all stock pledge agreements
executed by and between Agent and any Guarantors in each case as such may be
modified, amended or supplemented from time to time.
     “Subordinated Debt” shall mean any Indebtedness of Borrower, which
Indebtedness is unsecured, subordinated in right of repayment and remedies to
all of the Obligations and to all of Agent’s and Lenders’ rights, Liens and
remedies and in form and substance satisfactory to the Requisite Lenders in
their Permitted Discretion.
     “Subsidiary” shall mean, (i) as to Borrower, any Person in which more than
50% of all equity, membership, partnership or other ownership interests is owned
directly or indirectly by Borrower or one or more of its Subsidiaries, and
(ii) as to any other Person, any Person in which more than 50% of all equity,
membership, partnership or other ownership interests is owned directly or
indirectly by such Person or by one or more of such Person’s Subsidiaries.
     “Term” shall mean the period, commencing on the Closing Date and ending on
October 31, 2011.
     “Termination Fee” shall mean (for the time period indicated) the amount
equal to (i) 3% of the Facility Cap, if the date of such Revolver Termination is
after the Closing Date but before October 31, 2009, (ii) 2% of the Facility Cap,
if the date of such Revolver Termination is on or after October 31, 2009 but
prior to October 31, 2010 and (iii) 1% of the Facility Cap, if the date of such
Revolver Termination is on or after October 31, 2010 but prior to July 31, 2011.
     “UCC” shall mean the Uniform Commercial Code as in effect in the State of
New York; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York , then “UCC” means the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
     “Underlying Issuer” shall mean a Person that is the beneficiary of a L/C
Undertaking and that has issued a letter of credit at the request of the L/C
Issuer for the benefit of Borrower.
     “Underlying Letter of Credit” shall mean a letter of credit that has been
issued by an Underlying Issuer.

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     “Unfunded L/C Exposure” shall mean the maximum amount which all L/C Issuers
may be required, under all Letters of Credit or L/C Undertakings outstanding as
of any date of determination, to pay on such date or at any future time.
Unfunded L/C Exposure shall not include any amounts outstanding within the
meaning of Funded L/C Exposure.

Appendix A-11