EX-10.1






Exhibit 10.1




AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT




by and among




LASALLE BANK NATIONAL ASSOCIATION, as Agent




THE FINANCIAL INSTITUTIONS FROM TIME TO TIME




A PARTY HERETO, as Lenders




and




APAC CUSTOMER SERVICES, INC., as Borrower




DATED AS OF OCTOBER 31, 2005




1




TABLE OF CONTENTS




Page



EXHIBIT A — BUSINESS AND COLLATERAL LOCATIONS



EXHIBIT B — COMPLIANCE CERTIFICATE



EXHIBIT C — COMMERCIAL TORT CLAIMS



EXHIBIT D — FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT



EXHIBIT E — FORM OF PROMISSORY NOTE



EXHIBIT F – FORM OF BORROWING BASE CERTIFICATE



SCHEDULE 1-A — PERMITTED INVESTMENTS



SCHEDULE 1-B — PERMITTED LIENS



SCHEDULE 11(g) — LITIGATION



SCHEDULE 11(i) — AFFILIATE TRANSACTIONS



SCHEDULE 11(j) — NAMES & TRADE NAMES



SCHEDULE 11(n) — INDEBTEDNESS



SCHEDULE 11(p)-A – PARENT AND SUBSIDIARIES



SCHEDULE 11(p)-B — AFFILIATES



SCHEDULE 11(q) – DEFAULTS



SCHEDULE 17(a) – CLOSING DOCUMENT CHECKLIST



2




AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT




THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented
from time to time, this “Agreement”) made this 31st day of October, 2005 by and among LASALLE BANK
NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as agent (in such capacity as agent,
"Agent”) for itself and all other lenders from time to time a party hereto (“Lenders”), 135 South
LaSalle Street, Chicago, Illinois 60603-4105, all other Lenders and APAC CUSTOMER SERVICES, INC.,
an Illinois corporation, having its principal place of business at Six Parkway North Center,
Deerfield, Illinois 60015 (“Borrower”).



W I T N E S S E T H:




WHEREAS, Borrower, Agent and the Lenders are party to that certain Loan and Security
Agreement, dated as of June 2, 2005 (as amended or otherwise modified prior to the date hereof, but
without giving effect to this Agreement, the “Original Loan Agreement”), pursuant to which, among
other things, the Lenders made available to Borrower, Revolving Loans (as defined in the Original
Credit Agreement and hereinafter referred to as the “Original Revolving Loans”); and



WHEREAS, the parties to the Original Loan Agreement desire to amend and restate the Original
Loan Agreement subject to the terms and conditions set forth herein, to, among other things, (i)
restructure the terms of the credit facilities provided for under the Original Loan Agreement and
(ii) allow for the Borrower to, from time to time, request Revolving Loans or other financial
accommodations from Agent and Lenders pursuant to the terms and conditions set forth herein;



NOW, THEREFORE, in consideration of any Revolving Loan (including any Revolving Loan by
renewal or extension) hereafter made to Borrower by Agent and/or Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Borrower,
the parties agree as follows:



1. DEFINITIONS.



"Account”, “Account Debtor”, “Chattel Paper”, “Commercial Tort Claims”, “Deposit Accounts”,
"Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”,
"Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Right”, “Proceeds” and
"Tangible Chattel Paper” shall have the respective meanings assigned to such terms in the Illinois
Uniform Commercial Code, as the same may be in effect from time to time.



"Affiliate” shall mean any Person (other than an individual) (i) which directly or indirectly
through one or more intermediaries controls, is controlled by, or is under common control with,
Borrower, (ii) which beneficially owns or holds fifteen percent (15%) or more of the voting control
or equity interests of Borrower, or (iii) fifteen percent (15%) or more of the voting control or
equity interests of which is beneficially owned or held by Borrower.



"Applicable Margin” shall mean the Applicable Margin set forth below based on EBITDA for the
12-month period ending on the last day of each fiscal quarter:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable LIBOR
	Level	 	EBITDA	 	Margin
	I
	 	 	< $12,000,000	 	 	300 bps
	 
	 	 	 	 	 	 	 	 
	II
	 	 	> $12,000,000 < $17,000,000	 	 	275 bps
	 
	 	 	 	 	 	 	 	 
	III
	 	 	> $17,000,000	 	 	250 bps
	 
	 	 	 	 	 	 	 	 






The initial Applicable Margin shall be set at Level I and shall remain in effect until delivery to
Agent of Borrower’s compliance certificate for the month ending December 31, 2005, 10 Business Days
after which delivery the Applicable Margin will be adjusted based on the EBITDA for the 12-month
period ending on the last day of such month. Thereafter, the Applicable Margin shall be adjusted
to the extent applicable with respect to the compliance certificate delivered with respect to the
last month of each fiscal quarter of Borrower. Each such change shall take effect 10 Business Days
after delivery of such compliance certificate. If Borrowers fail to deliver the compliance
certificate within the time period required by this Agreement, the Applicable Margin shall
conclusively be presumed to be equal to Level I from the date such compliance certificate was
required to be delivered until 10 Business Days after delivery of such compliance certificate.



"Assignment and Acceptance” shall have the meaning in Section 20 hereof.



"Billed Eligible Accounts” shall mean an Eligible Account evidenced by an invoice rendered to
the Account Debtor thereunder, due and payable within forty-five (45) days after the date of the
invoice that does not remain unpaid ninety (90) days past the invoice date thereof.



"Business Day” shall mean any day other than a Saturday, a Sunday or (i) with respect to all
matters, determinations, fundings and payments in connection with LIBOR Rate Loans, any day on
which banks in London, England or Chicago, Illinois are required or permitted to close, and (ii)
with respect to all other matters, any day that banks in Chicago, Illinois are required or
permitted to close.



"Capital Expenditures” shall mean with respect to any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including expenditures for
capitalized lease obligations) by Borrower and its Subsidiaries during such period that are
required by generally accepted accounting principles, consistently applied, to be included in or
reflected by the property, plant and equipment or similar fixed asset accounts (or intangible
accounts subject to amortization) on the balance sheet of Borrower and its Subsidiaries.



"Cash Equivalent” shall mean any of the following: (a) marketable direct obligations of the
Government of the United States or any agency thereof backed by the full faith and credit of the
United States maturing within 365 days of the acquisition thereof, (b) certificates of deposit,
time deposits or bankers acceptances issued by any Lender or any United States commercial bank
having combined capital and surplus of at least $250,000,000, (c) commercial paper maturing within
270 days of the acquisition thereof issued by any Person organized under the laws of any state of
the United States and rated at least P-1 by Moody’s or “A-1” by S&P, (d) marketable general
obligations of a state or municipality of the United States, or any political subdivision of any of
the foregoing maturing within 365 days from the date of acquisition thereof, unconditionally
secured by the full faith and credit of such state or municipality or political subdivision and
having at the time of acquisition one of the two highest ratings obtainable from either S&P or
Moody’s, or (e) investments in money market funds, the portfolios of which are limited to holding
no less than 95% of their assets in investments of the type described in clauses (a), (b), (c) and
(d) of this definition.



"Code” means the Internal Revenue Code of 1986, as amended, and any successor law.



"Collateral” shall mean all of the property of Borrower described in Section 5 hereof,
together with all other real or personal property of any Obligor or any other Person now or
hereafter pledged to Agent, for the benefit of Agent and Lenders, to secure, either directly or
indirectly, repayment of any of the Liabilities.



"Defaulting Lender” shall have the meaning set forth in subsection 2(a) hereof.



"Designated Entities” shall mean any two of Verizon, UPS or Wellpoint (but including, as to
each entity, all of its affiliates) designated by the Borrower from time to time. From time to
time Borrower may request additional Account Debtors be added to the list of designated entities to
be added in Agent’s sole discretion.



"Disproportionate Advances” shall have the meaning set forth in subsection 2(a).



"EBITDA” shall mean, with respect to any period, Borrower’s and its Subsidiaries’ net income
for such period, plus the sum (without duplication) of all amounts deducted in arriving at such net
income amount in respect of (i) interest expense for such period, (ii) federal, state and local
income taxes for such period, (iii) all amounts properly charged for depreciation of fixed assets
and amortization of intangible assets (including, without limitation, goodwill, deferred expenses
and organization costs) for such period, (iv) non-cash restructuring charges and non-cash asset
impairment charges incurred during the period from July 1, 2005 through December 31, 2006 and not
to exceed $5,000,000 in connection with the Restructuring, (v) the write down of goodwill in the
quarter ending September 30, 2005 in an amount not to exceed $11,000,000; (vi) restructuring
charges not payable in cash within 30 days of such period and non-cash asset impairment charges
incurred for such period, in each case with respect to periods beginning after June 30, 2006, and
not to exceed (A) $1,250,000 for the six (6) month period from July 1, 2006 through the end of its
Fiscal Year ending on or about December 31, 2006 and (B) $2,500,000 in any Fiscal Year thereafter,
(vii) cash restructuring charges incurred during such period in connection with the Restructuring
Plan, not to exceed $9,000,000 from July 1, 2005 through June 30, 2006, and (viii) non-cash charges
related to the expensing of options for Borrower’s common stock, all on a consolidated basis and
minus the sum of any charges relating to restructuring charges when paid in cash that had been
previously added back to EBITDA as a non cash charge.



"Eligible Account” shall mean an Account owing to Borrower which is acceptable to Agent in its
sole discretion, determined in good faith, for lending purposes. Without limiting Agent’s
discretion, Agent shall consider an Account to be an Eligible Account if it meets, and so long as
it continues to meet, the following requirements (as such requirements may be adjusted or
supplemented by Agent in its sole credit judgment, determined in good faith with prompt notice to
Borrower when such requirements are adjusted or supplemented):




(i) it is an Account that is in all respects what it purports to be;




(ii) it is owned by Borrower, Borrower has the right to subject it to a security
interest in favor of Agent or assign it to Agent and it is subject to a first priority
perfected security interest in favor of Agent and to no other claim, lien, security interest
or encumbrance whatsoever, other than Permitted Liens;




(iii) it arises from (A) the performance of services by Borrower in the ordinary course
of Borrower’s business, and such services have been fully performed and acknowledged and
accepted by the Account Debtor thereunder; or (B) the sale or lease of Goods by Borrower in
the ordinary course of Borrower’s business, and (x) such Goods have been completed in
accordance with the Account Debtor’s specifications (if any) and delivered to the Account
Debtor, (y) such Account Debtor has not refused to accept, returned or offered to return,
any of the Goods which are the subject of such Account, and (z) Borrower has possession of,
or Borrower has delivered to Agent (at Agent’s request) shipping and delivery receipts
evidencing delivery of such Goods;




(iv) it is not an Account owing by an Account Debtor for which more than twenty-five
percent (25%) of the aggregate dollar amount of invoices owing by such Account Debtor remain
unpaid ninety (90) days after the respective invoice dates thereof, unless Agent has
approved in writing the continued eligibility thereof;




(v) it is a valid, legally enforceable obligation of the Account Debtor thereunder,
and, is not subject to any counterclaim, credit, allowance, adjustment or setoff asserted by
such Account Debtor (or, with respect to counterclaims or setoff rights which may exist with
respect to Accounts as a result of accounts payable owing by Borrower to an Account Debtor,
whether or not such counterclaim or setoff right is asserted), or to any claim by such
Account Debtor denying liability thereunder in whole or in part due to an asserted setoff
claim (except that Accounts excluded from Eligible Accounts solely by reason of this clause
(v) shall be excluded only to the extent of the amount of any asserted (or, with respect to
counterclaims or setoff rights which may exist with respect to Accounts as a result of
accounts payable owing by Borrower to an Account Debtor, whether or not such counterclaim or
setoff right is asserted) setoff, counterclaim, credit, allowance, adjustment or claim);




(vi) it does not arise out of a contract or order which fails in any material respect
to comply with the requirements of applicable law;




(vii) the Account Debtor thereunder is not a director, officer, employee or agent of
Borrower, or a Subsidiary, Parent or Affiliate;




(viii) it is not an Account with respect to which the Account Debtor is the United
States of America or any state or local government, or any department, agency or
instrumentality thereof, in each case, which is subject to a state or local law comparable
to the Assignment of Claims Act of 1940, unless Borrower assigns its right to payment of
such Account to Agent pursuant to, and in full compliance with, the Assignment of Claims Act
of 1940, as amended, or any comparable state or local law, as applicable;




(ix) it is not an Account with respect to which the Account Debtor is located in a
state which requires Borrower, as a precondition to commencing or maintaining an action in
the courts of that state, either to (A) receive a certificate of authority to do business
and be in good standing in such state; or (B) file a notice of business activities report or
similar report with such state’s taxing authority, unless (x) Borrower has taken one of the
actions described in clauses (A) or (B); (y) the failure to take one of the actions
described in either clause (A) or (B) may be cured retroactively by Borrower at its
election; or (z) Borrower has proven, to Agent’s reasonable satisfaction, that Borrower is
exempt from any such requirements under any such state’s laws;




(x) the Account Debtor is located within the United States of America or Canada;




(xi) it is not an Account with respect to which the Account Debtor’s obligation to pay
is subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale on approval, sale or return or consignment basis;




(xii) it is not an Account (A) with respect to which any representation or warranty
contained in this Agreement is untrue in any material respect; or (B) which violates any of
the covenants of Borrower contained in this Agreement;




(xiii) it is not an Account which, when added to a particular Account Debtor’s other
Accounts owed to Borrower, exceeds twenty percent (20%) (or 25% in respect of the Designated
Entities) of all Accounts of Borrower or a credit limit determined by Agent (any changes to
which Agent will provide notice to Borrower) in its sole discretion, determined in good
faith for that Account Debtor (except that Accounts excluded from Eligible Accounts solely
by reason of this clause (xiii) shall be excluded only to the extent of such excess); and




(xiv) it is not an Account with respect to which the prospect of payment or performance
by the Account Debtor is or will be impaired, as determined by Agent in its sole credit
judgment, determined in good faith and with notice to Borrower promptly when such
determination of exclusion from eligibility pursuant to this clause (xiv) is made by Agent.



"Environmental Laws” shall mean all federal, state, district, local and foreign laws, rules,
regulations, ordinances, and consent decrees relating to health, safety, hazardous substances,
pollution and environmental matters, as now or at any time hereafter in effect, applicable to
Borrower’s business or facilities owned or operated by Borrower, including laws relating to
emissions, discharges, releases or threatened releases of pollutants, contamination, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or
otherwise relating to the generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.



"ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, modified
or restated from time to time.



"Event of Default” shall have the meaning specified in Section 15 hereof.



"Excess Availability” shall mean, as of any date of determination, the lesser of (i) the
Maximum Revolving Loan Limit less the sum of the outstanding principal balance and accrued unpaid
interest and fees of the Revolving Loans and outstanding Letter of Credit Obligations and (ii) the
Revolving Loan Limit less the sum of the outstanding principal balance and accrued unpaid interest
and fees of the Revolving Loans and outstanding Letter of Credit Obligations, in each case as of
the close of business on such date and assuming, for purposes of calculation, that all accounts
payable which remain unpaid more than thirty (30) days after the due dates thereof as the close of
business on such date are treated as additional Revolving Loans outstanding on such date.
Notwithstanding the foregoing, Excess Availability shall be determined by reference to the most
current borrowing base certificate delivered pursuant to Section 9(a) hereof, (as adjusted
in accordance with Section 2(a)).



"Exited Business” shall have the meaning specified in the definition of “Restructuring.”



"Exited Business Assets” shall have the meaning specified in the definition of
“Restructuring.”



"Fiscal Year” shall mean each twelve (12) month accounting period of Borrower, which ends on
the Sunday closest to December 31 of each year.



“Fixed Charges” shall mean for any period, without duplication, scheduled payments of
principal during the applicable period with respect to all indebtedness of Borrower and its
Subsidiaries, on a consolidated basis, for borrowed money, plus scheduled payments of principal
during the applicable period with respect to all capitalized lease obligations of Borrower and its
Subsidiaries, on a consolidated basis, plus scheduled payments of interest during the applicable
period with respect to all indebtedness of Borrower and its Subsidiaries, on a consolidated basis,
for borrowed money including capital lease obligations, plus Capital Expenditures of Borrower and
its Subsidiaries, on a consolidated basis, during the applicable period, plus payments during the
applicable period in respect of income or franchise taxes of Borrower and its Subsidiaries, on a
consolidated basis.



"Hazardous Materials” shall mean any hazardous, toxic or dangerous substance, materials and
wastes, including, without limitation, hydrocarbons (including naturally occurring or man-made
petroleum and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation,
radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and
any other kind and/or type of pollutants or contaminants (including, without limitation, materials
which include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other
similar substances, materials, or wastes and including any other substances, materials or wastes
that are or become regulated under any Environmental Law (including, without limitation any that
are or become classified as hazardous or toxic under any Environmental Law).



"Indemnified Party” shall have the meaning specified in Section 23 hereof.



"Interest Period” shall have the meaning specified in subsection 4(a)(ii) hereof.



"Investment” means, with respect to any Person, any investment by such Person in any other
Person (including Affiliates) in the form of loans, guarantees, advances, or capital contributions
(excluding commission, travel, and similar advances to officers and employees of such Person made
in the ordinary course of business), purchases or other acquisitions, or contracts to purchase or
otherwise acquire, the obligations, indebtedness, stock, equity interests or all or substantially
all of the assets of such other Person (or of any division or business line of such other Person),
and any other items that are or would be classified as investments on a balance sheet prepared in
accordance with generally accepted accounting principals.



"IRS” means the United States Internal Revenue Service.



"Letter of Credit” shall mean any letter of credit issued on behalf of Borrower in accordance
with this Agreement.



"Letter of Credit Obligations” shall mean, as of any date of determination, the sum of (i) the
aggregate undrawn face amount of all Letters of Credit then outstanding, and (ii) the aggregate
unreimbursed amount of all drawn Letters of Credit not already converted to Revolving Loans
hereunder.



"Liabilities” shall mean any and all obligations, liabilities and indebtedness of Borrower to
Agent and each Lender or to any parent, affiliate or subsidiary of Agent and each Lender of any and
every kind and nature, created, arising under or evidenced by this Agreement, any Other Agreement
to which an Obligor is a party or any agreement to which an Obligor is a party related to cash
management services, deposit accounts, hedging obligations or similar bank services, whether now or
hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect,
absolute, contingent or otherwise (including, without limitation, obligations of performance) and
whether several, joint or joint and several.



"LIBOR Rate” shall mean, with respect to any Interest Period, a rate per annum equal to (a)
the offered rate for deposits in United States dollars for a period equal to such Interest Period
as displayed in the Bloomberg Financial Markets system (or such other authoritative source as
selected by Agent in its sole discretion) as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period divided by (b) a number equal to 1.0 minus the maximum
reserve percentages (expressed as a decimal fraction) including, without limitation, basic
supplemental, marginal and emergency reserves under any regulations of the Board of Governors of
the Federal Reserve System or other governmental authority having jurisdiction with respect
thereto, as now and from time to time in effect, for Eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of such Board) which are required to be maintained by
Agent by the Board of Governors of the Federal Reserve System. The LIBOR Rate shall be adjusted
automatically on and as of the effective date of any change in such reserve percentage.



"LIBOR Rate Loans” shall mean the Revolving Loans bearing interest with reference to the LIBOR
Rate.



"Lock Box” and “Lock Box Account” shall have the meanings specified in subsection 8(a)
hereof.



"Material Adverse Effect” shall mean a material adverse effect on the business, property,
assets, prospects, operations or condition, financial or otherwise, of a Person.



"Maximum Revolving Loan Limit” shall have the meaning specified in subsection 2(a)
hereof.



"Minimum Free Cash Flow” shall have the meaning specified in Section 14(c).



"Minimum Tangible Net Worth” shall have the meaning specified in Section 14(a).



"Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.



"Non-U.S. Lender” shall mean (a) each Lender (or Agent) that is a foreign person as defined in
Treasury Regulations section 1.1441-1(c)(2) or (b) each Lender (or Agent) that is a wholly-owned
domestic entity that is disregarded for United States federal tax purposes under Treasury
Regulations section 301.7701-2(c)(2) as an entity separate from its owner and whose single owner is
a foreign person within the meaning of Treasury Regulations section 1.1441-1(c)(2).



"Obligor” shall mean Borrower and each other Person who is or shall become primarily or
secondarily liable for any of the Liabilities.



"Original Loan Agreement” shall have the meaning specified in Recitals to this Agreement.



"Original Revolving Loans” shall have the meaning specified in Recitals to this Agreement.



"Original Term” shall have the meaning specified in Section 10 hereof.



"Other Agreements” shall mean all agreements, instruments and documents, other than this
Agreement, including, without limitation, guaranties, mortgages, trust deeds, pledges, powers of
attorney, consents, assignments, contracts, notices, security agreements, leases, financing
statements and all other writings heretofore, now or from time to time hereafter executed by or on
behalf of Borrower or any other Person and delivered to Agent and/or any Lender or to any parent,
affiliate or subsidiary of Agent and/or any Lender in connection with the Liabilities or the
transactions contemplated hereby, as each of the same may be amended, modified or supplemented from
time to time.



"Outstanding Original Revolving Loan Balance” shall have the meaning specified in Section
2(a).



"Parent” shall mean any Person now or at any time or times hereafter owning or controlling
(alone or with any other Person) at least a majority of the issued and outstanding equity of
Borrower.



"PBGC” shall have the meaning specified in subsection 12(b)(v) hereof.



"Permitted Investment” shall mean any of the following: (a) Investment in cash or Cash
Equivalents, (b) Investments received in satisfaction of judgments, settlements of debts or
compromises of obligations in the ordinary course of business, in each case, including, without
limitation, pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer, (c) advances and prepayments for asset purchases in
the ordinary course of business, (d) Investments consisting of guaranties and/or indebtedness
permitted under subsections 13(a) and 13(b) hereof, (e) Investments existing as of
the date hereof in any Subsidiary, (f) other Investments (i) so long as the aggregate amount of
such Investments made in any Fiscal Year does not exceed $50,000 in such Fiscal Year and (ii) no
such Investments may be made during the continuance of an Event of Default, (g) Investments in
prepaid expenses, negotiable instruments held for collection and lease, utility and workers’
compensation, performance and other similar deposits, and (h) Investments existing on the date
hereof and described on Schedule 1-A.



"Permitted Liens” shall mean (i) liens imposed by law, statutory liens of landlords, carriers,
warehousemen, processors, mechanics, workmen, repairmen, materialmen or suppliers and other similar
liens incurred in the ordinary course of business (including, without limitation, deposits made to
obtain the release of such liens) and securing amounts not yet due or declared to be due by the
claimant thereunder; (ii) liens or security interests in favor of Agent on behalf of the Lenders;
(iii) zoning restrictions and easements, rights-of-way licenses, covenants, matters of plat, minor
defects or irregularity in title or other agreements of record and other restrictions affecting the
use of real property that do not individually or in the aggregate have a material adverse effect on
Borrower’s ability to use such real property for its intended purpose in connection with Borrower’s
business; (iv) liens in connection with purchase money indebtedness (as defined in 9-103 of the
Uniform Commercial Code) and capitalized leases otherwise permitted pursuant to this Agreement,
provided, that such liens attach only to the assets the purchase of which was financed by such
purchase money indebtedness or which is the subject of such capitalized leases; (v) liens set forth
on Schedule 1-B hereto and such liens as may arise from any extension, renewal or
refinancing of the indebtedness relating to such scheduled lien; (vi) liens, pledges or deposits in
the ordinary course of business to secure obligations under workers’ compensation, unemployment
insurance laws, old age benefits, other types of social security or similar legislation; (vii) tax
liens with respect to taxes not required to be paid by Section 12(h) and liens resulting from
judgments to the extent not constituting an Event of Default hereunder or securing appeal or other
surety bonds related to such judgments; (viii) any interest or title of a lessor or sublessor under
any operating lease or any capitalized lease; (ix) liens on Cash Equivalents relating to banker’s
liens, rights of set-off or similar rights as to deposit or securities accounts and liens of a
collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course
of collection; (x) liens or encumbrances (including, without limitation, any interest of a
licensee) under licensing agreements for use of intellectual property existing on the date hereof
and hereafter entered into in the ordinary course of business; (xi) liens securing indebtedness or
other obligations under swaps, interest rate management agreements, hedge agreements or other
similar agreements not prohibited by this Agreement; (xii) liens of sellers of goods arising under
Article 2 of the Uniform Commercial Code; and (xiii) liens or deposits to secure the performance of
contracts, leases or other obligations of a like nature incurred in the ordinary course of
business; provided in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue, or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of any lien relating thereto and adequate reserves have been
established therefor.



"Person” shall mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company, institution,
entity, party or foreign or United States government (whether federal, state, county, city,
municipal or otherwise), including, without limitation, any instrumentality, division, agency, body
or department thereof.



"Plan” shall have the meaning specified in subsection 12(b)(v) hereof.



"Pre-Settlement Determination Date” shall have the meaning specified in Section 18
hereof.



"Prime Rate” shall mean LaSalle’s publicly announced prime rate (which is not intended to be
LaSalle’s lowest or most favorable rate in effect at any time) in effect from time to time.



“Prime Rate Loans” shall mean the Revolving Loans bearing interest with reference to the Prime
Rate.



"Pro Rata Share” shall mean at any time, with respect to any Lender, a fraction (expressed as
a percentage in no more than nine (9) decimal places), the numerator of which shall be the
Revolving Loan Commitment of such Lender at such time and the denominator of which shall be the
Maximum Revolving Loan Limit at such time.



