Document:

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                                                                    EXHIBIT 10.8

                               COMERICA BANK-TEXAS
                                       AND
                           THOMAS GROUP, INC., ET AL.

                               THIRD AMENDMENT TO
                           FIRST AMENDED AND RESTATED
                         REVOLVING CREDIT LOAN AGREEMENT

                              DATED: MARCH 29, 2002

KEY:

Bank         =     Comerica Bank-Texas
Borrower     =     Thomas Group, Inc.
TGL          =     Thomas Group of Louisiana, Inc.
TGS          =     Thomas Group of Sweden, Inc.
TGSU         =     Thomas Group (Suisse) GmbH
TGSR         =     Thomas Group (Suisse Results) GmbH
TGG          =     Thomas Group GmbH
TGA          =     Thomas Group Asia PTE LTD
TGH          =     Thomas Group Hong Kong Limited

DOCUMENT

1.   Third Amendment to First Amended and Restated Revolving Credit Loan
     Agreement

2.   Revolving Credit Note ($2,500,000)

3.   Term Note ($5,000,000)

4.   Restated Security Agreement (all assets) (to be executed by Borrower)

5.   Security Agreement (all assets) (to be executed by TGL)

6.   Security Agreement (all assets) (to be executed by TGS)

7.   Security Agreement (Negotiable Collateral) (stock)

8.   Security Agreement (Intellectual Property)

9.   Security Interest Assignment of Copyrights, Patents, and Trademarks

10.  Advance Formula Agreement

11.  Notice of Pledge and Control Agreement (TGSU)

12.  Notice of Pledge and Control Agreement (TGSR)

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13.  Notice of Pledge and Control Agreement (TGG)

14.  Notice of Pledge and Control Agreement (TGL)

15.  Notice of Pledge and Control Agreement (TGS)

16.  Notice of Pledge and Control Agreement (TGA)

17.  Notice of Pledge and Control Agreement (TGK)

18.  Disclaimer of Oral Agreements

19.  Omnibus General Certificates

20.  Subordination Agreements
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                  THIRD AMENDMENT TO FIRST AMENDED AND RESTATED
                         REVOLVING CREDIT LOAN AGREEMENT

     THIS THIRD AMENDMENT TO FIRST AMENDED AND RESTATED REVOLVING CREDIT LOAN
AGREEMENT (this "AMENDMENT"), dated as of March 29, 2002, is among THOMAS
GROUP, INC., a Delaware corporation (the "BORROWER"), each of the Domestic
Subsidiaries and Foreign Subsidiaries (as such terms are defined below) that is
a signatory hereto, and COMERICA BANK-TEXAS, a Texas banking association
("LENDER").

                                    RECITALS:

     The Borrower and the Lender have entered into that certain First Amended
and Restated Revolving Credit Loan Agreement dated as of December 4, 1996 (as
the same has been or may hereafter be amended, restated or otherwise modified
from time to time, the "AGREEMENT").

     In connection with the Agreement, each Domestic Subsidiary and each Foreign
Subsidiary have executed Guaranties securing the obligations, Indebtedness and
liabilities of the Borrower in favor of the Lender (collectively, the
"GUARANTIES").

     The Borrower, each Domestic Subsidiary, each Foreign Subsidiary, and the
Lender now desire to amend the Agreement as more specifically described herein.

     NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows (all provisions of this
Amendment being effective as of March 29, 2002 (the "EFFECTIVE DATE") unless
otherwise stated herein):

                                    ARTICLE I

                                   DEFINITIONS

     Section 1.1    DEFINITIONS. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.

                                   ARTICLE II

                          AMENDMENTS AND RATIFICATIONS

     Each of the following amendments is effective as of the date of this
Amendment, unless otherwise stated herein.

     Section 2.1    AMENDMENTS TO RECITALS. All references in the Recitals to
"$10,000,000" shall be changed to read "2,500,000."

     Section 2.2    AMENDMENTS TO SECTION 1 (DEFINITIONS) OF THE AGREEMENT.

             (a)    The following definitions in Section 1.1 of the Agreement
     are amended and restated in their entirety as follows:

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 1
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          "APPLICABLE RATE" shall mean the Prime Rate plus (i) for Advances
     evidenced by the Revolving Credit Note, two percent (2%), and (ii) for
     Advances evidenced by the Term Note, four percent (4%).

          "COLLATERAL" shall mean all of the Borrower's and each Domestic
     Subsidiary's assets and all of the following property Borrower and each
     Domestic Subsidiary now or later owns or has an interest in, wherever
     located, including without limitation:

               (i)    all Accounts Receivable (for purposes of this Agreement,
          "Accounts Receivable" consists of all Accounts, Chattel Paper
          (including without limit Electronic Chattel Paper and Tangible Chattel
          Paper), contract rights, Deposit Accounts, Documents, Instruments and
          rights to payment evidenced by Chattel Paper, Documents or
          Instruments, Health Care Insurance Receivables, Commercial Tort
          Claims, Letters of Credit, Letter of Credit Rights, Supporting
          Obligations, and rights to payment for money or funds advanced or
          sold);

               (ii)   all Inventory;

               (iii)  all Equipment and Fixtures;

               (iv)   all Software (for purposes of this Agreement "Software"
          consists of all (i) computer programs and supporting information
          provided in connection with a transaction relating to the program, and
          (ii) computer programs embedded in goods and any supporting
          information provided in connection with a transaction relating to the
          program whether or not the program is associated with the goods in
          such a manner that it customarily is considered part of the goods, and
          whether or not, by becoming the owner of the goods, a person acquires
          a right to use the program in connection with the goods, and whether
          or not the program is embedded in goods that consist solely of the
          medium in which the program is embedded);

               (v)    all Intellectual Property;

               (vi)   Investment Property, including without limitation,
          securities, securities entitlements, and financial assets, and
          including without limitation, 100% of the outstanding capital voting
          stock of each Domestic Subsidiary, and 65% of the outstanding capital
          voting stock of each Foreign Subsidiary;

               (vii)  all General Intangibles, including without limitation, all
          of Borrower's or all of each Domestic Subsidiary's rights to any tax
          refunds from the Internal Revenue Services and proceeds thereof;

               (viii) all Goods, Instruments, Documents, policies and
          certificates of insurance, Deposit Accounts, money, Investment
          Property or other property (except real property which is not a
          fixture) which are

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 2
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          now or later in possession or control of Lender, or as to which Lender
          now or later controls possession by documents or otherwise, and

               (ix)   all additions, attachments, accessions, parts,
          replacements, substitutions, renewals, interest, dividends,
          distributions, rights of any kind (including but not limited to stock
          splits, stock rights, voting and preferential rights), products, and
          proceeds of or pertaining to the above including, without limit, cash
          or other property which were proceeds and are recovered by a
          bankruptcy trustee or otherwise as a preferential transfer by
          Borrower.

          In the definition of Collateral, a reference to a type of collateral
     shall not be limited by a separate reference to a more specific or narrower
     type of that collateral. Capitalized terms not otherwise defined in this
     Agreement shall have the meanings assigned to them in Article 9 (or, absent
     definition in Article 9, in any other Article) of the UCC, as those
     meanings may be amended, revised or replaced from time to time.

          "CURRENT RATIO" shall mean, as computed in accordance with GAAP, the
     quotient of the Borrower's current assets divided by the sum of (i)
     Borrower's current liabilities, and (ii) Indebtedness (to the extent not
     duplicative).

          "DEFAULT RATE" shall mean the Maximum Legal Rate.

          "GUARANTOR" shall mean each Domestic Subsidiary, each Foreign
     Subsidiary, and any other Person who from time to time guarantees any
     portion of the Indebtedness.

          "LOAN" shall mean a loan or Advance of funds by the Lender pursuant to
     the Agreement, including without limitation, all funds advanced under the
     Term Loan and the Revolving Credit Loan.

          "NOTE" shall mean, collectively, the Revolving Credit Note and the
     Term Note.

          "REVOLVING CREDIT COMMITMENT" shall mean the obligation of the Lender
     to make Revolving Credit Loans to the Borrower in an aggregate principal
     amount at any time outstanding up to but not to exceed $2,500,000 from the
     date of this Agreement through the Termination Date.

          "REVOLVING CREDIT NOTE" shall mean that certain Amended and Restated
     Revolving Credit Note dated as of March 29, 2002 in the amount of
     $2,500,000 executed by the Borrower and payable to the order of the Lender,
     as the same has been or may hereafter be amended, restated, extended,
     increased, renewed or otherwise modified from time to time, and
     substitutions therefor.

          "SECURITY AGREEMENT" shall mean, collectively, that certain Security
     Agreement executed by Borrower in favor of Lender dated as of December 1,
     2001, as the same may be amended, restated, or otherwise modified from time
     to

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 3
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     time, including without limitation, that certain Restated Security
     Agreement executed by Borrower in favor of Lender dated as of March 29,
     2002, and such other security agreements as from time to time may be
     executed by the Borrower or any Guarantor for the benefit of Lender,
     whether pursuant to this Agreement or otherwise.

          "TERMINATION DATE" shall mean the maturity date of the Revolving
     Credit Loan, which is December 3, 2003, subject to the early maturity
     provisions of the Revolving Credit Note.

          (b)    The following defined terms are added to Section 1.1 of the
     Agreement:

          "ADVANCE FORMULA AGREEMENT" shall mean that certain Advance Formula
     Agreement dated as of March 29, 2002, executed by the Borrower and
     delivered to the Lender, as the same may be amended, restated or modified
     from time to time.

          "AMENDMENT FEE" has the meaning assigned to it in Section 9.16.

          "BORROWING BASE CERTIFICATE" shall mean a certificate in the form of
     EXHIBIT "A".

          "CAPITAL EXPENDITURE" shall mean any expenditure by a Person for (a)
     an asset which will be used in a year or years subsequent to the year in
     which the expenditure is made and which asset is properly classified in
     relevant financial statements of such Person as equipment, real property, a
     fixed asset or a similar type of capitalized asset in accordance with GAAP
     or (b) an asset relating to or acquired in connection with an acquired
     business, and any and all acquisition costs related to (a) or (b) above.

          "CASH FLOW" of any Person shall mean, for any applicable period of
     determination, the sum of (a) the Net Income of such Person for such period
     (after deduction for income taxes and other taxes of such Person determined
     by reference to income or profits of such Person in the same period), plus
     (b), to the extent deducted in the computation of such Net Income, the
     amount of depreciation and amortization expense and deferred tax
     liabilities of such Person for such period.

          "CASH FLOW COVERAGE RATIO" of any Person shall mean, for any
     applicable period of determination, the ratio of (a) the sum of Cash Flow
     to (b) the sum of the aggregate amount of principal payments on Debt
     (excluding principal payments on the Revolving Credit Loan) made by such
     Person during such period.

          "COMPLIANCE CERTIFICATE" shall mean a certificate to be furnished by
     Borrower to Lender, in the form of EXHIBIT "B", certified by the chief
     financial officer of Borrower (or in such officer's absence, another
     responsible officer of Borrower) pursuant to SECTION 9.1.3 of this
     Agreement, certifying that, as of the date thereof, no Default or Event of
     Default shall have occurred and be

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 4
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     continuing, or if any Default or Event of Default shall have occurred and
     be continuing, specifying in detail the nature and period of existence
     thereof and any action taken or proposed to be taken by Borrower with
     respect thereto, and also certifying as to whether Borrower is in
     compliance with the financial covenants contained herein (which certificate
     shall set forth, in reasonable detail, the calculations and the resultant
     ratios and financial tests determined thereunder).

          "COPYRIGHTS" shall mean any and all copyright rights, copyright
     applications, copyright registrations and like protections in each work or
     authorship and derivative work thereof, whether published or unpublished
     and whether or not the same also constitutes a trade secret, now or
     hereafter existing, created, acquired or held, including without limitation
     those set forth on EXHIBIT "C" attached hereto.

          "CURRENT MATURITIES OF LONG TERM INDEBTEDNESS" shall mean, in respect
     of a Person and as of any date of determination, that portion of Long Term
     Indebtedness that should be classified as current in accordance with GAAP.

          "DOMESTIC SUBSIDIARIES" shall mean, collectively, Thomas Group of
     Sweden, Inc., a Delaware corporation, Thomas Group of Louisiana, Inc., a
     Delaware corporation, and Interlink Technologies, Inc., an Ohio
     corporation.

          "FOREIGN SUBSIDIARIES" shall mean, collectively, Thomas Group GmbH,
     THOMAS GROUP ASIA PTE LTD, Thomas Group Hong Kong Limited, Thomas Group
     (Suisse) GmbH.

          "INTELLECTUAL PROPERTY" shall mean, collectively, the following:

               (i)    All Copyrights;

               (ii)   Any and all trade secrets, and any and all Intellectual
          Property rights in computer software and computer software products
          nor or hereafter existing, created, acquired or held;

               (iii)  Any and all design rights which may be available now or
          hereafter existing, created, acquired or held;

               (iv)   All Patents;

               (v)    All Trademarks;

               (vi)   Any and all claims for damages by way of past, present and
          future infringement of any of the rights included above, with the
          right, but not the obligation, to sue for and collect such damages for
          said use or infringement of the Intellectual Property rights
          identified above;

               (vii)  All licenses or other rights to use any of the Copyrights,
          Patents or Trademarks, and all license fees and royalties arising from
          such use to the extent permitted by such license or rights; and

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 5
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               (viii) All amendments, extensions, renewals and extensions of any
          of the Copyrights, Trademarks or Patents.

          "LONG TERM INDEBTEDNESS" shall mean, in respect of a Person and as of
     any date of determination, all Debt (other than the aggregate outstanding
     principal balance of all Revolving Loans) which should be classified as
     "funded indebtedness" or "long term indebtedness" on a balance sheet of
     such Person as of such date in accordance with GAAP.

          "NET INCOME" shall mean the net income of a Person for any applicable
     period of determination, determined in accordance with GAAP, but excluding,
     in any event:

               (i)    any gains or losses on the sale or other disposition, not
          in the ordinary course of business, of investments or fixed or capital
          assets, and any taxes on the excluded gains and any tax deductions or
          credits on account of any excluded losses; and

               (ii)   in the case of Borrower, net earnings of any Person in
          which Borrower has an ownership interest, unless such net earnings
          shall have actually been received by Borrower in the form of cash
          distributions.

          "PATENTS" shall mean all patents, patent applications and like
     protections including, without limitation, improvements, divisions,
     continuations, renewals, reissues, extensions and continuations-in-part of
     the same, including without limitation the patents and patent applications
     set forth on EXHIBIT "D" attached hereto.

          "TERM LOAN" shall mean the single Advance Loan made, or to be made, by
     Lender to or for the credit of Borrower not to exceed Five Million and
     No/100 Dollars ($5,000,000) in the aggregate.

          "TERM LOAN TERMINATION DATE" shall mean December 3, 2003, subject to
     the early maturity provisions of the Term Note.

          "TERM NOTE" shall mean that certain Variable Rate - Installment Note
     dated March 29, 2002 in the original principal amount of $5,000,000
     executed by Borrower, payable to the order of Lender as the same may be
     renewed, extended, modified, increased or restated from time to time.

          "THIRD AMENDMENT" means that certain Third Amendment to First Amended
     and Restated Revolving Credit Loan Agreement dated as of March 29, 2002
     executed by and among Borrower, Lender, and certain Guarantors described
     therein.

          "THIRD AMENDMENT EFFECTIVE DATE" means the "Effective Date," as such
     term is defined in the Third Amendment.

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 6
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          "TRADEMARKS" shall mean any trademark or servicemark rights, whether
     registered or not, applications to register and registrations of the same
     and like protections, and the entire goodwill of the business of Borrower
     connected with and symbolized by such trademarks, including without
     limitation those set forth on EXHIBIT "E" attached hereto.

     Section 2.3    ADDITION OF SECTION 2A. The following language is added to
the Agreement as Section 2A:

     SECTION 2A. TERM LOAN

             2.1    TERM LOAN COMMITMENT. On or before the Effective Date (as
     defined in the Third Amendment), subject to the terms and conditions of
     this Agreement and the other Loan Documents, the Lender agrees to make the
     Term Loan available as a single advance to the Borrower. At the time of
     borrowing the Term Loan, Borrower agrees to execute and deliver to Lender
     the Term Note to evidence the Indebtedness of Borrower to Lender under and
     in respect of the Term Loan.

             2.2    REPAYMENT OF AND INTEREST ON TERM LOAN. The Indebtedness
     from time to time outstanding under and evidenced by the Term Note shall
     bear interest at the rate provided in the Term Note and all outstanding
     principal and accrued and unpaid interest shall be payable as provided in
     the Term Note. Borrower shall not be permitted to reborrow any amounts
     repaid under the Term Note.

             2.3    USE OF PROCEEDS OF TERM LOAN. All of the proceeds of the
     Term Loan shall be used to repay a portion of the unpaid balance of the
     Revolving Credit Loans as in existence immediately prior to the Term Loan
     single Advance.

     Section 2.4    AMENDMENTS TO PRICING. The LIBOR Rate and Cost of Funds
pricing option is no longer available to the Borrower. References to "LIBOR
Advances" "LIBOR Rate" "Costs of Funds Advances" and "Costs of Funds Rate" and
other similar language relating to Cost of Funds or LIBOR are deleted in their
entirety from the Agreement.

     Section 2.5    DELETION OF SECTION 3, LETTERS OF CREDIT. The Lender's
commitment to issue Letters of Credit is hereby terminated and Section 3 is
hereby deleted in its entirety from the Agreement and replaced with the
following:

             SECTION 3. LETTERS OF CREDIT. This Section 3 is intentionally
     deleted. The Lender has no obligation to issue any letter of credit for the
     benefit of Borrower or any of its Subsidiaries.

     Section 2.6    AMENDMENTS TO SECTION 4.1, SECTION 4.2, AND SECTION 4.3.
Section 4.1, Section 4.2 and Section 4.3 of the Agreement are hereby amended and
restated in their entirety to read as follows:

             4.1.   INTEREST. The unpaid principal amount of the Advances shall
     bear interest prior to the Term Loan Termination Date or the Termination
     Date, as applicable, at a varying rate per annum equal from day to day to
     the lesser of (a)

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 7
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     the Maximum Rate, or (b) the Applicable Rate. If at any time the Applicable
     Rate for any Advance shall exceed the Maximum Legal Rate, thereby causing
     the interest accruing on such Advance to be limited to the Maximum Legal
     Rate, then any subsequent reduction in the Applicable Rate for such Advance
     shall not reduce the rate of interest on such Advance below the Maximum
     Legal Rate until the aggregate amount of interest accrued on such Advance
     equals the aggregate amount of interest which would have accrued on such
     Advance if the Applicable Rate had at all times been in effect. Accrued and
     unpaid interest on the Advances shall be due and payable as provided in the
     Term Note or Revolving Credit Note, as applicable. Notwithstanding the
     foregoing, any outstanding principal of any Advance and (to the fullest
     extent permitted by law) any other amount payable by the Borrower under
     this Agreement or any other Loan Document that is not paid in full when due
     (whether at stated maturity, by acceleration, or otherwise) shall bear
     interest at the Default Rate for the period from and including the due date
     thereof to but excluding the date the same is paid in full. Interest
     payable at the Default Rate shall be payable from time to time on demand.

             4.2.   BORROWING PROCEDURE.

             (a)    ADVANCES UNDER THE REVOLVING CREDIT LOANS. The Borrower
     shall give the Lender notice by means of an Advance Request Form of each
     requested Advance under the Revolving Credit Note on the same day (by 2:00
     p.m. Dallas time) of the requested date of each Advance, specifying: (a)
     the requested date of such Advance (which shall be a Business Day), and (b)
     the amount of such Advance. The Lender at its option may accept telephonic
     Advance requests by an Authorized Officer who provides the Lender with the
     Security Code, provided that such acceptance shall not constitute a waiver
     of the Lender's right to delivery of an Advance Request Form in connection
     with subsequent Advances. Any telephonic request for an Advance by the
     Borrower shall be promptly confirmed by submission of a properly completed
     Advance Request Form to the Lender. Each Prime Rate Advance shall be in a
     minimum principal amount of $50,000. Subject to the terms and conditions of
     this Agreement, each Advance shall be made available to the Borrower by
     depositing the same, in immediately available funds, in an account of the
     Borrower maintained with the Lender at the principal office designated by
     the Borrower. All notices under this Section shall be irrevocable and shall
     be given not later than 2:00 P.M. Dallas, Texas time on the day which is
     not less than the number of Business Days specified above for such notice.

             (b)    ADVANCES UNDER THE TERM LOAN. Subject to the satisfaction of
     all conditions precedent set forth in the Third Amendment, the Lender shall
     make the single Advance under the Term Loan and apply proceeds of the Term
     Loan to the Revolving Credit Loan by 3:00 p.m. (Dallas, Texas time) on the
     Effective Date of the Third Amendment.

             4.3    CONVERSIONS AND CONTINUATIONS. This Section 4.3 is
     intentionally deleted.

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 8
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     Section 2.7    AMENDMENT TO SECTION 4.8. Section 4.8 is hereby deleted in
its entirety from the Agreement and replaced with the following:

             4.8    EARLY TERMINATION. The Lender, at its sole discretion and
     upon at least ninety (90) days prior written notice to the Borrower, may
     declare all of the principal balance and accrued and unpaid interest owing
     on the Loans due and payable on April 30, 2003.

     Section 2.8    DELETION OF SECTION 5, YIELD PROTECTION AND ILLEGALITY.
Section 5 is hereby deleted in its entirety from the Agreement and replaced with
the following:

             SECTION 5  YIELD PROTECTION AND ILLEGALITY. This Section 5 is
     intentionally deleted.

     Section 2.9    AMENDMENT TO SECTION 9.1.3. Section 9.1.3 of the Agreement
is hereby amended and restated in its entirety as follows:

             9.1.3  MONTHLY COMPLIANCE CERTIFICATE. Furnish to the Lender not
     later than the twentieth (20th) day of each month (beginning May 20, 2002)
     a Compliance Certificate, dated as of the end of the month immediately
     prior to the due date for such Certificate, in a form acceptable to the
     Lender in its sole discretion, evidencing the Borrower's compliance with
     all financial covenants contained in the Agreement.

     Section 2.10   ADDITION OF SECTION 9.1.8, SECTION 9.19 AND SECTION 9.20 The
following language is added to the Agreement as Section 9.1.8, Section 9.1.9,
and Section 9.1.10:

             9.1.8  WEEKLY BORROWING BASE CERTIFICATE. Furnish to the Lender not
     later than Wednesday of each week (beginning April 10, 2002) a Borrowing
     Base Certificate, dated as of the end of the week immediately prior to the
     due date for such Borrowing Base Certificate, in a form acceptable to the
     Lender in its sole discretion.

             9.1.9  ACCOUNTS RECEIVABLE AGINGS. Furnish to the Lender as soon as
     available, and in any event within twenty (20) days after and as of the end
     of each calendar month: (i) detailed agings and reports of accounts
     receivable of Borrower and any Subsidiary acquiring accounts receivable
     from the United States of America or Canada; and (ii) a summary of agings
     and reports of accounts receivable of Borrower, consolidated.

             9.1.10 OTHER REPORTS. Furnish to the Lender not later than the
     twentieth (20th) day of each month (beginning April 15, 2002), a backlog
     report of business under contract and other business development.

     Section 2.11   AMENDMENTS TO SECTIONS 9.5 AND SECTION 9.7. The financial
covenants described in Section 9.5 and Section 9.7 of the Agreement are amended
and restated in their entirety as indicated below:

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 9
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             9.5    TANGIBLE NET WORTH. Maintain a Tangible Net Worth (excluding
     the effect upon Tangible Net Worth of any income tax refunds received by
     Borrower or any Subsidiary, and excluding from Debt all Subordinated Debt)
     AT ALL TIMES of not less than the amount set forth below, to be tested at
     or during the corresponding period set forth below:

<Table>
<Caption>
                             PERIOD                            AMOUNT
                             ------                            ------

                <S>                                           <C>
                At April 30, 2002                             $1,500,000
                At May 31, 2002                               $2,200,000
                At June 30, 2002 and on the last day of       $3,500,000
                each month thereafter through
                September 30, 2002
                At October 31, 2002                           $4,000,000
                At November 30, 2002                          $5,000,000
                At December 31, 2002                          $5,500,000
</Table>

     On January 31, 2003, and as of each month end thereafter, the Borrower's
     Tangible Net Worth shall increase monthly by an amount equal to 75% of the
     Borrower's Net Income for such calendar month computed in accordance with
     GAAP (with no reduction to Tangible Net Worth, for purposes of this
     covenant, for net losses and with no increases for income tax refunds).

             9.7.   CURRENT RATIO. Maintain AT ALL TIMES a Current Ratio of not
     less than 1.0 to 1.0 from June 30, 2002 through September 30, 2002, and not
     less than 1.1 to 1.0 at all times thereafter.

     Section 2.12   DELETION OF SECTION 9.6, SECTION 9.8, SECTION 9.9. The
financial covenants described in Section 9.6, Section 9.8, and Section 9.9 of
the Agreement are each deleted in their entirety and replaced with the
following:

             9.6.   DEBT RATIO. This Section 9.6 is intentionally deleted.

             9.8.   FUNDED DEBT-TO-EARNINGS RATIO. This Section 9.8 is
     intentionally deleted.

             9.9    NET INTEREST EXPENSE RATIO. This Section 9.9 is
     intentionally deleted.

     Section 2.13   DELETION OF SECTION 9.13. Section 9.13 of the Agreement is
deleted in its entirety and replaced with the following:

             9.13.  UNUSED FACILITY FEE. This Section 9.13 is intentionally
     deleted.

     Section 2.14   ADDITION OF SECTIONS 9.14, 9.15, 9.16, 9.17, 9.18 AND 9.19.
Section 9.14, Section 9.15, Section 9.16, Section 9.17, Section 9.18 and Section
9.19 are each added to the Agreement as follows:

             9.14   EQUITY. The Borrower will provide evidence satisfactory to
     Lender of its receipt in good funds of unrestricted contributions to its
     equity (or alternatively, from subordinated debt incurred on terms, and
     pursuant to such

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 10
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     subordination agreements, satisfactory to Lender in its sole discretion) in
     the following amounts no later than on the following respective dates:

<Table>
<Caption>
                          DATE             REQUIRED EQUITY OR SUBORDINATED DEBT
                                           CONTRIBUTION BY SUCH DATE

                <S>                               <C>
                April 5, 2002                     $1,000,000
                May 15, 2002                      $1,000,000
                June 30, 2002                     $1,000,000
</Table>

             9.15   LEGAL OPINIONS. No later than April 22, 2002 (with regard to
     legal opinions relating to the pledge of stock of Domestic Subsidiaries)
     and no later than June 3, 2002 (with regard to legal opinions relating to
     the pledge of stock of Foreign Subsidiaries), the Borrower will provide to
     Lender, addressed to Lender, legal opinions in content satisfactory to
     Lender in its sole discretion from foreign and U.S. counsel acceptable to
     Lender, advising Lender (a) that the pledge of stock of the Domestic
     Subsidiaries and the Foreign Subsidiaries has been duly authorized by all
     necessary corporate and shareholder action, (b) that the pledged shares, as
     evidenced by the stock certificates delivered for pledge to Lender,
     represent all of the issued and outstanding capital voting stock of each
     respective Subsidiary, (c) that such pledge transactions perfect a security
     interest in such pledged stock and are valid, binding and enforceable
     against the pledgor in such transactions under (i) the laws of the State of
     Texas and applicable laws of the United States, (ii) the laws of the state
     (or country) of organization of each entity whose stock is pledged, and (d)
     in the case of Foreign Subsidiaries, (i) that no registration of the pledge
     transaction is required under the laws of the country of organization for
     each respective Foreign Subsidiary, (ii) that the choice of law provisions
     in each respective Pledge Agreement will be upheld under the laws of the
     jurisdiction of organization for each Foreign Subsidiary. All foreign
     counsel opinions must be furnished by counsel licensed to practice law in
     the jurisdiction of organization for the respective Foreign Subsidiary to
     which such counsel's opinion relates. Should Lender determine in its sole
     discretion that all steps necessary to perfect Lender's security interest
     in such pledged stock have been satisfied, and that all the terms described
     in this Section 9.15 have been satisfied, then the Lender agrees that it
     shall execute documentation releasing each Foreign Subsidiary from its
     obligations under each of their respective Guaranties.

             9.16   AMENDMENT FEE. The Borrower shall pay to the Lender for the
     account of the Lender an amendment fee in connection with the execution of
     the Third Amendment in the amount of $150,000, of which $75,000 shall be
     paid on September 15, 2002, and of which $75,000 shall be paid on December
     15, 2002 (the "AMENDMENT FEE").

             9.17   ADDITIONAL GUARANTORS. Upon the creation or acquisition of
     any new Subsidiary (the "NEW SUBSIDIARY") at any time after the Third
     Amendment Effective Date, the Borrower shall cause the owner of stock of
     each New Subsidiary to execute a Security Agreement (or an amendment to an
     existing Security Agreement) in favor of the Lender, pledging 100% of the
     capital voting stock of such New Subsidiary should such New Subsidiary be
     incorporated or

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 11
<Page>

     formed under the laws of the United States, or pledging 65% of the capital
     voting stock of such New Subsidiary should such New Subsidiary be
     incorporated or formed under the laws of any nation other than the United
     States. Further, upon the creation of any New Subsidiary incorporated or
     formed under the laws of the United States, such New Subsidiary shall
     execute a Security Agreement in favor of the Lender, pledging all tangible
     and intangible assets of such New Subsidiary as Collateral for the Loan.
     Nothing contained in this Section 9.17 shall alter the requirements
     contained in Section 10.1 hereof.

             9.18   CASH FLOW COVERAGE RATIO. Borrower will maintain a Cash Flow
     Coverage Ratio of not less than 2.0 to 1.0 at each of the following
     respective testing dates, for the respective periods covered as of each
     such testing date:

                PERIOD COVERED/TESTING DATE
                ---------------------------

                One-month period ending October 31, 2002
                Two-month period ending November 30,2002
                Three-month period ending December 31, 2002
                Four-month period ending January 31, 2003
                Five-month period ending February 28, 2003
                Six-month period ending March 31, 2003
                Seven-month period ending April 30, 2003
                Eight-month period ending May 31, 2003
                Nine-month period ending June 30, 2003
                Ten-month period ending July 31, 2003
                Eleven-month period ending August 31, 2003
                Twelve-month period ending September 30, 2003
                Twelve-month period ending October 31, 2003
                Twelve-month period ending November 30, 2003

             9.19   FURTHER ASSURANCES. At any time and from time to time, upon
     the request of the Lender, and at the sole expense of the Borrower, the
     Borrower shall promptly execute and deliver all such further instruments,
     agreements, and documents and take such further action as the Lender may
     deem necessary or desirable to preserve and perfect its security interest
     in the Collateral and carry out the provisions and purposes of this
     Amendment. Without limiting the generality of the foregoing, the Borrower
     shall (a) execute and deliver to the Lender such financing statements as
     the Lender may from time to time require; and (b) execute and deliver to
     the Lender such other documents, instruments, and agreements as the Lender
     may reasonably require to perfect and maintain the validity, effectiveness,
     and priority of the Loan Documents and the liens intended to be created
     thereby. The Borrower authorizes the Lender to file one or more financing
     or continuation statements, and amendments thereto, relating to all or any
     part of the Collateral without the signature of the Borrower where
     permitted by law. A carbon, photographic, or other reproduction of this
     Amendment or of any financing statement covering the Collateral or any part
     thereof shall be sufficient as a financing statement and may be filed as a
     financing statement.

     Section 2.15   DELETION OF SECTION 10.13. The financial covenant described
in Section 10.13 of the Agreement is deleted in its entirety and replaced with
the following:

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 12
<Page>

             10.13. CAPITALIZED SOFTWARE COST LIMITATION. This Section 10.13 is
     intentionally deleted.

     Section 2.16   AMENDMENT TO SECTION 10.14. The financial covenant described
in Section 10.14 of the Agreement is amended and restated in its entirety as
indicated below:

             10.14  CONSECUTIVE LOSSES. Commencing on July 1, 2002, permit any
     "Loss" to exist on a rolling two-quarter basis, to be tested at the end of
     each quarter beginning with the quarter ending December 31, 2002. For
     purposes of this covenant, "Loss" shall mean as of any date of computation
     any negative number resulting from the computation of net income for the
     previous two calendar quarters, as computed in accordance with GAAP
     (excluding within the computation of net income all extraordinary and
     non-recurring charges to income).

     Section 2.17   ADDITION OF SECTION 10.15 AND SECTION 10.16. Section 10.15
and Section 10.16 are added to the Agreement as follows:

             10.15  CAPITAL EXPENDITURES. At no time permit the aggregate amount
     of all Capital Expenditures made during any fiscal years (commencing with
     Borrower's 2002 fiscal year) to exceed $300,000.

             10.16  DIVIDENDS. Declare or pay dividends on, or make any other
     distribution (whether by reduction of capital or otherwise) in respect of
     any shares of its capital stock or other ownership interests, except (a)
     dividends payable by a Subsidiary of Borrower to Borrower; (b) dividends
     payable solely in stock; and (c) the redemption, repurchase or acquisition
     of any shares of its capital stock payable upon an employee's termination
     pursuant to its employee stock option, repurchase, or similar plan;
     provided, however, that after giving effect to such redemption, repurchase
     or acquisition, the Borrower or the Subsidiary, as applicable, shall be in
     full compliance with the terms of the Agreement.

     Section 2.18   ADDITION OF SECTION 11.1.10, 11.1.11, 11.1.12 AND 11.1.13.
Section 11.1.10, Section 11.1.11, Section 11.1.12 and Section 11.1.13 are added
to the Agreement as follows:

             11.1.10 AMENDMENT FEE. If the Borrower fails to pay any portion of
     the Amendment Fee described in Section 9.16 hereof on the date that such
     portion is due and payable pursuant to Section 9.16 hereof.

             11.1.11 DELIVERY OF STOCK CERTIFICATES AND STOCK POWERS. If the
     Borrower fails to deliver to the Lender stock certificates and blank stock
     powers with respect to the stock being pledged (to the extent such stock is
     certificated) by each (i) Domestic Subsidiary no later than April 15th,
     2002, and (ii) Foreign Subsidiary no later than May 15, 2002.

             11.1.12 PERFECTION OF STOCK. Failure to deliver such control
     agreements or other agreements, or take any reasonable actions, as Lender
     in its sole discretion deems necessary for Lender to obtain a first
     priority security interest in

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 13
<Page>

     the pledge of 100% of the capital voting stock of each respective Domestic
     Subsidiary and in the pledge of 65% of the capital voting stock of each
     respective Foreign Subsidiary.

             11.1.13 SUBORDINATION AGREEMENT. Any default or event of default
     under any Subordinated Debt, including without limitation, default by
     reason of nonpayment of principal or interest.

     Section 2.19   ADDITION OF SECTION 12.20 AND SECTION 12.21. Section 12.20
and Section 12.21 are added to the Agreement as follows:

             12.20  AUDITS OF COLLATERAL; FEES. Lender shall have the right from
     time to time to audit Accounts, Inventory, and other Collateral pledged by
     Borrower, any Domestic Subsidiary or any Foreign Subsidiary, provided that
     such audits will be conducted no more than three (3) times in any fiscal
     year unless an Event of Default has occurred. Borrower agrees to reimburse
     Lender, on demand, for customary and reasonable fees and costs incurred by
     Lender for such audits and for each appraisal of Collateral and financial
     analysis and examination of Borrower or any Subsidiary performed from time
     to time. After the audit conducted in March of 2002 (the expense of which
     will approximate $9,000), the costs and expenses associated with any
     additional audit conducted at a future time shall be capped at $4000 for
     any individual audit.

             12.21  NEGATIVE PLEDGE. Except for liens in favor of Lender, the
     Borrower, each Domestic Subsidiary, and each Foreign Subsidiary hereby
     represents, warrants and certifies to Lender that, without the prior
     written consent of Lender, it will not, from and after the date hereof,
     permit any lien to exist against any of its respective assets. Further, the
     Borrower, each Domestic Subsidiary, and each Foreign Subsidiary hereby
     represent, warrant and certify to Lender that it will not otherwise grant,
     transfer, convey, assign, pledge, mortgage, hypothecate or otherwise
     dispose of or encumber, either absolutely or conditionally, any of its
     rights, titles, liens or other interests in any of its respective assets.
     The rights and powers given in this Section 12.21 may be transferred and
     assigned by Lender, in whole or in part, at such time and upon such terms
     as it may deem advisable and the assigns shall succeed to such rights and
     powers of Lender hereunder as may be so assigned.

                                   ARTICLE III

                                 LIMITED WAIVER

     Borrower has informed the Lender that certain Defaults have occurred under
the Agreement solely by reason of the following (hereinafter collectively
referred to as the "EXISTING SPECIFIED DEFAULTS"):

             (a)    Borrower's failure to comply with the Tangible Net Worth
     financial covenant described in Section 9.5 of the Agreement as of December
     31, 2001, January 31, 2002, and February 28, 2002;

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 14
<Page>

             (b)    Borrower's failure to comply with the Debt Ratio financial
     covenant described in Section 9.6 of the Agreement as of December 31, 2001,
     January 31, 2002, and February 28, 2002;

             (c)    Borrower's failure to comply with the Current Ratio
     financial covenant described in Section 9.7 of the Agreement as of December
     31, 2001, January 31, 2002, and February 28, 2002;

             (d)    Borrower's failure to comply with the Funded
     Debt-to-Earnings Ratio financial covenant described in Section 9.8 of the
     Agreement as of December 31, 2001, January 31, 2002, and February 28, 2002;

             (e)    Borrower's failure to comply with the Net Interest Expense
     Ratio financial covenant described in Section 9.9 of the Agreement as of
     December 31, 2001, January 31, 2002, and February 28, 2002;

             (f)    Borrower's failure to comply with the Capitalized Software
     Cost Limit financial covenant described in Section 10.13 of the Agreement
     as of December 31, 2001, January 31, 2002, and February 28, 2002; and

             (g)    Borrower's failure to comply with the Consecutive Losses
     financial covenant described in Section 10.14 of the Agreement as of
     December 31, 2001, January 31, 2002, and February 28, 2002.

     By execution of this Amendment, the Lender hereby waives the Existing
Specified Defaults through the reporting period ending March 31, 2002. Except as
otherwise specifically provided for in this Article III, nothing contained
herein shall be construed as a waiver by the Lender of any covenant or provision
of the Agreement, the other Loan Documents, this Amendment, or of any other
contract or instrument among Borrower, any Guarantor, and the Lender, and the
failure of the Lender at any time or times hereafter to require strict
compliance by Borrower of any provision thereof shall not waive, affect or
diminish any right of the Lender to thereafter demand strict compliance
therewith. The Lender hereby reserves all rights granted under the Agreement,
the other Loan Documents, this Amendment and any other contract or instrument
among Borrower, any Guarantor, and the Lender.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

     Section 4.1    CONDITIONS. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:

             (a)    Lender shall have received all of the following, each dated
     (unless otherwise indicated) the date of this Amendment, in form and
     substance satisfactory to the Lender:

                    (i)    this Amendment executed by the Borrower, the Lender,
             each Domestic Subsidiary, and each Foreign Subsidiary;

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 15
<Page>

                    (ii)   the Amended and Restated Revolving Credit Note in the
             amount of $2,500,000 executed by Borrower and payable to the order
             of the Lender;

                    (iii)  the Term Note in the amount of $5,000,000 executed by
             the Borrower and payable to the order of the Lender;

                    (iv)   the Restated Security Agreement executed by the
             Borrower in favor of the Lender, pledging all tangible and
             intangible assets of Borrower as Collateral for the Loan;

                    (v)    Security Agreements executed by each Domestic
             Subsidiary Borrower in favor of the Lender, pledging all tangible
             and intangible assets of each respective Domestic Subsidiary as
             Collateral for the Loan;

                    (vi)   Security Agreement (Intellectual Property) executed
             by Borrower in favor of the Lender, pledging all Intellectual
             Property as more particularly described therein;

                    (vii)  the Security Interest Assignment of Copyrights,
             Patents, and Trademarks executed by the Borrower in favor of the
             Lender;

                    (viii) the Guaranty Agreement executed by Interlink
             Technologies, Inc.;

                    (ix)   the Security Agreement (Negotiable Collateral)
             executed by the Borrower in favor of the Lender, pledging 100%
             capital voting stock of each respective Domestic Subsidiary; and
             pledging 65% of the capital voting stock of each respective Foreign
             Subsidiary, as Collateral for the Loan;

                    (x)    the Advance Formula Agreement executed by the
             Borrower;

                    (xi)   Borrower and each applicable Domestic Subsidiary
             shall pledge all reserves, cash, cash deposits, or other cash
             equivalents held for purposes of funding deferred compensation
             obligations under non-qualified plans (meaning deferred
             compensation plans not qualified under Section 401 of the Internal
             Revenue Code, as amended from time to time);

                    (xii)  Resolutions of the Board of Directors of the Borrower
             certified by its Secretary or an Assistant Secretary which
             authorize the execution, delivery, and performance by the Borrower
             of this Amendment, the Revolving Credit Note, the Term Note, the
             Security Agreements, and other Loan Documents executed in
             connection herewith;

                    (xiii) Resolutions of the Board of Directors of each
             Domestic Subsidiary and each Foreign Subsidiary certified by its
             Secretary or an Assistant Secretary which authorize the execution,
             delivery, and performance by each Domestic Subsidiary and each
             Foreign Subsidiary of this Amendment, each Security Agreement, and
             other Loan Documents executed in connection herewith; and

                    (xiv)  such other documents, instruments, and agreements as
             Lender may require, including without limitation, any documents
             necessary to create dominion

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 16
<Page>

             of funds accounts and lock box arrangements and any documents
             deemed necessary by the Lender in connection with the Borrower's
             pledge and assignment of all tax refunds to Lender, including
             without limitation IRS Power of Attorney, Form 2848.

             (b)    No Default or Event of Default (other than the Existing
     Specified Defaults) shall have occurred and be continuing;

             (c)    All of the representations and warranties contained in
     Article V of the Agreement, as amended hereby and in the other Loan
     Documents, shall be true and correct on and as of the date of this
     Amendment with the same force and effect as if such representations and
     warranties had been made on and as of such date, except to the extent such
     representations and warranties speak to a specific date or the existence of
     the Existing Specified Defaults.

                                    ARTICLE V

                  RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

     Section 5.1    RATIFICATIONS GENERALLY. The terms and provisions set forth
in this Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Agreement and except as expressly modified and
superseded by this Amendment, the terms and provisions of the Agreement and any
notes relating hereto, the Loan Documents, and all other documents executed in
connection with the Agreement are hereby ratified and confirmed and shall
continue in full force and effect. Borrower, each Guarantor, and Lender agree
that the Agreement, as amended hereby, the other Loan Documents, as amended
hereby, and all other documents executed in connection with the Agreement or
this Amendment to which Borrower or any Guarantor is a party shall continue to
be legal, valid, binding and enforceable in accordance with their respective
terms.

     Section 5.2    RATIFICATIONS BY GUARANTORS. Each Guarantor hereby ratifies
and reaffirms all of such Guarantor's obligations under such Guarantor's
respective Guaranty and acknowledges that such Guarantor's respective Guaranty
is not subject to any claims, defenses or offsets. Each Guarantor also hereby
agrees that nothing contained in the Agreement and the Loan Documents, as hereby
amended, shall adversely affect any right or remedy of the Lender under the
Guaranties and that the execution and delivery of this Amendment and the Loan
Documents shall in no way change or modify such Guarantor's obligations under
such Guarantor's respective Guaranty and shall not constitute a waiver by the
Lender of any of its rights against such Guarantor.

     Section 5.3    REPRESENTATIONS AND WARRANTIES. Borrower and each Guarantor
hereby represent and warrant to Lender that (a) the execution, delivery and
performance of this Amendment and any and all other Loan Documents executed
and/or delivered in connection herewith have been authorized by all requisite
action on the part of the Borrower and each Guarantor and will not violate the
certificate of incorporation or bylaws of the Borrower or any Guarantor, or
otherwise violate any other agreement to which Borrower or any Guarantor or any
of their respective properties is bound, (b) the certificate of incorporation
and bylaws of Borrower and each Guarantor has not been amended or revoked since
the date of the Agreement and each of the Borrower's and each Guarantor's
certificate of incorporation and bylaws is in full

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 17
<Page>

force and in effect, and (c) the representations and warranties contained in the
Agreement, as amended hereby, and any other Loan Documents executed in
connection therewith or herewith are true and correct on and as of the date
hereof as though made on and as of the date hereof except to the extent such
representations and warranties speak to a specific date or the existence of the
Existing Specified Defaults, (d) except for the Existing Specified Defaults, no
Default has occurred and is continuing, and (e) except for the Existing
Specified Defaults, Borrower is in full compliance with all covenants and
agreements contained in the Agreement as amended hereby.

                                   ARTICLE VI

                                  MISCELLANEOUS

     Section 6.1    SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other document
executed in connection herewith shall survive the execution and delivery of this
Amendment, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.

     Section 6.2    REFERENCE TO AGREEMENT. Each of the Agreement, the other
Loan Documents and any and all other agreements, documents, or instruments now
or hereafter executed and delivered pursuant to the terms hereof or pursuant to
the terms of the Agreement as amended hereby, are hereby amended so that any
reference in such documents to the Agreement and the other Loan Documents shall
mean a reference to the Agreement and the other Loan Documents, each as amended
hereby.

     Section 6.3    EXPENSES OF LENDER. As provided in the Agreement, Borrower
(and each Guarantor) agrees to pay on demand all reasonable costs and expenses
incurred by Lender in connection with the preparation, negotiation, and
execution of this Amendment and any other documents executed pursuant hereto and
any and all amendments, modifications, and supplements thereto, including
without limitation the costs and reasonable fees of Lender's legal counsel, and
all costs and expenses incurred by Lender in connection with the enforcement or
preservation of any rights under the Agreement, as amended hereby, or any other
document executed in connection therewith, including without limitation the
costs and reasonable fees of Lender's legal counsel.

     Section 6.4    SEVERABILITY. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

     Section 6.5    APPLICABLE LAW. This Amendment and all other documents
executed pursuant hereto shall be deemed to have been made and to be performable
in Dallas, Dallas County, Texas and shall be governed by and construed in
accordance with the laws of the State of Texas.

     Section 6.6    SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Lender, Borrower and its successors and assigns,
except Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of Lender.

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 18
<Page>

     Section 6.7    NO WAIVER. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant, condition or duty
by any Borrower or any obligated party shall be deemed a consent or waiver to or
of any other future breach of the same or any other covenant, condition or duty.

     Section 6.8    HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

     Section 6.9    COUNTERPARTS; FACSIMILES. This Amendment may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Further, any
facsimile copy, other copy or reproduction of a signed counterpart original of
this Amendment shall be as fully effective and binding as the original signed
counterpart of this Amendment.