"Renewal Term” shall have the meaning specified in Section 10 hereof.



"Requisite Lenders” shall mean, (a) at any time when more than two (2) Lenders are party to
the Loan Agreement, Lenders having Pro Rata Shares aggregating at least sixty-six and two-thirds
percent (66 2/3%) at such time or (b) at any time when two (2) or fewer Lenders are party to the
Loan Agreement, Lenders having Pro Rata Shares aggregating at least one hundred percent (100%) at
such time.



"Restructuring” shall mean the restructuring of Borrower’s business to effectuate the exit by
Borrower from substantially all of its outbound customer acquisition business (the “Exited
Business”) as more fully described in the Restructuring Plan presented to Agent on July 18, 2005
(the “Restructuring Plan”), such Restructuring to occur between July 1, 2005 and December 31, 2006.
The Restructuring contemplates the termination of certain client relationships, the closing of
those certain customer interaction centers identified in section A-I of Exhibit A, the sale
or disposal of assets used in the Exited Business at such locations (the “Exited Business Assets”)
and the transfer of certain of Borrower’s assets from one customer interaction center to another.



"Restructuring Plan” shall have the meaning specified in the definition of “Restructuring”.



"Revolving Loan Commitment” shall mean, with respect to any Lender, the maximum amount of
Revolving Loans which such Lender has agreed to make to Borrower, subject to the terms and
conditions of this Agreement, as set forth on the signature page hereto or an Assignment and
Acceptance Agreement executed by such Lender, in each case, as such amount may be reduced from time
to time pursuant to Section 2(d).



"Revolving Loan Limit” shall have the meaning specified in subsection 2(a) hereof.



"Revolving Loans” shall have the meaning specified in subsection 2(a) hereof.



"S&P” shall mean Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. and any
successor thereto.



"Schwartz Group” means Theodore G. Schwartz, the immediate family members of Theodore G.
Schwartz, any trusts for the benefit of Theodore G. Schwartz or his immediate family members, any
split-interest trust of which a charity or charities and Theodore G. Schwartz or his immediate
family members are the only beneficiaries, or any partnership or corporation of which Theodore G.
Schwartz or his immediate family members are direct or indirect partners or shareholders.



"Security Agreement” shall mean that certain Security Agreement dated June 2, 2005 by and
among each Subsidiary of Borrower and Agent, for the benefit of Agent and Lenders, as the same may
be amended, modified or supplemented from time to time.



"Settlement Date” shall have the meaning specified in Section 18 hereof.



"Special Litigation Reserve” shall mean a reserve established by Agent on June 30, 2006 equal
to $1,000,000, which reserve shall be increased on the last Business Day of each calendar month by
(i) $300,000 for each calendar month from July 2006 through December 2006, (ii) $150,000 for each
calendar month from January 2007 through December 2007 and (iii) $125,000 for each calendar month
from January 2008 through the earlier to occur of (A) December 2008 and (B) the termination of this
Agreement pursuant to Section 10, provided that such reserve may be adjusted by Agent from time to
time, in its sole discretion, determined in good faith, and may be eliminated if Borrower and Agent
agree.



"Subsidiary” shall mean any corporation of which more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time stock of any other class of such
corporation shall have or might have voting power by reason of the happening of any contingency) is
at the time, directly or indirectly, owned by Borrower, or any partnership, joint venture or
limited liability company of which more than fifty percent (50%) of the outstanding equity
interests are at the time, directly or indirectly, owned by Borrower or any partnership of which
Borrower is a general partner.



"Tangible Net Worth” shall have the meaning specified in subsection 14(a) hereof.



"Tax” shall mean, in relation to any LIBOR Rate Loans and the applicable LIBOR Rate, any tax,
levy, impost, duty, deduction, withholding or charges of whatever nature required to be paid by
Agent or any Lender and/or to be withheld or deducted from any payment otherwise required hereby to
be made by Borrower to Agent or any Lender with respect to any LIBOR Rate Loan; provided, that the
term “Tax” shall not include (i) any franchise taxes or any taxes measured by or imposed upon the
net income or net profits of Agent or any Lender or (ii) any United States withholding tax imposed
under laws (including any statute, treaty or regulation) in effect on the date of the closing of
the transactions described herein or related hereto (or, in the case of an assignee pursuant to
Section 20 of this Agreement, on the date of the Assignment and Acceptance by which such
assignee becomes a Lender hereunder) applicable to Agent or such Lender (as the case may be).



"Treasury Regulations” means the final and temporary (but not proposed) income tax regulations
promulgated under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).



"Unbilled Eligible Accounts” shall mean an Eligible Account not yet evidenced by an invoice
rendered to the Account Debtor thereunder but projected to be invoiced within thirty (30) days
after the last date of the service giving rise to such Eligible Account based upon documentation
satisfactory to Agent in its sole discretion determined in good faith.



2. LOANS.



(a) Revolving Loans.



Immediately prior to the effectiveness of this Agreement, as of the date hereof, the
outstanding principal balance of the Original Revolving Loans was $9,407,249.59 (the “Outstanding
Original Revolving Loan Balance”). On the date hereof, the Outstanding Original Revolving Loan
Balance shall remain an outstanding Liability except to the extent that such Outstanding Original
Revolving Loan Balance is repaid on the date hereof. Subject to the terms and conditions of this
Agreement and the Other Agreements to which an Obligor is a party, during the Original Term and any
Renewal Term, so long as no Event of Default has occurred and is continuing, each Lender, severally
and not jointly, agrees to make its Pro Rata Share of revolving loans and advances (the “Revolving
Loans”) requested by Borrower up to such Lender’s Revolving Loan Commitment so long as after giving
effect to such Revolving Loans, the sum of the aggregate unpaid principal balance of the Revolving
Loans and the Letter of Credit Obligations does not exceed the sum of the following sublimits (the
"Revolving Loan Limit”):




(i) eighty-five percent (85%) of the face amount (less maximum discounts, credits and
allowances which may be taken by or granted to Account Debtors in connection therewith in
the ordinary course of Borrower’s business) of Borrower’s Billed Eligible Accounts; plus




(ii) (A) eighty-five percent (85%) of the face amount (less maximum discounts, credits
and allowances which may be taken by or granted to Account Debtors in connection therewith
in the ordinary course of Borrower’s business) of Borrower’s Unbilled Eligible Accounts or
(B) Seventeen Million and No/100 Dollars ($17,000,000), whichever is less; minus




(iii) such reserves as Agent elects, in its sole discretion, determined in good faith,
to establish from time to time (which amount shall include the Special Litigation Reserve
and an amount reflecting unpaid payroll including payroll taxes which amount shall initially
be $7,000,000);



provided, that the Revolving Loan Limit shall in no event exceed, as of any date, Twenty-Five
Million and No/100 Dollars ($25,000,000) (such amount from time to time in effect, the “Maximum
Revolving Loan Limit”); provided, further, that the Revolving Loan Limit shall be determined by
reference to the most current borrowing base certificate delivered pursuant to Section 9(a)
and such determination shall remain in effect until delivery of the next borrowing base certificate
unless the Revolving Loan Limit is otherwise adjusted by Agent in its sole credit judgment
determined in good faith as a result of Billed Eligible Accounts or Unbilled Eligible Accounts
becoming ineligible prior to the delivery of the next borrowing base certificate or the
establishment by Agent in its sole discretion, determined in good faith, of any reserves. Agent
shall provide prompt notice to Borrower when (i) any adjustment of the Revolving Loan Limit prior
to the delivery of a borrowing base certificate pursuant to Section 9(a) is made and (ii)
establishing any reserves.



The aggregate unpaid principal balance of the Revolving Loans shall not at any time exceed the
lesser of the (i) Revolving Loan Limit minus the Letter of Credit Obligations and (ii) the Maximum
Revolving Loan Limit minus the Letter of Credit Obligations. If at any time the outstanding
Revolving Loans exceeds either the Revolving Loan Limit or the Maximum Revolving Loan Limit, in
each case minus the Letter of Credit Obligations, or any portion of the Revolving Loans and Letter
of Credit Obligations exceeds any applicable sublimit within the Revolving Loan Limit, Borrower
shall immediately, and without the necessity of demand by Agent, pay to Agent such amount as may be
necessary to eliminate such excess and Agent shall apply such payment to the outstanding Prime Rate
Loans until such Revolving Loans are paid in full and then to the outstanding LIBOR Rate Loans.



Neither Agent nor any Lender shall be responsible for any failure by any other Lender to
perform its obligations to make Revolving Loans hereunder, and the failure of any Lender to make
its Pro Rata Share of any Revolving Loan hereunder shall not relieve any other Lender of its
obligation, if any, to make its Pro Rata Share of any Revolving Loans hereunder.



If Borrower makes a request for a Revolving Loan as provided herein Agent, at its option and
in its sole discretion, shall do either of the following:




(i) advance the amount of the proposed Revolving Loan to Borrower disproportionately (a
“Disproportionate Advance”) out of Agent’s own funds on behalf of Lenders, which advance
shall be on the same day as Borrower’s request therefor with respect to Prime Rate Loans if
Borrower notifies Agent of such request by 1:00 P.M. (Chicago time) on such day, and request
settlement in accordance with Section 18 hereof such that upon such settlement each
Lender’s share of the outstanding Revolving Loans (including, without limitation, the amount
of any Disproportionate Advance) equals its Pro Rata Share; or




(ii) Notify each Lender by telecopy, electronic mail or other similar form of
teletransmission of the proposed advance on the same day Agent is notified or deemed
notified by Borrower of Borrower’s request for an advance pursuant to this subsection
2(a). Each Lender shall remit, to the demand deposit account designated by Borrower (i)
with respect to Prime Rate Loans, at or prior to 3:00 P.M., Chicago time, on the date of
notification, if such notification is made before 1:00 P.M., Chicago time, or 10:00 A.M.,
Chicago time, on the Business Day immediately succeeding the date of such notification, if
such notification is made after 1:00 P.M., Chicago time, and (ii) with respect to LIBOR Rate
Loans, at or prior to 10:30 A.M., Chicago time, on the date such LIBOR Rate Loans are to be
advanced, immediately available funds in an amount equal to such Lender’s Pro Rata Share of
such proposed advance.



If and to the extent that a Lender does not settle with Agent as required under this Agreement (a
"Defaulting Lender”) Borrower and Defaulting Lender severally agree to repay to Agent forthwith on
demand such amount required to be paid by such Defaulting Lender to Agent, together with interest
thereon, for each day from the date such amount is made available to Borrower until the date such
amount is repaid to Agent (x) in the case of a Defaulting Lender at the rate published by the
Federal Reserve Bank of New York on the next succeeding Business Day as the “Federal Funds Rate” or
if no such rate is published for any Business Day, at the average rate quoted for such day for such
transactions from three (3) federal funds brokers of recognized standing selected by Agent, and (y)
in the case of Borrower, at the interest rate applicable at such time for such Revolving Loans;
provided, that Borrower’s obligation to repay such advance to Agent shall not relieve such
Defaulting Lender of its liability to Agent for failure to settle as provided in this Agreement.



Borrower hereby authorizes Agent, in its sole discretion determined in good faith, to charge
any of Borrower’s accounts or advance Revolving Loans to make any payments of principal, interest,
fees, reasonable and documented costs or reasonable and documented expenses required to be made
under this Agreement or the Other Agreements.



A request for a Revolving Loan shall be made or shall be deemed to be made, each in the
following manner: Borrower shall give Agent same day notice, no later than 1:00 P.M. (Chicago
time) on such day, of its request for a Revolving Loan as a Prime Rate Loan, and at least three (3)
Business Days prior notice of its request for a Revolving Loan as a LIBOR Rate Loan, in which
notice Borrower shall specify the amount of the proposed borrowing, the applicable Interest Period
for LIBOR Rate Loans, and the proposed borrowing date; provided, however, that no such request may
be made at a time when there exists an Event of Default or an event which, with the passage of time
or giving of notice, will become an Event of Default. In the event that Borrower maintains a
controlled disbursement account at LaSalle, each check presented for payment against such
controlled disbursement account and any other charge or request for payment against such controlled
disbursement account shall constitute, to the extent there are insufficient funds in such
controlled disbursement account to make such payment, a request for a Revolving Loan as a Prime
Rate Loan in an amount equal to any such insufficient funds. As an accommodation to Borrower,
Agent may permit telephone requests for Revolving Loans and electronic transmittal of instructions,
authorizations, agreements or reports to Agent by Borrower. Unless Borrower specifically directs
Agent in writing not to accept or act upon telephonic or electronic communications from Borrower,
Agent shall have no liability to Borrower for any loss or damage suffered by Borrower as a result
of Agent’s honoring of any requests, execution of any instructions, authorizations or agreements or
reliance on any reports communicated to it telephonically or electronically and purporting to have
been sent to Agent by Borrower and Agent shall have no duty to verify the origin of any such
communication or the authority of the Person sending it, except, in each case, to the extent Agent
is grossly negligent or commits willful misconduct.



Borrower hereby irrevocably authorizes Agent to disburse the proceeds of each Revolving Loan
requested by Borrower, or deemed to be requested by Borrower, as follows: the proceeds of each
Revolving Loan requested under subsection 2(a) shall be disbursed by Agent in lawful money
of the United States of America in immediately available funds, in the case of the initial
borrowing, in accordance with the terms of the written disbursement letter from Borrower, and in
the case of each subsequent borrowing, by wire transfer, book transfer or Automated Clearing House
(ACH) transfer to such bank account as may be agreed upon by Borrower and Agent from time to time,
or elsewhere if pursuant to a written direction from Borrower.



(b) Repayments.



The Liabilities shall be repaid as follows:




(i) Repayment of Revolving Loans. The Revolving Loans and all other
Liabilities shall be repaid on the last day of the Original Term or any Renewal Term if this
Agreement is renewed pursuant to Section 10 hereof. Borrower may borrow, prepay and
reborrow Revolving Loans in accordance with the terms of this Agreement. With respect to
any prepayments of the Revolving Loans other than from Proceeds of Collateral pursuant to
Section 8 hereof, such prepayments may be made without premium or penalty (but with any
required breakage fees pursuant to Section 4(b)(iv)), upon at least three Business Days’
notice to Agent in the case of any LIBOR Rate Loans, or upon notice given to Agent not later
than 1:00 P.M. (Chicago time) on the proposed date of prepayment in the case of any Prime
Rate Loans, in each case, stating the proposed date, the types of Revolving Loans to be
prepaid, the application of such prepayment among Revolving Loans and aggregate principal
amount of the prepayment, and if such notice is given, Borrower shall, prepay the specified
outstanding aggregate principal amount of the applicable Revolving Loans.




(ii) Mandatory Prepayments. Upon receipt of the proceeds of the sale or other
disposition of any Equipment or real property of Borrower which is subject to a mortgage in
favor of Agent, or if any of the Equipment or real property subject to such mortgage is
damaged, destroyed or taken by condemnation in whole or in part, the proceeds thereof shall
be paid by Borrower to Agent, for the benefit of Agent and Lenders, as a prepayment of the
Revolving Loans and other Liabilities as provided in Section 8 but shall not
permanently reduce the Revolving Loan Commitments.



(c) Notes.



The Revolving Loans shall, in Agent’s and Lenders’ sole discretion, be evidenced by one or
more promissory notes in substantially the form of Exhibit E hereto. However, if such
Revolving Loans are not so evidenced, such Revolving Loans may be evidenced solely by entries upon
the books and records maintained by Agent and each Lender.



(d) Reduction or Termination of the Revolving Loan Commitments.



Subject to Section 10, Borrower may, upon at least thirty (30) Business Days’ notice
to Agent, permanently reduce in whole or in part the Revolving Loan Commitments to an amount not
less than the then outstanding principal and outstanding accrued interest of the Revolving Loans;
provided, however, that each partial reduction of the Revolving Loan Commitments shall be (i) in an
aggregate amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii)
made ratably among the Lenders in accordance with their Revolving Loan Commitments. Each time the
Revolving Loan Commitments are reduced pursuant to this Section 2(d) to an amount in excess
of zero, Borrower agrees to pay to Agent, for the benefit of Lenders, as a prepayment fee, an
amount equal to (i) two percent (2%) of the amount such Revolving Loan Commitments were so reduced
if such prepayment occurs two (2) years or more prior to the end of the Original Term, (ii) one and
one-half percent (1.50%) of the amount such Revolving Loan Commitments were so reduced if such
prepayment occurs less than two (2) years, but at least one (1) year prior to the end of the
Original Term, or (iii) one half of one percent (0.50%) of the amount such Revolving Loan
Commitments were so reduced if such prepayment occurs less than one (1) year prior to the end of
the Original Term.



3. LETTERS OF CREDIT.



(a) General Terms.



Subject to the terms and conditions of this Agreement and the Other Agreements to which an
Obligor is a party, during the Original Term or any Renewal Term, so long as no Event of Default
has occurred and is continuing, Agent shall from time to time issue, upon Borrower’s request,
commercial and/or standby Letters of Credit; provided, that the aggregate undrawn face amount of
all such Letters of Credit shall at no time exceed Fifteen Million and No/100 Dollars
($15,000,000). Payments made by the issuer of a Letter of Credit to any Person on account of any
Letter of Credit shall be immediately payable by Borrower without notice, presentment or demand and
Borrower agrees that each payment made by the issuer of a Letter of Credit in respect of a Letter
of Credit shall constitute a request by Borrower for a Prime Rate Loan on the date of such payment
sufficient to reimburse such issuer; provided that, if no Event of Default has occurred and is
continuing, such Prime Rate Loan shall be deemed to be advanced by Lenders on the date of payment
to such issuer notwithstanding any failure to satisfy the notice requirements set forth in
Section 2. In the event such Prime Rate Loan is not advanced by Agent or Lenders for any
reason, such reimbursement obligations (whether owing to the issuer of the Letter of Credit or
Agent or Lenders) shall become part of the Liabilities hereunder and shall bear interest at the
rate then applicable to Revolving Loans constituting Prime Rate Loans until repaid. Borrower shall
remit to Agent, for the benefit of Lenders, a Letter of Credit fee equal to three percent (3%) per
annum on the aggregate undrawn face amount of all Letters of Credit outstanding, which fee shall be
payable monthly in arrears on the last Business Day of each month for such month or portion
thereof. Borrower shall also pay on demand the normal and customary administrative charges of the
issuer of the Letter of Credit for issuance, amendment, negotiation, renewal or extension of any
Letter of Credit.



(b) Requests for Letters of Credit.



Borrower shall make requests for Letters of Credit in writing at least three (3) Business Days
prior to the date such Letter of Credit is to be issued. Each such request shall specify the date
such Letter of Credit is to be issued, the amount thereof, the name and address of the beneficiary
thereof and a description of the transaction to be supported thereby. Any such notice shall be
accompanied by the form of Letter of Credit requested and any application or reimbursement
agreement customarily required by the issuer of such Letter of Credit. If any term of such
application or reimbursement agreement is inconsistent with this Agreement, then the provisions of
this Agreement shall control to the extent of such inconsistency.



(c) Obligations Absolute.



Borrower shall be obligated to reimburse the issuer of any Letter of Credit, or Agent and/or
Lenders if Agent and/or Lenders have reimbursed such issuer on Borrower’s behalf, for any payments
made in respect of any Letter of Credit, which obligation shall be unconditional and irrevocable
and shall be paid regardless of: (i) any lack of validity or enforceability of any Letter of
Credit, (ii) any amendment or waiver of or consent or departure from all or any provisions of any
Letter of Credit, this Agreement or any Other Agreement, (iii) the existence of any claim, set off,
defense or other right which Borrower or any other Person may have against any beneficiary of any
Letter of Credit or Agent, any Lender or the issuer of the Letter of Credit, (iv) any draft or
other document presented under any Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate in any respect, (v)
any payment under any Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, and (vi) any other act or omission to act or
delay of any kind of the issuer of such Letter of Credit, Agent, any Lender or any other Person or
any other event or circumstance that might otherwise constitute a legal or equitable discharge of
Borrower’s obligations hereunder. It is understood and agreed by Borrower that the issuer of any
Letter of Credit may accept documents that appear on their face to be in order without further
investigation or inquiry, regardless of any notice or information to the contrary.



(d) Expiration Dates of Letters of Credit.



The expiration date of each Letter of Credit shall be no later than the earlier of (i) one (1)
year from the date of issuance and (ii) the thirtieth (30th) day prior to the end of the Original
Term or any Renewal Term. Notwithstanding the foregoing, a Letter of Credit may provide for
automatic extensions of its expiration date for one or more one (1) year periods, so long as the
issuer thereof has the right to terminate the Letter of Credit at the end of each one (1) year
period and no extension period extends past the thirtieth (30th) day prior to the end of the
Original Term or any Renewal Term.



(e) Participation.



Immediately upon the issuance of a Letter of Credit in accordance with this Agreement, each
Lender shall be deemed to have irrevocably and unconditionally purchased and received from Agent,
without recourse or warranty, an undivided interest and participation therein to the extent of such
Lender’s Pro Rata Share (including, without limitation, all obligations of Borrower with respect
thereto). Borrower hereby indemnifies Agent and each Lender (in its capacity as Agent or Lender,
as applicable) against any and all liability and expense (other than any liability or expense
caused by or resulting from Agent’s or such Lender’s gross negligence or willful misconduct) it may
incur in connection with any Letter of Credit and agrees to reimburse Agent and each Lender for any
payment made by Agent or any Lender to the issuer in connection with the issuer’s payment with
respect to a Letter of Credit.



(f) Letters of Credit Outstanding under Original Loan Agreement.



Borrower, Lenders and Agent hereby agree that any and all “Letters of Credit” (as such term is
defined in the Original Loan Agreement) outstanding on the date hereof shall be deemed to be
Letters of Credit issued under this Agreement.



4. INTEREST, FEES AND CHARGES.



(a) Interest Rate.



Subject to the terms and conditions set forth below, the Revolving Loans shall bear interest
at the per annum rate of interest set forth in subsection (i), (ii) or
(iii) below:




(i) One-fourth of one percent (0.25%) per annum in excess of the Prime Rate in effect
from time to time, payable on the last Business Day of each month in arrears for the month
or portion thereof. Said rate of interest shall increase or decrease by an amount equal to
each increase or decrease in the Prime Rate effective on the effective date of each such
change in the Prime Rate.




(ii) The Applicable Margin in excess of the LIBOR Rate for the applicable Interest
Period, such rate to remain fixed for such Interest Period. “Interest Period” shall mean
any continuous period of one (1), two (2) or three (3) months, as selected from time to time
by Borrower by irrevocable notice (in writing, by telecopy, telex, electronic mail or cable
or by telephone as provided in Section 2 hereof) given to Agent not less than three
(3) Business Days prior to the first day of each respective Interest Period; provided that:
(A) each such period occurring after such initial period shall commence on the day on which
the immediately preceding period expires; (B) the final Interest Period shall be such that
its expiration occurs on or before the end of the Original Term or any Renewal Term; and (C)
if for any reason Borrower shall fail to timely select a period, then such Revolving Loans
shall continue as, or revert to, Prime Rate Loans. Said rate of interest shall be payable
on the last Business Day of each month in arrears and on the last Business Day of such
Interest Period.




(iii) Upon the occurrence and during the continuance of an Event of Default, the
Revolving Loans shall bear interest at the rate of two percent (2.0%) per annum in excess of
the interest rate otherwise payable thereon, which interest shall be payable on demand. All
interest shall be calculated on the basis of a 360-day year. Agent will provide prompt
notice to Borrower after the increase of interest pursuant to this subsection
4(a)(iii).



(b) Other LIBOR Provisions; Taxes.




(i) Subject to the provisions of this Agreement, Borrower shall have the option (A) as
of any date, to convert all or any part of the Prime Rate Loans to, or request that new
Revolving Loans be made as, LIBOR Rate Loans of various Interest Periods, (B) as of the last
day of any Interest Period, to continue all or any portion of the relevant LIBOR Rate Loans
as LIBOR Rate Loans; (C) as of the last day of any Interest Period, to convert all or any
portion of the LIBOR Rate Loans to Prime Rate Loans; and (D) at any time, to request new
Revolving Loans as Prime Rate Loans; provided, that Revolving Loans may not be continued as
or converted to LIBOR Rate Loans if the continuation or conversion thereof would violate the
provisions of subsections 4(b)(ii) or 4(b)(iii) of this Agreement or if an
Event of Default has occurred and is continuing.




(ii) Agent’s determination of the LIBOR Rate as provided above shall be conclusive,
absent manifest error. Furthermore, if Agent or any Lender determines, in good faith (which
determination shall be conclusive, absent manifest error), prior to the commencement of any
Interest Period that (A) U.S. Dollar deposits of sufficient amount and maturity for funding
the Revolving Loans are not available to Agent or such Lender in the London Interbank
Eurodollar market in the ordinary course of business, or (B) by reason of circumstances
affecting the London Interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the Revolving Loans requested by
Borrower to be LIBOR Rate Loans or the Revolving Loans bearing interest at the rates set
forth in subsection 4(a)(ii) of this Agreement shall not represent the effective
pricing to such Lender for U.S. Dollar deposits of a comparable amount for the relevant
period (such as for example, but not limited to, official reserve requirements required by
Regulation D to the extent not given effect in determining the rate), Agent shall promptly
notify Borrower and (1) all existing LIBOR Rate Loans shall convert to Prime Rate Loans upon
the end of the applicable Interest Period, and (2) no additional LIBOR Rate Loans shall be
made until such circumstances are cured.




(iii) If, after the date hereof, the introduction of, or any change in any applicable
law, treaty, rule, regulation or guideline or in the interpretation or administration
thereof by any governmental authority or any central bank or other fiscal, monetary or other
authority having jurisdiction over Agent or any Lender or its lending offices (a “Regulatory
Change”), shall, in the opinion of counsel to Agent or such Lender, make it unlawful for
Agent or such Lender to make or maintain LIBOR Rate Loans, then Agent shall promptly notify
Borrower and (A) the LIBOR Rate Loans shall immediately convert to Prime Rate Loans on the
last Business Day of the then existing Interest Period or on such earlier date as required
by law and (B) no additional LIBOR Rate Loans shall be made until such circumstance is
cured.




(iv) If, for any reason, a LIBOR Rate Loan is paid prior to the last Business Day of
any Interest Period or if a LIBOR Rate Loan does not occur on a date specified by Borrower
in its request (other than as a result of a default by Agent or a Lender), Borrower agrees
to indemnify Agent and each Lender against any loss (including any loss on redeployment of
the deposits or other funds acquired by Agent or such Lender to fund or maintain such LIBOR
Rate Loan but excluding any lost profit or margins), cost or expense incurred by Agent or
such Lender as a result of such prepayment. If Agent or any Lender makes such a claim for
compensation, it shall provide to Borrower a certificate setting forth the amount of such
loss, cost or expense and an explanation of the basis for and the computation of such loss,
cost or expense and the amounts shown on such certificate shall be conclusive in the absence
manifest error.




(v) If any Regulatory Change (whether or not having the force of law) shall (A) impose,
modify or deem applicable any assessment, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of or loans by, or any other
acquisition of funds or disbursements by, Agent or any Lender; (B) subject to the provisions
of subsection 4(b)(vi) (which shall be controlling with respect to the matters
covered thereby), cause Agent or any Lender or the LIBOR Rate Loans to be subject to any Tax
or change the basis of taxation of payments to Agent or any Lender of principal or interest
due from Borrower to Agent or such Lender hereunder (other than a change in the taxation of
the overall net income of Agent or such Lender); or (C) impose on Agent or any Lender any
other adverse condition regarding the LIBOR Rate Loans or Agent’s or any Lender’s funding
thereof, and Agent or any Lender shall determine (which determination shall be conclusive,
absent any manifest error) that the result of the foregoing is to increase the cost to Agent
or such Lender of making or maintaining the LIBOR Rate Loans or to reduce the amount of
principal or interest received by Agent or such Lender hereunder, then Borrower shall pay to
such party, on demand, such additional amounts as such party shall, from time to time,
determine are sufficient to compensate and indemnify such party from such increased cost or
reduced amount. If Agent or a Lender makes such a claim for compensation, it shall provide
to Borrower after such claim a certificate setting forth the computation of the increased
costs or reduced amount in reasonable detail and such compilation shall be conclusive in
absence of manifest error.




(vi) Each of Agent and each Lender shall receive payments of amounts of principal of
and interest with respect to the LIBOR Rate Loans free and clear of, and without deduction
for, any Taxes.




(A) If Borrower shall be required to withhold or deduct any Tax from any such
amount payable with respect to a LIBOR Rate Loan, then such amount shall be
increased by Borrower to the extent necessary to ensure that, after such withholding
or deduction, Agent or such Lender (as the case may be) receives a net amount equal
to the amount it would have received had no such withholding or deduction been
required or made. If Agent or any Lender shall be subject to any Tax in respect of
any LIBOR Rate Loan or any part thereof, then Borrower shall indemnify Agent or such
Lender (as the case may be) for the full amount of such Tax paid by Agent or such
Lender (as the case may be) within 30 days after the date Agent or such Lender (as
the case may be) makes written demand therefor. Such written demand shall be
accompanied by a certificate setting forth in reasonable detail the amount of such
indemnification and the basis for the calculation of such amount, and shall be
conclusive in the absence of manifest error. Notwithstanding the foregoing,
Borrower shall not be obligated to indemnify Agent or such Lender (as the case may
be) to the extent that such Tax was incurred by Agent or such Lender (as the case
may be) (x) more than one hundred eighty (180) days prior to the date that Agent or
such Lender (as the case may be) become aware that Agent or such Lender (as the case
may be) is subject to such Tax or (y) to the extent such Tax was incurred as a
result of Agent’s or such Lender’s gross negligence or willful misconduct.




(B) Prior to the closing of the transactions described herein or related
hereto, in the case of each Non-U.S. Lender that is a signatory hereto, and on the
date of the Assignment and Acceptance pursuant to which it becomes a Lender in the
case of each other Non-U.S. Lender (and from time to time thereafter if requested by
Borrower or Agent), each Non-U.S. Lender that is entitled at such time to an
exemption from United States withholding tax, or that is subject to such tax at a
reduced rate under an applicable tax treaty, shall provide Borrower and Agent with
two validly completed originals of each of the following, as applicable: (1) Form
W-8ECI (claiming exemption from United States withholding tax because the income is
effectively connected with a United States trade or business) or any successor form,
(2) Form W-8BEN (claiming exemption from, or a reduction of, United States
withholding tax under an applicable tax treaty) or any successor form, (3) in the
case of a Non-U.S. Lender claiming exemption under section 871(h) or 881(c) of the
Code, Form W-8BEN (claiming exemption from United States withholding tax under the
portfolio interest exemption) or any successor form and a certificate in form and
substance reasonably satisfactory to Agent and Borrower to the effect that (x) such
Non-U.S. Lender is not a “bank” for purposes of section 881(c)(3)(A) of the Code, is
not subject to regulatory or other legal requirements as a bank in any jurisdiction,
and has not been treated as a bank for purposes of any tax, securities law or other
filing or submission made to any governmental authority, any application made to a
rating agency or qualification for any exemption from any tax, securities law or
other legal requirements, (y) is not a ten percent (10%) shareholder for purposes of
section 881(c)(3)(B) of the Code and (z) is not a controlled foreign corporation
receiving interest from a related person for purposes of section 881(c)(3)(C) of the
Code, (4) in the case of a Non-U.S. Lender that is an “intermediary” within the
meaning of Treasury Regulations section 1.1441-1(c)(13), Form W-8IMY or any
successor or substitute form or forms, including therewith any withholding
certificates and withholding statements required under the applicable Treasury
Regulations or (5) any other applicable form, certificate or document prescribed by
the IRS or applicable law certifying as to such Non-U.S. Lender’s entitlement to
such exemption from United States withholding tax or reduced rate with respect to
all payments to be made to such Non-U.S. Lender with respect to the LIBOR Rate
Loans. Each Non-U.S. Lender shall also provide to each of Borrower and Agent two
completed copies of the relevant forms (or successor forms), certificates or
documents described in clauses (1) through (5) of the immediately preceding sentence
on or before the date that the most recent form, certificate or document previously
provided expires or becomes obsolete, or promptly after the occurrence of any event
requiring a change in the most recent form, certificate or document previously
provided, certifying that such Non-U.S. Lender is exempt from or entitled to a
reduced rate of United States withholding tax on payments made to such Non-U.S.
Lender with respect to the LIBOR Rate Loans, unless a change in any applicable law,
treaty or governmental rule, regulation or order (or any change in the
interpretation, administration or application thereof) has occurred prior to the
date on which any such delivery would otherwise be required that renders all such
documentation inapplicable or that would prevent such Non-U.S. Lender from duly
completing and delivering any documentation with respect to it.




(C) Prior to the closing of the transactions described herein or related
hereto, in the case of each Lender that is a signatory hereto, and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Lender (and from time to time thereafter if reasonably requested by
Borrower or Agent), each Lender that is a United States person as defined in section
7701(a)(30) of the Code and that is not an “exempt recipient” (as defined in
Treasury Regulations section 1.6049-4(c)) with respect to which no backup
withholding is required shall deliver to Borrower and Agent two validly completed
originals of Form W-9 or any successor form, certifying that such Person is exempt
from United States backup withholding tax on payments made hereunder with respect to
the LIBOR Rate Loans.




(D) Unless Borrower has received, prior to making any payment with respect to a
LIBOR Rate Loan to or for a Lender, forms or other documents satisfactory to it
indicating that payments with respect to a LIBOR Rate Loan are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, Borrower shall withhold amounts required to be withheld by applicable
law from such payments at the applicable statutory rate. For any period with
respect to which any Lender has failed to provide Borrower or Agent with the
appropriate form, certificate or document described in subclause 4(b)(vi)(B)
or subclause 4(b)(vi)(C) above, such Lender shall not be entitled to the
payment of increased amounts or indemnification under subclause 4(b)(vi)(A)
above for any Taxes imposed by reason of such failure.




(E) If, any part of any Tax paid by Agent or any Lender pursuant to subclause
4(b)(vi)(A) above is subsequently recovered by Agent or such Lender, such party
shall reimburse Borrower to the extent of the amount so recovered. A certificate of
an officer of Agent or any Lender setting forth the amount of such recovery and the
basis therefor shall be conclusive, absent manifest error.




(vii) Each request for LIBOR Rate Loans shall be in an amount not less than One Million
and No/100 Dollars ($1,000,000), and in integral multiples of, Two Hundred Fifty Thousand
and No/100 Dollars ($250,000).




(viii) Unless otherwise specified by Borrower, all Revolving Loans shall be Prime Rate
Loans.




(ix) No more than four (4) Interest Periods may be in effect with respect to
outstanding LIBOR Rate Loans at any one time.



(c) Fees And Charges.




(i) Unused Line Fee: Borrower shall pay to Agent, for the benefit of Lenders,
an unused line fee of three-eighths of one percent (0.375%) per annum of the difference
between the Maximum Revolving Loan Limit in effect at such time and the sum of (x) the
average daily balance of the Revolving Loans plus (y) the Letter of Credit Obligations for
each month, which fee shall be fully earned by Lenders and payable monthly in arrears on the
last Business Day of each month for the month or portion thereof. Said fee shall be
calculated on the basis of a 360 day year.




(ii) Agent’s Fees: Borrower shall pay to Agent, for its own account, the fees
set forth in the Amended and Restated Fee Letter of even date herewith executed by Borrower
in favor of Agent.




(iii) Costs and Expenses: Borrower shall reimburse Agent for all reasonable
and documented out-of-pocket costs and reasonable and documented out-of-pocket expenses,
including, without limitation, legal expenses and attorneys’ fees (whether for internal or
outside counsel), incurred by Agent in connection with the (i) documentation and
consummation of the transactions contemplated by or related to this Agreement and the Other
Agreements, including, without limitation, Uniform Commercial Code and other public record
searches and filings, overnight courier or other express or messenger delivery, appraisal
costs, surveys, title insurance and environmental audit or review costs; (ii) collection,
protection or enforcement of any rights in or to the Collateral; (iii) collection of any
Liabilities; and (iv) administration and enforcement of any of Agent’s and/or any Lender’s
rights under this Agreement or any Other Agreement (including, without limitation, any costs
and expense of any third party provider engaged by Agent for such purposes). Borrower shall
also pay all normal service charges with respect to all accounts maintained by Borrower with
any Lender and LaSalle and any additional services requested by Borrower from any Lender and
LaSalle. All such costs, expenses and charges shall, if owed to LaSalle, be reimbursed by
Agent and Lenders and in such event, or in the event such costs and expenses are owed to
Agent or a Lender, shall constitute Liabilities hereunder, shall be payable by Borrower to
Agent on demand, and until paid, shall bear interest at the highest rate then applicable to
Revolving Loans hereunder. Agent shall provide invoices for such fees, costs, expenses and
charges of Persons other than Agent or Lenders to Borrower promptly after receipt thereof
from such Persons. In addition, during the occurrence and continuance of an Event of
Default, Borrower shall reimburse each Lender for all documented out-of-pocket costs and
documented out-of-pocket expenses, including, without limitation, legal expenses and
reasonable attorneys’ fees (whether for internal or outside counsel), incurred by such
Lender in connection with the (i) collection, protection or enforcement of any rights in or
to the Collateral; (ii) collection of any Liabilities; and (iii) administration and
enforcement of any of Lenders’ rights under this Agreement.




(iv) Capital Adequacy Charge. If Agent or any Lender shall have determined
that the adoption after the date hereof of any law, rule or regulation regarding capital
adequacy, or any change after the date hereof therein or in the interpretation or
application thereof, or compliance by Agent or such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any central bank or
governmental authority enacted after the date hereof, does or shall have the effect of
reducing the rate of return on such party’s capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such party’s policies with respect
to capital adequacy) by a material amount, then from time to time, after submission by Agent
to Borrower of a written demand therefor (“Capital Adequacy Demand”) together with the
certificate described below, Borrower shall pay to such party such additional amount or
amounts (“Capital Adequacy Charge”) as will compensate such party for such reduction, such
Capital Adequacy Demand to be made with reasonable promptness following such determination.
A certificate of Agent or such Lender claiming entitlement to payment as set forth above
shall be conclusive in the absence of manifest error. Such certificate shall set forth, in
reasonable detail, the nature of the occurrence giving rise to such reduction, the amount of
the Capital Adequacy Charge to be paid to Agent or such Lender, and the method by which such
amount was determined. In determining such amount, the applicable party may use any
reasonable averaging and attribution method, applied on a non-discriminatory basis.



(d) Maximum Interest.



It is the intent of the parties that the rate of interest and other charges to Borrower under
this Agreement and the Other Agreements shall be lawful; therefore, if for any reason the interest
or other charges payable under this Agreement are found by a court of competent jurisdiction, in a
final determination, to exceed the limit which Agent or any Lender may lawfully charge Borrower,
then the obligation to pay interest and other charges shall automatically be reduced to such limit
and, if any amount in excess of such limit shall have been paid, then such amount shall be refunded
to Borrower.



(e) Interest Under Original Loan Agreement.



Borrower, Lenders and Agent hereby agree that any and all accrued and unpaid interest on the
Original Revolving Loans shall remain Liabilities of the Borrower hereunder, and shall be due and
payable by Borrower, for the benefit of the Lenders, in the same matter as interest becomes due and
payable hereunder.



(f) Fees, Charges and Expenses Under Original Loan Agreement.



Borrower, Lenders and Agent hereby agree that any and all accrued and unpaid fees, charges and
expenses owing to Agent or any Lender under the Original Loan Agreement or any “Other Agreement”
(as such term is defined in the Original Loan Agreement) shall be deemed to be accrued fees,
charges and expenses hereunder, shall remain Liabilities of the Borrower hereunder, and shall be
due and payable by Borrower, for the benefit of the Lenders, in the same manner as comparable fees,
charges and expenses are due and payable hereunder.



5. COLLATERAL.



(a) Grant of Security Interest to Agent.



As security for the payment of all Revolving Loans now or in the future made by Agent and
Lenders to Borrower hereunder and for the payment or other satisfaction of all other Liabilities,
Borrower hereby grants to Agent, for the benefit of Agent and Lenders, a continuing security
interest in the following property of Borrower, whether now or hereafter owned, existing, acquired
or arising and wherever now or hereafter located: (a) all Accounts (whether or not Eligible
Accounts); (b) all Chattel Paper, Instruments, Documents and General Intangibles (including,
without limitation, all patents, patent applications, trademarks, trademark applications, trade
names, trade secrets, goodwill, copyrights, copyright applications, registrations, licenses,
software, franchises, customer lists, tax refund claims, claims against carriers and shippers,
guarantee claims, contract rights, payment intangibles, security interests, security deposits and
rights to indemnification); (c) all Inventory; (d) all Goods (other than Inventory), including,
without limitation, Equipment, vehicles and Fixtures and all Goods whose sale, lease or other
disposition by Borrower has given rise to Accounts and have been returned to, or repossessed or
stopped in transit by, Borrower; (e) all Investment Property; (f) all Deposit Accounts, bank
accounts, deposits and cash; (g) all Letter-of-Credit Rights; (h) Commercial Tort Claims listed on
Exhibit C hereto, (i) any other property of Borrower now or hereafter in the possession, custody or
control of Agent or any Lender or any agent or any parent, affiliate or subsidiary of Agent or any
Lender or any participant with any Lender in the Loans, for any purpose (whether for safekeeping,
deposit, collection, custody, pledge, transmission or otherwise) and (j) all additions and
accessions to, substitutions for, and replacements, products and Proceeds of the foregoing
property, including, without limitation, proceeds of all insurance policies insuring the foregoing
property, and all of Borrower’s books and records relating to any of the foregoing and to
Borrower’s business; provided that this Agreement shall not create a security interest in or lien
upon, and the term “Collateral” shall not include, (a) any General Intangible or other right
arising under any contract, Instrument, Document, license or other document to the extent that the
grant of a security interest would result in a breach of the terms of, or constitute a default
under, such General Intangible, contract, Instrument, Document, license or other document (other
than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406,
9-407 or 9-408 or any successor provision of the Uniform Commercial Code of the relevant
jurisdiction or any other applicable law) and (b) tangible personal property subject to a Permitted
Lien described in clause (iv) or (viii) of such definition to the extent the granting of a security
interest in or lien thereon is prohibited by the terms of the indebtedness secured thereby.



Notwithstanding anything in this Agreement or any Other Agreement to the contrary, (a) neither
this Agreement nor any Other Agreement shall operate as a sale, transfer, conveyance or other
assignment to Agent or any Lender of any applications by an Obligor for a trademark based on an
intent to use the same if and so long as such application is pending and has not been the subject
of a statement of use or amendment to allege use (such pending applications which are based on
intent to use being hereinafter referred to collectively as “Intent-To-Use Applications”), but
rather, if and so long as such Obligor’s Intent-To-Use Application is pending, this Agreement and
any applicable Other Agreement shall operate only to create a security interest for collateral
purposes in favor of Agent for the benefit of Lenders, on such Intent-To-Use Applications as
collateral security for the Liabilities and (b) the lien and security interest of this Agreement or
any Other Agreement on any Collateral sold or otherwise disposed of in accordance with the
provisions of this Agreement shall be automatically released. Agent shall (and is hereby
authorized by each Lender to), at Borrower’s expense, execute and deliver such instruments
(including Uniform Commercial Code termination statements), and take such other actions, as
Borrower may from time to time reasonably request to confirm or evidence such release made pursuant
to the immediately preceding sentence.



(b) Other Security.



Agent, in its sole discretion, without waiving or releasing any obligation, liability or duty
of Borrower under this Agreement or the Other Agreements or any Event of Default, may at any time
or times hereafter, but shall not be obligated to, pay, acquire or accept an assignment of any
security interest, lien, encumbrance or claim asserted by any Person in, upon or against the
Collateral. All sums paid by Agent in respect thereof and all reasonable and documented
out-of-pocket costs, fees and reasonable and documented out-of-pocket expenses including, without
limitation, attorneys’ fees of inside or outside counsel, all court costs and all other reasonable
and documented out-of-pocket charges relating thereto incurred by Agent shall constitute
Liabilities, payable by Borrower to Agent on demand and, until paid, shall bear interest at the
highest rate then applicable to Revolving Loans hereunder. Agent shall provide invoices for such
fees, costs, expenses and charges of Persons other than Agent or Lenders to Borrower promptly after
receipt thereof from such Persons.



(c) Possessory Collateral.



Immediately upon Borrower’s receipt of any portion of the Collateral evidenced by (i) any
Investment Property consisting of certificated securities, (ii) an Instrument with an outstanding
principal amount in excess of $250,000 or (iii) any Document, including without limitation, any
Tangible Chattel Paper, involving or with respect to assets having a value in excess of $250,000,
Borrower shall deliver the original thereof to Agent together with an appropriate endorsement or
other specific evidence of lien thereof to Agent (in form and substance acceptable to Agent);
provided that if either Excess Availability is less than $3,000,000 or an Event of Default has
occurred and is continuing, Borrower shall promptly deliver to Agent a schedule of all items of
Collateral of the type described in clauses (ii) and (iii) above and, if requested by Agent in its
sole discretion determined in good faith, deliver an original any of such Collateral to Agent
together with an appropriate endorsement or other specific evidence of lien thereof to Agent (in
form and substance acceptable to Agent). If an endorsement or evidence of lien of any such items
shall not be made for any reason, Agent is hereby irrevocably authorized, as Borrower’s attorney
and agent-in-fact, to endorse or assign the same on Borrower’s behalf.



(d) Electronic Chattel Paper.



To the extent that Borrower obtains or maintains any Electronic Chattel Paper, Borrower shall
create, store and assign the record or records comprising the Electronic Chattel Paper in such a
manner that (i) a single authoritative copy of the record or records exists which is unique,
identifiable and except as otherwise provided in clauses (iv), (v) and (vi) below, unalterable,
(ii) the authoritative copy identifies Agent as the assignee of the record or records, (iii) the
authoritative copy is communicated to and maintained by the Agent or its designated custodian, (iv)
copies or revisions that add or change an identified assignee of the authoritative copy can only be
made with the participation of Agent, (v) each copy of the authoritative copy and any copy of a
copy is readily identifiable as a copy that is not the authoritative copy and (vi) any revision of
the authoritative copy is readily identifiable as an authorized or unauthorized revision.



6. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN.



Borrower shall, at Agent’s request, at any time and from time to time, authenticate, execute
and deliver to Agent such financing statements (including, without limitation, one or more
financing statements indicating that such financing statements cover all assets or all personal
property (or words of similar effect) of Borrower and regardless of whether any particular asset
described in such financing statements falls within the scope of the Uniform Commercial Code or the
granting clause of this Agreement), documents and other agreements and instruments (and pay the
cost of filing or recording the same in all public offices deemed necessary or desirable by Agent)
and do such other acts and things or cause third parties to do such other acts and things as Agent
may deem necessary or desirable in its sole discretion determined in good faith in order to
establish and maintain a valid, attached and perfected security interest in the Collateral in favor
of Agent (free and clear of all other liens, claims, encumbrances and rights of third parties
whatsoever, whether voluntarily or involuntarily created, except Permitted Liens) to secure payment
of the Liabilities, and in order to facilitate the collection of the Collateral. Borrower
irrevocably hereby makes, constitutes and appoints Agent (and all Persons designated by Agent for
that purpose) as Borrower’s true and lawful attorney and agent-in-fact to execute and file such
financing statements, documents and other agreements and instruments and do such other acts and
things as may be necessary to preserve and perfect Agent’s security interest in the Collateral.
Borrower hereby authorizes the filing of any financing statements or continuation statements, and
amendments to financing statements, in any jurisdictions and with any filing offices as the Agent
may determine, in its sole discretion, are necessary or advisable to perfect the security interest
granted to the Agent in connection herewith. Such financing statements may describe the collateral
in the same manner as described in this Agreement or may contain an indication or description of
collateral that describes such property in any other manner as the Agent may determine, in its sole
discretion, is necessary or prudent to ensure the perfection of the security interest in the
collateral granted to the Agent in connection herewith, including, without limitation, describing
such property as “all assets whether now owned or hereafter acquired” or “all personal property
whether now owned or hereafter acquired”. Borrower further ratifies and confirms the prior filing
by Agent of any and all financing statements which identify the Borrower as debtor, Agent as
secured party and any or all Collateral as collateral.



7. Intentionally Omitted.



8. COLLECTIONS.



(a) Borrower shall direct all of its Account Debtors to make all payments on the Accounts
directly to a post office box (the “Lock Box”) designated by, and under the exclusive control of,
Agent, at a financial institution acceptable to Agent. Borrower shall establish an account (the
"Lock Box Account”) in Agent’s name with a financial institution acceptable to Agent, into which
all payments received in the Lock Box shall be deposited, and into which Borrower will, within one
Business Day of receipt thereof, deposit all payments received by Borrower on Accounts in the
identical form in which such payments were received, whether by cash or check. If Borrower or
Subsidiary, any officer, director, employee or agent of Borrower or any Subsidiary, or any other
Person acting for or in concert with Borrower shall receive any monies, checks, notes, drafts or
other payments relating to or as Proceeds of Accounts or other Collateral, Borrower and each such
Person shall receive all such items in trust for, and as the sole and exclusive property of, Agent
and, within one Business Day of receipt thereof, shall remit the same (or cause the same to be
remitted) in kind to the Lock Box Account. The financial institution with which the Lock Box
Account is established shall acknowledge and agree, in a manner satisfactory to Agent in its sole
discretion determined in good faith, that the amounts on deposit in such Lock Box and Lock Box
Account are the sole and exclusive property of Agent, that such financial institution will follow
the instructions of Agent with respect to disposition of funds in the Lock Box and Lock Box Account
without further consent from Borrower, that such financial institution has no right to setoff
(other than with respect to items deposited therein that are returned or otherwise not collected
and for customary charges, fees, commissions and expenses and other agreed upon exceptions) against
the Lock Box or Lock Box Account or against any other account maintained by such financial
institution into which the contents of the Lock Box or Lock Box Account are transferred, and that
such financial institution shall wire, or otherwise transfer in immediately available funds to
Agent in a manner satisfactory to Agent, funds deposited in the Lock Box Account on a daily basis
as such funds are collected. Borrower agrees that all payments made to such Lock Box Account or
otherwise received by Agent, whether in respect of the Accounts or as Proceeds of other Collateral
or otherwise, will be applied on account of the Liabilities in accordance with the terms of this
Agreement; provided, that so long as no Event of Default has occurred, payments received by Agent
shall not be applied to the unmatured portion of the LIBOR Rate Loans or to any other Liabilities
that are not due and payable (other than the principal balance of Prime Rate Loans), but shall be
held in a cash collateral account maintained by Agent, until the earlier of (i) the last Business
Day of the Interest Period applicable to any such LIBOR Rate Loan which Borrower has not elected to
continue as a LIBOR Rate Loan or the due date of such other Liability and then the immediately
available funds in such cash collateral account shall be applied to reduce such LIBOR Rate loan and
such other Liabilities and (ii) the occurrence and continuance of an Event of Default; provided
further, that so long as no Event of Default has occurred and is continuing, the immediately
available funds in such cash collateral account shall be disbursed, at Borrower’s discretion, to
Borrower so long as after giving effect to such disbursement, the Revolving Loan Limit at such
time, equals or exceeds the outstanding Revolving Loans at such time. Borrower agrees to pay all
fees, costs and expenses in connection with opening and maintaining the Lock Box and Lock Box
Account. All of such fees, costs and expenses if not paid by Borrower when due, may be paid by
Agent and in such event all amounts paid by Agent shall constitute Liabilities hereunder, shall be
payable to Agent by Borrower upon demand, and, until paid, shall bear interest at the highest rate
then applicable to Revolving Loans hereunder. All checks, drafts, instruments and other items of
payment or Proceeds of Collateral shall be endorsed by Borrower to Agent, and, if that endorsement
of any such item shall not be made for any reason, Agent is hereby irrevocably authorized to
endorse the same on Borrower’s behalf. For the purpose of this section, Borrower irrevocably
hereby makes, constitutes and appoints Agent (and all Persons designated by Agent for that purpose)
as Borrower’s true and lawful attorney and agent-in-fact (i) to endorse Borrower’s name upon said
items of payment and/or Proceeds of Collateral and upon any Chattel Paper, Document, Instrument,
invoice or similar document or agreement relating to any Account of Borrower or Goods pertaining
thereto; (ii) to take control in any manner of any item of payment or Proceeds thereof and (iii) to
have access to any lock box or postal box into which any of Borrower’s mail is deposited, and open
and process all mail addressed to Borrower and deposited therein.