     Section 6.10   RELEASE AND COVENANT NOT TO SUE. BORROWER AND EACH GUARANTOR
(IN ITS OWN RIGHT AND ON BEHALF OF ITS RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS) (THE "RELEASING
PARTIES") JOINTLY AND SEVERALLY RELEASE, ACQUIT, AND FOREVER DISCHARGE LENDER
AND ITS DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND
AGENTS, AND ATTORNEYS (THE "RELEASED PARTIES"), TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE STATE AND FEDERAL LAW, FROM ANY AND ALL ACTS AND OMISSIONS OF THE
RELEASED PARTIES, AND FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS,
DEMANDS, CONTROVERSIES, COSTS, DEBTS, SUMS OF MONEY, ACCOUNTS, RECKONINGS,
BONDS, BILLS, DAMAGES, OBLIGATIONS, LIABILITIES, OBJECTIONS, AND EXECUTIONS OF
ANY NATURE, TYPE, OR DESCRIPTION WHICH THE RELEASING PARTIES HAVE AGAINST THE
RELEASED PARTIES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, GROSS NEGLIGENCE,
USURY, FRAUD, DECEIT, MISREPRESENTATION, CONSPIRACY, UNCONSCIONABILITY, DURESS,
ECONOMIC DURESS, DEFAMATION, CONTROL, INTERFERENCE WITH CONTRACTUAL AND BUSINESS
RELATIONSHIPS, CONFLICTS OF INTEREST, MISUSE OF INSIDER INFORMATION,
CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF COLLATERAL, WRONGFUL RELEASE OF
COLLATERAL, FAILURE TO INSPECT, ENVIRONMENTAL DUE DILIGENCE, NEGLIGENT LOAN
PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF, VIOLATIONS OF STATUTES AND
REGULATIONS OF GOVERNMENTAL ENTITIES, INSTRUMENTALITIES AND AGENCIES (BOTH CIVIL
AND CRIMINAL), RACKETEERING ACTIVITIES, SECURITIES AND ANTITRUST LAWS
VIOLATIONS, TYING ARRANGEMENTS, DECEPTIVE TRADE PRACTICES, BREACH OR ABUSE OF
ANY ALLEGED FIDUCIARY DUTY, BREACH OF ANY ALLEGED SPECIAL RELATIONSHIP, COURSE
OF CONDUCT OR DEALING, ALLEGED OBLIGATION OF FAIR DEALING, ALLEGED OBLIGATION OF
GOOD FAITH, AND ALLEGED OBLIGATION OF GOOD FAITH AND FAIR DEALING, WHETHER OR
NOT IN CONNECTION WITH OR RELATED TO THE LOAN DOCUMENTS AND THIS AGREEMENT, AT
LAW OR IN EQUITY, IN CONTRACT IN TORT, OR OTHERWISE, KNOWN OR UNKNOWN, SUSPECTED
OR UNSUSPECTED UP TO

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 19
<Page>

AND INCLUDING THE DATE OF THIS AGREEMENT (THE "RELEASED CLAIMS"). THE RELEASING
PARTIES FURTHER AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK IN CONNECTION WITH ANY
CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE AND EXEMPLARY DAMAGES,
DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY, DAMAGES ATTRIBUTABLE TO
MENTAL ANGUISH, AND DAMAGES ATTRIBUTABLE TO PAIN AND SUFFERING, AND THE
RELEASING PARTIES DO HEREBY WAIVE AND RELEASE ALL SUCH DAMAGES WITH RESPECT TO
ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH MAY ARISE AT ANY TIME AGAINST ANY
OF THE RELEASED PARTIES. THE RELEASING PARTIES REPRESENT AND WARRANT THAT NO
FACTS EXIST WHICH COULD PRESENTLY OR IN THE FUTURE COULD SUPPORT THE ASSERTION
OF ANY OF THE RELEASED CLAIMS AGAINST THE RELEASED PARTIES. THE RELEASING
PARTIES FURTHER COVENANT NOT TO SUE THE RELEASED PARTIES ON ACCOUNT OF ANY OF
THE RELEASED CLAIMS, AND EXPRESSLY WAIVE ANY AND ALL DEFENSES THEY MAY HAVE IN
CONNECTION WITH THEIR DEBTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS AND THIS
AGREEMENT. THIS PARAGRAPH IS IN ADDITION TO AND SHALL NOT IN ANY WAY LIMIT ANY
OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES IN FAVOR
OF THE RELEASED PARTIES.

     Section 6.11   INDEMNIFICATION. BORROWER AND EACH GUARANTOR HEREBY AGREE TO
INDEMNIFY, DEFEND AND SAVE LENDER HARMLESS FROM ANY AND ALL CLAIMS, LOSSES,
COSTS, DAMAGES, LIABILITIES, OBLIGATIONS AND EXPENSES, INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES (WHETHER INSIDE OR OUTSIDE COUNSEL IS
USED), INCURRED BY LENDER BY REASON OF ANY DEFAULT OR EVENT OF DEFAULT, IN
COMMERCIALLY REASONABLE ACTIONS TO DEFEND OR PROTECT THE LIENS WHICH SECURE OR
PURPORT TO SECURE ALL OR ANY PORTION OF THE INDEBTEDNESS, WHETHER EXISTING UNDER
ANY LOAN DOCUMENTS OR OTHERWISE OR THE PRIORITY THEREOF, OR IN COMMERCIALLY
REASONABLE ACTS TO ENFORCE THE OBLIGATIONS OF BORROWER, ANY GUARANTOR, OR ANY
OTHER PERSON UNDER OR PURSUANT TO ANY LOAN DOCUMENT, OR IN THE PROSECUTION OR
DEFENSE OF ANY ACTION OR PROCEEDING CONCERNING ANY MATTER GROWING OUT OF OR
CONNECTED WITH THE COLLATERAL OR ANY LOAN DOCUMENTS, INCLUDING ANY CLAIMS,
LOSSES, COSTS, DAMAGES, LIABILITIES, OBLIGATIONS, AND EXPENSES RESULTING FROM
LENDER'S OWN NEGLIGENCE, EXCEPT AND TO THE EXTENT BUT ONLY TO THE EXTENT CAUSED
BY LENDER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

     Section 6.12   ENTIRE AGREEMENT. THE AGREEMENT, THIS AMENDMENT AND ALL
OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION
WITH THE AGREEMENT OR THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 20
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AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

     [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 21
<Page>

     Executed as of the date first written above.

                                    BORROWER:

                                    THOMAS GROUP, INC., a Delaware corporation

                                    By:
                                       -----------------------------------------
                                         Jim Taylor
                                         Chief Financial Officer, Vice President

                                    DOMESTIC SUBSIDIARIES:

                                    THOMAS GROUP OF LOUISIANA, INC.

                                    By:
                                       -----------------------------------------
                                          Alex W. Young
                                          Vice President, Secretary

                                    THOMAS GROUP OF SWEDEN, INC.

                                    By:
                                       -----------------------------------------
                                          Robert French
                                          Managing Director

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 22
<Page>

                                     JOINDER

     By execution of this Joinder each Foreign Subsidiary hereby expressly (i)
acknowledges and accepts the terms of this Amendment, (ii) affirms the
representations and warranties attributable to each of them in Section 5.3 of
the Amendment, (iii) ratifies and affirms its obligations under its respective
Guaranty Agreement in favor of the Lender (as amended, supplemented or otherwise
modified the "Guaranty Agreement"), as provided in Section 5.2 of the Amendment,
(iv) acknowledges, renews and extends its continued liability under its Guaranty
Agreement and agrees that its Guaranty Agreement remains in full force and
effect, as provided for in Section 5.2 of the Amendment; and (iv) guarantees to
the Lender to promptly pay when due all amounts owing or to be owing by it under
its Guaranty Agreement pursuant to the terms and conditions thereof.

                                    FOREIGN SUBSIDIARIES:

                                    THOMAS GROUP ASIA PTE LTD

                                    By:
                                       -----------------------------------------
                                           Jim Taylor
                                           Director

                                    THOMAS GROUP GMBH

                                    By:
                                       -----------------------------------------
                                           Robert French
                                           Title:
                                                 -------------------------------

                                    THOMAS GROUP HONG KONG LIMITED

                                    By:
                                       -----------------------------------------
                                           Jim Taylor
                                           Director

                                    THOMAS GROUP (SUISSE) GMBH

                                    By:
                                       -----------------------------------------
                                           Robert French
                                           Title:
                                                 -------------------------------

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 23
<Page>

                                    LENDER:

                                    COMERICA BANK-TEXAS

                                    By:
                                       -----------------------------------------
                                       Robin M. Kain, Vice President

THIRD AMENDMENT TO CREDIT AGREEMENT - Page 24
<Page>

                                    EXHIBIT A

                           BORROWING BASE CERTIFICATE

<Page>

                                    EXHIBIT B

                             COMPLIANCE CERTIFICATE

<Page>

                                    EXHIBIT C

                                   COPYRIGHTS

<Page>

                                    EXHIBIT D

                                     PATENTS

<Page>

                                    EXHIBIT E

                                   TRADEMARKS
<Page>

                   AMENDED AND RESTATED REVOLVING CREDIT NOTE

$2,500,000.00                   Dallas, Texas                     March 29, 2002

     FOR VALUE RECEIVED, THOMAS GROUP, INC., a Delaware corporation (the
"MAKER"), promises to pay to the order of COMERICA BANK-TEXAS (the "BANK ") at
1601 Elm Street, Dallas, Texas 75201, on the Termination Date (unless sooner due
under the terms of the Loan Agreement, as such terms are defined below), an
aggregate principal sum of Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00) or, if less, the aggregate unpaid principal sum shown on the
schedule which, at the sole option of the Bank, may be attached hereto and made
a part hereof.

     Reference is made to that certain First Amended and Restated Revolving
Credit Loan Agreement, dated as of December 4, 1996, between the Maker and the
Bank (as the same has been or may be amended, restated or modified from time to
time, the "LOAN AGREEMENT "). Unless otherwise defined herein, capitalized terms
herein shall have the meanings given such terms in the Loan Agreement.

     This Note is the Revolving Credit Note referred to in the Loan Agreement.
Interest shall accrue on the unpaid principal balance of this Note and be paid
at the lesser of the (a) Maximum Legal Rate (as later defined) or (b) the
Applicable Rate. Notwithstanding the foregoing, (i) upon the occurrence of an
Event of Default, or (ii) after the Termination Date (whether by acceleration or
otherwise), interest on the unpaid principal balance of this Note shall accrue
and be paid at the Default Rate. Interest shall be payable on the first day of
each month, commencing April 1, 2002, and continuing on the same day of each
successive month thereafter up to and including the Termination Date (whether by
acceleration or otherwise) and, from and after such Termination Date, on demand.
The entire principal balance of this Note remaining unpaid and all accrued but
unpaid interest shall be due and payable in full on the Termination Date (unless
otherwise due by acceleration). Reference is hereby made to the Loan Agreement
for a statement of the other terms and conditions of the Note, including those
conditions under which this Note may be accelerated.

     In any calendar year, upon ninety (90) days prior written notice given by
the Bank to the undersigned, the entire principal balance remaining unpaid and
all accrued and unpaid interest owing herein shall become immediately due and
payable at the option of the holder of this Note on April 30, 2003. This
mandatory prepayment option shall continue regularly and annually thereafter
until the earlier of (i) the exercise of such mandatory prepayment option by the
holder of this Note, or (ii) the Termination Date.

     A late payment charge equal to a reasonable amount not to exceed 5% of each
late payment may be charged on any payment not received by the Bank within 10
calendar days after the payment due date, but acceptance of payment of this
charge shall not waive any Default or Event of Default under this Note or the
Loan Documents.

     If an Event of Default (as defined in the Loan Agreement) occurs and is not
cured within the time, if any, provided for by the Loan Agreement and is
continuing, the Bank may exercise any one or more of the rights (including the
right to accelerate this Note and any other

<Page>

Indebtedness, as defined in the Loan Agreement) and remedies granted by the Loan
Agreement. Without limitation, if an Event of Default occurs and is not cured
within the time, if any, provided for by the Loan Agreement, then the Bank, upon
the occurrence and continuance of any such Event of Default, or after the
expiration of any time provided for cure, may at its option and without prior
notice to the Maker declare the principal of and interest on this Note to be
immediately due and payable and may set off against the principal of and
interest on this Note (i) any amount owing by the Bank to the Maker (ii) any
property of the Maker in the possession of the Bank and (iii) any amount in any
deposit account of the Maker with the Bank.

     No agreements, conditions, provisions or stipulations contained in this
Note or in any other agreement between the Maker and the Bank, or the occurrence
of an Event of Default, or the exercise by the Bank of the right to accelerate
the payment of the maturity of principal and interest, or to exercise any option
whatsoever contained in this Note or any other agreement between the Maker and
the Bank, or the arising of any contingency whatsoever, shall entitle the Bank
to collect, in any event, interest exceeding the maximum rate of nonusurious
interest allowed from time to time by applicable state or federal laws as now or
as may hereinafter be in effect (the "MAXIMUM LEGAL RATE") and in no event shall
the Maker be obligated to pay interest exceeding such Maximum Legal Rate, and
all agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel the Maker to pay a
rate of interest exceeding the Maximum Legal Rate shall be without binding force
or effect, at law or in equity, to the extent only of the excess of interest
over such Maximum Legal Rate. In the event any interest is charged in excess of
the Maximum Legal Rate (the "EXCESS"), the Maker acknowledges and stipulates
that any such charge shall be the result of an accidental and bona fide error,
and such Excess shall be, first, applied to reduce the principal of any
obligations due, and, second, returned to the Maker, it being the intention of
the parties hereto not to enter at any time into an usurious or otherwise
illegal relationship. The parties hereto recognize that with fluctuations in the
prime commercial interest rate from time to time announced by the Bank such an
unintentional result could inadvertently occur. By the execution of this Note,
the Maker covenants that (a) the credit or return of any Excess shall constitute
the acceptance by the Maker of such Excess, and (b) the Maker shall not seek or
pursue any other remedy, legal or equitable, against the Bank based, in whole or
in part, upon the charging or receiving of any interest in excess of the Maximum
Legal Rate. For the purpose of determining whether or not any Excess has been
contracted for, charged or received by the Bank, all interest at any time
contracted for, charged or received by the Bank in connection with the Maker's
obligations shall be amortized, prorated, allocated and spread in equal parts
during the entire term of this Note. If at any time the rate of interest payable
hereunder shall be computed on the basis of the Maximum Legal Rate, any
subsequent reduction in the Contract Rate shall not reduce such interest
thereafter payable hereunder below the amount computed on the basis of the
Maximum Legal Rate until the aggregate amount of such interest accrued and
payable under this Note equals the total amount of interest which would have
accrued if such interest had been at all times computed solely on the basis of
the Contract Rate.

     Unless preempted by federal law, the rate of interest from time to time in
effect hereunder shall not exceed the applicable weekly ceiling from time to
time in effect under Chapter 303 of the Texas Finance Code as amended or
succeeded.

                                      -2-
<Page>

     The provisions of this Note governing interest shall be deemed to be
incorporated into every document or communication relating to the obligations
which sets forth or prescribes any account, right or claims or alleged account,
right or claim of the Bank with respect to the Maker (or any other obligor in
respect of the obligations), whether or not any provisions of this Note are
referred to therein. All such documents and communications and all figures set
forth therein shall, for the sole purpose of computing the extent of the
obligations asserted by the Bank thereunder, be automatically recomputed by the
Maker or any other obligor, and by any court considering the same, to give
effect to the adjustments or credits required by this Note.

     If the applicable state or federal law is amended in the future to allow a
greater rate of interest to be charged under this Note than is presently allowed
by applicable state or federal law, then the limitation of interest hereunder
shall be increased to the maximum rate of interest allowed by applicable state
or federal law, as amended, which increase shall be effective hereunder on the
effective date of such amendment, and all interest charges owing to the Bank by
reason thereof shall be payable upon demand.

     The provisions of Chapter 346 of the Texas Finance Code (formerly Chapter
15 of the Texas Credit Code (Vernon's Texas Civil Statutes), Article 5069-15),
as amended, are specifically declared by the parties hereto not to be applicable
to this Note or any of the other agreements executed in connection herewith or
therewith or to the transactions contemplated hereby or thereby.

     Except as provided for in the Loan Agreement, the Maker and all guarantors
and endorsers (i) waive presentment, demand, protest and notice of dishonor,
(ii) agree that no extension or indulgence to the Maker or release or
nonenforcement of any security, whether with or without notice, shall affect the
obligations of any guarantor or endorser, and (iii) agree to reimburse the
holder of this Note for any and all costs and expenses (including, but not
limited to, reasonable attorney fees) incurred in collecting or attempting to
collect any and all principal of and interest on this Note.

     This Note shall be governed by and construed in accordance with the laws of
the State of Texas and applicable federal laws. THE MAKER, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY
JURY WITH RESPECT TO ANY AND ALL ACTIONS AND PROCEEDINGS AT ANY TIME IN WHICH
THE MAKER AND THE BANK ARE PARTIES ARISING OUT OF THIS NOTE, THE LOAN AGREEMENT,
ANY LOAN DOCUMENTS OR ANY OTHER AGREEMENT RELATING TO THE FOREGOING DOCUMENTS.

     This Note is given in amendment, restatement and modification of (but not
as an extinguishment of, substitution for or novation of) that certain Revolving
Credit Note dated December 1, 2001, in the original principal amount of
$10,000,000, executed by Thomas Group, Inc. and payable to the order of the
Bank.

                [Remainder of this page intentionally left blank]

                                      -3-
<Page>

     IN WITNESS WHEREOF, the Maker has executed this Note as of the first date
indicated above.

                                                     THOMAS GROUP, INC.

                                                     By:
                                                        -----------------------
                                                           Name:
                                                           Title:
<Page>

[COMERICA LOGO]      VARIABLE RATE-INSTALLMENT NOTE

<Table>
<Caption>
AMOUNT            NOTE DATE          MATURITY DATE        TAX IDENTIFICATION NUMBER
<S>               <C>                <C>                  <C>
$5,000,000.00     March 29, 2002     December 3, 2003     72-0843540
</Table>

FOR VALUE RECEIVED, the undersigned promise(s) to pay to the order of COMERICA
BANK-TEXAS, a Texas banking association ("Bank"), at any office of the Bank in
the State of Texas, Five Million and No/100 Dollars (U.S. $5,000,000) (in
installments of $200,000 each plus interest on the unpaid balance from the date
of this Note at a per annum rate equal to the lesser of (a) the Maximum Rate, as
later defined, or (b) the Stated Rate, as later defined, until maturity, whether
by acceleration or otherwise. If on any day the Stated Rate shall exceed the
Maximum Rate for that day, the rate of interest applicable to this Note shall be
fixed at the Maximum Rate on that day and on each day thereafter until the total
amount of interest accrued on the unpaid principal balance of this Note equals
the total amount of interest which would have accrued if there had been no
Maximum Rate. Subject to the limitations hereinbelow set forth, interest shall
be calculated for the actual number of days the principal is outstanding on the
basis of a 360-day year if this Note evidences a business or commercial loan.
The Stated Rate shall mean the Bank's "prime rate," which is the annual rate of
interest so designated by the Bank and which is changed by the Bank from time to
time, plus four percent (4%). Interest rate changes will be effective for
interest computation purposes as and when the Maximum Rate or the Stated Rate,
as applicable, changes.

Reference is made to that certain First Amended and Restated Revolving Credit
Loan Agreement, dated as of December 4, 1996, between the undersigned and the
Bank (as the same has been or may be amended, restated or modified from time to
time, the "LOAN AGREEMENT"). Unless otherwise defined herein, capitalized terms
herein shall have the meanings given such terms in the Loan Agreement. This Note
is the Term Note referred to in the Loan Agreement.

Notwithstanding the foregoing, (i) upon the occurrence of an Event of Default,
or (ii) after the earlier of acceleration or December 3, 2003, interest on the
unpaid principal balance of this Note shall accrue and be paid at the Default
Rate.

Installments of principal plus accrued unpaid interest shall be due and payable
under this Note on the fifteenth (15th) day of each month, commencing July 15,
2002, and continuing on the same day of each successive month thereafter until
December 3, 2003. The entire remaining unpaid balance of principal and accrued
but unpaid interest shall be due and payable on December 3, 2003.

In any calendar year, upon ninety (90) days prior written notice given by the
Bank to the undersigned, the entire principal balance remaining unpaid and all
accrued and unpaid interest owing herein shall become immediately due and
payable at the option of the holder of this Note on April 30, 2003. This
mandatory prepayment option shall continue regularly and annually thereafter
until the earlier of (i) the exercise of such mandatory prepayment option by the
holder of this Note, or (ii) December 3, 2003.

The term "Maximum Rate," as used herein, shall mean at the particular time in
question the maximum nonusurious rate of interest which, under applicable law,
may then be charged on this Note. If such maximum rate of interest changes after
the date hereof, the Maximum Rate shall be automatically increased or decreased,
as the case may be, without notice to the undersigned from time to time as of
the effective date of each change in such maximum rate.

If this Note or any installment under this Note shall become payable on a day
other than a day on which the Bank is open for business, this payment may be
extended to the next succeeding business day and interest shall be payable at
the rate specified in this Note during this extension. Any payments of principal
in excess of the installment payments required under this Note need not be
accepted by the Bank (except as required under applicable law), but if accepted
shall apply to the installments last falling due. A late installment charge
equal to a reasonable amount not to exceed 5% of each late installment may be
charged on any installment payment not received by the Bank within 10 calendar
days after the installment due date, but acceptance of payment of this charge
shall not waive any Default under this Note.

This Note and any other indebtedness and liabilities of any kind of the
undersigned (or any of them) to the Bank (including without limitation that
certain Revolving Credit Note dated of even date herewith in the amount of
$2,500,000 executed by the undersigned in favor of the Bank, as the same may be
amended, restated, increased, extended or otherwise modified from time to time),
and any and all modifications, renewals or extensions of it, whether joint or
several, contingent or absolute, now existing or later arising, and however
evidenced and whether incurred voluntarily or involuntarily, known or unknown,
or originally payable to the Bank or to a third party and subsequently acquired
by Bank including, without limitation, any late charges; loan fees or charges;
overdraft indebtedness; costs incurred by Bank in establishing, determining,
continuing or defending the validity or priority of any security interest,
pledge or other lien or in pursuing any of its rights or remedies under any loan
document (or otherwise) or in connection with any proceeding involving the Bank
as a result of any financial accommodation to the undersigned (or any of them);
and reasonable costs and expenses of attorneys and paralegals, whether inside or
outside counsel is used, and whether any suit or other action is instituted, and
to court costs if suit or action is instituted, and whether any such fees, costs
or expenses are incurred at the trial court level or on appeal, in bankruptcy,
in administrative proceedings, in probate proceedings or otherwise (collectively
"Indebtedness") are secured by and the Bank is granted a security interest in
and lien upon all items deposited in any account of any of the undersigned with
the Bank and by all proceeds of these items (cash or otherwise), all account
balances of any of the undersigned from time to time with the Bank, by all
property of any of the undersigned from time to time in the possession of the
Bank and by any other collateral, rights and properties described in each and
every deed of trust, mortgage, security agreement, pledge, assignment and other
agreement which has been, or will at any time(s) later be, executed by any (or
all) of the undersigned to or for the benefit of the Bank (collectively
"Collateral").

If an Event of Default (as defined in the Loan Agreement) occurs, or if the
undersigned (or any of them) or any guarantor under a guaranty of all or part of
the Indebtedness ("guarantor") (i) fail(s) to pay this Note or any of the
Indebtedness when due, by maturity, acceleration or otherwise, or fail(s) to pay
any Indebtedness owing on a demand basis upon demand; or (ii) fail(s) to comply
with any of the terms or provisions of any agreement between the undersigned (or
any of them) or any guarantor and the Bank; or (iii) become(s) insolvent or the
subject of a voluntary or involuntary proceeding in

<Page>

bankruptcy, or a reorganization, arrangement or creditor composition proceeding,
(if a business entity) cease(s) doing business as a going concern, (if a natural
person) die(s) or become(s) incompetent, (if a partnership) dissolve(s) or any
general partner of it dies, becomes incompetent or becomes the subject of a
bankruptcy proceeding or (if a corporation or a limited liability company) is
the subject of a dissolution, merger or consolidation; or (a) if any warranty or
representation made by any of the undersigned or any guarantor in connection
with this Note or any of the Indebtedness shall be discovered to be untrue or
incomplete; or (b) if there is any termination, notice of termination, or breach
of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the Indebtedness; or (c) if there is any failure
by any of the undersigned or any guarantor to pay when due any of its
indebtedness (other than to the Bank) or in the observance or performance of any
term, covenant or condition in any document evidencing, securing or relating to
such indebtedness; or (d) if the Bank deems itself insecure, believing that the
prospect of payment of this Note or any of the Indebtedness is impaired or shall
fear deterioration, removal or waste of any of the Collateral; or (e) if there
is filed or issued a levy or writ of attachment or garnishment or other like
judicial process upon the undersigned (or any of them) or any guarantor or any
of the Collateral, including without limit, any accounts of the undersigned (or
any of them) or any guarantor with the Bank, then the Bank, upon the occurrence
of any of these events (each a "Default"), may at its option and without prior
notice to the undersigned (or any of them), declare any or all of the
Indebtedness to be immediately due and payable (notwithstanding any provisions
contained in the evidence thereof to the contrary), sell or liquidate all or any
portion of the Collateral, set off against the Indebtedness any amounts owing by
the Bank to the undersigned (or any of them), charge interest at the default
rate provided in the document evidencing the relevant Indebtedness and exercise
any one or more of the rights and remedies granted to the Bank by any agreement
with the undersigned (or any of them) or given to it under applicable law. All
payments under this Note shall be in immediately available United States funds,
without setoff or counterclaim.

If this Note is signed by two or more parties (whether by all as makers or by
one or more as an accommodation party or otherwise), the obligations and
undertakings under this Note shall be that of all and any two or more jointly
and also of each severally. This Note shall bind the undersigned, and the
undersigned's respective heirs, personal representatives, successors and
assigns.

The undersigned waive(s) presentment, demand, protest, notice of dishonor,
notice of demand or intent to demand, notice of acceleration or intent to
accelerate, and all other notices and agree(s) that no extension or indulgence
to the undersigned (or any of them) or release, substitution or nonenforcement
of any security, or release or substitution of any of the undersigned, any
guarantor or any other party, whether with or without notice, shall affect the
obligations of any of the undersigned. The undersigned waive(s) all defenses or
right to discharge available under Section 3.605 of the Texas Uniform Commercial
Code and waive(s) all other suretyship defenses or right to discharge. The
undersigned agree(s) that the Bank has the right to sell, assign, or grant
participations or any interest in, any or all of the Indebtedness, and that, in
connection with this right, but without limiting its ability to make other
disclosures to the full extent allowable, the Bank may disclose all documents
and information which the Bank now or later has relating to the undersigned or
the Indebtedness. The undersigned agree(s) that the Bank may provide information
relating to this Note or the Indebtedness or relating to the undersigned to the
Bank's parent, affiliates, subsidiaries and service providers.

The undersigned agree(s) to reimburse the holder or owner of this Note upon
demand for any and all costs and expenses (including without limit, court costs,
legal expenses and reasonable attorneys' fees, whether inside or outside counsel
is used, and whether or not suit is instituted and, if suit is instituted,
whether at the trial court level, appellate level, in a bankruptcy, probate or
administrative proceeding or otherwise) incurred in collecting or attempting to
collect this Note or incurred in any other matter or proceeding relating to this
Note.

The undersigned acknowledge(s) and agree(s) that there are no contrary
agreements, oral or written, establishing a term of this Note and agree(s) that
the terms and conditions of this Note may not be amended, waived or modified
except in a writing signed by an officer of the Bank expressly stating that the
writing constitutes an amendment, waiver or modification of the terms of this
Note. As used in this Note, the word "undersigned" means, individually and
collectively, each maker, accommodation party, indorser and other party signing
this Note in a similar capacity. If any provision of this Note is unenforceable
in whole or part for any reason, the remaining provisions shall continue to be
effective. THIS NOTE IS MADE IN THE STATE OF TEXAS AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.

This Note and all other documents, instruments and agreements evidencing,
governing, securing, guaranteeing or otherwise relating to or executed pursuant
to or in connection with this Note or the Indebtedness evidenced hereby (whether
executed and delivered prior to, concurrently with or subsequent to this Note),
as such documents may have been or may hereafter be amended from time to time
(the "Loan Documents") are intended to be performed in accordance with, and only
to the extent permitted by, all applicable usury laws. If any provision hereof
or of any of the other Loan Documents or the application thereof to any person
or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the application of such provision to any other person or
circumstance nor the remainder of the instrument in which such provision is
contained shall be affected thereby and shall be enforced to the greatest extent
permitted by law. It is expressly stipulated and agreed to be the intent of the
holder hereof to at all times comply with the usury and other applicable laws
now or hereafter governing the interest payable on the indebtedness evidenced by
this Note. If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to the indebtedness evidenced by this Note, or
if Bank's exercise of the option to accelerate the maturity of this Note, or if
any prepayment by the undersigned or prepayment agreement results (or would, if
complied with, result) in the undersigned having paid, contracted for or being
charged for any interest in excess of that permitted by law, then it is the
express intent of the undersigned and Bank that this Note and the other Loan
Documents shall be limited to the extent necessary to prevent such result and
all excess amounts theretofore collected by Bank shall be credited on the
principal balance of this Note or, if fully paid, upon such other Indebtedness
as shall then remaining outstanding (or, if this Note and all other Indebtedness
have been paid in full, refunded to the undersigned), and the provisions of this
Note and the other Loan Documents shall immediately be deemed reformed and the
amounts thereafter collectable hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable

                                       2
<Page>

law, but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid, or agreed to be paid, by the undersigned
for the use, forbearance, detention, taking, charging, receiving or reserving of
the indebtedness of the undersigned to Bank under this Note or arising under or
pursuant to the other Loan Documents shall, to the maximum extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the usury ceiling from
time to time in effect and applicable to such indebtedness for so long as such
indebtedness is outstanding. To the extent federal law permits Bank to contract
for, charge or receive a greater amount of interest, Bank will rely on federal
law instead of the Texas Finance Code, as supplemented by Texas Credit Title,
for the purpose of determining the Maximum Rate. Additionally, to the maximum
extent permitted by applicable law now or hereafter in effect, Bank may, at its
option and from time to time, implement any other method of computing the
Maximum Rate under the Texas Finance Code, as supplemented by Texas Credit
Title, or under other applicable law, by giving notice, if required, to the
undersigned as provided by applicable law now or hereafter in effect.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Bank to accelerate the maturity of
any interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.

THE UNDERSIGNED AND THE BANK, BY ACCEPTANCE OF THIS NOTE, ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH
PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL
OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES
ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS.

THIS WRITTEN LOAN AGREEMENT (AS DEFINED BY SECTION 26.02 OF THE TEXAS BUSINESS
AND COMMERCE CODE) REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

                                        DEBTOR:

                                        THOMAS GROUP, INC.,
                                        a Delaware corporation

                                        By:
                                            ------------------------------------
                                            Jim Taylor
                                            CFO, Vice President of Finance

5221 N. O'Connor Boulevard, Suite 500    Irving,    Texas    75039
--------------------------------------------------------------------------------
STREET ADDRESS                           CITY       STATE    ZIP CODE

--------------------------------------------------------------------------------
                          FOR BANK USE ONLY                 CCAR #
--------------------------------------------------------------------------------
LOAN OFFICER INITIALS    LOAN GROUP NAME    OBLIGOR NAME
--------------------------------------------------------------------------------
LOAN OFFICER ID. NO.     LOAN GROUP NO.     OBLIGOR NO.     NOTE NO.    AMOUNT
--------------------------------------------------------------------------------

                                        3
<Page>

[COMERICA LOGO]    RESTATED SECURITY AGREEMENT
                   (All Assets)

As of March 29, 2002 for value received, THOMAS GROUP, INC. ("Debtor") pledges,
assigns and grants to Comerica Bank-Texas, a Texas banking association ("Bank"),
whose address is P. O. Box 650282, Dallas, Texas 75265-0282, Attention:
Margareth Fanini a continuing security interest and lien (any pledge,
assignment, security interest or other lien arising hereunder is sometimes
referred to herein as a "security interest") in the Collateral (as defined
below) to secure payment when due, whether by stated maturity, demand,
acceleration or otherwise, of all existing and future indebtedness
("Indebtedness") to the Bank of THOMAS GROUP, INC. ("Borrower") and/or Debtor.
Indebtedness includes without limit any and all obligations or liabilities of
the Borrower and/or Debtor to the Bank, whether absolute or contingent, direct
or indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, known or unknown, originally payable to the Bank or to a third party
and subsequently acquired by the Bank including, without limitation, any late
charges, loan fees or charges, and overdraft indebtedness, any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of any security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and/or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting Indebtedness, including without limit attorneys'
fees. Debtor agrees to pay Bank all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorneys'
fees shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether inside or outside counsel
is used, whether or not a suit or action is instituted, and to court costs if a
suit or action is instituted, and whether attorneys' fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy, administrative or
probate proceeding or otherwise.

Reference is made to that certain First Amended and Restated Revolving Credit
Loan Agreement entered into by and between Debtor and Bank dated as of October
4, 1996 (as the same has been or may hereafter be amended, restated, or modified
from time to time, collectively, the "Loan Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in (i)
the Loan Agreement, or (ii) Article 9 of the Texas Business and Commerce Code,
as provided for in Section 5.12 hereof.

Debtor further covenants, agrees, represents and warrants as follows:

1.   COLLATERAL shall mean all of the Debtor's assets and all of the following
     property Debtor now or later owns or has an interest in, wherever located,
     including without limitation:

     (a)  all Accounts Receivable (for purposes of this Agreement, "Accounts
          Receivable" consists of all Accounts, Chattel Paper (including without
          limit Electronic Chattel Paper and Tangible Chattel Paper), contract
          rights, Deposit Accounts, Documents, Instruments and rights to payment
          evidenced by Chattel Paper, Documents or Instruments, Health Care
          Insurance Receivables, Commercial Tort Claims, Letters of Credit,
          Letter of Credit Rights, Supporting Obligations, and rights to payment
          for money or funds advanced or sold),

     (b)  all Inventory,

     (c)  all Equipment and Fixtures,

     (d)  all Software (for purposes of this Agreement "Software" consists of
          all (i) computer programs and supporting information provided in
          connection with a transaction relating to the program, and (ii)
          computer programs embedded in goods and any supporting information
          provided in connection with a transaction relating to the program
          whether or not the program is associated with the goods in such a
          manner that it customarily is considered part of the goods, and
          whether or not, by becoming the owner of the goods, a person acquires
          a right to use the program in connection with the goods, and whether
          or not the program is embedded in goods that consist solely of the
          medium in which the program is embedded),

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     (e)  all Intellectual Property,

     (f)  all Investment Property including, without limit, securities,
          securities entitlements, and financial assets, and including without
          limitation, 100% of the outstanding capital voting stock of each
          Domestic Subsidiary, and 65% of the outstanding capital voting stock
          of each Foreign Subsidiary,

     (g)  all General Intangibles, including without limitation, all of Debtor's
          rights to a tax refund from the Internal Revenue Services and proceeds
          thereof;

     (h)  all Goods, Instruments, Documents, policies and certificates of
          insurance, Deposit Accounts, money, Investment Property or other
          property (except real property which is not a fixture) which are now
          or later in possession or control of Bank, or as to which Bank now or
          later controls possession by documents or otherwise, and

     (i)  all additions, attachments, accessions, parts, replacements,
          substitutions, renewals, interest, dividends, distributions, rights of
          any kind (including but not limited to stock splits, stock rights,
          voting and preferential rights), products, and proceeds of or
          pertaining to the above including, without limit, cash or other
          property which were proceeds and are recovered by a bankruptcy trustee
          or otherwise as a preferential transfer by Debtor.

In the definition of Collateral, a reference to a type of collateral shall not
be limited by a separate reference to a more specific or narrower type of that
collateral.

2.   WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records. Debtor
          shall, at the request of Bank, mark its records and the Collateral to
          clearly indicate the security interest of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the right and authority to subject it to a security interest
          granted to Bank; (b) none of the Collateral is subject to any security
          interest other than that in favor of Bank; (c) there are no financing
          statements on file, other than in favor of Bank; (d) no person, other
          than Bank, has possession or control (as defined in the Uniform
          Commercial Code) of any Collateral of such nature that perfection of a
          security interest may be accomplished by control; and (e) Debtor
          acquired its rights in the Collateral in the ordinary course of its
          business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank. Debtor will not, without the prior written consent of Bank,
          sell, transfer, lease or grant control to any person other than Bank
          over, or permit to be sold, transferred, leased or controlled (by a
          person other than Bank), any or all of the Collateral, except for
          Inventory in the ordinary course of its business and will not return
          any Inventory to its supplier. Bank or its representatives may at all
          reasonable times inspect the Collateral and may enter upon all
          premises where the Collateral is kept or might be located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue an
          exclusive, perfected and first security interest of Bank in the
          Collateral. Debtor agrees that Bank has no obligation to acquire or
          perfect any lien on or security interest in any asset(s), whether
          realty or personalty, to secure payment of the Indebtedness, and
          Debtor is not relying upon assets in which the Bank may have a lien or
          security interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and bonded in
          a manner satisfactory to Bank. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so, and Debtor agrees to
          repay all amounts so expended by Bank immediately upon

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          demand, together with interest at the highest lawful default rate
          which could be charged by Bank on any Indebtedness.

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all amounts so
          expended by Bank immediately upon demand, together with interest at
          the highest lawful default rate which could be charged by Bank on any
          Indebtedness.

     2.7  On each occasion on which Debtor evidences to Bank the account
          balances on and the nature and extent of the Accounts Receivable,
          Debtor shall be deemed to have warranted that except as otherwise
          indicated (a) each of those Accounts Receivable is valid and
          enforceable without performance by Debtor of any act; (b) each of
          those account balances are in fact owing, (c) there are no setoffs,
          recoupments, credits, contra accounts, counterclaims or defenses
          against any of those Accounts Receivable, (d) as to any Accounts
          Receivable represented by a note, trade acceptance, draft or other
          instrument or by any chattel paper or document, the same have been
          endorsed and/or delivered by Debtor to Bank, (e) Debtor has not
          received with respect to any Account Receivable, any notice of the
          death of the related account debtor, or of the dissolution,
          liquidation, termination of existence, insolvency, business failure,
          appointment of a receiver for, assignment for the benefit of creditors
          by, or filing of a petition in bankruptcy by or against, the account
          debtor, and (f) as to each Account Receivable, except as may be
          expressly permitted by Bank to the contrary in another document, the
          account debtor is not an affiliate of Debtor, the United States of
          America or any department, agency or instrumentality of it, or a
          citizen or resident of any jurisdiction outside of the United States.
          Debtor will do all acts and will execute all writings requested by
          Bank to perform, enforce performance of, and collect all Accounts
          Receivable. Debtor shall neither make nor permit any modification,
          compromise or substitution for any Account Receivable without the
          prior written consent of Bank. Debtor shall, at Bank's request,
          arrange for verification of Accounts Receivable directly with account
          debtors or by other methods acceptable to Bank.

     2.8  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws, ordinances, directives,
          orders, statutes, or regulations an object of which is to regulate or
          improve health, safety, or the environment ("Environmental Laws").

     2.9  If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtedness. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.10 At any time and without notice, Bank may (a) cause any or all of the
          Collateral to be transferred to its name or to the name of its
          nominees; (b) receive or collect by legal proceedings or otherwise all
          dividends, interest, principal payments and other sums and all other
          distributions at any time payable or receivable on account of the
          Collateral, and hold the same as Collateral, or apply the same to the
          Indebtedness, the manner and distribution of the application to be in
          the sole discretion of Bank; (c) enter into any extension,
          subordination, reorganization, deposit, merger or consolidation
          agreement or any other agreement relating to or affecting the
          Collateral, and deposit or surrender control of the Collateral, and
          accept other property in exchange for the

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<Page>

          Collateral and hold or apply the property or money so received
          pursuant to this Agreement; and (d) take such actions in its own name
          or in Debtor's name as Bank, in its sole discretion, deems necessary
          or appropriate to establish exclusive control (as defined in the
          Uniform Commercial Code) over any Collateral of such nature that
          perfection of the Bank's security interest may be accomplished by
          control.

     2.11 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered.

     2.12 Debtor delivers this Agreement based solely on Debtor's independent
          investigation of (or decision not to investigate) the financial
          condition of Borrower and is not relying on any information furnished
          by Bank. Debtor assumes full responsibility for obtaining any further
          information concerning the Borrower's financial condition, the status
          of the Indebtedness or any other matter which the undersigned may deem
          necessary or appropriate now or later. Debtor waives any duty on the
          part of Bank, and agrees that Debtor is not relying upon nor expecting
          Bank to disclose to Debtor any fact now or later known by Bank,
          whether relating to the operations or condition of Borrower, the
          existence, liabilities or financial condition of any guarantor of the
          Indebtedness, the occurrence of any default with respect to the
          Indebtedness, or otherwise, notwithstanding any effect such fact may
          have upon Debtor's risk or Debtor's rights against Borrower. Debtor
          knowingly accepts the full range of risk encompassed in this
          Agreement, which risk includes without limit the possibility that
          Borrower may incur Indebtedness to Bank after the financial condition
          of Borrower, or Borrower's ability to pay debts as they mature, has
          deteriorated.

     2.13 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilities or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorneys' fees, suffered by any of them as
          a direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws, INCLUDING ANY CLAIMS, DAMAGES,
          FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND
          RESULTING FROM BANK'S OWN NEGLIGENCE, except and to the extent (but
          only to the extent) caused by Bank's gross negligence or willful
          misconduct.

3.   COLLECTION OF PROCEEDS.

     3.1  Debtor agrees to collect and enforce payment of all Collateral until
          Bank shall direct Debtor to the contrary. Immediately upon notice to
          Debtor by Bank and at all times after that, Debtor agrees to fully and
          promptly cooperate and assist Bank in the collection and enforcement
          of all Collateral and to hold in trust for Bank all payments received
          in connection with Collateral and from the sale, lease or other
          disposition of any Collateral, all rights by way of suretyship or
          guaranty and all rights in the nature of a lien or security interest
          which Debtor now or later has regarding Collateral. Immediately upon
          and after such notice, Debtor agrees to (a) endorse to Bank and
          immediately deliver to Bank all payments received on Collateral or
          from the sale, lease or other disposition of any Collateral or arising
          from any other rights or interests of Debtor in the Collateral, in the
          form received by Debtor without commingling with any other funds, and
          (b) immediately deliver to Bank all property in Debtor's possession or
          later coming into Debtor's possession through enforcement of Debtor's
          rights or interests in the Collateral. Debtor irrevocably authorizes
          Bank or any Bank employee or agent to endorse the name of Debtor upon
          any checks or other items which are received in payment for any
          Collateral, and to do any and all things necessary in order to reduce
          these items to money. Bank shall have no duty as to the collection or
          protection of Collateral or the proceeds of it, or as to the
          preservation of any related rights, beyond the use of reasonable care
          in the custody and preservation of Collateral in the possession of
          Bank. Debtor agrees to take all steps necessary to preserve rights
          against prior parties with respect to the Collateral. Nothing in this
          Section 3.1 shall be deemed a consent by Bank to any sale, lease or
          other disposition of any Collateral.

     3.2  Debtor agrees that immediately upon Bank's request (whether or not any
          Event of Default exists) the Indebtedness shall be on a "remittance
          basis" as follows: Debtor shall at its sole expense establish and
          maintain (and Bank, at Bank's option may establish and maintain at
          Debtor's expense): (a) an United States Post Office lock box (the
          "Lock Box"), to which Bank shall have exclusive access and control.
          Debtor

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<Page>

          expressly authorizes Bank, from time to time, to remove contents from
          the Lock Box, for disposition in accordance with this Agreement.
          Debtor agrees to notify all account debtors and other parties
          obligated to Debtor that all payments made to Debtor (other than
          payments by electronic funds transfer) shall be remitted, for the
          credit of Debtor, to the Lock Box, and Debtor shall include a like
          statement on all invoices; and (b) a non-interest bearing deposit
          account with Bank which shall be titled as designated by Bank (the
          "Cash Collateral Account") to which Bank shall have exclusive access
          and control. Debtor agrees to notify all account debtors and other
          parties obligated to Debtor that all payments made to Debtor by
          electronic funds transfer shall be remitted to the Cash Collateral
          Account, and Debtor, at Bank's request, shall include a like statement
          on all invoices. Debtor shall execute all documents and authorizations
          as required by Bank to establish and maintain the Lock Box and the
          Cash Collateral Account.

     3.3  All items or amounts which are remitted to the Lock Box, to the Cash
          Collateral Account, or otherwise delivered by or for the benefit of
          Debtor to Bank on account of partial or full payment of, or with
          respect to, any Collateral shall, at Bank's option, (a) be applied to
          the payment of the Indebtedness, whether then due or not, in such
          order or at such time of application as Bank may determine in its sole
          discretion, or, (b) be deposited to the Cash Collateral Account.
          Debtor agrees that Bank shall not be liable for any loss or damage
          which Debtor may suffer as a result of Bank's processing of items or
          its exercise of any other rights or remedies under this Agreement,
          including without limitation indirect, special or consequential
          damages, loss of revenues or profits, or any claim, demand or action
          by any third party arising out of or in connection with the processing
          of items or the exercise of any other rights or remedies under this
          Agreement. Debtor agrees to indemnify and hold Bank harmless from and
          against all such third party claims, demands or actions, and all
          related expenses or liabilities, including, without limitation,
          attorneys' fees and INCLUDING CLAIMS, DAMAGES, FINES, EXPENSES,
          LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND RESULTING FROM BANK'S
          OWN NEGLIGENCE except to the extent (but only to the extent) caused by
          Bank's gross negligence or willful misconduct.

4.   DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise; or

          (b)  Any failure or neglect to comply with, or breach of or default
               under, any term of this Agreement, or any other agreement or
               commitment between Borrower, Debtor, or any guarantor of any of
               the Indebtedness ("Guarantor") and Bank; or

          (c)  Any warranty, representation, financial statement, or other
               information made, given or furnished to Bank by or on behalf of
               Borrower, Debtor, or any Guarantor shall be, or shall prove to
               have been, false or materially misleading when made, given, or
               furnished; or

          (d)  Any loss, theft, substantial damage or destruction to or of any
               Collateral or the issuance or filing of any attachment, levy,
               garnishment or the commencement of any proceeding in connection
               with any Collateral or of any other judicial process of, upon or
               in respect of Borrower, Debtor, any Guarantor, or any Collateral;
               or

          (e)  Sale or other disposition by Borrower, Debtor, or any Guarantor
               of any substantial portion of its assets or property or voluntary
               suspension of the transaction of business by Borrower, Debtor, or
               any Guarantor, or death, dissolution, termination of existence,
               merger, consolidation, insolvency, business failure, or
               assignment for the benefit of creditors of or by Borrower,
               Debtor, or any Guarantor; or commencement of any proceedings
               under any state or federal bankruptcy or insolvency laws or laws
               for the relief of debtors by or against Borrower, Debtor, or any
               Guarantor; or the appointment of a receiver, trustee, court
               appointee, sequestrator or otherwise, for all or any part of the
               property of Borrower, Debtor, or any Guarantor; or

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<Page>

          (f)  Bank deems the margin of Collateral insufficient or itself
               insecure, in good faith believing that the prospect of payment of
               the Indebtedness or performance of this Agreement is impaired or
               shall fear deterioration, removal, or waste of Collateral; or

          (g)  An Event of Default shall occur under the Loan Agreement, any
               Loan Document, or any other instrument, agreement or other
               document evidencing, securing or otherwise relating to any of the
               Indebtedness.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any right or remedy available to it including, without
          limitation, any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other dispositions, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement; and except as provided in this Agreement, all
               notice of sale, lease or other disposition, and advertisement,
               and other notice or demand, any right or equity of redemption,
               and any obligation of a prospective purchaser or lessee to
               inquire as to the power and authority of Bank to sell, lease, or
               otherwise dispose of the Collateral or as to the application by
               Bank of the proceeds of sale or otherwise, which would otherwise
               be required by, or available to Debtor under, applicable law are
               expressly waived by Debtor to the fullest extent permitted.

          At any sale pursuant to this Section 4.2, whether under the power of
          sale, by virtue of judicial proceedings or otherwise, it shall not be
          necessary for Bank or a public officer under order of a court to have
          present physical or constructive possession of Collateral to be sold.
          The recitals contained in any conveyances and receipts made and given
          by Bank or the public officer to any purchaser at any sale made
          pursuant to this Agreement shall, to the extent permitted by
          applicable law, conclusively establish the truth and accuracy of the
          matters stated (including, without limit, as to the amounts of the
          principal of and interest on the Indebtedness, the accrual and
          nonpayment of it and advertisement and conduct of the sale); and all
          prerequisites to the sale shall be presumed to have been satisfied and
          performed. Upon any sale of any Collateral, the receipt of the officer
          making the sale under judicial proceedings or of Bank shall be
          sufficient discharge to the purchaser for the purchase money, and the
          purchaser shall not be obligated to see to the application of the
          money. Any sale of any Collateral under this Agreement shall be a
          perpetual bar against Debtor with respect to that Collateral. At any
          sale or other disposition of the Collateral pursuant to this Section
          4.2, Bank disclaims all warranties which would otherwise be given
          under the Uniform Commercial Code, including without limit a
          disclaimer of any warranty relating to title, possession, quiet
          enjoyment or the like, and Bank may communicate these disclaimers to a
          purchaser at such disposition. This disclaimer of warranties will not
          render the sale commercially unreasonable.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in the Collateral and direct
          payment of it to Bank. Bank may, itself, upon the occurrence of any
          Event of Default so notify and direct any account debtor or obligor.
          At the request of Bank, whether or not an Event of Default shall have
          occurred, Debtor shall immediately take such actions as the Bank shall
          request to establish

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<Page>

          exclusive control (as defined in the Uniform Commercial Code) by Bank
          over any Collateral which is of such a nature that perfection of a
          security interest may be accomplished by control.