(b) Agent may, at any time and from time to time upon the occurrence and during the
continuance of an Event of Default, whether before or after notification to any Account Debtor and
whether before or after the maturity of any of the Liabilities, (i) enforce collection of any of
Borrower’s Accounts or other amounts owed to Borrower by suit or otherwise; (ii) exercise all of
Borrower’s rights and remedies with respect to proceedings brought to collect any Accounts or other
amounts owed to Borrower; (iii) surrender, release or exchange all or any part of any Accounts or
other amounts owed to Borrower, or compromise or extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder; (iv) sell or assign any Account of
Borrower or other amount owed to Borrower upon such terms, for such amount and at such time or
times as Agent deems advisable; (v) prepare, file and sign Borrower’s name on any proof of claim in
bankruptcy or other similar document against any Account Debtor or other Person obligated to
Borrower; and (vi) do all other acts and things which are necessary, in Agent’s sole discretion, to
fulfill Borrower’s obligations under this Agreement and the Other Agreements and to allow Agent to
collect the Accounts or other amounts owed to Borrower. In addition to any other provision hereof,
Agent may at any time, upon the occurrence and during the continuance of an Event of Default, at
Borrower’s expense, notify any parties obligated on any of the Accounts to make payment directly to
Agent of any amounts due or to become due thereunder.



(c) For purposes of calculating interest and fees, Agent shall, (i) within two (2) Business
Days after receipt by Agent at its office in Chicago, Illinois of checks and (ii) within one (1)
Business Day after receipt by Agent at its office in Chicago, Illinois of cash or other immediately
available funds from collections of items of payment and Proceeds of any Collateral, apply the
whole or any part of such collections or Proceeds against the Liabilities in accordance with and
subject to subsection 8(a). For purposes of determining the amount of Loans available for
borrowing purposes, checks and cash or other immediately available funds from collections of items
of payment and Proceeds of any Collateral shall be applied in whole or in part against the
Liabilities, in such order as Agent shall determine in its sole discretion determined in good
faith, on the day of receipt, subject to actual collection.



(d) On a monthly basis, Agent shall deliver to Borrower an account statement showing all
Revolving Loans, charges and payments, which shall be deemed final, binding and conclusive upon
Borrower unless Borrower notifies Agent in writing, specifying any error therein, within thirty
(30) days of the date such account statement is sent to Borrower and any such notice shall only
constitute an objection to the items specifically identified.



9. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.



(a) Borrowing Base Reporting.



Borrower shall deliver to Agent an executed borrowing base certificate at least weekly (no
later than Wednesday of each week and calculated as of the last Business Day of the preceding week)
or more frequently if requested by Agent after the occurrence of and during the continuance of an
Event of Default or provided by Borrower, which shall be accompanied by copies of Borrower’s sales
journal, unbilled services/sales activities report, cash receipts journal and credit memo journal
for the relevant period. Such weekly report shall reflect the billed and unbilled activity of
Borrower with respect to Accounts for the immediately preceding week, and shall be substantially
the form of Exhibit F hereto and shall contain such additional information concerning
Accounts as may be requested by Agent, from time to time, including, without limitation, but only
if specifically requested by Agent, copies of all invoices prepared in connection with such
Accounts.



(b) Monthly Reports.



Borrower shall deliver to Agent, in addition to any other reports, (i) within fifteen (15)
days after the end of each month, (A) a detailed trial balance of Borrower’s Accounts aged per
invoice date, in form and substance reasonably satisfactory to Agent including, without limitation,
the names and addresses of all Account Debtors of Borrower, and (B) a summary and detail of
accounts payable (such Accounts and accounts payable divided into such time intervals as Agent may
require in its sole discretion), including a listing of any held checks (ii) within fourteen (14)
days after the end of each month prior to and including June 2006, a summary of actual cash
expenditures incurred in connection with the Restructuring during the previous month and (iii) for
the quarter ending December 31, 2005 only, within fourteen (14) days after the end of such quarter,
a summary of actual weekly cash flow of the Borrower from the date hereof through December 31, 2005
together with a weekly comparison of the cash flow projections of Borrower delivered pursuant to
clause (i) of Section 17(f).



(c) Financial Statements.



Borrower shall deliver to Agent the following financial information, all of which shall be
prepared in accordance with generally accepted accounting principles consistently applied, and
shall be accompanied by a compliance certificate in the form of Exhibit B hereto, which
compliance certificate shall include a calculation of all financial covenants contained in this
Agreement which are to be complied with as of the last day of the applicable period covered by the
applicable financial statements: (i) no later than thirty (30) days after each fiscal month,
copies of internally prepared financial statements, including, without limitation, balance sheets
and statements of income, retained earnings and cash flow of Borrower, certified by the Chief
Financial Officer of Borrower, in each case subject to year-end adjustments and the absence of
footnotes and (ii) no later than seventy-five (75) days after the end of each of Borrower’s Fiscal
Years, audited annual financial statements with an unqualified opinion by Deloitte & Touche or
another independent certified public accountants selected by Borrower and reasonably satisfactory
to Agent, which financial statements shall be accompanied by copies of any management letters sent
to the Borrower by such accountants. Borrower shall use commercially reasonable efforts to obtain
a letter from such accountants acknowledging that they are aware that a primary intent of Borrower
in obtaining such financial statements is to influence Agent and Lenders and that Agent and Lenders
are relying upon such financial statements in connection with the exercise of their rights
hereunder.



(d) Annual Projections.



At least fifteen (15) days prior to the beginning of each Fiscal Year, Borrower shall deliver
to Agent projected balance sheets, statements of income and cash flow for Borrower, for each of the
twelve (12) months during such Fiscal Year, which shall include the assumptions used therein,
together with appropriate supporting details as reasonably requested by Agent.



(e) Explanation of Budgets and Projections.



In conjunction with the delivery of the annual presentation of projections or budgets referred
to in subsection 9(d) above, Borrower shall deliver a letter signed by the President or a
Vice President of Borrower and by the Treasurer or Chief Financial Officer of Borrower, describing,
comparing and analyzing, in detail, all changes and developments between the anticipated financial
results included in such projections or budgets and the historical financial statements of
Borrower.



(f) Public Reporting.



Promptly upon the filing thereof, Borrower shall deliver to Agent copies of all registration
statements and annual, quarterly, monthly or other regular reports which Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission, as well as promptly providing to
Agent copies of any reports and proxy statements delivered to its shareholders.



(g) Other Information.



Promptly following request therefor by Agent, such other business or financial data, reports,
appraisals and projections as Agent may reasonably request.



10. TERMINATION; AUTOMATIC RENEWAL.



THIS AGREEMENT SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL OCTOBER 31, 2008 (THE “ORIGINAL
TERM”) AND SHALL AUTOMATICALLY RENEW ITSELF FROM YEAR TO YEAR THEREAFTER (EACH SUCH ONE-YEAR
RENEWAL BEING REFERRED TO HEREIN AS A “RENEWAL TERM”) UNLESS (A) THE DUE DATE OF THE LIABILITIES
IS ACCELERATED PURSUANT TO SECTION 16 HEREOF; (B) BORROWER REDUCES THE REVOLVING LOAN
COMMITMENTS OF ALL LENDERS TO ZERO IN ACCORDANCE WITH SECTION 2(D) HEREOF; OR (C) BORROWER
OR ANY LENDER ELECTS TO TERMINATE THIS AGREEMENT AT THE END OF THE ORIGINAL TERM OR AT THE END OF
ANY RENEWAL TERM BY GIVING THE OTHER PARTIES HERETO WRITTEN NOTICE OF SUCH ELECTION AT LEAST NINETY
(90) DAYS PRIOR TO THE END OF THE ORIGINAL TERM OR THE THEN CURRENT RENEWAL TERM. UPON TERMINATION
OF THIS AGREEMENT, BORROWER SHALL PAY ALL OF THE LIABILITIES IN FULL. If one or more of the events
specified in clauses (A), (B) and (C) occurs or this Agreement otherwise expires, then (i) Agent
and Lenders shall not make any additional Revolving Loans on or after the date identified as the
date on which the Liabilities are to be repaid; and (ii) this Agreement shall terminate on the date
thereafter that the Liabilities are paid in full. At such time as Borrower has repaid all of the
Liabilities and this Agreement has terminated, Borrower shall deliver to Agent and Lenders a
release, in form and substance satisfactory to Agent, of all obligations and liabilities of Agent
and Lenders and their officers, directors, employees, agents, parents, subsidiaries and affiliates
to Borrower, and if Borrower is obtaining new financing from another lender, Borrower shall deliver
such lender’s indemnification of Agent and Lenders, in form and substance satisfactory to Agent,
for checks which Agent has credited to Borrower’s account, but which subsequently are dishonored
for any reason or for automatic clearinghouse or wire transfers not yet posted to Borrower’s
account. If, during the term of this Agreement, Borrower reduces the Revolving Loan Commitments of
all Lenders to zero in accordance with Section 2(d) hereof and, as a result thereof, this
Agreement is terminated, Borrower agrees to pay to Agent, for the benefit of Lenders, as a
prepayment fee, in addition to the payment of all other Liabilities, an amount equal to (i) two
percent (2%) of the Maximum Revolving Loan Limit then in effect if such prepayment occurs two (2)
years or more prior to the end of the Original Term, (ii) one and one-half percent (1.50%) of the
Maximum Revolving Loan Limit then in effect if such prepayment occurs less than two (2) years, but
at least one (1) year prior to the end of the Original Term, or (iii) one half of one percent
(0.50%) of the Maximum Revolving Loan Limit then in effect if such prepayment occurs less than one
(1) year prior to the end of the Original Term. Notwithstanding the foregoing, (a) Borrower shall
not be obligated to pay such prepayment fee if the Revolving Loans are refinanced in connection
with a refinancing by LaSalle or an affiliate of LaSalle and (b) if Borrower refinances the
Revolving Loans with a lender that is not LaSalle or an affiliate of LaSalle on a date that is less
than two (2) years, but at least one (1) year prior to the end of the Original Term, for the sole
reason that Agent has refused a written request from Borrower to reduce or eliminate the Special
Litigation Reserve (which written request shall be accompanied by an executed proposal letter to
refinance the Revolving Loans, which proposal letter reflects the elimination or reduction of the
Special Litigation Reserve), then such prepayment fee shall be one half of one percent (0.50%) of
the Maximum Revolving Loan Limit then in effect.



11. REPRESENTATIONS AND WARRANTIES.



Borrower hereby represents and warrants to Agent and each Lender as follows, which
representations and warranties (whether appearing in this Section 11 or elsewhere) shall be
true at the time of Borrower’s execution hereof and the closing of the transactions described
herein or related hereto, shall remain true as of the date made until the repayment in full and
satisfaction of all the Liabilities and termination of this Agreement, and except for those
specific to a past date (which shall be remade as true and correct as of such past date) shall be
remade by Borrower at the time each Loan is made pursuant to this Agreement.



(a) Financial Statements and Other Information.



The financial statements and other written information (in each case, other than financial
projections, and other forward-looking information) delivered by Borrower to Agent or any Lender at
or prior to the date of this Agreement accurately reflect in all material respects the financial
condition of Borrower as of the date hereof, and there has been no material adverse change in the
financial condition, the operations, property, assets or prospects of Borrower since the date of
the financial statements delivered to Agent with respect to the month ending August 28, 2005. All
written information (other than financial projections, and other forward-looking information) now
or heretofore furnished by Borrower to Agent or any Lender is true and correct in all material
respects as of the date with respect to which such information was furnished. Furthermore, with
respect to financial projections, and other forward-looking information, Borrower represents only
that such projections and information were prepared in good faith based upon assumptions believed
to be reasonable at the time made.



(b) Locations.



The office where Borrower keeps its books, records and accounts (or copies thereof) concerning
the Collateral, Borrower’s principal place of business and all of Borrower’s other places of
business and post office boxes to which payments on Borrower’s Accounts are sent and locations of
bank accounts are as set forth in Exhibit A and at other locations within and outside of
the continental United States of which Agent has been advised by Borrower in accordance with
subsection 12(b)(i). The Collateral, including, without limitation, the Equipment (except
any part thereof which Borrower shall have advised Agent in writing consists of Collateral normally
used in more than one state, Collateral delivered to third parties for repair in the ordinary
course and other Collateral with a fair market value of less than $50,000, in the aggregate) is
kept, or, in the case of vehicles, based, only at the addresses set forth on Exhibit A, and
at other locations within and outside of the continental United States of which Agent has been
advised by Borrower in writing in accordance with subsection 12(b)(i) hereof.



(c) Loans by Borrower.



Borrower has not made any loans or advances to any Affiliate or other Person except for (i)
loans or advances permitted by Sections 13(f) or 13(i) and (ii) advances
authorized hereunder to employees, officers and directors of Borrower for travel and other expenses
arising in the ordinary course of Borrower’s business.



(d) Accounts.



Each Account classified on any report delivered by Borrower pursuant to Section 9(a)
hereof as an Eligible Account, a Billed Eligible Account or an Unbilled Eligible Account,
respectively, conformed as of the date of such report in all respects to the requirements of such
classification as set forth in the respective definitions of “Eligible Account”, “Billed Eligible
Account” and “Unbilled Eligible Account” as set forth herein as of such date.



(e) Liens.



Borrower is the lawful owner of all Collateral now owned or hereafter acquired by Borrower,
free from all liens, claims, security interests and encumbrances whatsoever, whether voluntarily or
involuntarily created and whether or not perfected, other than the Permitted Liens.



(f) Organization, Authority and No Conflict.



Borrower is a corporation duly organized, validly existing and in good standing in the State
of Illinois, its state organizational identification number on the date hereof is 50244296 and
Borrower is duly qualified and in good standing in all states where the nature and extent of the
business transacted by it or the ownership of its assets makes such qualification necessary, except
where the failure to be so qualified and in good standing could not reasonably be expected to have
a Material Adverse Effect on Borrower. Borrower has the right and power and is duly authorized and
empowered to enter into, execute and deliver this Agreement and the Other Agreements to which it is
a party and perform its obligations hereunder and thereunder. Borrower’s execution, delivery and
performance of this Agreement and the Other Agreements to which it is a party does not conflict
with the provisions of the organizational documents of Borrower, any statute, regulation, ordinance
or rule of law, or any agreement, contract or other document which is binding on Borrower, in each
case, which conflict could reasonably be expected to have a Material Adverse Effect on Borrower,
and Borrower’s execution, delivery and performance of this Agreement and the Other Agreements shall
not result in the imposition of any lien or other encumbrance upon any of Borrower’s property under
any existing indenture, mortgage, deed of trust, loan or credit agreement or other agreement or
instrument by which Borrower or any of its property may be bound or affected other than in favor of
Agent on behalf of the Lenders.



(g) Litigation.



Except as set forth on Schedule 11(g), there are no actions or proceedings which are
pending or, to Borrower’s knowledge, threatened against Borrower which action or proceeding could
reasonably be expected to have a Material Adverse Effect on Borrower. Borrower has no Commercial
Tort Claims pending other than those set forth on Exhibit C hereto (as Exhibit C may be amended
from time to time) and those of which Agent has been advised by Borrower in writing in accordance
with Section 12(b)(iii) hereof.



(h) Compliance with Laws and Maintenance of Permits.



Borrower has obtained all governmental consents, franchises, certificates, licenses,
authorizations, approvals and permits, the lack of which could reasonably be expected to have a
Material Adverse Effect on Borrower. Borrower is in compliance in all material respects with all
applicable federal, state, local and foreign statutes, orders, regulations, rules and ordinances
(including, without limitation, Environmental Laws and statutes, orders, regulations, rules and
ordinances relating to taxes, employer and employee contributions and similar items, securities,
ERISA or employee health and safety) the failure to comply with which could reasonably be expected
to have a Material Adverse Effect on Borrower.



(i) Affiliate Transactions.



Except as set forth on Schedule 11(i) hereto or as permitted pursuant to Section
13(i) hereof, Borrower is not conducting, permitting or suffering to be conducted, transactions
with any Affiliate other than transactions with Affiliates for the purchase or sale of Inventory or
services in the ordinary course of business pursuant to terms that are no less favorable to
Borrower than the terms upon which such transactions would have been made had they been made to or
with a Person that is not an Affiliate.



(j) Names and Trade Names.



Borrower’s name since the date five years prior to the date hereof has always been as set
forth on the first page of this Agreement and since the date five years prior to the date hereof,
Borrower has used no trade names, assumed names, fictitious names or division names in the
operation of its business, except as set forth on Schedule 11(j) hereto.



(k) Equipment.



Borrower has good and merchantable title to and ownership of all Equipment.



(l) Enforceability.



This Agreement and the Other Agreements to which Borrower is a party are the legal, valid and
binding obligations of Borrower and are enforceable against Borrower in accordance with their
respective terms, except as limited by applicable bankruptcy, insolvency or other laws related to
enforcement of creditors’ rights generally and general principles of equity related to
enforceability.



(m) Solvency.



Borrower is, after giving effect to the transactions contemplated hereby, solvent, able to pay
its debts as they become due, has capital sufficient to carry on its business, now owns property
having a value both at fair valuation and at present fair saleable value greater than the amount
required to pay its debts, and will not be rendered insolvent by the execution and delivery of this
Agreement or any of the Other Agreements or by completion of the transactions contemplated
hereunder or thereunder.



(n) Indebtedness.



Except as set forth on Schedule 11(n) hereto and indebtedness permitted under
subsection 13(b), Borrower is not obligated (directly or indirectly), for any loans or
other indebtedness for borrowed money other than the Revolving Loans.



(o) Margin Security and Use of Proceeds.



Borrower does not own any margin securities, and none of the proceeds of the Revolving Loans
hereunder shall be used for the purpose of purchasing or carrying any margin securities or for the
purpose of reducing or retiring any indebtedness which was originally incurred to purchase any
margin securities or for any other purpose not permitted by Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to time.



(p) Parent, Subsidiaries and Affiliates.



Except as set forth on Schedule 11(p)-A hereto, Borrower has no Parents, Subsidiaries
or divisions, nor is Borrower engaged in any joint venture or partnership with any other Person.
Except as set forth on Schedule 11(p)-B hereto, Borrower has no other Affiliates (provided
that Borrower may update Schedule 11(p)-B from time to time and such update shall not
constitute an amendment under, or otherwise be subject to, Section 21 hereof).



(q) No Defaults.



Except as set forth on Schedule 11(q), Borrower is not in default under any material
contract, lease or commitment to which it is a party or by which it is bound which default could
reasonably be expected to have a Material Adverse Effect on Borrower, nor does Borrower know of any
dispute regarding any contract, lease or commitment which could reasonably be expected to have a
Material Adverse Effect on Borrower.



(r) Employee Matters.



There are no controversies pending or, to Borrower’s knowledge, threatened between Borrower
and any of its employees, agents or independent contractors other than controversies which could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect on Borrower, and
Borrower is in compliance with all federal and state laws respecting employment and employment
terms, conditions and practices except for such non-compliance which could not reasonably be
expected to have a Material Adverse Effect on Borrower.



(s) Intellectual Property.



Borrower possesses adequate licenses, patents, patent applications, copyrights, service marks,
trademarks, trademark applications, tradestyles and trade names to continue to conduct its business
as heretofore conducted by it.



(t) Environmental Matters.



Borrower has not generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off its premises (whether or not owned by
it) in any manner which at any time violates any Environmental Law or any license, permit,
certificate, approval or similar authorization thereunder and the operations of the Borrower comply
in all material respects with all Environmental Laws and all licenses, permits, certificates,
approvals and similar authorizations thereunder. There has been no investigation, proceeding,
complaint, order, directive, claim, citation or notice by any governmental authority or any other
Person, nor is any pending or to the best of the Borrower’s knowledge threatened with respect to
any non-compliance with or violation of the requirements of any Environmental Law by the Borrower
or the release, spill or discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling, production or disposal
of any Hazardous Materials or any other environmental, health or safety matter, which affects the
Borrower or its business, operations or assets or any properties at which the Borrower has
transported, stored or disposed of any Hazardous Materials. Borrower has no material liability
(contingent or otherwise) in connection with a release, spill or discharge, threatened or actual,
of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials.



(u) ERISA Matters.



Borrower has paid and discharged all obligations and liabilities arising under ERISA of a
character which, if unpaid or unperformed, might result in the imposition of a lien against any of
its properties or assets.



12. AFFIRMATIVE COVENANTS.



Until payment and satisfaction in full of all Liabilities and termination of this Agreement,
unless Borrower obtains Requisite Lenders’ prior written consent waiving or modifying any of
Borrower’s covenants hereunder in any specific instance, Borrower covenants and agrees as follows:



(a) Maintenance of Records.



Borrower shall at all times keep accurate and complete books, records and accounts with
respect to all of Borrower’s business activities, in accordance with sound accounting practices and
generally accepted accounting principles consistently applied, and shall keep such books, records
and accounts, and any copies thereof, only at the addresses indicated for such purpose on
Exhibit A (as Exhibit A may be amended from time to time) or such locations of
which Agent has been advised by Borrower in accordance with Section 12(b)(i).



(b) Notices.



Borrower shall:




(i) Locations. Promptly (but in no event less than ten (10) days prior to the
occurrence thereof) notify Agent of the proposed opening of any new place of business or new
location of Collateral (other than any Collateral that is normally used in more than one
state, any Collateral delivered to third parties for repair in the ordinary course and other
Collateral with a fair market value of less than $50,000, in the aggregate), the closing of
any existing place of business or location of Collateral (other than the locations of the
Exited Business Assets, any Collateral that is normally used in more than one state, any
Collateral delivered to third parties for repair in the ordinary course and other Collateral
with a fair market value of less than $50,000, in the aggregate), any change of in the
location of Borrower’s books, records and accounts (or copies thereof), the opening or
closing of any post office box to which payments on Borrower’s Accounts are sent or the
opening or closing of any bank account, which notice shall constitute Borrower’s
authorization to amend Exhibit A to include such place of business or location.




(ii) Eligible Accounts. Promptly upon becoming aware thereof, notify Agent if
any Account or Accounts involving in excess of $25,000 in the aggregate, identified by
Borrower to Agent as an Eligible Account, Billed Eligible Account or Unbilled Eligible
Account becomes ineligible for any reason.




(iii) Litigation and Proceedings; Tax Liens. Promptly upon becoming aware
thereof, notify Agent of any actions or proceedings which are pending or threatened against
Borrower which could reasonably be expected to have a Material Adverse Effect on Borrower,
of any Commercial Tort Claims of Borrower which may arise, which notice shall constitute
Borrower’s authorization to amend Exhibit C to add such Commercial Tort Claim and of any
lien, claim, security interest or other encumbrance whatsoever for taxes on any of
Borrower’s or its Subsidiaries’ assets.




(iv) Names and Trade Names. Notify Agent within ten (10) days of the change of
its name or the use of any trade name, assumed name, fictitious name or division name not
previously disclosed to Agent in writing.




(v) ERISA Matters. Promptly notify Agent of (x) the occurrence of any
“reportable event” (as defined in ERISA) which might result in the termination by the
Pension Benefit Guaranty Corporation (the “PBGC”) of any employee benefit plan (“Plan”)
covering any officers or employees of the Borrower, any benefits of which are, or are
required to be, guaranteed by the PBGC, (y) receipt of any notice from the PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor or (z) its
intention to terminate or withdraw from any Plan.




(vi) Environmental Matters. Immediately notify Agent upon becoming aware of
any investigation, proceeding, complaint, order, directive, claim, citation or notice with
respect to any non-compliance with or violation of the requirements of any Environmental Law
by Borrower or the generation, use, storage, treatment, transportation, manufacture
handling, production or disposal of any Hazardous Materials or any other environmental,
health or safety matter which affects Borrower or its business operations or assets or any
properties at which Borrower has transported, stored or disposed of any Hazardous Materials.




(vii) Default; Material Adverse Change. Promptly advise Agent of any material
adverse change in the business, property, assets, prospects, operations or condition,
financial or otherwise, of Borrower, the occurrence of any Event of Default hereunder or the
occurrence of any event which, if uncured, will become an Event of Default after notice or
lapse of time (or both).



All of the foregoing notices shall be provided by Borrower to Agent in writing.



(c) Compliance with Laws and Maintenance of Permits.



Borrower shall maintain all governmental consents, franchises, certificates, licenses,
authorizations, approvals and permits, the lack of which could reasonably be expected to have a
Material Adverse Effect on Borrower and Borrower shall remain in compliance with all applicable
federal, state, local and foreign statutes, orders, regulations, rules and ordinances (including,
without limitation, Environmental Laws and statutes, orders, regulations, rules and ordinances
relating to taxes, employer and employee contributions and similar items, securities, ERISA or
employee health and safety) the failure with which to comply could reasonably be expected to have a
Material Adverse Effect on Borrower.



(d) Inspection and Audits.



Borrower shall permit Agent and Lenders, or any Persons designated by Agent, to call at
Borrower’s places of business at any reasonable times and upon reasonable prior written notice
(provided that no notice shall be required after the occurrence of and during the continuance of an
Event of Default), to inspect the Collateral and to inspect, audit, check and make extracts from
Borrower’s books, records, journals, orders, receipts and any correspondence and other data
relating to Borrower’s business, the Collateral or any transactions between the parties hereto, and
shall have the right to make such verification concerning Borrower’s business as Agent may consider
reasonable under the circumstances; provided that absent the existence of an Event of Default,
Agent and Lenders shall not conduct such inspections, audits or checks in excess of three (3) times
per Fiscal Year; provided, that in addition thereto and without limiting the foregoing, Borrower
shall permit, once during the term of this Agreement, one additional review of Borrower by a
consultant satisfactory to Agent in its reasonable discretion. Borrower shall furnish to Agent
such information relevant to Agent’s and/or any Lender’s rights under this Agreement and the Other
Agreements to which an Obligor is a party as Agent shall at any time and from time to time request
in its sole discretion determined in good faith. Agent, through its officers, employees or agents
shall have the right, at any time and from time to time in Borrower’s name, upon reasonable prior
notice (provided that no notice shall be required after the occurrence of and during the
continuance of an Event of Default), to verify the validity, amount or any other matter relating to
any of Borrower’s Accounts, by mail, telephone, telecopy, electronic mail or otherwise. Borrower
authorizes Agent and Lenders to discuss the affairs, finances and business of Borrower with any
officers, employees or directors of Borrower, and, to discuss the financial condition of Borrower
with Borrower’s independent public accountants; provided that Borrower shall be informed of such
discussion and an officer of Borrower shall be provided the opportunity to participate in such
discussion. Any such discussions shall be without liability to Agent or any Lender or to
Borrower’s independent public accountants. Borrower shall pay to Agent all reasonable and
documented out-of-pocket fees and costs and expenses incurred by Agent in the exercise of its
rights under this Section 12(d), and all of such costs and expenses shall constitute
Liabilities hereunder, shall be payable on demand and, until paid, shall bear interest at the
highest rate then applicable to Revolving Loans hereunder. Agent shall provide invoice for such
fees, costs, expenses and charges of Persons other than Agent or Lenders to Borrower promptly after
receipt thereof from such Persons.



(e) Insurance.



Borrower shall:




(i) Keep the Collateral insured against loss or damage by such risks as are customarily
insured against by Persons engaged in businesses similar to that of Borrower, with such
companies, in such amounts, with such self-insurance retentions or deductibles, and under
policies in such form, as shall be satisfactory to Agent in its sole discretion determined
in good faith. Original (or certified) copies of such policies of insurance in effect on
the date hereof have been or shall be, within ninety (90) days of the date hereof, delivered
to Agent, together with evidence of payment of all premiums therefor, and shall contain an
endorsement, in form and substance acceptable to Agent, showing loss under such insurance
policies payable to Agent, for the benefit of Agent and Lenders. Such endorsement, or an
independent instrument furnished to Agent, shall provide that the insurance company shall
give Agent at least thirty (30) days written notice before any such policy of insurance is
altered or canceled and that no act, whether willful or negligent, or default of Borrower or
any other Person shall affect the right of Agent to recover under such policy of insurance
in case of loss or damage. In addition, Borrower shall cause to be executed and delivered
to Agent an assignment of proceeds of its business interruption insurance policies.
Borrower hereby directs all insurers under all policies of insurance to pay all proceeds
payable thereunder directly to Agent. Borrower irrevocably makes, constitutes and appoints
Agent (and all officers, employees or agents designated by Agent) as Borrower’s true and
lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims
under such policies of insurance, endorsing the name of Borrower on any check, draft,
instrument or other item of payment for the proceeds of such policies of insurance and
making all determinations and decisions with respect to such policies of insurance.




(ii) Maintain, at its expense, such public liability and third party property damage
insurance as is customary for Persons engaged in businesses similar to that of Borrower with
such companies and in such amounts, with such self-insurance retentions or deductibles and
under policies in such form as shall be satisfactory to Agent in its sole discretion
determined in good faith and original (or certified) copies of such policies in effect on
the date hereof have been or shall be, within ninety (90) days after the date hereof,
delivered to Agent, together with evidence of payment of all premiums therefor; each such
policy shall contain an endorsement showing Agent and Lenders as additional insureds
thereunder and providing that the insurance company shall give Agent at least thirty (30)
days written notice before any such policy shall be altered or canceled.



If Borrower at any time or times hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay any premium relating thereto, then Agent, without waiving or
releasing any obligation or default by Borrower hereunder, may (but shall be under no obligation
to) obtain and maintain such policies of insurance and pay such premiums and take such other
actions with respect thereto as Agent deems advisable. Such insurance, if obtained by Agent, may,
but need not, protect Borrower’s interests or pay any claim made by or against Borrower with
respect to the Collateral. Such insurance may be more expensive than the cost of insurance
Borrower may be able to obtain on its own and may be cancelled only upon Borrower providing
evidence that it has obtained the insurance as required above. All documented out-of-pocket sums
disbursed by Agent in connection with any such actions, including, without limitation, documented
out-of-pocket court costs, expenses, other charges relating thereto and reasonable attorneys’ fees
(whether for internal or outside counsel), shall be payable on demand by Borrower to Agent and,
until paid, shall bear interest at the highest rate then applicable to Loans hereunder.



(f) Collateral.



Other than that which is no longer necessary for Borrower’s business, Borrower shall keep the
Collateral in good condition, repair and order (ordinary wear and tear excepted) and shall in its
reasonable business judgment make all necessary repairs to the Equipment and replacements thereof
so that the operating efficiency and the value thereof shall at all times be preserved and
maintained.



(g) Use of Proceeds.



All proceeds of the Revolving Loans received by Borrower and issuances of Letters of Credit
hereunder shall be used solely for (i) refinancing existing indebtedness, (ii) for general
corporate or business purposes of Borrower (including the Restructuring) and (iii) Investments by
Borrower in Subsidiaries to the extent permitted by Section 13(f).



(h) Taxes.



Borrower shall file all federal tax returns and all material state or local tax returns and
pay all taxes evidenced by such returns when due, and shall cause any liens for such taxes to be
promptly released; provided, that Borrower shall have the right to contest the payment of such
taxes and imposition of such liens in good faith by appropriate proceedings so long as (i) the
amount so contested is shown on Borrower’s financial statements; (ii) if required by Agent, a
reserve in accordance with subsection 2(a) is established by Agent against Borrower’s
ability to borrow Revolving Loans under subsection 2(a) in an amount of money which, in the
sole judgment of Agent, is sufficient to pay such taxes and any interest or penalties that may
accrue thereon; and (iii) if Borrower fails to prosecute such contest with reasonable diligence,
Agent may apply the money so deposited in payment of such taxes. If Borrower fails to pay any such
taxes and in the absence of any such contest by Borrower, Agent may (but shall be under no
obligation to) advance and pay any sums required to pay any such taxes and/or to secure the release
of any lien therefor, and any sums so advanced by Agent shall be payable by Borrower to Agent on
demand, and, until paid, shall bear interest at the highest rate then applicable to Revolving Loans
hereunder.



(i) Intellectual Property.



Borrower shall, in its reasonable business judgment, maintain adequate licenses, patents,
patent applications, copyrights, service marks, trademarks, trademark applications, tradestyles and
trade names to continue its business as heretofore conducted by it or as hereafter conducted by it.



(j) Checking Accounts and Cash Management Services.



Borrower shall maintain its general checking/controlled disbursement account with LaSalle.
Customary charges shall be assessed thereon. In addition, Borrower shall enter into agreements
with LaSalle for standard cash management services. Borrower shall be responsible for all
customary charges assessed thereon. On or before December 31, 2005, Borrower shall close and shall
cause its Subsidiaries to close all of their bank accounts that are not located at LaSalle.



(k) Patriot Act, Bank Secrecy Act and Office of Foreign Assets Control.



As required by federal law and the Agent’s, LaSalle’s and each Lender’s policies and
practices, the Agent, LaSalle and each Lender may need to obtain, verify and record certain
customer identification information and documentation in connection with opening or maintaining
accounts, or establishing or continuing to provide services and Borrower agrees to provide such
information. In addition, and without limiting the foregoing sentence, the Borrower shall (a) not
use or permit the use of the proceeds of the Revolving Loans to violate any of the foreign asset
control regulations of Office of Foreign Assets Control (“OFAC”) or any enabling statute or
Executive Order relating thereto, and (b) comply, and cause each Subsidiary to comply, with all
applicable Bank Secrecy Act (“BSA”) laws and regulations, as amended.



13. NEGATIVE COVENANTS.



Until payment and satisfaction in full of all Liabilities and termination of this Agreement,
unless Borrower obtains Requisite Lenders’ prior written consent waiving or modifying any of
Borrower’s covenants hereunder in any specific instance, Borrower agrees as follows:



(a) Guaranties.



Borrower shall not assume, guarantee or endorse, or otherwise become liable in connection
with, the obligations of any Person, except (i) by endorsement of instruments for deposit or
collection or similar transactions in the ordinary course of business or (ii) guaranties of
indebtedness permitted by subsection 13(b).



(b) Indebtedness.



Borrower shall not create, incur, assume or become obligated (directly or indirectly), for any
loans or other indebtedness for borrowed money other than the Revolving Loans, except that Borrower
may (i) borrow money from a Person on an unsecured and subordinated basis if a subordination
agreement in favor of Agent for the benefit of Lenders and in form and substance satisfactory to
Agent in its sole discretion determined in good faith is executed and delivered to Agent relative
thereto; (ii) maintain its present indebtedness listed on Schedule 11(n) hereto, in each
case, together with any refinancing, extension or renewal thereof so long as the principal amount
of such indebtedness and the Collateral therefor are not increased or expanded, as applicable;
(iii) incur unsecured indebtedness to trade creditors in the ordinary course of business; (iv)
incur purchase money indebtedness or capitalized lease obligations in connection with Capital
Expenditures permitted pursuant to subsection 14(c) hereof; (v) incur operating lease
obligations requiring payments not to exceed $12,000,000 in the aggregate during any Fiscal Year of
Borrower; (vi) indebtedness under swaps, interest rate management agreements, foreign currency or
commodity hedge agreements entered into in the ordinary course of business; and (vii) incur
indebtedness consisting of guaranties of indebtedness described in clauses (i)-(vi) hereof.



(c) Liens.



Borrower shall not grant or permit to exist (voluntarily or involuntarily) any lien, claim,
security interest or other encumbrance whatsoever on any of its assets, other than Permitted Liens.



(d) Mergers, Sales, Acquisitions, Subsidiaries and Other Transactions Outside the Ordinary
Course of Business.



Borrower shall not (i) enter into any merger or consolidation; (ii) change the state of
Borrower’s organization or enter into any transaction which has the effect of changing Borrower’s
state of organization, unless Borrower has taken action, in a manner satisfactory to Agent in its
sole discretion, to maintain the perfection of Agent’s security interest for the benefit of Lenders
in the Collateral to the extent of such perfection prior to such change; (iii) sell, lease or
otherwise dispose of any of its assets other than the sale of the Exited Business Assets in
accordance with the Restructuring Plan and other than in the ordinary course of business; (iv)
purchase the stock, other equity interests or all or a material portion of the assets of any Person
or division of such Person; or (v) enter into any transaction to purchase, redeem or retire any
shares of any class of its stock or any other equity interest, or to issue of any shares, warrants
or other rights to receive or purchase any shares of, any class of its stock or any other equity
interest, other than the issuance of stock in connection with dividends or distributions payable in
its stock. Borrower shall not form any new Subsidiaries or enter into any new joint ventures or
partnerships with any other Person. Notwithstanding this Section 13(d), Borrower may merge
or consolidate with any Subsidiary so long as Borrower is the surviving entity.



(e) Dividends and Distributions.



Borrower shall not declare or pay any dividend or other distribution (whether in cash or in
kind) on any class of its stock other than dividends or distributions payable in its stock or make
payment of principal or interest with respect to subordinated debt.



(f) Investments; Loans.



Borrower shall not purchase or otherwise acquire, or contract to purchase or otherwise
acquire, the obligations or stock of any Person, other than direct obligations of the United States
and other Permitted Investments; nor shall Borrower lend or otherwise advance funds to any Person
except for loans or advances made to employees, officers and directors for travel and other
expenses arising in the ordinary course of business and other Permitted Investments, provided, that
with respect to Permitted Investments in the form of loans to Obligors, at the request of Agent,
such loans shall be evidenced by intercompany notes in form and substance satisfactory to Agent and
pledged to Agent for the benefit of Lenders.



(g) Fundamental Changes, Line of Business.



Borrower shall not amend its organizational documents or change its Fiscal Year or enter into
a new line of business materially different from Borrower’s current business.



(h) [Intentionally Omitted].



(i) Affiliate Transactions.



Except as set forth on Schedule 11(i) hereto or other Affiliate transactions as
permitted pursuant to Section 13 hereof, Borrower shall not conduct, permit or suffer to be
conducted, transactions with Affiliates other than (i) transactions for the purchase or sale of
Inventory or services in the ordinary course of business, (ii) payment of reasonable fees, expenses
and compensation to directors, officers or employees of Borrower and any Subsidiary and customary
indemnification and insurance arrangements in favor of any director, officer or employee of
Borrower and any Subsidiary and any agreement relating to any of the foregoing entered into in the
ordinary course of business, (iii) tax sharing agreements among Borrower and/or any of its
Subsidiaries and (iv) transactions pursuant to terms that are no less favorable to Borrower than
the terms upon which such transactions would have been made had they been made to or with a Person
that is not an Affiliate.



(j) Settling of Accounts.



Borrower shall not settle or adjust any Account identified by Borrower as an Eligible Account
(other than settlements of Accounts in accordance with normal business practices, provided that no
settlement of any individual Account shall exceed 3.5% of the amount of that Account without the
consent of Agent) or with respect to which the Account Debtor is an Affiliate without the consent
of Agent, provided, that upon the occurrence and during the continuance of an Event of Default,
Borrower shall not settle or adjust any Account without the consent of Agent.



14. FINANCIAL COVENANTS.



Until payment and satisfaction in full of all Liabilities and termination of this Agreement,
unless Borrower obtains Requisite Lenders’ prior written consent waiving or modifying any of
Borrower’s financial covenants hereunder in any specific instance, Borrower shall maintain and keep
in full force and effect each of the financial covenants set forth below:



(a) Tangible Net Worth.



Borrower’s Tangible Net Worth shall not as of the last day of each fiscal quarter of Borrower
be less than the Minimum Tangible Net Worth; “Minimum Tangible Net Worth” being defined for
purposes of this subsection as (i) $6,500,000 at all times from the date hereof through December
31, 2005, (ii) $6,000,000 at all times from January 1, 2006 through June 30, 2006 and (iii) for
each other fiscal quarter of Borrower, the Minimum Tangible Net Worth during the immediately
preceding fiscal quarter of Borrower plus fifty percent (50%) of Borrower’s positive net income for
such fiscal quarter as reflected on Borrower’s financial statements delivered pursuant to
subsection 9(c) for such fiscal quarter; and “Tangible Net Worth” being defined for
purposes of this subsection as of any particular date, the difference between (a) total
shareholders equity, minus (b) the value of Borrower’s unamortized debt discount and expense,
prepaid expenses, deposits, unamortized deferred charges (including deferred income tax assets with
a maximum limit of up to Twelve Million and No/100 Dollars ($12,000,000.00)), goodwill,
organization costs, noncompetition agreements, patents, copyrights, trademarks and other intangible
items, all as determined in accordance with generally accepted accounting principles applied on a
basis consistent with the financial statement dated August 28, 2005 except as set forth herein.



(b) Interest Coverage.



Borrower shall not permit the ratio of (x) EBITDA for the applicable period minus Capital
Expenditures for the applicable period to (y) interest expense (determined in accordance with
generally accepted accounting principles) for the applicable period of Borrower and its
Subsidiaries to be less than 2.0 to 1.0 as of the last day of each fiscal quarter of Borrower, for
(i) each 1 fiscal quarter period ending on or about December 31, 2005, (ii) the 2 fiscal quarter
period ending March 31, 2006, (iii) the 3 fiscal quarter period ending on or about June 30, 2006
and (iv) each 4 fiscal quarter period ending on the last day of each fiscal quarter of Borrower
thereafter.



(c) Minimum Free Cash Flow.



Borrower shall not permit EBITDA minus unfinanced Capital Expenditures (“Minimum Free Cash
Flow”) to be less than the amounts set forth below during the period comprising such fiscal
quarter:



	 	 	 	 	 
	Fiscal Quarter
	 	Minimum Free Cash Flow

	 
	 	 	 	 
	Ending on or about December 31, 2005
	 	$	600,000	 
	 
	 	 	 	 
	Ending on or about March 31, 2006
	 	$	600,000	 
	 
	 	 	 	 
	Ending on or about June 30, 2006
and, if applicable, each fiscal quarter
thereafter
	 	$	1,000,000	 
	 
	 	 	 	 






; provided, that this covenant shall not be applicable and Minimum Free Cash Flow shall not be
tested after the date of the fiscal quarter ending on or about June 30, 2006 if no Event of Default
has occurred and is continuing on such date.



(d) Excess Availability.



Borrower shall at all times maintain Excess Availability of at least $3,000,000; provided that
Borrower need not maintain any Excess Availability if on any date (on or after March 31, 2006) the
following have been satisfied (i) no Event of Default has occurred and is continuing on such date,
(ii) Agent has received a copy of Borrower’s 10-K for the Fiscal Year ending on or about December
31, 2005, (iii) Agent has received Borrower’s compliance certificate for the month ending on March
31, 2006 or any applicable month thereafter and (iv) Borrower shall have maintained Excess
Availability for the immediately preceding calendar month in excess of $3,000,000.



(e) Maximum Cash Restructuring Charge.



Borrower shall not incur cash restructuring charges in excess of $9,000,000 in the aggregate
in connection with the Restructuring during the period between July 1, 2005 and December 31, 2006.



(f) Fixed Charge Coverage.



With respect to Borrower’s fiscal quarters ending on or about September 30, 2006 and
thereafter, Borrower shall not permit the ratio of its EBITDA to Fixed Charges for the trailing
twelve month period ending on the last day of each fiscal quarter to be less than or equal to 1.20
to 1:00; provided that Fixed Charge Coverage shall not be tested unless and until Minimum Free Cash
Flow ceases to be tested pursuant to Section 14(c).



15. DEFAULT.



The occurrence of any one or more of the following events shall constitute an “Event of
Default” by Borrower hereunder:



(a) Payment.



The failure of any Obligor to pay when due any of the Liabilities.



(b) Breach of this Agreement and the Other Agreements.



The failure of any Obligor to perform, keep or observe any of the covenants, conditions,
promises, agreements or obligations of such Obligor under this Agreement or any of the Other
Agreements; provided that any such failure under subsections 12(b)(i), (iv) and
(v), 12(c) and 12(i) of this Agreement or subsections 8(b)(i), (iii) and (iv),
8(c) and 8(h) of the Security Agreement shall not constitute an Event of Default hereunder until
the tenth (10th) day following the occurrence thereof.



(c) Breaches of Other Obligations.



The failure of any Obligor to perform, keep or observe any of the covenants, conditions,
promises, agreements or obligations of such Obligor under any other agreement with any Person if
such failure could reasonably be expected to have a Material Adverse Effect on such Obligor.



(d) Breach of Representations and Warranties.



The making by any Obligor to Agent or any Lender of any representation or warranty within or
in connection with this Agreement or the Other Agreements which is untrue or misleading in any
respect as of the date made.



(e) Loss of Collateral.



The loss, theft, damage or destruction of, or (except as permitted hereby (including the sale
of the Exited Business Assets) or permitted by the Security Agreement) the sale, lease or
furnishing under a contract of service of, any of the Collateral except for any loss, theft, damage
or destruction that could not reasonably be expected to have a Material Adverse Effect on Borrower
or Borrower and its Subsidiaries taken as a whole.



(f) Levy, Seizure or Attachment.



The making or any attempt by any Person to make any levy, seizure or attachment upon any of
the Collateral.



(g) Bankruptcy or Similar Proceedings.



The commencement of any proceedings in bankruptcy by or against any Obligor or for the
liquidation or reorganization of any Obligor, or alleging that such Obligor is insolvent or unable
to pay its debts as they mature, or for the readjustment or arrangement of any Obligor’s debts,
whether under the United States Bankruptcy Code or under any other law, whether state or federal,
now or hereafter existing, for the relief of debtors, or the commencement of any analogous
statutory or non-statutory proceedings involving any Obligor; provided, however, that if such
commencement of proceedings against such Obligor is involuntary, such action shall not constitute
an Event of Default unless such proceedings are not dismissed within sixty (60) days after the
commencement of such proceedings, though Agent and Lenders shall have no obligation to make
Revolving Loans to or issue, or cause to be issued, Letters of Credit on behalf of Borrower during
such sixty (60) day period or, if earlier, until such proceedings are dismissed.



(h) Appointment of Receiver.



The appointment of a receiver or trustee for any Obligor, for any of the Collateral or for any
substantial part of any Obligor’s assets or the institution of any proceedings for the dissolution
(other than in connection with a merger or consolidation permitted by Section 13(d)), or
the full or partial liquidation (other than in connection with a merger or consolidation permitted
by Section 13(d)), or the merger or consolidation (other than in connection with a merger
or consolidation permitted by Section 13(d)), of any Obligor which is a corporation,
limited liability company or a partnership; provided, however, that if such appointment or
commencement of proceedings against such Obligor is involuntary, such action shall not constitute
an Event of Default unless such appointment is not revoked or such proceedings are not dismissed
within sixty (60) days after the commencement of such proceedings, though Agent and Lenders shall
have no obligation to make Revolving Loans to or issue, or cause to be issued Letters of Credit on
behalf of Borrower during such sixty (60) day period, or, if earlier, until such appointment is
revoked or such proceedings are dismissed.



(i) Judgment.



The entry of any judgment or order against any Obligor which remains unsatisfied or
undischarged and in effect for thirty (30) days after such entry without being vacated, stayed or
bonded pending appeal which involves in the aggregate an amount in excess of $250,000.



(j) Death or Dissolution of Obligor.



The dissolution of any Obligor which is a partnership, limited liability company, corporation
or other entity (other than in connection with a merger or consolidation permitted by Section
13(d)).



(k) Default or Revocation of Guaranty.



The occurrence of an event of default under, or the revocation or termination of, any
agreement, instrument or document (other than this Agreement) executed and delivered by any Person
to Agent or any Lender pursuant to which such Person has guaranteed to Agent and Lenders the
payment of all or any of the Liabilities or has granted Agent a security interest in or lien upon
some or all of such Person’s real and/or personal property to secure the payment of all or any of
the Liabilities (other than in connection with a merger or consolidation permitted by Section
13(d)) provided, that a breach of subsections 8(b)(i), (iii) and (iv), 8(c) and 8(h) of the
Security Agreement will not constitute an Event of Default hereunder until the tenth
(10th) day following the occurrence thereof.



(l) Criminal Proceedings.



The institution in any court of a criminal proceeding against any Obligor, or the indictment
of any Obligor for any crime to the extent such proceeding or indictment would reasonably be
expected to have a Material Adverse Effect.



(m) Change of Control.



(i) Any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than the Schwartz Group, becomes the beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of 30%, or more, of the outstanding common stock of Borrower having the right to vote
for the election of members of the Board of Directors or (ii) Borrower ceases to own, directly or
indirectly, and control 100% of the equity interests of each of its Subsidiaries.



(n) Material Adverse Change.



Any material adverse change in the Collateral, business, property, assets, prospects,
operations or condition, financial or otherwise of any Obligor, as determined by Requisite Lenders
in their sole judgment, determined in good faith, or the occurrence of any event which, in
Requisite Lenders’ sole judgment, determined in good faith, could reasonably be expected to have a
Material Adverse Effect on Borrower or Borrower and its Subsidiaries taken as a whole.