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank in such order as the Bank,
          in its discretion, deems appropriate including, without limitation,
          the following order: first upon all expenses authorized by the Uniform
          Commercial Code and all reasonable attorneys' fees and legal expenses
          incurred by Bank; the balance of the proceeds of the sale or other
          disposition shall be applied in the payment of the Indebtedness, first
          to interest, then to principal, then to remaining Indebtedness and the
          surplus, if any, shall be paid over to Debtor or to such other
          person(s) as may be entitled to it under applicable law. Debtor shall
          remain liable for any deficiency, which it shall pay to Bank
          immediately upon demand. Debtor agrees that Secured Party shall be
          under no obligation to accept any noncash proceeds in connection with
          any sale or disposition of Collateral unless failure to do so would be
          commercially unreasonable. If Secured Party agrees in its sole
          discretion to accept noncash proceeds (unless the failure to do so
          would be commercially unreasonable), Secured Party may ascribe any
          commercially reasonable value to such proceeds. Without limiting the
          foregoing, Secured Party may apply any discount factor in determining
          the present value of proceeds to be received in the future or may
          elect to apply proceeds to be received in the future only as and when
          such proceeds are actually received in cash by Secured Party.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law or in
          equity for the collection of the Indebtedness or for the recovery of
          any other sum to which Bank may be entitled for the breach of this
          Agreement by Debtor. Nothing in this Agreement shall reduce or release
          in any way any rights or security interests of Bank contained in any
          existing agreement between Borrower, Debtor, or any Guarantor and
          Bank.

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

     4.7  Debtor (a) irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor and (b) authorizes Bank or any
          agent of Bank, in its own name, at Debtor's expense, to do any of the
          following, as Bank, in its sole discretion, deems appropriate:

          (i)   to demand, receive, sue for, and give receipts or acquittances
                for any moneys due or to become due on any Collateral
                (including, without limit, to draft against Collateral) and to
                endorse any item representing any payment on or proceeds of the
                Collateral;

          (ii)  to execute and file in the name of and on behalf of Debtor all
                financing statements or other filings or Collateral control
                agreements deemed necessary or desirable by Bank to evidence,
                perfect, or continue the security interests granted in this
                Agreement; and

          (iii) to do and perform any act on behalf of Debtor permitted or
                required under this Agreement.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

     4.9  The following shall be the basis for any finder of fact's
          determination of the value of any Collateral which is the subject
          matter of a disposition giving rise to a calculation of any surplus or
          deficiency under Section 9.615 (f) of the Uniform Commercial Code (as
          in effect on or after July 1, 2001): (a) the Collateral which is the
          subject matter of the disposition shall be valued in an "as is"
          condition as of the date of the disposition, without any assumption or
          expectation that such Collateral will be repaired or improved in any
          manner; (b) the valuation shall be based upon an assumption that the
          transferee of such Collateral desires a resale of the Collateral for
          cash promptly (but no later than 30 days) following the disposition;
          (c) all reasonable closing costs customarily borne by the seller in
          commercial sales transactions relating to property similar to such
          Collateral shall be deducted including, without limitation, brokerage
          commissions, tax prorations, attorneys' fees, whether inside

                                        7
<Page>

          or outside counsel is used, and marketing costs; (d) the value of the
          Collateral which is the subject matter of the disposition shall be
          further discounted to account for any estimated holding costs
          associated with maintaining such Collateral pending sale (to the
          extent not accounted for in (c) above), and other maintenance,
          operational and ownership expenses; and (e) any expert opinion
          testimony given or considered in connection with a determination of
          the value of such Collateral must be given by persons having at least
          5 years experience in appraising property similar to the Collateral
          and who have conducted and prepared a complete written appraisal of
          such Collateral taking into consideration the factors set forth above.
          The "value" of any such Collateral shall be a factor in determining
          the amount of proceeds which would have been realized in a disposition
          to a transferee other than a secured party, a person related to a
          secured party or a secondary obligor under Section 9-615(f) of the
          Uniform Commercial Code.

5.   MISCELLANEOUS.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.15 below.

     5.2  Debtor will give Bank not less than 90 days prior written notice of
          all contemplated changes in Debtor's name, location, chief executive
          office, principal place of business, and/or location of any
          Collateral, but the giving of this notice shall not cure any Event of
          Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement. In
          connection with the above, but without limiting its ability to make
          other disclosures to the full extent allowable, Bank may disclose all
          documents and information which Bank now or later has relating to
          Debtor, the Indebtedness or this Agreement, however obtained. Debtor
          further agrees that Bank may provide information relating to this
          Agreement or relating to Debtor or the Indebtedness to the Bank's
          parent, affiliates, subsidiaries, and service providers.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone. Any such action shall not constitute acceptance of
          collateral in discharge of any portion of the Indebtedness.

     5.6  Debtor, to the extent not expressly prohibited by applicable law,
          waives any right to require the Bank to: (a) proceed against any
          person or property; (b) give any notice of sale in a manner or at such
          time other than as required by Sections 9.611, 9.612 and 9.613 of the
          Uniform Commercial Code; or (c) pursue any other remedy in the Bank's
          power. Debtor waives notice of acceptance of this Agreement and
          presentment, demand, protest, notice of protest, dishonor, notice of
          dishonor, notice of default, notice of intent to accelerate or demand
          payment or notice of acceleration of any Indebtedness, any and all
          other notices to which the undersigned might otherwise be entitled,
          and diligence in collecting any Indebtedness, and agree(s) that the
          Bank may, once or any number of times, modify the terms of any
          Indebtedness, compromise, extend, increase, accelerate, renew or
          forbear to enforce payment of any or all Indebtedness, or permit
          Borrower to incur additional Indebtedness, all without notice to
          Debtor and without affecting in any manner the unconditional
          obligation of Debtor under this Agreement. Debtor unconditionally and
          irrevocably waives each and every defense and setoff of any nature
          which, under principles of guaranty or otherwise, would operate to
          impair or diminish in any way the obligation of Debtor under this
          Agreement, and acknowledges that such waiver is by this reference
          incorporated into each security agreement, collateral assignment,
          pledge and/or other document from Debtor now or later securing the
          Indebtedness, and acknowledges that as of the date of this Agreement
          no such defense or setoff exists.

     5.7  Debtor waives any and all rights (whether by subrogation, indemnity,
          reimbursement, or otherwise) to recover from Borrower any amounts paid
          or the value of any Collateral given by Debtor pursuant to this
          Agreement until such time as all of the Indebtedness has been fully
          paid.

                                        8
<Page>

     5.8  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least ten days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other disposition is to be made, unless a shorter notice period is
          reasonable under the circumstances. A notice shall be deemed to be
          given under this Agreement when delivered to Debtor or when placed in
          an envelope addressed to Debtor and deposited, with postage prepaid,
          in a post office or official depository under the exclusive care and
          custody of the United States Postal Service or delivered to an
          overnight courier. The mailing shall be by overnight courier,
          certified, or first class mail.

     5.9  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuation.

     5.10 This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the Indebtedness or any portion of it, and shall bind Debtor and
          the heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.10 is deemed a consent by Bank to any
          assignment by Debtor.

     5.11 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

     5.12 Except as otherwise expressly provided in this Agreement, all terms in
          this Agreement which are defined in the Uniform Commercial Code shall
          have the meanings assigned to them in Article 9 (or, absent definition
          in Article 9, in any other Article) of the Uniform Commercial Code, as
          those meanings may be amended, revised or replaced from time to time.
          "Uniform Commercial Code" means the Texas Business and Commerce Code
          as amended, revised or replaced from time to time. Notwithstanding the
          foregoing, the parties intend that the terms used herein which are
          defined in the Uniform Commercial Code have, at all times, the
          broadest and most inclusive meanings possible. Accordingly, if the
          Uniform Commercial Code shall in the future be amended or held by a
          court to define any term used herein more broadly or inclusively than
          the Uniform Commercial Code in effect on the date of this Agreement,
          then such term, as used herein, shall be given such broadened meaning.
          If the Uniform Commercial Code shall in the future be amended or held
          by a court to define any term used herein more narrowly, or less
          inclusively, than the Uniform Commercial Code in effect on the date of
          this Agreement, such amendment or holding shall be disregarded in
          defining terms used in this Agreement.

     5.13 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. THIS AGREEMENT
          SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
          LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS
          PRINCIPLES.

     5.14 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

                                        9
<Page>

     5.15 Debtor represents and warrants that Debtor's exact name is the name
          set forth in this Agreement. Debtor further represents and warrants
          the following and agrees that Debtor is, and at all times shall be,
          located at 5221 N O'Connor Blvd, Suite 500, Irving, Texas 75039.

          Debtor is a registered organization organized under the laws of the
          United States, and Debtor is located in the state that United States
          law and the Uniform Commercial Code designates as its location. Based
          on the foregoing, Debtor is located (as determined pursuant to the
          Uniform Commercial Code) in the State of Delaware.

          If Collateral is located at other than the address specified above,
          such Collateral is located and shall be maintained at

          ----------------------------------------------------------------------
          STREET ADDRESS

          ----------------------------------------------------------------------
          CITY                  STATE            ZIP CODE              COUNTY

          Collateral shall be maintained only at the locations identified in
          this Section 5.15.

     5.16 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commercial
          Code and may be filed by Bank in any filing office.

     5.17 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commercial Code, but the obligations contained in Section 2.13 of this
          Agreement shall survive termination.

     5.18 Debtor agrees to reimburse the Bank upon demand for any and all costs
          and expenses (including, without limit, court costs, legal expenses
          and reasonable attorneys' fees, whether inside or outside counsel is
          used, whether or not suit is instituted and, if suit is instituted,
          whether at the trial court level, appellate level, in a bankruptcy,
          probate or administrative proceeding or otherwise) incurred in
          enforcing or attempting to enforce this Agreement or in exercising or
          attempting to exercise any right or remedy under this Agreement or
          incurred in any other matter or proceeding relating to this Security
          Agreement.

     5.19 This Agreement is a restatement of that certain Security Agreement
          dated as of December 1, 2001 by and between Debtor and the Bank (the
          "Original Agreement"). All liens, assignments and security interests
          of the Original Agreement are hereby ratified, confirmed, brought
          forward, renewed, extended and rearranged as Collateral for the
          Indebtedness, in addition to and cumulative of all other Collateral
          for the Indebtedness.

6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.

7.   THIS IS A TEXAS SPECIFIC PROVISION: THIS WRITTEN LOAN AGREEMENT (AS DEFINED
     BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE) REPRESENTS THE
     FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
     OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
     THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

8.   SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)

                                       10
<Page>

DEBTOR:                                        BANK:

THOMAS GROUP, INC.,                            COMERICA BANK-TEXAS,
a Delaware corporation                         a Texas banking association

By:                                            By:
   ------------------------------                 ------------------------------
    Jim Taylor                                    Robin M. Kain
    CFO, Vice President of Finance                Vice President

                                       11
<Page>

[COMERICA LOGO]     SECURITY AGREEMENT
                    (All Assets)

As of March 29, 2002 for value received, THOMAS GROUP OF LOUISIANA, INC., a
Delaware corporation ("Debtor") pledges, assigns and grants to Comerica
Bank-Texas, a Texas banking association ("Bank"), whose address is P. O. Box
650282, Dallas, Texas 75265-0282, Attention: Margareth Fanini a continuing
security interest and lien (any pledge, assignment, security interest or other
lien arising hereunder is sometimes referred to herein as a "security interest")
in the Collateral (as defined below) to secure payment when due, whether by
stated maturity, demand, acceleration or otherwise, of all existing and future
indebtedness ("Indebtedness") to the Bank of THOMAS GROUP, INC. ("Borrower").
Indebtedness includes without limit any and all obligations or liabilities of
the Borrower and/or Debtor to the Bank, whether absolute or contingent, direct
or indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, known or unknown, originally payable to the Bank or to a third party
and subsequently acquired by the Bank including, without limitation, any late
charges, loan fees or charges, and overdraft indebtedness, any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of any security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and/or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting Indebtedness, including without limit attorneys'
fees. Debtor agrees to pay Bank all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorneys'
fees shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether inside or outside counsel
is used, whether or not a suit or action is instituted, and to court costs if a
suit or action is instituted, and whether attorneys' fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy, administrative or
probate proceeding or otherwise.

Reference is made to that certain First Amended and Restated Revolving Credit
Loan Agreement entered into by and between Borrower and Bank dated as of October
4, 1996 (as the same has been or may hereafter be amended, restated, or modified
from time to time, collectively, the "Loan Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in (i)
the Loan Agreement, or (ii) Article 9 of the Texas Business and Commerce Code,
as provided for in Section 5.12 hereof.

Debtor further covenants, agrees, represents and warrants as follows:

1.   COLLATERAL shall mean all of the Debtor's assets and all of the following
     property Debtor now or later owns or has an interest in, wherever located,
     including without limitation:

     (a)  all Accounts Receivable (for purposes of this Agreement, "Accounts
          Receivable" consists of all Accounts, Chattel Paper (including without
          limit Electronic Chattel Paper and Tangible Chattel Paper), contract
          rights, Deposit Accounts, Documents, Instruments and rights to payment
          evidenced by Chattel Paper, Documents or Instruments, Health Care
          Insurance Receivables, Commercial Tort Claims, Letters of Credit,
          Letter of Credit Rights, Supporting Obligations, and rights to payment
          for money or funds advanced or sold),

     (b)  all Inventory,

     (c)  all Equipment and Fixtures,

     (d)  all Software (for purposes of this Agreement "Software" consists of
          all (i) computer programs and supporting information provided in
          connection with a transaction relating to the program, and (ii)
          computer programs embedded in goods and any supporting information
          provided in connection with a transaction relating to the program
          whether or not the program is associated with the goods in such a
          manner that it customarily is considered part of the goods, and
          whether or not, by becoming the owner of the goods, a person acquires
          a right to use the program in connection with the goods, and whether
          or not the program is embedded in goods that consist solely of the
          medium in which the program is embedded),

<Page>

     (e)  all Intellectual Property,

     (f)  all Investment Property including, without limit, securities,
          securities entitlements, and financial assets,

     (g)  all General Intangibles, including without limitation, all of Debtor's
          rights to a tax refund from the Internal Revenue Services and proceeds
          thereof;

     (h)  all Goods, Instruments, Documents, policies and certificates of
          insurance, Deposit Accounts, money, Investment Property or other
          property (except real property which is not a fixture) which are now
          or later in possession or control of Bank, or as to which Bank now or
          later controls possession by documents or otherwise, and

     (i)  all additions, attachments, accessions, parts, replacements,
          substitutions, renewals, interest, dividends, distributions, rights of
          any kind (including but not limited to stock splits, stock rights,
          voting and preferential rights), products, and proceeds of or
          pertaining to the above including, without limit, cash or other
          property which were proceeds and are recovered by a bankruptcy trustee
          or otherwise as a preferential transfer by Debtor.

In the definition of Collateral, a reference to a type of collateral shall not
be limited by a separate reference to a more specific or narrower type of that
collateral.

2.   WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records. Debtor
          shall, at the request of Bank, mark its records and the Collateral to
          clearly indicate the security interest of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the right and authority to subject it to a security interest
          granted to Bank; (b) none of the Collateral is subject to any security
          interest other than that in favor of Bank; (c) there are no financing
          statements on file, other than in favor of Bank; (d) no person, other
          than Bank, has possession or control (as defined in the Uniform
          Commercial Code) of any Collateral of such nature that perfection of a
          security interest may be accomplished by control; and (e) Debtor
          acquired its rights in the Collateral in the ordinary course of its
          business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank. Debtor will not, without the prior written consent of Bank,
          sell, transfer, lease or grant control to any person other than Bank
          over, or permit to be sold, transferred, leased or controlled (by a
          person other than Bank), any or all of the Collateral, except for
          Inventory in the ordinary course of its business and will not return
          any Inventory to its supplier. Bank or its representatives may at all
          reasonable times inspect the Collateral and may enter upon all
          premises where the Collateral is kept or might be located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue an
          exclusive, perfected and first security interest of Bank in the
          Collateral. Debtor agrees that Bank has no obligation to acquire or
          perfect any lien on or security interest in any asset(s), whether
          realty or personalty, to secure payment of the Indebtedness, and
          Debtor is not relying upon assets in which the Bank may have a lien or
          security interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and bonded in
          a manner satisfactory to Bank. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so, and Debtor agrees to
          repay all amounts so expended by Bank immediately upon demand,
          together with interest at the highest lawful default rate which could
          be charged by Bank on any Indebtedness.

                                        2
<Page>

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all amounts so
          expended by Bank immediately upon demand, together with interest at
          the highest lawful default rate which could be charged by Bank on any
          Indebtedness.

     2.7  On each occasion on which Debtor evidences to Bank the account
          balances on and the nature and extent of the Accounts Receivable,
          Debtor shall be deemed to have warranted that except as otherwise
          indicated (a) each of those Accounts Receivable is valid and
          enforceable without performance by Debtor of any act; (b) each of
          those account balances are in fact owing, (c) there are no setoffs,
          recoupments, credits, contra accounts, counterclaims or defenses
          against any of those Accounts Receivable, (d) as to any Accounts
          Receivable represented by a note, trade acceptance, draft or other
          instrument or by any chattel paper or document, the same have been
          endorsed and/or delivered by Debtor to Bank, (e) Debtor has not
          received with respect to any Account Receivable, any notice of the
          death of the related account debtor, or of the dissolution,
          liquidation, termination of existence, insolvency, business failure,
          appointment of a receiver for, assignment for the benefit of creditors
          by, or filing of a petition in bankruptcy by or against, the account
          debtor, and (f) as to each Account Receivable, except as may be
          expressly permitted by Bank to the contrary in another document, the
          account debtor is not an affiliate of Debtor, the United States of
          America or any department, agency or instrumentality of it, or a
          citizen or resident of any jurisdiction outside of the United States.
          Debtor will do all acts and will execute all writings requested by
          Bank to perform, enforce performance of, and collect all Accounts
          Receivable. Debtor shall neither make nor permit any modification,
          compromise or substitution for any Account Receivable without the
          prior written consent of Bank. Debtor shall, at Bank's request,
          arrange for verification of Accounts Receivable directly with account
          debtors or by other methods acceptable to Bank.

     2.8  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws, ordinances, directives,
          orders, statutes, or regulations an object of which is to regulate or
          improve health, safety, or the environment ("Environmental Laws").

     2.9  If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtedness. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.10 At any time and without notice, Bank may (a) cause any or all of the
          Collateral to be transferred to its name or to the name of its
          nominees; (b) receive or collect by legal proceedings or otherwise all
          dividends, interest, principal payments and other sums and all other
          distributions at any time payable or receivable on account of the
          Collateral, and hold the same as Collateral, or apply the same to the
          Indebtedness, the manner and distribution of the application to be in
          the sole discretion of Bank; (c) enter into any extension,
          subordination, reorganization, deposit, merger or consolidation
          agreement or any other agreement relating to or affecting the
          Collateral, and deposit or surrender control of the Collateral, and
          accept other property in exchange for the Collateral and hold or apply
          the property or money so received pursuant to this Agreement; and (d)
          take such actions in its own name or in Debtor's name as Bank, in its
          sole discretion, deems necessary or appropriate to

                                        3
<Page>

          establish exclusive control (as defined in the Uniform Commercial
          Code) over any Collateral of such nature that perfection of the Bank's
          security interest may be accomplished by control.

     2.11 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered.

     2.12 Debtor delivers this Agreement based solely on Debtor's independent
          investigation of (or decision not to investigate) the financial
          condition of Borrower and is not relying on any information furnished
          by Bank. Debtor assumes full responsibility for obtaining any further
          information concerning the Borrower's financial condition, the status
          of the Indebtedness or any other matter which the undersigned may deem
          necessary or appropriate now or later. Debtor waives any duty on the
          part of Bank, and agrees that Debtor is not relying upon nor expecting
          Bank to disclose to Debtor any fact now or later known by Bank,
          whether relating to the operations or condition of Borrower, the
          existence, liabilities or financial condition of any guarantor of the
          Indebtedness, the occurrence of any default with respect to the
          Indebtedness, or otherwise, notwithstanding any effect such fact may
          have upon Debtor's risk or Debtor's rights against Borrower. Debtor
          knowingly accepts the full range of risk encompassed in this
          Agreement, which risk includes without limit the possibility that
          Borrower may incur Indebtedness to Bank after the financial condition
          of Borrower, or Borrower's ability to pay debts as they mature, has
          deteriorated.

     2.13 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilities or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorneys' fees, suffered by any of them as
          a direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws, INCLUDING ANY CLAIMS, DAMAGES,
          FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND
          RESULTING FROM BANK'S OWN NEGLIGENCE, except and to the extent (but
          only to the extent) caused by Bank's gross negligence or willful
          misconduct.

3.   COLLECTION OF PROCEEDS.

     3.1  Debtor agrees to collect and enforce payment of all Collateral until
          Bank shall direct Debtor to the contrary. Immediately upon notice to
          Debtor by Bank and at all times after that, Debtor agrees to fully and
          promptly cooperate and assist Bank in the collection and enforcement
          of all Collateral and to hold in trust for Bank all payments received
          in connection with Collateral and from the sale, lease or other
          disposition of any Collateral, all rights by way of suretyship or
          guaranty and all rights in the nature of a lien or security interest
          which Debtor now or later has regarding Collateral. Immediately upon
          and after such notice, Debtor agrees to (a) endorse to Bank and
          immediately deliver to Bank all payments received on Collateral or
          from the sale, lease or other disposition of any Collateral or arising
          from any other rights or interests of Debtor in the Collateral, in the
          form received by Debtor without commingling with any other funds, and
          (b) immediately deliver to Bank all property in Debtor's possession or
          later coming into Debtor's possession through enforcement of Debtor's
          rights or interests in the Collateral. Debtor irrevocably authorizes
          Bank or any Bank employee or agent to endorse the name of Debtor upon
          any checks or other items which are received in payment for any
          Collateral, and to do any and all things necessary in order to reduce
          these items to money. Bank shall have no duty as to the collection or
          protection of Collateral or the proceeds of it, or as to the
          preservation of any related rights, beyond the use of reasonable care
          in the custody and preservation of Collateral in the possession of
          Bank. Debtor agrees to take all steps necessary to preserve rights
          against prior parties with respect to the Collateral. Nothing in this
          Section 3.1 shall be deemed a consent by Bank to any sale, lease or
          other disposition of any Collateral.

     3.2  Debtor agrees that immediately upon Bank's request (whether or not any
          Event of Default exists) the Indebtedness shall be on a "remittance
          basis" as follows: Debtor shall at its sole expense establish and
          maintain (and Bank, at Bank's option may establish and maintain at
          Debtor's expense): (a) an United States Post Office lock box (the
          "Lock Box"), to which Bank shall have exclusive access and control.
          Debtor expressly authorizes Bank, from time to time, to remove
          contents from the Lock Box, for disposition in accordance with this
          Agreement. Debtor agrees to notify all account debtors and other
          parties obligated to

                                        4
<Page>

          Debtor that all payments made to Debtor (other than payments by
          electronic funds transfer) shall be remitted, for the credit of
          Debtor, to the Lock Box, and Debtor shall include a like statement on
          all invoices; and (b) a non-interest bearing deposit account with Bank
          which shall be titled as designated by Bank (the "Cash Collateral
          Account") to which Bank shall have exclusive access and control.
          Debtor agrees to notify all account debtors and other parties
          obligated to Debtor that all payments made to Debtor by electronic
          funds transfer shall be remitted to the Cash Collateral Account, and
          Debtor, at Bank's request, shall include a like statement on all
          invoices. Debtor shall execute all documents and authorizations as
          required by Bank to establish and maintain the Lock Box and the Cash
          Collateral Account.

     3.3  All items or amounts which are remitted to the Lock Box, to the Cash
          Collateral Account, or otherwise delivered by or for the benefit of
          Debtor to Bank on account of partial or full payment of, or with
          respect to, any Collateral shall, at Bank's option, (a) be applied to
          the payment of the Indebtedness, whether then due or not, in such
          order or at such time of application as Bank may determine in its sole
          discretion, or, (b) be deposited to the Cash Collateral Account.
          Debtor agrees that Bank shall not be liable for any loss or damage
          which Debtor may suffer as a result of Bank's processing of items or
          its exercise of any other rights or remedies under this Agreement,
          including without limitation indirect, special or consequential
          damages, loss of revenues or profits, or any claim, demand or action
          by any third party arising out of or in connection with the processing
          of items or the exercise of any other rights or remedies under this
          Agreement. Debtor agrees to indemnify and hold Bank harmless from and
          against all such third party claims, demands or actions, and all
          related expenses or liabilities, including, without limitation,
          attorneys' fees and INCLUDING CLAIMS, DAMAGES, FINES, EXPENSES,
          LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND RESULTING FROM BANK'S
          OWN NEGLIGENCE except to the extent (but only to the extent) caused by
          Bank's gross negligence or willful misconduct.

4.   DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise; or

          (b)  Any failure or neglect to comply with, or breach of or default
               under, any term of this Agreement, or any other agreement or
               commitment between Borrower, Debtor, or any guarantor of any of
               the Indebtedness ("Guarantor") and Bank; or

          (c)  Any warranty, representation, financial statement, or other
               information made, given or furnished to Bank by or on behalf of
               Borrower, Debtor, or any Guarantor shall be, or shall prove to
               have been, false or materially misleading when made, given, or
               furnished; or

          (d)  Any loss, theft, substantial damage or destruction to or of any
               Collateral or the issuance or filing of any attachment, levy,
               garnishment or the commencement of any proceeding in connection
               with any Collateral or of any other judicial process of, upon or
               in respect of Borrower, Debtor, any Guarantor, or any Collateral;
               or

          (e)  Sale or other disposition by Borrower, Debtor, or any Guarantor
               of any substantial portion of its assets or property or voluntary
               suspension of the transaction of business by Borrower, Debtor, or
               any Guarantor, or death, dissolution, termination of existence,
               merger, consolidation, insolvency, business failure, or
               assignment for the benefit of creditors of or by Borrower,
               Debtor, or any Guarantor; or commencement of any proceedings
               under any state or federal bankruptcy or insolvency laws or laws
               for the relief of debtors by or against Borrower, Debtor, or any
               Guarantor; or the appointment of a receiver, trustee, court
               appointee, sequestrator or otherwise, for all or any part of the
               property of Borrower, Debtor, or any Guarantor; or

          (f)  Bank deems the margin of Collateral insufficient or itself
               insecure, in good faith believing that the prospect of payment of
               the Indebtedness or performance of this Agreement is impaired or
               shall fear deterioration, removal, or waste of Collateral; or

                                        5
<Page>

          (g)  An Event of Default shall occur under the Loan Agreement, any
               Loan Document, or any other instrument, agreement or other
               document evidencing, securing or otherwise relating to any of the
               Indebtedness.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any right or remedy available to it including, without
          limitation, any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other dispositions, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement; and except as provided in this Agreement, all
               notice of sale, lease or other disposition, and advertisement,
               and other notice or demand, any right or equity of redemption,
               and any obligation of a prospective purchaser or lessee to
               inquire as to the power and authority of Bank to sell, lease, or
               otherwise dispose of the Collateral or as to the application by
               Bank of the proceeds of sale or otherwise, which would otherwise
               be required by, or available to Debtor under, applicable law are
               expressly waived by Debtor to the fullest extent permitted.

          At any sale pursuant to this Section 4.2, whether under the power of
          sale, by virtue of judicial proceedings or otherwise, it shall not be
          necessary for Bank or a public officer under order of a court to have
          present physical or constructive possession of Collateral to be sold.
          The recitals contained in any conveyances and receipts made and given
          by Bank or the public officer to any purchaser at any sale made
          pursuant to this Agreement shall, to the extent permitted by
          applicable law, conclusively establish the truth and accuracy of the
          matters stated (including, without limit, as to the amounts of the
          principal of and interest on the Indebtedness, the accrual and
          nonpayment of it and advertisement and conduct of the sale); and all
          prerequisites to the sale shall be presumed to have been satisfied and
          performed. Upon any sale of any Collateral, the receipt of the officer
          making the sale under judicial proceedings or of Bank shall be
          sufficient discharge to the purchaser for the purchase money, and the
          purchaser shall not be obligated to see to the application of the
          money. Any sale of any Collateral under this Agreement shall be a
          perpetual bar against Debtor with respect to that Collateral. At any
          sale or other disposition of the Collateral pursuant to this Section
          4.2, Bank disclaims all warranties which would otherwise be given
          under the Uniform Commercial Code, including without limit a
          disclaimer of any warranty relating to title, possession, quiet
          enjoyment or the like, and Bank may communicate these disclaimers to a
          purchaser at such disposition. This disclaimer of warranties will not
          render the sale commercially unreasonable.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in the Collateral and direct
          payment of it to Bank. Bank may, itself, upon the occurrence of any
          Event of Default so notify and direct any account debtor or obligor.
          At the request of Bank, whether or not an Event of Default shall have
          occurred, Debtor shall immediately take such actions as the Bank shall
          request to establish exclusive control (as defined in the Uniform
          Commercial Code) by Bank over any Collateral which is of such a nature
          that perfection of a security interest may be accomplished by control.

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank in such order as the Bank,
          in its discretion, deems appropriate including, without limitation,
          the following

                                        6
<Page>

          order: first upon all expenses authorized by the Uniform Commercial
          Code and all reasonable attorneys' fees and legal expenses incurred by
          Bank; the balance of the proceeds of the sale or other disposition
          shall be applied in the payment of the Indebtedness, first to
          interest, then to principal, then to remaining Indebtedness and the
          surplus, if any, shall be paid over to Debtor or to such other
          person(s) as may be entitled to it under applicable law. Debtor shall
          remain liable for any deficiency, which it shall pay to Bank
          immediately upon demand. Debtor agrees that Secured Party shall be
          under no obligation to accept any noncash proceeds in connection with
          any sale or disposition of Collateral unless failure to do so would be
          commercially unreasonable. If Secured Party agrees in its sole
          discretion to accept noncash proceeds (unless the failure to do so
          would be commercially unreasonable), Secured Party may ascribe any
          commercially reasonable value to such proceeds. Without limiting the
          foregoing, Secured Party may apply any discount factor in determining
          the present value of proceeds to be received in the future or may
          elect to apply proceeds to be received in the future only as and when
          such proceeds are actually received in cash by Secured Party.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law or in
          equity for the collection of the Indebtedness or for the recovery of
          any other sum to which Bank may be entitled for the breach of this
          Agreement by Debtor. Nothing in this Agreement shall reduce or release
          in any way any rights or security interests of Bank contained in any
          existing agreement between Borrower, Debtor, or any Guarantor and
          Bank.

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

     4.7  Debtor (a) irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor and (b) authorizes Bank or any
          agent of Bank, in its own name, at Debtor's expense, to do any of the
          following, as Bank, in its sole discretion, deems appropriate:

          (i)   to demand, receive, sue for, and give receipts or acquittances
                for any moneys due or to become due on any Collateral
                (including, without limit, to draft against Collateral) and to
                endorse any item representing any payment on or proceeds of the
                Collateral;

          (ii)  to execute and file in the name of and on behalf of Debtor all
                financing statements or other filings or Collateral control
                agreements deemed necessary or desirable by Bank to evidence,
                perfect, or continue the security interests granted in this
                Agreement; and

          (iii) to do and perform any act on behalf of Debtor permitted or
                required under this Agreement.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

     4.9  The following shall be the basis for any finder of fact's
          determination of the value of any Collateral which is the subject
          matter of a disposition giving rise to a calculation of any surplus or
          deficiency under Section 9.615 (f) of the Uniform Commercial Code (as
          in effect on or after July 1, 2001): (a) the Collateral which is the
          subject matter of the disposition shall be valued in an "as is"
          condition as of the date of the disposition, without any assumption or
          expectation that such Collateral will be repaired or improved in any
          manner; (b) the valuation shall be based upon an assumption that the
          transferee of such Collateral desires a resale of the Collateral for
          cash promptly (but no later than 30 days) following the disposition;
          (c) all reasonable closing costs customarily borne by the seller in
          commercial sales transactions relating to property similar to such
          Collateral shall be deducted including, without limitation, brokerage
          commissions, tax prorations, attorneys' fees, whether inside or
          outside counsel is used, and marketing costs; (d) the value of the
          Collateral which is the subject matter of the disposition shall be
          further discounted to account for any estimated holding costs
          associated with maintaining such Collateral pending sale (to the
          extent not accounted for in (c) above), and other maintenance,
          operational and ownership expenses; and (e) any expert opinion
          testimony given or considered

                                        7
<Page>

          in connection with a determination of the value of such Collateral
          must be given by persons having at least 5 years experience in
          appraising property similar to the Collateral and who have conducted
          and prepared a complete written appraisal of such Collateral taking
          into consideration the factors set forth above. The "value" of any
          such Collateral shall be a factor in determining the amount of
          proceeds which would have been realized in a disposition to a
          transferee other than a secured party, a person related to a secured
          party or a secondary obligor under Section 9-615(f) of the Uniform
          Commercial Code.

5.   MISCELLANEOUS.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.15 below.

     5.2  Debtor will give Bank not less than 90 days prior written notice of
          all contemplated changes in Debtor's name, location, chief executive
          office, principal place of business, and/or location of any
          Collateral, but the giving of this notice shall not cure any Event of
          Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement. In
          connection with the above, but without limiting its ability to make
          other disclosures to the full extent allowable, Bank may disclose all
          documents and information which Bank now or later has relating to
          Debtor, the Indebtedness or this Agreement, however obtained. Debtor
          further agrees that Bank may provide information relating to this
          Agreement or relating to Debtor or the Indebtedness to the Bank's
          parent, affiliates, subsidiaries, and service providers.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone. Any such action shall not constitute acceptance of
          collateral in discharge of any portion of the Indebtedness.

     5.6  Debtor, to the extent not expressly prohibited by applicable law,
          waives any right to require the Bank to: (a) proceed against any
          person or property; (b) give any notice of sale in a manner or at such
          time other than as required by Sections 9.611, 9.612 and 9.613 of the
          Uniform Commercial Code; or (c) pursue any other remedy in the Bank's
          power. Debtor waives notice of acceptance of this Agreement and
          presentment, demand, protest, notice of protest, dishonor, notice of
          dishonor, notice of default, notice of intent to accelerate or demand
          payment or notice of acceleration of any Indebtedness, any and all
          other notices to which the undersigned might otherwise be entitled,
          and diligence in collecting any Indebtedness, and agree(s) that the
          Bank may, once or any number of times, modify the terms of any
          Indebtedness, compromise, extend, increase, accelerate, renew or
          forbear to enforce payment of any or all Indebtedness, or permit
          Borrower to incur additional Indebtedness, all without notice to
          Debtor and without affecting in any manner the unconditional
          obligation of Debtor under this Agreement. Debtor unconditionally and
          irrevocably waives each and every defense and setoff of any nature
          which, under principles of guaranty or otherwise, would operate to
          impair or diminish in any way the obligation of Debtor under this
          Agreement, and acknowledges that such waiver is by this reference
          incorporated into each security agreement, collateral assignment,
          pledge and/or other document from Debtor now or later securing the
          Indebtedness, and acknowledges that as of the date of this Agreement
          no such defense or setoff exists.

     5.7  Debtor waives any and all rights (whether by subrogation, indemnity,
          reimbursement, or otherwise) to recover from Borrower any amounts paid
          or the value of any Collateral given by Debtor pursuant to this
          Agreement until such time as all of the Indebtedness has been fully
          paid.

     5.8  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least ten days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other disposition is to be made, unless a

                                        8
<Page>

          shorter notice period is reasonable under the circumstances. A notice
          shall be deemed to be given under this Agreement when delivered to
          Debtor or when placed in an envelope addressed to Debtor and
          deposited, with postage prepaid, in a post office or official
          depository under the exclusive care and custody of the United States
          Postal Service or delivered to an overnight courier. The mailing shall
          be by overnight courier, certified, or first class mail.

     5.9  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuation.

     5.10 This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the Indebtedness or any portion of it, and shall bind Debtor and
          the heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.10 is deemed a consent by Bank to any
          assignment by Debtor.

     5.11 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

     5.12 Except as otherwise expressly provided in this Agreement, all terms in
          this Agreement which are defined in the Uniform Commercial Code shall
          have the meanings assigned to them in Article 9 (or, absent definition
          in Article 9, in any other Article) of the Uniform Commercial Code, as
          those meanings may be amended, revised or replaced from time to time.
          "Uniform Commercial Code" means the Texas Business and Commerce Code
          as amended, revised or replaced from time to time. Notwithstanding the
          foregoing, the parties intend that the terms used herein which are
          defined in the Uniform Commercial Code have, at all times, the
          broadest and most inclusive meanings possible. Accordingly, if the
          Uniform Commercial Code shall in the future be amended or held by a
          court to define any term used herein more broadly or inclusively than
          the Uniform Commercial Code in effect on the date of this Agreement,
          then such term, as used herein, shall be given such broadened meaning.
          If the Uniform Commercial Code shall in the future be amended or held
          by a court to define any term used herein more narrowly, or less
          inclusively, than the Uniform Commercial Code in effect on the date of
          this Agreement, such amendment or holding shall be disregarded in
          defining terms used in this Agreement.

     5.13 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. THIS AGREEMENT
          SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
          LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS
          PRINCIPLES.

     5.14 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

                                        9
<Page>

     5.15 Debtor represents and warrants that Debtor's exact name is the name
          set forth in this Agreement. Debtor further represents and warrants
          the following and agrees that Debtor is, and at all times shall be,
          located at the following mailing address: 5221 N O'Connor Blvd, Suite
          500, Irving, Texas 75039.

          Debtor is a registered organization organized under the laws of the
          United States, and Debtor is located in the state that United States
          law and the Uniform Commercial Code designates as its location. Based
          on the foregoing, Debtor is located (as determined pursuant to the
          Uniform Commercial Code) in the State of Delaware.

          If Collateral is located at other than the address specified above,
          such Collateral is located and shall be maintained at

          ----------------------------------------------------------------------
          STREET ADDRESS

          ----------------------------------------------------------------------
          CITY               STATE            ZIP CODE             COUNTY

          Collateral shall be maintained only at the locations identified in
          this Section 5.15.

     5.16 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commercial
          Code and may be filed by Bank in any filing office.

     5.17 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commercial Code, but the obligations contained in Section 2.13 of this
          Agreement shall survive termination.

     5.18 Debtor agrees to reimburse the Bank upon demand for any and all costs
          and expenses (including, without limit, court costs, legal expenses
          and reasonable attorneys' fees, whether inside or outside counsel is
          used, whether or not suit is instituted and, if suit is instituted,
          whether at the trial court level, appellate level, in a bankruptcy,
          probate or administrative proceeding or otherwise) incurred in
          enforcing or attempting to enforce this Agreement or in exercising or
          attempting to exercise any right or remedy under this Agreement or
          incurred in any other matter or proceeding relating to this Security
          Agreement.

6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.

7.   THIS IS A TEXAS SPECIFIC PROVISION: THIS WRITTEN LOAN AGREEMENT (AS DEFINED
     BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE) REPRESENTS THE
     FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
     OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
     THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

8.   SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)

                                       10
<Page>

DEBTOR:                                              BANK:

THOMAS GROUP OF LOUISIANA, INC.,                     COMERICA BANK-TEXAS,
a Delaware corporation                               a Texas banking association

By:                                                  By:
   -------------------------------------------          ------------------------
   Alex W. Young, Vice President and Secretary          Robin M. Kain
                                                        Vice President

                                       11
<Page>

[COMERICA LOGO]    SECURITY AGREEMENT
                   (All Assets)

As of March 29, 2002 for value received, THOMAS GROUP OF SWEDEN, INC., a
Delaware corporation ("Debtor") pledges, assigns and grants to Comerica
Bank-Texas , a Texas banking association ("Bank"), whose address is P. O. Box
650282, Dallas, Texas 75265-0282, Attention: Margareth Fanini a continuing
security interest and lien (any pledge, assignment, security interest or other
lien arising hereunder is sometimes referred to herein as a "security interest")
in the Collateral (as defined below) to secure payment when due, whether by
stated maturity, demand, acceleration or otherwise, of all existing and future
indebtedness ("Indebtedness") to the Bank of THOMAS GROUP, INC. ("Borrower").
Indebtedness includes without limit any and all obligations or liabilities of
the Borrower and/or Debtor to the Bank, whether absolute or contingent, direct
or indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, known or unknown, originally payable to the Bank or to a third party
and subsequently acquired by the Bank including, without limitation, any late
charges, loan fees or charges, and overdraft indebtedness, any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of any security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and/or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting Indebtedness, including without limit attorneys'
fees. Debtor agrees to pay Bank all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorneys'
fees shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether inside or outside counsel
is used, whether or not a suit or action is instituted, and to court costs if a
suit or action is instituted, and whether attorneys' fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy, administrative or
probate proceeding or otherwise.

Reference is made to that certain First Amended and Restated Revolving Credit
Loan Agreement entered into by and between Borrower and Bank dated as of October
4, 1996 (as the same has been or may hereafter be amended, restated, or modified
from time to time, collectively, the "Loan Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in (i)
the Loan Agreement, or (ii) Article 9 of the Texas Business and Commerce Code,
as provided for in Section 5.12 hereof.

Debtor further covenants, agrees, represents and warrants as follows:

1.   COLLATERAL shall mean all of the Debtor's assets and all of the following
     property Debtor now or later owns or has an interest in, wherever located,
     including without limitation:

     (a)  all Accounts Receivable (for purposes of this Agreement, "Accounts
          Receivable" consists of all Accounts, Chattel Paper (including without
          limit Electronic Chattel Paper and Tangible Chattel Paper), contract
          rights, Deposit Accounts, Documents, Instruments and rights to payment
          evidenced by Chattel Paper, Documents or Instruments, Health Care
          Insurance Receivables, Commercial Tort Claims, Letters of Credit,
          Letter of Credit Rights, Supporting Obligations, and rights to payment
          for money or funds advanced or sold),

     (b)  all Inventory,

     (c)  all Equipment and Fixtures,

     (d)  all Software (for purposes of this Agreement "Software" consists of
          all (i) computer programs and supporting information provided in
          connection with a transaction relating to the program, and (ii)
          computer programs embedded in goods and any supporting information
          provided in connection with a transaction relating to the program
          whether or not the program is associated with the goods in such a
          manner that it customarily is considered part of the goods, and
          whether or not, by becoming the owner of the goods, a person acquires
          a right to use the program in connection with the goods, and whether
          or not the program is embedded in goods that consist solely of the
          medium in which the program is embedded),

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     (e)  all Intellectual Property,

     (f)  all Investment Property including, without limit, securities,
          securities entitlements, and financial assets,

     (g)  all General Intangibles, including without limitation, all of Debtor's
          rights to a tax refund from the Internal Revenue Services and proceeds
          thereof;

     (h)  all Goods, Instruments, Documents, policies and certificates of
          insurance, Deposit Accounts, money, Investment Property or other
          property (except real property which is not a fixture) which are now
          or later in possession or control of Bank, or as to which Bank now or
          later controls possession by documents or otherwise, and

     (i)  all additions, attachments, accessions, parts, replacements,
          substitutions, renewals, interest, dividends, distributions, rights of
          any kind (including but not limited to stock splits, stock rights,
          voting and preferential rights), products, and proceeds of or
          pertaining to the above including, without limit, cash or other
          property which were proceeds and are recovered by a bankruptcy trustee
          or otherwise as a preferential transfer by Debtor.

In the definition of Collateral, a reference to a type of collateral shall not
be limited by a separate reference to a more specific or narrower type of that
collateral.

2.   WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records. Debtor
          shall, at the request of Bank, mark its records and the Collateral to
          clearly indicate the security interest of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the right and authority to subject it to a security interest
          granted to Bank; (b) none of the Collateral is subject to any security
          interest other than that in favor of Bank; (c) there are no financing
          statements on file, other than in favor of Bank; (d) no person, other
          than Bank, has possession or control (as defined in the Uniform
          Commercial Code) of any Collateral of such nature that perfection of a
          security interest may be accomplished by control; and (e) Debtor
          acquired its rights in the Collateral in the ordinary course of its
          business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank. Debtor will not, without the prior written consent of Bank,
          sell, transfer, lease or grant control to any person other than Bank
          over, or permit to be sold, transferred, leased or controlled (by a
          person other than Bank), any or all of the Collateral, except for
          Inventory in the ordinary course of its business and will not return
          any Inventory to its supplier. Bank or its representatives may at all
          reasonable times inspect the Collateral and may enter upon all
          premises where the Collateral is kept or might be located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue an
          exclusive, perfected and first security interest of Bank in the
          Collateral. Debtor agrees that Bank has no obligation to acquire or
          perfect any lien on or security interest in any asset(s), whether
          realty or personalty, to secure payment of the Indebtedness, and
          Debtor is not relying upon assets in which the Bank may have a lien or
          security interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and bonded in
          a manner satisfactory to Bank. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so, and Debtor agrees to
          repay all amounts so expended by Bank immediately upon demand,
          together with interest at the highest lawful default rate which could
          be charged by Bank on any Indebtedness.

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<Page>

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all amounts so
          expended by Bank immediately upon demand, together with interest at
          the highest lawful default rate which could be charged by Bank on any
          Indebtedness.

     2.7  On each occasion on which Debtor evidences to Bank the account
          balances on and the nature and extent of the Accounts Receivable,
          Debtor shall be deemed to have warranted that except as otherwise
          indicated (a) each of those Accounts Receivable is valid and
          enforceable without performance by Debtor of any act; (b) each of
          those account balances are in fact owing, (c) there are no setoffs,
          recoupments, credits, contra accounts, counterclaims or defenses
          against any of those Accounts Receivable, (d) as to any Accounts
          Receivable represented by a note, trade acceptance, draft or other
          instrument or by any chattel paper or document, the same have been
          endorsed and/or delivered by Debtor to Bank, (e) Debtor has not
          received with respect to any Account Receivable, any notice of the
          death of the related account debtor, or of the dissolution,
          liquidation, termination of existence, insolvency, business failure,
          appointment of a receiver for, assignment for the benefit of creditors
          by, or filing of a petition in bankruptcy by or against, the account
          debtor, and (f) as to each Account Receivable, except as may be
          expressly permitted by Bank to the contrary in another document, the
          account debtor is not an affiliate of Debtor, the United States of
          America or any department, agency or instrumentality of it, or a
          citizen or resident of any jurisdiction outside of the United States.
          Debtor will do all acts and will execute all writings requested by
          Bank to perform, enforce performance of, and collect all Accounts
          Receivable. Debtor shall neither make nor permit any modification,
          compromise or substitution for any Account Receivable without the
          prior written consent of Bank. Debtor shall, at Bank's request,
          arrange for verification of Accounts Receivable directly with account
          debtors or by other methods acceptable to Bank.

     2.8  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws, ordinances, directives,
          orders, statutes, or regulations an object of which is to regulate or
          improve health, safety, or the environment ("Environmental Laws").

     2.9  If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtedness. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.10 At any time and without notice, Bank may (a) cause any or all of the
          Collateral to be transferred to its name or to the name of its
          nominees; (b) receive or collect by legal proceedings or otherwise all
          dividends, interest, principal payments and other sums and all other
          distributions at any time payable or receivable on account of the
          Collateral, and hold the same as Collateral, or apply the same to the
          Indebtedness, the manner and distribution of the application to be in
          the sole discretion of Bank; (c) enter into any extension,
          subordination, reorganization, deposit, merger or consolidation
          agreement or any other agreement relating to or affecting the
          Collateral, and deposit or surrender control of the Collateral, and
          accept other property in exchange for the Collateral and hold or apply
          the property or money so received pursuant to this Agreement; and (d)
          take such actions in its own name or in Debtor's name as Bank, in its
          sole discretion, deems necessary or appropriate to

                                        3
<Page>

          establish exclusive control (as defined in the Uniform Commercial
          Code) over any Collateral of such nature that perfection of the Bank's
          security interest may be accomplished by control.