16. REMEDIES UPON AN EVENT OF DEFAULT.



(a) Upon the occurrence of an Event of Default described in subsection 15(g) hereof,
all of the Liabilities shall immediately and automatically become due and payable, without notice
of any kind. Upon the occurrence and during the continuance of any other Event of Default, all
Liabilities may, at the option of Requisite Lenders, and without demand, notice or legal process of
any kind, be declared, and immediately shall become, due and payable.



(b) Upon the occurrence and during the continuance of an Event of Default, Agent may exercise
from time to time any rights and remedies available to it under the Uniform Commercial Code and any
other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted
in this Agreement or in any of the Other Agreements and all of Agent’s rights and remedies shall be
cumulative and non-exclusive to the extent permitted by law. In particular, but not by way of
limitation of the foregoing, Agent may, upon the occurrence and during the continuance of an Event
of Default, in each case, to the extent permitted by law, without notice, demand or legal process
of any kind, take possession of any or all of the Collateral (in addition to Collateral of which it
already has possession), wherever it may be found, and for that purpose may pursue the same
wherever it may be found, and may enter onto any of Borrower’s premises where any of the Collateral
may be, and search for, take possession of, remove, keep and store any of the Collateral until the
same shall be sold or otherwise disposed of, and Agent shall have the right to store the same at
any of Borrower’s premises without cost to Agent or Lenders. At Agent’s request upon the
occurrence and during the continuance of an Event of Default, Borrower shall, at Borrower’s
expense, assemble the Collateral and make it available to Agent at one or more places to be
designated by Agent and reasonably convenient to Agent and Borrower. Borrower recognizes and
agrees that if Borrower fails to perform, observe or discharge any of its Liabilities under this
Agreement or the Other Agreements, Agent and Lenders shall to the extent permitted by law be
entitled to temporary and permanent injunctive relief in any such case without the necessity of
proving actual damages. To the extent permitted by law, any notification of intended disposition
of any of the Collateral required by law will be deemed to be a reasonable authenticated
notification of disposition if given at least ten (10) days prior to such disposition and such
notice shall (i) describe Agent and Borrower, (ii) describe the Collateral that is the subject of
the intended disposition, (iii) state the method of the intended disposition, (iv) state that
Borrower is entitled to an accounting of the Liabilities and state the charge, if any, for an
accounting and (v) state the time and place of any public disposition or the time after which any
private sale is to be made. Agent and Lenders may disclaim any warranties that might arise in
connection with the sale, lease or other disposition of the Collateral and has no obligation to
provide any warranties at such time. Any Proceeds of any disposition by Agent of any of the
Collateral in accordance with this Section 16 may be applied by Agent to the payment of
documented out-of-pocket expenses in connection with the Collateral, including, without limitation,
legal expenses and reasonable attorneys’ fees (whether for internal or outside counsel), and any
balance of such Proceeds may be applied by Agent toward the payment of such of the Liabilities, and
in such order of application, as Agent may from time to time elect.



17. CONDITIONS PRECEDENT.



The obligation of Agent and Lenders, to fund the initial Revolving Loan, and to issue or cause
to be issued the initial Letter of Credit, is subject to the satisfaction or waiver on or before
the date hereof of the following conditions precedent:



(a) Agent shall have received each of the agreements, opinions, reports, approvals, consents,
certificates and other documents set forth on the closing document list attached hereto as
Schedule 17(a) (the “Closing Document List”) in each case in form and substance
satisfactory to Agent;



(b) Since August 28, 2005, no event shall have occurred which has had or could reasonably be
expected to have a Material Adverse Effect on any Obligor, as determined by Agent or Requisite
Lenders in their sole discretion;



(c) Agent shall have received payment in full of all reasonable and documented fees and
expenses payable to it by Borrower in connection herewith, on or before disbursement of the initial
Revolving Loans hereunder; and



(d) Agent shall have determined that immediately after giving effect to (A) the making of the
initial Revolving Loans, (B) the issuance of the initial Letters of Credit, if any, requested to be
made on such date, (C) the payment of all fees due upon such date and (D) the payment or
reimbursement by Borrower of Agent for all closing costs and expenses incurred in connection with
the transactions contemplated hereby, Borrower has Excess Availability of not less than Four
Million Five Hundred Thousand Dollars ($4,500,000);



(e) Agent shall have received (i) projected weekly cash flows of Borrower through December 31,
2005, (ii) projections of covenant compliance through March 31, 2006 and (iii) projections of cash
expenditures to be incurred in connection with the Restructuring through June 30, 2006, each, in
form and substance reasonably satisfactory to Agent;



(f) Agent shall have received the financial statements from the Borrower for the fiscal
quarter ending on or about September 30, 2005, which statements shall be in form and substance
reasonably satisfactory to each of Silverman Consulting and the Agent; and



(g) The Obligors shall have executed and delivered to Agent all such other documents,
instruments and agreements which Agent determines are reasonably necessary to consummate the
transactions contemplated hereby.



18. SETTLEMENTS, DISTRIBUTIONS AND APPORTIONMENT OF PAYMENTS.



On a weekly basis (or more frequently if requested by Agent) (a “Settlement Date”), Agent
shall provide each Lender with a statement of the outstanding balance of the Liabilities as of the
end of the Business Day immediately preceding the Settlement Date (the “Pre-Settlement
Determination Date”) and the current balance of the Revolving Loans funded by each Lender (whether
made directly by such Lender to Borrower or constituting a settlement by such Lender of a previous
Disproportionate Advance made by Agent on behalf of such Lender to Borrower). If such statement
discloses that such Lender’s current balance of the Revolving Loans as of the Pre-Settlement
Determination Date exceeds such Lender’s Pro Rata Share of the Liabilities outstanding as of the
Pre-Settlement Determination Date, then Agent shall, on the Settlement Date, transfer, by wire
transfer, the net amount due to such Lender in accordance with such Lender’s instructions, and if
such statement discloses that such Lender’s current balance of the Revolving Loans as of the
Pre-Settlement Determination Date is less than such Lender’s Pro Rata Share of the Liabilities
outstanding as of the Pre-Settlement Determination Date, then such Lender shall, on the Settlement
Date, transfer, by wire transfer the net amount due to Agent in accordance with Agent’s
instructions. In addition, payments actually received by Agent with respect to the following items
shall be distributed by Agent to Lenders as follows:



(a) Within one (1) Business Day of receipt thereof by Agent, payments to be applied to
interest on the Revolving Loans shall be paid to each Lender in proportion to its Pro Rata Share,
subject to any adjustments for any Disproportionate Advances as provided in subsection
2(a)(i), so that Agent shall receive interest on the Disproportion Advances and each Lender
shall only receive interest on the amount of funds actually advanced by such Lender;



(b) Within one (1) Business Day of receipt thereof by Agent, payments to be applied to the
Letter of Credit fee set as provided in subsection 3(a) hereof shall be paid to each Lender
in proportion to its Pro Rata Share;



(c) Within one (1) Business Day of receipt thereof by Agent, payments to be applied to the
unused line fee set forth in subsection 4(c)(i) hereof shall be paid to each Lender in
proportion to its Pro Rata Share; and



(d) Within one (1) Business Day of receipt thereof by Agent, payments to be applied to the
prepayment fee set forth in Section 2(d) or 10 hereof shall be paid to each Lender
in proportion to its Pro Rata Share.



Notwithstanding the foregoing, Agent shall not be obligated to transfer to any Defaulting
Lender any payment made by Borrower to Agent, nor shall such Defaulting Lender be entitled to share
any interest, fees or other payment hereunder, until payment is made by such Defaulting Lender to
Agent as required in this Agreement.



19. AGENT.



(a) Appointment of Agent.




(i) Each Lender hereby designates LaSalle as Agent to act as herein specified. Each
Lender hereby irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement, the Other Agreements and the notes and any other instruments
and agreements referred to herein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto. Except as
otherwise provided herein, Agent shall hold all Collateral and all payments of principal,
interest, fees, charges and expenses received pursuant to this Agreement or any of the Other
Agreements for the benefit of Lenders. Agent may perform any of its duties hereunder by or
through its agents or employees.




(ii) The provisions of this Section 19 (other than Section 19(i)) are
solely for the benefit of Agent and Lenders, and neither Borrower nor any other Obligor
shall have any rights as a third party beneficiary of any of the provisions of this
Section 19 (other than Section 19(i)). In performing its functions and
duties under this Agreement, Agent shall act solely as agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for any Obligor.



(b) Nature of Duties of Agent.



Agent shall not have duties, obligations or responsibilities except those expressly set forth
in this Agreement and the Other Agreements. Neither Agent nor any of its officers, directors,
employees or agents shall be liable for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence or willful misconduct. The
duties of Agent shall be mechanical and administrative in nature; Agent shall not have by reason of
this Agreement or the Other Agreements a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or the Other Agreements, expressed or implied, is intended to or shall be
so construed as to impose upon Agent any obligations in respect of this Agreement or the Other
Agreements except as expressly set forth herein.



(c) Lack of Reliance on Agent.




(i) Independently and without reliance upon Agent, each Lender, to the extent it deems
appropriate, has made and shall continue to make (A) its own independent investigation of
the financial or other condition and affairs of Agent, each Obligor and any other Lender in
connection with the taking or not taking of any action in connection herewith and (B) its
own appraisal of the creditworthiness of Agent, each Obligor and any other Lender, and,
except as expressly provided in this Agreement, Agent shall not have any 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 making of the Revolving Loans or at any time or times thereafter.




(ii) Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of this Agreement or the
Other Agreements or any notes or the financial or other condition of any Obligor. 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 the Other Agreements, or the
financial condition of any Obligor, or the existence or possible existence of any Event of
Default.



(d) Certain Rights of Agent.



Agent shall have the right to request instructions from Requisite Lenders or all Lenders, as
applicable, pursuant to this Agreement, by notice to each Lender. If Agent shall request
instructions from Requisite Lenders or all Lenders, as applicable, with respect to any act or
action (including the failure to act) in connection with this Agreement, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have received instructions
from Requisite Lenders or all Lenders, as applicable, and Agent shall not incur liability to any
Person by reason of so refraining. 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 hereunder
in accordance with the instructions of Requisite Lenders or all Lenders, as applicable.



(e) Reliance by Agent.



Agent shall be under no duty to examine, inquire into, or pass upon the validity,
effectiveness or genuineness of this Agreement, any of the Other Agreements or any instrument,
document or communication furnished pursuant hereto or thereto or in connection herewith or
therewith. Agent shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order, electronic mail or other documentary, teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent or made by the
proper person. Agent may consult with legal counsel (including counsel for any Obligor with
respect to matters concerning any Obligor), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.



(f) Indemnification of Agent.



To the extent Agent is not promptly reimbursed and indemnified by Borrower, each Lender will
reimburse and indemnify Agent, in proportion to its Pro Rata Share, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent in performing its duties hereunder, in any
way relating to or arising out of this Agreement; provided, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent’s gross negligence or willful misconduct. If
any indemnity furnished to Agent for any purpose shall, in the opinion of Agent, be insufficient or
become impaired, Agent may call for additional indemnities and cease to do, or not commence, the
acts to be indemnified against, even if so directed by Requisite Lenders or all Lenders, as
applicable, until such additional indemnification is provided. The obligations of Lenders under
this subsection 19(f) shall survive the payment in full of the Liabilities and the
termination of this Agreement.



(g) Agent in its Individual Capacity.



With respect to the Revolving Loans made by it pursuant hereto, Agent shall have the same
rights and powers hereunder as any other Lender or holder of a note or participation interest and
may exercise the same as though it was not performing the duties specified herein; and the term
“Lenders,” or any similar terms shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity. Agent may accept deposits from, lend money to, acquire equity
interests in, and generally engage in any kind of banking, trust, financial advisor or other
business with Borrower or any Affiliate of Borrower as if it were not performing the duties
specified herein, and may accept fees and other consideration from Borrower for services in
connection with this Agreement and otherwise without having to account for the same to Lenders, to
the extent such activities are not in contravention of the terms of this Agreement.



(h) Holders of Notes.



Agent may deem and treat the payee of any promissory note as the owner thereof for all
purposes hereof unless and until a written notice of the assignment or transfer thereof shall have
been filed with Agent. Any request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is the holder of any promissory note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such promissory note or
of any promissory note or notes issued in exchange therefor.



(i) Successor Agent.




(i) Agent may, upon five (5) Business Days’ notice to Lenders and Borrower, resign at
any time (effective upon the appointment of a successor Agent pursuant to the provisions of
this subsection 19(i)) by giving written notice thereof to Lenders and Borrower.
Upon any such resignation, Requisite Lenders with, so long as no Event of Default exists,
the consent of Borrower (which consent shall not be unreasonably withheld or delayed) shall
have the right, upon five (5) days’ notice, to appoint a successor Agent. If no successor
Agent shall have been so appointed by Requisite Lenders and accepted such appointment,
within thirty (30) days after the retiring Agent’s giving of notice of resignation, then,
upon five (5) days’ notice, the retiring Agent may with, so long as no Event of Default
exists, the consent of Borrower (which consent shall not be unreasonably withheld or
delayed) on behalf of Lenders, appoint a successor Agent, which shall be a bank or a trust
company or other financial institution which maintains an office in the United States, or a
commercial bank organized under the laws of the United States of America or of any State
thereof, or any affiliate of such bank or trust company or other financial institution which
is engaged in the banking business, having a combined capital and surplus of at least Fifty
Million and No/100 Dollars ($50,000,000.00).




(ii) Upon the acceptance of any appointment as an Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Section 19 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an Agent under
this Agreement.



(j) Collateral Matters.




(i) Each Lender authorizes and directs Agent to enter into the Other Agreements for the
benefit of Lenders. Each Lender hereby agrees that, except as otherwise set forth herein,
any action taken by Requisite Lenders in accordance with the provisions of this Agreement or
the Other Agreements, and the exercise by the Requisite Lenders 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 Lenders. Agent is hereby authorized on behalf of
all Lenders, without the necessity of any notice to or further consent from any Lender to
take any action with respect to any Collateral or Other Agreements which may be necessary to
perfect and maintain perfected the security interest in and liens upon the Collateral
granted pursuant to this Agreement and the Other Agreements.




(ii) Agent will not, without the verbal consent of all Lenders, which consent shall (a)
be confirmed promptly thereafter in writing and (b) not be unreasonably withheld or delayed,
execute any release of Agent’s security interest in any Collateral except for releases
relating to dispositions of Collateral (x) permitted by this Agreement and (y) in connection
with the repayment in full of all of the Liabilities by Borrower and the termination of all
obligations of Agent and Lenders under this Agreement and the Other Agreements;
provided, that with the consent of Requisite Lenders, Agent may release its liens on
Collateral having a book value not greater than ten percent (10%) of the total book value of
all Collateral, as determined by Agent, either in a single transaction or series of related
transactions, not to exceed twenty percent (20%) of the book value of all Collateral in any
Fiscal Year. Agent shall not be required to execute any such release 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. In the event
of any sale or transfer of any of the Collateral, Agent shall be authorized to deduct all of
the expenses reasonably incurred by Agent from the proceeds of any such sale or transfer.




(iii) Lenders hereby agree that the lien granted to Agent in any property sold or
disposed of in accordance with the provisions of this Agreement shall be automatically
released; provided, however that Agent’s lien shall attach to and continue
for the benefit of Agent and Lenders in the proceeds and products of such property arising
from any such sale or disposition.




(iv) To the extent, pursuant to the provisions of this subsection 19(j),
Agent’s execution of a release is required to release its lien upon any sale and transfer of
Collateral which is consented to in writing by Requisite Lenders or all Lenders, as
applicable, 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 liens granted to Agent for the benefit of
Lenders herein or pursuant hereto upon the Collateral that was sold or transferred.




(v) Agent shall not have any obligation whatsoever to Lenders or to any other Person to
assure that the Collateral exists or is owned by Borrower or any other Obligor or is cared
for, protected or insured or that the liens granted to Agent 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 or to continue exercising at all or in
any manner or under any duty of care, disclosure or fidelity any of the rights, authorities
and powers granted or available to Agent in this Section 19 or in any of the Other
Agreements, it being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem appropriate, in
its sole discretion, given Agent’s own interest in the Collateral as one of Lenders and that
Agent shall have no duty or liability whatsoever to Lenders, except for its gross negligence
or willful misconduct.




(vi) In the event that any Lender receives any Proceeds of any Collateral by setoff,
exercise of any banker’s lien or otherwise, in an amount in excess of such Lender’s Pro Rata
Share of such Proceeds, such Lender shall purchase for cash (and other Lenders shall sell)
interests in each of such other Lender’s Pro Rata Share of the Liabilities as would be
necessary to cause all Lenders to share the amount so set off or otherwise received with
each other Lender in accordance with their respective Pro Rata Shares. No Lender shall
exercise any right of set off or banker’s lien without the prior written consent of Agent.



(k) Actions with Respect to Defaults.



In addition to Agent’s right to take actions on its own accord as permitted under this
Agreement, Agent shall take such action with respect to an Event of Default as shall be directed by
Requisite Lenders or all Lenders, as applicable, under this Agreement; provided, that until Agent
shall have received such directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it shall deem advisable
and in the best interests of Lenders. No Lender shall have any right individually to enforce or
seek to enforce this Agreement or any Other Agreement or to realize upon any Collateral, unless
instructed to do so by Agent.



(l) Delivery of Information.



Agent shall not be required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by Agent from Borrower or any
other Obligor, Requisite Lenders, any Lender or any other Person under or in connection with this
Agreement or any Other Agreement except (i) as specifically provided in this Agreement or any Other
Agreement and (ii) as specifically requested from time to time in writing by any Lender with
respect to a specific document, instrument, notice or other written communication received by and
in the possession of Agent at the time of receipt of such request and then only in accordance with
such specific request.



(m) Demand.



Subject to the terms of this Agreement, Agent shall make demand for repayment by Borrower of
all Liabilities owing by Borrower hereunder, upon the occurrence and during the continuance of an
Event of Default, upon the written request of Requisite Lenders. Agent shall make such demand in
such manner as it deems appropriate, in its sole discretion, to effectuate the request of the
Requisite Lenders. Nothing contained herein shall limit the discretion of Agent to take reserves,
to deem certain Accounts ineligible, or to exercise any other discretion granted to Agent in this
Agreement.



(n) Notice of Default.



Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of
Default or any event which, with passage of time or giving of notice, could become an Event of
Default, except with respect to Events of Default arising as a result of Borrower’s failure to pay
principal, interest or fees required to be paid to Agent for the benefit of Lenders, unless Agent
shall have received written notice from a Lender or Borrower describing such Event of Default or
event which, with the passage of time or giving of notice, could become an Event of Default, and
which identifies such event as a “notice of default”. Upon receipt of any such notice or Agent
becoming aware of Borrower’s failure to pay principal, interest or fees required to be paid to
Agent for the benefit of Lenders, Agent will notify each Lender of such receipt or event.



20. ASSIGNABILITY.



(a) Borrower shall not have the right to assign this Agreement or any interest therein except
with the prior written consent of Agent and all Lenders.



(b) Any Lender may make, carry or transfer Revolving Loans at, to or for the account of, any
of its branch offices or the office of an affiliate of such Lender except to the extent such
transfer would result in increased costs to Borrower (including, without limitation, under
Section 4 of this Agreement).



(c) Each Lender may, with the consent of Agent and Borrower (provided, that Borrower’s consent
(i) shall not be unreasonably withheld or delayed, (ii) shall not be required if an Event of
Default exists and (iii) shall not be required for an assignment by a Lender to a Lender or an
affiliate of a Lender), but without the consent of any other Lender, assign to one or more banks or
other financial institutions all or a portion of its rights and obligations under this Agreement
and the Other Agreements; provided, that (i) for each such assignment, the parties thereto
shall execute and deliver to Agent, for its acceptance and recording in the Register (as defined
below), an Assignment and Acceptance Agreement in the form attached hereto as Exhibit D
(the “Assignment and Acceptance”), and a processing and recordation fee of Three Thousand Five
Hundred and No/100 Dollars ($3,500.00) to be paid by the assignee, and (ii) no such assignment
shall be for less than Five Million and No/100 Dollars ($5,000,000.00). Upon such execution and
delivery of the Assignment and Acceptance to Agent and Agent’s recording of such assignment in the
Register, from and after the date specified as the effective date in the Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto, and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance, such assignee shall
have the rights and obligations of a Lender hereunder and (y) the assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights (other than any rights it may have prior to such assignment
pursuant to Section 23 of this Agreement which will survive) and be released from its
obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). Any attempted assignment or transfer in violation of
this Section 20(c) shall be null and void.



(d) By executing and delivering an Assignment and Acceptance, the assignee thereunder confirms
and agrees as follows: (i) other than as provided in such Assignment and Acceptance, the assigning
Lender makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this Agreement and the
Other Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any of the Other Agreements, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
Borrower or any other Obligor or the performance or observance by Borrower or any other Obligor of
its obligations under this Agreement and the Other Agreements, (iii) such assignee confirms that it
has received a copy of this Agreement and the Other Agreements, together with copies of the
financial statements referred to in Section 9 of this Agreement and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance, (iv) such assignee will, independently and without reliance
upon Agent, such assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (v) such assignee appoints and authorizes Agent to take
such action as agent on its behalf and to exercise such powers under this Agreement as are
delegated to Agent by the terms hereof, together with such powers as are reasonably incidental
thereto and (vi) such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be performed by it as a
Lender.



(e) Agent shall, maintain at its address referred to in Section 24 of the Agreement a
copy of each Assignment and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of Lenders and the Revolving Loan Commitment of, and
principal amount of the Revolving Loans owing to, each Lender from time to time (the “Register”).
The entries in the Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Agent and Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register and copies of each
Assignment and Acceptance shall be available for inspection by Borrower, Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice. The Revolving Loans and any
promissory notes evidencing Revolving Loans are registered obligations and the right, title and
interest of any Lender and/or its assignees in and to such Revolving Loans or promissory notes, as
applicable, shall be transferable only upon notation of such transfer in the Register. This
Section 20(e) shall be construed so that the Revolving Loans and any promissory notes
evidencing Revolving Loans are at all times maintained in “registered form” within the meaning of
sections 163(f), 871(h)(2) and 881(c)(2) of the Code and the applicable Treasury Regulations.



(f) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender, Agent
shall, if such Assignment and Acceptance has been completed and is in substantially the form of
Exhibit D hereto, and in accordance with the provisions of this Section 20, (i)
accept such Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to Borrower. Within five (5) Business Days after its
receipt of such notice, Borrower shall execute and deliver to Agent in exchange for the surrendered
promissory note or notes, a new promissory note or notes to the order of the assignee in amounts
equal to such assignee’s Revolving Loan Commitment and outstanding Revolving Loans hereunder and,
if the assigning Lender has retained a portion of the Revolving Loans or its Revolving Loan
Commitment, a new promissory note or notes to the order of the assigning Lender in an amount equal
to the remaining Revolving Loan Commitment and outstanding Revolving Loans hereunder of such
assigning Lender under the terms of this Agreement. Such new promissory note or notes shall
re-evidence the indebtedness outstanding under the old promissory note or notes and shall be in the
aggregate principal amount of such surrendered promissory note or notes, shall be dated of even
date herewith and shall otherwise be in substantially the form of the promissory note or notes
subject to such assignment.



(g) Each Lender may sell participations (without the consent of Agent, Borrower or any other
Lender) to one or more parties, in or to all (or a portion) of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving Loan Commitment or
the Revolving Loans owing to it); provided, that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) Borrower, Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement or any Other Agreement, (iv)such Lender shall not transfer, grant,
assign or sell any participation under which the participant shall have rights to approve any
amendment or waiver of this Agreement or any Other Agreement and (v) any such participant shall not
be entitled to receive any greater payments under this Agreement or any Other Agreement than such
Lender would have been entitled to receive with respect to the rights participated.



(h) Each Lender agrees that, without the prior written consent of Borrower and Agent, it will
not make any assignment hereunder in any manner or under any circumstances that would require
registration or qualification of, or filings in respect of, any Revolving Loan or other Liabilities
under the securities laws of the United States of America or of any jurisdiction.



(i) In connection with the efforts of any Lender to assign its rights or obligations or to
participate interests, such Lender may disclose any information in its possession regarding
Borrower, provided that any assignee or participant or any potential assignee or participant agrees
to follow and be bound by the confidentiality requirements set forth in Section 28 hereof.