     2.11 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered.

     2.12 Debtor delivers this Agreement based solely on Debtor's independent
          investigation of (or decision not to investigate) the financial
          condition of Borrower and is not relying on any information furnished
          by Bank. Debtor assumes full responsibility for obtaining any further
          information concerning the Borrower's financial condition, the status
          of the Indebtedness or any other matter which the undersigned may deem
          necessary or appropriate now or later. Debtor waives any duty on the
          part of Bank, and agrees that Debtor is not relying upon nor expecting
          Bank to disclose to Debtor any fact now or later known by Bank,
          whether relating to the operations or condition of Borrower, the
          existence, liabilities or financial condition of any guarantor of the
          Indebtedness, the occurrence of any default with respect to the
          Indebtedness, or otherwise, notwithstanding any effect such fact may
          have upon Debtor's risk or Debtor's rights against Borrower. Debtor
          knowingly accepts the full range of risk encompassed in this
          Agreement, which risk includes without limit the possibility that
          Borrower may incur Indebtedness to Bank after the financial condition
          of Borrower, or Borrower's ability to pay debts as they mature, has
          deteriorated.

     2.13 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilities or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorneys' fees, suffered by any of them as
          a direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws, INCLUDING ANY CLAIMS, DAMAGES,
          FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND
          RESULTING FROM BANK'S OWN NEGLIGENCE, except and to the extent (but
          only to the extent) caused by Bank's gross negligence or willful
          misconduct.

3.   COLLECTION OF PROCEEDS.

     3.1  Debtor agrees to collect and enforce payment of all Collateral until
          Bank shall direct Debtor to the contrary. Immediately upon notice to
          Debtor by Bank and at all times after that, Debtor agrees to fully and
          promptly cooperate and assist Bank in the collection and enforcement
          of all Collateral and to hold in trust for Bank all payments received
          in connection with Collateral and from the sale, lease or other
          disposition of any Collateral, all rights by way of suretyship or
          guaranty and all rights in the nature of a lien or security interest
          which Debtor now or later has regarding Collateral. Immediately upon
          and after such notice, Debtor agrees to (a) endorse to Bank and
          immediately deliver to Bank all payments received on Collateral or
          from the sale, lease or other disposition of any Collateral or arising
          from any other rights or interests of Debtor in the Collateral, in the
          form received by Debtor without commingling with any other funds, and
          (b) immediately deliver to Bank all property in Debtor's possession or
          later coming into Debtor's possession through enforcement of Debtor's
          rights or interests in the Collateral. Debtor irrevocably authorizes
          Bank or any Bank employee or agent to endorse the name of Debtor upon
          any checks or other items which are received in payment for any
          Collateral, and to do any and all things necessary in order to reduce
          these items to money. Bank shall have no duty as to the collection or
          protection of Collateral or the proceeds of it, or as to the
          preservation of any related rights, beyond the use of reasonable care
          in the custody and preservation of Collateral in the possession of
          Bank. Debtor agrees to take all steps necessary to preserve rights
          against prior parties with respect to the Collateral. Nothing in this
          Section 3.1 shall be deemed a consent by Bank to any sale, lease or
          other disposition of any Collateral.

     3.2  Debtor agrees that immediately upon Bank's request (whether or not any
          Event of Default exists) the Indebtedness shall be on a "remittance
          basis" as follows: Debtor shall at its sole expense establish and
          maintain (and Bank, at Bank's option may establish and maintain at
          Debtor's expense): (a) an United States Post Office lock box (the
          "Lock Box"), to which Bank shall have exclusive access and control.
          Debtor expressly authorizes Bank, from time to time, to remove
          contents from the Lock Box, for disposition in accordance with this
          Agreement. Debtor agrees to notify all account debtors and other
          parties obligated to

                                        4
<Page>

          Debtor that all payments made to Debtor (other than payments by
          electronic funds transfer) shall be remitted, for the credit of
          Debtor, to the Lock Box, and Debtor shall include a like statement on
          all invoices; and (b) a non-interest bearing deposit account with Bank
          which shall be titled as designated by Bank (the "Cash Collateral
          Account") to which Bank shall have exclusive access and control.
          Debtor agrees to notify all account debtors and other parties
          obligated to Debtor that all payments made to Debtor by electronic
          funds transfer shall be remitted to the Cash Collateral Account, and
          Debtor, at Bank's request, shall include a like statement on all
          invoices. Debtor shall execute all documents and authorizations as
          required by Bank to establish and maintain the Lock Box and the Cash
          Collateral Account.

     3.3  All items or amounts which are remitted to the Lock Box, to the Cash
          Collateral Account, or otherwise delivered by or for the benefit of
          Debtor to Bank on account of partial or full payment of, or with
          respect to, any Collateral shall, at Bank's option, (a) be applied to
          the payment of the Indebtedness, whether then due or not, in such
          order or at such time of application as Bank may determine in its sole
          discretion, or, (b) be deposited to the Cash Collateral Account.
          Debtor agrees that Bank shall not be liable for any loss or damage
          which Debtor may suffer as a result of Bank's processing of items or
          its exercise of any other rights or remedies under this Agreement,
          including without limitation indirect, special or consequential
          damages, loss of revenues or profits, or any claim, demand or action
          by any third party arising out of or in connection with the processing
          of items or the exercise of any other rights or remedies under this
          Agreement. Debtor agrees to indemnify and hold Bank harmless from and
          against all such third party claims, demands or actions, and all
          related expenses or liabilities, including, without limitation,
          attorneys' fees and INCLUDING CLAIMS, DAMAGES, FINES, EXPENSES,
          LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND RESULTING FROM BANK'S
          OWN NEGLIGENCE except to the extent (but only to the extent) caused by
          Bank's gross negligence or willful misconduct.

4.   DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise; or

          (b)  Any failure or neglect to comply with, or breach of or default
               under, any term of this Agreement, or any other agreement or
               commitment between Borrower, Debtor, or any guarantor of any of
               the Indebtedness ("Guarantor") and Bank; or

          (c)  Any warranty, representation, financial statement, or other
               information made, given or furnished to Bank by or on behalf of
               Borrower, Debtor, or any Guarantor shall be, or shall prove to
               have been, false or materially misleading when made, given, or
               furnished; or

          (d)  Any loss, theft, substantial damage or destruction to or of any
               Collateral or the issuance or filing of any attachment, levy,
               garnishment or the commencement of any proceeding in connection
               with any Collateral or of any other judicial process of, upon or
               in respect of Borrower, Debtor, any Guarantor, or any Collateral;
               or

          (e)  Sale or other disposition by Borrower, Debtor, or any Guarantor
               of any substantial portion of its assets or property or voluntary
               suspension of the transaction of business by Borrower, Debtor, or
               any Guarantor, or death, dissolution, termination of existence,
               merger, consolidation, insolvency, business failure, or
               assignment for the benefit of creditors of or by Borrower,
               Debtor, or any Guarantor; or commencement of any proceedings
               under any state or federal bankruptcy or insolvency laws or laws
               for the relief of debtors by or against Borrower, Debtor, or any
               Guarantor; or the appointment of a receiver, trustee, court
               appointee, sequestrator or otherwise, for all or any part of the
               property of Borrower, Debtor, or any Guarantor; or

          (f)  Bank deems the margin of Collateral insufficient or itself
               insecure, in good faith believing that the prospect of payment of
               the Indebtedness or performance of this Agreement is impaired or
               shall fear deterioration, removal, or waste of Collateral; or

                                        5
<Page>

          (g)  An Event of Default shall occur under the Loan Agreement, any
               Loan Document, or any other instrument, agreement or other
               document evidencing, securing or otherwise relating to any of the
               Indebtedness.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any right or remedy available to it including, without
          limitation, any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other dispositions, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement; and except as provided in this Agreement, all
               notice of sale, lease or other disposition, and advertisement,
               and other notice or demand, any right or equity of redemption,
               and any obligation of a prospective purchaser or lessee to
               inquire as to the power and authority of Bank to sell, lease, or
               otherwise dispose of the Collateral or as to the application by
               Bank of the proceeds of sale or otherwise, which would otherwise
               be required by, or available to Debtor under, applicable law are
               expressly waived by Debtor to the fullest extent permitted.

          At any sale pursuant to this Section 4.2, whether under the power of
          sale, by virtue of judicial proceedings or otherwise, it shall not be
          necessary for Bank or a public officer under order of a court to have
          present physical or constructive possession of Collateral to be sold.
          The recitals contained in any conveyances and receipts made and given
          by Bank or the public officer to any purchaser at any sale made
          pursuant to this Agreement shall, to the extent permitted by
          applicable law, conclusively establish the truth and accuracy of the
          matters stated (including, without limit, as to the amounts of the
          principal of and interest on the Indebtedness, the accrual and
          nonpayment of it and advertisement and conduct of the sale); and all
          prerequisites to the sale shall be presumed to have been satisfied and
          performed. Upon any sale of any Collateral, the receipt of the officer
          making the sale under judicial proceedings or of Bank shall be
          sufficient discharge to the purchaser for the purchase money, and the
          purchaser shall not be obligated to see to the application of the
          money. Any sale of any Collateral under this Agreement shall be a
          perpetual bar against Debtor with respect to that Collateral. At any
          sale or other disposition of the Collateral pursuant to this Section
          4.2, Bank disclaims all warranties which would otherwise be given
          under the Uniform Commercial Code, including without limit a
          disclaimer of any warranty relating to title, possession, quiet
          enjoyment or the like, and Bank may communicate these disclaimers to a
          purchaser at such disposition. This disclaimer of warranties will not
          render the sale commercially unreasonable.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in the Collateral and direct
          payment of it to Bank. Bank may, itself, upon the occurrence of any
          Event of Default so notify and direct any account debtor or obligor.
          At the request of Bank, whether or not an Event of Default shall have
          occurred, Debtor shall immediately take such actions as the Bank shall
          request to establish exclusive control (as defined in the Uniform
          Commercial Code) by Bank over any Collateral which is of such a nature
          that perfection of a security interest may be accomplished by control.

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank in such order as the Bank,
          in its discretion, deems appropriate including, without limitation,
          the following

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<Page>

          order: first upon all expenses authorized by the Uniform Commercial
          Code and all reasonable attorneys' fees and legal expenses incurred by
          Bank; the balance of the proceeds of the sale or other disposition
          shall be applied in the payment of the Indebtedness, first to
          interest, then to principal, then to remaining Indebtedness and the
          surplus, if any, shall be paid over to Debtor or to such other
          person(s) as may be entitled to it under applicable law. Debtor shall
          remain liable for any deficiency, which it shall pay to Bank
          immediately upon demand. Debtor agrees that Secured Party shall be
          under no obligation to accept any noncash proceeds in connection with
          any sale or disposition of Collateral unless failure to do so would be
          commercially unreasonable. If Secured Party agrees in its sole
          discretion to accept noncash proceeds (unless the failure to do so
          would be commercially unreasonable), Secured Party may ascribe any
          commercially reasonable value to such proceeds. Without limiting the
          foregoing, Secured Party may apply any discount factor in determining
          the present value of proceeds to be received in the future or may
          elect to apply proceeds to be received in the future only as and when
          such proceeds are actually received in cash by Secured Party.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law or in
          equity for the collection of the Indebtedness or for the recovery of
          any other sum to which Bank may be entitled for the breach of this
          Agreement by Debtor. Nothing in this Agreement shall reduce or release
          in any way any rights or security interests of Bank contained in any
          existing agreement between Borrower, Debtor, or any Guarantor and
          Bank.

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

     4.7  Debtor (a) irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor and (b) authorizes Bank or any
          agent of Bank, in its own name, at Debtor's expense, to do any of the
          following, as Bank, in its sole discretion, deems appropriate:

          (i)    to demand, receive, sue for, and give receipts or acquittances
                 for any moneys due or to become due on any Collateral
                 (including, without limit, to draft against Collateral) and to
                 endorse any item representing any payment on or proceeds of the
                 Collateral;

          (ii)   to execute and file in the name of and on behalf of Debtor all
                 financing statements or other filings or Collateral control
                 agreements deemed necessary or desirable by Bank to evidence,
                 perfect, or continue the security interests granted in this
                 Agreement; and

          (iii)  to do and perform any act on behalf of Debtor permitted or
                 required under this Agreement.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

     4.9  The following shall be the basis for any finder of fact's
          determination of the value of any Collateral which is the subject
          matter of a disposition giving rise to a calculation of any surplus or
          deficiency under Section 9.615 (f) of the Uniform Commercial Code (as
          in effect on or after July 1, 2001): (a) the Collateral which is the
          subject matter of the disposition shall be valued in an "as is"
          condition as of the date of the disposition, without any assumption or
          expectation that such Collateral will be repaired or improved in any
          manner; (b) the valuation shall be based upon an assumption that the
          transferee of such Collateral desires a resale of the Collateral for
          cash promptly (but no later than 30 days) following the disposition;
          (c) all reasonable closing costs customarily borne by the seller in
          commercial sales transactions relating to property similar to such
          Collateral shall be deducted including, without limitation, brokerage
          commissions, tax prorations, attorneys' fees, whether inside or
          outside counsel is used, and marketing costs; (d) the value of the
          Collateral which is the subject matter of the disposition shall be
          further discounted to account for any estimated holding costs
          associated with maintaining such Collateral pending sale (to the
          extent not accounted for in (c) above), and other maintenance,
          operational and ownership expenses; and (e) any expert opinion
          testimony given or considered

                                        7
<Page>

          in connection with a determination of the value of such Collateral
          must be given by persons having at least 5 years experience in
          appraising property similar to the Collateral and who have conducted
          and prepared a complete written appraisal of such Collateral taking
          into consideration the factors set forth above. The "value" of any
          such Collateral shall be a factor in determining the amount of
          proceeds which would have been realized in a disposition to a
          transferee other than a secured party, a person related to a secured
          party or a secondary obligor under Section 9-615(f) of the Uniform
          Commercial Code.

5.   MISCELLANEOUS.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.15 below.

     5.2  Debtor will give Bank not less than 90 days prior written notice of
          all contemplated changes in Debtor's name, location, chief executive
          office, principal place of business, and/or location of any
          Collateral, but the giving of this notice shall not cure any Event of
          Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement. In
          connection with the above, but without limiting its ability to make
          other disclosures to the full extent allowable, Bank may disclose all
          documents and information which Bank now or later has relating to
          Debtor, the Indebtedness or this Agreement, however obtained. Debtor
          further agrees that Bank may provide information relating to this
          Agreement or relating to Debtor or the Indebtedness to the Bank's
          parent, affiliates, subsidiaries, and service providers.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone. Any such action shall not constitute acceptance of
          collateral in discharge of any portion of the Indebtedness.

     5.6  Debtor, to the extent not expressly prohibited by applicable law,
          waives any right to require the Bank to: (a) proceed against any
          person or property; (b) give any notice of sale in a manner or at such
          time other than as required by Sections 9.611, 9.612 and 9.613 of the
          Uniform Commercial Code; or (c) pursue any other remedy in the Bank's
          power. Debtor waives notice of acceptance of this Agreement and
          presentment, demand, protest, notice of protest, dishonor, notice of
          dishonor, notice of default, notice of intent to accelerate or demand
          payment or notice of acceleration of any Indebtedness, any and all
          other notices to which the undersigned might otherwise be entitled,
          and diligence in collecting any Indebtedness, and agree(s) that the
          Bank may, once or any number of times, modify the terms of any
          Indebtedness, compromise, extend, increase, accelerate, renew or
          forbear to enforce payment of any or all Indebtedness, or permit
          Borrower to incur additional Indebtedness, all without notice to
          Debtor and without affecting in any manner the unconditional
          obligation of Debtor under this Agreement. Debtor unconditionally and
          irrevocably waives each and every defense and setoff of any nature
          which, under principles of guaranty or otherwise, would operate to
          impair or diminish in any way the obligation of Debtor under this
          Agreement, and acknowledges that such waiver is by this reference
          incorporated into each security agreement, collateral assignment,
          pledge and/or other document from Debtor now or later securing the
          Indebtedness, and acknowledges that as of the date of this Agreement
          no such defense or setoff exists.

     5.7  Debtor waives any and all rights (whether by subrogation, indemnity,
          reimbursement, or otherwise) to recover from Borrower any amounts paid
          or the value of any Collateral given by Debtor pursuant to this
          Agreement until such time as all of the Indebtedness has been fully
          paid.

     5.8  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least ten days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other disposition is to be made, unless a

                                        8
<Page>

          shorter notice period is reasonable under the circumstances. A notice
          shall be deemed to be given under this Agreement when delivered to
          Debtor or when placed in an envelope addressed to Debtor and
          deposited, with postage prepaid, in a post office or official
          depository under the exclusive care and custody of the United States
          Postal Service or delivered to an overnight courier. The mailing shall
          be by overnight courier, certified, or first class mail.

     5.9  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuation.

     5.10 This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the Indebtedness or any portion of it, and shall bind Debtor and
          the heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.10 is deemed a consent by Bank to any
          assignment by Debtor.

     5.11 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

     5.12 Except as otherwise expressly provided in this Agreement, all terms in
          this Agreement which are defined in the Uniform Commercial Code shall
          have the meanings assigned to them in Article 9 (or, absent definition
          in Article 9, in any other Article) of the Uniform Commercial Code, as
          those meanings may be amended, revised or replaced from time to time.
          "Uniform Commercial Code" means the Texas Business and Commerce Code
          as amended, revised or replaced from time to time. Notwithstanding the
          foregoing, the parties intend that the terms used herein which are
          defined in the Uniform Commercial Code have, at all times, the
          broadest and most inclusive meanings possible. Accordingly, if the
          Uniform Commercial Code shall in the future be amended or held by a
          court to define any term used herein more broadly or inclusively than
          the Uniform Commercial Code in effect on the date of this Agreement,
          then such term, as used herein, shall be given such broadened meaning.
          If the Uniform Commercial Code shall in the future be amended or held
          by a court to define any term used herein more narrowly, or less
          inclusively, than the Uniform Commercial Code in effect on the date of
          this Agreement, such amendment or holding shall be disregarded in
          defining terms used in this Agreement.

     5.13 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. THIS AGREEMENT
          SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
          LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS
          PRINCIPLES.

     5.14 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

                                        9
<Page>

     5.15 Debtor represents and warrants that Debtor's exact name is the name
          set forth in this Agreement. Debtor further represents and warrants
          the following and agrees that Debtor is, and at all times shall be,
          located at the following mailing address: 5221 N O'Connor Blvd, Suite
          500, Irving, Texas 75039.

          Debtor is a registered organization organized under the laws of the
          United States, and Debtor is located in the state that United States
          law and the Uniform Commercial Code designates as its location. Based
          on the foregoing, Debtor is located (as determined pursuant to the
          Uniform Commercial Code) in the State of Delaware.

          If Collateral is located at other than the address specified above,
          such Collateral is located and shall be maintained at

          ----------------------------------------------------------------------
          STREET ADDRESS

          ----------------------------------------------------------------------
          CITY             STATE             ZIP CODE                COUNTY

          Collateral shall be maintained only at the locations identified in
          this Section 5.15.

     5.16 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commercial
          Code and may be filed by Bank in any filing office.

     5.17 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commercial Code, but the obligations contained in Section 2.13 of this
          Agreement shall survive termination.

     5.18 Debtor agrees to reimburse the Bank upon demand for any and all costs
          and expenses (including, without limit, court costs, legal expenses
          and reasonable attorneys' fees, whether inside or outside counsel is
          used, whether or not suit is instituted and, if suit is instituted,
          whether at the trial court level, appellate level, in a bankruptcy,
          probate or administrative proceeding or otherwise) incurred in
          enforcing or attempting to enforce this Agreement or in exercising or
          attempting to exercise any right or remedy under this Agreement or
          incurred in any other matter or proceeding relating to this Security
          Agreement.

6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.

7.   THIS IS A TEXAS SPECIFIC PROVISION: THIS WRITTEN LOAN AGREEMENT (AS DEFINED
     BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE) REPRESENTS THE
     FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
     OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
     THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

8.   SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)

                                       10
<Page>

DEBTOR:                                           BANK:

THOMAS GROUP OF SWEDEN, INC.,                     COMERICA BANK-TEXAS,
a Delaware corporation                            a Texas banking association

By:                                               By:
     ----------------------------------           ------------------------------
     Robert French                                Robin M. Kain
     Title:                                       Vice President

                                       11
<Page>

[COMERICA LOGO]    SECURITY AGREEMENT
                   (Negotiable Collateral)

As of March 29, 2002, for value received, the undersigned ("Debtor") pledges,
assigns and grants to Comerica Bank-Texas, a Texas banking association ("Bank"),
whose address is P. O. Box 650282, Dallas, Texas 75265-0282, Attention:
Margareth Fanini, a continuing security interest and lien (any pledge,
assignment, security interest or other lien arising hereunder is sometimes
referred to herein as a "security interest") in the Collateral (as defined
below) to secure payment when due, whether by stated maturity, demand
acceleration or otherwise, of all existing and future indebtedness
("Indebtedness") to the Bank of Thomas Group, Inc. ("Borrower") and/or Debtor.
Indebtedness includes without limit any and all obligations or liabilities of
the Borrower and/or Debtor to the Bank, whether absolute or contingent, direct
or indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, known or unknown originally payable to the Bank or to a third party and
subsequently acquired by the Bank including, without limitation, any late
charges, loan fees or charges, and overdraft indebtedness, any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of any security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and/or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting Indebtedness, including without limit attorneys'
fees. Debtor agrees to pay Bank all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorneys'
fees shall be deemed a reference to reasonable fees, costs, and expenses of
counsel and paralegals, whether inside or outside counsel is used, whether or
not a suit or action is instituted, and to court costs if a suit or action is
instituted, and whether attorneys' fees or court costs are incurred at the trial
court level, on appeal, in a bankruptcy, administrative or probate proceeding or
otherwise.

Debtor further covenants, agrees, represents and warrants as follows:

1.   COLLATERAL shall mean:

     (a)  Debtor's shares of stock (up to the percentages indicated) in the
          companies listed on Schedule I attached hereto and incorporated herein
          for all purposes;

     (b)  all goods, instruments (including, without limit, promissory notes),
          documents (including, without limit, negotiable documents), policies
          and certificates of insurance, deposit accounts, and money, investment
          property or other property (except real property which is not a
          fixture) which are now or later in possession or control of Bank, or
          as to which Bank now or later controls possession by documents or
          otherwise, and

     (c)  all additions, attachments, accessions, parts, replacements,
          substitutions, renewals, interest, stock dividends, dividends,
          securities, distributions, revenues, other property rights of any kind
          (including but not limited to stock splits, stock rights, voting and
          preferential rights), products, and proceeds of or pertaining to the
          above including, without limit, cash or other property which were
          proceeds and are recovered by a bankruptcy trustee or otherwise as a
          preferential transfer by Debtor.

     In the definition of Collateral, a reference to a type of collateral shall
     not be limited by a separate reference to a more specific or narrower type
     of that collateral.

2.   WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records. Debtor
          shall, at the request of Bank, mark its records and the Collateral to
          clearly indicate the security interest of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the

<Page>

          right and authority to subject it to a security interest granted to
          Bank; (b) none of the Collateral is subject to any security interest
          other than that in favor of Bank; (c) there are no financing
          statements on file, other than in favor of Bank; (d) no person, other
          than Bank, has possession or control (as defined in the Uniform
          Commercial Code) of any Collateral of such nature that perfection of a
          security interest may be accomplished by control; and (e) Debtor
          acquired its rights in the Collateral in the ordinary course of its
          business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank. Debtor will not, without the prior written consent of Bank,
          sell, transfer or lease, or permit to be sold, transferred or leased,
          any or all of the Collateral. Bank or its representatives may at all
          reasonable times inspect the Collateral and may enter upon all
          premises where the Collateral is kept or might be located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue an
          exclusive perfected and first security interest of Bank in the
          Collateral. Debtor agrees that Bank has no obligation to acquire or
          perfect any lien on or security interest in any asset(s), whether
          realty or personalty, to secure payment of the Indebtedness, and
          Debtor is not relying upon assets in which the Bank may have a lien or
          security interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and bonded in
          a manner satisfactory to Bank. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so, and Debtor agrees to
          repay all amounts so expended by Bank immediately upon demand,
          together with interest at the highest lawful default rate which could
          be charged by Bank on any Indebtedness.

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all amounts so
          expended by Bank immediately upon demand, together with interest at
          the highest lawful default rate which could be charged by Bank on any
          Indebtedness.

     2.7  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws, ordinances, directives,
          orders, statutes, or regulations an object of which is to regulate or
          improve health, safety, or the environment ("Environmental Laws").

     2.8  If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtedness. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.9  At any time and without notice, Bank may (a) cause any or all of the
          Collateral to be transferred to its name or to the name of its
          nominees; (b) receive or collect by legal proceedings or otherwise all
          dividends, interest, principal payments and other sums and all other
          distributions at any time payable or receivable on account of

                                        2
<Page>

          the Collateral, and hold the same as Collateral, or apply the same to
          the Indebtedness, the manner and distribution of the application to be
          in the sole discretion of Bank; (c) enter into any extension,
          subordination, reorganization, deposit, merger or consolidation
          agreement or any other agreement relating to or affecting the
          Collateral, and deposit or surrender control of the Collateral, and
          accept other property in exchange for the Collateral and hold or apply
          the property or money so received pursuant to this Agreement; and (d)
          take such actions in its own name or in Debtor's name as Bank, in its
          sole discretion, deems necessary or appropriate to establish exclusive
          control (as defined in the Uniform Commercial Code) over any
          Collateral of such nature that perfection of the Bank's security
          interest may be accomplished by control.

     2.10 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered.

     2.11 Debtor delivers this Agreement based solely on Debtor's independent
          investigation of (or decision not to investigate) the financial
          condition of Borrower and is not relying on any information furnished
          by Bank. Debtor assumes full responsibility for obtaining any further
          information concerning the Borrower's financial condition, the status
          of the Indebtedness or any other matter which the undersigned may deem
          necessary or appropriate now or later. Debtor waives any duty on the
          part of Bank, and agrees that Debtor is not relying upon nor expecting
          Bank to disclose to Debtor any fact now or later known by Bank,
          whether relating to the operations or condition of Borrower, the
          existence, liabilities or financial condition of any guarantor of the
          Indebtedness, the occurrence of any default with respect to the
          Indebtedness, or otherwise, notwithstanding any effect such fact may
          have upon Debtor's risk or Debtor's rights against Borrower. Debtor
          knowingly accepts the full range of risk encompassed in this
          Agreement, which risk includes without limit the possibility that
          Borrower may incur Indebtedness to Bank after the financial condition
          of Borrower, or Borrower's ability to pay debts as they mature, has
          deteriorated.

     2.12 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilities or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorneys' fees, suffered by any of them as
          a direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws, INCLUDING ANY CLAIMS, DAMAGES,
          FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND
          RESULTING FROM BANKS OWN NEGLIGENCE, except and to the extent (but
          only to the extent) caused by Bank's gross negligence or willful
          misconduct.

3.   COLLECTION OF PROCEEDS. Debtor agrees to collect and enforce payment of all
     Collateral until Bank shall direct Debtor to the contrary. Immediately upon
     notice to Debtor by Bank and at all times after that, Debtor agrees to
     fully and promptly cooperate and assist Bank in the collection and
     enforcement of all Collateral and to hold in trust for Bank all payments
     received in connection with Collateral and from the sale, lease or other
     disposition of any Collateral, all rights by way of suretyship or guaranty
     and all rights in the nature of a lien or security interest which Debtor
     now or later has regarding Collateral. Immediately upon and after such
     notice, Debtor agrees to (a) endorse to Bank and immediately deliver to
     Bank all payments received on Collateral or from the sale, lease or other
     disposition of any Collateral or arising from any other rights or interests
     of Debtor in the Collateral, in the form received by Debtor without
     commingling with any other funds, and (b) immediately deliver to Bank all
     property in Debtor's possession or later coming into Debtor's possession
     through enforcement of Debtor's rights or interests in the Collateral.
     Debtor irrevocably authorizes Bank or any Bank employee or agent to endorse
     the name of Debtor upon any checks or other items which are received in
     payment for any Collateral, and to do any and all things necessary in order
     to reduce these items to money. Bank shall have no duty as to the
     collection or protection of Collateral or the proceeds of it, nor as to the
     preservation of any related rights, beyond the use of reasonable care in
     the custody and preservation of Collateral in the possession of Bank.
     Debtor agrees to take all steps necessary to preserve rights against prior
     parties with respect to the Collateral. Nothing in this Section 3 shall be
     deemed a consent by Bank to any sale, lease or other disposition of any
     Collateral.

                                        3
<Page>

4.   DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise; or

          (b)  Any failure or neglect to comply with, or breach of or default
               under, any term of this Agreement, or any other agreement or
               commitment between Borrower, Debtor, or any guarantor of any of
               the Indebtedness ("Guarantor") and Bank; or

          (c)  Any warranty, representation, financial statement, or other
               information made, given or furnished to Bank by or on behalf of
               Borrower, Debtor, or any Guarantor shall be, or shall prove to
               have been, false or materially misleading when made, given, or
               furnished; or

          (d)  Any loss, theft, substantial damage or destruction to or of any
               Collateral, or the issuance or filing of any attachment, levy,
               garnishment or the commencement of any proceeding in connection
               with any Collateral or of any other judicial process of, upon or
               in respect of Borrower, Debtor, any Guarantor, or any Collateral;
               or

          (e)  Sale or other disposition by Borrower, Debtor, or any Guarantor
               of any substantial portion of its assets or property or voluntary
               suspension of the transaction of business by Borrower, Debtor, or
               any Guarantor, or death, dissolution, termination of existence,
               merger, consolidation, insolvency, business failure, or
               assignment for the benefit of creditors of or by Borrower,
               Debtor, or any Guarantor; or commencement of any proceedings
               under any state or federal bankruptcy or insolvency laws or laws
               for the relief of debtors by or against Borrower, Debtor, or any
               Guarantor; or the appointment of a receiver, trustee, court
               appointee, sequestrator or otherwise, for all or any part of the
               property of Borrower, Debtor, or any Guarantor; or

          (f)  Bank deems the margin of Collateral insufficient or itself
               insecure, in good faith believing that the prospect of payment of
               the Indebtedness or performance of this Agreement is impaired or
               shall fear deterioration, removal, or waste of Collateral; or

          (g)  An event of default shall occur under any instrument, agreement
               or other document evidencing, securing or otherwise relating to
               any of the Indebtedness.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any right or remedy available to it, including, without
          limitation, any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other dispositions, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement; and except as provided in this Agreement, all
               notice of sale, lease or other disposition,

                                        4
<Page>

               and advertisement, and other notice or demand, any right or
               equity of redemption, and any obligation of a prospective
               purchaser or lessee to inquire as to the power and authority of
               Bank to sell, lease, or otherwise dispose of the Collateral or as
               to the application by Bank of the proceeds of sale or otherwise,
               which would otherwise be required by, or available to Debtor
               under, applicable law are expressly waived by Debtor to the
               fullest extent permitted.

          At any sale pursuant to this Section 4.2, whether under the power of
          sale, by virtue of judicial proceedings or otherwise, it shall not be
          necessary for Bank or a public officer under order of a court to have
          present physical or constructive possession of Collateral to be sold.
          The recitals contained in any conveyances and receipts made and given
          by Bank or the public officer to any purchaser at any sale made
          pursuant to this Agreement shall, to the extent permitted by
          applicable law, conclusively establish the truth and accuracy of the
          matters stated (including, without limit, as to the amounts of the
          principal of and interest on the Indebtedness, the accrual and
          nonpayment of it and advertisement and conduct of the sale); and all
          prerequisites to the sale shall be presumed to have been satisfied and
          performed. Upon any sale of any Collateral, the receipt of the officer
          making the sale under judicial proceedings or of Bank shall be
          sufficient discharge to the purchaser for the purchase money, and the
          purchaser shall not be obligated to see to the application of the
          money. Any sale of any Collateral under this Agreement shall be a
          perpetual bar against Debtor with respect to that Collateral. Any sale
          of any Collateral under this Agreement shall be a perpetual bar
          against Debtor with respect to that Collateral. At any sale or other
          disposition of the Collateral pursuant to this Section 4.2, Bank
          disclaims all warranties which would otherwise be given under the
          Uniform Commercial Code, including without limit a disclaimer of any
          warranty relating to title, possession, quiet enjoyment or the like,
          and Bank may communicate these disclaimers to a purchaser at such
          disposition. This disclaimer of warranties will not render the sale
          commercially unreasonable.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in any Collateral and direct
          payment of it to Bank. Bank may, itself, upon the occurrence of any
          Event of Default so notify and direct any account debtor or obligor.
          At the request of Bank, whether or not an Event of Default shall have
          occurred, Debtor shall immediately take such actions as the Bank shall
          request to establish exclusive control (as defined in the Uniform
          Commercial Code) by Bank over any Collateral which is of such a nature
          that perfection of a security interest may be accomplished by control.

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank in such order as the Bank,
          in its discretion, deems appropriate including, without limitation,
          the following order: first upon all expenses authorized by the Uniform
          Commercial Code and all reasonable attorneys' fees and legal expenses
          incurred by Bank; the balance of the proceeds of the sale or other
          disposition shall be applied in the payment of the Indebtedness, first
          to interest, then to principal, then to remaining Indebtedness and the
          surplus, if any, shall be paid over to Debtor or to such other
          person(s) as may be entitled to it under applicable law. Debtor shall
          remain liable for any deficiency, which it shall pay to Bank
          immediately upon demand. Debtor agrees that Secured Party shall be
          under no obligation to accept any noncash proceeds in connection with
          any sale or disposition of Collateral unless failure to do so would be
          commercially unreasonable. If Secured Party agrees in its sole
          discretion to accept noncash proceeds (unless the failure to do so
          would be commercially unreasonable), Secured Party may ascribe any
          commercially reasonable value to such proceeds. Without limiting the
          foregoing, Secured Party may apply any discount factor in determining
          the present value of proceeds to be received in the future or may
          elect to apply proceeds to be received in the future only as and when
          such proceeds are actually received in cash by Secured Party.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law or in
          equity for the collection of the Indebtedness or for the recovery of
          any other sum to which Bank may be entitled for the breach of this
          Agreement by Debtor. Nothing in this Agreement shall reduce or release
          in any way any rights or security interests of Bank contained in any
          existing agreement between Borrower, Debtor, or any Guarantor and
          Bank.

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

                                        5
<Page>

     4.7  Debtor (a) irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor and (b) authorizes Bank or any
          agent of Bank, in its own name, at Debtor's expense, to do any of the
          following, as Bank, in its sole discretion, deems appropriate:

          (i)    to demand, receive, sue for, and give receipts or acquittances
                 for any moneys due or to become due with respect to any
                 Collateral and to endorse any item representing any payment on
                 or proceeds of the Collateral;

          (ii)   to execute and file in the name of and on behalf of Debtor all
                 financing statements or other filings deemed necessary or
                 desirable by Bank to evidence, perfect, or continue the
                 security interests granted in this Agreement; and

          (iii)  to do and perform any act on behalf of Debtor permitted or
                 required under this Agreement.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

     4.9  The following shall be the basis for any finder of fact's
          determination of the value of any Collateral which is the subject
          matter of a disposition giving rise to a calculation of any surplus or
          deficiency under Section 9.615(f) of the Uniform Commercial Code (as
          in effect on or after July 1, 2001): (a) the Collateral which is the
          subject matter of the disposition shall be valued in an "as is"
          condition as of the date of the disposition, without any assumption or
          expectation that such Collateral will be repaired or improved in any
          manner; (b) the valuation shall be based upon an assumption that the
          transferee of such Collateral desires a resale of the Collateral for
          cash promptly (but no later than 30 days) following the disposition;
          (c) all reasonable closing costs customarily borne by the seller in
          commercial sales transactions relating to property similar to such
          Collateral shall be deducted including, without limitation, brokerage
          commissions, tax prorations, attorneys' fees, whether inside or
          outside counsel is used, and marketing costs; (d) the value of the
          Collateral which is the subject matter of the disposition shall be
          further discounted to account for any estimated holding costs
          associated with maintaining such Collateral pending sale (to the
          extent not accounted for in (c) above), and other maintenance,
          operational and ownership expenses; and (e) any expert opinion
          testimony given or considered in connection with a determination of
          the value of such Collateral must be given by persons having at least
          5 years experience in appraising property similar to the Collateral
          and who have conducted and prepared a complete written appraisal of
          such Collateral taking into consideration the factors set forth above.
          The "value" of any such Collateral shall be a factor in determining
          the amount of proceeds which would have been realized in a disposition
          to a transferee other than a secured party, a person related to a
          secured party or a secondary obligor under Section 9.615(f) of the
          Uniform Commercial Code.

5.   MISCELLANEOUS.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.15 below.

     5.2  Debtor will give Bank not less than 90 days prior written notice of
          all contemplated changes in Debtor's name, location, chief executive
          office, principal place of business, and/or location of any
          Collateral, but the giving of this notice shall not cure any Event of
          Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement. In
          connection with the above, but without limiting its ability to make
          other disclosures to the full extent allowable, Bank may disclose all
          documents and information which Bank now or later has relating to
          Debtor, the Indebtedness or this Agreement, however obtained. Debtor
          further agrees that Bank may provide information relating to this

                                        6
<Page>

          Agreement or relating to Debtor or the Indebtedness to the Bank's
          parent, affiliates, subsidiaries, and service providers.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone. Any such action shall not constitute acceptance of
          collateral in discharge of any portion of the Indebtedness.

     5.6  Debtor, to the extent not expressly prohibited by applicable law,
          waives any right to require the Bank to: (a) proceed against any
          person or property; (b) give any notice of sale in a manner or at such
          time other than as required by Sections 9.611, 9.612 and 9.613 of the
          Uniform Commercial Code; or (c) pursue any other remedy in the Bank's
          power. Debtor waives notice of acceptance of this Agreement and
          presentment, demand, protest, notice of protest, dishonor, notice of
          dishonor, notice of default, notice of intent to accelerate or demand
          payment or notice of acceleration of any Indebtedness, any and all
          other notices to which the undersigned might otherwise be entitled,
          and diligence in collecting any Indebtedness, and agree(s) that the
          Bank may, once or any number of times, modify the terms of any
          Indebtedness, compromise, extend, increase, accelerate, renew or
          forbear to enforce payment of any or all Indebtedness, or permit
          Borrower to incur additional Indebtedness, all without notice to
          Debtor and without affecting in any manner the unconditional
          obligation of Debtor under this Agreement. Debtor unconditionally and
          irrevocably waives each and every defense and setoff of any nature
          which, under principles of guaranty or otherwise, would operate to
          impair or diminish in any way the obligation of Debtor under this
          Agreement, and acknowledges that such waiver is by this reference
          incorporated into each security agreement, collateral assignment,
          pledge and/or other document from Debtor now or later securing the
          Indebtedness, and acknowledges that as of the date of this Agreement
          no such defense or setoff exists.

     5.7  Debtor waives any and all rights (whether by subrogation, indemnity,
          reimbursement, or otherwise) to recover from Borrower any amounts paid
          or the value of any Collateral given by Debtor pursuant to this
          Agreement until such time as all of the Indebtedness has been fully
          paid.

     5.8  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least ten days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other disposition is to be made, unless a shorter notice period is
          reasonable under the circumstances. A notice shall be deemed to be
          given under this Agreement when delivered to Debtor or when placed in
          an envelope addressed to Debtor and deposited, with postage prepaid,
          in a post office or official depository under the exclusive care and
          custody of the United States Postal Service or delivered to an
          overnight courier. The mailing shall be by overnight courier,
          certified, or first class mail.

     5.9  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuation.

     5.10 This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the Indebtedness or any portion of it, and shall bind Debtor and
          the heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.10 is deemed a consent by Bank to any
          assignment by Debtor.

     5.11 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

                                        7
<Page>

     5.12 Except as otherwise provided in this Agreement, all terms in this
          Agreement have the meanings assigned to them in Article 9 (or, absent
          definition in Article 9, in any other Article) of the Uniform
          Commercial Code, as those meanings may be amended, revised or replaced
          from time to time. "Uniform Commercial Code" means the Texas Business
          and Commerce Code as amended, revised or replaced from time to time.
          Notwithstanding the foregoing, the parties intend that the terms used
          herein which are defined in the Uniform Commercial Code have, at all
          times, the broadest and most inclusive meanings possible. Accordingly,
          if the Uniform Commercial Code shall in the future be amended or held
          by a court to define any term used herein more broadly or inclusively
          than the Uniform Commercial Code in effect on the date of this
          Agreement, then such term, as used herein, shall be given such
          broadened meaning. If the Uniform Commercial Code shall in the future
          be amended or held by a court to define any term used herein more
          narrowly, or less inclusively, than the Uniform Commercial Code in
          effect on the date of this Agreement, such amendment or holding shall
          be disregarded in defining terms used in this Agreement.

     5.13 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. THIS AGREEMENT
          SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
          LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS
          PRINCIPLES.

     5.14 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

     5.15 Debtor represents and warrants that Debtor's exact name is the name
          set forth in this Agreement. Debtor further represents and warrants
          the following and agrees that Debtor is, and at all times shall be,
          located in the following place: 5221 N. O'Connor Boulevard, Suite 500,
          Irving, Texas 75039.

          Debtor is a registered organization organized under the laws of the
          United States, and Debtor is located in the state that United States
          law designates as its location or, if United States law authorizes the
          Debtor to designate the state for its location, the state designated
          by Debtor, or if neither of the foregoing are applicable, at the
          District of Columbia. Based on the foregoing, Debtor is located (as
          determined pursuant to the Uniform Commercial Code) in the State of
          Delaware.

          The Collateral is located and shall be maintained at the following
          location(s)

          -------------------------------------------------------------------
          STREET ADDRESS

          -------------------------------------------------------------------
          CITY              STATE              ZIP CODE              COUNTY

          Collateral shall be maintained only at the locations identified in
          this Section 5.15.

     5.16 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commercial
          Code and may be filed by Bank in any filing office.

     5.17 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commercial Code, but the obligations contained in Section 2.13 of this
          Agreement shall survive termination.

     5.18 Debtor agrees to reimburse the Bank upon demand for any and all costs
          and expenses (including, without limit, court costs, legal expenses
          and reasonable attorneys' fees, whether inside or outside counsel is
          used, whether or not suit is instituted and, if suit is instituted,
          whether at the trial court level, appellate level, in a bankruptcy,
          probate or administrative proceeding or otherwise) incurred in
          enforcing or attempting to enforce

                                        8
<Page>

          this Agreement or in exercising or attempting to exercise any right or
          remedy under this Agreement or incurred in any other matter or
          proceeding relating to this Security Agreement.

6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.

7.   THIS WRITTEN LOAN AGREEMENT (AS DEFINED BY SECTION 26.02 OF THE TEXAS
     BUSINESS AND COMMERCE CODE) REPRESENTS THE FINAL AGREEMENT BETWEEN THE
     PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
     OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
     AGREEMENTS BETWEEN THE PARTIES.

8.   SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)

DEBTOR:                                        BANK:

THOMAS GROUP, INC.                             COMERICA BANK-TEXAS,
                                               a Texas banking association

By:
   -------------------------------------
   Name:                                       By:
        --------------------------------          ------------------------------
   Title:                                         Robin M. Kain
         -------------------------------          Vice President

                                        9
<Page>

                                   SCHEDULE I

                                   COLLATERAL

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------------------
            ISSUER                        OWNER OF STOCK        TYPE OF STOCK OR           NUMBER OF     CERTIFICATE
                                                                 EQUITY INTEREST             SHARES        NUMBERS
------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                     <C>                        <C>           <C>
Thomas Group of Louisiana, Inc.         Thomas Group, Inc.      100% capital voting
                                                                       stock
------------------------------------------------------------------------------------------------------------------------------
Thomas Group of Sweden, Inc.            Thomas Group, Inc.      100% capital voting
                                                                       stock
------------------------------------------------------------------------------------------------------------------------------
Interlink Technologies, Inc.            Thomas Group, Inc.      100% capital voting
                                                                       stock
------------------------------------------------------------------------------------------------------------------------------
Thomas Group (Suisse) GmbH              Thomas Group, Inc.      65% capital voting
                                                                       stock
------------------------------------------------------------------------------------------------------------------------------
Thomas Group Hong Kong                  Thomas Group, Inc.      65% capital voting
Limited                                                                stock
------------------------------------------------------------------------------------------------------------------------------
Thomas Group Asia PTE LTD               Thomas Group, Inc.      65% capital voting
                                                                       stock
------------------------------------------------------------------------------------------------------------------------------
Thomas Group (Suisse Results)           Thomas Group, Inc.      65% capital voting
GmbH                                                                   stock
------------------------------------------------------------------------------------------------------------------------------
Thomas Group GmbH                       Thomas Group, Inc.      65% capital voting
                                                                       stock
------------------------------------------------------------------------------------------------------------------------------
</Table>

                                       12
<Page>

[COMERICA LOGO]    SECURITY AGREEMENT
                   (Intellectual Property)

As of March 29, 2002, for value received, the undersigned ("Debtor") pledges,
assigns and grants to Comerica Bank-Texas, a Texas banking association ("Bank"),
whose address is P.O. Box 650282, Dallas, Texas 75265-0282, Attention:
Margareth Fanini, a continuing security interest and lien (any pledge,
assignment, security interest or other lien arising hereunder is sometimes
referred to herein as a "security interest") in the Collateral (as defined
below) to secure payment when due, whether by stated maturity, demand,
acceleration or otherwise, of all existing and future indebtedness
("Indebtedness") to the Bank of Thomas Group, Inc. ("Borrower") and/or Debtor.
Indebtedness includes without limit any and all obligations or liabilities of
the Borrower and/or Debtor to the Bank, whether absolute or contingent, direct
or indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, known or unknown, originally payable to the Bank or to a third party
and subsequently acquired by the Bank including, without limitation, any late
charges, loan fees or charges, and overdraft indebtedness, any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of any security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and/or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting Indebtedness, including without limit attorneys'
fees. Debtor agrees to pay Bank all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorneys'
fees shall be deemed a reference to reasonable fees, costs, and expenses of
counsel and paralegals, whether inside or outside counsel is used, whether or
not a suit or action is instituted, and to court costs if a suit or action is
instituted, and whether attorneys' fees or court costs are incurred at the trial
court level, on appeal, in a bankruptcy, administrative or probate proceeding or
otherwise.

1.   COLLATERAL shall mean all of the following property Debtor now or later
     owns or has an interest in, wherever located:

     (a)  Any and all copyright rights, copyright applications, copyright
          registrations and like protections in each work or authorship and
          derivative work thereof, whether published or unpublished and whether
          or not the same also constitutes a trade secret, now or hereafter
          existing, created, acquired or held, including without limitation
          those set forth on EXHIBIT A attached hereto (collectively, the
          "Copyrights");

     (b)  Any and all trade secrets, and any and all intellectual property
          rights in computer software and computer software products nor or
          hereafter existing, created, acquired or held;

     (c)  Any and all design rights which may be available to Debtor now or
          hereafter existing, created, acquired or held;

     (d)  All patents, patent applications and like protections including,
          without limitation, improvements, divisions, continuations, renewals,
          reissues, extensions and continuations-in-part of the same, including
          without limitation the patents and patent applications set forth on
          EXHIBIT B attached hereto (collectively, the "Patents")

     (e)  Any trademark or servicemark rights, whether registered or not,
          applications to register and registrations of the same and like
          protections, and the entire goodwill of the business of Debtor
          connected with and symbolized by such trademarks, including without
          limitation those set forth on EXHIBIT C attached hereto (collectively,
          the "Trademarks");

     (f)  Any and all claims for damages by way of past, present and future
          infringement of any of the rights included above, with the right, but
          not the obligation, to sue for and collect such damages for said use
          or infringement of the intellectual property rights identified above;

     (g)  All licenses or other rights to use any of the Copyrights, Patents or
          Trademarks, and all license fees and royalties arising from such use
          to the extent permitted by such license or rights;

     (h)  All amendments, extensions, renewals and extensions of any of the
          Copyrights, Trademarks or Patents;

<Page>

     (i)  All proceeds and products of the foregoing, including without
          limitation all payments under insurance or any indemnity or warranty
          payable in respect of any of the foregoing;

     (j)  all goods, instruments, documents, policies and certificates of
          insurance, deposits, money, investment property or other property
          (except real property which is not a fixture) which are now or later
          in possession or control of Bank, or as to which Bank now or later
          controls possession by documents or otherwise, and

     (k)  all additions, attachments, accessions, parts, replacements,
          substitutions, renewals, interest, dividends, distributions, rights of
          any kind (including but not limited to stock splits, stock rights,
          voting and preferential rights), products, and proceeds of or
          pertaining to the above including, without limit, cash or other
          property which were proceeds and are recovered by a bankruptcy trustee
          or otherwise as a preferential transfer by Debtor.

2.   WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records and allow
          Bank to visit and inspect any of Debtor's plants or facilities that
          manufacture, install or store products (or that have done so during
          the prior 6 month period) that are sold utilizing any of the
          Collateral and to inspect the products and quality control records
          relating thereto. Debtor shall, at the request of Bank, mark its
          records and the Collateral to clearly indicate the security interest
          of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the right and authority to subject it to a security interest
          granted to Bank; (b) none of the Collateral is subject to any security
          interest other than that in favor of Bank and there are no financing
          statements on file, other than in favor of Bank; and (c) Debtor
          acquired its rights in the Collateral in the ordinary course of its
          business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank. Debtor will not, without the prior written consent of Bank,
          sell, transfer or lease, or permit to be sold, transferred or leased,
          any or all of the Collateral, except for non-exclusive licenses
          granted by Debtor in the ordinary course of business. Bank or its
          representatives may at all reasonable times inspect the Collateral and
          may enter upon all premises where the Collateral is kept or might be
          located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue a
          perfected and first security interest of Bank in the Collateral.
          Debtor agrees that Bank has no obligation to acquire or perfect any
          lien on or security interest in any asset(s), whether realty or
          personalty, to secure payment of the Indebtedness, and Debtor is not
          relying upon assets in which the Bank may have a lien or security
          interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and bonded in
          a manner satisfactory to Bank. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so, and Debtor agrees to
          repay all amounts so expended by Bank immediately upon demand,
          together with interest at the highest lawful default rate which could
          be charged by Bank on any Indebtedness.

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all

                                       2
<Page>

          amounts so expended by Bank immediately upon demand, together with
          interest at the highest lawful default rate which could be charged by
          Bank on any Indebtedness.

     2.7  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws, ordinances, directives,
          orders, statutes, or regulations an object of which is to regulate or
          improve health, safety, or the environment ("Environmental Laws").

     2.8  If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtedness. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.9  At any time and without notice, Bank may (a) cause any or all of the
          Collateral to be transferred to its name or to the name of its
          nominees; (b) receive or collect by legal proceedings or otherwise all
          dividends, interest, principal payments and other sums and all other
          distributions at any time payable or receivable on account of the
          Collateral, and hold the same as Collateral, or apply the same to the
          Indebtedness, the manner and distribution of the application to be in
          the sole discretion of Bank; (c) enter into any extension,
          subordination, reorganization, deposit, merger or consolidation
          agreement or any other agreement relating to or affecting the
          Collateral, and deposit or surrender control of the Collateral, and
          accept other property in exchange for the Collateral and hold or apply
          the property or money so received pursuant to this Agreement.

     2.10 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered.

     2.11 Debtor delivers this Agreement based solely on Debtor's independent
          investigation of (or decision not to investigate) the financial
          condition of Borrower and is not relying on any information furnished
          by Bank. Debtor assumes full responsibility for obtaining any further
          information concerning the Borrower's financial condition, the status
          of the Indebtedness or any other matter which the undersigned may deem
          necessary or appropriate now or later. Debtor waives any duty on the
          part of Bank, and agrees that Debtor is not relying upon nor expecting
          Bank to disclose to Debtor any fact now or later known by Bank,
          whether relating to the operations or condition of Borrower, the
          existence, liabilities or financial condition of any guarantor of the
          Indebtedness, the occurrence of any default with respect to the
          Indebtedness, or otherwise, notwithstanding any effect such fact may
          have upon Debtor's risk or Debtor's rights against Borrower. Debtor
          knowingly accepts the full range of risk encompassed in this
          Agreement, which risk includes without limit the possibility that
          Borrower may incur Indebtedness to Bank after the financial condition
          of Borrower, or Borrower's ability to pay debts as they mature, has
          deteriorated.

     2.12 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilities or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorneys' fees, suffered by any of them as
          a direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws, INCLUDING ANY CLAIMS, DAMAGES,
          FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND
          RESULTING FROM BANK'S OWN NEGLIGENCE, except and to the extent (but
          only to the extent) caused by Bank's gross negligence or willful
          misconduct.

                                       3
<Page>

     2.13 Debtor is now the sole owner of the Collateral, except for
          non-exclusive licenses granted by Debtor to its customers in the
          ordinary course of business.

     2.14 Performance of this Security Agreement does not conflict with or
          result in a breach of any agreement to which Debtor is party or by
          which Debtor is bound, except to the extent that certain intellectual
          property agreements prohibit the assignment of the rights thereunder
          to a third party without the licensor's or other party's consent and
          this Security Agreement constitutes an assignment.

     2.15 Each of the Patents is valid and enforceable, and no part of the
          Collateral has been judged invalid or unenforceable, in whole or in
          part, and no claim has been made that any part of the Collateral
          violates the rights of any third party.

     2.16 Debtor shall deliver to Bank within thirty (30) days of the last day
          of each fiscal quarter, a report signed by Debtor, in form acceptable
          to Bank, listing any applications or registrations that Debtor has
          made or filed in respect of any patents, copyrights or trademarks and
          the status of any outstanding applications or registrations. Debtor
          shall promptly advise Bank of any material change in the composition
          of the Collateral, including but not limited to any subsequent
          ownership right of the Debtor in or to any Trademark, Patent or
          Copyright not specified in this Security Agreement.

     2.17 Debtor shall (i) protect, defend and maintain the validity and
          enforceability of the Trademarks, Patents and Copyrights, (ii) use its
          best efforts to detect infringements of the Trademarks, Patents and
          Copyrights and promptly advise Bank in writing of material
          infringements detected and (iii) not allow any Trademarks, Patents or
          Copyrights to be abandoned, forfeited or dedicated to the public
          without the written consent of Bank, which shall not be unreasonably
          withheld, unless Debtor determines that reasonable business practices
          suggest that abandonment is appropriate.

     2.18 Debtor shall register or cause to be registered (to the extent not
          already registered) with the United States Patent and Trademark Office
          or the United States Copyright Office, as applicable, those
          intellectual property rights listed on EXHIBITS A, B and C hereto
          within thirty (30) days of the date of this Security Agreement. Debtor
          shall register or cause to be registered with the United States Patent
          and Trademark Office or the United States Copyright Office, as
          applicable, those additional intellectual property rights developed or
          acquired by Debtor from time to time in connection with any product
          prior to the sale or licensing of such product to any third party
          (including without limitation revisions or additions to the
          intellectual property rights listed on such EXHIBITS A, B and C).
          Debtor shall, from time to time, execute and file such other
          instruments, and take such further actions as Bank may reasonably
          request from time to time to perfect or continue the perfection of
          Bank's interest in the Collateral.

     2.19 This Security Agreement creates, and in the case of after-acquired
          Collateral, this Security Agreement will create at the time Debtor
          first has rights in such after-acquired Collateral, in favor of Bank a
          valid and perfected first priority security interest in the Collateral
          in the United States securing the payment and performance of the
          Indebtedness upon making the filings referred to below.

     2.20 Except for, and upon, the filing with the United States Patent and
          Trademark office with respect to the Patents and Trademarks and the
          Register of Copyrights with respect to the Copyrights necessary to
          perfect the security interests created hereunder, and except as has
          been already made or obtained, no authorization, approval or other
          action by, and no notice to or filing with, any U.S. governmental
          authority or U.S. regulatory body is required either (a) for the grant
          by Debtor of the security interest granted hereby or for the
          execution, delivery or performance of this Security Agreement by
          Debtor in the U.S. or (b) for the perfection in the United States or
          the exercise by Bank of its rights and remedies hereunder;

     2.21 All information heretofore, herein or hereafter supplied to Bank by or
          on behalf of Debtor with respect to the Collateral is accurate and
          complete in all material respects;

     2.22 Debtor shall not enter into any agreement that would materially impair
          or conflict with Debtor's obligations hereunder without Bank's prior
          written consent. Debtor shall not permit the inclusion in any material
          contract to which it becomes a party of any provisions that could or
          might in any way prevent the creation of a security interest in
          Debtor's rights and interests in any property included within the
          definition of the Collateral acquired

                                       4
<Page>

          under such contracts, except that certain contracts may contain
          anti-assignment provisions that could in effect prohibit the creation
          of a security interest in such contracts if Debtor is required, in its
          commercially reasonable judgment to accept such provisions; and

     2.23 Upon any executive officer of Debtor obtaining knowledge thereof,
          Debtor will promptly notify Bank in writing of any event that
          materially adversely affects the value of any of the Collateral, the
          ability of Debtor to dispose of any Collateral or the rights and
          remedies of Bank in relation thereto, including the levy of any legal
          process against any of the Collateral.

3.   COLLECTION OF PROCEEDS.

     3.1  Debtor agrees to collect and enforce payment of all Collateral until
          Bank shall direct Debtor to the contrary. Immediately upon notice to
          Debtor by Bank and at all times after that, Debtor agrees to fully and
          promptly cooperate and assist Bank in the collection and enforcement
          of all Collateral and to hold in trust for Bank all payments received
          in connection with Collateral and from the sale, lease or other
          disposition of any Collateral, all rights by way of suretyship or
          guaranty and all rights in the nature of a lien or security interest
          which Debtor now or later has regarding Collateral. Immediately upon
          and after such notice, Debtor agrees to (a) endorse to Bank and
          immediately deliver to Bank all payments received on Collateral or
          from the sale, lease or other disposition of any Collateral or arising
          from any other rights or interests of Debtor in the Collateral, in the
          form received by Debtor without commingling with any other funds, and
          (b) immediately deliver to Bank all property in Debtor's possession or
          later coming into Debtor's possession through enforcement of Debtor's
          rights or interests in the Collateral. Debtor irrevocably authorizes
          Bank or any Bank employee or agent to endorse the name of Debtor upon
          any checks or other items which are received in payment for any
          Collateral, and to do any and all things necessary in order to reduce
          these items to money. Bank shall have no duty as to the collection or
          protection of Collateral or the proceeds of it, or as to the
          preservation of any related rights, beyond the use of reasonable care
          in the custody and preservation of Collateral in the possession of
          Bank. Debtor agrees to take all steps necessary to preserve rights
          against prior parties with respect to the Collateral. Nothing in this
          Section 3.1 shall be deemed a consent by Bank to any sale, lease or
          other disposition of any Collateral.

4.   DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise; or

          (b)  Any failure or neglect to comply with, or breach of or default
               under, any term of this Agreement, or any other agreement or
               commitment between Borrower, Debtor, or any guarantor of any of
               the Indebtedness ("Guarantor") and Bank; or

          (c)  Any warranty, representation, financial statement, or other
               information made, given or furnished to Bank by or on behalf of
               Borrower, Debtor, or any Guarantor shall be, or shall prove to
               have been, false or materially misleading when made, given, or
               furnished; or

          (d)  Any loss, theft, substantial damage or destruction to or of any
               Collateral, or the issuance or filing of any attachment, levy,
               garnishment or the commencement of any proceeding in connection
               with any Collateral or of any other judicial process of, upon or
               in respect of Borrower, Debtor, any Guarantor, or any Collateral;
               or

          (e)  Sale or other disposition by Borrower, Debtor, or any Guarantor
               of any substantial portion of its assets or property or voluntary
               suspension of the transaction of business by Borrower, Debtor, or
               any Guarantor, or death, dissolution, termination of existence,
               merger, consolidation, insolvency, business failure, or
               assignment for the benefit of creditors of or by Borrower,
               Debtor, or any Guarantor; or commencement of any proceedings
               under any state or federal bankruptcy or insolvency laws or laws
               for the relief of debtors by or against Borrower, Debtor, or any
               Guarantor; or the appointment of a

                                       5
<Page>

               receiver, trustee, court appointee, sequestrator or otherwise,
               for all or any part of the property of Borrower, Debtor, or any
               Guarantor; or

          (f)  Bank deems the margin of Collateral insufficient or itself
               insecure, in good faith believing that the prospect of payment of
               the Indebtedness or performance of this Agreement is impaired or
               shall fear deterioration, removal, or waste of Collateral; or

          (g)  An event of default shall occur under any instrument, agreement
               or other document evidencing, securing or otherwise relating to
               any of the Indebtedness.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any right or remedy available to it including, without
          limitation, any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other dispositions, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement; and except as provided in this Agreement, all
               notice of sale, lease or other disposition, and advertisement,
               and other notice or demand, any right or equity of redemption,
               and any obligation of a prospective purchaser or lessee to
               inquire as to the power and authority of Bank to sell, lease, or
               otherwise dispose of the Collateral or as to the application by
               Bank of the proceeds of sale or otherwise, which would otherwise
               be required by, or available to Debtor under, applicable law are
               expressly waived by Debtor to the fullest extent permitted.

          (e)  Use and enjoy a nonexclusive, royalty-free license to use the
               Copyrights, Patents and Trademarks.

          At any sale pursuant to this Section 4.2, whether under the power of
          sale, by virtue of judicial proceedings or otherwise, it shall not be
          necessary for Bank or a public officer under order of a court to have
          present physical or constructive possession of Collateral to be sold.
          The recitals contained in any conveyances and receipts made and given
          by Bank or the public officer to any purchaser at any sale made
          pursuant to this Agreement shall, to the extent permitted by
          applicable law, conclusively establish the truth and accuracy of the
          matters stated (including, without limit, as to the amounts of the
          principal of and interest on the Indebtedness, the accrual and
          nonpayment of it and advertisement and conduct of the sale); and all
          prerequisites to the sale shall be presumed to have been satisfied and
          performed. Upon any sale of any Collateral, the receipt of the officer
          making the sale under judicial proceedings or of Bank shall be
          sufficient discharge to the purchaser for the purchase money, and the
          purchaser shall not be obligated to see to the application of the
          money. Any sale of any Collateral under this Agreement shall be a
          perpetual bar against Debtor with respect to that Collateral.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in the Collateral and direct
          payment of it to Bank. Bank may, itself, upon the occurrence of any
          Event of Default so notify and direct any account debtor or obligor.

                                       6
<Page>

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank in such order as the Bank,
          in its discretion, deems appropriate including, without limitation,
          the following order: first upon all expenses authorized by the Uniform
          Commercial Code and all reasonable attorneys' fees and legal expenses
          incurred by Bank; the balance of the proceeds of the sale or other
          disposition shall be applied in the payment of the Indebtedness, first
          to interest, then to principal, then to remaining Indebtedness and the
          surplus, if any, shall be paid over to Debtor or to such other
          person(s) as may be entitled to it under applicable law. Debtor shall
          remain liable for any deficiency, which it shall pay to Bank
          immediately upon demand.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law or in
          equity for the collection of the Indebtedness or for the recovery of
          any other sum to which Bank may be entitled for the breach of this
          Agreement by Debtor. Nothing in this Agreement shall reduce or release
          in any way any rights or security interests of Bank contained in any
          existing agreement between Borrower, Debtor, or any Guarantor and
          Bank.

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

     4.7  Debtor irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor:

          (a)  to demand, receive, sue for, and give receipts or acquittances
               for any moneys due or to become due on any Collateral and to
               endorse any item representing any payment on or proceeds of the
               Collateral;

          (b)  to execute and file in the name of and on behalf of Debtor all
               financing statements or other filings deemed necessary or
               desirable by Bank to evidence, perfect, or continue the security
               interests granted in this Agreement, and Debtor further
               authorizes and requests that the Register of Copyrights and the
               Commissioner of Patents and Trademarks record this Security
               Agreement; and

          (c)  to do and perform any act on behalf of Debtor permitted or
               required under this Agreement.

          (d)  to modify, in its sole discretion, this Security Agreement
               without first obtaining Debtor's approval of or signature to such
               modification by amending EXHIBIT A, EXHIBIT B and EXHIBIT C
               hereof, as appropriate, to include reference to any right, title
               or interest in any Copyrights, Patents or Trademarks acquired by
               Debtor after the execution hereof or to delete any reference to
               any right, title or interest in any Copyrights, Patents or
               Trademarks in which Debtor no longer has or claims any right,
               title or interest.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

5.   MISCELLANEOUS.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.15 below.

     5.2  Debtor will give Bank not less than 90 days prior written notice of
          all contemplated changes in Debtor's name, chief executive office
          location, principal place of business location, and/or location of any
          Collateral, but the giving of this notice shall not cure any Event of
          Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

                                       7
<Page>

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement. In
          connection with the above, but without limiting its ability to make
          other disclosures to the full extent allowable, Bank may disclose all
          documents and information which Bank now or later has relating to
          Debtor, the Indebtedness or this Agreement, however obtained. Debtor
          further agrees that Bank may provide information relating to this
          Agreement or relating to Debtor or the Indebtedness to the Bank's
          parent, affiliates, subsidiaries, and service providers.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone. Any such action shall not constitute acceptance of
          Collateral in discharge of any portion of the Indebtedness.

     5.6  Debtor, to the extent not expressly prohibited by applicable law,
          waives any right to require the Bank to: (a) proceed against any
          person or property; (b) give any notice of sale in a manner or at such
          time other than as required by Sections 9.611, 9.612 and 9.613 of the
          Uniform Commercial Code; or (c) pursue any other remedy in the Bank's
          power. Debtor waives notice of acceptance of this Agreement and
          presentment, demand, protest, notice of protest, dishonor, notice of
          dishonor, notice of default, notice of intent to accelerate or demand
          payment or notice of acceleration of any Indebtedness, any and all
          other notices to which the undersigned might otherwise be entitled,
          and diligence in collecting any Indebtedness, and agree(s) that the
          Bank may, once or any number of times, modify the terms of any
          Indebtedness, compromise, extend, increase, accelerate, renew or
          forbear to enforce payment of any or all Indebtedness, or permit
          Borrower to incur additional Indebtedness, all without notice to
          Debtor and without affecting in any manner the unconditional
          obligation of Debtor under this Agreement. Debtor unconditionally and
          irrevocably waives each and every defense and setoff of any nature
          which, under principles of guaranty or otherwise, would operate to
          impair or diminish in any way the obligation of Debtor under this
          Agreement, and acknowledges that such waiver is by this reference
          incorporated into each security agreement, collateral assignment,
          pledge and/or other document from Debtor now or later securing the
          Indebtedness, and acknowledges that as of the date of this Agreement
          no such defense or setoff exists.

     5.7  Debtor waives any and all rights (whether by subrogation, indemnity,
          reimbursement, or otherwise) to recover from Borrower any amounts paid
          or the value of any Collateral given by Debtor pursuant to this
          Agreement until such time as all of the Indebtedness has been fully
          paid.

     5.8  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least five days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other disposition is to be made, unless a shorter notice period is
          reasonable under the circumstances. A notice shall be deemed to be
          given under this Agreement when delivered to Debtor or when placed in
          an envelope addressed to Debtor and deposited, with postage prepaid,
          in a post office or official depository under the exclusive care and
          custody of the United States Postal Service or delivered to an
          overnight courier. The mailing shall be by overnight courier,
          certified, or first class mail.

     5.9  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuation.

     5.10 This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the

                                       8
<Page>

          Indebtedness or any portion of it, and shall bind Debtor and the
          heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.10 is deemed a consent by Bank to any
          assignment by Debtor.

     5.11 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

     5.12 Except as otherwise provided in this Agreement, all terms in this
          Agreement have the meanings assigned to them in Article 9 (or, absent
          definition in Article 9, in any other Article) of the Uniform
          Commercial Code. "Uniform Commercial Code" means the Texas Business
          and Commerce Code as amended.

     5.13 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. THIS AGREEMENT
          SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
          LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS
          PRINCIPLES.

     5.14 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

     5.15 Debtor's chief executive office and its principal place of business is
          located and shall be maintained at

          5221 N. O'Connor Boulevard, Suite 500
          --------------------------------------------------------------------
          STREET ADDRESS

          Irving                   TX                75039
          --------------------------------------------------------------------
          CITY                     STATE             ZIP CODE

          If Collateral is located at other than the address specified above,
          such Collateral is located and shall be maintained at

          --------------------------------------------------------------------
          STREET ADDRESS

          --------------------------------------------------------------------
          CITY                     STATE             ZIP CODE        COUNTY

          Collateral shall be maintained only at the locations identified in
          this Section 5.15.

     5.16 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commercial
          Code and may be filed by Bank in any filing office.

     5.17 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commercial Code, but the obligations contained in Section 2.13 of this
          Agreement shall survive termination.

     5.18 Debtor agrees to reimburse the Bank upon demand for any and all costs
          and expenses (including, without limit, court costs, legal expenses
          and reasonable attorneys' fees, whether inside or outside counsel is
          used, whether or not suit is instituted and, if suit is instituted,
          whether at the trial court level, appellate level, in a bankruptcy,
          probate or administrative proceeding or otherwise) incurred in
          enforcing or attempting to enforce this Security Agreement or in
          exercising or attempting to exercise any right or remedy under this
          Agreement or incurred in any other matter or proceeding relating to
          this Security Agreement.

                                       9
<Page>

6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.

7.   THIS WRITTEN LOAN AGREEMENT (AS DEFINED BY SECTION 26.02 OF THE TEXAS
     BUSINESS AND COMMERCE CODE) REPRESENTS THE FINAL AGREEMENT BETWEEN THE
     PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
     OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
     AGREEMENTS BETWEEN THE PARTIES.

8.   SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)

                                                     DEBTOR:

                                                     Thomas Group, Inc.

                                                     By:
                                                        ------------------------
                                                        SIGNATURE OF

                                                     Its:
                                                         -----------------------
                                                         TITLE (if applicable)

                                                     BANK:

                                                     Comerica Bank-Texas,
                                                     a Texas banking association

                                                     By:
                                                        ------------------------
                                                        Robin M. Kain
                                                        Vice President

                                       10
<Page>

                          SECURITY INTEREST ASSIGNMENT

     THIS SECURITY INTEREST ASSIGNMENT (this "ASSIGNMENT"), dated as of
March 29, 2002, is executed by Thomas Group, Inc., a Delaware corporation (the
"BORROWER"), whose address is 5221 N. O'Connor Boulevard, Suite 500, Irving,
Texas, 75039, in favor of Comerica Bank-Texas, a Texas banking association (the
"LENDER").

                                R E C I T A L S:

     The Borrower and Lender have entered into that certain First Amended and
Restated Revolving Credit Loan Agreement dated as of December 4, 1996 (as the
same has been or may hereafter be amended, supplemented, modified or restated
from time to time, the "LOAN AGREEMENT"), providing, subject to the terms and
conditions thereof, for extensions of credit to be made by the Lender to the
Borrower;

     A.   Capitalized terms used but not defined herein have the meanings
ascribed to them in the Loan Agreement or the Security Agreement (hereinafter
defined);

     B.   Lender has conditioned its obligations under the Loan Agreement upon
the execution and delivery of this Assignment by Borrower. Pursuant to the Loan
Agreement, and as Collateral for the Loan, the Borrower has entered into that
certain Security Agreement (Intellectual Property) dated on or about the date
hereof (as the same may be amended, supplemented, modified or changed from time
to time, the "SECURITY AGREEMENT"), pursuant to which the Borrower has or will
grant to the Lender a lien on and security interest in certain Collateral
described therein, including, but not limited to the following (collectively,
the "INTELLECTUAL PROPERTY"):

          1.   Any and all copyright rights, copyright applications, copyright
     registrations and like protections in each work or authorship and
     derivative work thereof, whether published or unpublished and whether or
     not the same also constitutes a trade secret, now or hereafter existing,
     created, acquired or held, including without limitation those set forth on
     EXHIBIT A attached hereto (collectively, the "COPYRIGHTS");

          2.   Any and all trade secrets, and any and all intellectual property
     rights in computer software and computer software products nor or hereafter
     existing, created, acquired or held;

          3.   Any and all design rights which may be available to Borrower now
     or hereafter existing, created, acquired or held;

          4.   All patents, patent applications and like protections including,
     without limitation, improvements, divisions, continuations, renewals,
     reissues, extensions and continuations-in-part of the same, including
     without limitation the patents and patent applications set forth on
     EXHIBIT B attached hereto (collectively, the "PATENTS")

<Page>

          5.   Any trademark or servicemark rights, whether registered or not,
     applications to register and registrations of the same and like
     protections, and the entire goodwill of the business of Borrower connected
     with and symbolized by such trademarks, including without limitation those
     set forth on EXHIBIT C attached hereto (collectively, the "TRADEMARKS");

          6.   Any and all claims for damages by way of past, present and future
     infringement of any of the rights included above, with the right, but not
     the obligation, to sue for and collect such damages for said use or
     infringement of the intellectual property rights identified above;

          7.   All licenses or other rights to use any of the Copyrights,
     Patents or Trademarks, and all license fees and royalties arising from such
     use to the extent permitted by such license or rights;

          8.   All amendments, extensions, renewals and extensions of any of the
     Copyrights, Trademarks or Patents;

          9.   All proceeds and products of the foregoing, including without
     limitation all payments under insurance or any indemnity or warranty
     payable in respect of any of the foregoing;

          10.  all goods, instruments, documents, policies and certificates of
     insurance, deposits, money, investment property or other property (except
     real property which is not a fixture) which are now or later in possession
     or control of Bank, or as to which Bank now or later controls possession by
     documents or otherwise, and

          11.  all additions, attachments, accessions, parts, replacements,
     substitutions, renewals, interest, dividends, distributions, rights of any
     kind (including but not limited to stock splits, stock rights, voting and
     preferential rights), products, and proceeds of or pertaining to the above
     including, without limit, cash or other property which were proceeds and
     are recovered by a bankruptcy trustee or otherwise as a preferential
     transfer by Borrower.

     C.   It is a condition precedent to the Lender's obligations in connection
with the Loan that the parties hereto execute this Assignment to memorialize the
granting of the security interest in and to the Intellectual Property in a form
suitable for recording this document with any legal entity.

     NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, the parties hereto agree as follows:

          1.   Borrower hereby grants and assigns a security interest, and
     ratifies and confirms the grant of a security interest pursuant to the
     Security Agreement, to Lender, as Collateral for the payment and
     performance of the Indebtedness (as defined in the Loan Agreement) in and
     to Borrower's entire right, title and interest in the Intellectual Property
     as defined herein, including without limitation all renewals thereof, all
     proceeds thereof

                                       -2-
<Page>

     (including, but not limited to, all license royalties and proceeds of
     infringement suits), and the right to sue for past, present and future
     infringements.

          2.   At such time as (i) all of the Indebtedness has been completely
     paid and performed in full, and (ii) the Revolving Credit Commitment, the
     Term Loan, and any other commitments described in the Loan Agreement, have
     been terminated, the Lender shall release its security interest in
     Borrower's entire right, title and interest in the Intellectual Property,
     including without limitation all renewals thereof, all proceeds thereof
     (including, but not limited to, all license royalties and proceeds of
     infringement suits), and the right to sue for past, present and future
     infringements.

          3.   Borrower represents and warrants that it has the full right and
     power to make the assignment of the Intellectual Property, and it has not
     made any previous assignment, transfer, agreement in conflict herewith or
     constituting a present or future assignment of or encumbrance on the
     Intellectual Property, other than the Permitted Liens.

          4.   This Assignment cannot be altered, amended or modified in any
     way, except by a writing signed by Lender and Borrower. This Assignment
     shall be binding upon Borrower and its respective successors and permitted
     assigns, and shall inure to the benefit of Lender and its respective
     successors and assigns. THIS ASSIGNMENT SHALL, EXCEPT TO THE EXTENT THAT
     THE LAWS OF ANOTHER STATE APPLY TO THE INTELLECTUAL PROPERTY OR ANY PART
     THEREOF, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
     STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. By
     receiving this Assignment, Lender is entitled to receive all of the
     benefits and none of the obligations and liabilities which may arise from a
     security interest in the Intellectual Property.

          5.   This Agreement may be executed in any number of counterparts,
     each of which shall be deemed an original, but all of which together shall
     constitute one and the same instrument. Any facsimile copy, other copy or
     reproduction of a signed counterpart original of this Agreement shall be as
     fully effective and binding as the original signed counterpart of this
     Agreement.

                 REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

                                       -3-
<Page>

     IN WITNESS WHEREOF, this Assignment has been executed as of the day and
year first written above.

                                  BORROWER:

                                  THOMAS GROUP, INC.

                                  By:
                                     ------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           ------------------------------

                                  Address:
                                  5221 N. O'Connor, Suite 500
                                  Irving, Texas 75039

                                  LENDER:

                                  COMERICA BANK-TEXAS

                                  By:
                                     ------------------------------------
                                     Robin M. Kain
                                     Vice President

                                  Address:
                                  P.O. Box 650282
                                  Dallas, Texas 75265-0282

                                       -4-
<Page>

THE STATE OF TEXAS       Section
                         Section
COUNTY OF__________      Section

     Before me ____________________ on this day personally appeared____________,
________________ of Thomas Group, Inc., a Delaware corporation, known to me to
be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same, on behalf of said corporation, for
the purposes and consideration therein expressed.

     Given under my hand and seal this ____ day of March, 2002.

[S E A L]
                                    --------------------------------------------
                                    Notary Public - State of Texas
My Commission Expires:
                                    --------------------------------------------
                                    Printed Name of Notary Public
------------------------

THE STATE OF TEXAS       Section
                         Section
COUNTY OF DALLAS         Section

     Before me ________________ on this day personally appeared
_____________________________, __________________________ of Comerica
Bank-Texas, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same, on behalf
of said association, for the purposes and consideration therein expressed.

     Given under my hand and seal office this ____ day of March, 2002.

[S E A L]
                                    --------------------------------------------
                                    Notary Public - State of Texas
My Commission Expires:
                                    --------------------------------------------
                                    Printed Name of Notary Public
------------------------

                                       -5-
<Page>

                                    EXHIBIT A

                                   COPYRIGHTS

<Page>

                                    EXHIBIT B

                                     PATENTS

<Page>

                                    EXHIBIT C

                                   TRADEMARKS

<Table>
<Caption>
-------------------------------------------------------------------------------------------
U.S. APPLICATIONS                                     FILING DATE
-----------------
TRADE MARK                          SERIAL NO.        (REG. DT.)         REGISTRATION NO.
-------------------------------------------------------------------------------------------
<S>                                 <C>               <C>                <C>
OPTTIMIZE                           76/142,388        10/06/00           Awaiting Notice of
                                                                         Publication
-------------------------------------------------------------------------------------------
TCT                                 74/105,681        10/15/90           1,707,129
                                                      08/11/92
-------------------------------------------------------------------------------------------
THE RESULTS COMPANY                 75/685,814        04/15/99
-------------------------------------------------------------------------------------------
TOTAL CYCLE TIME                    74/090,544        08/23/90           1,892,079
                                                      05/02/95
-------------------------------------------------------------------------------------------
Process Value Management
-------------------------------------------------------------------------------------------
PVM
-------------------------------------------------------------------------------------------
Process Entitlement
-------------------------------------------------------------------------------------------
Process Strategy Map
-------------------------------------------------------------------------------------------
Supply Chain Process Value
-------------------------------------------------------------------------------------------
</Table>
<Page>

[COMERICA LOGO]   ADVANCE FORMULA AGREEMENT

As of March 29, 2002, this Agreement is made between THOMAS GROUP, INC.
("Borrower" or "Debtor") and COMERICA BANK-TEXAS, a Texas banking association
("Bank").

For and in consideration of the loans and other credit which Borrower may now or
hereafter obtain or request from Bank which are secured pursuant to the security
agreements and other agreements as may be executed and delivered by Borrower
from time to time for the benefit of Bank, and for other good and valuable
consideration, Borrower agrees as follows:

1.   FORMULA LOANS. The credit which Bank may now or hereafter extend to
     Borrower subject to the limitations of this Agreement and to the conditions
     and limitations of any other agreement between Borrower and Bank is
     identified as follows:

          Revolving line of credit of up to $2,500,000, as evidenced in that
          certain Amended and Restated Revolving Credit Note of even date
          herewith in the amount of $2,500,000 executed by the Borrower and
          payable to the order of the Bank (as the same has been and may
          hereafter be amended, restated, increased, extended or otherwise
          modified ("the Note"),

     and any extensions, renewals or substitutions, whether in a greater or
     lesser amount, including any letters of credit issued thereunder ("Formula
     Loans"). The aggregate principal amount of the Formula Loans outstanding
     can never exceed the lesser of (a) $2,500,000, or (b) the sum resulting
     from the limited terms set forth in Paragraph 2 below. Reference is made to
     that certain First Amended and Restated Revolving Credit Loan Agreement
     dated as of December 4, 1996 executed between the Borrower and the Bank (as
     the same has been or may hereafter be amended, restated, or modified from
     time to time, the "Loan Agreement") for a statement of other terms and
     conditions of the Note. Capitalized terms not otherwise defined herein
     shall have the meanings assigned to such terms in the Loan Agreement.

2.   ADVANCE FORMULA. Borrower warrants and agrees that Borrower's Indebtedness
     to Bank for the Formula Loans shall never exceed the percentage of the
     Eligible Accounts (as hereinafter defined) of the Debtor as set forth below
     during the corresponding period set forth below:

<Table>
<Caption>
                              PERIOD                                      PERCENTAGE OF ELIGIBLE ACCOUNTS
                              ------                                      -------------------------------
           <S>                                                                          <C>
           From March 26, 2002 through May 31, 2002                                     85%

           From June 1, 2002 through June 30, 2002                                      80%

           From July 1, 2002 through the Termination Date                               75%
</Table>

3.   FORMULA COMPLIANCE. If the limitations in paragraph 2 above are exceeded at
     any time, Borrower shall immediately pay Bank sums sufficient to reduce the
     Formula Loans by the amount of such excess.

4.   ELIGIBLE ACCOUNT. "Eligible Account" shall mean an Account (as hereinafter
     defined) arising in the ordinary course of a Debtor's business which meets
     each of the following requirements:

     (a)  it is owing less than ninety (90) days after the date of the original
          invoice or other writing evidencing such Account; or

     (b)  it is from an Account Debtor (i) maintaining its chief executive
          office in the United States of America or Canada, or (ii) organized
          under the laws of the United States of America (or any state thereof)
          or Canada;

     (c)  it arises from the sale of goods, or from services rendered;

     (d)  it is evidenced by an invoice;

     (e)  it is a valid, legally enforceable obligation of the Account Debtor;

<Page>

     (f)  it is subject to a first priority, properly perfected security
          interest in favor of Bank and is not subject to any sale of accounts,
          any rights of offset, assignment, lien or security interest whatsoever
          other than to Bank;

     (g)  it is not owing by a subsidiary or affiliate of Borrower or a Debtor.

         For purposes of this Agreement, an "Account" shall mean any right of a
         Debtor to payment for goods sold or leased or for services rendered,
         but shall not include interest or service charges, and "Account Debtor"
         shall mean a person who is obligated on or under an Account. An Account
         which is at any time an Eligible Account, but which subsequently fails
         to meet any of the foregoing requirements, shall forthwith cease to be
         an Eligible Account.

5.   CERTIFICATES, SCHEDULES AND REPORTS. Borrower shall be required to prepare
     and deliver to the Bank such certificates, schedules, and reports as are
     required in the Loan Agreement.

6.   INSPECTIONS; COMPLIANCE. Borrower and each Debtor shall permit Bank and its
     designees from time to time to make such inspections and audits, and to
     obtain such confirmations or other information, with respect to any of the
     Collateral or any Account Debtor as Bank is entitled to make or obtain
     under the Loan Agreement or Security Agreement, and shall reimburse Bank on
     demand for all costs and expenses incurred by Bank in connection with such
     inspections and audits. Borrower and each Debtor shall further comply with
     all of the other terms and conditions of the Security Agreement.

7.   DEFAULT. Any failure by Borrower or a Debtor to comply with this Agreement
     shall constitute an "Event of Default" under the Formula Loans and under
     the Loan Agreement, the other loan documents relating thereto, and the
     Indebtedness described therein.

8.   AMENDMENTS; WAIVERS. This Agreement may be amended, modified or terminated
     only in writing duly executed by Borrower and Bank. No delay by Bank in
     requiring Borrower's compliance herewith shall constitute a waiver of such
     right. The rights granted to Bank hereunder are cumulative, and in addition
     to any other rights Bank may have by agreement or under applicable law.
     This Agreement shall supersede and replace in their entirety any prior
     advance formula agreements in effect between Bank and Borrower. This
     Agreement shall be governed by and construed in accordance with the
     internal laws of the State of Texas, without regard to conflict of laws
     principles.

9.   DISCRETIONARY/DEMAND BASIS FORMULA LOANS. Notwithstanding anything to the
     contrary set forth in this Agreement, in the event that the Formula Loans
     are at any time on a demand basis or advances are subject to the Bank's
     discretion, Borrower and Debtor hereby acknowledges and agrees that the
     formula set forth in paragraph 2 hereof is merely for advisory and guidance
     purposes and Bank shall not be obligated to make any loans or advances
     under the Formula Loans, and, notwithstanding the terms of paragraph 3
     above, Bank may at any time, at its option, demand payment of any or all of
     the Formula Loans, whereupon the same shall become due and payable.

10.  DILUTION OF ACCOUNTS. In the event the Bank, at any time in its sole
     discretion, determines that the dollar amount of Eligible Accounts
     collectable by a Debtor is reduced or diluted as a result of discounts or
     rebates granted by a Debtor to the respective Account Debtor, returned or
     rejected Inventory or services, or such other reason or factor as Bank
     deems applicable, Bank may, in its sole discretion, upon five (5) business
     days' prior written notice to Borrower, reduce or other wise modify the
     percentage of Eligible Accounts included within the Advance Formula under
     paragraph 2(a) above and/or reduce the dollar amount of the applicable
     Debtor's Eligible Accounts by an amount determined by Bank in its sole
     discretion.

11.  JURY WAIVER. BORROWER AND DEBTOR(S) AND BANK ACKNOWLEDGE THAT THE RIGHT TO
     TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH
     PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
     COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
     BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
     REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
     AGREEMENT OR THE INDEBTEDNESS.

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
first above written.

                                        2
<Page>

Borrower's Chief Executive Office Address:     BORROWER:

5221 N. O'Connor Boulevard                     THOMAS GROUP, INC.
Suite 500
Irving, Texas 75039
                                               By:
                                                  ------------------------------
                                                     Name:
                                                          ----------------------
                                                     Title:
                                                           ---------------------
Accepted and Approved:

COMERICA BANK-TEXAS,
a Texas banking association

By:
   ------------------------------
       Robin M. Kain
       Vice President

                                        3
<Page>

[COMERICA LOGO]
NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group (Suisse) GmbH ("Issuer").

                                    RECITALS:

     A.   Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B.   By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with Article
8 of the UCC.

     C.   By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1.   THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2.   LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3.   CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4.   DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5.   DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6.   TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7.   OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8.   TERMINATION. The rights and powers granted herein to Secured Party
have been granted in order to perfect its security interest in the Securities,
are powers coupled with an interest and will neither be affected by the
dissolution or bankruptcy of Pledgor or by the lapse of time. The obligations of
Issuer herein described shall continue in effect until the security interest of
Secured Party in the Securities has been terminated and Secured Party has
notified Issuer of such termination in writing.

     9.   THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10.  AMENDMENTS. No amendment, modification or termination of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by the party to be charged.

     11.  SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12.  SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13.  NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14.  RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15.  CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16.  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17.  INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18.  JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                COMERICA BANK - TEXAS

Comerica Bank - Texas                     By:
                                             --------------------------------
P.O. Box 650282                              Robin Kane, Vice President
Dallas, Texas 75265-0282
Attention: Robin Kane

Address:                                  PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500    THOMAS GROUP, INC.
Irving, Texas 75039
                                          By:
                                             --------------------------------
                                             Jim Taylor, CFO and Vice President

Address for each Issuer:                  ISSUER:

c/o Thomas Group, Inc.                    THOMAS GROUP (SUISSE) GMBH
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039
                                          By:
                                             --------------------------------
                                             Robert French, Managing Director

                                        2
<Page>

                                    EXHIBIT A
<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------------
                                                                PERCENTAGE
ISSUER                                OWNER                    OWNERSHIP AND          NUMBER OF       CERTIFICATE
                                    OF STOCK                 TYPE OF STOCK OR          SHARES           NUMBERS
                                                              EQUITY INTEREST
-------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                         <C>                                      <C>
Thomas Group (Suisse) GmbH      Thomas Group, Inc.          65% capital voting                       Uncertificated
                                                                  stock                                Securities
-------------------------------------------------------------------------------------------------------------------------
</Table>

                                       3
<Page>

[COMERICA LOGO]
NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group (Suisse Results) GmbH
("Issuer").

                                    RECITALS:

     A.   Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B.   By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with Article
8 of the UCC.

     C.   By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1.   THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2.   LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3.   CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4.   DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5.   DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6.   TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7.   OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8.   TERMINATION. The rights and powers granted herein to Secured Party
have been granted in order to perfect its security interest in the Securities,
are powers coupled with an interest and will neither be affected by the
dissolution or bankruptcy of Pledgor or by the lapse of time. The obligations of
Issuer herein described shall continue in effect until the security interest of
Secured Party in the Securities has been terminated and Secured Party has
notified Issuer of such termination in writing.

     9.   THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10.  AMENDMENTS. No amendment, modification or termination of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by the party to be charged.

     11.  SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12.  SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13.  NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14.  RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15.  CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16.  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17.  INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18.  JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                 COMERICA BANK - TEXAS

Comerica Bank - Texas                      By:
                                              ----------------------------------
P.O. Box 650282                               Robin Kane, Vice President
Dallas, Texas 75265-0282
Attention: Robin Kane

Address:                                   PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500     THOMAS GROUP, INC.
Irving, Texas 75039
                                           By:
                                              ----------------------------------
                                              Jim Taylor, CFO and Vice President

Address for each Issuer:                   ISSUER:

                                           THOMAS GROUP (SUISSE RESULTS) GMBH
c/o Thomas Group, Inc.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039                        By:
                                              ----------------------------------
                                              Robert French
                                              Title:
                                                    ----------------------------

                                       2
<Page>

                                    EXHIBIT A

<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------------------
                                                                 PERCENTAGE
ISSUER                                    OWNER                 OWNERSHIP AND        NUMBER OF       CERTIFICATE
                                         OF STOCK              TYPE OF STOCK OR        SHARES           NUMBERS
                                                               EQUITY INTEREST
-----------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                    <C>                                    <C>
Thomas Group (Suisse Results)         Thomas Group, Inc.     65% capital voting                     Uncertificated
GmbH                                                              stock                               Securities
-----------------------------------------------------------------------------------------------------------------------
</Table>

                                       3
<Page>

[COMERICA LOGO]
NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group GmbH ("Issuer").

                                    RECITALS:

     A. Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B. By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with
Article 8 of the UCC.

     C. By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1. THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2. LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3. CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4. DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5. DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6. TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7. OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8. TERMINATION. The rights and powers granted herein to Secured Party have
been granted in order to perfect its security interest in the Securities, are
powers coupled with an interest and will neither be affected by the dissolution
or bankruptcy of Pledgor or by the lapse of time. The obligations of Issuer
herein described shall continue in effect until the security interest of Secured
Party in the Securities has been terminated and Secured Party has notified
Issuer of such termination in writing.

     9. THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10. AMENDMENTS. No amendment, modification or termination of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by the party to be charged.

     11. SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12. SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14. RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15. CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17. INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18. JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                 COMERICA BANK - TEXAS

Comerica Bank - Texas                      By:
P.O. Box 650282                               ----------------------------------
Dallas, Texas 75265-0282                      Robin Kane, Vice President
Attention: Robin Kane

Address:                                   PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500     THOMAS GROUP, INC.
Irving, Texas 75039
                                           By:
                                              ----------------------------------
                                              Jim Taylor, CFO and Vice President

Address for each Issuer:                   ISSUER:

                                           THOMAS GROUP GMBH
c/o Thomas Group, Inc.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039                        By:
                                              ----------------------------------
                                              Robert French
                                              Title:
                                                    ----------------------------

                                       2
<Page>

                                    EXHIBIT A
<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------
                                                             PERCENTAGE
          ISSUER                         OWNER              OWNERSHIP AND        NUMBER OF       CERTIFICATE
                                        OF STOCK           TYPE OF STOCK OR       SHARES           NUMBERS
                                                           EQUITY INTEREST
--------------------------------------------------------------------------------------------------------------

<S>                                <C>                   <C>                    <C>             <C>
Thomas Group GmbH                  Thomas Group, Inc.    65% capital voting                     Uncertificated
                                                               stock                               Securities
--------------------------------------------------------------------------------------------------------------
</Table>

                                       4
<Page>

[COMERICA LOGO]
NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group of Louisiana, Inc.
("Issuer").

                                    RECITALS:

     A. Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B. By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with
Article 8 of the UCC.

     C. By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1. THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2. LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3. CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4. DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5. DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6. TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7. OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8. TERMINATION. The rights and powers granted herein to Secured Party have
been granted in order to perfect its security interest in the Securities, are
powers coupled with an interest and will neither be affected by the dissolution
or bankruptcy of Pledgor or by the lapse of time. The obligations of Issuer
herein described shall continue in effect until the security interest of Secured
Party in the Securities has been terminated and Secured Party has notified
Issuer of such termination in writing.

     9. THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10. AMENDMENTS. No amendment, modification or termination of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by the party to be charged.

     11. SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12. SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14. RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15. CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17. INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18. JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                 COMERICA BANK - TEXAS

Comerica Bank - Texas                      By:
P.O. Box 650282                               ----------------------------------
Dallas, Texas 75265-0282                      Robin Kane, Vice President
Attention: Robin Kane

Address:                                   PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500     THOMAS GROUP, INC.
Irving, Texas 75039
                                           By:
                                              ----------------------------------
                                              Jim Taylor, CFO and Vice President

Address for each Issuer:                   ISSUER:

                                           THOMAS GROUP OF LOUISIANA, INC.
c/o Thomas Group, Inc.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039                        By:
                                              ----------------------------------
                                              Alex W. Young, Vice President
                                               and Secretary

                                       2
<Page>

                                    EXHIBIT A

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------
                                                              PERCENTAGE
         ISSUER                          OWNER               OWNERSHIP AND       NUMBER OF       CERTIFICATE
                                       OF STOCK            TYPE OF STOCK OR        SHARES          NUMBERS
                                                            EQUITY INTEREST
--------------------------------------------------------------------------------------------------------------
<S>                                <C>                   <C>                    <C>             <C>
Thomas Group of Louisiana, Inc.    Thomas Group, Inc.    100% capital voting                    Uncertificated
                                                                stock                             Securities
--------------------------------------------------------------------------------------------------------------
</Table>

                                       3
<Page>

[COMERICA LOGO] NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED
                SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group of Sweden, Inc. ("Issuer").

                                    RECITALS:

     A. Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B. By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with
Article 8 of the UCC.

     C. By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1. THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2. LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3. CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4. DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5. DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6. TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7. OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8. TERMINATION. The rights and powers granted herein to Secured Party have
been granted in order to perfect its security interest in the Securities, are
powers coupled with an interest and will neither be affected by the dissolution
or bankruptcy of Pledgor or by the lapse of time. The obligations of Issuer
herein described shall continue in effect until the security interest of Secured
Party in the Securities has been terminated and Secured Party has notified
Issuer of such termination in writing.