21. AMENDMENTS, ETC.



No amendment or waiver of any provision of this Agreement or any of the Other Agreements to
which Borrower, Agent or any Lender is a party, nor consent to any departure by any Obligor
therefrom, shall in any event be effective unless the same shall be in writing and signed by
Borrower and Requisite Lenders, or if Lenders shall not be parties thereto, by the parties thereto
and consented to by Requisite Lenders, and each such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given; provided,
that no amendment, waiver or consent shall, unless in writing and signed by all Lenders, do any of
the following: (i) increase the Revolving Loan Commitments of Lenders or subject Lenders to any
additional obligations to extend credit to Borrower, (ii) reduce the principal of, or interest on,
the Loans (other than as expressly permitted herein) or any fees hereunder, (iii) postpone any date
fixed for any payment in respect of principal of, or interest on, the Loan or any fees hereunder,
(iv) change the Pro Rata Shares of Lenders, or any minimum requirement necessary for Lenders or
Requisite Lenders to take any action hereunder, (v) amend or waive this Section 21, or
change the definition of Requisite Lenders, or (vi) except in connection with the financing,
refinancing, sale or other disposition of any asset of Borrower permitted under this Agreement (or
to the extent Requisite Lender approval only is required with any such release pursuant to
subsection 19(j) hereof), release or subordinate any liens in favor of Agent, for the
benefit of Agent and Lenders, on any of the Collateral and provided further, that no amendment,
waiver or consent affecting the rights or duties of Agent under this Agreement or any Other
Agreement shall in any event be effective, unless in writing and signed by Agent in addition to
Lenders required hereinabove to take such action. Notwithstanding any of the foregoing to the
contrary, for purposes of voting or consenting to matters with respect to this Agreement and the
Other Agreements, a Defaulting Lender shall not be considered a Lender and such Defaulting Lender’s
Revolving Loan Commitment shall each be deemed to be $0 until such Defaulting Lender makes the
payments required in this Agreement.



In the event that any consent, waiver or amendment requiring the agreement of all Lenders as
set forth above is agreed to by the Requisite Lenders, but not all Lenders, Agent may, in its sole
discretion, cause any non-consenting Lender to assign its rights and obligations under this
Agreement and the Other Agreements to one or more new Lenders or existing Lenders in the manner and
according to the terms set forth in Section 20 of this Agreement; provided, that (i) no
Lender may be required to assign its rights and obligations to a new Lender because such lender is
unwilling to increase its own loan commitments, (ii) such new Lender must be willing to consent to
the proposed amendment, waiver or consent and (iii) in connection with such assignment the new
Lender pays the assigning Lender an amount equal to the Liabilities owing to such assigning Lender,
including all principal, accrued and unpaid interest and accrued and unpaid fees to the date of
assignment. Such assignment shall occur within thirty (30) days of notice by Agent to such
non-consenting Lender of Agent’s intent to cause such non-consenting Lender to assign its interests
hereunder.



22. NONLIABILITY OF AGENT AND LENDERS.



The relationship between Borrower, Agent and Lenders shall be solely that of borrower and
lender. Neither Agent nor any Lender shall have any fiduciary responsibilities to Borrower.
Neither Agent nor any Lender undertakes any responsibility to Borrower to review or inform Borrower
of any matter in connection with any phase of Borrower’s business or operations.



23. INDEMNIFICATION.



Borrower agrees to defend (with counsel reasonably satisfactory to Agent), protect, indemnify
and hold harmless Agent and each Lender, each affiliate or subsidiary of Agent and each Lender, and
each of their respective shareholders, members, officers, directors, managers, employees, attorneys
and agents (each an “Indemnified Party”) from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of
any kind or nature (including, without limitation, the disbursements and the reasonable fees of
counsel for each Indemnified Party in connection with any investigative, administrative or judicial
proceeding, whether or not the Indemnified Party shall be designated a party thereto), which may be
imposed on, incurred by, or asserted against, any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal, state or local laws or regulations, including,
without limitation, securities laws and regulations, Environmental Laws and commercial laws and
regulations, under common law or in equity, or based on contract or otherwise) in any manner
relating to or arising out of this Agreement or any Other Agreement, or any act, event or
transaction related or attendant thereto, the making or issuance and the management of the Loans or
any Letters of Credit or the use or intended use of the proceeds of the Loans or any Letters of
Credit; provided, however, that (i) the provisions of this Section 23 shall not apply with
respect to taxes (which shall be governed by Section 4(b) hereof) and (ii) Borrower shall
not have any obligation hereunder to any Indemnified Party with respect to matters caused by or
resulting from the willful misconduct or gross negligence of such Indemnified Party. To the extent
that the undertaking to indemnify set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Borrower shall satisfy such undertaking to the maximum
extent permitted by applicable law. Any liability, obligation, loss, damage, penalty, cost or
expense covered by this indemnity shall be paid to each Indemnified Party on demand, and, failing
prompt payment, shall, together with interest thereon at the highest rate then applicable to Loans
hereunder from the date incurred by each Indemnified Party until paid by Borrower, be added to the
Liabilities of Borrower and be secured by the Collateral. The provisions of this Section
23 shall survive the satisfaction and payment of the other Liabilities and the termination of
this Agreement. Agent shall provide invoices for such fees, costs, expenses and charges of Persons
other than Agent or Lenders to Borrower promptly after receipt thereof from such Persons.



24. NOTICE.



All written notices and other written communications with respect to this Agreement shall be
sent by ordinary, certified or overnight mail, by telecopy or delivered in person, and in the case
of Agent shall be sent to it at 135 South LaSalle Street, Chicago, Illinois 60603-4105, attention:
Steve Fenton, Esq., facsimile number: (312) 904 – 6109 or as otherwise directed by Agent in
writing, in the case of a Lender shall be sent to it at the address set forth below its name on the
signature page hereto or in the Assignment and Acceptance Agreement or as otherwise directed by
such Lender in writing, and in the case of Borrower shall be sent to it at its principal place of
business set forth on Exhibit A hereto or as otherwise directed by Borrower in writing.
All notices shall be deemed received upon actual receipt thereof or refusal of delivery.



25. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.



This Agreement and the Other Agreements to which Borrower is a party are submitted by Borrower
to Agent and Lenders for their acceptance or rejection at Agent’s principal place of business as an
offer by Borrower to borrow monies from Agent and Lenders now and from time to time hereafter, and
shall not be binding upon Agent or any Lender or become effective until accepted by Agent and
Lenders, in writing, at said place of business. If so accepted by Agent and Lenders, this
Agreement and the Other Agreements shall be deemed to have been made at said place of business.
THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE
OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER
RESPECTS, INCLUDING, WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES. If
any provision of this Agreement shall be held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or remaining provisions of this Agreement.



BORROWER HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURTS LOCATED WITHIN THE CITY OF CHICAGO AND STATE OF ILLINOIS FOR ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, THE
OTHER AGREEMENTS OR THE COLLATERAL. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH FOR NOTICE IN THIS
AGREEMENT AND TO THE EXTENT PERMITTED BY LAW SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER
THE SAME HAS BEEN POSTED. BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT AGAINST BORROWER BY AGENT OR LENDERS IN ACCORDANCE WITH THIS
SECTION.



26. HEADINGS OF SUBDIVISIONS.



The headings of subdivisions in this Agreement are for convenience of reference only, and
shall not govern the interpretation of any of the provisions of this Agreement.



27. POWER OF ATTORNEY.



Borrower acknowledges and agrees that its appointment of Agent as its attorney and
agent-in-fact for the purposes specified in, this Agreement is an appointment coupled with an
interest and shall be irrevocable until all of the Liabilities are satisfied and paid in full and
this Agreement is terminated.



28. CONFIDENTIALITY.



Borrower, Agent and each Lender hereby agree to use commercially reasonable efforts to assure
that any and all information relating to Borrower or any Obligor which is (i) furnished by Borrower
or any Obligor to Agent or any Lender (or to any affiliate of Agent or any Lender); and (ii)
non-public, confidential or proprietary in nature or credit information, shall be kept confidential
by Agent and such Lender or such affiliate in accordance with applicable law; provided, however,
that such information and other credit information relating to Borrower may be distributed by such
party to such party’s directors, officers, employees, attorneys, affiliates, assignees,
participants, auditors, agents and regulators, to Agent and any other Lender and upon the order of
a court or other governmental agency having jurisdiction over Agent or such Lender or such
affiliate, to any other party. In addition such information and other credit information may be
distributed by Agent or any Lender to potential participants or assignees of any portion of the
Liabilities, provided, that such potential participant or assignee agrees to follow the
confidentiality requirements set forth herein. Borrower, Agent and each Lender further agree that
this provision shall survive the termination of this Agreement. Notwithstanding the foregoing,
Borrower hereby consents to Agent publishing a tombstone or similar advertising material relating
to the financing transaction contemplated by this Agreement.



29. COUNTERPARTS.



This Agreement, any of the Other Agreements and any amendments, waivers, consents or
supplements may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be deemed an original,
but all of which counterparts together shall constitute but one agreement.



30. ELECTRONIC SUBMISSIONS.



Upon not less than thirty (30) days’ prior written notice (the “Approved Electronic Form
Notice”) and subject to Borrower’s consent (which consent shall not be unreasonably withheld or
delayed), Agent may permit or require that any of the documents, certificates, forms, deliveries or
other communications, authorized, required or contemplated by this Agreement or the Other
Agreements, be submitted to Agent in “Approved Electronic Form” (as hereafter defined), subject to
any reasonable terms, conditions and requirements in the applicable Approved Electronic Forms
Notice. For purposes hereof “Electronic Form” means e-mail, e-mail attachments, data submitted on
web-based forms or any other communication method that delivers machine readable data or
information to Agent, and “Approved Electronic Form” means an Electronic Form that has been
approved in writing by Agent (which approval has not been revoked or modified by Agent) and sent to
Borrower in an Approved Electronic Form Notice. Except as otherwise specifically provided in the
applicable Approved Electronic Form Notice, any submissions made in an applicable Approved
Electronic Form shall have the same force and effect that the same submissions would have had if
they had been submitted in any other applicable form authorized, required or contemplated by this
Agreement or the Other Agreements.



31. WAIVER OF JURY TRIAL; OTHER WAIVERS.



(a) BORROWER, AGENT AND EACH LENDER EACH HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, ANY OF THE OTHER
AGREEMENTS, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWER, AGENT OR
SUCH LENDER OR WHICH, IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE
RELATIONSHIP AMONG BORROWER, AGENT AND LENDERS. IN NO EVENT SHALL AGENT OR ANY LENDER BE LIABLE
FOR LOST PROFITS OR OTHER SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.



(b) Borrower hereby waives demand, presentment, protest and notice of nonpayment, and further
waives the benefit of all valuation, appraisal and exemption laws.



(c) Borrower hereby waives the benefit of any law that would otherwise restrict or limit Agent
or any Lender or any affiliate of Agent or any Lender in the exercise of its right, which is hereby
acknowledged and agreed to, to set-off against the Liabilities that are due and payable, without
notice at any time upon the occurrence and during the continuance of an Event of Default, any
indebtedness, matured or unmatured, owing by Agent or any Lender or such affiliate of Agent or any
Lender to Borrower, including, without limitation any Deposit Account at Agent or any Lender or
such affiliate. Borrower waives every defense, counterclaim (other than counterclaims which would
be waived if not made) or set-off which Borrower may now have or hereafter may have to any action
by Agent and Lenders in enforcing this Agreement or the Other Agreements and/or any of the
Liabilities, or in enforcing Agent’s rights in the Collateral and ratifies and confirms whatever
Agent and Lenders may do in accordance with the terms hereof and agrees that Agent and Lenders
shall not be liable for any error in judgment or mistakes of fact or law except for Agent’s or any
Lender’s gross negligence or willful misconduct.



(d) TO THE EXTENT PERMITTED BY LAW, BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY AGENT OR ANY LENDER OF ITS RIGHTS TO REPOSSESS THE COLLATERAL OF
BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON SUCH COLLATERAL.



(e) Agent’s and/or Lenders’ failure, at any time or times hereafter, to require strict
performance by Borrower of any provision of this Agreement or any of the Other Agreements shall not
waive, affect or diminish any right of Agent or any Lender thereafter to demand strict compliance
and performance therewith. Any suspension or waiver by Agent or any Lender of an Event of Default
under this Agreement or any default under any of the Other Agreements shall not suspend, waive or
affect any other Event of Default under this Agreement or any other default under any of the Other
Agreements, whether the same is prior or subsequent thereto and whether of the same or of a
different kind or character. No delay on the part of Agent or any Lender in the exercise of any
right or remedy under this Agreement or any Other Agreement shall preclude other or further
exercise thereof or the exercise of any right or remedy.



32. EFFECT OF AMENDMENT AND RESTATEMENT



Upon the execution and delivery of this Agreement, the “Liabilities” under, and as such term
is defined in, the Original Loan Agreement shall continue in full force and effect, but shall now
be governed by the terms and conditions set forth in this Agreement. Such Liabilities, together
with any and all additional Liabilities incurred by Borrower hereunder or under any of the Other
Agreements, shall continue to be secured by the assets of Borrower whether now existing or
hereafter acquired and wheresoever located subject to the exceptions set forth herein and in the
Other Agreements. Borrower hereby reaffirms its Liabilities, grants of security interests, pledges
and the validity of all covenants by Borrower contained in this Agreement and any and all Other
Agreements. The execution and delivery of this Agreement shall not constitute a novation or
repayment of the Liabilities under the Original Loan Agreement



3




IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date
first written above.



	 
	APAC CUSTOMER SERVICES, INC.
By: /s/ George H. Hepburn III
Title: Senior Vice President and CFO
Address: Six Parkway North Center
Deerfield, Illinois 60015
LASALLE BANK NATIONAL ASSOCIATION, as Agent and a Lender
By: /s/ Douglas C. Colletti
Title: Senior Vice President
Address: 135 South LaSalle Street
Chicago, Illinois 60603-4105

	Revolving Loan Commitment: $25,000,000







4




EXHIBIT A — BUSINESS AND COLLATERAL LOCATIONS




Attached to and made a part of that certain Loan and Security Agreement of even date herewith
among APAC Customer Services, Inc. (“Borrower”) and LASALLE BANK NATIONAL ASSOCIATION, as Agent and
all Lenders from time to time a party thereto.




	 	A.	 	Borrower’s business locations (please indicate which location is the principal place of
business and at which locations originals and all copies of Borrower’s books, records and
accounts concerning the Collateral are kept).





	 	 	 	 	 	 	 	 	 	 	 	 	 
	Street Address	 	City	 	State	 	Zip Code
	Principal Places of Business:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Six Parkway North
	 	Deerfield
	 	IL
	 		60015	
	(1st Floor and part of 2nd floor)
	 	 	 	 	 	 	 	 	 	 	 	 
	Other Operating Locations:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	1650 South Research Loop Road
	 	Tucson
	 	AZ
	 		85710	
	425 East Second Street SE
(Floors 1, 2, 7, 10,
and mezzanine)
	 	Cedar Rapids
	 	IA
	 		52401	
	Building 1A
	 	Davenport
	 	IA
	 		52806	
	River Cities Industrial Center
	 	 	 	 	 	 	 	 	 	 	 	 
	200 East 90th Street
	 	 	 	 	 	 	 	 	 	 	 	 
	902 North 91st Plaza
	 	Omaha
	 	NE
	 		68114	
	9102 Burt Street
	 	 	 	 	 	 	 	 	 	 	 	 
	425 Ayers Avenue
	 	Corpus Christi
	 	TX
	 		78415	
	6565 MacArthur Blvd, Suite 470
	 	Irving
	 	TX
	 		75039	
	11008 Warwick
	 	Newport News
	 	VA
	 		23601	
	3200 Riverside Drive
	 	Green Bay
	 	WI
	 		54301	
	3131 US HWY 16
	 	Onalaska
	 	WI
	 		54650	






5




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Street Address	 	City	 	State	 	Zip Code
	Building C 1st to 4th Floor and	 	 	 	 	 	 
	Building B 4th Floor	 	 	 	 	 	 
	Northgate Cyberzone, Filinvest	 	 	 	 	 	 
	Corporation City	 	 	 	 	 	 
	Alabang Muntinlupa City	 	 	 	 	 	 
	Manila, Philippines	 	Manila, Philippines	 	 	 	 
	1650 South Research Loop Road	 	Tucson	 	AZ	 	85710
	(Parking)	 	 	 	 	 	 	 	 	 	 	 	 
	425 Ayers Avenue
	 	Corpus Christi
	 	TX
	 	 	78415	 
	(Parking)
	 	 	 	 	 	 	 	 	 	 	 	 
	Building C NorthGate
Cyberzone, Filinvest
Corporation City
Alabang Muntinlupa City
Manila, Philippines
(Car Park)
	 	Manila, Philippines
	 	 	 	 	 	 	 	 
	205 Apitong Street
Ayala Alabang Village
Muntinlupa City
(Site Director’s living quarters)
	 	Manila, Philippines
	 	 	 	 	 	 	 	 
	Location of books, records and
accounts (or copies thereof)
concerning the Collateral:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	APAC Customer Services, Inc.
	 	Deerfield
	 	IL
	 	 	60015	 
	Six Parkway North
	 	 	 	 	 	 	 	 	 	 	 	 






6





	 	 	 	A.I. Below are listed additional current Borrower business locations that are currently
closed, scheduled to close, and/or scheduled to be sublet as part of the Restructuring, also
known as Exited Business Assets.





	 	 	 	 	 	 	 	 	 	 	 
	Street Address	 	City	 	State	 	Zip Code	 	Current Status
	200 Alton Square

	 	Alton
	 	IL
	 	 	62002	 	 	Center closed,

still under lease
	 
	 	 	 	 	 	 	 	 	 	 
	4825 Avenue O

	 	Fort Madison
	 	IA
	 	 	52627	 	 	Center closed,

still under lease.
	 
	 	 	 	 	 	 	 	 	 	 
	131 Genesee Street

	 	Utica
	 	NY
	 	 	13501	 	 	Center open
	 
	 	 	 	 	 	 	 	 	 	 
	940 SW 104th Street

	 	Oklahoma City

(a/k/a Westminster)
	 	

OK
	 	

43139
	 	

Center open
	 
	 	 	 	 	 	 	 	 	 	 
	2325 Crossroads Blvd

	 	Waterloo
	 	IA
	 	 	50702	 	 	Center open
	 
	 	 	 	 	 	 	 	 	 	 
	600-B S Tyler

	 	Wichita
	 	KS
	 	 	67207	 	 	Center Open
	 
	 	 	 	 	 	 	 	 	 	 
	Six Parkway North

(4th,

3rd, and

part of 2nd floor)

	 	

Deerfield
	 	

IL
	 	

60015
	 	

Office space slated

to be

sublet/assigned
	 
	 	 	 	 	 	 	 	 	 	 






7





	 	B.	 	Other locations of Collateral (warehouse locations, processing locations, consignment
locations, but excluding any Collateral which is normally used in more than one state,
Collateral delivered to third parties for repair in the ordinary course and other Collateral
with a fair market value of less than $50,000, in the aggregate) and all post office boxes of
Borrower to which payments on Borrower’s Accounts are sent.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Description	 	Street Address	 	City	 	State	 	Zip Code
	1996 Red K1500 Chevy Truck
	 	425 East Second Street SE	 	Cedar Rapids
	 	IA
	 	 	52401	 
	1997 Red F150 Ford Truck
	 	425 East Second Street SE	 	Cedar Rapids
	 	IA
	 	 	52401	 
	1995 Safari Van
	 	425 East Second Street SE	 	Cedar Rapids
	 	IA
	 	 	52401	 
	2004 Toyota Tacoma
	 	Six Parkway North
	 	Deerfield
	 	IL
	 	 	60015	 
	2004 Chevrolet Truck
	 	425 East Second Street SE	 	Cedar Rapids
	 	IA
	 	 	52401	 
	2005 Chevrolet Truck Black
	 	425 East Second Street SE	 	Cedar Rapids
	 	IA
	 	 	52401	 
	Outside of the United States
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Description
	 	Street Address	 	City	 	Country	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2003 Honda CRV
	 	Building C NorthGate
	 	Manila
	 	Philippines
	 	 	 	 
	 
	 	Cyberzone, Filinvest
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Corporation City
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Alabang Muntinlupa City
	 	 	 	 	 	 	 	 	 	 	 	 






	 	 	 	 	 
	Post office boxes of Borrower to which payments on Borrower’s Accounts are sent:

	APAC Customer Services, Inc.
	 	APAC Customer Services, Inc.

	7550 Collection Center Drive
	 	3567 Payshare Circle
	Chicago, IL 60693
	 	Chicago, IL  60674

	Over-the-counter deposits:
	 	 	 	 
	Bank of America
	 	APAC Customer Services, Inc.

	Apparel Center/Merchandise Mart
	 	LBX 3567

	350 N. Orleans Street
	 	540 West Monroe – 4th Floor
	Chicago, IL 60654
	 	Chicago, IL 60661







8





	 	C.	 	Bank Accounts of Borrower (other than those at LaSalle):





	 	 	 	 	 	 	 	 	 
	Institution	 	Account Name / Type of Account	 	Account Number
	Bank of America
	 	APAC Customer Services, Inc.
	 	 	 	 
	231 LaSalle Street
	 	Concentration Account,
	 	 	 	 
	Chicago, IL 60697
	 	Depository Account for Lockbox
	 		86665-10130	
	 
	 	APAC Customer Services, Inc.
	 	 	 	 
	 
	 	Payroll Account
	 	 	 	 
	Bank of America
	 	Payroll Disbursement account
	 		87652-01557	
	 
	 	APAC Customer Services, Inc.
	 	 	 	 
	 
	 	Accounts Payable
	 	 	 	 
	Bank of America
	 	APDisbursement account
	 		87657-01545	
	 
	 	APAC Customer Services, Inc.
	 	 	 	 
	 
	 	Payroll Card
	 	 	 	 
	Bank of America
	 	Concentration Account
	 		87658-01979	
	Bank of America
	 	APAC Customer Services, Inc.
	 	 	 	 
	(Manila, Philippines)
	 	Philippine Peso account
	 		605972571012	
	Bank of America
	 	APAC Customer Services, Inc.
	 	 	 	 
	(Manila, Philippines)
	 	USD account
	 		605972571525	






9




SCHEDULE 1-A — PERMITTED INVESTMENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Investment/	 	 	 	 
	Company Name	 	Ownership	 	Approximate Value	 	Comments
	(	 	 	 	 	 	 	 	 	 	 	 	 
	a)	 	 	 	 	 	 	 	 	 	 	 	 
	2001	 	 	 	 	 	 	 	 	 	 	 	 
	Develo
pment
Corpor
ation
200 First Street SE
Cedar Rapids, IA 52401
	 	 	3.03	%	 	$	250,000	 	 	Purchase of stock

	 
	 	 	 	 	 	 	 	 	 	The Company
	 
	 	 	 	 	 	 	 	 	 	has limited

	 
	 	 	 	 	 	 	 	 	 	partnership

	 
	 	 	 	 	 	 	 	 	 	interest in RRE

	 
	 	 	 	 	 	 	 	 	 	Investors, L.P.

	 
	 	 	 	 	 	 	 	 	 	("LP").  LPis an
	 
	 	 	 	 	 	 	 	 	 	equity investment

	 
	 	 	 	 	 	 	 	 	 	group that has been

	 
	 	 	 	 	 	 	 	 	 	fully invested and

	 
	 	 	 	 	 	 	 	 	 	is now in the wind

	 
	 	 	 	 	 	 	 	 	 	down stages. No

	RRE Ventures, LP
	 	 	 	 	 	 	 	 	 	further capital

	126 East 56th Street
	 	 	 	 	 	 	 	 	 	contributions will

	New York, NY 10022
	 		1.6708	%	 	$	157,399		 	be required.







10




SCHEDULE 1-B — PERMITTED LIENS




Debtor: APAC Customer Services, Inc.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	File Number/	 	 
	Secured Party	 	Jurisdiction/Office	 	Date Filed	 	Description of Collateral
	National City

Leasing Corporation

(assigned by

Trimmarc Financial,

Inc.)

	 	Illinois Secretary

of State
	 	4276284

10/2/00
	 	All equipment and other personal

property covered by that certain

Master Lease Agreement No.

MLA-1129, between Debtor as

lessee, and Trimmarc Financial,

Inc. as lessor, dated as of

August 10, 2000 (17 InFocus

Projectors)
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Wells Fargo

Equipment Finance,

Inc. (assigned by

Celtic Leasing

Corp.)

	 	Illinois Secretary

of State
	 	4307192

12/1/00
	 	All equipment and other personal

property and all modifications

and additions thereto and

replacements and substitutions

thereto, in whole or in part, now

or hereafter covered by that

certain Lease Schedule No. 01

dated 11/30/00 to Master Lease

Agreement No. CML – 1044-A dated

11/13/00, between Celtic Leasing

Corp., as lessor, and Debtor as

lessee. The equipment includes,

but not limited to, Dell

computers and accessories thereto
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CIT Communications

Finance Corporation

	 	Illinois Secretary

of State
	 	4430217

8/27/01
	 	Equipment now or hereafter,

acquired, which is leased to

Debtor by Secured Party pursuant

to Lease No. M105808, including

but not limited to, AVAYA Inc.

Definity, and all attachments,

accessions, additions,

substitutions, products,

replacements, and rentals and a

right to use license for any

software related to any of the

foregoing, and proceeds therefrom
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Xerox Corporation

	 	Illinois Secretary

of State
	 	4422454

8/8/01
	 	One (1) Xerox DC2060 and one (1)

Xerox DC200EFI together with all

parts, attachments, additions,

replacements and repairs

incorporated in or affixed

thereto.
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Brown County

	 	Illinois Secretary

of State
	 	4898265

3/11/02
	 	Cummins Generators and attachments

In Lieu of

Wisconsin SOS 01644012 1/27/97

Continued as

020001928828 1/23/02
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Information Leasing

Corporation

	 	Illinois Secretary

of State
	 	5464293

06/25/02
	 	Equipment: Kentrox Service Point

CSUs in various locations

Assigned to Information Leasing

Corporation by Comtech Capital,

L.L.C. (6132782 11/15/02)
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CIT Communications

Finance Corporation

	 	Illinois Secretary

of State
	 	5918464

10/1/02
	 	Equipment now or hereafter

acquired, which is sold to Debtor

by Secured Party pursuant to

Lease No. M105808, including but

not limited to AVAYA Inc.