     9. THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10. AMENDMENTS. No amendment, modification or termination of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by the party to be charged.

     11. SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12. SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14. RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15. CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17. INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18. JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                 COMERICA BANK - TEXAS

Comerica Bank - Texas                      By:
P.O. Box 650282                               ----------------------------------
Dallas, Texas 75265-0282                      Robin Kane, Vice President
Attention: Robin Kane

Address:                                   PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500     THOMAS GROUP, INC.
Irving, Texas 75039
                                           By:
                                              ----------------------------------
                                              Jim Taylor, CFO and Vice President

Address for each Issuer:                   ISSUER:

c/o Thomas Group, Inc.                     THOMAS GROUP (SUISSE) GMBH
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039
                                           By:
                                              ----------------------------------
                                              Robert French, Managing Director

                                       2
<Page>

                                    EXHIBIT A

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------
                                                             PERCENTAGE
          ISSUER                         OWNER              OWNERSHIP AND        NUMBER OF       CERTIFICATE
                                       OF STOCK            TYPE OF STOCK OR       SHARES           NUMBERS
                                                          EQUITY INTEREST
--------------------------------------------------------------------------------------------------------------
<S>                                <C>                   <C>                    <C>             <C>
Thomas Group (Suisse) GmbH         Thomas Group, Inc.    65% capital voting                     Uncertificated
                                                              stock                              Securities
--------------------------------------------------------------------------------------------------------------
</Table>

                                       3
<Page>

[COMERICA LOGO]
NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group Asia PTE LTD ("Issuer").

                                    RECITALS:

     A. Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B. By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with
Article 8 of the UCC.

     C. By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1. THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2. LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3. CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4. DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5. DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6. TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7. OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8. TERMINATION. The rights and powers granted herein to Secured Party have
been granted in order to perfect its security interest in the Securities, are
powers coupled with an interest and will neither be affected by the dissolution
or bankruptcy of Pledgor or by the lapse of time. The obligations of Issuer
herein described shall continue in effect until the security interest of Secured
Party in the Securities has been terminated and Secured Party has notified
Issuer of such termination in writing.

     9. THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10. AMENDMENTS. No amendment, modification or termination of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by the party to be charged.

     11. SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12. SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13. NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14. RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15. CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17. INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18. JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                 COMERICA BANK - TEXAS

Comerica Bank - Texas                      By:
P.O. Box 650282                               ---------------------------------
Dallas, Texas 75265-0282                      Robin Kane, Vice President
Attention: Robin Kane

Address:                                   PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500     THOMAS GROUP, INC.
Irving, Texas 75039
                                           By:
                                              ---------------------------------
                                              Jim Taylor, CFO and Vice President

Address for each Issuer:                   ISSUER:

                                           THOMAS GROUP ASIA PTE LTD
c/o Thomas Group, Inc.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039                        By:
                                              ----------------------------------
                                              Jim Taylor, Director

                                       2
<Page>

                                    EXHIBIT A

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------
                                                             PERCENTAGE
         ISSUER                          OWNER              OWNERSHIP AND         NUMBER OF       CERTIFICATE
                                       OF STOCK           TYPE OF STOCK OR         SHARES           NUMBERS
                                                          EQUITY INTEREST
--------------------------------------------------------------------------------------------------------------
<S>                                <C>                   <C>                    <C>             <C>
Thomas Group Asia PTE LTD          Thomas Group, Inc.    65% capital voting                     Uncertificated
                                                               stock                              Securities
--------------------------------------------------------------------------------------------------------------
</Table>

                                       3
<Page>

[COMERICA LOGO]
NOTICE OF PLEDGE AND CONTROL AGREEMENT (ISSUER OF UNCERTIFICATED SECURITY)

     This Agreement dated as of March 29, 2002 is executed among Comerica Bank -
Texas, a Texas banking association ("Secured Party"), Thomas Group, Inc., a
Delaware corporation ("Pledgor"), and Thomas Group Hong Kong Limited ("Issuer").

                                    RECITALS:

     A.   Pursuant to a Security Agreement (Negotiable Collateral) dated as of
March 29, 2002 executed by and between Secured Party and Pledgor ("Security
Agreement") Pledgor has granted Secured Party a security interest in and to
certain of the Investment Property (as defined in the Uniform Commercial Code as
adopted in the State of Texas, as amended "UCC") of Pledgor, and more
particularly, the uncertificated securities described on Exhibit A attached
hereto and incorporated herein for all purposes ("Securities").

     B.   By entering into this control agreement ("Agreement"), the parties are
perfecting the Secured Party's security interest in the Securities, and the
Secured Party shall have control over the Securities in accordance with Article
8 of the UCC.

     C.   By executing this Agreement, each party respectively represents,
warrants, and agrees to the following, with and for the benefit of the Secured
Party:

     The parties agree as follows:

     1.   THE SECURITIES. Issuer hereby represents and warrants to Secured Party
and Pledgor that (a) the Securities have been established solely in the name of
Pledgor as recited above, (b) Exhibit A attached hereto is a complete and
accurate description of the Securities as of the date thereof, and (c) except
for the claims and interests of Secured Party and Pledgor in the Securities,
neither Pledgor nor Issuer has any knowledge of any other claim to or interest
in the Securities.

     2.   LIENS. Issuer hereby acknowledges the security interest in the
Securities granted to Secured Party by Pledgor. Issuer has not been served with
any notices of levy or other documents under which any other person claims any
interest in the Securities. Issuer has not received notice of any security
interest in or claim to the Securities, or any portion of the Securities, other
than this Agreement, and Issuer is not presently obligated to comply with any
notifications it may receive from anybody (except the Pledgor) directing Issuer
to register transfers of the Securities or to redeem the Securities (any such
notifications are referred to herein as "Instructions"). Issuer covenants and
agrees that it has not and will not hereafter agree with any third party that
Issuer will comply with instructions concerning the Securities originated by
such third party. Issuer will promptly notify Secured Party and Pledgor if any
person asserts any lien, security interest, encumbrance or adverse claim against
the Securities.

     3.   CONTROL. Issuer covenants and agrees that it will comply with
Instructions originated by Secured Party concerning all or any portion of the
Securities at any time without further consent by Pledgor. Without the prior
written consent of the Secured Party, Issuer will not comply or agree to comply
with any Instructions Issuer may receive from the Pledgor or any other person
with respect to all or any portion of the Securities.

     4.   DIVIDENDS. By execution of this Agreement, Issuer acknowledges and
agrees that (i) the Security Agreement created a security interest in dividends,
and (ii) the Secured Party may at any time and without notice receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of the Securities, and hold the same as Collateral (as such term is
defined in the Security Agreement), or apply the same to the Indebtedness (as
such term is defined in the Security Agreement), the manner and distribution of
the application to be in the sole discretion of Secured Party.

     5.   DUPLICATE STATEMENTS AND NOTICES. Issuer will send copies of all
statements, confirmations, notices of claims and other correspondence concerning
the Securities to Secured Party at the address set forth below.

     6.   TAX REPORTING. All items of income, gain, expense, and loss recognized
in the Securities shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of Pledgor.

     7.   OTHER AGREEMENTS AND ISSUER'S JURISDICTION. In the event of a conflict
between this Agreement and any other agreement between the Issuer and the
Pledgor, the terms of this Agreement will prevail. Regardless of any provision
in such agreement, the State of Texas shall be deemed to be Issuer's location
for the purposes of this Agreement and the perfection and priority of Secured
Party's security interest in the Securities.

     8.   TERMINATION. The rights and powers granted herein to Secured Party
have been granted in order to perfect its security interest in the Securities,
are powers coupled with an interest and will neither be affected by the
dissolution or bankruptcy of Pledgor or by the lapse of time. The obligations of
Issuer herein described shall continue in effect until the security interest of
Secured Party in the Securities has been terminated and Secured Party has
notified Issuer of such termination in writing.

     9.   THIS AGREEMENT. This Agreement, the schedules and exhibits hereto and
the agreements and instruments required to be executed and delivered hereunder,
set forth the entire agreement of the parties with respect to the subject matter
hereof and supersede and discharge all prior agreements (written or oral) and
negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations. There are no oral conditions precedent to the
effectiveness of this Agreement.

<Page>

     10.  AMENDMENTS. No amendment, modification or termination of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by the party to be charged.

     11.  SUCCESSORS. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs and personal representatives.

     12.  SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

     13.  NOTICES. Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of receipt is received or two
days after being sent by certified or registered United States mail, return
receipt requested, postage prepaid, addressed to the party at the address set
forth below next to such party's signature. Any party may change its address for
notices in the manner set forth above.

     14.  RULES OF CONSTRUCTION. In this Agreement, words in the singular number
include the plural, and in the plural include the singular. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender, and the word "or"
is disjunctive but not exclusive. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience and do not define,
limit or describe the scope or intent of the provisions of this Agreement.

     15.  CHOICE OF LAW. THE PARTIES HERETO AGREE THAT CERTAIN MATERIAL EVENTS,
OCCURRENCES AND TRANSACTIONS RELATING TO THIS AGREEMENT BEAR A REASONABLE
RELATIONSHIP TO THE STATE OF TEXAS. THE VALIDITY, TERMS, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THOSE LAWS OF THE STATE OF
TEXAS WHICH ARE APPLICABLE TO AGREEMENTS WHICH ARE NEGOTIATED, EXECUTED,
DELIVERED AND PERFORMED SOLELY IN THE STATE OF TEXAS. THE SECURITIES ARE SUBJECT
TO ARTICLE 8 OF THE UCC.

     16.  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

     17.  INDEMNIFICATION. Pledgor agrees to indemnify Secured Party, its
officers and employees, and hold it and them harmless for and from all claims,
losses, liabilities and expenses, including without limitation, reasonable legal
fees and expenses arising from any claim of any party resulting from actions
Secured Party takes in accordance with the provisions of this Agreement.

     18.  JURY WAIVER. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.

Addresses:                                COMERICA BANK - TEXAS

Comerica Bank - Texas                     By:
P.O. Box 650282                              -----------------------------------
Dallas, Texas 75265-0282                     Robin Kane, Vice President
Attention: Robin Kane

Address:                                  PLEDGOR:

5221 N. O'Connor Boulevard., Suite 500    THOMAS GROUP, INC.
Irving, Texas 75039
                                          By:
                                             -----------------------------------
                                             Jim Taylor, CFO and Vice President

Address for each Issuer:                  ISSUER:

                                          THOMAS GROUP HONG KONG LIMITED
c/o Thomas Group, Inc.
5221 N. O'Connor Boulevard, Suite 500
Irving, Texas 75039                       By:
                                             -----------------------------------
                                             Jim Taylor, Director

                                       2
<Page>

                                    EXHIBIT A
<Table>
<Caption>
--------------------------------------------------------------------------------------------------------
                                                        PERCENTAGE
                                   OWNER              OWNERSHIP AND
        ISSUER                   OF STOCK            TYPE OF STOCK OR       NUMBER OF      CERTIFICATE
                                                     EQUITY INTEREST         SHARES          NUMBERS
--------------------------------------------------------------------------------------------------------
<S>                         <C>                    <C>                      <C>           <C>
Thomas Group Hong Kong      Thomas Group, Inc.     65% capital voting                     Uncertificated
Limited                                                  stock                              Securities
--------------------------------------------------------------------------------------------------------
</Table>

                                       3
<Page>
[COMERICA LOGO]    NO ORAL AGREEMENTS

     This Agreement (the "Agreement") is executed as of March 29, 2002 by THOMAS
GROUP, INC. ("Borrower"), THOMAS GROUP OF LOUISIANA, INC., THOMAS GROUP OF
SWEDEN, INC., INTERLINK TECHNOLOGIES, INC. (collectively, the "Domestic
Subsidiaries"), and THOMAS GROUP GMBH, THOMAS GROUP (SUISSE) GMBH, THOMAS GROUP
ASIA PTE LTD, THOMAS GROUP HONG KONG LIMITED (collectively, the "Foreign
Subsidiaries") and COMERICA BANK - TEXAS, a Texas banking association
("Lender"), in connection with credit accommodations made by the Lender to the
Borrower (the "Loan").

    The parties covenant and agree as follows:

(1) The rights and obligations of the parties shall be determined solely from
    the written "Loan Agreement" (as such term is defined in Section 26.02(a)(2)
    of the Texas Business and Commerce Code) executed and delivered in
    connection with the Loan, and any oral agreements between or among the
    parties are superseded by and merged into the Loan Agreement.

(2) The Loan Agreement has not been and may not be varied by any oral agreements
    or discussions that have or may occur before, contemporaneously with, or
    subsequent thereto.

(3) THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
    PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
    OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
    AGREEMENTS AMONG THE PARTIES.

    This Agreement, which may be executed in counterparts, is executed and
delivered as of the date first written above.

     BORROWER:                             LENDER:

     THOMAS GROUP, INC.,                   COMERICA BANK - TEXAS
     a Delaware corporation

     By:                                   By:
        ---------------------------------     ----------------------------------
     Printed Name:                            Robin M. Kain
                  -----------------------     Vice President
     Its:
         --------------------------------

     DOMESTIC SUBSIDIARIES:                FOREIGN SUBSIDIARIES:

     THOMAS GROUP OF LOUISIANA, INC.       THOMAS GROUP ASIA PTE LTD

     By:                                   By:
        ---------------------------------     ----------------------------------
     Printed Name:                         Printed Name:
                  -----------------------               ------------------------
     Its:                                  Its:
         --------------------------------      ---------------------------------

     THOMAS GROUP OF SWEDEN, INC.          THOMAS GROUP GMBH

     By:                                   By:
        ---------------------------------     ----------------------------------
     Printed Name:                         Printed Name:
                  -----------------------               ------------------------
     Its:                                  Its:
         --------------------------------      ---------------------------------

     INTERLINK TECHNOLOGIES, INC.          THOMAS GROUP HONG KONG LIMITED

     By:                                   By:
        ---------------------------------     ----------------------------------
     Printed Name:                         Printed Name:
                  -----------------------               ------------------------
     Its:                                  Its:
         --------------------------------      ---------------------------------

                                           THOMAS GROUP (SUISSE) GMBH
                                           By:
                                              ----------------------------------
                                           Printed Name:
                                                        ------------------------
                                           Its:
                                               ---------------------------------
<Page>

                           OMNIBUS GENERAL CERTIFICATE

     The undersigned persons, holding the respective offices as set forth in the
signatures of each of the respective undersigned entities, being THOMAS GROUP,
INC. ("COMPANY"), a Delaware corporation, THOMAS GROUP OF SWEDEN, INC.
("TGSWEDEN"), a Delaware corporation, THOMAS GROUP OF LOUISIANA, INC. ("TGL"), a
Delaware corporation, THOMAS GROUP (SUISSE) GMBH ("TGS"), a Swiss corporation,
THOMAS GROUP GMBH ("TGG"), a German corporation, THOMAS GROUP ASIA PTE LTD
("TGASIA"), a Singapore corporation and THOMAS GROUP HONG KONG, LIMITED
("TGHK"), a Hong Kong limited liability company, (a) hereby delivers this
Certificate in connection with that certain Third Amendment to First Amended and
Restated Revolving Credit Loan Agreement dated as of even date herewith (the
"AGREEMENT"), by and between Company and Comerica Bank-Texas ("LENDER"), a Texas
banking association, and related loan documents and (b) hereby certifies to
Lender, with the knowledge and intent that Lender may, without any investigation
on its part, rely fully upon the matters herein in connection with any extension
of credit to Company, that the following matters are true and correct on the
date hereof. Company, TGSweden, TGL, TGS, TGG, TGAsia and TGHK are sometimes
collectively referred to herein as the "CONSTITUENT COMPANIES."

     1. RESOLUTIONS. Attached hereto as EXHIBIT A are true and correct copies of
resolutions relating to the agreements to be executed and delivered by each of
the Constituent Companies to Lender in connection with the Agreement and related
documents (collectively, the "SUBJECT AGREEMENTS"), which resolutions have been
duly adopted by the Board of Directors (or equivalent managing group, in the
case of TGS, TGG, TGAsia and TGHK) of each of the Constituent Companies, and
none of such resolutions have been amended, modified or repealed in any respect,
and all of such resolutions are in full force and effect on the date hereof.

     2. INCUMBENCY. The individuals named on SCHEDULE I attached hereto are the
duly elected, qualified and acting officers, respectively, of each of the
Constituent Companies and hold the offices set forth opposite their respective
names as of the date hereof, and the signatures under the respective names and
titles of said officers are their true and authentic signatures.

     3. INCORPORATION. The certificate of incorporation (or other equivalent
charter documents of the Constituent Companies), bylaws and all amendments
thereto which have been delivered to Lender, are still in full force and effect
and have not been amended.

     4. ORGANIZATION, STANDING AND QUALIFICATION. Each of the Constituent
Companies (a) is duly organized, validly existing and in good standing under the
laws of the state (or nation, as the case may be) of organization (except that
Company, TGSweden, and TGL are not in good standing with the Delaware Secretary
of State), (b) has all requisite power, corporate or otherwise, to conduct
business and to execute and deliver, and perform its respective obligations
under, the Subject Agreements, and (c) is duly qualified to transact business as
a foreign corporation in each jurisdiction where the nature of its respective
property or assets (whether real, personal or mixed, or tangible or intangible),
or the conduct of business requires such qualification.

     5. FULL DISCLOSURE. No information, exhibit or written report furnished by
or on behalf of any of the Constituent Companies to Lender in connection with
the negotiation or execution of the Subject Agreements, or the transactions
contemplated thereby, contains any material misstatement of fact or omits the
statement of a material fact necessary to make the statements contained therein
not misleading.

<Page>

     IN WITNESS WHEREOF, I have duly executed this Certificate as of
March 29, 2002.

THOMAS GROUP, INC.                      THOMAS GROUP ASIA PTE LTD

By:                                     By:
   -------------------------------         -------------------------------
   Jim Taylor                                Jim Taylor
   Vice President and Chief Financial        Director
    Officer

THOMAS GROUP GMBH                       THOMAS GROUP OF SWEDEN, INC.

By:                                     By:
   -------------------------------         -------------------------------
   Robert French                             Name
   Managing Director                         Title

THOMAS GROUP (SUISSE) GMBH              THOMAS GROUP HONG KONG LIMITED

By:                                     By:
   -------------------------------         -------------------------------
   Robert French                             Jim Taylor
   Managing Director                         Director

THOMAS GROUP OF LOUISIANA, INC.

By:
   -------------------------------
   Alex W. Young
   Vice President and Secretary

<Page>

                                   SCHEDULE I

<Table>
<Caption>
   NAME                 SIGNATURE                      ENTITY                          TITLE
<S>              <C>                         <C>                                 <C>
Jim Taylor                                   Thomas Group, Inc.                  Chief Financial
                 ------------------------                                        Officer,
                                                                                 Vice President
Alex W. Young
                 ------------------------    Thomas Group of Louisiana, Inc.*    Vice President,
                                                                                 Secretary
Robert French
                 ------------------------    Thomas Group of Sweden, Inc.*       -----------------------
Robert French
                 ------------------------    Thomas Group GmbH*                  Managing Director
Robert French
                 ------------------------    Thomas Group (Suisse) GmbH*         Managing Director
Jim Taylor
                 ------------------------    Thomas Group Asia PTE LTD*          Director
Jim Taylor
                 ------------------------    Thomas Group Hong Kong, Limited*    Director
</Table>

     This Schedule may be executed in one or more counterparts, each of which
shall be certified as follows:

     The undersigned, Jim Taylor, hereby certifies each above signature to be
the authentic signature of the person whose name appears opposite such
signature.

                                 -----------------------------------------------
                                 Jim Taylor,  Secretary to Thomas  Group,  Inc.,
                                 and  authorized  by the "*"  entities to verify
                                 the signatures  above  corresponding to the "*"
                                 entity officers.

<Page>

                                    EXHIBIT A

                    RESOLUTIONS OF THE CONSTITUENT COMPANIES

                                 [See Attached.]

<Page>

                    RESOLUTIONS OF THE BOARD OF DIRECTORS OF
                               THOMAS GROUP, INC.
                               (the "Corporation")

     RESOLVED, that the Chairman of the Board, the President and any Vice
President of the Corporation, by the signature of any one or more of them, be,
and the same hereby are, authorized and directed to execute and deliver to
Comerica Bank-Texas (hereinafter referred to as "BANK") in the name of and on
behalf of the Corporation, with such changes in the terms and provisions thereof
as the officer executing same shall, in his sole discretion, deem advisable,
(i) a certain proposed Third Amendment to First Amended and Restated Revolving
Credit Loan Agreement (the "AMENDMENT") in such form as is approved by the
above-authorized officers; and (ii) such other agreements, instruments,
statements and writings as the officer or officers executing the same may deem
desirable or necessary in connection with any of the foregoing, and to incur on
behalf of the Corporation the obligations described in the Amendment; be it

     RESOLVED FURTHER, that said agreements and other statements in writing
executed in the name and on behalf of the Corporation by the Chief Executive
Officer, President or any Vice President shall be presumed conclusively to be
the instruments, the execution of which is authorized by the resolutions; be it

     RESOLVED FURTHER, that the aforementioned officers of the Corporation be,
and the same hereby are, authorized and directed to execute, in the name of and
on behalf of the Corporation, notes, deeds of trust, security agreement,
financing statements, assignments, collateral reports, loan statements,
confirmations of delivery, lien statements, pledge certificates, release
certificates, removal reports, guaranties, cross-collateralization agreements
and such other writings as are necessary in their dealings with Bank, and any
such papers executed by any of them prior to this time are approved, ratified
and confirmed; and that the Secretary and every Assistant Secretary of the
Corporation be, and they severally hereby are, instructed to provide Bank, from
time to time with lists of the persons who shall have been authorized by the
Corporation to take the above action; and that such designations communicated to
Bank shall continue in full force and effect until notice of revocation thereof
is communicated to Bank at least ten (10) days prior to the effective date of
termination of such authority; be it

     RESOLVED FURTHER, that any officer of the Corporation, by his signature,
be, and the same hereby is, authorized and directed to certify to Bank the
adoption of these resolutions; and be it

     RESOLVED FURTHER, that the aforementioned officers of the Corporation be,
and each of them hereby is, authorized, directed and empowered to do all other
things and acts, to execute and deliver all other instruments, documents and
certificates and to pay all costs, fees and taxes as may be, in their sole
judgment, necessary, proper or advisable in order to carry out or comply with
the purpose or intent of the foregoing resolutions; and that all of the acts and
deeds of the aforementioned officers of the Corporation which are consistent
with the purposes and intent of such resolutions be, and the same hereby are, in
all respect approved, confirmed and adopted as the acts and deeds of the
Corporation.

<Page>

                    RESOLUTIONS OF THE BOARD OF DIRECTORS OF
                         THOMAS GROUP SWEDEN, INC., AND
                         THOMAS GROUP OF LOUISIANA, INC.
                        (collectively, the "Corporation")

     RESOLVED, that the President and any Vice President of the Corporation, by
the signature of any one or more of them, be, and the same hereby are,
authorized and directed to execute and deliver to Comerica Bank-Texas
(hereinafter referred to as "BANK") in the name of and on behalf of the
Corporation, with such changes in the terms and provisions thereof as the
officer executing same shall, in his sole discretion, deem advisable, (i) a
certain proposed Third Amended and Restated Revolving Credit Loan Agreement (the
"AMENDMENT") in such form as is approved by the above-authorized officers; and
(ii) such other agreements, instruments, statements and writings as the officer
or officers executing the same may deem desirable or necessary in connection
with any of the foregoing; be it

     RESOLVED FURTHER, that said agreements and other statements in writing
executed in the name and on behalf of the Corporation by the Chairman of the
Board, President or any Vice President shall be presumed conclusively to be the
instruments, the execution of which is authorized by the resolutions; be it

     RESOLVED FURTHER, that the Board of Directors of the Corporation has
determined that the benefits to be received under the Amendment as set forth in
these resolutions are at least equal to the potential exposure and risk to the
Corporation under the Amendment; be it

     RESOLVED FURTHER, that the aforementioned officers of the Corporation be,
and the same hereby are, authorized and directed to execute, in the name of and
on behalf of the Corporation, such other writings as are necessary in their
dealings with Bank, and any such papers executed by any of them prior to this
time are approved, ratified and confirmed; and that the Secretary and every
Assistant Secretary of the Corporation be, and they severally hereby are,
instructed to provide Bank, from time to time with lists of the persons who
shall have been authorized by the Corporation to take the above action; and that
such designations communicated to Bank shall continue in full force and effect
until notice of revocation thereof is communicated to Bank at least ten
(10) days prior to the effective date of termination of such authority; be it

     RESOLVED FURTHER, that any officer of the Corporation, by his signature,
be, and the same hereby is, authorized and directed to certify to Bank the
adoption of these resolutions; and be it

     RESOLVED FURTHER, that the aforementioned officers of the Corporation be,
and each of them hereby is, authorized, directed and empowered to do all other
things and acts, to execute and deliver all other instruments, documents and
certificates and to pay all costs, fees and taxes as may be, in their sole
judgment, necessary, proper or advisable in order to carry out or comply with
the purpose or intent of the foregoing resolutions; and that all of the acts and
deeds of the aforementioned officers of the Corporation which are consistent
with the purposes and intent of such resolutions be, and the same hereby are, in
all respect approved, confirmed and adopted as the acts and deeds of the
Corporation.

<Page>

                    RESOLUTIONS OF THE BOARD OF DIRECTORS OF
                          THOMAS GROUP GMBH AND THOMAS
                               GROUP (SUISSE) GMBH
                        (collectively, the "Corporation")

     RESOLVED, that the Managing Director of the Corporation, by his signature,
be, and the same hereby is, authorized and directed to execute and deliver to
Comerica Bank-Texas (hereinafter referred to as "BANK") in the name of and on
behalf of the Corporation, with such changes in the terms and provisions thereof
as the Managing Director executing same shall, in his sole discretion, deem
advisable, (i) a certain proposed Third Amendment to First Amended and Restated
Revolving Credit Loan Agreement (the "AMENDMENT") in such form as is approved by
the above-authorized Managing Directors; and (ii) such other agreements,
instruments, statements and writings as the Managing Director or Managing
Directors executing the same may deem desirable or necessary in connection with
any of the foregoing; be it

     RESOLVED FURTHER, that said agreements and other statements in writing
executed in the name and on behalf of the Corporation by the Managing Director
shall be presumed conclusively to be the instruments, the execution of which is
authorized by the resolutions; be it

     RESOLVED FURTHER, that the Board of Directors of the Corporation has
determined that the benefits to be received under the Amendment set forth in
these resolutions are at least equal to the potential exposure and risk to the
Corporation under the Amendment; be it

     RESOLVED FURTHER, that the aforementioned Managing Director of the
Corporation be, and the same hereby is, authorized and directed to execute, in
the name of and on behalf of the Corporation, such other writings as are
necessary in their dealings with Bank, (and any such papers executed by any of
them prior to this time are approved, ratified and confirmed), and to provide
Bank, from time to time with lists of the persons who shall have been authorized
by the Corporation to take the above action; and that such designations
communicated to Bank shall continue in full force and effect until notice of
revocation thereof is communicated to Bank at least ten (10) days prior to the
effective date of termination of such authority; be it

     RESOLVED FURTHER, that the Managing Director of the Corporation, by his
signature, be, and the same hereby is, authorized and directed to certify to
Bank the adoption of these resolutions; and be it

     RESOLVED FURTHER, that the aforementioned Managing Director of the
Corporation be, and is, authorized, directed and empowered to do all other
things and acts, to execute and deliver all other instruments, documents and
certificates and to pay all costs, fees and taxes as may be, in their sole
judgment, necessary, proper or advisable in order to carry out or comply with
the purpose or intent of the foregoing resolutions; and that all of the acts and
deeds of the aforementioned Managing Director of the Corporation which are
consistent with the purposes and intent of such resolutions be, and the same
hereby are, in all respect approved, confirmed and adopted as the acts and deeds
of the Corporation.

<Page>

                    RESOLUTIONS OF THE BOARD OF DIRECTORS OF
                      THOMAS GROUP ASIA PRIVATE LIMITED AND
                         THOMAS GROUP HONG KONG, LIMITED
                        (collectively, the "Corporation")

     RESOLVED, that any Director of the Corporation, by his signature, be, and
the same hereby is, authorized and directed to execute and deliver to Comerica
Bank-Texas (hereinafter referred to as "BANK") in the name of and on behalf of
the Corporation, with such changes in the terms and provisions thereof as the
Director executing same shall, in his sole discretion, deem advisable, (i) a
certain proposed Third Amendment to First Amended and Restated Revolving Credit
Loan Agreement (the "AMENDMENT") in such form as is approved by the
above-authorized Directors; and (ii) such other agreements, instruments,
statements and writings as the Director or Directors executing the same may deem
desirable or necessary in connection with any of the foregoing; be it

     RESOLVED FURTHER, that said agreements and other statements in writing
executed in the name and on behalf of the Corporation by the Director shall be
presumed conclusively to be the instruments, the execution of which is
authorized by the resolutions; be it

     RESOLVED FURTHER, that the Board of Directors of the Corporation has
determined that the benefits to be received under the Amendment set forth in
these resolutions are at least equal to the potential exposure and risk to the
Corporation under the Amendment; be it

     RESOLVED FURTHER, that the aforementioned Director of the Corporation be,
and the same hereby is, authorized and directed to execute, in the name of and
on behalf of the Corporation, such other writings as are necessary in their
dealings with Bank, (and any such papers executed by any of them prior to this
time are approved, ratified and confirmed), and to provide Bank, from time to
time with lists of the persons who shall have been authorized by the Corporation
to take the above action; and that such designations communicated to Bank shall
continue in full force and effect until notice of revocation thereof is
communicated to Bank at least ten (10) days prior to the effective date of
termination of such authority; be it

     RESOLVED FURTHER, that any Director of the Corporation, by his signature,
be, and the same hereby is, authorized and directed to certify to Bank the
adoption of these resolutions; and be it

     RESOLVED FURTHER, that the aforementioned Director of the Corporation be,
and is, authorized, directed and empowered to do all other things and acts, to
execute and deliver all other instruments, documents and certificates and to pay
all costs, fees and taxes as may be, in their sole judgment, necessary, proper
or advisable in order to carry out or comply with the purpose or intent of the
foregoing resolutions; and that all of the acts and deeds of the aforementioned
Director of the Corporation which are consistent with the purposes and intent of
such resolutions be, and the same hereby are, in all respect approved, confirmed
and adopted as the acts and deeds of the Corporation.
<Page>

                             SUBORDINATION AGREEMENT

     The undersigned (the "INVESTOR"), being an owner and holder of certain
obligations of Thomas Group, Inc. (the "BORROWER"), and payable or otherwise
accruing to the Investor arising in connection with the promissory note attached
hereto as "EXHIBIT A" (the "INVESTOR NOTE", and the obligations arising in
connection with the Investor Note, the "INVESTOR OBLIGATIONS"), does, for the
benefit of, and at the instance of, Comerica Bank-Texas, a Texas banking
association (the "BANK") and as an inducement to the Bank to extend or to
continue to extend financial accommodations to the Borrower from time to time,
undertake the following actions:

     1. SUBORDINATION.

          a. The Investor does hereby expressly subordinate and make inferior at
all times and in all respects all of its indebtedness, obligations (including
without limitation, the Investor Obligations), liens and claims, whether express
or implied, written or verbal, secured or unsecured, now existing or hereafter
arising, of any amount and of any nature from the Borrower to the Investor
(collectively, the "SUBORDINATED INDEBTEDNESS") to all indebtedness,
obligations, liens and claims, whether express or implied, written or verbal,
now existing or hereafter arising, of any amount and of any nature (and all
renewals, extension and modifications thereof) from the Borrower to the Bank
(collectively, the "SENIOR INDEBTEDNESS").

          b. The Investor does hereby agree that the Subordinated Indebtedness
shall be and remain at all times and in all respects secondary and inferior to
the Senior Indebtedness, and all of the Senior Indebtedness, as now or hereafter
renewed or extended, shall remain at all times and in all aspects prior and
superior to the Subordinated Indebtedness. No consent or notice shall at any
time be required in connection with the renewal or extension of any of the
Senior Indebtedness.

     2. PAYMENTS ON INVESTOR OBLIGATIONS. Notwithstanding anything to the
contrary, so long as no "Default" or "Event of Default" (as such terms are
defined in the Senior Loan Agreement) shall have occurred and be continuing
under that certain First Amended and Restated Revolving Credit Loan Agreement
dated as of December 4, 1996, among the Borrower and the Bank (as amended or
otherwise modified from time to time, the "SENIOR LOAN AGREEMENT"), the Borrower
may make scheduled payments (but not prepayments) of interest and/or principal
on, and otherwise satisfy, the Investor Obligations in accordance with the terms
of the Investor Note.

     3. DEFAULT. Any failure to comply with the terms of, or any default or
event of default declared under the Investor Note shall constitute an "Event of
Default" (as such term is defined therein) under the Senior Loan Agreement. The
Borrower agrees to promptly notify the Bank of any default or event of default
declared under the Investor Note. So long as any "Default" or "Event of Default"
(as such terms are defined therein) shall have occurred and be continuing under
the Senior Loan Agreement, the Investor will not ask for, demand, sue for, take
or receive, or offer to make any discharge or release of, any of the
Subordinated Indebtedness.

<Page>

     4. INVESTOR NOTE. No amendment or modification to the Investor Note shall
be made without the express written approval of the Bank.

     5. BANKRUPTCY. The provisions of this Subordination Agreement shall
continue in full force and effect, notwithstanding the commencement of a case
under Title 11 of the United States Code, as amended and/or superseded, by or
against the Borrower or the Investor.

     6. MISCELLANEOUS. This Subordination Agreement shall be governed in all
respects by the laws of the State of Texas as such laws are applied to
agreements between Texas residents entered into and to be performed entirely
with Texas. This Subordination Agreement may be executed in one or more
counterparts and on telecopy counterparts, each of which when so executed shall
be deemed to be an original but all of which when taken together shall
constitute one and the same agreement.

            [SIGNATURE PAGES FOR THIS SUBORDINATION AGREEMENT FOLLOW]

<Page>

     EXECUTED this 25th day of March, 2001.

                                    INVESTOR:

                                    JOHN R. HAMANN

                                    /s/ John R. Hamann
                                    --------------------------------

AGREEMENT AND ACKNOWLEDGEMENT:

The Borrower hereby accepts notice of the subordination created by this
Subordination Agreement and agrees that it will take no action inconsistent
with this Subordination Agreement.

                                    BORROWER:

                                    THOMAS GROUP, INC

                                    By:   /s/ Jim Taylor
                                        ---------------------------------------
                                    Name:   JIM TAYLOR
                                          -------------------------------------
                                    Title:   VP & CFO
                                           ------------------------------------

<Page>

                                    EXHIBIT A

                                   OBLIGATIONS

                  [Attach copy of promissory note to Investor]

<Page>

                                 PROMISSORY NOTE

$92,000                       Dallas, Texas                 March 29, 2002

FOR VALUE RECEIVED, the undersigned, Thomas Group, Inc., a Delaware corporation
("Maker"), promises to pay to the order of John R. Hamann ("Payee"), at Dallas,
Texas, or at such other place as the holder hereof shall designate from time to
time in writing, in lawful money of the United States of America, the principal
sum of Ninety Two Thousand and No/100 Dollars($92,000), and to pay interest from
the date hereof on the principal balance hereof from time to time remaining
unpaid prior to maturity at the prime rate of interest from to time in effect at
Dallas, Texas (which rate shall change from time to time when and as such prime
rate of interest shall change) plus six percent (6%) per annum, such interest
payable semi-annually on October 1 and April 1 of each year. All past due
principal and interest shall bear interest at the higher of such rate or
eighteen percent (18%) per annum until paid. The interest hereon shall never be
charged or collected at a Highest Lawful Rate (as defined herein).

     The entire principal of this Note and accrued interest thereon shall be due
in full on April 1, 2004.

     Except as otherwise provided in this Note, the undersigned waives demand,
presentment for payment, protest, notice of protest, notice of intention to
accelerate, filing of suit, and diligence in collecting this Note.

     If this Note shall be collected by legal proceedings or through a
bankruptcy court, or shall be placed in the hands of an attorney for collection
after maturity, no matter how maturity is brought about, the undersigned agrees
to pay reasonable attorneys' or collection fees incurred by Payee in connection
therewith.

     This Note shall be construed in accordance with and governed by the laws of
the State of Texas.

     The undersigned shall have the right to prepay the principal in whole or in
part from time to time without premium or penalty.

     This Note shall become and be immediately due and payable upon the written
demand of the holder hereof to the Maker if one or more of the following events
shall happen and be continuing at the time of such demand:

     (1)  a decree or order by a court of competent jurisdiction shall have been
          entered, either (i) adjusting the Maker a bankrupt or insolvent, or
          (ii) approving a petition seeking reorganization or arrangement of the
          Maker under the Title II of the United States Code (the "Bankruptcy
          Code") or any other similar applicable federal or state law, or
          (iii) appointing a receiver or liquidator or trustee or assignee in
          bankruptcy of

<Page>

          insolvency of the Maker or a receiver of all or any substantial
          portion of its property, and any such decree or order shall have
          continued in force undischarged or unstayed for a period of sixty (60)
          days; or

     (2)  the Maker shall institute proceedings to be adjudicated a voluntary
          bankrupt, or shall consent to the filing of a bankruptcy petition
          against it, or shall file a petition or answer or consent seeking
          reorganization or arrangement under the Bankruptcy Code or any other
          similar applicable federal or state law, or shall consent to the
          filing of any such petition, or shall consent to the appointment of a
          receiver or liquidator or trustee or assignee in bankruptcy or
          insolvency of it or of all or substantially all of its property, or
          shall make a general assignment for the benefit of creditors, or shall
          admit in writing its inability to pay its debts generally as they
          become due.

     Any notice or demand required to be given hereunder by any holder hereof
shall be deemed to have been given and received (1) when actually received by
Maker, if delivered in person, or (2) forty-eight (48) hours after a letter
containing such notice is deposited in the United States mail, certified or
registered, with postage prepaid, and addressed to Maker at 5221 North O'Connor
Boulevard, Irving, Texas, 75039, or at such other address of Maker as Maker
shall advise the holder hereof by certified or registered mail.

     This Note and all other agreements between Maker and Payee are hereby
expressly limited so that, in no contingency or event whatsoever, whether
through acceleration of maturity of this Note or otherwise, shall the amount
paid or agreed to be paid to the Payee for the use, forbearance or detention of
the money advanced or to be advanced hereunder exceed the highest lawful rate
permissible under the laws of the State of Texas as applicable to this
transaction. If, from any circumstances whatsoever, fulfillment of any provision
hereof, at the time performance of such provision shall be due, shall involve
the payment of interest in excess of the Highest Lawful Rate, and if from any
circumstances the holder hereof shall ever receive as interest an amount that
would exceed the Highest Lawful Rate, the amount that would be excessive shall
be applied to the reduction of the unpaid principal balance of this Note (and
not to the payment of interest) or if such excessive interest exceeds the unpaid
balance of principal of the Note, the excess shall be refunded to Maker, and the
holder hereof shall not be subject to any penalty provided for the contracting
for, or charging or receiving of, interest in excess of the Highest Lawful Rate
regardless of when or the circumstances under which such refund or application
was made.

     In the event that, subsequent to the date hereof, Maker obtains financing
from any third party source, whether in the form of debt or equity, Maker and
Payee agree to amend this Note and enter into such other documentation as is
necessary for Payee to receive consideration for the loan evidenced by this Note
on terms and conditions no less favorable to Payee than those provided to such
third party. By way of illustration but not of limitation, should such third
party source receive equity securities or securities convertible into equity
securities of Maker in connection with a financing, Payee shall receive the same
on the same terms and at the same price.

<Page>

     EXECUTED as of the day and year first above written.

                                    THOMAS GROUP, INC.

                                    By:

                                    Name:  /s/ Jim Taylor
                                          -------------------------------------
                                    Title: CFO, Vice President of Finance
                                           ------------------------------------

<Page>

                             SUBORDINATION AGREEMENT

     The undersigned (the "INVESTOR"), being an owner and holder of certain
obligations of Thomas Group, Inc. (the "BORROWER"), and payable or otherwise
accruing to the Investor arising in connection with the promissory note attached
hereto as "EXHIBIT A" (the "INVESTOR NOTE", and the obligations arising in
connection with the Investor Note, the "INVESTOR OBLIGATIONS"), does, for the
benefit of, and at the instance of, Comerica Bank-Texas, a Texas banking
association (the "BANK") and as an inducement to the Bank to extend or to
continue to extend financial accommodations to the Borrower from time to time,
undertake the following actions:

     1. SUBORDINATION.

          a. The Investor does hereby expressly subordinate and make inferior at
all times and in all respects all of its indebtedness, obligations (including
without limitation, the Investor Obligations), liens and claims, whether express
or implied, written or verbal, secured or unsecured, now existing or hereafter
arising, of any amount and of any nature from the Borrower to the Investor
(collectively, the "SUBORDINATED INDEBTEDNESS") to all indebtedness,
obligations, liens and claims, whether express or implied, written or verbal,
now existing or hereafter arising, of any amount and of any nature (and all
renewals, extension and modifications thereof) from the Borrower to the Bank
(collectively, the "SENIOR INDEBTEDNESS").

          b. The Investor does hereby agree that the Subordinated Indebtedness
shall be and remain at all times and in all respects secondary and inferior to
the Senior Indebtedness, and all of the Senior Indebtedness, as now or hereafter
renewed or extended, shall remain at all times and in all aspects prior and
superior to the Subordinated Indebtedness. No consent or notice shall at any
time be required in connection with the renewal or extension of any of the
Senior Indebtedness.

     2. PAYMENTS ON INVESTOR OBLIGATIONS. Notwithstanding anything to the
contrary, so long as no "Default" or "Event of Default" (as such terms are
defined in the Senior Loan Agreement) shall have occurred and be continuing
under that certain First Amended and Restated Revolving Credit Loan Agreement
dated as of December 4, 1996, among the Borrower and the Bank (as amended or
otherwise modified from time to time, the "SENIOR LOAN AGREEMENT"), the Borrower
may make scheduled payments (but not prepayments) of interest and/or principal
on, and otherwise satisfy, the Investor Obligations in accordance with the terms
of the Investor Note.

     3. DEFAULT. Any failure to comply with the terms of, or any default or
event of default declared under the Investor Note shall constitute an "Event of
Default" (as such term is defined therein) under the Senior Loan Agreement. The
Borrower agrees to promptly notify the Bank of any default or event of default
declared under the Investor Note. So long as any "Default" or "Event of Default"
(as such terms are defined therein) shall have occurred and be continuing under
the Senior Loan Agreement, the Investor will not ask for, demand, sue for, take
or receive, or offer to make any discharge or release of, any of the
Subordinated Indebtedness.

<Page>

     4. INVESTOR NOTE. No amendment or modification to the Investor Note shall
be made without the express written approval of the Bank.

     5. BANKRUPTCY. The provisions of this Subordination Agreement shall
continue in full force and effect, notwithstanding the commencement of a case
under Title 11 of the United States Code, as amended and/or superseded, by or
against the Borrower or the Investor.

6. MISCELLANEOUS. This Subordination Agreement shall be governed in all respects
by the laws of the State of Texas as such laws are applied to agreements between
Texas residents entered into and to be performed entirely with Texas. This
Subordination Agreement may be executed in one or more counterparts and on
telecopy counterparts, each of which when so executed shall be deemed to be an
original but all of which when taken together shall constitute one and the same
agreement.

            [SIGNATURE PAGES FOR THIS SUBORDINATION AGREEMENT FOLLOW]

<Page>

     EXECUTED this 31st day of March, 2001.

                                    [Name of Investor]

                                    By:  /s/ John T. Chain, JR.
                                        ---------------------------------------
                                    Name:   JOHN T. CHAIN, JR.
                                          -------------------------------------
                                    Title:
                                           ------------------------------------

AGREEMENT AND ACKNOWLEDGMENT:

The Borrower hereby accepts notice of the subordination created by this
Subordination Agreement and agrees that it will take no action inconsistent with
this Subordination Agreement.

                                    BORROWER:

                                    THOMAS GROUP, INC.

                                    By:
                                        ---------------------------------------
                                    Name:
                                          -------------------------------------
                                    Title:
                                           ------------------------------------

<Page>

     EXECUTED this ___ day of March, 2001.

                                    INVESTOR:

                                    JOHN T. CHAIN, JR.

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

AGREEMENT AND ACKNOWLEDGMENT:

The Borrower hereby accepts notice of the subordination created by this
Subordination Agreement and agrees that it will take no action inconsistent with
this Subordination Agreement.

                                    BORROWER:

                                    THOMAS GROUP, INC.

                                    By:  /s/ Jim Taylor
                                        ---------------------------------------
                                    Name:    JIM TAYLOR
                                          -------------------------------------
                                    Title:   VP & CFO
                                           ------------------------------------

<Page>

                                    EXHIBIT A

                                   OBLIGATIONS

                  [Attach copy of promissory note to Investor]

<Page>

                                 PROMISSORY NOTE

$1,000,000                   Dallas, Texas                  March 29, 2002

FOR VALUE RECEIVED, the undersigned, Thomas Group, Inc., a Delaware corporation
("Maker"), promises to pay to the order of John T. Chain, Jr. ("Payee"), at
Dallas, Texas, or at such other place as the holder hereof shall designate from
time to time in writing, in lawful money of the United States of America, the
principal sum of One Million and No/100 Dollars ($1,000,000), and to pay
interest from April 1, 2002 on the principal balance hereof from time to time
remaining unpaid prior to maturity at the prime rate of interest from time to
time in effect at Dallas, Texas (which rate shall change from time to time when
and as such prime rate of interest shall change) plus six percent (6%) per
annum, such interest payable semi-annually on October 1 and April 1 of each
year. All past due principal and interest shall bear interest at the higher of
such rate or eighteen percent (18%) per annum until paid. The interest hereon
shall never be charged or collected at a Highest Lawful Rate (as defined
herein).

     The entire principal of this Note and accrued interest thereon shall be due
in full on April 1, 2004.

     Except as otherwise provided in this Note, the undersigned waives demand,
presentment for payment, protest, notice of protest, notice of intention to
accelerate, filing of suit, and diligence in collecting this Note.

     If this Note shall be collected by legal proceedings or through a
bankruptcy court, or shall be placed in the hands of an attorney for collection
after maturity, no matter how maturity is brought about, the undersigned agrees
to pay reasonable attorneys' or collection fees incurred by Payee in connection
therewith.

     This Note shall be construed in accordance with and governed by the laws of
the State of Texas.

     The undersigned shall have the right to prepay the principal in whole or in
part from time to time without premium or penalty.

     This Note shall become and be immediately due and payable upon the written
demand of the holder hereof to the Maker if one or more of the following events
shall happen and be continuing at the time of such demand:

     (1)  a decree or order by a court of competent jurisdiction shall have been
          entered, either (i) adjudging the Maker a bankrupt or insolvent, or
          (ii) approving a petition seeking reorganization or arrangement of the
          Maker under the Title II of the United States Code (the "Bankruptcy
          Code") or any other similar applicable federal or state law, or (iii)
          appointing a receiver or liquidator or trustee or assignee in
          bankruptcy or insolvency of the Maker or a receiver of all or any
          substantial portion of its property,

<Page>

          and any such decree or order shall have continued in force
          undischarged or unstayed for a period of sixty (60) days; or

     (2)  the Maker shall institute proceedings to be adjudicated a voluntary
          bankrupt, or shall consent to the filing of a bankruptcy petition
          against it, or shall file a petition or answer or consent seeking
          reorganization or arrangement under the Bankruptcy Code or any other
          similar applicable federal or state law, or shall consent to the
          filing of any such petition, or shall consent to the appointment of a
          receiver or liquidator or trustee or assignee in bankruptcy or
          insolvency of it or of all or substantially all of its property, or
          shall make a general assignment for the benefit of creditors, or shall
          admit in writing its inability to pay its debts generally as they
          become due.

     Any notice or demand required to be given hereunder by any holder hereof
shall be deemed to have been given and received (1) when actually received by
Maker, if delivered in person, or (2) forty-eight (48) hours after a letter
containing such notice is deposited in the United States mail, certified or
registered, with postage prepaid, and addressed to Maker at 5221 North O'Connor
Boulevard, Irving, Texas, 75039, or at such other address of Maker as Maker
shall advise the holder hereof by certified or registered mail.

     This Note and all other agreements between Maker and Payee are hereby
expressly limited so that, in no contingency or event whatsoever, whether
through acceleration of maturity of this Note or otherwise, shall the amount
paid or agreed to be paid to the Payee for the use, forbearance or detention of
the money advanced or to be advanced hereunder exceed the highest lawful rate
permissible under the laws of the State of Texas as applicable to this
transaction. If, from any circumstances whatsoever, fulfillment of any provision
hereof, at the time performance of such provision shall be due, shall involve
the payment of interest in excess of the Highest Lawful Rate, and if from any
circumstances the holder hereof shall ever receive as interest an amount that
would exceed the Highest Lawful Rate, the amount that would be excessive shall
be applied to the reduction of the unpaid principal balance of this Note (and
not to the payment of interest) or if such excessive interest exceeds the unpaid
balance of principal of the Note, the excess shall be refunded to Maker, and the
holder hereof shall not be subject to any penalty provided for the contracting
for, or charging or receiving of, interest in excess of the Highest Lawful Rate
regardless of when or the circumstances under which such refund or application
was made.

     In the event that, subsequent to the date hereof, Maker obtains financing
from any third party source, whether in the form of debt or equity, Maker and
Payee agree to amend this Note and enter into such other documentation as is
necessary for Payee to receive consideration for the loan evidenced by this Note
on terms and conditions no less favorable to Payee than those provided to such
third party. By way of illustration but not of limitation, should such third
party source receive equity securities or securities convertible into equity
securities of Maker in connection with a financing, Payee shall receive the same
on the same terms and at the same price.

<Page>

     EXECUTED as of the day and year first above written.

                                    THOMAS GROUP, INC.

                                    By:
                                    Name:  /s/ Jim Taylor
                                          ------------------------------------
                                    Title:  CFO, Vice President of Finance
                                          ------------------------------------<PAGE>

                                                                    EXHIBIT 4.1

                             INDEPENDENT BANK CORP.

                                       AND

                              THE BANK OF NEW YORK,
                              AS INDENTURE TRUSTEE

                                    INDENTURE

                    8.625% JUNIOR SUBORDINATED DEBENTURES DUE 2031

                          DATED AS OF DECEMBER 11, 2001

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                              PAGE
<S>                                                                                                           <C>
ARTICLE I DEFINITIONS.............................................................................................6
         1.1          Definitions of Terms........................................................................6
ARTICLE II ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF THE DEBENTURES....................14
         2.1          Designation and Principal Amount...........................................................14
         2.2          Maturity...................................................................................15
         2.3          Form and Payment...........................................................................15
         2.4          [Intentionally Left Blank].................................................................15
         2.5          Interest...................................................................................15
         2.6          Execution and Authentications..............................................................16
         2.7          Registration of Transfer and Exchange......................................................17
         2.8          Temporary Debentures.......................................................................18
         2.9          Mutilated, Destroyed, Lost or Stolen Debentures............................................18
         2.10         Cancellation...............................................................................19
         2.11         Benefit of Indenture.......................................................................20
         2.12         Authenticating Agent.......................................................................20
ARTICLE III REDEMPTION OF DEBENTURES.............................................................................20
         3.1          Redemption.................................................................................20
         3.2          Special Event Redemption...................................................................21
         3.3          Optional Redemption by Company.............................................................21
         3.4          Notice of Redemption.......................................................................22
         3.5          Payment Upon Redemption....................................................................23
         3.6          No Sinking Fund............................................................................24
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD..................................................................24
         4.1          Extension of Interest Payment Period.......................................................24
         4.2          Notice of Extension........................................................................24
         4.3          Limitation on Transactions.................................................................25
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY....................................................................25
         5.1          Payment of Principal and Interest..........................................................25
         5.2          Maintenance of Agency......................................................................26
         5.3          Paying Agents..............................................................................26
         5.4          Appointment to Fill Vacancy in Office of Trustee...........................................27
         5.5          Compliance with Consolidation Provisions...................................................27
         5.6          Limitation on Transactions.................................................................27
         5.7          Covenants as to the Trust..................................................................28
         5.8          Covenants as to Purchases..................................................................29
         5.9          Waiver of Usury, Stay or Extension Laws....................................................29
ARTICLE VI DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE....................................29
         6.1          Company to Furnish Trustee Names and Addresses of Debentureholders.........................29
         6.2          Preservation of Information Communications with Debentureholders...........................29

                                      -i-

<PAGE>

<S>                                                                                                            <C>
         6.3          Reports by the Company.....................................................................30
         6.4          Reports by the Trustee.....................................................................30
ARTICLE VII REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT.....................................31
         7.1          Events of Default..........................................................................31
         7.2          Collection of Indebtedness and Suits for Enforcement by Trustee............................32
         7.3          Application of Moneys Collected............................................................34
         7.4          Limitation on Suits........................................................................34
         7.5          Rights and Remedies Cumulative; Delay or Omission not Waiver...............................35
         7.6          Control by Debentureholders................................................................35
         7.7          Undertaking to Pay Costs...................................................................36
         7.8          Direct Action; Right of Set-Off............................................................36
ARTICLE VIII FORM OF DEBENTURE AND ORIGINAL ISSUE................................................................37
         8.1          Form of Debenture..........................................................................37
         8.2          Original Issue of Debentures...............................................................37
ARTICLE IX CONCERNING THE TRUSTEE................................................................................37
         9.1          Certain Duties and Responsibilities of the Trustee.........................................37
         9.2          Notice of Defaults.........................................................................38
         9.3          Certain Rights of Trustee..................................................................39
         9.4          Trustee Not Responsible for Recitals, etc..................................................40
         9.5          May Hold Debentures........................................................................40
         9.6          Moneys Held in Trust.......................................................................40
         9.7          Compensation and Reimbursement.............................................................41
         9.8          Reliance on Officers' Certificate..........................................................41
         9.9          Disqualification:  Conflicting Interests...................................................41
         9.10         Corporate Trustee Required; Eligibility....................................................42
         9.11         Resignation and Removal; Appointment of Successor..........................................42
         9.12         Acceptance of Appointment by Successor.....................................................43
         9.13         Merger, Conversion, Consolidation or Succession to Business................................44
         9.14         Preferential Collection of Claims Against the Company......................................44
ARTICLE X CONCERNING THE DEBENTUREHOLDERS........................................................................44
         10.1         Evidence of Action by Holders..............................................................44
         10.2         Proof of Execution by Debentureholders.....................................................45
         10.3         Who May be Deemed Owners...................................................................45
         10.4         Certain Debentures Owned by Company Disregarded............................................46
         10.5         Actions Binding on Future Debentureholders.................................................46
ARTICLE XI SUPPLEMENTAL INDENTURES...............................................................................46
         11.1         Supplemental Indentures Without the Consent of Debentureholders............................46
         11.2         Supplemental Indentures with Consent of Debentureholders...................................47
         11.3         Effect of Supplemental Indentures..........................................................48
         11.4         Debentures Affected by Supplemental Indentures.............................................48
         11.5         Execution of Supplemental Indentures.......................................................48
ARTICLE XII SUCCESSOR CORPORATION................................................................................49
         12.1         Company May Consolidate, etc...............................................................49
         12.2         Successor Corporation Substituted..........................................................50

                                      -ii-

<PAGE>

<S>                                                                                                           <C>
         12.3         Evidence of Consolidation, etc. to Trustee.................................................50
ARTICLE XIII SATISFACTION AND DISCHARGE..........................................................................50
         13.1         Satisfaction and Discharge of Indenture....................................................50
         13.2         Discharge of Obligations...................................................................51
         13.3         Deposited Moneys to be Held in Trust.......................................................51
         13.4         Payment of Monies Held by Paying Agents....................................................51
         13.5         Repayment to Company.......................................................................51
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS......................................52
         14.1         No Recourse................................................................................52
ARTICLE XV MISCELLANEOUS PROVISIONS..............................................................................52
         15.1         Effect on Successors and Assigns...........................................................52
         15.2         Actions by Successor.......................................................................53
         15.3         Surrender of Company Powers................................................................53
         15.4         Notices....................................................................................53
         15.5         Governing Law..............................................................................53
         15.6         Treatment of Debentures as Debt............................................................53
         15.7         Compliance Certificates and Opinions.......................................................53
         15.8         Payments on Business Days..................................................................54
         15.9         Conflict with Trust Indenture Act..........................................................54
         15.10        Counterparts...............................................................................54
         15.11        Severability...............................................................................54
         15.12        Assignment.................................................................................54
         15.13        Acknowledgment of Rights...................................................................55
ARTICLE XVI SUBORDINATION OF DEBENTURES..........................................................................55
         16.1         Agreement to Subordinate...................................................................55
         16.2         Default on Senior Debt, Subordinated Debt or Additional Senior Obligations.................55
         16.3         Liquidation; Dissolution; Bankruptcy.......................................................56
         16.4         Subrogation................................................................................57
         16.5         Trustee to Effectuate Subordination........................................................58
         16.6         Notice by the Company......................................................................58
         16.7         Rights of the Trustee; Holders of Senior Indebtedness......................................59
         16.8         Subordination May Not be Impaired..........................................................59
</TABLE>

                                     -iii-

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT                                                        SECTION OF
OF 1939, AS AMENDED                                                        INDENTURE
<S>                                                                        <C>
310(a).................................................................................9.10
310(b)..................................................................................9.9
       ................................................................................9.11
310(c).......................................................................Not Applicable
311(a).................................................................................9.14
311(b).................................................................................9.14
311(c)...................................................................... Not Applicable
312(a)..................................................................................6.1
      ...............................................................................6.2(a)
312(b)...............................................................................6.2(c)
312(c)...............................................................................6.2(c)
313(a)...............................................................................6.4(a)
313(b)...............................................................................6.4(b)
313(c)...............................................................................6.4(a)
       ..............................................................................6.4(b)
313(d)...............................................................................6.4(c)
314(a)...............................................................................6.3(a)
314(b).......................................................................Not Applicable
314(c).................................................................................15.7
314(d).......................................................................Not Applicable
314(e).................................................................................15.7
314(f).......................................................................Not Applicable
315(a)...............................................................................9.1(a)
       .................................................................................9.3
315(b)..................................................................................9.2
315(c)...............................................................................9.1(a)
315(d)...............................................................................9.1(b)
315(e)..................................................................................7.7
316(a)..................................................................................1.1
       .................................................................................7.6
316(b)...............................................................................7.4(b)
316(c)..............................................................................10.1(b)
317(a)..................................................................................7.2
317(b)..................................................................................5.3
318(a).................................................................................15.9
</TABLE>

Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
      be a part of the Indenture

                                      -iv-

<PAGE>

                                    INDENTURE

         INDENTURE, dated as of December 11, 2001 between INDEPENDENT BANK
CORP., a Massachusetts corporation (the "Company"), and THE BANK OF NEW YORK, a
New York banking corporation (the "Trustee");

                                    RECITALS

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of securities to be known as its 8.625% Junior Subordinated Debentures
due 2031 (hereinafter referred to as the "Debentures"), the form and substance
of such Debentures and the terms, provisions and conditions thereof to be set
forth as provided in this Indenture;

         WHEREAS, Independent Capital Trust III, a Delaware statutory business
trust (the "Trust"), has offered to the public up to $25,000,000 aggregate
liquidation amount of its Preferred Securities (as defined herein) and proposes
to invest the proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Company of up to $773,200 aggregate
liquidation amount of its Common Securities (as defined herein), in up to
$25,773,200 aggregate principal amount of the Debentures;

         WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture;

         WHEREAS, all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects;

         WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and

         WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.

         NOW, THEREFORE, in consideration of the premises and the purchase of
the Debentures by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of the Debentures:

                                      -5-
<PAGE>

                                   ARTICLE I

                                   DEFINITIONS

1.1      DEFINITIONS OF TERMS.

         The terms defined in this Section 1.1 (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.1 and shall include the
plural as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act, or that are by reference in the Trust
Indenture Act defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in the Trust Indenture Act and in the Securities
Act as in force at the date of the execution of this instrument. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with Generally Accepted Accounting Principles.

         "Accelerated Maturity Date" means if the Company elects to accelerate
the Maturity Date in accordance with Section 2.2(c), the date selected by the
Company which is prior to the Scheduled Maturity Date, but is after December 31,
2006.

         "Additional Interest" shall have the meaning set forth in Section
2.5(c).

         "Additional Junior Indebtedness" means, without duplication, (A) any
indebtedness, liabilities or obligations of the Company, or any Affiliate of the
Company, under debt securities (or guarantees in respect of debt securities)
initially issued to any trust, or a trustee of a trust, partnership or other
entity affiliated with the Company that is, directly or indirectly, a finance
subsidiary (as such term is defined in Rule 3a-5 under the Investment Company
Act) or other financing vehicle of the Company or any Affiliate of the Company
in connection with the issuance by that entity of preferred securities or other
securities that are intended to qualify for Tier 1 capital treatment (or the
then equivalent thereof) for purposes of the capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Company, other than the
Debentures; PROVIDED, HOWEVER, that the inability of the Company to treat all or
any portion of the Additional Junior Indebtedness as Tier 1 capital shall not
disqualify it as Additional Junior Indebtedness if such inability results from
the Company having cumulative preferred stock, minority interests in
consolidated subsidiaries, or any other class of security or interest which the
Federal Reserve now or may hereafter accord Tier 1 capital treatment (including
the Debentures) in excess of the amount which may qualify for treatment as Tier
1 capital under applicable capital adequacy guidelines of the Federal Reserve,
and (B) any indebtedness, liabilities or obligations of the Company, or any
Affiliate of the Company, that is junior or otherwise subordinate in right of
payment to Senior Indebtedness of the Company and that has a maturity or is
otherwise due and payable by the Company on a date twelve (12) months or more
after its date of original issuance, other than the Debentures.

         "Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of

                                      -6-
<PAGE>

derivative products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; PROVIDED, HOWEVER, that Additional
Senior Obligations does not include claims in respect of Senior Debt or
Subordinated Debt or obligations which, by their terms, are expressly stated to
be not superior in right of payment to the Debentures or to rank PARI PASSU in
right of payment with the Debentures. For purposes of this definition, "claim"
shall have the meaning assigned thereto in Section 101(4) of the United States
Bankruptcy Code of 1978, as amended.

         "Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.

         "Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified Person is a
general partner; (e) any officer or director of the specified Person; and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.

         "Authenticating Agent" means an authenticating agent with respect to
the Debentures appointed by the Trustee pursuant to Section 2.12.

         "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.

         "Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such Board or any other duly designated officers of
the Company.

         "Board Resolution" means a copy of a resolution certified by the Clerk
or an Assistant Clerk of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification.

         "Business Day" means, with respect to the Debentures, any day other
than a Saturday or a Sunday or a day on which federal or state banking
institutions in Rockland, Massachusetts or the Borough of Manhattan, The City of
New York, are authorized or required by law, executive order or regulation to
close, or a day on which the Corporate Trust Office of the Trustee or the
Property Trustee is closed for business.

         "Capital Treatment Event" means the receipt by the Company and the
Trust of an Opinion of Counsel, rendered by a law firm having a recognized
national bank regulatory practice, to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under the Trust Agreement, there is more

                                      -7-
<PAGE>

than an insubstantial risk of impairment of the Company's ability to treat the
Preferred Securities (or any substantial portion thereof) as Tier 1 capital (or
the then equivalent thereof), for purposes of the capital adequacy guidelines of
the Federal Reserve, as then in effect and applicable to the Company; PROVIDED,
HOWEVER, that the Trust or the Company shall have requested and received such an
Opinion of Counsel with regard to such matters within a reasonable period of
time after the Trust or the Company shall have become aware of the possible
occurrence of any such event; PROVIDED, HOWEVER, that the inability of the
Company to treat all or any portion of the Liquidation Amount of the Preferred
Securities as Tier 1 Capital shall not constitute the basis for a Capital
Treatment Event if such inability results from the Company having cumulative
preferred stock, minority interests in consolidated subsidiaries, or any other
class of security or interest which the Federal Reserve now or may hereafter
accord Tier 1 Capital treatment in excess of the amount which may qualify for
treatment as Tier 1 Capital under applicable capital adequacy guidelines of the
Federal Reserve; PROVIDED, FURTHER, HOWEVER, that the distribution of Junior
Subordinated Debentures in connection with the dissolution of the Trust shall
not in and of itself constitute a Capital Treatment Event.

         "Certificate" means a certificate signed by the principal executive
officer, the chief financial officer, the principal accounting officer, the
treasurer or any vice president of the Company. The Certificate need not comply
with the provisions of Section 15.7.

         "Change in 1940 Act Law" shall have the meaning set forth in the
definition of "Investment Company Event."

         "Commission" means the Securities and Exchange Commission.

         "Common Securities" means undivided beneficial interests in the assets
of the Trust which rank PARI PASSU with the Preferred Securities; PROVIDED,
HOWEVER, that upon the occurrence of an Event of Default, the rights of holders
of Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of holders
of Preferred Securities.

         "Company" means Independent Bank Corp., a corporation duly organized
and existing under the laws of the Commonwealth of Massachusetts and subject to
the provisions of Article XII, shall also include its successors and assigns.

         "Compounded Interest" shall have the meaning set forth in Section 4.1.

         "Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at101 Barclay Street,
New York, New York 10286, Attention: Corporate Trust Trustee Administration.

         "Coupon Rate" shall have the meaning set forth in Section 2.5.

         "Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.

                                      -8-
<PAGE>

         "Debentures" shall have the meaning set forth in the Recitals hereto.

         "Debentureholder," "holder of Debentures," "registered holder," or
other similar term, means the Person or Persons in whose name or names a
particular Debenture shall be registered on the books of the Company or the
Trustee kept for that purpose in accordance with the terms of this Indenture.

         "Debenture Register" shall have the meaning set forth in Section
2.7(b).

         "Debenture Registrar" shall have the meaning set forth in Section
2.7(b).

         "Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) and every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.

         "Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.

         "Deferred Interest" shall have the meaning set forth in Section 4.1.

         "Direct Action" shall have the meaning set forth in Section 7.8.

         "Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Trust Agreement and the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Trust Agreement.

         "Event of Default" means, with respect to the Debentures, any event
specified in Section 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.

         "Exchange Act," means the Securities Exchange Act of 1934, as amended,
as in effect at the date of execution of this Indenture.

         "Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.

         "Federal Reserve" means the Board of Governors of the Federal Reserve
System.

                                      -9-
<PAGE>

         "Generally Accepted Accounting Principles" means such accounting
principles as are generally accepted at the time of any computation required
hereunder.

         "Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depositary receipt; PROVIDED, HOWEVER, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.

         "Herein," "hereof," and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.

         "Interest Payment Date," when used with respect to any installment of
interest on the Debentures, means the date specified in the Debenture or in an
indenture supplemental hereto with respect to the Debentures as the fixed date
on which an installment of interest with respect to the Debentures is due and
payable.

         "Investment Company Act," means the Investment Company Act of 1940, as
amended, as in effect at the date of execution of this Indenture.

         "Investment Company Event" means the receipt by the Trust and the
Company of an Opinion of Counsel, rendered by a law firm having a recognized
national tax and securities law practice, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or
shall be considered an "investment company" that is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Preferred Securities under the
Trust Agreement; PROVIDED, HOWEVER, that the Trust or the Company shall have
requested and received such an Opinion of Counsel with regard to such matters
within a reasonable period of time after the Trust or the Company shall have
become aware of the possible occurrence of any such event.

                                      -10-
<PAGE>

         "Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon, including Compounded Interest and Additional Interest,
if any.

         "Ministerial Action" shall have the meaning set forth in Section 3.2.

         "Officers' Certificate" means a certificate signed by the President or
an Executive Vice President and by the Chief Financial Officer or the Treasurer
or an Assistant Treasurer or the Clerk or an Assistant Clerk of the Company that
is delivered to the Trustee in accordance with the terms hereof. Each such
certificate shall include the statements provided for in Section 15.7, if and to
the extent required by the provisions thereof.

         "Opinion of Counsel" means an opinion in writing of independent,
outside legal counsel for the Company that is delivered to the Trustee in
accordance with the terms hereof. Each such opinion shall include the statements
provided for in Section 15.7, if and to the extent required by the provisions
thereof.

         "Outstanding," when used in reference to the Debentures, means, subject
to the provisions of Section 10.4, as of any particular time, all Debentures
theretofore authenticated and delivered by the Trustee under this Indenture,
except (a) Debentures theretofore canceled by the Trustee or any paying agent,
or delivered to the Trustee or any paying agent for cancellation or that have
previously been canceled; (b) Debentures or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and segregated in trust by
the Company (if the Company shall act as its own paying agent); PROVIDED,
HOWEVER, that if such Debentures or portions of such Debentures are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as in Article III PROVIDED, or provision satisfactory to the Trustee
shall have been made for giving such notice; and (c) Debentures in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.7; PROVIDED, HOWEVER, that in
determining whether the holders of the requisite percentage of Debentures have
given any request, notice, consent or waiver hereunder, Debentures held by the
Company or any Affiliate of the Company shall not be included; PROVIDED,
FURTHER, that the Trustee shall be protected in relying upon any request,
notice, consent or waiver unless a Responsible Officer of the Trustee shall have
actual knowledge that the holder of such Debenture is the Company or an
Affiliate thereof.

         "Person" means any individual, corporation, partnership, joint-venture,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

         "Predecessor Debenture" means every previous Debenture evidencing all
or a portion of the same debt as that evidenced by such particular Debenture;
and, for the purposes of this definition, any Debenture authenticated and
delivered under Section 2.9 in lieu of a lost, destroyed or stolen Debenture
shall be deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.

                                      -11-
<PAGE>

         "Preferred Securities" means the 8.625% Cumulative Trust Preferred
Securities representing undivided beneficial interests in the assets of the
Trust which rank PARI PASSU with Common Securities issued by the Trust;
PROVIDED, HOWEVER, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.

         "Preferred Securities Guarantee" means any guarantee that the Company
may enter into with the Trustee or other Persons that operates directly or
indirectly for the benefit of holders of Preferred Securities.

         "Property Trustee" has the meaning set forth in the Trust Agreement.

         "Redemption Price" shall have the meaning set forth in Section 3.2.

         "Responsible Officer" when used with respect to the Trustee means any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture, including any vice
president, any assistant vice president, any assistant secretary or any other
officer or assistant officer of the Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.

         "Scheduled Maturity Date" means December 31, 2031.

         "Securities Act," means the Securities Act of 1933, as amended, as in
effect at the date of execution of this instrument.

         "Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is PARI
PASSU with, or subordinated to, the Debentures, PROVIDED, HOWEVER, that Senior
Debt shall not be deemed to include (i) any Debt of the Company which when
incurred and without respect to any election under section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the Company;
(ii) any Debt owed to any employee of the Company; (iii) any Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the holders of the Debentures as a result of the
subordination provisions of this Indenture would be greater than they otherwise
would have been as a result of any obligation of such holders to pay amounts
over to the obligees on such trade accounts payable or accrued liabilities
arising in the ordinary course of business as a result of subordination
provisions to which such Debt is subject; and (iv) any Debt which constitutes
Subordinated Debt.

                                      -12-
<PAGE>

         "Senior Indebtedness" shall have the meaning set forth in Section 16.1.

         "Special Event" means a Tax Event, an Investment Company Event or a
Capital Treatment Event.

         "Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to Senior Debt of the Company (other than the Debentures); PROVIDED, HOWEVER,
that Subordinated Debt will not be deemed to include (i) any Debt of the Company
which when incurred and without respect to any election under section 1111(b) of
the United States Bankruptcy Code of 1978, as amended, was without recourse to
the Company; (ii) any Debt owed to any employee of the Company; (iii) any Debt
which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the holders of the Subordinated
Debentures as a result of the subordination provisions of this Indenture would
be greater than they otherwise would have been as a result of any obligation of
such holders to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; (iv) any Debt which
constitutes Senior Debt; and (v) any Debt of the Company under debt securities
(and guarantees in respect of these debt securities) initially issued to any
trust, or a trustee of a trust, partnership or other entity affiliated with the
Company that is, directly or indirectly, a financing vehicle of the Company in
connection with the issuance by that entity of preferred securities or other
securities which are intended to qualify for Tier 1 capital treatment.

         "Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries; (ii) any general
partnership, limited liability company, joint venture, trust or similar entity,
at least a majority of whose outstanding partnership or similar interests shall
at the time be owned by such Person, or by one or more of its Subsidiaries, or
by such Person and one or more of its Subsidiaries; and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general
partner.

         "Tax Event" means the receipt by the Company and the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or shall be within 90 days after the
date of such Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the Debentures;

                                      -13-
<PAGE>

(ii) interest payable by the Company on the Debentures is not, or within 90 days
after the date of such Opinion of Counsel, shall not be, deductible by the
Company, in whole or in part, for United States federal income tax purposes; or
(iii) the Trust is, or shall be within 90 days after the date of such Opinion of
Counsel, subject to more than a DE MINIMIS amount of other taxes, duties,
assessments or other governmental charges; PROVIDED, HOWEVER, that the Trust or
the Company shall have requested and received such an Opinion of Counsel with
regard to such matters within a reasonable period of time after the Trust or the
Company shall have become aware of the possible occurrence of any of the events
described in clauses (i) through (iii) above.

         "Trust" means Independent Capital Trust III, a Delaware statutory
business trust.

         "Trust Agreement" means the Amended and Restated Declaration of Trust,
dated as of December 11, 2001, of the Trust.

         "Trustee" means The Bank of New York and, subject to the provisions of
Article IX, shall also include its successors and assigns, and, if at any time
there is more than one Person acting in such capacity hereunder, "Trustee" shall
mean each such Person.

         "Trust Indenture Act," means the Trust Indenture Act of 1939, as
amended, subject to the provisions of Sections 11.1, 11.2, and 12.1, as in
effect at the date of execution of this instrument.

         "Trust Securities" means the Common Securities and Preferred
Securities, collectively.

         "Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.

                                   ARTICLE II

        ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE
                               OF THE DEBENTURES

2.1      DESIGNATION AND PRINCIPAL AMOUNT.

         There is hereby authorized Debentures designated the 8.625% Junior
Subordinated Debentures due 2031 limited in aggregate principal amount to
$25,773,200 which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Debentures pursuant to Section
2.6.

                                      -14-
<PAGE>

2.2      MATURITY.

         (a) The Maturity Date shall be either:

             (i)  the Scheduled Maturity Date; or

             (ii) if the Company elects to accelerate the Maturity Date to
         be a date prior to the Scheduled Maturity Date in accordance with
         Section 2.2(c), the Accelerated Maturity Date.

         (b) the Company may at any time before the day which is 90 days before
the Scheduled Maturity Date and after December 31, 2006 elect to shorten the
Maturity Date only once to the Accelerated Maturity Date, PROVIDED that the
Company has received the prior approval of the Federal Reserve if then required
under applicable capital guidelines, policies or regulations of the Federal
Reserve.

         (c) if the Company elects to accelerate the Maturity Date in accordance
with Section 2.2(b), the Company shall give notice to the Trustee and the Trust
(unless the Trust is not the holder of the Debentures, in which case the Trustee
will give notice to the holders of the Debentures) of the acceleration of the
Maturity Date and the Accelerated Maturity Date at least 30 days and no more
than 180 days before the Accelerated Maturity Date; PROVIDED, HOWEVER that
nothing provided in this Section 2.2 shall limit the Company's rights, as
provided in Article III hereof, to redeem all or a portion of the Debentures at
such time or times on or after December 31, 2006, as the Company may so
determine, or at any time upon the occurrence of a Special Event.

2.3      FORM AND PAYMENT.

         The Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Debentures issued in
certificated form shall be payable, the transfer of such Debentures shall be
registrable and such Debentures shall be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the holder at such address as shall appear in the Debenture
Register or by wire transfer to an account maintained by the holder as specified
in the Debenture Register, PROVIDED that the holder provides proper transfer
instructions by the regular record date. Notwithstanding the foregoing, so long
as the holder of any Debentures is the Property Trustee, the payment of
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Property Trustee shall be made
at such place and to such account as may be designated by the Property Trustee.

2.4      [INTENTIONALLY LEFT BLANK].

2.5      INTEREST.

         (a) Each Debenture shall bear interest at the rate of 8.625% per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable,

                                      -15-
<PAGE>

and on any overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded quarterly, payable (subject to the provisions of Article
IV) quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing on December 31, 2001 to
the Person in whose name such Debenture or any Predecessor Debenture is
registered, at the close of business on the regular record date for such
interest installment, which shall be the fifteenth day of the last month of the
calendar quarter.

         (b) The amount of interest payable for any period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of
interest payable on such date shall be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day (and
without any reduction of interest or any other payment in respect of any such
acceleration), in each case with the same force and effect as if made on the
date such payment was originally payable.

         (c) If, at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company shall pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges shall be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.

2.6      EXECUTION AND AUTHENTICATIONS.

         (a) The Debentures shall be signed on behalf of the Company by its
President or one of its Vice Presidents or Chief Financial Officer or Treasurer,
attested by its Clerk or one of its Assistant Clerks. Signatures may be in the
form of a manual or facsimile signature. The Company may use the facsimile
signature of any Person who shall have been a President or Vice President
thereof, or of any Person who shall have been a Clerk or Assistant Clerk
thereof, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such Person shall have ceased to be
the President or a Vice President, or the Clerk or an Assistant Clerk, of the
Company (and any such signature shall be binding on the Company). The Debentures
may contain such notations, legends or endorsements required by law, stock
exchange rule or usage. Each Debenture shall be dated the date of its
authentication by the Trustee.

         (b) A Debenture shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive

                                      -16-
<PAGE>

evidence that the Debenture so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.

         (c) At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Debentures executed by the Company to
the Trustee for authentication, together with a written order of the Company for
the authentication and delivery of such Debentures signed by its President or
any Vice President and its Chief Financial Officer or the Treasurer or any
Assistant Treasurer, and the Trustee in accordance with such written order shall
authenticate and deliver such Debentures.

         (d) In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.

         (e) The Trustee shall not be required to authenticate such Debentures
if the issue of such Debentures pursuant to this Indenture shall affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.

2.7      REGISTRATION OF TRANSFER AND EXCHANGE.

         (a) Debentures may be exchanged upon presentation thereof at the office
or agency of the Company designated for such purpose in the Borough of
Manhattan, The City of New York, or at the office of the Debenture Registrar,
for other Debentures and for a like aggregate principal amount in denominations
of integral multiples of $25, upon payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, all as provided in this
Section 2.7. In respect of any Debentures so surrendered for exchange, the
Company shall execute, the Trustee shall authenticate and such office or agency
shall deliver in exchange therefor the Debenture or Debentures that the
Debentureholder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.

         (b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, The City of New
York, or at the office of the Debenture Registrar or such other location
designated by the Company a register or registers (herein referred to as the
"Debenture Register") in which, subject to such reasonable regulations as the
Debenture Registrar (as defined below) may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article II PROVIDED
and which at all reasonable times shall be open for inspection by the Trustee.
The registrar for the purpose of registering Debentures and transfer of
Debentures as herein provided shall initially be the Trustee and thereafter as
may be appointed by the Company as authorized by Board Resolution (the
"Debenture Registrar"). Upon surrender for transfer of any Debenture at the
office or agency of the Company designated for such purpose, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in the name of the transferee or transferees a new Debenture or Debentures for a
like aggregate principal amount. All

                                      -17-
<PAGE>

Debentures presented or surrendered for exchange or registration of transfer, as
provided in this Section 2.7, shall be accompanied (if so required by the
Company or the Debenture Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Debenture Registrar, duly
executed by the registered holder or by such holder's duly authorized attorney
in writing.

         (c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial
redemption, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.8, Section 3.5(b) and Section 11.4 not involving any
transfer.

         (d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Debentures and ending at the close of business on
the day of such mailing; nor (ii) to register the transfer of or exchange any
Debentures or portions thereof called for redemption.

         (e) Debentures may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Indenture. Any
transfer or purported transfer of any Debenture not made in accordance with this
Indenture shall be null and void.

2.8      TEMPORARY DEBENTURES.

         Pending the preparation of definitive Debentures, the Company may
execute, and the Trustee shall authenticate and deliver, temporary Debentures
(printed, lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they are
issued, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every
temporary Debenture shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures. Without unnecessary delay the Company
shall execute and shall furnish definitive Debentures and thereupon any or all
temporary Debentures may be surrendered in exchange therefor (without charge to
the holders), at the office or agency of the Company designated for the purpose
in the Borough of Manhattan, The City of New York, and the Trustee shall
authenticate and such office or agency shall deliver in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures, unless the Company advises the Trustee to the effect that definitive
Debentures need not be executed and furnished until further notice from the
Company. Until so exchanged, the temporary Debentures shall be entitled to the
same benefits under this Indenture as definitive Debentures authenticated and
delivered hereunder.

2.9      MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.

         (a) In case any temporary or definitive Debenture shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute,

                                      -18-
<PAGE>

and upon the Company's request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Debenture bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost, stolen or
mutilated. In every case the applicant for a substituted Debenture shall furnish
to the Company and the Trustee such security or indemnity as may be required by
them to save each of them harmless, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company and the Trustee evidence
to their satisfaction of the destruction, loss or theft of the applicant's
Debenture and of the ownership thereof. The Trustee may authenticate any such
substituted Debenture and deliver the same upon the written request or
authorization of the President or any Vice President and the Chief Financial
Officer or the Treasurer or any Assistant Treasurer of the Company. Upon the
issuance of any substituted Debenture, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. In case any Debenture that has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and
the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.

         (b) Every replacement Debenture issued pursuant to the provisions of
this Section 2.9 shall constitute an additional contractual obligation of the
Company whether or not the mutilated, destroyed, lost or stolen Debenture shall
be found at any time, or be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debentures duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.

2.10     CANCELLATION.

         All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the
Trustee shall deliver to the Company canceled Debentures held by the Trustee. In
the absence of such request the Trustee may dispose of canceled Debentures in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.

                                      -19-
<PAGE>

2.11     BENEFIT OF INDENTURE.

         Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any Person, other than the parties hereto
and the holders of the Debentures (and, with respect to the provisions of
Article XVI, the holders of Senior Indebtedness) any legal or equitable right,
remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants, conditions and
provisions being for the sole benefit of the parties hereto and of the holders
of the Debentures (and, with respect to the provisions of Article XVI, the
holders of Senior Indebtedness).

2.12     AUTHENTICATING AGENT.

         (a) So long as any of the Debentures remain Outstanding there may be an
Authenticating Agent for any or all such Debentures, which Authenticating Agent
the Trustee shall have the right to appoint. Said Authenticating Agent shall be
authorized to act on behalf of the Trustee to authenticate Debentures issued
upon exchange, transfer or partial redemption thereof, and Debentures so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. All references in this Indenture to the authentication of Debentures
by the Trustee shall be deemed to include authentication by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall be
a corporation that has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is
subject to supervision or examination by federal or state authorities. If at any
time any Authenticating Agent shall cease to be eligible in accordance with
these provisions, it shall resign immediately.

         (b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.

                                  ARTICLE III

                            REDEMPTION OF DEBENTURES

3.1      REDEMPTION.

         Subject to the Company having received prior approval of the Federal
Reserve, if then required under the applicable capital guidelines, policies or
regulations of the Federal Reserve,

                                      -20-
<PAGE>

the Company may redeem the Debentures issued hereunder on and after the dates
set forth in and in accordance with the terms of this Article III.

3.2      SPECIAL EVENT REDEMPTION.

         Subject to the Company having received the prior approval of the
Federal Reserve, if then required under the applicable capital guidelines,
policies or regulations of the Federal Reserve, if a Special Event has occurred
and is continuing, then, notwithstanding Section 3.3(a) but subject to Section
3.3(b), the Company shall have the right upon not less than 30 days' nor more
than 60 days' notice to the holders of the Debentures to redeem the Debentures,
in whole but not in part, for cash within 180 days following the occurrence of
such Special Event (the "180-Day Period") at a redemption price equal to 100% of
the principal amount to be redeemed plus any accrued and unpaid interest thereon
to the date of such redemption (the "Redemption Price"), PROVIDED that if at the
time there is available to the Company the opportunity to eliminate, within the
180-Day Period, a Tax Event by taking some ministerial action (a "Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Company, the Trust
or the holders of the Trust Securities issued by the Trust, the Company shall
pursue such Ministerial Action in lieu of redemption, and, PROVIDED FURTHER,
that the Company shall have no right to redeem the Debentures pursuant to this
Section 3.2 while it is pursuing any Ministerial Action pursuant to its
obligations hereunder, and, PROVIDED FURTHER, that, if it is determined that the
taking of a Ministerial Action would not eliminate the Tax Event within the 180
Day Period, the Company's right to redeem the Debentures pursuant to this
Section 3.2 shall be restored and it shall have no further obligations to pursue
the Ministerial Action. The Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date of such redemption or such earlier time as the
Company determines, PROVIDED that the Company shall deposit with the Trustee an
amount sufficient to pay the Redemption Price by 10:00 a.m., New York time, on
the date such Redemption Price is to be paid.

3.3      OPTIONAL REDEMPTION BY COMPANY.

         (a) Subject to the provisions of Section 3.3(c), except as otherwise
may be specified in this Indenture, the Company shall have the right to redeem
the Debentures, in whole or in part, from time to time, on or after December 31,
2006, at a Redemption Price equal to 100% of the principal amount to be redeemed
plus any accrued and unpaid interest thereon to the date of such redemption. Any
redemption pursuant to this Section 3.3(a) shall be made upon not less than 30
days' nor more than 60 days' notice to the holder of the Debentures, at the
Redemption Price. If the Debentures are only partially redeemed pursuant to this
Section 3.3(a), the Debentures shall be redeemed pro rata or by lot or in such
other manner as the Trustee shall deem appropriate and fair in its discretion.
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines
PROVIDED that the Company shall deposit with the Trustee an amount sufficient to
pay the Redemption Price by 10:00 a.m., New York time, on the date such
Redemption Price is to be paid.

                                      -21-
<PAGE>

         (b) Subject to the provisions of Section 3.3(c), the Company shall have
the right to redeem Debentures at any time and from time to time in a principal
amount equal to the Liquidation Amount (as defined in the Trust Agreement) of
any Preferred Securities purchased and beneficially owned by the Company, plus
an additional principal amount of Debentures equal to the Liquidation Amount (as
defined in the Trust Agreement) of that number of Common Securities that bears
the same proportion to the total number of Common Securities then outstanding as
the number of Preferred Securities to be redeemed bears to the total number of
Preferred Securities then outstanding. Such Debentures shall be redeemed
pursuant to this Section 3.3(b) only in exchange for and upon surrender by the
Company to the Property Trustee of the Preferred Securities and a proportionate
amount of Common Securities, whereupon the Property Trustee shall cancel the
Preferred Securities and Common Securities so surrendered and a Like Amount (as
defined in the Trust Agreement) of Debentures shall be extinguished by the
Trustee and shall no longer be deemed Outstanding.

         (c) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from The Nasdaq
National Market or any national securities exchange or other organization on
which the Preferred Securities are then listed or quoted, the Company shall not
be permitted to effect such partial redemption and may only redeem the
Debentures in whole or in part to such extent as would not cause a delisting.

3.4      NOTICE OF REDEMPTION.

         (a) Except in the case of a redemption pursuant to Section 3.3(b), in
case the Company shall desire to exercise such right to redeem all or, as the
case may be, a portion of the Debentures in accordance with the right reserved
so to do, the Company shall, or shall cause the Trustee to upon receipt of 45
days' written notice from the Company (which notice shall, in the event of a
partial redemption, include a representation to the effect that such partial
redemption will not result in the delisting of the Preferred Securities as
described in Section 3.3(c) above), give notice of such redemption to holders of
the Debentures to be redeemed by mailing, first class postage prepaid, a notice
of such redemption not less than 30 days and not more than 60 days before the
date fixed for redemption to such holders at their last addresses as they shall
appear upon the Debenture Register unless a shorter period is specified in the
Debentures to be redeemed. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the registered holder receives the notice. In any case, failure duly to give
such notice to the holder of any Debenture designated for redemption in whole or
in part, or any defect in the notice, shall not affect the validity of the
proceedings for the redemption of any other Debentures. In the case of any
redemption of Debentures prior to the expiration of any restriction on such
redemption provided in the terms of such Debentures or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with any such restriction. Each such notice of redemption
shall specify the date fixed for redemption and the Redemption Price and shall
state that payment of the Redemption Price shall be made at the office or agency
of the Company in the Borough of Manhattan, The City of New York or at the
Corporate Trust Office, upon presentation and surrender of such Debentures, that
interest accrued to the date fixed for redemption shall be paid as specified in
said notice and that from and after said date interest shall cease to accrue. If
less than all the Debentures are to be redeemed, the notice to the holders of

                                      -22-
<PAGE>

the Debentures shall specify the particular Debentures to be redeemed. If the
Debentures are to be redeemed in part only, the notice shall state the portion
of the principal amount thereof to be redeemed and shall state that on and after
the redemption date, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion thereof shall be
issued.

         (b) Except in the case of redemption pursuant to Section 3.3(b), if
less than all the Debentures are to be redeemed, the Company shall give the
Trustee at least 45 days' notice in advance of the date fixed for redemption as
to the aggregate principal amount of Debentures to be redeemed, and thereupon
the Trustee shall select, pro rata or by lot or in such other manner as it shall
deem appropriate and fair in its discretion, the portion or portions (equal to
$25 or any integral multiple thereof) of the Debentures to be redeemed and shall
thereafter promptly notify the Company in writing of the numbers of the
Debentures to be redeemed, in whole or in part. The Company may, if and whenever
it shall so elect pursuant to the terms hereof, by delivery of instructions
signed on its behalf by its Chairman, its President or any Vice President, its
Chief Financial Officer, or its Treasurer, instruct the Trustee or any paying
agent to call all or any part of the Debentures for redemption and to give
notice of redemption in the manner set forth in this Section 3.4, such notice to
be in the name of the Company or its own name as the Trustee or such paying
agent may deem advisable. In any case in which notice of redemption is to be
given by the Trustee or any such paying agent, the Company shall deliver or
cause to be delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Debenture Register, transfer books or other
records, or suitable copies or extracts therefrom, sufficient to enable the
Trustee or such paying agent to give any notice by mail that may be required
under the provisions of this Section 3.4.

3.5      PAYMENT UPON REDEMPTION.

         (a) If the giving of notice of redemption shall have been completed as
above provided, the Debentures or portions of Debentures to be redeemed
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable Redemption Price, and interest on
such Debentures or portions of Debentures shall cease to accrue on and after the
date fixed for redemption, unless the Company shall default in the payment of
such Redemption Price with respect to any such Debenture or portion thereof. On
presentation and surrender of such Debentures on or after the date fixed for
redemption at the place of payment specified in the notice, said Debentures
shall be paid and redeemed at the Redemption Price (but if the date fixed for
redemption is an Interest Payment Date, the interest installment payable on such
date shall be payable to the registered holder at the close of business on the
applicable record date pursuant to Section 3.3).

         (b) Upon presentation of any Debenture that is to be redeemed in part
only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Debenture is presented shall deliver to the holder
thereof, at the expense of the Company, a new Debenture of authorized
denomination in principal amount equal to the unredeemed portion of the
Debenture so presented.

                                      -23-
<PAGE>

3.6      NO SINKING FUND.

         The Debentures are not entitled to the benefit of any sinking fund.

                                   ARTICLE IV

                      EXTENSION OF INTEREST PAYMENT PERIOD

4.1      EXTENSION OF INTEREST PAYMENT PERIOD.

         The Company shall have the right, at any time and from time to time
during the term of the Debentures so long as no Event of Default has occurred
and is continuing, to defer payments of interest by extending the interest
payment period of such Debentures for a period not exceeding 20 consecutive
quarters (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; PROVIDED that no
Extended Interest Payment Period may extend beyond the Maturity Date or end on a
date other than an Interest Payment Date. To the extent permitted by applicable
law, interest, the payment of which has been deferred because of the extension
of the interest payment period pursuant to this Section 4.1, shall bear interest
thereon at the Coupon Rate compounded quarterly for each quarter of the Extended
Interest Payment Period ("Compounded Interest"). At the end of the Extended
Interest Payment Period, the Company shall calculate (and deliver such
calculation to the Trustee) and pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest (together,
"Deferred Interest") that shall be payable to the holders of the Debentures in
whose names the Debentures are registered in the Debenture Register on the first
record date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period so long as no Event of Default has occurred and is
continuing, provided that such period together with all such further extensions
thereof shall not exceed 20 consecutive quarters, or extend beyond the Maturity
Date of the Debentures or end on a date other than an Interest Payment Date.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.

4.2      NOTICE OF EXTENSION.

         (a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period two Business Days before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by the Trust are
payable; or (ii) the date the Trust is required to give notice of the record
date, or the date such Distributions are payable, to The Nasdaq National Market
or other applicable self-regulatory

                                      -24-
<PAGE>

organization or to holders of the Preferred Securities issued by the Trust, but
in any event at least one Business Day before such record date.

         (b) If the Property Trustee is not the only holder of the Debentures at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least two Business Days
before the earlier of (i) the next succeeding Interest Payment Date; or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to The Nasdaq National Market or other applicable
self-regulatory organization or to holders of the Debentures.

         (c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted
in the maximum Extended Interest Payment Period permitted under Section 4.1.

4.3      LIMITATION ON TRANSACTIONS.

         If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, or (ii) there shall have occurred and be
continuing any Event of Default, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (A) dividends or distributions in common stock of the Company, or
any declaration of a non-cash dividend in connection with the implementation of
a shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (B)
purchases of common stock of the Company related to the rights under any of the
Company's benefit plans for its directors, officers or employees, or (C) as a
result of a reclassification of its capital stock for another class of its
capital stock); (b) the Company shall not make any payment of interest,
principal or premium, if any, or repay, repurchase or redeem any debt securities
issued by the Company which rank PARI PASSU with or junior to the Debentures or
make any guarantee payment with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee ranks PARI
PASSU with or junior to the Debentures; PROVIDED, HOWEVER, that, notwithstanding
the foregoing, the Company may make payments pursuant to its obligations under
the Preferred Securities Guarantee; and (c) the Company shall not redeem,
purchase or acquire less than all of the outstanding Debentures or any of the
Preferred Securities.

                                   ARTICLE V

                       PARTICULAR COVENANTS OF THE COMPANY

5.1      PAYMENT OF PRINCIPAL AND INTEREST.

         The Company shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein. Each such payment of the principal of and interest on
the Debentures shall relate only to the Debentures, shall not be combined with
any other payment of the principal of or interest on any other

                                      -25-
<PAGE>

obligation of the Company, and shall be clearly and unmistakably identified as
pertaining to the Debentures.

5.2      MAINTENANCE OF AGENCY.

         So long as any of the Debentures remain Outstanding, the Company shall
maintain, or shall cause to be maintained, an office or agency in the Borough of
Manhattan, The City of New York, and at such other location or locations as may
be designated as provided in this Section 5.2, where (i) Debentures may be
presented for payment; (ii) Debentures may be presented as hereinabove
authorized for registration of transfer and exchange; and (iii) notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be given or served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by its President or
an Executive Vice President and delivered to the Trustee, designate some other
office or agency for such purposes or any of them. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands. In addition to any such office or agency,
the Company may from time to time designate one or more offices or agencies
outside of the Borough of Manhattan, The City of New York, where the Debentures
may be presented for registration or transfer and for exchange in the manner
provided herein, and the Company may from time to time rescind such designation
as the Company may deem desirable or expedient; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company shall give
the Trustee prompt written notice of any such designation or rescission thereof.