Definity BCS and all attachments,

accessions, additions,

substitutions, products,

replacements, and rentals and a

right to use license for any

software related to any of the

foregoing, and proceeds therefrom
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	
 
	 	 	 	 	 	 	 	Equipment now or hereafter

acquired, which is sold to Debtor

by Secured Party pursuant to

Lease No. M105808, including but

not limited to AVAYA Inc.

Definity G3R and all attachments,

accessions, additions,

substitutions, products,

replacements, and rentals and a

right to use license for any

software related to any of the

foregoing, and proceeds therefrom

In Lieu of:
	CIT Communications

Finance

	 	Illinois Secretary

of State
	 	5945224

10/7/02
	 	Oklahoma Central Filing Office

0043813 8/25/99
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CIT Communications

Finance Corporation

	 	Illinois Secretary

of State
	 	5945232

10/7/02
	 	Equipment now or hereafter

acquired, which is sold to Debtor

by Secured Party pursuant to

Lease No. M105808, including but

not limited to AVAYA Inc.

Definity Add-On, and all

attachments, accessions,

additions, substitutions,

products, replacements, and

rentals and a right to use

license for any software related

to any of the foregoing, and

proceeds therefrom

In Lieu of

IA SOS K890161 1/12/98
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CIT Communications

	 	Illinois Secretary
	 	 	5945275	 	 	Equipment now or hereafter

acquired, which is sold to Debtor

by Secured Party pursuant to

Lease No. M105808, including but

not limited to AVAYA Inc.

Definity Add-On, and all

attachments, accessions,

additions, substitutions,

products, replacements, and

rentals and a right to use

license for any software related

to any of the foregoing, and

proceeds therefrom

In Lieu of:
	Finance

	 	of State
	 	 	10/7/02	 	 	IA SOS G-100193 8/3/99
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CIT Communications

	 	Illinois Secretary
	 	 	5945313	 	 	Equipment now or hereafter

acquired, which is sold to Debtor

by Secured Party pursuant to

Lease No. M105808, including but

not limited to AVAYA Inc.

Definity Add-On, and all

attachments, accessions,

additions, substitutions,

products, replacements, and

rentals and a right to use

license for any software related

to any of the foregoing, and

proceeds therefrom

In Lieu of:
	Finance

	 	of State
	 	 	10/7/02	 	 	IA SOS P033247 8/2/99
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CIT Communications

Finance Corporation

	 	Illinois Secretary

of State
	 	5947707

10/7/02
	 	Equipment now or hereafter

acquired, which is sold to Debtor

by Secured Party pursuant to

Lease No. M105808, including but

not limited to AVAYA Inc.

Definity Upgrade, and all

attachments, accessions,

additions, substitutions,

products, replacements, and

rentals and a right to use

license for any software related

to any of the foregoing, and

proceeds therefrom
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Information Leasing

Corporation

	 	Illinois Secretary

of State
	 	6458556

01/27/03
	 	Kentrox Service Points CSUs

Assigned to Information Leasing

Corporation by Comtech Capital,

L.L.C. (7114400 6/6/03)
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	IOS Capital

	 	Illinois Secretary

of State
	 	7755236

10/28/03
	 	All equipment now or hereafter

leased in an equipment leasing

transaction in connection with

that certain Master Agreement/Lease

No. 1000064, Product

Schedule No./Agreement No.

01385DF, as amended from time to

time, between Secured Party as

lessor, and Debtor as lessee, and

all additions, improvements,

attachments, accessories,

accessions, upgrades and

replacements related thereto, and

any and all substitutions or

exchanges, and any and all

products, insurance, and/or other

proceeds (cash and non-cash)

therefrom.
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	IOS Capital

	 	Illinois Secretary

of State
	 	7980078

12/16/03
	 	All equipment now or hereafter

leased in an equipment leasing

transaction in connection with

that certain Master Agreement/Lease

No. 1000064, Product

Schedule No./Agreement No.

947215A, as amended from time to

time, between Secured Party as

lessor, and Debtor as lessee, and

all additions, improvements,

attachments, accessories,

accessions, upgrades and

replacements related thereto, and

any and all substitutions or

exchanges, and any and all

products, insurance, and/or other

proceeds (cash and non-cash)

therefrom.
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	IOS Capital

	 	Illinois Secretary

of State
	 	9014624

8/24/04
	 	All equipment now or hereafter

leased in an equipment leasing

transaction in connection with

that certain Master Agreement/Lease

No. 1007030, Product

Schedule No./Agreement No.

OS459A2, as amended from time to

time, between Secured Party as

lessor, and Debtor as lessee, and

all additions, improvements,

attachments, accessories,

accessions, upgrades and

replacements related thereto, and

any and all substitutions or

exchanges, and any and all

products, insurance, and/or other

proceeds (cash and non-cash)

therefrom.
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Shawn P. Johnson and

Christina P. Johnson

	 	Lee (North)

District Court Iowa
	 	SCSC15669

12/18/03
	 	Judgment of $333.75 with interest

thereon at the rate of 6.442%

from 7/14/03 and court costs in

the amount of $19.50 against APAC
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Wells Fargo

Equipment Finance,

Inc.

	 	Texas Secretary of

State
	 	00-634894

11/30/00
	 	All equipment and other personal

property and all modifications

and additions thereto and

replacements and substitutions

thereto, in whole or in part, now

or hereafter covered by that

certain Lease Schedule No. 01

dated 11/30/00 to Master Lease

Agreement No. CML – 1044-A dated

11/13/00, between Celtic Leasing

Corp., as lessor, and Debtor as

lessee. The equipment includes,

but not limited to, Dell

computers and accessories thereto

Assigned to Wells Fargo Equipment

Finance, Inc. by Celtic Leasing

Corp. (01-613572 2/2/01)
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Wells Fargo

Equipment Finance,

Inc. (assigned by

Celtic Leasing

Corp.)

	 	Wisconsin

Department of

Financial

Institutions
	 	02014537

12/04/00
	 	All equipment and other personal

property and all modifications

and additions thereto and

replacments and substituions

thereto, in whole or in part, now

or hereafter covered by that

certain Lease Schedule No. 01

dated 11/30/00 to Master Lease

Agreement No. CML – 1044-A dated

11/13/00, between Celtic Leasing

Corp., as lessor, and Debtor as

lessee. The equipment includes,

but not limited to, Dell

computers and accessories thereto
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	J&J Real Estate, L.C.

	 	N/A
	 	 	N/A	 	 	All personal property and all

substitutions thereof, kept and

used by Debtor on the property

leased to Debtor by Secured

Party.
	 

	 	 
	 	 	 	 	 	 






11




SCHEDULE 11(g) – LITIGATION




PENDING LITIGATION



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	DATE	 	 	 	 	 	 	 	 
	NAME	 	FILED	 	COURT	 	AMOUNT DEMANDED IN COMPLAINT	 	DESCRIPTION	 	STATUS
	Bauman v. APAC	 	5/5/05	 	Circuit Court of
Buchanan County,
Missouri	 	$117,040 and costs and fees
	 	Landlord seeks declaratory
judgment based upon alleged
breach of lease.
	 	6/17/05 – Answer filed. Removed
to federal court.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	McIntyre-Handy v.
APAC (Suit #1,
premised on Charge
#2)	 	6/13/05	 	U.S. Court of
Appeals,
4th
Circuit	 	$301,250
	 	Plaintiff appeals decision of
Eastern District of Virginia,
granting APAC’s motion for
summary judgment and dismissing
case in which plaintiff alleged
disability discrimination and
retaliation.
	 	9/21/05 – 4th Circuit
grants appellant’s request to
proceed in forma pauperis.
10/5/05 – Respondent’s brief filed.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	McIntyre-Handy v.
APAC (Suit #2,
premised on Charge
#3)	 	7/28/05	 	U.S. District
Court, Eastern
District of VA	 	$312,000
	 	Former CSR alleges disability
discrimination and retaliation.
	 	11/14/05 – Last day to move or
answer.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Whalen, Sara
Elizabeth v. APAC	 	10/19/05	 	TX – County Court
at Law No.4, Nueces
County	 	N/A
	 	Former Operations Manager
alleges gender discrimination
and retaliation.
	 	11/14/05 – Last day to move or
answer.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 
	 	 






12




SCHEDULE 11(i) – AFFILIATE TRANSACTIONS




13




NONE

SCHEDULE 11(j) – NAMES & TRADE NAMES




NONE




14




SCHEDULE 11(n) – INDEBTEDNESS




NONE




15




SCHEDULE 11(p)-A – PARENT AND SUBSIDIARIES




APAC Customer Services, Inc.



 FEIN 36-2777140



Illinois (state of incorporation)



Prior Corporate Name: APAC Teleservices, Inc.



(name changed to APAC Customer Services in 1999)



APAC Customer Services General Partner, Inc. 1



FEIN 36-4198932



Illinois (state of incorporation)



 APAC Customer Services of Illinois, Inc. 1



FEIN 36-4204566



Illinois (state of incorporation)



ITI Holdings, LLC1



FEIN 47-0791858



Delaware (state of incorporation)



APAC Customer Services of Texas, L.P. 3



 FEIN 36-4199020



Texas (state of incorporation)



APAC Customer Services of Iowa, LLC1



FEIN 32-0047230



Illinois (state of incorporation)



APAC Customer Services, L.L.C. 2



FEIN 36-4155947



Illinois (state of incorporation)




	 	1	 	100% ownership by APAC Customer Services, Inc.






	 	2	 	99% ownership by APAC Customer Services, Inc. and 1% ownership by APAC
Customer Services of Illinois, Inc.






	 	3	 	99% ownership by APAC Customer Services, L.L.C. and 1% ownership by
APAC Customer Services General Partner, Inc.





16




SCHEDULE 11(p)-B –AFFILIATES





	 	1.	 	Schwartz Group – wholly owned by Theodore G. Schwartz






	 	2.	 	Form and Function Consulting





17




SCHEDULE 11(q) – DEFAULTS




18




NONE




EXHIBIT B – COMPLIANCE CERTIFICATE




Attached to and made a part of that certain Amended and Restated Loan and Security Agreement,
as it may be amended in accordance with its terms from time to time, including all exhibits
attached thereto (the “Agreement”) dated as of October 31, 2005 among APAC Customer Services, Inc.
(“Borrower”), LASALLE BANK NATIONAL ASSOCIATION as agent (“Agent”) and each lender from time to
time a party thereto (“Lenders”).



This Certificate is submitted pursuant to subsection 9(c) of the Agreement.



The undersigned hereby certifies to Agent and Lenders that as of the date of this Certificate:



1. The undersigned is the Senior Vice President and Chief Financial Officer of Borrower.



2. There exists no event or circumstance which is or which with the passage of time, the
giving of notice, or both would constitute an Event of Default, as that term is defined in the
Agreement, or, if such an event of circumstance exists, a writing attached hereto specifies the
nature thereof, the period of existence thereof and the action that Borrower has taken or proposes
to take with respect thereto.



3. No material adverse change in the condition, financial or otherwise, business, property, or
results of operations of Borrower has occurred since Borrower’s financial statement dated August
28, 2005, or, if such a change has occurred, a writing attached hereto specifies the nature thereof
and the action that Borrower has taken or proposes to take with respect thereto.



4. The representations and warranties contained in the Agreement are true and correct as of
the date hereof except to the extent any such representation or warranty relates to an earlier
date, in which case such representation or warranty shall have been true and correct on and as of
such earlier date, or, if such representations and warranties are not or have not been true and
correct as of the applicable date, a writing attached hereto specifies the nature thereof, the
period of existence thereof and the action that Borrower has taken or proposes to take with respect
thereto.



5. The financial statements of Borrower being concurrently delivered herewith have been
prepared in accordance with generally accepted accounting principles consistently applied and there
have been no material changes in accounting policies or financial reporting practices of Borrower
since Borrower’s financial statement dated August 28, 2005, or, if any such change has occurred,
such changes are set forth in a writing attached hereto.



6. To the extent applicable, attached hereto is a true and correct calculation of EBITDA and
the financial covenants contained in Section 14 of the Agreement.



	 
	 

	APAC CUSTOMER SERVICES, INC.

By

Its







19




EXHIBIT C – COMMERCIAL TORT CLAIMS




NONE




20




EXHIBIT D




FORM OF ASSIGNMENT AND ACCEPTANCE




This Assignment and Acceptance (the “Assignment and Acceptance”) is executed as of
     ,      , between      , a      (“Assignee”), and
     , a      (“Assignor”).



W I T N E S S E T H:




WHEREAS, Assignor is party to an Amended and Restated Loan and Security Agreement dated as of
     , 2005 (as amended, modified or supplemented from time to time, the “Loan
Agreement”) among LaSalle Bank National Association, in its individual capacity as a lender and as
agent (“Agent”), all other lenders from time to time a party to the Loan Agreement, and APAC
Customer Services, Inc., an Illinois corporation (the “Borrower”).



WHEREAS, Assignor has agreed to assign to Assignee [all/a portion] of Assignor’s rights and
obligations with respect to the loans and other financial accommodations to Borrower pursuant to
the Loan Agreement, and Assignee has agreed to accept such assignment;



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



33. Defined Terms



Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Loan Agreement.



34. Assignment and Assumption



Subject to and in accordance with the terms of the Loan Agreement, Assignor hereby assigns to
Assignee, without recourse, representation or warranty (other than as expressly provided herein),
and Assignee hereby assumes, all of Assignor’s right, title and interest in and obligations arising
under the Loan Agreement and the Other Agreements with respect to [all/a portion] of the
outstanding Revolving Loans to Borrower equal to all or a portion of Assignee’s Pro Rata Share (as
set forth under Assignee’s signature hereto) of the outstanding Revolving Loans, if any, and
Assignor’s Pro-Rata share of the Letter of Credit Obligations; provided, that Assignee’s
obligations to Assignor, Borrower or any Lender are strictly limited to those assumed obligations
arising under the Loan Agreement and Other Agreements, unless otherwise explicitly provided for
herein. Upon the Assignment Effective Date (as defined below), Assignee’s Revolving Loan
Commitment and Pro Rata Share shall be as set forth below Assignee’s signature hereto. After
giving effect to the assignment hereunder, Assignor’s remaining Revolving Loan Commitment and Pro
Rata Share shall be as set forth below Assignor’s signature hereto.



35. Payments on Assignment Effective Date



In consideration of the assignment by Assignor to Assignee pursuant to this Assignment and
Acceptance, Assignee agrees to pay to Assignor on or prior to the Assignment Effective Date an
amount specified by Assignor in writing on or prior to the Assignment Effective Date which
represents Assignee’s Pro Rata Share of the Revolving Loans to Borrower outstanding on the
Assignment Effective Date.



36. Effectiveness



This Assignment and Acceptance shall become effective upon the full execution and delivery of
this Assignment and Acceptance to Agent for recording in the Register pursuant to the Loan
Agreement (the “Assignment Effective Date”).



37. Representations and Warranties



(a) Each of Assignor and Assignee represents and warrants to the other party as follows:



(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to fulfill its obligations
under, and to consummate the transactions contemplated by, this Assignment and
Acceptance;



(ii) the making and performance by it of this Assignment and Acceptance and all
documents required to be executed and delivered by it hereunder do not and will not
violate any law or regulation of the jurisdiction of its incorporation or any other
law or regulation applicable to it;



(iii) this Assignment and Acceptance has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms, except as limited by applicable bankruptcy, reorganization,
insolvency or similar laws affecting the enforcement of creditors’ rights generally
and by general equity principles; and



(iv) all approvals, authorizations, or other actions by, or filing with, any
governmental authority necessary for the validity or enforceability of its
obligations under this Assignment and Acceptance have been obtained.



(b) Assignor represents and warrants to Assignee that Assignee’s Pro Rata Share of the Maximum
Loan Limit and the outstanding Loans being assigned hereunder are not subject to any liens or
security interests created by or known to Assignor.



(c) Assignee represents and warrants that it has made its own independent investigation of the
financial condition and affairs of the Credit Parties (as defined below) in connection with the
making of the Revolving Loans and the assignment by Assignor to Assignee hereunder and has made and
shall continue to make its own appraisal of the creditworthiness of the Credit Parties. Assignor
shall have no duty or responsibility (except as expressly provided in the Loan Agreement) either
initially or on a continuing basis to make any such investigation or any such appraisal on behalf
of Assignee or to provide Assignee with any credit or other information with respect thereto,
whether coming into its possession before the making of the Revolving Loans or at any time or times
thereafter and shall further have no responsibility with respect to the accuracy of, or the
completeness of, any information provided to Assignee, whether by Assignor or by or on behalf of
any Credit Party.



38. Miscellaneous



(a) Assignor shall not be responsible to Assignee for the execution (by any party other than
Assignor), effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of
the Loan Agreement, the Other Agreements or any of the agreements, documents or instruments
executed and/or delivered in connection therewith (collectively, the “Loan Documents”) or for any
representations, warranties, recitals or statements made therein or in any written or oral
statement or in any financial or other statements, instruments, reports, certificates or any other
documents made or furnished or made available by Assignor to Assignee or by or on behalf of
Borrower or any other person obligated under the Loan Documents (collectively, the “Credit
Parties”) to Assignor or Assignee in connection with the Loan Documents and the transactions
contemplated thereby. Except as otherwise set forth in the Loan Agreement, Assignor shall not be
required to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the
use of the proceeds of the Revolving Loans or as to the existence or possible existence of any
default (matured or unmatured) under the Loan Documents.



(b) Assignee (i) agrees that it will perform all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Lender and (ii) represents that it is either
(A) a corporation organized under the laws of the United States or a state thereof or (B) entitled
to complete exemption from United States withholding tax imposed on or with respect to any payments
to be made to it pursuant to any Loan Document.



(c) ANY DISPUTE BETWEEN ASSIGNOR AND ASSIGNEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS ASSIGNMENT AND
ACCEPTANCE AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE STATE OF ILLINOIS.



(d) No term or provision of this Assignment and Acceptance may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the parties to this Assignment
and Acceptance.



(e) This Assignment and Acceptance may be executed in one or more counterparts, each of which
shall be an original but all of which, taken together, shall constitute one and the same
instrument.



(f) All payments hereunder or in connection herewith shall be made in U.S. dollars and in
immediately available funds, payable to the account of Assignor at its office as designated in the
Loan Agreement.



(g) This Assignment and Acceptance shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Neither of the parties hereto may
assign or transfer any of its rights or obligations under this Assignment and Acceptance without
the prior consent of the other party. The preceding sentence shall not limit the right of Assignee
to assign all or part of its Pro Rata Share of the Maximum Loan Limit and any outstanding Revolving
Loans assigned under this Assignment and Acceptance in the manner contemplated by the Loan
Agreement.



(h) All representations and warranties made herein and indemnities provided for herein shall
survive the consummation of the transactions contemplated hereby.



21




IN WITNESS WHEREOF, the parties hereto have executed this Assignment and Acceptance as
the date first above written.



	 
	__________________________________,
as Assignor
By
Name
Its
Pro Rata Share: ______%
Revolving Loan Commitment: $_______________
__________________________________,
as Assignee
By
Name
Its
Pro Rata Share: _______%
Revolving Loan Commitment: $_______________







Accepted by:



LaSalle National Association, as Agent



By



Its



[Accepted by:



APAC Customer Services, Inc.



	 	 	 
	By	 	 
	Its

	 	]
	 

	 	

	 
	 	 






22




REVOLVING NOTE




	 	 	 
	Executed as of the      day of

     , 2005 at Chicago, Illinois.

	 	

No.     
	 
	 	 
	Amount $25,000,000.00

	 	







FOR VALUE RECEIVED, the Undersigned promises to pay to the order of LASALLE BANK NATIONAL
ASSOCIATION (hereinafter, together with any holder hereof, called “Lender”), at the main office of
the Agent, the principal sum of TWENTY FIVE MILLION DOLLARS AND 00/100 CENTS ($25,000,000.00) plus
the aggregate unpaid principal amount of all advances made by Lender to the Undersigned pursuant to
and in accordance with Subsection 2(a) of the Loan Agreement (as hereinafter defined) in
excess of such amount, or, if less, the aggregate unpaid principal amount of all advances made by
Lender to the Undersigned pursuant to and in accordance with Subsection 2(a) of the Loan
Agreement. The Undersigned (jointly and severally, if more than one) further promises to pay
interest on the outstanding principal amount hereof on the dates and at the rates provided in the
Loan Agreement from the date hereof until payment in full hereof.



This Note is referred to in and was delivered pursuant to that certain Amended and Restated
Loan and Security Agreement, as it may be amended, supplemented, restated or otherwise modified
from time to time, together with all exhibits thereto, dated      , 2005, among LaSalle Bank
National Association, as Agent (“Agent”), the financial institutions from time to time a party
thereto, as lenders, and the Undersigned (the “Loan Agreement”). All terms which are capitalized
and used herein (which are not otherwise defined herein) shall have the meaning ascribed to such
term in the Loan Agreement.



Principal hereunder shall be payable pursuant to the terms of the Loan Agreement.



The Undersigned hereby authorizes the Agent to charge any account of the Undersigned for all
sums due hereunder. If payment hereunder becomes due and payable on a Saturday, Sunday or legal
holiday under the laws of the United States or the State of Illinois, the due date thereof shall be
extended to the next succeeding business day, and interest shall be payable thereon at the rate
specified with respect to such payment in the Loan Agreement during such extension. Credit shall
be given for payments made in the manner and at the times as provided in the Loan Agreement. It is
the intent of the parties that the rate of interest and other charges to the Undersigned under this
Note shall be lawful; therefore, if for any reason the interest or other charges payable hereunder
are found by a court of competent jurisdiction, in a final determination, to exceed the limit which
Lender may lawfully charge the Undersigned, then the obligation to pay interest or other charges
shall automatically be reduced to such limit and, if any amount in excess of such limit shall have
been paid, then such amount shall be refunded to the Undersigned.



The principal and all accrued interest hereunder may be prepaid by the Undersigned, in part or
in full, at any time without premium or penalty (but with any required breakage fees pursuant to
Section 4(b)(iv)); provided, however, that the Undersigned shall pay a prepayment fee as
provided in the Loan Agreement.



The Undersigned waives the benefit of any law that would otherwise restrict or limit Lender in
the exercise of its right, which is hereby acknowledged, to set-off against the Liabilities that
are due and payable, without notice and at any time upon the occurrence and during the continuance
of an Event of Default, any indebtedness matured or unmatured owing from Lender to the Undersigned.
The Undersigned waives every defense, counterclaim (other than counterclaims which would be waived
if not made) or setoff which the Undersigned may now have or hereafter may have to any action by
Lender in enforcing this Note and/or any of the other Liabilities, or in enforcing Lender’s rights
in the Collateral and ratifies and confirms whatever Lender may in accordance with to the terms
hereof and of the Loan Agreement and agrees that Lender shall not be liable for any error in
judgment or mistakes of fact or law except for Lender’s gross negligence or willful misconduct.



The Undersigned, any other party liable with respect to the Liabilities and any and all
endorsers and accommodation parties, and each one of them, if more than one, waive any and all
presentment, demand, notice of dishonor, protest, and all other notices and demands in connection
with the enforcement of Lender’s rights hereunder.



The loan evidenced hereby has been made and this Note has been delivered at Chicago, Illinois.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO
INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING
WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, and shall be binding upon
the Undersigned and the Undersigned’s heirs, legal representatives, successors and assigns. If
this Note contains any blanks when executed by the Undersigned (or any one of them, if more than
one), the Lender is hereby authorized, with notice to the Undersigned (or any one of them, if more
than one) to complete any such blanks according to the terms upon which the loan or loans were
granted. Wherever possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Note shall be prohibited
by or be invalid under such law, such provision shall be severable, and be ineffective to the
extent of such prohibition or invalidity, without invalidating the remaining provisions of this
Note.



To induce the Lender to make the loan evidenced by this Note, the Undersigned (i) hereby
consents to the non-exclusive jurisdiction and venue of any local, State or Federal Court located
within the city of Chicago, State of Illinois for all actions arising directly or indirectly as a
result or in consequence of this Note or any other agreement with the Lender, or the Collateral;
and (ii) waives any objection based on forum non-conveniens. IN ADDITION, LENDER AND THE
UNDERSIGNED HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR
INDIRECTLY TO THIS NOTE, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY THE
UNDERSIGNED OR LENDER OR WHICH IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE
RELATIONSHIP BETWEEN THE UNDERSIGNED AND LENDER. In addition, the Undersigned agrees that all
service of process shall be made as provided in the Loan Agreement.



As used herein, all provisions shall include the masculine, feminine, neuter, singular and
plural thereof, wherever the context and facts require such construction and in particular the word
“Undersigned” shall be so construed.



This Note is issued in full substitution for and replacement of, but not in payment of the
Revolving Note of Borrower dated June 2, 2005, payable to the order of Lender in the original
principal amount of FOURTY MILLION DOLLARS AND 00/100 CENTS ($40,000,000.00).



23




IN WITNESS WHEREOF, each of the Undersigned, if more than one, has executed this Note
on the date above set forth.



	 
	 

	 

	 

	APAC CUSTOMER SERVICES INC.

By:

	Its:







==============================================================



FOR BANK USE ONLY



Officer’s Initials:      


Approval:      





24




25