5.3      PAYING AGENTS.

         (a) The Company shall be the initial paying agent. If the Company shall
appoint one or more paying agents for the Debentures, other than the Trustee,
the Company shall cause each such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 5.3:

                  (i) that it shall hold all sums held by it as such agent for
         the payment of the principal of or interest on the Debentures (whether
         such sums have been paid to it by the Company or by any other obligor
         of such Debentures) in trust for the benefit of the Persons entitled
         thereto;

                  (ii) that it shall give the Trustee notice of any failure by
         the Company (or by any other obligor of such Debentures) to make any
         payment of the principal of or interest on the Debentures when the same
         shall be due and payable;

                                      -26-
<PAGE>

                  (iii) that it shall, at any time during the continuance of any
         failure referred to in the preceding paragraph (a)(ii) above, upon the
         written request of the Trustee, forthwith pay to the Trustee all sums
         so held in trust by such paying agent; and

                  (iv) that it shall perform all other duties of paying agent
         as set forth in this Indenture.

         (b) If the Company shall act as its own paying agent with respect to
the Debentures, it shall on or before each due date of the principal of or
interest on such Debentures, set aside, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay such principal
or interest so becoming due on Debentures until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of such action, or any failure (by it or any other obligor on such
Debentures) to take such action. Whenever the Company shall have one or more
paying agents for the Debentures, it shall, prior to each due date of the
principal of or interest on any Debentures, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal or interest,
and (unless such paying agent is the Trustee) the Company shall promptly notify
the Trustee of this action or failure so to act.

         (c) Notwithstanding anything in this Section 5.3 to the contrary, (i)
the agreement to hold sums in trust as provided in this Section 5.3 is subject
to the provisions of Section 13.3 and 13.4; and (ii) the Company may at any
time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or direct any paying agent to pay, to
the Trustee all sums held in trust by the Company or such paying agent, such
sums to be held by the Trustee upon the same terms and conditions as those upon
which such sums were held by the Company or such paying agent; and, upon such
payment by any paying agent to the Trustee, such paying agent shall be released
from all further liability with respect to such money.

5.4      APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.

         The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, shall appoint, in the manner provided in Section 9.11, a
Trustee, so that there shall at all times be a Trustee hereunder.

5.5      COMPLIANCE WITH CONSOLIDATION PROVISIONS.

         The Company shall not, while any of the Debentures remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article XII hereof are complied with.

5.6      LIMITATION ON TRANSACTIONS.

         If Debentures are issued to the Trust or a Trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Company shall be in default with respect to any of its obligations under the
Preferred Securities Guarantee relating to the Trust; or (iii) the Company shall
have given notice of its election to defer payments of interest on such
Debentures by

                                      -27-
<PAGE>

extending the interest payment period as provided in this Indenture and such
period, or any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (A) dividends or distributions in common
stock of the Company, or any declaration of a non-cash dividend in connection
with the implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (B) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees, or (C) as a result of a reclassification of its capital stock into
another class of its capital stock); and (b) the Company shall not make any
payment of interest, principal or premium, if any, or repay, repurchase or
redeem any debt securities issued by the Company which rank PARI PASSU with or
junior to the Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks PARI PASSU with or junior in interest to the Debentures;
PROVIDED, HOWEVER, that notwithstanding the foregoing the Company may make
payments pursuant to its obligations under the Preferred Securities Guarantee;
and (c) the Company shall not redeem, purchase or acquire less than all of the
outstanding Debentures or any of the Preferred Securities.

5.7      COVENANTS AS TO THE TRUST.

         For so long as such Trust Securities of the Trust remain outstanding,
the Company shall (i) maintain 100% direct or indirect ownership of the Common
Securities of the Trust; PROVIDED, HOWEVER, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of the
Common Securities; (ii) not voluntarily terminate, wind up or liquidate the
Trust, except upon prior approval of the Federal Reserve if then so required
under applicable capital guidelines, policies or regulations of the Federal
Reserve and use its reasonable efforts to cause the Trust (a) to remain a
business trust (and to avoid involuntary termination, winding up or
liquidation), except in connection with a distribution of Debentures, the
redemption of all of the Trust Securities of the Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement; and
(b) to otherwise continue not to be treated as an association taxable as a
corporation or partnership for United States federal income tax purposes; (iii)
use its reasonable efforts to cause each holder of Trust Securities to be
treated as owning an individual beneficial interest in the Debentures; and (iv)
the Company, and any successor to the Company, shall use best efforts to
maintain the eligibility of the Preferred Securities for quotation or listing on
any national securities exchange or other organization on which the Preferred
Securities are then quoted or listed (including, if applicable, The Nasdaq
National Market) and shall use best efforts to keep the Preferred Securities so
quoted or listed for so long as the Preferred Securities remain outstanding. In
connection with the distribution of the Debentures to the holders of the
Preferred Securities issued by the Trust upon a Dissolution Event, the Company
shall use its best efforts to list such Debentures on The Nasdaq National Market
or on such other exchange as the Preferred Securities are then listed.

                                      -28-
<PAGE>

5.8      COVENANTS AS TO PURCHASES.

         Except upon the exercise by the Company of its right to redeem the
Debentures pursuant to Section 3.2 upon the occurrence and continuation of a
Special Event or pursuant to Section 3.3(b), prior to ___________ __, 2006, the
Company shall not purchase any Debentures, in whole or in part, from the Trust.

5.9      WAIVER OF USURY, STAY OR EXTENSION LAWS.

         The Company shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performances of this Indenture, and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                   ARTICLE VI

       DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

6.1      COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF DEBENTUREHOLDERS.

         The Company shall furnish or cause to be furnished to the Trustee (a)
on a quarterly basis on each regular record date (as described in Section 2.5) a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of the Debentures as of such regular record date,
provided that the Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company (in the event the
Company fails to provide such list on a quarterly basis, the Trustee shall be
entitled to rely on the most recent list provided by the Company); and (b) at
such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished;
PROVIDED, HOWEVER, that, in either case, no such list need be furnished if the
Trustee shall be the Debenture Registrar.

6.2      PRESERVATION OF INFORMATION COMMUNICATIONS WITH DEBENTUREHOLDERS.

         (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as registrar for the Debentures (if acting in
such capacity).

                                      -29-
<PAGE>

         (b) The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.

         (c) Debentureholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Debentureholders with respect to their rights
under this Indenture or under the Debentures.

6.3      REPORTS BY THE COMPANY.

         (a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and registered on
a national securities exchange as may be prescribed from time to time in such
rules and regulations.

         (b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.

         (c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable overnight delivery service that provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
6.3 as may be required by rules and regulations prescribed from time to time by
the Commission. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates.)

6.4      REPORTS BY THE TRUSTEE.

         (a) On or before July 15 in each year in which any of the Debentures
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses appear upon the
Debenture Register, a brief report dated as of the preceding May 15, if and to
the extent required under Section 313(a) of the Trust Indenture Act.

                                      -30-
<PAGE>

         (b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.

         (c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.

                                  ARTICLE VII

        REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT

7.1      EVENTS OF DEFAULT.

         (a) Whenever used herein with respect to the Debentures, "Event of
Default" means any one or more of the following events that has occurred and is
continuing:

                  (i) the Company defaults in the payment of any installment of
         interest upon any of the Debentures, as and when the same shall become
         due and payable, and continuance of such default for a period of 30
         days; PROVIDED, HOWEVER, that a valid extension of an interest payment
         period by the Company in accordance with the terms of this Indenture
         shall not constitute a default in the payment of interest for this
         purpose;

                  (ii) the Company defaults in the payment of the principal on
         the Debentures as and when the same shall become due and payable
         whether at maturity, upon redemption, by declaration or otherwise;

                  (iii) the Company fails to observe or perform any other of its
         covenants or agreements with respect to the Debentures for a period of
         90 days after the date on which written notice of such failure,
         requiring the same to be remedied and stating that such notice is a
         "Notice of Default" hereunder, shall have been given to the Company by
         the Trustee, by registered or certified mail, or to the Company and the
         Trustee by the holders of at least 25% in principal amount of the
         Debentures at the time Outstanding;

                  (iv) the Company pursuant to or within the meaning of any
         Bankruptcy Law (i) commences a voluntary case; (ii) consents to the
         entry of an order for relief against it in an involuntary case; (iii)
         consents to the appointment of a Custodian of it or for all or
         substantially all of its property; or (iv) makes a general assignment
         for the benefit of its creditors;

                  (v) a court of competent jurisdiction enters an order under
         any Bankruptcy Law that (i) is for relief against the Company in an
         involuntary case; (ii) appoints a Custodian of the Company for all or
         substantially all of its property; or (iii) orders the liquidation of
         the Company, and the order or decree remains unstayed and in effect for
         90 days; or

                                      -31-
<PAGE>

                  (vi) the Trust shall have voluntarily or involuntarily
         dissolved, wound-up its business or otherwise terminated its existence
         except in connection with (i) the distribution of Debentures to holders
         of Trust Securities in liquidation of their interests in the Trust;
         (ii) the redemption of all of the outstanding Trust Securities of the
         Trust; or (iii) certain mergers, consolidations or amalgamations, each
         as permitted by the Trust Agreement.

         (b) In each and every such case referred to in paragraph (i) through
(vi) of this Section 7.1(a), unless the principal of all the Debentures shall
have already become due and payable, either the Trustee or the holders of not
less than 25% in aggregate principal amount of the Debentures then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Debentureholders) may declare the principal of all the Debentures to be due
and payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything contained in this
Indenture or in the Debentures.

         (c) At any time after the principal of the Debentures shall have been
so declared due and payable, and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered as hereinafter provided,
the holders of a majority in aggregate principal amount of the Debentures then
Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures and the principal of any and
all Debentures that shall have become due otherwise than by acceleration (with
interest upon such principal, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures to the date of such payment or
deposit) and the amount payable to the Trustee under Section 9.7; and (ii) any
and all Events of Default under this Indenture, other than the nonpayment of
principal on Debentures that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 7.6. No such rescission and
annulment shall extend to or shall affect any subsequent default or impair any
right consequent thereon.

         (d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company and the Trustee shall continue as though no such proceedings had
been taken.

7.2      COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

         (a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debentures, and such
default shall have continued for a period of 30 days; or (2) in case it shall
default in the payment of the principal of any of the Debentures when the same
shall have become due and payable, whether upon maturity of the

                                      -32-
<PAGE>

Debentures or upon redemption or upon declaration or otherwise, then, upon
demand of the Trustee, the Company shall pay to the Trustee, for the benefit of
the holders of the Debentures, the whole amount that then shall have become due
and payable on all such Debentures for principal or interest, or both, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law and, if the
Debentures are held by the Trust or a trustee of the Trust, without duplication
of any other amounts paid by the Trust or trustee in respect thereof) upon
overdue installments of interest at the rate per annum expressed in the
Debentures; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, and the amount payable to the
Trustee under Section 9.7.

         (b) If the Company shall fail to pay such amounts set forth in Section
7.2(a) forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
other obligor upon the Debentures and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Company or
other obligor upon the Debentures, wherever situated.

         (c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company, the Trust, or the creditors or property of either, the
Trustee shall have power to intervene in such proceedings and take any action
therein that may be permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of the Debentures allowed for the entire amount due
and payable by the Company under this Indenture at the date of institution of
such proceedings and for any additional amount that may become due and payable
by the Company after such date, and to collect and receive any moneys or other
property payable or deliverable on any such claim, and to distribute the same
after the deduction of the amount payable to the Trustee under Section 9.7; and
any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of the Debentures to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the making of such
payments directly to such Debentureholders, to pay to the Trustee any amount due
it under Section 9.7.

         (d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to the Debentures, may be
enforced by the Trustee without the possession of any of such Debentures, or the
production thereof at any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 9.7, be
for the ratable benefit of the holders of the Debentures. In case of an Event of
Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the

                                      -33-
<PAGE>

specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law. Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such proceeding.

7.3      APPLICATION OF MONEYS COLLECTED.

         Any moneys or other assets collected by the Trustee pursuant to this
Article VII with respect to the Debentures shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys or other assets on account of principal or interest,
upon presentation of the Debentures, and notation thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:

         FIRST: To the payment of costs and expenses of collection and of all
         amounts payable to the Trustee under Section 9.7;

         SECOND: To the payment of all Senior Indebtedness of the Company if and
         to the extent required by Article XVI; and

         THIRD: To the payment of the amounts then due and unpaid upon the
         Debentures for principal and interest, in respect of which or for the
         benefit of which such money has been collected, ratably, without
         preference or priority of any kind, according to the amounts due and
         payable on such Debentures for principal and interest, respectively.

7.4      LIMITATION ON SUITS.

         (a) Except as set forth in this Indenture, no holder of any Debenture
shall have any right by virtue or by availing of any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless (i) such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to the Debentures specifying such Event of
Default, as hereinbefore provided; (ii) the holders of not less than 25% in
aggregate principal amount of the Debentures then Outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as trustee hereunder; (iii) such holder or holders shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby; (iv) the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or proceeding;
and (v) during such 60 day period, the holders of a majority in principal amount
of the Debentures do not give the Trustee a direction inconsistent with the
request.

         (b) Notwithstanding anything contained herein to the contrary or any
other provisions of this Indenture, the right of any holder of the Debentures to
receive payment of the principal of

                                      -34-
<PAGE>

and interest on the Debentures, as therein provided, on or after the respective
due dates expressed in such Debenture (or in the case of redemption, on the
redemption date), or to institute suit for the enforcement of any such payment
on or after such respective dates or redemption date, shall not be impaired or
affected without the consent of such holder and by accepting a Debenture
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Debenture with every other such taker and holder and the
Trustee, that no one or more holders of Debentures shall have any right in any
manner whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures. For the protection and enforcement of the provisions of
this Section 7.4, each and every Debentureholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

7.5      RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.

         (a) Except as otherwise provided in Section 2.9(b), all powers and
remedies given by this Article VII to the Trustee or to the Debentureholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any other powers and remedies available to the Trustee or the holders of the
Debentures, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debentures.

         (b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or the Debentureholders may
be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Debentureholders.

7.6      CONTROL BY DEBENTUREHOLDERS.

         The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, determined in accordance with Section 10.4,
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; PROVIDED, HOWEVER, that such direction shall not
be in conflict with any rule of law or with this Indenture. Subject to the
provisions of Section 9.1, the Trustee shall have the right to decline to follow
any such direction if the Trustee in good faith shall, by a Responsible Officer
or Officers of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Debentures at the time Outstanding affected
thereby, determined in accordance with Section 10.4, may on behalf of the
holders of all of the Debentures waive any past default in the performance of
any of the covenants contained herein and its consequences, except (i) a default
in the payment of the principal of, or interest on, any of the Debentures as and
when the same shall become due by the terms of such Debentures

                                      -35-
<PAGE>

otherwise than by acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal has been
deposited with the Trustee (in accordance with Section 7.1(c)); (ii) a default
in the covenants contained in Section 5.7; or (iii) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
holder of each Outstanding Debenture affected; PROVIDED, HOWEVER, that if the
Debentures are held by the Trust or a trustee of the Trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver; PROVIDED FURTHER, that
if the consent of the holder of each Outstanding Debenture is required, such
waiver shall not be effective until each holder of the Trust Securities of the
Trust shall have consented to such waiver. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debentures shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.

7.7      UNDERTAKING TO PAY COSTS.

         All parties to this Indenture agree, and each holder of any Debentures
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 7.7 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders holding more than 10% in aggregate principal amount of the
Outstanding Debentures, or to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of or interest on the Debentures, on
or after the respective due dates expressed in such Debenture or established
pursuant to this Indenture.

7.8      DIRECT ACTION; RIGHT OF SET-OFF

         In the event that an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay interest on
or principal of the Debentures on an Interest Payment Date or Maturity Date, as
applicable, then a holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Preferred Securities of
such holders (a "Direct Action"). In connection with such Direct Action, the
Company will have a right of set-off under this Indenture to the extent of any
payment actually made by the Company to such holder of the Preferred Securities
with respect to such Direct Action.

                                      -36-
<PAGE>

                                  ARTICLE VIII

                      FORM OF DEBENTURE AND ORIGINAL ISSUE

8.1      FORM OF DEBENTURE.

         The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A to
this Indenture, attached hereto and incorporated herein by reference.

8.2      ORIGINAL ISSUE OF DEBENTURES.

         Debentures in the aggregate principal amount of $25,773,200 may, upon
execution of this Indenture, be executed by the Company and delivered to the
Trustee for authentication. The Trustee shall thereupon authenticate and deliver
said Debentures to or upon the written order of the Company, signed by its
President, or any Vice President and its Chief Financial Officer or the
Treasurer or an Assistant Treasurer, without any further action by the Company.

                                   ARTICLE IX

                             CONCERNING THE TRUSTEE

9.1      CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.

         (a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform with respect to the Debentures such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
shall be read into this Indenture against the Trustee. In case an Event of
Default has occurred that has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

         (b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:

                  (i) prior to the occurrence of an Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                           (1)  the duties and obligations of the Trustee shall
                                with respect to the Debentures be determined
                                solely by the express provisions of this
                                Indenture, and the Trustee shall not be liable
                                with respect to the Debentures except for the
                                performance of such duties and obligations as
                                are specifically set forth in this Indenture,
                                and no implied

                                      -37-
<PAGE>

                                covenants or obligations shall be read into
                                this Indenture against the Trustee; and

                           (2)  in the absence of bad faith on the part of the
                                Trustee, the Trustee may with respect to the
                                Debentures conclusively rely, as to the truth of
                                the statements and the correctness of the
                                opinions expressed therein, upon any
                                certificates or opinions furnished to the
                                Trustee and conforming to the requirements of
                                this Indenture; but in the case of any such
                                certificates or opinions that by any provision
                                hereof are specifically required to be furnished
                                to the Trustee, the Trustee shall be under a
                                duty to examine the same to determine whether or
                                not they conform to the requirements of this
                                Indenture;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer or Responsible Officers of
         the Trustee, unless it shall be proved that the Trustee was negligent
         in ascertaining the pertinent facts;

                  (iii) the Trustee shall not be liable with respect to any
         action taken or omitted to be taken by it in good faith in accordance
         with the direction of the holders of not less than a majority in
         principal amount of the Debentures at the time Outstanding relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Trustee, or exercising any trust or power conferred
         upon the Trustee under this Indenture with respect to the Debentures;
         and

                  (iv) none of the provisions contained in this Indenture shall
         require the Trustee to expend or risk its own funds or otherwise incur
         personal financial liability in the performance of any of its duties or
         in the exercise of any of its rights or powers, if there is reasonable
         ground for believing that the repayment of such funds or liability is
         not reasonably assured to it under the terms of this Indenture or
         adequate indemnity against such risk is not reasonably assured to it.

9.2      NOTICE OF DEFAULTS.

         Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Debentures, the Trustee shall transmit by mail to all holders of the Debentures,
as their names and addresses appear in the Debenture Register, notice of such
default, unless such default shall have been cured or waived; PROVIDED, HOWEVER,
that, except in the case default in the payment of the principal or interest
(including any Additional Interest) on any Debenture, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of the directors and/or Responsible
Officers of the Trustee determines in good faith that the withholding of such
notice is in the interests of the holders of such Debentures; and PROVIDED,
FURTHER, that in the case of any default of the character specified in Section
7.1(a)(iii), no such notice to holders of Debentures need be sent until at least
30 days after the occurrence thereof.

                                      -38-
<PAGE>

For the purposes of this Section 9.2, the term "default" means any event which
is, or after notice or lapse of time or both, would become, an Event of Default
with respect to the Debentures.

9.3      CERTAIN RIGHTS OF TRUSTEE.

         Except as otherwise provided in Section 9.1:

         (a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, security or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;

         (b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by its President or any Vice President and by
the Clerk or an Assistant Clerk or the Treasurer or an Assistant Treasurer
thereof (unless other evidence in respect thereof is specifically prescribed
herein);

         (c) The Trustee shall not be deemed to have knowledge of a default or
an Event of Default, other than an Event of Default specified in Section
7.1(a)(i) or (ii), unless and until it receives written notification of such
Event of Default from the Company or by holders of at least 25% of the aggregate
principal amount of the Debentures at the time Outstanding;

         (d) The Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted hereunder in
good faith and in reliance thereon;

         (e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (that has not been cured or waived) to exercise with respect to the
Debentures such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs;

         (f) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;

         (g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstanding Debentures
(determined as provided in Section 10.4); PROVIDED, HOWEVER, that if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred

                                      -39-
<PAGE>

by it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and

         (h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

         (i) The rights, privileges, protections, immunities and benefits given
to the Trustee, including without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed [BY THE TRUSTEE]
to act hereunder.

         (j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of offices
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

9.4      TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.

         (a) The Recitals contained herein and in the Debentures shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.

         (b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.

         (c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of such Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture, or for the use or application of any
moneys received by any paying agent other than the Trustee.

9.5      MAY HOLD DEBENTURES.

         The Trustee or any paying agent or registrar for the Debentures, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, paying agent or
Debenture Registrar.

9.6      MONEYS HELD IN TRUST.

         Subject to the provisions of Section 13.5, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The

                                      -40-
<PAGE>

Trustee shall be under no liability for interest on any moneys received by it
hereunder except such as it may agree with the Company to pay thereon.

9.7      COMPENSATION AND REIMBURSEMENT.

         (a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such compensation (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust), as the Company and the Trustee may from time to time agree in writing,
for all services rendered by it in the execution of the trusts hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee, and, except as otherwise expressly provided herein, the Company
shall pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, liability or expense incurred without negligence
or bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises.

         (b) The obligations of the Company under this Section 9.7 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Debentures.

9.8      RELIANCE ON OFFICERS' CERTIFICATE.

         Except as otherwise provided in Section 9.1, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.

9.9      DISQUALIFICATION:  CONFLICTING INTERESTS.

         If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.

                                      -41-
<PAGE>

9.10     CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

         There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by federal, State,
territorial, or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.10, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Company may not, nor may any Person
directly or indirectly controlling, controlled by, or under common control with
the Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.10, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.11.

9.11     RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

         (a) The Trustee or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Debentures by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may, at the expense of the Company, petition
any court of competent jurisdiction for the appointment of a successor trustee
with respect to Debentures, or any Debentureholder who has been a bona fide
holder of a Debenture or Debentures for at least six months may, subject to the
provisions of Sections 9.9 and 9.10, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.

         (b)      In case at any time any one of the following shall occur:

                  (i) the Trustee shall fail to comply with the provisions of
         Section 9.9 after written request therefor by the Company or by any
         Debentureholder who has been a bona fide holder of a Debenture or
         Debentures for at least six months; or

                  (ii) the Trustee shall cease to be eligible in accordance with
         the provisions of Section 9.10 and shall fail to resign after written
         request therefor by the Company or by any such Debentureholder; or

                                      -42-
<PAGE>

                  (iii) the Trustee shall become incapable of acting, or shall
         be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
         proceeding, or a receiver of the Trustee or of its property shall be
         appointed or consented to, or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation.

Then, in any such case, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Sections 9.9 and 9.10, unless the Trustee's
duty to resign is stayed as provided herein, any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six months may, on
behalf of that holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a successor trustee.

         (c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee with
the consent of the Company.

         (d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures pursuant to any of the
provisions of this Section 9.11 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 9.12.

         (e) Any successor trustee appointed pursuant to this Section 9.11 may
be appointed with respect to the Debentures, and at any time there shall be only
one Trustee with respect to the Debentures.

9.12     ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

         (a) In case of the appointment hereunder of a successor trustee with
respect to the Debentures, every successor trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
trustee all the rights, powers, and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor trustee all property and
money held by such retiring Trustee hereunder.

         (b) Upon request of any successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section 9.12.

                                      -43-
<PAGE>

         (c) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article IX.

         (d) Upon acceptance of appointment by a successor trustee as provided
in this Section 9.12, the Company shall transmit notice of the succession of
such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Company fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.

9.13     MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 9.9 and eligible under the provisions
of Section 9.10, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debentures shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Debentures so authenticated with the same effect as if such
successor Trustee had itself authenticated such Debentures.

9.14     PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.

         The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.

                                   ARTICLE X

                         CONCERNING THE DEBENTUREHOLDERS

10.1     EVIDENCE OF ACTION BY HOLDERS.

         (a) Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Debentures
may take any action (including the making of any demand or request, the giving
of any notice, consent or waiver or the taking of any other action), the fact
that at the time of taking any such action the holders of such majority or
specified percentage have joined therein may be evidenced by any instrument or
any number of instruments of similar tenor executed by such holders of
Debentures in Person or by agent or proxy appointed in writing.

                                      -44-
<PAGE>

         (b) If the Company shall solicit from the Debentureholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Debentureholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action, but the Company shall have no obligation to do so. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Debentureholders of record at the close of business on the record date shall
be deemed to be Debentureholders for the purposes of determining whether
Debentureholders of the requisite proportion of Outstanding Debentures have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Debentures shall be computed as of the record date; PROVIDED,
HOWEVER, that no such authorization, agreement or consent by such
Debentureholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

10.2     PROOF OF EXECUTION BY DEBENTUREHOLDERS.

         Subject to the provisions of Section 9.1, proof of the execution of any
instrument by a Debentureholder (such proof shall not require notarization) or
such Debentureholder's agent or proxy and proof of the holding by any Person of
any of the Debentures shall be sufficient if made in the following manner:

         (a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.

         (b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.

         (c) The Trustee may require such additional proof of any matter
referred to in this Section 10.2 as it shall deem necessary.

10.3     WHO MAY BE DEEMED OWNERS.

         Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any paying agent, any Authenticating Agent
and any Debenture Registrar may deem and treat the Person in whose name such
Debenture shall be registered upon the books of the Company as the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of and interest on such Debenture (subject to Section
2.3) and for all other purposes; and neither the Company nor the Trustee nor any
paying agent nor any Authenticating Agent nor any Debenture Registrar shall be
affected by any notice to the contrary.

                                      -45-
<PAGE>

10.4     CERTAIN DEBENTURES OWNED BY COMPANY DISREGARDED.

         In determining whether the holders of the requisite aggregate principal
amount of Debentures have concurred in any direction, consent or waiver under
this Indenture, the Debentures that are owned by the Company or any other
obligor on the Debentures or by any Person directly or indirectly controlling or
controlled by or under common control with the Company or any other obligor on
the Debentures shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except (i) that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures that the Trustee actually knows
are so owned shall be so disregarded; and (ii) for purposes of this Section
10.4, the Trust shall be deemed not to be controlled by the Company. The
Debentures so owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section 10.4, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.

10.5     ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.

         At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures specified
in this Indenture in connection with such action, any holder of a Debenture that
is shown by the evidence to be included in the Debentures the holders of which
have consented to such action may, by filing written notice with the Trustee,
and upon proof of holding as provided in Section 10.2, revoke such action so far
as concerns such Debenture. Except as aforesaid any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the holders of all the Debentures.

                                   ARTICLE XI

                             SUPPLEMENTAL INDENTURES

11.1     SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF DEBENTUREHOLDERS.

         In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act

                                      -46-
<PAGE>

as then in effect), without the consent of the Debentureholders, for one or more
of the following purposes:

         (a) to cure any ambiguity, defect, or inconsistency herein, or in the
Debentures;

         (b) to comply with Article X;

         (c) to provide for uncertificated Debentures in addition to or in place
of certificated Debentures;

         (d) to add to the covenants of the Company for the benefit of the
holders of all or any of the Debentures or to surrender any right or power
herein conferred upon the Company;

         (e) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Debentures, only as herein set forth;

         (f) to make any change that does not adversely affect the rights of any
Debentureholder in any material respect;

         (g) to provide for the issuance of and establish the form and terms and
conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or of the
Debentures, or to add to the rights of the holders of the Debentures;

         (h) to qualify or maintain the qualification of this Indenture under
the Trust Indenture Act; or

         (i) to evidence a consolidation or merger involving the Company as
permitted under Section 12.1.

The Trustee is hereby authorized to join with the Company in the execution of
any such supplemental indenture, and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 11.1 may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debentures at the time Outstanding, notwithstanding any of the
provisions of Section 11.2.

11.2     SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.

         With the consent (evidenced as provided in Section 10.1) of the holders
of not less than a majority in aggregate principal amount of the Debentures at
the time Outstanding, the Company, when authorized by Board Resolutions, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or

                                      -47-
<PAGE>

changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner not covered by
Section 11.1 the rights of the holders of the Debentures under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall without the consent
of the holders of each Debenture then Outstanding and affected thereby, (i)
extend the fixed maturity of any Debentures, reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
without the consent of the holder of each Debenture so affected; or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture; PROVIDED FURTHER, that if the
Debentures are held by the Trust or a trustee of the Trust, such supplemental
indenture shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the Trust shall have consented to such
supplemental indenture; PROVIDED FURTHER, that if the consent of the holder of
each Outstanding Debenture is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities of the Trust shall have
consented to such supplemental indenture. It shall not be necessary for the
consent of the Debentureholders affected thereby under this Section 11.2 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such consent shall approve the substance thereof.

11.3     EFFECT OF SUPPLEMENTAL INDENTURES.

         Upon the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debentures shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

11.4     DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.

         Debentures affected by a supplemental indenture, authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article XI, may bear a notation in form approved by the
Company, provided such form meets the requirements of any exchange or automated
quotation system upon which the Debentures may be listed or quoted, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures so modified as to conform, in the opinion of the Board
of Directors of the Company, to any modification of this Indenture contained in
any such supplemental indenture may be prepared by the Company, authenticated by
the Trustee and delivered in exchange for the Debentures then Outstanding.

11.5     EXECUTION OF SUPPLEMENTAL INDENTURES.

         (a) Upon the request of the Company, accompanied by its Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debentureholders
required to consent thereto as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture unless

                                      -48-
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such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Sections 9.1, may receive
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article XI is authorized or permitted by, and conforms
to, the terms of this Article XI and that it is proper for the Trustee under the
provisions of this Article XI to join in the execution thereof.

         (b) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 11.5, the
Trustee shall transmit by mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders as their names and addresses appear upon the Debenture
Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.

                                  ARTICLE XII

                              SUCCESSOR CORPORATION

12.1     COMPANY MAY CONSOLIDATE, ETC.

         Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company, as the
case may be), or successive consolidations or mergers in which the Company, as
the case may be, or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the
property of the Company, as the case may be, or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation (whether
or not affiliated with the Company, as the case may be, or its successor or
successors) authorized to acquire and operate the same; PROVIDED, HOWEVER, the
Company hereby covenants and agrees that, (i) upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment, in the case of the Company, of the principal of and interest on all of
the Debentures, according to their tenor and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be kept
or performed by the Company as the case may be, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the entity formed by such consolidation, or into
which the Company, as the case may be, shall have been merged, or by the entity
which shall have acquired such property, and the ultimate parent entity of such
successor entity expressly assumes the obligations of the Company under the
related Preferred Securities Guarantee, to the extent the Preferred Securities
are then Outstanding; (ii) in case the Company consolidates with or merges into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any State or the District of Columbia; and (iii)
immediately after giving effect thereto, no Event of Default, and no event

                                      -49-
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which, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing.

12.2     SUCCESSOR CORPORATION SUBSTITUTED.

         (a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of, in the case of the Company, the due
and punctual payment of the principal of and interest on all of the Debentures
Outstanding and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, as the case may be,
such successor corporation shall succeed to and be substituted for the Company,
with the same effect as if it had been named as the Company herein, and
thereupon the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Debentures.

         (b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not in
substance) may be made in the Debentures thereafter to be issued as may be
appropriate.

         (c) Nothing contained in this Indenture or in any of the Debentures
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).

12.3     EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.

         The Trustee, subject to the provisions of Section 9.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article XII.

                                  ARTICLE XIII

                           SATISFACTION AND DISCHARGE

13.1     SATISFACTION AND DISCHARGE OF INDENTURE.

         If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Debentures theretofore authenticated (other than any Debentures
that shall have been destroyed, lost or stolen and that shall have been replaced
or paid as provided in Section 2.9) and all Debentures for whose payment money
or Governmental Obligations have theretofore been deposited in trust or
segregated and held in trust by the Company (and thereupon repaid to the Company
or discharged from such trust, as provided in Section 13.5); or (b) all such
Debentures not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit or cause to be deposited with the Trustee as trust funds
the entire amount in moneys or Governmental Obligations sufficient or a
combination

                                      -50-
<PAGE>

thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption all Debentures
not theretofore delivered to the Trustee for cancellation, including principal
and interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company; then this Indenture shall
thereupon cease to be of further effect except for the provisions of Sections
2.3, 2.7, 2.9, 5.1, 5.2, 5.3, 9.6, 9.7 and 9.10, that shall survive until the
date of maturity or redemption date, as the case may be, and Sections 9.7 and
13.5, that shall survive to such date and thereafter, and the Trustee, on demand
of the Company and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture.

13.2     DISCHARGE OF OBLIGATIONS.

         If at any time all Debentures not heretofore delivered to the Trustee
for cancellation or that have not become due and payable as described in Section
13.1 shall have been paid by the Company by depositing irrevocably with the
Trustee as trust funds moneys or an amount of Governmental Obligations
sufficient in the opinion of a nationally recognized certified public accounting
firm to pay at maturity or upon redemption all Debentures not theretofore
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity or date fixed for redemption, as the
case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with the Trustee,
the obligations of the Company under this Indenture shall cease to be of further
effect except for the provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3, 9.6,
9.7 and 13.5 hereof that shall survive until such Debentures shall mature and be
paid. Thereafter, Sections 9.7 and 13.5 shall survive.

13.3     DEPOSITED MONEYS TO BE HELD IN TRUST.

         All monies or Governmental Obligations deposited with the Trustee
pursuant to Sections 13.1 or 13.2 shall be held in trust and shall be available
for payment as due, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the Debentures for
the payment or redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.

13.4     PAYMENT OF MONIES HELD BY PAYING AGENTS.

         In connection with the satisfaction and discharge of this Indenture,
all moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.

13.5     REPAYMENT TO COMPANY.

         Any monies or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company in trust, for payment of principal
of or interest on the

                                      -51-
<PAGE>

Debentures that are not applied but remain unclaimed by the holders of such
Debentures for at least two years after the date upon which the principal of or
interest on such Debentures shall have respectively become due and payable,
shall be repaid to the Company, as the case may be, on December 31 of each year
or (if then held by the Company) shall be discharged from such trust; and
thereupon the paying agent and the Trustee shall be released from all further
liability with respect to such moneys or Governmental Obligations, and the
holder of any of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof.

                                  ARTICLE XIV

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

14.1     NO RECOURSE.

         No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of the Debentures, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.

                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS

15.1     EFFECT ON SUCCESSORS AND ASSIGNS.

         All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its respective
successors and assigns, whether so expressed or not.

                                      -52-
<PAGE>

15.2     ACTIONS BY SUCCESSOR.

         Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.

15.3     SURRENDER OF COMPANY POWERS.

         The Company by instrument in writing executed by appropriate authority
of its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Company, and thereupon such power so surrendered shall
terminate both as to the Company, as the case may be, and as to any successor
corporation.

15.4     NOTICES.

         Except as otherwise expressly provided herein any notice or demand that
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures to or on the Company may
be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: Independent Bank Corp., 288 Union
Street, Rockland, Massachusetts 02370, Attention: Chief Financial Officer. Any
notice, election, request or demand by the Company or any Debentureholder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.

15.5     GOVERNING LAW.

         This Indenture and each Debenture shall be deemed to be a contract made
under the internal laws of the State of New York and for all purposes shall be
construed in accordance with the laws of said State.

15.6     TREATMENT OF DEBENTURES AS DEBT.

         It is intended that the Debentures shall be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.

15.7     COMPLIANCE CERTIFICATES AND OPINIONS.

         (a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is

                                      -53-
<PAGE>

specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.

         (b) Each certificate or opinion of the Company provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (1) a statement that the
Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
Person, he has made such examination or investigation as, in the opinion of such
Person, is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and (4) a statement as
to whether or not, in the opinion of such Person, such condition or covenant has
been complied with; PROVIDED, HOWEVER, that each such certificate shall comply
with the provisions of Section 314 of the Trust Indenture Act.

15.8     PAYMENTS ON BUSINESS DAYS.

         In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.

15.9     CONFLICT WITH TRUST INDENTURE ACT.

         If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

15.10    COUNTERPARTS.

         This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.

15.11    SEVERABILITY.

         In case any one or more of the provisions contained in this Indenture
or in the Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.

15.12    ASSIGNMENT.

         The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company shall remain liable for all such

                                      -54-
<PAGE>

obligations. Subject to the foregoing, this Indenture is binding upon and inures
to the benefit of the parties thereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.

15.13    ACKNOWLEDGMENT OF RIGHTS.

         The Company acknowledges that, with respect to any Debentures held by
the Trust or a trustee of the Trust, if the Property Trustee fails to enforce
its rights under this Indenture as the holder of the Debentures held as the
assets of the Trust, any holder of Preferred Securities may institute legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest or principal on
the Debentures on the date such interest or principal is otherwise payable (or
in the case of redemption, on the redemption date), the Company acknowledges
that a holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder on or after the respective due date
specified in the Debentures.

                                  ARTICLE XVI

                           SUBORDINATION OF DEBENTURES

16.1     AGREEMENT TO SUBORDINATE.

         The Company covenants and agrees, and each holder of Debentures issued
hereunder by such holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; and each holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Company of the principal of and interest on all
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Debt, Subordinated Debt and Additional Senior Obligations
(collectively, "Senior Indebtedness") to the extent provided herein, whether
outstanding at the date of this Indenture or thereafter incurred. No provision
of this Article XVI shall prevent the occurrence of any default or Event of
Default hereunder.

16.2     DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR ADDITIONAL SENIOR
         OBLIGATIONS.

         In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default,
then, in either case, no payment shall be made by the Company with respect to
the principal (including redemption payments) of or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be received
by the Trustee when such payment is prohibited by the preceding sentence of this
Section 16.2, such payment

                                      -55-
<PAGE>

shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness or their respective representatives, or
to the trustee or trustees under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior Indebtedness (or
their representative or representatives or a trustee) notify the Trustee in
writing within 90 days of such payment of the amounts then due and owing on the
Senior Indebtedness and only the amounts specified in such notice to the Trustee
shall be paid to the holders of Senior Indebtedness.

16.3     LIQUIDATION; DISSOLUTION; BANKRUPTCY.

         (a) Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Debentures
or the Trustee would be entitled to receive from the Company, except for the
provisions of this Article XVI, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the holders of the Debentures or by the Trustee
under this Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the holders of Debentures or to the Trustee.

         (b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of the
Company, as the case may be, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.

                                      -56-
<PAGE>

         (c) For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XVI with respect
to the Debentures to the payment of all Senior Indebtedness of the Company, as
the case may be, that may at the time be outstanding, provided that (i) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment; and (ii) the rights of the holders of
such Senior Indebtedness are not, without the consent of such holders, altered
by such reorganization or readjustment. The consolidation of the Company with,
or the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article XII shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 16.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
XII. Nothing in Section 16.2 or in this Section 16.3 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 9.7.

16.4     SUBROGATION.

         (a) Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the holders of the Debentures shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of and interest
on the Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article XVI, and no payment over pursuant to the provisions of this Article XVI
to or for the benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Debentures, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XVI
are and are intended solely for the purposes of defining the relative rights of
the holders of the Debentures, on the one hand, and the holders of such Senior
Indebtedness on the other hand.

         (b) Nothing contained in this Article XVI or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors (other than the holders of Senior Indebtedness of the
Company), and the holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Debentures the
principal of and interest on the Debentures as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the holders of the Debentures and creditors of the
Company, as the case may be, other than the holders of Senior Indebtedness of
the Company, as the case may be, nor shall anything herein or therein prevent
the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if

                                      -57-
<PAGE>

any, under this Article XVI of the holders of such Senior Indebtedness in
respect of cash, property or securities of the Company, as the case may be,
received upon the exercise of any such remedy.

         (c) Upon any payment or distribution of assets of the Company referred
to in this Article XVI, the Trustee, subject to the provisions of Article IX,
and the holders of the Debentures shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XVI.

16.5     TRUSTEE TO EFFECTUATE SUBORDINATION.

         Each holder of Debentures by such holder's acceptance thereof
authorizes and directs the Trustee on such holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article XVI and appoints the Trustee such holder's attorney-in-fact for any
and all such purposes.

16.6     NOTICE BY THE COMPANY.

         (a) The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI. Notwithstanding the
provisions of this Article XVI or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article XVI, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 9.1, shall be entitled in all
respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the
Trustee shall not have received the notice provided for in this Section 16.6 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Debenture), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.

         (b) The Trustee, subject to the provisions of Section 9.1, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the Company
(or a trustee on behalf of such holder) to establish

                                      -58-
<PAGE>

that such notice has been given by a holder of such Senior Indebtedness or a
trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of such Senior Indebtedness to participate in
any payment or distribution pursuant to this Article XVI, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article XVI, and, if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment.

16.7     RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.

         (a) The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XVI in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. The Trustee's right to compensation and reimbursement
of expenses as set forth in Section 9.7 shall not be subject to the
subordination provisions of the Article XVI.

         (b) With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 9.1, the Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall pay over or deliver to holders of
Debentures, the Company or any other Person money or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article XVI or
otherwise.

16.8     SUBORDINATION MAY NOT BE IMPAIRED.

         (a) No right of any present or future holder of any Senior Indebtedness
of the Company to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.

         (b) Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
holders of the Debentures, without incurring responsibility to the holders of
the Debentures and without impairing or releasing the subordination provided in
this Article XVI or the obligations hereunder of the holders of the Debentures
to the holders of such Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or

                                      -59-
<PAGE>

alter, such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable
in any manner for the collection of such Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company and any
other Person.

                                      -60-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.

INDEPENDENT BANK CORP.

By: /s/ Denis K. Sheahan
    -------------------------------
Name: Denis K. Sheahan
Title: Chief Financial Officer

THE BANK OF NEW YORK,
     as Trustee

By: /s/ Kisha Holder
    -------------------------------
Name: Kisha Holder
Title: Assistant Treasurer

                                      -61-
<PAGE>

                                                                      EXHIBIT A

                           (FORM OF FACE OF DEBENTURE)

                             INDEPENDENT BANK CORP.

                       8.625% JUNIOR SUBORDINATED DEBENTURE

                             DUE December 31, 2031

NO. 1                                                               $25,773,200

                                                           CUSIP NO. 453836 AD 0

         Independent Bank Corp., a Massachusetts corporation (the "Company,"
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to INDEPENDENT
CAPITAL TRUST III or registered assigns, the principal sum of Twenty Five
Million Seven Hundred Seventy Three Thousand Two Hundred No/Dollars
($25,773,200) on December 31, 2031 (the "Stated Maturity"), and to pay
interest on said principal sum from December 11, 2031 or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral
as set forth herein) in arrears on the last day of March, June, September and
December of each year commencing December 31, 2001, at the rate of 8.625% per
annum until the principal hereof shall have become due and payable, and on
any overdue principal and (without duplication and to the extent that payment
of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
for any partial period shall be computed on the basis of the number of days
elapsed in a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on this Debenture is not a business day, then
payment of interest payable on such date shall be made on the next succeeding
day that is a business day (and without any interest or other payment in
respect of any such delay) except that, if such business day is in the next
succeeding calendar year, payment of such interest will be made on the
immediately preceding business day, in each case, with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date shall, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Debentures, as defined in said Indenture) is
registered at the close of business on the regular record date for such
interest installment, which shall be the close of business on the business
day next preceding such Interest Payment Date unless otherwise provided in
the Indenture. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered holders on
such regular record date and may be paid to the Person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the close
of business on a special record date to be fixed by the Trustee for the
payment of such defaulted interest, notice thereof shall be fixed by the
Trustee for the payment of such defaulted interest, notice thereof shall be
given to the registered holders of the Debentures not less than 10 days prior
to such special record date, or

                                      A-1
<PAGE>

may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange or quotation system on or in which the
Debentures may be listed or quoted, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of and
the interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that payment of interest may be made at the
option of the Company by check mailed to the registered holder at such address
as shall appear in the Debenture Register. Notwithstanding the foregoing, so
long as the holder of this Debenture is the Property Trustee, the payment of the
principal of and interest on this Debenture shall be made at such place and to
such account as may be designated by the Trustee.

         The Stated Maturity may be shortened at any time by the Company to any
date not earlier than December 31, 2006, subject to the Company having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines, policies or regulations of the Federal Reserve.

         The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions; (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided; and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.

         This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.

         The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.

                                      A-2

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.

Dated December 11, 2001.

INDEPENDENT BANK CORP.

By:________________________________
Name: Denis K. Sheahan
Title: Chief Financial Officer

Attest:

By:
   --------------------------------------------------
Name:
Title:

                                      A-3

<PAGE>

                     [FORM OF CERTIFICATE OF AUTHENTICATION]

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Debentures described in the within-mentioned Indenture.

Dated: December 11, 2001

The Bank of New York,
   as Trustee or Authentication Agent

By:
    -------------------------------------------------
    Authorized Signatory

                                      A-4

<PAGE>

                         [FORM OF REVERSE OF DEBENTURE]

                   8.625% JUNIOR SUBORDINATED DEBENTURE DUE 2031
                                   (CONTINUED)

         This Debenture is one of the subordinated debentures of the Company
(herein sometimes referred to as the "Debentures"), all issued or to be issued
under and pursuant to an Indenture dated as of December 11, 2001 (the
"Indenture") duly executed and delivered between the Company and The Bank of New
York, as Trustee (the "Trustee"), to which Indenture reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures. The Debentures are limited in aggregate principal amount as
specified in the Indenture.

         Because of the occurrence and continuation of a Special Event (as
defined in the Indenture), in certain circumstances, this Debenture may
become due and payable at the principal amount together with any interest
accrued thereon (the "Redemption Price"). The Redemption Price shall be paid
prior to 12:00 noon, Eastern Standard Time, on the date of such redemption or
at such earlier time as the Company determines. The Company shall have the
right as set forth in the Indenture to redeem this Debenture at the option of
the Company, without premium or penalty, in whole or in part at any time on
or after December 31, 2006 (an "Optional Redemption"), or at any time in
certain circumstances upon the occurrence of a Special Event, at a Redemption
Price equal to 100% of the principal amount hereof plus any accrued but
unpaid interest hereon, to the date of such redemption. Any redemption
pursuant to this paragraph shall be made upon not less than 30 days nor more
than 60 days notice, at the Redemption Price. The Redemption Price shall be
paid at the time and in the manner provided therefor in the Indenture. If the
Debentures are only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures shall be redeemed pro rata or by lot or by any
other method utilized by the Trustee as described in the Indenture.

         In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the cancellation hereof.

         In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time Outstanding (as defined
in the Indenture) to execute supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures; PROVIDED, HOWEVER, that no such
supplemental indenture shall (i) extend the fixed maturity of the Debentures
except as provided in the Indenture, or

                                      A-5
<PAGE>

reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, without the consent of the holder of each Debenture
so affected; or (ii) reduce the aforesaid percentage of Debentures, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of each Debenture then Outstanding and affected thereby.
The Indenture also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debentures at the time Outstanding, on behalf
of all of the holders of the Debentures, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the payment
of the principal of or interest on any of the Debentures. Any such consent or
waiver by the registered holder of this Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Debenture and of any Debenture issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.

         No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal and interest on this
Debenture at the time and place and at the rate and in the money herein
prescribed.

         Provided certain conditions are met, the Company shall have the right
at any time during the term of the Debentures and from time to time to extend
the interest payment period of such Debentures for up to 20 consecutive quarters
(each, an "Extended Interest Payment Period"), at the end of which period the
Company shall pay all interest then accrued and unpaid (together with interest
thereon at the rate specified for the Debentures to the extent that payment of
such interest is enforceable under applicable law). Before the termination of
any such Extended Interest Payment Period, so long as no Event of Default shall
have occurred and be continuing, the Company may further extend such Extended
Interest Payment Period, provided that such Extended Interest Payment Period
together with all such further extensions thereof shall not exceed 20
consecutive quarters, extend beyond the Stated Maturity or end on a date other
than an Interest Payment Date. At the termination of any such Extended Interest
Payment Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due and subject to the foregoing conditions, the Company
may commence a new Extended Interest Payment Period.

         As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered holder hereof on the
Debenture Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures of
authorized denominations and for the same aggregate principal amount shall be
issued to the designated transferee or transferees. No service charge shall be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.

                                      A-6

<PAGE>

         Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.

         No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

         The Debentures are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof.

         All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

         This Debenture shall be deemed to be a contract made under the internal
laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State.

                                      A-7

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